2009 Legislative Session: First Session, 39th 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)

Monday, October 5, 2009

Afternoon Sitting

Volume 3, Number 7

[ Page 885 ]

MONDAY, OCTOBER 5, 2009

The House met at 1:34 p.m.

[Mr. Speaker in the chair.]

Routine Business

Tributes

HARRY NYCE

C. James: I want to take an opportunity to recognize a historic moment in our province's history that occurred last week. That is the election of Nisga'a hereditary Chief Harry Nyce as president of the Union of B.C. Municipalities. As we know, Chief Nyce is UBCM's first, first nations president. He served for many years on the executive, and I know that he'll continue that service for all municipalities. I ask this House to please pass on our congratulations to Chief Nyce and to the UBCM.

Introductions by Members

Hon. M. de Jong: A legislative officer is visiting us today in the Legislature in anticipation of perhaps a little more history. Kim Carter is the Ombudsman. If this Legislature sees fit, we are hopeful that she will leave this chamber or, at least at her next visit, that she will attend with a different title than Ombudsman. I hope the House will make her feel welcome today.

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Tributes

Run for the Cure
fundraiser for breast cancer

Hon. M. Stilwell: I would like to take the opportunity to introduce the House to Lisa Tees. Lisa has inspired many of her family and friends to run, walk and fundraise for a cure for breast cancer. This past Sunday, October 4, men and women around the province and across the country ran for the cure for breast cancer. They ran for a cure for the women in their lives.

Last December Lisa Tees was diagnosed with breast cancer at the age of 38 years old. After surgery, six months of chemo and six straight weeks of radiation, Lisa and over 50 of her friends participated in this year's Run for the Cure. Many ran, some walked, but all gave their time and their pocketbooks in the hopes of a cure.

Lisa's team, the Ta Ta's for Tees, won in the friends and family category, as they raised over $12,500 for the Run for the Cure. I know Lisa's message would be to all women of all ages to do self-examinations, see your doctor regularly and get a regular mammogram. In other words, Lisa's message is: save second base. Thank you, Lisa.

Introductions by Members

V. Huntington: It's my pleasure to introduce to the House a family visiting the Legislature from my riding of Delta South. Billy and Stephanie Mitchell and their sons Ben, age ten, and Sam, age seven, are here on one of the cruise ships. They are spending a day visiting Victoria before they head south to San Diego.

It's a special honour to have Ben and Sam here as they are each highly acclaimed B.C. athletes. In fact, they each came in second place in their age divisions in the western national BMX championships. Ben in particular is hoping to be a representative of Canada in the 2020 Olympics. Please make them welcome.

Hon. I. Chong: I have two introductions I'd like to make this afternoon. The first is to say welcome to Lisa Tees, because I was part of a team on Sunday that joined with the other 49 who walked on her behalf. Accompanying her today is one of the tremendous organizers who helped fundraise that incredible sum on Lisa's behalf, and that is my administrative coordinator, Lisa Johnson. I hope the House would make her very welcome.

The other group of individuals I'd like to welcome to this House I don't see in the gallery. Perhaps they're on their way here; I know they're in the precincts somewhere. It is a group of grade 12 students from Spectrum Community School, their entrepreneurship class. They're accompanied by their teacher, Mr. Chuck Groot. The students are participating in the Junior Achievement Titan program. I hope the House would please make them very welcome.

Hon. C. Hansen: There are 30 grade 11 students in the Legislature today from the Prince of Wales Mini School in my riding. They're accompanied by their teacher, Mr. Andrew Humphries. I hope everyone will make them very welcome.

J. Thornthwaite: I would like to welcome Joe Heilman from Heilman Renovations. He's from North Vancouver, a fellow chamber of commerce member. He was here for an AGM last night. I hope the House will make him feel welcome.

J. Slater: I would like to introduce Heather and Dave Remillard from the Boundary area. They live in the village of Midway. I would like the House to make them very welcome.

J. McIntyre: I would like the House to welcome the mayor of Squamish, who is with us here today, Greg
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Gardner. He's a successful GM dealer and a prominent community leader. He ran for council in a by-election and was elected mayor last November '08. He was in the precincts here today for meetings accompanied by the new chief administrative officer in Squamish, Kevin Ramsay. Would the House please make him feel very welcome.

Tributes

laverne kindree

J. McIntyre: It is with sadness that I rise to inform the House of the passing of Dr. LaVerne Kindree a week ago Saturday at the age of 88. Dr. Kindree, a true pioneer, was the Squamish region's sole physician for many years and one of its most beloved residents.

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Dr. Kindree leaves behind an impressive legacy of public service, and for this he was recently appointed to the Order of Canada for his 50 years of dedication to the health and well-being of Squamish. I've had the privilege of working with him on some seniors and medical expansion projects, and he was truly an amazing gentleman and a community leader par excellence. He's survived by his wife Norma, five children, four foster children and many grandchildren, and he will be greatly missed by all.

I ask that the House please send condolences to the family.

Introduction and
First Reading of Bills

Bill 12 — Ombudsman
amendment act, 2009

Hon. M. de Jong presented a message from His Honour the Administrator: a bill intituled Ombudsman Amendment Act, 2009.

Hon. M. de Jong: I move the bill be introduced and read a first time now.

Motion approved.

Hon. M. de Jong: The position of Ombudsman has existed in British Columbia for 30 years. Earlier in this session we recognized the 30th anniversary of the establishment of that legislative office. I am told that the term "ombudsman" derives from a Swedish term and that in that language it is gender-neutral. That is not the case with respect to the English translation — ombudsman.

With the passage of this bill, that would change, on the request of the present officeholder, who has drawn this to the government's attention. We are pleased to present to this House a bill that would have the effect of changing the title of "Ombudsman" to "Ombudsperson" and changing that term wherever it appears in legislation within the Revised Statutes of British Columbia.

I move that the bill be placed on the orders of the day for second reading at the next sitting of the House after today.

Bill 12, Ombudsman Amendment Act, 2009, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Statements
(Standing Order 25B)

SURREY POLICE AWARDS

D. Hayer: It is with pride that I rise, as I do every year, to pay tribute to the brave men and women who serve and protect us in our communities. Particularly today, I want to recognize those police officers and staff support workers in Surrey who were nominees and recipients of the Surrey Police Officer of the Year Awards last week. The awards ceremony is sponsored by the Surrey Board of Trade and has a long history of recognition, dating back to the time when I was president of the Surrey Chamber of Commerce.

While these awards recognize the performance of leading officers and community partners, the entire detachment deserves praise for fighting crime on our streets, particularly in the area of combatting Surrey's marijuana grow ops.

Now, I would like to recognize those recipients of the 2009 Surrey Police Officer of the Year awards. For the Arnold Silzer Award, finalists were Surrey robbery unit — Gidon — and Surrey RCMP drug section, marijuana enforcement and offence-related property teams, while the district 1 footbeat team was the winner.

Police and Business Partnership Award finalists were Barb Cerney and the Downtown Business Improvement Association, while Whalley Enhancement Association was the winner.

Municipal Employee of the Year finalists were Hardeep Gosal and Annie-Mae Perrin, while Carrie Chattell was the winner.

Volunteer of the Year finalists were Doreen Johnson and Olga Duncan, while Betty Gilbert was the winner.

Auxiliary Constable of the Year finalist, Ken Merells; winner, Mark Elson.

Police Officer of the Year, nominated by peers. Finalists were Mike Spencer and Crystal Heisler. The winner was Drew Grainger.

Police Officer of the Year, nominated by the community. Finalists were Johanna Robinson and Murray McAulay. The winner was Darren Malcolm.
[ Page 887 ]

I ask all the members of the House to join me in congratulating all the nominees, finalists, winners and sponsors for their outstanding contribution to the public safety in Surrey.

ISLAND JADE SOCIETY

C. Trevena: Most of our communities have a place of last resort — a place where the most vulnerable know they'll be helped without judgment. That, I believe, is one of the hallmarks of a civil society. Whether it be a food bank, a Salvation Army shelter or a soup kitchen, it's a place of brief respite.

Campbell River is extraordinarily lucky to have a place which is even more than that. It's a place where people who've given up all hope of finding justice or maintaining some human dignity can turn for help.

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It's the Island JADE Society, a place where people won't be turned away, where their problems are understood and the labyrinths they face deconstructed. Island JADE evolved from the North Island Advocacy. Its founder, Sian Thompson, wanted to move beyond the concept and practice of advocacy.

JADE is an acronym for "justice, advocacy, dignity, empowerment." The people who walk through its doors looking for help are helped in all of those fields — the search for social justice, the advocacy in dealing with bureaucracy, the dignity in being respected as an individual human being and the empowerment that they can take charge of their own lives.

It's not a place where miracles happen, but it's a place where hundreds of people are helped, whether assisting through complex rules in accessing welfare or — a sad commentary on today's realities — being provided with a tent because there is no other shelter available.

Island JADE is a small operation — two advocates and a homeless outreach worker — covering Campbell River and down into the Comox Valley. Its work is known in our communities, especially among those people who are directed there by others knowing that there is really nothing else around to help them.

Early this year Sian Thomson was nominated for and received a B.C. Community Achievement Award presented by the Premier. There's no question she deserved it and that her organization also deserved it. Our society will likely always need a place of last resort. Let's hope that for everyone, that place is one of justice, advocacy, dignity and empowerment.

SMALL BUSINESS IN B.C.

N. Letnick: All around this province small business people are working long hours and risking their life savings to follow their dreams. Through the thousands of individual actions taken by small business people, our province's economy has grown to one of the strongest in the country.

In recognition of this key economic sector, British Columbia has officially proclaimed October as Small Business Month. B.C. first recognized Small Business Week in 1979, and three years ago it grew to a month-long celebration to help people learn how to take advantage of the opportunities and services available to small business people.

Small business is critical to creating jobs and strong communities. With approximately 384,000 small businesses operating in British Columbia, representing 98 percent of all business in this province, the small business sector employs over one million people and accounts for nearly 56 percent of all private sector jobs in B.C.

In 2008 small business accounted for one-third of British Columbia's GDP — the highest of all provinces in the country. The number of self-employed people in British Columbia rose nearly 14 percent between 2003 and 2008, well above the national average of 9.5 percent. Small business workers have seen annual earnings increase by 24 percent over the last five years, and that's more than twice the increase for large business workers.

In 2005 the province created a permanent Small Business Roundtable to give small business a voice in government. I would like to welcome the two newest members today: Cybele Negris and Sonia Virk, who joined Kelowna's own Robert Fine and 19 other British Columbians on the Roundtable, as we work together to keep British Columbia the most small business–friendly jurisdiction in Canada by cutting red tape and making it easier and less expensive to do business, creating jobs and increasing prosperity for all British Columbians.

PERSONS CASE AND
WOMEN IN GOVERNMENT

S. Hammell: Hon. Speaker, if you stepped back in time to the first quarter of the last century, you would be shocked, I'm sure, and appalled to realize that women at that time were not legally deemed as persons. I'm sure many of the fathers, brothers, husbands and sons of the women of the time were also shocked and appalled, but not the all-male Supreme Court of Canada that weighed the arguments in 1928 and concluded that women were not qualified persons within the meaning of the British North America Act.

The five women who brought the original petition to the Supreme Court appealed the case to London, and on October 18, 1929, the British Privy Council ruled that women were qualified persons. The Persons Case was a vindication of a 60-year-old battle begun in 1867, during which women in Canada and Britain had sought
[ Page 888 ]
in vain for a determination by the courts that they were entitled to hold public office and to enter universities and the professions. The judgment of the Privy Council was one of the most important milestones in the history of the women's struggle for full citizenship and emancipation.

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This month, Women's History Month, encourages us to ask: how are we doing? Clearly there are few barriers for women now entering universities and participating in the professions. That is a great success, but the gains made by women in public life are appalling.

At the national level women sit at 22 percent of the elected members, way below many developed and developing nations. In British Columbia we see the same results. In 1991, 20 percent of the seats were women; in 1996, 26; in 2001, 22; in 2005, 21; and in 2009, 28 percent, largely due to the 34 percent of women that sit in the NDP caucus.

CONTRIBUTIONS OF SENIORS

S. Cadieux: This past week on October 1 we celebrated the International Day of Older Persons. Designated by the General Assembly of the United Nations and first observed throughout the world in 1991, this year's theme, celebrating the tenth anniversary of the International Year of Older Persons, was towards a society for all ages.

Seniors are a vital part of the constituency of Surrey-Panorama, and I'm pleased this day recognizes their essential contributions to B.C. communities and draws attention to the greying of our world's population.

I recently had the pleasure of speaking to the White Rock and South Surrey Probus Club, a group of seniors who are still very active in our community. It's important to recognize that this age of aging and our seniors' need to give back to local neighbourhoods is about staying active in body and mind.

Today worldwide there are around 600 million people over age 60. This total will double by 2025 and reach approximately two billion by 2050. By 2031 almost a quarter of British Columbia's population will be over 65.

A recent article in one of our local papers told the story of Kara Warnock, a Fraser Heights Secondary student who spent the summer with her grandmother. Her experience demonstrated to her and to British Columbians how vital the contributions of our seniors are to the future generations of B.C.

My grandmother, Patricia Homewood, just turned 93 a few weeks ago. She's meant very much to me and has certainly helped shape the person I am today. Please help me and take this opportunity to recognize B.C. seniors and join in celebrating the contributions of our seniors for International Day of Older Persons.

WEST COAST LEGAL EDUCATION
AND ACTION FUND

M. Mungall: In the spirit of Women's History Month, I'd like to share with the House the organization West Coast Legal Education and Action Fund, also known as West Coast LEAF. The organization was formed in 1985 when the equality guarantees of the Canadian Charter of Rights and Freedoms came into force.

As an affiliate of the national LEAF, their mission is to achieve equality through B.C.-based equality rights litigation, law reform and public legal education and to change historic patterns of systemic discrimination against women.

LEAF's non-profit charitable work involves many, many programs such as litigation, as mentioned, advocating legal aid reforms and supporting women's access to justice. But one program has had a very positive, very direct impact on Nelson, and that is the No Means No program.

This program empowers youth while educating them about sexual consent and human rights. By complementing existing curricula in the classroom, No Means No is working with grade 8 students at Trafalgar School. For a community the size of Nelson, that means every grade 8 student. It works with those students to delve into the myths of sexuality and stereotypes that, of course, can lead to violence. The result is that students understand their rights and respect that no means no.

To bring this empowering program to your community, contact West Coast LEAF. For a nominal fee — and of course that nominal fee is negotiable, considering the economic times — a trained youth facilitator will be able to deliver this valuable program that prevents violence in our communities.

Hon. B. Lekstrom: I seek leave to make an introduction.

Mr. Speaker: Proceed.

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Introductions by Members

Hon. B. Lekstrom: It's my pleasure to introduce a friend of this House and a colleague who I'm sure needs no introduction. Joining us in the gallery is Olga Ilich. Will the House please make her welcome.

Oral Questions

FUNDING FOR SPECIAL OLYMPICS

C. James: Last week we learned about cuts to Special Olympics programs in the Sunshine Coast. Today
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we've learned that those cuts are across the province. Communities across B.C. are impacted. Communities like the Comox Valley, Surrey and 100 Mile House will all lose programs and services that B.C. Special Olympics rely on.

My question is to the Minister of Healthy Living and Sport. How does her government justify wasting taxpayer dollars on video games, pool tables and three ministers to take care of sports, while it's gutting funds for Special Olympics athletes?

Hon. R. Coleman: As the member knows, we've had to make some difficult decisions with regards to gaming grants this year and had to make choices with regards to who we could help first. When we made that decision, we made that decision with regards to children in schools so they could have healthy outcomes in school.

We made the decision with regards to public safety, so that search and rescue teams would be there, particularly coming into this winter, during avalanche season — be out there to save people's lives and be there for their assistance.

Sometimes when you do that, you have to rationalize some of your other grants. Disabled sports did get some money this year, and some others have been spread across. The reason we did that is so we could actually optimize the services to communities like Mackenzie and those that may have a food bank that need assistance this year so that we can actually, frankly, concentrate on what's important.

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

C. James: Mr. Speaker, I'll tell you the kind of choice this government made. This government chose to give three ministers a job instead of providing funding for disabled athletes in British Columbia. That's where the money should go.

A letter from the ministry to the Special Olympics society revealed a massive cut in funds for Special Olympics — 68 percent on the Sunshine Coast alone. Critical funding for critical services.

So my question is to the Premier. How does a 68 percent cut for Special Olympics athletes match up to this government's priority to protect funding for developmentally disabled adults and children?

Hon. R. Coleman: Like I said, we made choices. We also made a choice with regard to the developmentally disabled this year. We increased the funding to Community Living B.C. so every wait-listed person in the province of British Columbia with a developmentally disabled child will have funding for their children this year.

We increased the funding so we could deal with IQ 70, so that we could make sure the new definition could be funded for children in the province of British Columbia so they can have services in their communities where they need it.

I know it's difficult for some sports organizations right now, because we've had to rationalize some money to put priorities in different places in government. I empathize with that. I also empathize with the fact that those organizations did get some money this year. We'll try and work with them in the future to improve their outcomes. But frankly, we had to make a choice on behalf of children, developmentally disabled children in B.C. — services in the community — and we made those on behalf of the children of British Columbia.

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

C. James: I'd remind the minister that these are cuts to developmentally disabled children and adults. These are cuts to critical programs and services that provide support for those athletes.

Let's take a moment to look at this government's choices. Hundreds of thousands of dollars for a no-work zone. Half a million dollars for three sports ministers' offices. That's this government's choice — and deep cuts to Special Olympics. In the Comox Valley, 83 percent cut; 100 Mile House, 80 percent cut; Surrey, 70 percent; Sunshine Coast, a 68 percent cut.

Again, my question is to the Premier. How can this government, in the year we're hosting the Olympics, justify cuts to Special Olympics?

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Hon. R. Coleman: Tens of millions of dollars to take care of developmentally disabled children and adults waiting on wait-lists in the province of British Columbia so they can have their services. Tens of millions of dollars in services for those people that the member is actually talking about, in their communities with their parents for the services those kids need, and every single dime was opposed by the Leader of the Opposition and the members opposite for those disabled children.

Interjections.

Mr. Speaker: Members.

Hon. R. Coleman: We made choices for children, for the services for children, for meals for children in school, and those were the right decisions. At the same time, we were able to manage to send some money to disabled sports in British Columbia.
[ Page 890 ]

N. Simons: Across the province there are coaches, there are parents, there are brothers and sisters of kids and adults with disabilities — developmental disabilities, in particular — who are extremely worried about these cuts. To many, Special Olympics is what people with developmental disabilities look forward to. It gives them a meaning in life, and it gives them joy. It also brings communities together.

This priority has obviously fallen fairly low on this government's agenda. How can you explain to athletes across this province, Special Olympians, that this choice was based simply on bad planning and that the effect will be extremely negative to their families? You know what I mean.

Hon. R. Coleman: I will try and respond to the question from the member for Powell River–Sunshine Coast.

We managed to send some money to the disabilities sports in your community, as we did across B.C., as we tried to manage the dollars. The provincial organization actually received a $60,000 bingo affiliation grant, which was $5,000 more than it received last year.

As we did that, we also had to do it in the management of what the other priorities of any grant program in British Columbia should be, and that is what they identify, what their priorities are and who needs it the most at any given time. In these difficult times it's human and social services. It's public safety. If somebody is lost in the back country this winter, I want those organizations to be funded.

Interjections.

Mr. Speaker: Members.

Hon. R. Coleman: It's also to Community Living B.C., who needed money to deal with wait-lists and other services for developmentally disabled adults and children across British Columbia. I think those were the right decisions to make.

Mr. Speaker: The member has a supplemental.

N. Simons: Maybe I just wasn't expecting an answer anyway.

This is the minister who has consciously put $77 million of previously ministerial funding into gaming. He has taken away from charities — $77 million less for charities in this province. That's a cut.

Stephanie Rogers is an athlete, a three-time medallist and a swimmer. Her dad, Gary Rogers, is her coach. This is her life. This is what she does.

Athletes, Special Olympians across this province, are going to be hurt while this government is spending tons of money on Olympic boxes, luxury parties and the rest of it.

So how can this government justify those two things? Why did government make a conscious decision to fund Olympic parties and luxury boxes instead of dealing with those Special Olympians across this province who wanted to be able to participate?

Hon. R. Coleman: It's interesting to have somebody that even lives close to Nanaimo lecturing this government on issues in and around charities in the province of British Columbia. But you know….

Interjections.

Mr. Speaker: Members.

Continue, Minister.

Hon. R. Coleman: Let's talk about a charitable purpose. Somebody is lost in the back country in the middle of winter, and there's a search and rescue team that can go there because somebody has covered their liability and given them the machinery and the training so they can go out and save a life. That's a pretty good charitable purpose.

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A child arrives at school and gets a meal. You're opposed to a child arriving at school…? That's not a charitable purpose? You don't think feeding a child so it has a better educational outcome is a charitable purpose? I happen to think it is. We'll make that choice on behalf of children every single time.

Interjections.

Mr. Speaker: Members.

K. Corrigan: This past July at the summer Special Olympics in Abbotsford, here's how the Premier described the participating athletes: "It's about doing your best, trying your hardest and sharing with others what you can do." Less than two months later this government turned around and made massive cuts to the same programs that allow these athletes to train and compete in sports.

To the Minister of Healthy Living and Sport: is it acceptable to make promises to B.C.'s Special Olympics athletes and then make cuts to the very services they rely on?

Interjections.

Mr. Speaker: Members.

Hon. R. Coleman: As I explained to the member opposite a few minutes ago, we have to make tough
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decisions. We did provide what we thought we could to disabled sports this year. Disabled sports actually got a number of millions of dollars. In actual fact, they did that at the expense…. There's no money for adult sports. There's no number for additional environmental groups. A number of other programs were cut in order to have money to spread around youth and disabled sports.

Interjection.

Hon. R. Coleman: I hear one of the members from Vancouver chirping away. He's the one that'll stand up in a couple of minutes and say: "I want more money for arts." So maybe you could give up the money you want for arts and send it over to disabled….

What choices would you make? You're not making a choice. You're not interested.

I'm been involved with Special Olympians over the years.

Interjections.

Mr. Speaker: Minister, just sit down for a second.

Members.

Continue, Minister.

Hon. R. Coleman: I can tell the members opposite that I know the volunteers and the coaches and the people who deal with disabled sports in British Columbia and their commitment. That's why we made the effort to make sure there would be some money available for disabled sports this year.

Mr. Speaker: The member has a supplemental.

K. Corrigan: We do know about this government's choices — choices to fund luxury boxes and choices to throw half-million-dollar parties. It's not just the families and athletes in Surrey, the Comox Valley, 100 Mile House and the Sunshine Coast that are questioning this government's priorities. People across B.C. want this minister, this Premier and this government to give their heads a shake about their misplaced priorities.

Even VANOC CEO John Furlong has publicly called for sports programs to be treated as a priority. These are his words: "I hope that as a result of what we do in February, sport will end up in a place on the national agenda, as much a priority as any other thing we care about."

Again to the Minister of Healthy Living and Sport: how does she justify these shortsighted cuts for Special Olympics athletes during a time when B.C. is preparing to welcome the world for the 2010 Olympics?

Hon. R. Coleman: We make choices, and we set priorities. First of all, developmentally disabled children in the community around us and the people that represent them, like Rory Summers from the B.C. Association for Community Living, say this: "It is not often I give kudos to the government. At this particular time I think we need to. They've shown true leadership by listening to the community and responding to our needs."

Their needs were to deal with wait-lists for services for children and adults that were developmentally disabled. In British Columbia we spent tens of millions of dollars meeting that commitment.

The priorities are clear. We'll help those in need the most. We'll buy the 23 SROs in Vancouver, the 45 across the province. We'll take 7,000 people off the street and connect them to homes in British Columbia with our outreach workers. We'll do it because we're going to put the people of British Columbia that need it the most first in our decisions.

FUNDING FOR PROGRAMS
for SPECIAL NEEDS children

M. Karagianis: Families with special needs children rely on the infant development program. For example, Dorothy Gazzola, parent of Faith who has Down syndrome, said that the program is a godsend and that it has played an integral part in how well her daughter Faith is developing as a special needs child.

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My question is to the Minister of Children and Families. Why is she cutting a program that has a proven track record of helping special needs children?

Hon. M. Polak: Well, as it turns out, the member is incorrect. There will be no cuts to the infant development program and no cuts to the supported child development program. In fact, both budgets remain at an all-time high of $18 million for infant development and $57 million for supported child development.

Mr. Speaker: The member has a supplemental.

M. Karagianis: The minister is wrong, absolutely wrong.

Right here I have a notice from the B.C. Association for Community Living: "Elimination of Provincial Infant and Child Development Offices a Shocking Blow to Child Development in British Columbia."

This goes on to say from Janice Barr, chair of the supported child development provincial steering committee and executive director of the association for Community Living: "The government is not making an administrative cut. They are severing a key link for support…a direct impact on the lives of children and youth with special needs."

Again, why is the minister cutting a vital program and eliminating a program that helps children with special needs?
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Hon. M. Polak: Again, there will be absolutely no change to the services that are received through the infant development program and the supported child development program.

While the two provincial adviser positions have been valuable over the course of development of both of these programs around the province, these are not positions that provide direct services to families and children. The fact remains that these are administrative positions that we can fulfil the duties of within the ministry, and that allows us to direct increased funding to front-line direct services to kids.

Interjections.

Mr. Speaker: Members.

G. Coons: If the minister had done her homework and talked to the stakeholders, the front-line workers and the families, she would have found out how valuable this program is.

The minister is on record saying that there isn't a need for these advisers. The loss of the infant development program will be even harder on first nations families and families living in the north.

Melinda Heidsma, Prince George Association for Community Living, which delivers the IDP services in the north, says: "The provincial IDP office is a lifeline not only for families but also for the IDP consultants all over the province."

Compared to the parents living in urban areas, those parents in rural and northern B.C. have access to even fewer supports and services for their special needs children. Why is the minister reducing the level of help that special needs families from first nations families and from the north receive?

Hon. M. Polak: Let me say to the members opposite once again that there will be no loss of service. There will be no interruption of service for families receiving the infant development program or supported child development program. In fact, what is most disturbing to me…

Interjections.

Mr. Speaker: Members.

Hon. M. Polak: …is the way in which the opposition members have preyed upon the fears of those who receive these services by telling them that a program is ending when it is not changing one iota.

Mr. Speaker: The member has a supplemental.

G. Coons: Experts in the field rebuke this minister's spin and rhetoric. The B.C. Association for Community Living says that it's not an administrative cut, that the IDP and its staff have a direct impact on the lives of children and youth with special needs.

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Now, not only is the B.C. Association for Community Living describing this cut as devastating, five front-line consultants from the Prince Rupert area who work extensively with infant and child development, especially with first nations children, say that this cut will seriously impact families, especially in the north. They point to how families in the north rely even more on the services that the IDP program provides and how it is essential for these families.

Will the minister revisit her decision and restore funding to this vital program?

Hon. M. Polak: The provincial advisers play an intermediary role between the ministry and service providers. They do not provide direct service to children. The infant development program retains its full budget of $18 million. The supported child development program retains its budget of $57 million.

Interjections.

Mr. Speaker: Members.

Hon. M. Polak: I find it difficult to believe that the opposition would defend the idea of maintaining two administrative positions costing us $600,000 a year that could go into direct front-line services for kids.

J. Kwan: I have a letter here, actually, from the provincial adviser, infant development program of B.C. Here's what Dana had to say.

"It is very important that MCFD and the government understand that the provincial IDP office and aboriginal supported child development provincial offices are not bureaucracies, nor are they administrative structures. They have very little, if any, administrative functions."

They go on to say:

"The provincial IDP office provides direct services to families who call for information, to professionals who need to know where to refer a newly diagnosed baby or to access up-to-date evidence based on early childhood intervention information."

My question to the minister is this. Does this sound like administrativia to you, when you're a parent on the other side needing help for your newborn child and support of services?

Hon. M. Polak: Well, let me make it clear to the opposition member. The coordinator positions that provide referrals and the types of services to which she just referred — those are continuing. We are talking about the provincial adviser positions. They perform an intermediary role between the ministry and the service providers.
[ Page 893 ]

I just can't understand why the opposition would want to maintain government positions at the expense of services to kids. What is it you don't like about providing front-line services to kids?

Interjections.

Mr. Speaker: Members.

SCHOOL DISTRICT funding

R. Austin: A letter from the Prince George school district clearly states that contrary to what the Education Minister told this House, they were given absolutely no warning about the cancellation of facilities grants. Now the district has a $2.3 million deficit in their special purpose fund and has cancelled or suspended all school maintenance.

I'll quote from a letter between Prince George school district and the minister. "Contrary to statements made by you and representatives of your ministry, there was no forewarning that the annual facility grant, a grant that is ingrained in district operations, would be held back or, in the case of the current fiscal period, completely eliminated."

Can the minister explain why her version of events doesn't match reality?

Hon. M. MacDiarmid: The Ministry of Education and our government this year have provided yet again record amounts of funding for schools — records amounts of funding.

Interjections.

Mr. Speaker: Members.

Hon. M. MacDiarmid: In spite of the fact there are 7,000 fewer students expected this year, we are providing an extra $84 million to go to classrooms in this province.

Our government has made choices this year. Absolutely, we've made choices about how we'll do things, and our focus is on the student in the classroom.

With respect to the annual facilities grant, back in June of this year school districts — secretary-treasurers — were advised that they should go slow on their projects, that they should use reserve funding, that this was a different year. That advice did go out in June of this year.

[1420]

Mr. Speaker: The member has a supplemental.

Interjection.

Mr. Speaker: Minister.

R. Austin: A new minister but the same old message box. Let me quote again from this letter. "The complete absence of communication or communication that is vague and disingenuous implies either that your ministry does not want or know how to communicate or worse — that there is an underlying agenda to set boards up to fail in their basic mission."

The minister told this House that school boards were warned about the cancellation of facilities grants. The Prince George school district says that's not the case. How can school boards do their jobs when faced with a government that can't even get its story straight about major last-minute cuts to cash-strapped districts?

Hon. M. MacDiarmid: This is a government that this year alone is investing $447 million in new schools, in upgrades, in seismic projects. We continue to make these investments because we know how important it is.

With respect to the annual facilities grants this year, the communication did go out, and we're continuing to work hard with all of the school districts. We've made it very clear. If there are issues of health and safety for students…. In fact, we've already found ways to work with districts to provide funding through their reserves so that they can address the needs of students.

This is ongoing work. We are meeting individually and discussing with each school district as necessary. Many of the school districts were able to slow down their projects, and they're having absolutely no difficulty.

We'll continue to work with all of them, to work with Surrey, and we will continue to invest in schools in this province.

FUNDING FOR
JUSTICE EDUCATION SOCIETY

L. Krog: Public trust in the justice system is at an all-time low. After the election, five months into the fiscal year, this government and this minister cut by $310,000 the budget of the Justice Education Society. They're closing offices. They're laying off staff. They're making cuts every which way they can.

To the Minister of Education: why did she suddenly and retroactively cut the program that helps people access education and understand the law processes — essentially taking away British Columbians' rights to justice?

Hon. M. MacDiarmid: This year, as I've mentioned, we are providing record funding, but we've made a conscious decision this year.
[ Page 894 ]

Interjections.

Mr. Speaker: Members.

Hon. M. MacDiarmid: In spite of what the members opposite might wish us to think, this year there is a record amount of funding going to the classroom. And when it….

Interjections.

Mr. Speaker: Members.

Minister, just take your seat for a second.

Members.

Continue, Minister.

Hon. M. MacDiarmid: When it came to our grants, without doubt, we did make decisions that were different this year, and our priorities were clear. We made sure that we were protecting our most vulnerable students, that we were investing, again, record amounts in early learning and literacy and that we were investing in our aboriginal students. These were good decisions in difficult economic times, and they are the choices that we made.

Mr. Speaker: Member has a supplemental.

L. Krog: That's some record. It's a 40 percent cut. No matter how you dance around the issue, it's a 40 percent cut to that organization. It affects those who can least afford it — 15,000 ordinary students, 600 youth at risk and 1,000 aboriginal students in remote communities. Those services are being terminated.

This comes on top of the cuts the government has made to legal aid — cuts that already put an enormous strain on our justice system. I want to hear from this minister: what research does she have to show that this won't end up just costing the justice system a great deal more in the long run?

Hon. M. MacDiarmid: Challenging economic times call for leadership, and they call for decisions to be made. Our government has made a decision.

Interjections.

Mr. Speaker: Members.

Hon. M. MacDiarmid: We are investing record amounts in classroom education this year. It is the decision our government made, and it's a decision that we all stand by.

[1425]

We know very clearly what the opposition would have done. They are not governing. We know very clearly what would have happened. We know that right now British Columbians would be experiencing a much higher deficit and higher taxes. These are not choices that we would make.

Interjections.

Mr. Speaker: Members.

Continue, Minister.

Interjections.

Mr. Speaker: Continue.

Hon. M. MacDiarmid: Record investments — record investments in classrooms. record investments in students, record investments in early learning and literacy. These are the choices that we've made in these difficult times. Again, we stand by them.

[End of question period.]

J. McIntyre: I seek leave to make an additional introduction.

Mr. Speaker: Proceed.

Introductions by Members

J. McIntyre: I notice that we have members in the gallery from the Canadian Chamber of Commerce. I understand they're meeting. They're having their AGM in Victoria. I hope the House will make them welcome.

N. Simons: I'll try and say this eloquently. Will the House please welcome a city councillor from Powell River, Chris McNaughton, who is in the House visiting today. Welcome to the House.

Motions Without Notice

LEGISLATIVE SITTING HOURS

Hon. M. de Jong: Following discussions with the Opposition House Leader and with leave, I would move a sessional order amendment dealing with the hours of operation for the chamber between now and the conclusion of proceedings.

The Opposition House Leader has the formal motion for the information of members. It would make the following adjustment on a sessional basis only, and that is that on Wednesday the House would sit in the afternoon from 1:30 p.m. to 7 p.m. and on Thursday from 10 a.m. till 12 noon and from 1:30 p.m. to 6 p.m.

By leave, I move:

[That effective immediately, the Standing Orders of the Legislative Assembly of British Columbia be amended as follows for
[ Page 895 ]
the duration of the First Session of the Thirty-ninth Parliament, which commenced on August 25, 2009:

1. That Standing Order 2(1) is deleted and the following substituted:

Sittings

Daily sittings.

2. (1) The time for the ordinary meeting of the House shall, unless otherwise ordered, be as follows:

2. That Standing Order 3 be deleted and the following substituted:

Hour of interruption.

3. If at the hour of 6:30 p.m. on any Monday and Tuesday, 7:00 p.m. on Wednesday, and 6:00 p.m. on Thursday, the business of the day is not concluded and no other hour has been agreed on for the next sitting, the Speaker shall leave the Chair:

subject to the provisions of Standing Order 2(2)(b).]

With leave, I move that that sessional order be adopted by the House.

Leave granted.

Motion approved.

APPOINTMENT OF SPECIAL COMMITTEE TO
REVIEW THE FREEDOM OF INFORMATION
AND PROTECTION OF PRIVACY ACT

Hon. M. de Jong: Again with leave, I move the following motion that I have provided to the Opposition House Leader, and that is that the special committee be appointed to review the Freedom of Information and Protection of Privacy Act. That takes place statutorily, pursuant to section 80 of that act.

[That a Special Committee be appointed to review the Freedom of Information and Protection of Privacy Act (RSBC 1996 c. 165) pursuant to section 80 of that Act, and that the Special Committee so appointed shall have the powers of a Select Standing Committee and is also empowered:

(a) to appoint of their number, one or more subcommittees and to refer to such subcommittees any of the matters referred to the Committee;

(b) to sit during a period in which the House is adjourned, during the recess after prorogation until the next following Session and during any sitting of the House;

(c) to adjourn from place to place as may be convenient;

(d) to conduct public consultations by any means the Committee considers appropriate, including but not limited to public meetings and electronic means;

(e) to retain such personnel as required to assist the Committee;

and shall report to the House by May 31, 2010; to deposit the original of its reports with the Clerk of the Legislative Assembly during a period of adjournment and upon resumption of the sittings of the House, the Chair shall present all reports to the Legislative Assembly.

That the said Special Committee is to be composed of Mr. Cantelon (Convener), Messrs. Foster, Horne, Dalton, Sultan, and Bloy and Mme. Cadieux and Messrs. D. Routley, Lali, Gentner and Mmes. Conroy and Kwan.]

The usual powers are granted to the committee. By virtue of this motion, the committee is charged with reporting back to this House by May 31, 2010. With leave, I move that motion.

Leave granted.

Hon. M. de Jong: With apologies, I should read into the record, pursuant to the terms of the motion, the following membership. Mr. Cantelon is convener, and it includes members Messrs. Foster, Horne, Dalton, Sultan, Bloy, Mme. Cadieux, Messrs. Routley, Lali, Gentner, and Mmes. Conroy and Kwan.

Motion approved.

Hon. M. de Jong: I'm reminded, pursuant to my last comment, that that is D. Routley, for the record.

Orders of the Day

Hon. M. de Jong: For this afternoon, I call continued second reading debate of Bill 8, the Strata Property Amendment Act, in this chamber, and in Committee A, Committee of Supply — for the information of members, the ongoing debate on the estimates for the Ministry of Forests.

[1430]

Second Reading of Bills

Bill 8 — Strata property
amendment act, 2009

(continued)

S. Fraser: In discussions on Bill 8, I'd like to comment on a few things that affect my constituency and certainly the association on Vancouver Island of strata owners and, I would suggest, all strata owners across the province.

We have a bill here that is being brought forward, which I do not believe properly addresses the issues.
[ Page 896 ]
While it makes some attempts to do so in some circumstances, it is woefully lacking in many others.

It's unfortunate. The strata owners across the province have waited a long time for this bill. It's certainly well overdue, and the disappointment is palpable amongst the associations and owners throughout the province because there is so much missing from Bill 8.

I would like to make a few specific comments about that. A major issue neglected by Bill 8 is the large number of votes controlled by the owner-developer, if you will. That's for unsold strata units. With this lacking, developers can sort of tame strata councils, if you will, in order to evade responsibilities under the act. There's a key flaw there.

Bill 8 still does not require the disclosure of strata council minutes to a purchaser. So here we have Bill 8 coming forward now, and really, without this key information in strata council minutes, if that's not made available…. In many cases this written information would be the only indication, for instance, of a leaky-condo issue or a problem within the strata. To omit that piece of information in the bill is a massive flaw, and we don't need to poll too many British Columbians to understand that.

[L. Reid in the chair.]

Although Bill 8 appears to provide for more transparency and tracking and reporting the condition of strata corporate assets, it could also be undermined if the regulations provide too many loopholes — and they do, Madam Speaker. Welcome to the chair.

Bill 8 appears to provide more transparency in tracking and reporting the condition of strata corporation assets. Again, that's undermined if the regulations provide too many loopholes, which they do.

In essence, the bill should not be premature, but it is in this case. It is not ready to bring forward after all this time and after all the waiting — patiently — by strata owners and strata associations. I know that the Vancouver Island Strata Owners Association have worked hard to try to provide meaningful input to this process. I do not see their input being respected in this act, in Bill 8.

I would note that we need a proper, open and public review of the needs and the issues dealt with in this act. I would suggest that constructive feedback from strata owners has fallen on deaf ears with this government and with the ministry. I would ask that this bill be drafted in a way that protects the public interest, that protects people — strata owners — like those who live in Little Qualicum River Estates in my constituency and many more that have come to me with concerns about the great flaws and shortcomings of the previous, existing act and now are not seeing those issues addressed appropriately.

With that, I will sit down.

[1435]

D. Thorne: It was a little like déjà vu speaking to this act again, but I couldn't let the occasion pass without saying a few words about how disappointed I am in the fact that this bill has come back in basically the same form that it was in, in March when I last spoke to it. I can't see any substantive changes of any kind other than that it's no longer under the Minister of Finance. It's now under the Minister of Social Development.

I know that when we discussed this in March, it came to the House the day before…. Well, actually it was the day, if I'm not mistaken, that the government basically announced that we would be leaving this chamber and going out into the world of elections the following day.

When we were discussing this at the time, we were all aware that the bill was going to die on the order paper and that it wasn't going to pass. At that time, if memory serves, the minister, who would have been at that time the Minister of Finance, made some comments. I actually have a copy of some of the comments that the minister made.

One of the most important, according to the people on this side of the House and also some of the stakeholders — who up to that time had not been consulted in any meaningful way around this proposed bill — was that the minister had said that they would go out and invite further feedback from organizations rather than pushing the bill through in any kind of rushed manner — that now, with the summer, there would be time to have some consultation with other than developers and strata owners and things like that.

I couldn't let this pass today on second reading without getting up and stating in a generalized way that it's very, very disappointing that this consultation does not appear to have happened. The government was severely criticized last spring for having private and confidential consultation processes with developers, property managers, their lawyers and others, and also informed the strata associations that if they wanted to meet with the government and state their views and be part of the consultation, that would have to be done in silence — that there would be a confidentiality agreement, which most of the strata owners chose not to do.

They were expecting, when they knew this bill was going to die on the order paper, that even though the ministers have changed, the consultation would in fact take place. That was possibly even longer than six months ago. That hasn't happened. You know, there's a lot of disappointment around that.

I also wanted to just say a little bit about some of the issues that we talked about being wrong with the bill — or not necessarily being wrong with the bill. Most people support this bill even though it's very, very limited, doesn't go nearly far enough and has not had the proper consultation. I'm not aware of any of the stakeholders, including most strata councils, that would say they're opposed to the changes that are recommended
[ Page 897 ]
in this bill. Of course any step — even a small one, if it's a step in the right direction — is to be welcomed by all of us.

However, the more or less closed-door process that was used by this government has kind of given the ordinary person living in a strata the feeling that they're not really important to the process and that they really did have very little to contribute to the legislation, even though it's affecting them and their property and for most people, I would think, probably their big financial investment. As we've discussed in this chamber many, many times, a home is often the biggest financial outlay that most of us will ever make.

[1440]

I know that many, many — and in my own family as well — people that live in stratas or own strata units feel that the bill, even though it's a small step in the right direction, is a bit undemocratic. I say that — in fact, in my opinion and many others — that taints the bill, which is too bad, because when you have a positive bill, even a small one — you know, a small step in the right direction — it's nice for all of us to be happy about it and not feel that it's tainted in any way.

Some of the other aspects that are not considered in this bill are licensing standards for strata managers, for example. I was the past critic for Housing for the two years prior to this sitting. I heard from many, many owners of stratas that this is a significant issue and that the standards for licensing for strata managers need to be looked at and need to be cleared up, changed, clarified — whatever word you want to use — and could have been looked at over the summer.

I don't know of any reason…. Of course, I could be wrong. This may not be true. There may have been a reason that this bill had to come back in essentially the small form that it was in, in March — that we couldn't have added to it and made it a more significant bill. I mean, that would have meant leaving it and not putting it forward until November or possibly even the spring. Maybe that's the reason.

Maybe the government's thinking is: "Let's get this through now. It's a step in the right direction. Then we'll make a very big effort to actually go out and do some real consultation with strata owners, and we'll bring forward another bill after Christmas, adding to this bill, that moves us way forward, and we'll deal with all of the issues that keep coming up again and again."

Those issues are not going to go away. Those issues are going to remain. More and more people are moving into stratas. That is not going to change, and I think we all know that.

Again, this bill does nothing to improve the accountability of strata developers, for sure. We all know there have been many, many issues around that. The offence and penalty provisions that are needed are not dealt with in this bill, not in the way that they need to be dealt with.

These three issues are very, very important and are part of, I submit, the court system — the fact that you now have to go to the Supreme Court to deal with a lot of these issues. This bill will move us more into arbitration and mediation and even compulsory arbitration and mediation in some cases — all moves in the right direction, as I have said. But without the licensing standard, accountability of strata developers and proper offence and penalty provisions, that's only a small bite out of a big, big…. A small piece of the puzzle, so to speak.

I could talk about the many other areas that strata councils and strata owners were hoping would be dealt with in this bill, but I know there are other people waiting to speak. I would just close by saying that I hope I'm right. I said this in the spring, now with disappointment that it's come back in the same limited form.

I hope we can assure strata owners across British Columbia that this is just a first bite and that after Christmas there will be more, and more over the next year or so, where we'll finally deal with the whole problem for strata owners. As most of us are aging and probably…. You know, in the next couple of years many in this House will be moving into stratas ourselves. We'll all want to be consulted for changes too.

[1445]

R. Fleming: I appreciate the chance to participate in the debate this afternoon on Bill 8, the Strata Property Amendment Act, in particular because in the capital regional district there are 20,000 homeowners who live in and enjoy owning a home of this tenure type.

It is a critically important debate that we're having today, and this legislation is critically important to modernize and amend it in the right way, because many people's family savings and their dreams of home ownership touch exactly upon this act and are governed by this legislation.

Let's be clear. Strata owners have been waiting a long time for the act to be changed. There have been a number of deficiencies brought to government's attention over a number of years, and this government has promised to review this legislation on many previous occasions. They had an opportunity to do that last fall, 2008. That was at least one opportunity, which they did not take advantage of, because, of course, we'll all recall in this place that the legislative sitting in fall 2008 was cancelled entirely.

I appreciate, in the context of this debate, that one does not get too many bites at the apple, so to speak. But I think that the Condominium Home Owners Association of British Columbia and other organizations have made the point, in the public realm, that even though they are among those most impatient at change, that have been loudest and most persistent in advocating for a number of reforms, common-sense changes to the act that have to happen — some of which are in this
[ Page 898 ]
bill; some of which are not…. They still validate the view that it's important to get legislation changed in the right way — not in just any way but the right way — and that it be done comprehensively.

I think one of the reasons why they can't endorse passing this legislation at this time is because the consultation was not done properly. Not everybody was invited to the table by this government to give their views, to share their experiences and to advocate for certain changes that they felt were long overdue.

Of course, we have jurisprudence to guide us in our changes. We have had the court system spend considerable amounts of its time sorting out some of the common and recurring problems with the act.

Certainly, all of the guideposts are in place for us to get legislation right. But again, the consultation, which wasn't done provincewide and wasn't done in an open manner, wasn't done in public venues allowing strata owners of all types — and there are tens of thousands in this province — to participate and make their submissions known. I think that makes for weaker legislation than we ought to be debating here this afternoon.

Having said that, I think one of the things that is long overdue and that has been consistently asked for is an improved dispute resolution process in the legislation. The fact that the Supreme Court of British Columbia had been hearing cases to do with interpretation of this act in the past, I think, has been a waste of the court's time. And costs for strata corporations…. Certainly, there are other priorities in the justice system than to deal with that.

Now there are avenues proposed in this legislation that will be more cost-effective, more timely and more flexible, which will allow for arbitration and mediation proceedings to solve disputes.

I think people are aware that provincial politics can be a bear pit at times. I'm certainly aware that strata politics can be a vicious thing as well. So the fact that these things can be adjudicated in a more timely fashion at cheaper cost, resolving outstanding issues, is a good thing and, I think, is the main point in favour of the legislative amendment act that we're dealing with today.

I have to speak on behalf of the Vancouver Island Strata Owners Association in this regard, because I have met with them on a number of occasions, and I think their criticisms of Bill 8 are valid. They have pointed out some things missing in the act that could have been contemplated and that could have been accomplished.

[1450]

One is to look at licensing standards for strata managers. In order to recruit and attract people to work as strata managers in buildings, it requires that there be a certain professional standard, and this legislation doesn't spell out or strengthen the licensing standards we have in that regard.

The other major thing, too — I think it's a good point, especially since we have had and experienced the sudden cancellation of the Homeowner Protection Office this summer, when certainly it has work to be done in remediating properties all over British Columbia — is that in this legislation going forward, we're still dealing with the past. People will be out of pocket, and some people will be losing their homes, because the province has failed a number of strata home owners in dealing with leaky buildings.

Moving forward, looking ahead, this legislation does not provide an accountability framework that is adequate for those developing strata condominium projects in B.C., and I think that's a problem.

Surely, with the liabilities that have been shared by municipal government, by property owners in particular, by everybody who has suffered because of building envelope failures that shouldn't have happened in B.C., then changing this legislation and how those things are dealt with — how liabilities are shared, how accountability is spelled out in legislation — should have been a priority that was better dealt with in this bill.

There are, for example, no offence and penalty provisions that are changed or added in this legislation, which could have served as a deterrent and a guidepost for how disputes around strata property management issues are dealt with. There could have been better — and this is VISOA's point of view, the Vancouver Island Strata Owners Association — conflict-of-interest provisions in this legislation that would have removed people with perceived or actual conflicts from participating in their own proceedings or overseeing their own proceedings. Strata owners are suggesting that that has missed the mark in this bill.

Also, the rights of owners to attend strata meetings and to look at issues around strata fee inequities…. It has been suggested by many of the stakeholder organizations, for whom this legislation is written and serves, that that has been missed in this amendment bill.

I can say — as an MLA in the capital region who represents an area where the vacancy rate in the rental market is below 1 percent and has hovered close to zero percent in recent years, an area that has been without the benefit of government robust family housing programs that build new rental accommodation — that there are many people who would wish to rent privately owned accommodation in strata buildings and are prohibited from doing so because of the bylaws.

In that regard, I think section 23 of this bill is particularly important because it will make it more fair for owners and owner-investors of strata units to have bylaws that are friendly to provisions that allow the rental of properties.

There are suites not far from this building in Victoria — in a rental market that is extremely tight, beyond critically low levels — that are dark at night every night, where people who are paying mortgages and fees on those properties are unable to rent because it has been deemed illegal to do so by strata bylaws.

[ Page 899 ]
Now, that practice could continue under this legislation, but there will be more opportunities for owner-investors and strata unit owners to have rights to rent those properties and to demand a process and an explanation by the strata property association if they are going to do that.

[1455]

I think seeking clarity on that is good for potential buyers, people who are investing in condominium units. That will produce, hopefully, some more confidence in the housing market. If you compare 2009 to 2008, housing starts in this part of the world, just here on the south Island, have declined by 75 percent. We need some market signals.

We've sent a bad market signal on the harmonized sales tax. The closing costs of a unit of housing in this part of the world have just gone up thousands, if not tens of thousands, of dollars for prospective buyers. We need to give some kind of signal. I hope that this legislation, by making it easier for owner-investors and owners of strata properties to rent, will be some kind of positive signal that may mitigate other tax policy measures that government is implementing and that will dampen down demand for new housing starts.

I think that is the bulk of my remarks. There's one more point I might just address in passing, and that's around the depreciation report that is a new section of the legislation, section 15 of the bill.

The opposition members have been asking questions about why government anticipates that there is a quite long two-year lag time for the implementation of this provision. Certainly it is nothing to do with the capacity of market appraisals and those who work in real estate to be able to adjust to this in a more timely manner. They've given the confidence that they would be ready to act sooner than what government allows in this bill.

What we have been asking for in this debate is that rather than have this be spelled out by regulation later, it be part of the main legislative package that we're debating here today. That would serve the interests of transparency. It would provide some certainty now. We've already got the main stakeholders in this province saying that they don't feel adequately consulted on this legislation. They would like more details, and they would like some things that are missing from the bill to be included now, while they have the opportunity to do it.

The depreciation report section of the bill also speaks to that, I think, flawed process that should have taken place over the summer or whenever, when government has had ample opportunity to do so — a fulsome consultation period. It wasn't, and I think the legislation is weaker than it ought to be because that work wasn't done at the front end of the legislative process in drafting Bill 8, which is before the House today.

Thank you very much, Madam Speaker, for allowing me some comments this afternoon.

B. Ralston: I want to address Bill 8. There are approximately 460,000 strata properties in British Columbia. Increasingly, about 25 percent of the population, I am advised, lives in strata property. Increasingly, it's a choice that people make as to the place they live.

The Strata Property Act regulates — probably to a greater extent than municipal bylaws do in the jurisdiction in which the strata corporation might find itself — the very intimate details of how the building is run, costs to individual owners, the regulation of disputes — which, given that sometimes those disputes arise between neighbours or immediate neighbours, can be very aggravating and vexing to the parties concerned and to other people who are residents or owners in the building.

[Mr. Speaker in the chair.]

Although this may not seem like glamorous legislation, it has an effect on the lives of tens of thousands of people and on a number of disputes that inevitably arise when people live in close proximity to one another.

Now, this bill does make a couple of changes, but it falls far short of the promise that the then minister responsible, the Minister of Finance, made here in this House. Admittedly, that was prior to the election, but when this bill in very similar form came before the House, only to die on the order paper when the election was called, he did say the following.

I want to quote just so that I have the Minister of Finance, the then responsible minister, accurately:

[1500]

"We should go out and invite feedback from organizations rather than pushing this bill through to a conclusion in a rushed manner.

"I certainly invite that feedback in the weeks and months to come. This is a bill that obviously will not complete all of its stages before this House rises. But it is certainly a piece of legislation that if we are re-elected as government, we are committed to bringing back into this House. We're committed to assessing the constructive feedback that comes from condo owners and strata property associations, property managers, the general public and anyone with regard to what's in the bill."

So a very broad promise of consultation from the minister.

"If there are changes that are desirable, then we would consider incorporating those changes before this bill would be reintroduced."

Now again, perhaps in the kind of expansive moment that the minister was experiencing prior to the election, he made very broad and sweeping statements in the passage that I've just quoted. Unfortunately, in putting together the bill and beginning the consultation that was promised, none of that came to pass. A very narrow consultation took place. The bill is very limited in its scope. A couple of changes are made, but it's almost identical to the bill that was presented before.

Essentially, what I am told is it was very much a closed door process and relied on input, private meetings,
[ Page 900 ]
between government officials and developers, property managers and those people invited to speak with the proposed drafters of the bill.

Now, there's certainly nothing wrong about consulting that part of the industry — indeed, it may be valuable — but the promise was made to consult much more broadly. Given the number of people that live in strata properties, given the activity of strata property owners associations, given the long list of recommendations that they have for what I think are real improvements to the legislation, that opportunity seems to have either been missed or deliberately avoided. That is certainly regrettable.

The importance, I think, for this kind of legislation is a consultation process where these individual…. They are fairly narrowly defined. They're carefully thought-out suggestions that come from many who have suggestions to make the act more workable, to resolve disputes more quickly, to address some of the inequities of finance and, indeed, the role of owner-developers, who sometimes have a disproportionate influence in the operation of strata corporations.

There is a host of reforms that have been recommended, and the government seems to have not been interested in this process to receive any of those. Certainly, they are not reflected in this legislation.

I have been, through some of the consultation I've done, particularly with the Vancouver Island Strata Owners Association, who presented a very detailed brief…. I understand it's been forwarded to the government, although it's not clear to them whether it was received or considered or just what steps might have been taken from their very detailed and carefully thought-out submissions.

I want to make some comments based on their analysis of the bill. Aside from the fact that the consultation didn't take place, they are concerned that the bill does not address the weak licensing standards for strata managers. Often conflict arises because of the conduct, sometimes considered to be…. This is certainly a minority of management companies, but where there are conflicts and where there appears to be unethical or unprofessional conduct by strata management companies, conflict arises.

The regulatory body that the complaints are made to doesn't really seem to take an interest in those kinds of complaints. It's the Real Estate Council of B.C. They licence strata managers, and they've been, in the view of this organization, unresponsive to those concerns.

The bill doesn't address the accountability of strata developers for non-compliance with the act or misrepresentations that might have been made to prospective buyers. It doesn't have any offence and penalty provisions. It's significant to note that legislation in Alberta, which we often hear from the government is to be considered when considering legislation, has offence and penalty sections. So does Ontario, where again there is a fairly well-used act, given the number of strata properties in Ontario. So there's no real deterrent to breaches of the act, no mechanism for addressing those in that way.

[1505]

It doesn't define the meaning of "common property." This can be a dispute, because assessments are made on the basis of common property. Where there is an uncertain and unclear definition of common property, disputes can arise.

Bad legislation or inadequate legislation that doesn't address this problem just gives rise to disputes where a judicial interpretation is required, rather than having the drafters deal with that problem at the outset and avoiding the resort to litigation to define what should have been contemplated by the drafters in the first place.

They go on to say that greater clarity is needed in the definition of what's defined as a conflict of interest. Section 32 is expanded but doesn't really go far enough where the owner-developer is a council member and uses or may be seen to use his position to enhance his or her financial position at the expense of other strata owners.

It's a case where the owner-developer is on the strata council and may use that position to vote on matters which may be of financial benefit to that person. It's pretty clear that that is a classic definition of a conflict of interest. These amendments don't address that in a clear way, doubtlessly giving rise to further disputes and further litigation — again, which could be avoided by the careful and thoughtful attention of legislative drafters at this stage, rather than just leaving it for another time.

Section 6 fails to embed the right of an owner to attend a strata council meeting as an observer. This right can be and has been removed from the bylaws of some strata corporations.

One would think that if you're a strata owner, if you're a member of the strata corporation, you would have the basic right to attend the meetings of the council. Apparently, in some cases it can be removed, forbidding an owner from coming to the meeting where matters of a financial interest to that person would be decided. This bill doesn't address that.

It doesn't remove the requirement for a three-quarters, or 75 percent, vote of owners under section 39 to remove a management company as the management company from the strata corporation. The acts, I'm told, in Ontario and Alberta, often the touchstone for members opposite, do not have that requirement. What it does is…. It's a high hurdle to overcome to remove an incompetent or inefficient or ineffective strata management company as the company and replace it with another one that the owners so choose. That is not addressed.

Strata fee inequities are not addressed, arising from the limited options for unit entitlement available to the
[ Page 901 ]
developer under section 246(3) when a strata plan is established. Once that's established, then a unanimous consent is required to change that allocation. That's as one might expect — usually, as a practicality, impossible to achieve.

It relies heavily on regulations, which could allow — it's not clear, and doubtlessly the critic, the member for Vancouver-Hastings, will pursue this at committee stage — for exemptions from depreciation reports and audited financial statements, two of the amendments to the act that this bill does bring before the House.

Parliamentarians and those who observe parliamentary processes have often spoken about the balance that's required between legislation, which is done openly and publicly and debated and proceeds through the House, and the power of regulation, which of course does not proceed through the House. It's done by an order-in-council — that is, the cabinet sitting in private, subject to freedom of information.

Ordinarily, cabinet confidentiality does not permit much insight into why a decision was made or what options were discussed and very little opportunity, if any, for public input. The balance between the legislation and the power that's given under the act to make regulations is of concern to those who observe these matters.

[1510]

Those are some of the concerns that are expressed about the bill as it is. Given those concerns and given what I think are broad and constructive suggestions that the Legislature and indeed the 460,000 strata property owners in the province might benefit from, I think it's important that there be further consultation on this bill.

Mr. Speaker, I move:

[That the motion for second reading of Bill 8, intituled Strata Property Amendment Act, 2009, be amended by deleting the word "now" and substituting therefor the words "six months hence."]

On the amendment.

B. Ralston: If I just might briefly speak to that amendment.

I've read and referred the House to the comments of the Minister of Finance made in March of this year about the fact that he welcomed a broad consultation. It's clear that that hasn't taken place.

Ordinarily, I don't think this would be necessary. But given the importance of this legislation and given what appear to be the many constructive suggestions, I'm firmly of the view that the House, this legislation and the minister — who's, I'm sure, in a very constructive mood when considering this bill…. I don't think it's a highly partisan issue, but certainly there's an opportunity for the House to work together and improve this bill.

By delaying the discussion of this bill for six months, the government will be able to go out, have that broad consultation, come back with a better, more comprehensive bill that will be of benefit to British Columbians who are concerned — and there are many — about these issues.

So with that, on the amendment, I conclude my remarks.

S. Simpson: As soon as they calm down on the other side, we'll move ahead.

We don't have any desire to delay this inordinately. What I would say is that this is important legislation. It is legislation that we know that those in the sector are looking for.

What we've been told, though, in regard to this — and we've been told it by a number of organizations and by individuals — is that they felt they had a commitment. They had a commitment back in March. At that time this legislation — or its predecessor, Bill 12 — was introduced by the now Minister of Finance, who had responsibility for that.

On March 31 in Hansard the minister made commitments. He essentially made commitments that, by their nature, almost made this an exposure bill — a bill that allowed a discussion to go on. The minister who had responsibility for the bill at the time, the Minister of Finance, said there did need to be consultation. There did need to be broad discussion around this. The government was looking forward to getting the opinions and views of a wide range of interests, including the million-odd people who live in condominiums around this province.

That never occurred. That consultation never occurred. Because of that, we're now in a situation where we felt the need to bring forward this motion at this time to make that point.

So this is a delay that we're proposing that is unfortunate, but it's a delay that's caused by the government not keeping its promise to people who live in strata properties that in fact they would be consulted, that in fact there would be that discussion.

What we know is that while the bill contains a number of important pieces — and at the end of the day we will support the bill — the reality is this: it is half a loaf. The bill is half a loaf.

There are a number of issues that are not addressed in the bill that those organizations, like the Vancouver Island Strata Owners Association, like the Condominium Home Owners Association, have said need clarification.

[1515]

As the previous speaker, the member for Surrey-Whalley, noted, there are a number of pieces here that are dealt with through regulation and not legislation. I know that those organizations…. First of all, their preference certainly would have been that they be legislated. But equally important, they would like to have the opportunity, I know, to have a conversation with the minister or the minister's officials about what those
[ Page 902 ]
regulations might look like when they deal with audits or deal with depreciations or deal with those other matters. That opportunity isn't here.

We've heard from those organizations. The Vancouver Island Strata Owners Association certainly commented. The Condominium Home Owners Association, which represents about 100,000 units across the province, in a release that they issued on September 22, said:

"The Condominium Home Owners Association is calling on the provincial government to conduct a public consultation prior to making any legislative changes to the Strata Property Act."

That was the day after the tabling of this bill. They went on to say:

"The Condominium Home Owners Association is advocating an open public consultation process. This legislation will have a significant impact on the use and administration of strata properties once the regulations come into effect. In addition, this legislation will impact other stakeholders such as professional engineers, certified general accountants, the real estate and development industry and requires the input of each of these industries before we can move forward.

"Prior to proceeding any further, we ask that the minister slow this process down and convene public meetings provincewide that will allow strata owners and those involved in the strata industry to comment on the proposed…amendments. Those directly impacted by the legislation need the opportunity to make the appropriate submissions."

We have heard from people in the sector that they want to support this bill. They don't believe that the bill does everything that they'd like to accomplish. There are things about the legislation, because of the nature of regulation versus legislation, that are not clear. We will make every effort to go through that in committee stage and to get that clarification.

But the best way to deal with this would be to hoist the motion, as this amendment calls for. Allow people a few months to have this discussion, as was committed to by the Minister of Finance back on March 31 when he introduced Bill 12, the predecessor to this bill. Have that discussion. Have this legislation back with the amendments or changes that are deemed to make sense based on consultation with the industry and with homeowners, strata owners, and be able to pass this in the matter of a few months.

Again, it's unfortunate that that's necessary, but if the government had fulfilled the commitment they made in March and had that consultation between March and now, we wouldn't be in this situation. But the government didn't fulfil that commitment that they made to people in the sector, and as a consequence, we are where we are today.

Our desire would be that the government do what it said it was going to do — hold a public consultation, speak to people who are interested and committed in the sector, make the changes that make sense, bring back the bill where we get a whole loaf and not half a loaf. It will be a better piece of legislation for it.

Hon. R. Coleman: I'm going to respond to the member's motion — quite lengthily, perhaps.

First of all, let's be clear about something. It's been seven months since this legislation was in this House. After the legislation was introduced in the House, every single person that had made a submission to government was written and asked for more information if they wanted to submit it. That's called consultation.

Now, the members opposite don't like this piece of it, and this is interesting to me. It's a time-honoured tradition in this House — and members opposite that were around at the time will remember — that when you're doing legislation, you actually do consultation in a confidential way, because you don't put legislation out there in draft without having people sign some sort of a document of confidentiality.

There's a reason for that, hon. Members. Legislation can affect trade practices and economies of things, and that's why it's done that way. I want to be clear. The members don't want to hear the truth. That's fine.

So 19 parties provided comments to the Ministry of Finance staff on the drafting instructions to the amendments to Bill 12 as they were being developed. These included condominium associations, including the Condominium Home Owners Association; the Pacific Condominium Association; the other condominium associations; strata managers; strata properties of British Columbia; developers; the Urban Development Institute; the Real Estate Council of British Columbia; several property solicitors; and members of the general public.

[1520]

It is routine for government to ask that those reviewing legislative amendments pledge to keep the material confidential. The individuals and groups above signed undertakings of confidentiality. That's how it's done when you do the draft.

Next step. The other major organization that actually represents strata properties in British Columbia, which is the Vancouver Island Strata Owners Association, was invited to be part of that consultation on the draft legislation and declined to participate in the confidential review.

The member for Victoria-Hillside, or whatever it is, was up here a minute ago complaining about the fact that the Vancouver Island condominium association never got a chance to consult. They were invited to, and they didn't, hon. Member.

I know that you guys would prefer that we delayed this legislation and went to a six-month hoist. Then all the condominiums in the next six months that come into the marketplace can all have rental restrictions on them and not be stood up and not be held up for the people who live in them. We lose more and more rental stock. That's one of the things this legislation actually fixes.

I've got a whole bunch of other comments about what these members have to say, but I can tell you what. It's so typical of the NDP — delay, delay, delay, deny, never
[ Page 903 ]
do nothing and never get anything done. This legislation needs to go forward for people in condominiums in the province of British Columbia. We will be voting against the hoist motion.

[1525]

Mr. Speaker: Hon. Members, the motion is to the amendment of Bill 8, Strata Property Amendment Act, reading as followed, by the member from Surrey-Whalley: "I move that the motion for second reading of Bill 8, Strata Property Amendment Act, 2009, be amended by deleting the word 'now' and substituting therefore the words 'six months hence.'"

Amendment negatived on the following division:

On the main motion.

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

[1530]

Hon. R. Coleman: Through to this, as I close debate, I have a number of issues I want to address on behalf of the comments made by the members opposite.

This particular piece of legislation….

Interjections.

Mr. Speaker: Minister, would you just wait a couple of minutes while members….

Continue, Minister.

Hon. R. Coleman: The Strata Property Act was actually passed and given its royal assent in 1998, and it took effect on July 1, 2000. It replaced the earlier Condominium Act.

Over the years this particular piece of legislation has been amended by successive governments as issues came forward, which is actually kind of routine with regard to legislation like this because rewrites are often lengthy and time-consuming and don't address the immediate issues that people may have or concerns they want to address.

This particular piece of legislation, in response to the members opposite….

Interjections.

Hon. R. Coleman: First of all, it significantly improves the dispute resolution process for strata corporations and strata owners. When the original act was written, I remember doing the debates with one of the members opposite back then and discussing this particular piece of legislation. There was some concern raised, as I recall — whether it was at committee stage or in a briefing — with regard to trying to put this into the courts for a group of people that have to learn to get along and try and find out how to mediate their issues over time.

There's a sense of maturity that has to come into something like the Strata Property Act and strata relationships. Over time, we did get to a point where we were spending more time, having people spend excessive dollars unnecessarily to try and settle disputes within their strata properties.

By making it go more to mediation and arbitration, it actually gives us an opportunity to start to bring back what strata corporations and strata relationships were supposed to be in the first place. That was a group of people who would have two pieces: a unit entitlement within a unit, which basically becomes what is mortgageable to them as their piece of property, and then common property and limited common property, which would be available for their use or limited use by one of
[ Page 904 ]
the residents, depending whether it's a patio or a deck or whatever the case may be.

Strata property should be clearly stated, because one of the members opposite seemed to not understand that townhouses were actually strata properties, as well as condominiums. In actual fact, they are. There are also things like bare land stratas that actually affect strata property in British Columbia as well, which is basically strata titling just the land, and the residence on top of the land being owned by the person — the strata lot being their strata lot for that particular residence.

That was one of the objectives, as we've heard over the years from people with regard to strata properties. Consultations and discussions have taken place — and government relations meetings and meetings in ministers' offices and MLAs' offices. Submissions have been made on this particular act probably for about two or three years.

We also wanted to enhance consumer protection and increase accountability. This is a pretty key piece for a couple of reasons. For instance, I've owned three condos in the city of Victoria over the years I've been here. If I go and make an investment in a particular piece of property, I make it with the information that's in front of me today. If I go to buy a piece of property, make an offer of purchase and sale, and in that offer of purchase and sale and in the bylaws of that organization it clearly states that my unit can be rented, and I make that investment on that basis, that should not be taken away from me.

However, the act as it exists allows, by a three-quarter vote, a strata corporation to decide that it's no longer a rental building. That does two things. The first thing it does is basically grandfathers me, who might own it, until the time I sell it. Then I'm stuck. It takes a whole bunch of product out of the marketplace over time, because no longer can those units be in the rental marketplace. We end up with an issue where an investor — coming from Asia, Europe or wherever they may come from across Canada — buys a piece of property and finds out after the fact that somebody has allowed those people to change that investment.

[1535]

This also allows us to do some other things for consumer protection. One of the issues some of the members may have come across in strata property and that this actually enables us to fix is this. There are strata properties in British Columbia where people have bought a townhouse, and the townhouse had an unfinished basement. By the time they bought the property, the only piece of their unit that was in the unit entitlement for the calculation of strata fees was a finished area of the building. They made the investment on that basis of unit entitlement, and that's what their strata fees would be.

Some strata councils have decided afterwards…. As development has changed and densities have changed in the building, as smaller units have come in — phased development and what have you — they've come along and said: "You know what? We want more money from you because you've now finished your basement." They didn't make their investment on the basis that that would ever be the unit entitlement. That has actually gone to court, and the courts have decided that unless we change the legislation or regulation, that can happen to somebody.

Imagine if you're a senior living in a townhouse in Langley, Surrey or a couple of other communities that I'm very familiar with, where this has happened. All of a sudden your strata fees go up by 60 or 70 percent, just because the other people in your strata decide to come and try to gouge you for the money. There's a point where there's a fundamental rule of fairness of law and a fundamental rule in the application of principles, and sometimes they don't seem to meet. That's when we have to change something to fix the problem.

Now, it's an important issue. We could sit back and wait and not do it, but a number of these are going to go to court. Millions of dollars perhaps could be spent in legal fees, where if we actually fixed the problem and get on with it, we can actually deal with that situation. We're trying to get to where we get a balance in the housing market.

I remember many years ago having debates with the member for Port Coquitlam. They were friendly debates — estimates debates. We both had one thing, I think, that we both understood, and that was that if we didn't get a balance in the marketplace for people to allow a rental of an investment property or do basement suites or have secondary ideas in housing or, in actual fact, find a way for the federal government, which hasn't happened in the number of years that we've been in this House, to allow us to have the pass-through on taxes and costs for recapture of capital gains, we were going to end up with a rental crisis in the province of British Columbia, because nobody would make the investment anymore.

That's what's starting to happen, and this legislation allows us to change it on the condominium side. On the long-term side, there are some issues with regard to taxes, etc., in housing that we need to fix. It actually provides a framework for the creation and the operation of strata developments in British Columbia.

This is so key, because there are a number of stratas — and few, by the way — where there is this discourse within their operations. They're the ones we hear about — when there are almost half a million condominium units in British Columbia serving about a million people. Most of them function well as a group of people at a board, with their rules and regulations, and some of their bylaws actually function pretty well. But there are those that have difficulties, and that's what brings us to the House to try and see if we can strengthen the guidelines or clarify it.

The one thing we should know about legislation, though, is that we can't actually legislate human behav-
[ Page 905 ]
iour. All we can lay out are the guidelines and principles that people should conduct themselves, either by statutory law or by regulation, in order to set those guidelines and how they should operate. As they do that, it's important to recognize that over time you will amend a law in order to adjust some of those issues.

Now, these amendments, contrary to what some people have said, actually have been part of consultations with a number of people — associations, strata developers, the Real Estate Council of B.C.

I've been an MLA for almost 14 years, and I don't think I've gone through a year where I haven't had at least two or three people come into my constituency office and give me papers on strata property and recommendations and ideas that I've forwarded either to a minister, the minister responsible or to a portion of government to talk about it.

As we do this, we need to improve the ways we do it. We need to lower the temperature with regards to how that relationship is built within the strata corporation. We need to make it inexpensive, efficient and fair, and that's why we're going away from the court side to small claims court, mediation and arbitration.

This act also allows us to deal with other issues that are often of concern with regard to strata properties. I know some of the members opposite had some concerns and issues, they said in second reading, about conflict-of-interest rules. We believe this improves it. I'm sure that during committee stage, this will have a discussion with the members with regard to that. But there's very little in there today with regard to conflict of interest.

[1540]

My biggest concern, as I listened to some of the debates, was it seemed that members — and not all members, but a couple of members — opposite were basically saying: "The owner-developer is bad. The owner-developer sets his rules. The owner-developer is going to take away my rights." The owner-developer still is tied to unit entitlement for strata fees like everybody else.

One of the things we should remember is that at the beginning of this process, somebody who wants to expend millions of dollars to take the risk to build the condominium building in the first place, who will then make it available for sale or rent as it comes through…. Without them, we don't get the housing — period. So they're a partner in this, and they're not to be vilified as one member did with regards to one particular project in one particular community — which I still haven't received the details on or in fact remember.

But you should remember that most strata properties…. Any member here who has been in local government or around the development business or the real estate business or been a consumer will know that most of these are handled extremely professionally on the transition over, and the transition over just needs to have rules around it.

So as we do this, we have to remember something else. Somebody was talking about how the Strata Property Act should deal with how the building is built. Well, it doesn't. The Strata Property Act is about the relationship on property that is owned by individuals, unit entitlement in condominiums and the relationship of that group of people to make decisions on behalf of the whole condominium operation, plus make decisions on finances and costs.

The building standards branch, the building code, engineers, architects, planners, municipalities and building inspectors take care of the construction site. We changed the rain screening, as the members know, ten years ago in British Columbia in the building standards and code to a credit of a report done on leaky condos back in about 1999. We changed those rules so we could change the standards to react, and that wasn't done through the Strata Property Act. It was actually done through the building code. That's not unusual because that's the way it should be.

The issues as you come through this are interesting and require some clarification. The first one was one member opposite went into quite a discourse about rentals and how they were renting it or they weren't renting it — certain things — and somebody was nefarious on rentals and all this. So let's be clear. This act is not about some nefarious thing to get people to rent their properties. It's about saying that if you buy a property today, after this act is passed and you are allowed to rent it, you get to maintain that right to do so.

It's not about what we can't go back and retroactively change. It's about what we can do to actually encourage people to increase the rental stock in British Columbia. And if the members opposite aren't in favour of that, they will tell us, I'm sure, at this section during second reading.

One of the other comments which somebody said was: "You've got to do something about licensing strata property managers." Since January 1, 2006, strata property managers have had to be licensed under the Real Estate Act in British Columbia. It was a change brought a few years back. They have to be licensed. They actually report through that very professional setup that has errors and omissions, etc., through the Real Estate Act, and they report through the Real Estate Council. They have to be licensed, and that actually changed on January 1, 2006. So you don't need to put licensing in one act when you already have it covered in another.

The act itself. Having talked to the various people — including some of the people whose letters were written and read into the House today — within the last few days who have said, "Get on with this. It's the right piece of legislation. You're doing it right. That's what we're asking for," etc., I think we should have to get on with it.

We'll obviously be walking through this thing in committee stage, and hopefully, we can pass the legislation
[ Page 906 ]
in this session so that we can deal with those concerns about unit entitlement, people taking away their rights, the opportunity for someone who makes an investment in a piece of real estate in British Columbia to know that if they make that investment, they can rest assured that somebody isn't going to come along and change its economics afterwards, which I think is an absolutely terrible thing to do to anybody.

It would be like somebody coming to your home and saying: "Now, in this community, if you sell your house, you can't…." or: "You have to sell your house because you can never rent it. So we don't care if you lose money in your mortgage or your house." That's exactly what — some of this — was going on.

[1545]

We need to fix that. I think it needs to be fixed as soon as possible, and I believe that. I said that in the spring when I spoke to this piece of legislation in second reading. I say it again today.

On that note, as we work forward to what the good parts of this piece of legislation are and what it's going to do that is very important within this relationship of almost 500,000 units in B.C., I move second reading.

Motion approved.

Hon. R. Coleman: I move that the bill be referred to a Committee of the Whole House at the next sitting of the House after today.

Bill 8, Strata Property Amendment Act, 2009, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. C. Hansen: I call committee stage on Budget Measures Implementation Act (No. 2), 2009.

Committee of the Whole House

BIll 2 — BUDGET MEASURES
IMPLEMENTATION ACT (No. 2), 2009

(continued)

The House in Committee of the Whole (Section B) on Bill 2; C. Trevena in the chair.

The committee met at 3:47 p.m.

On section 13 (continued).

S. Herbert: We were talking in the last session about section 13, which basically strikes out "…for the purposes of Tourism British Columbia" and substitutes "for the raising of revenue for the purpose of promoting tourism."

At that time I was speaking about some of my concerns about how we're moving away from performance-based funding, dedicated funding to tourism to go for the Tourism B.C., the agency which…. I must say and to read into the record again just what an award-winning organization Tourism B.C. was and continues to be, since it's not wound down completely, and about how Tourism B.C. really is a model for other communities because its funding is secure, it is dedicated and it is performance-based funding.

I think back to the session when we were talking about this before. The minister, when asked: "Is this guaranteed funding; is this dedicated funding mandatory…?" Is this mandatory, I believe, was the question. The minister wouldn't say it was mandatory in terms of the law. He would say it was an obligation.

Well, we've seen from this government before how they say, "Oh well, yes, this is an obligation," but in fact, that doesn't turn out to be the case because they change that.

I think about the gaming money, which is supposed to be dedicated to charities, but the government has found a sneaky way to take that money and put it into programs which used to be funded by taxpayer revenues. That's why I'm spending such an amount of time on this.

Since the last discussion on this, I've spoken with a number of tourism operators. They've told me that they are disappointed in the playing with semantics, as they called it, the playing with words — how it's not mandatory, but it is an obligation. As we know, obligations are different than mandatory, because if it's mandatory, you have to do that, whereas obligations…. At least you would think you have to do that, but as we've seen before, the government has many obligations which then are not followed through with because they're not legally required to and won't face a penalty if they do otherwise.

I'm wondering if the minister would give me his definition of the word "obligation" and whether that's legally obliged or if that's just a moral obligation.

[1550]

Hon. K. Krueger: This is actually a repetitive question from what we covered at length the last time we spoke. The provision that is introduced — raising of revenue for the purpose of promoting tourism — is much more specific than the raising of revenue for the purposes of Tourism British Columbia.

S. Herbert: Well, I differ with the minister about his answer. He, I believe, has not answered my question, which is: is it legally obligated, or is it just morally obligated funding?

I find it troubling that he tries to say this is stronger than Tourism B.C. When the money went to Tourism
[ Page 907 ]
B.C., they had their own dedicated board of directors, a board of directors made up of industry experts whose livelihoods depended and depend on the tourism industry.

Now what we're seeing is that the government is doing away with Tourism B.C. and replacing it with the minister and a couple of his handpicked advisers, which isn't the same as the professionals deciding how that money would be spent. Instead, it's much more open to political interference.

So again, maybe the minister can tell me why it's not possible for him to answer if this is mandatory — yes or no — under the law.

Hon. K. Krueger: The directive provisions in the Hotel Room Tax Act respecting this tax are in no way diminished by the amendment. If the members opposite are ever government — heaven forbid — they can introduce other words if they choose, but there is no legal encumbrance in the Hotel Room Tax Act presently for the revenues collected through the hotel tax. There is no statutory appropriation attached to the provision, and there is nothing changed in a negative way with this amendment. That's still the case.

S. Herbert: I'm just curious. The minister said that there is currently no legal encumbrance to the hotel room tax. Could he explain to me exactly what that means? Is it that it could be spent anywhere, but the government has chosen to spend it here?

Hon. K. Krueger: I just explained that. There's no appropriation under the existing provision or the amendment. The funds flow through the Ministry of Finance for the purposes stated.

S. Herbert: What I'm hearing from the minister is just backing up the concerns of the industry, which is that there is no legal encumbrance to how the hotel tax is spent.

The government used to say that that money went to Tourism British Columbia, where the board of Tourism British Columbia would decide where that money got spent and how best to market our province with a long-term vision so that we could plan, and the industry could plan, more than a year out.

What this government has done and the minister has done is done away with Tourism B.C., got rid of its independent board of directors and instead replaced it with himself and a couple of handpicked advisers, which to me is quite a difference in terms of how we market our province, in terms of who's calling the shots.

[1555]

I know we'll get to discussion of the board of directors later versus a handpicked advisory panel, but I guess I'll turn back to my question, since the minister has refused to answer it so far. Is there a legal obligation that this money be spent on tourism — so that if it's not spent on tourism, the minister would be breaking the law?

Hon. K. Krueger: Again, that's a repetitive question. I have said repeatedly that it is a legislative obligation. That's what a legislative obligation means: a legal obligation. Legislation is law.

S. Herbert: I'm hearing two things. First, the minister says there's no legal encumbrance to how the hotel room tax is spent. But now he says that the Legislature obligates them to spend this portion on tourism. Can he justify or explain to me the two differences here?

Hon. K. Krueger: There was no specific appropriation required under the legislation as it exists today. What we are doing is imposing a legislative requirement on government that the funds will be used for tourism promotion.

So nothing has been lost, with regard to the member's concerns. In fact, arguably, it will be easier to follow the money with this arrangement, because the Ministry of Finance will be reporting the specific amounts that flow to tourism marketing under this provision.

S. Herbert: The minister stated that before there was no specific appropriation, but now there is. Wasn't it a specific appropriation in that it was going to Tourism B.C., which had a specific mandate and independence to spend it on tourism?

Hon. K. Krueger: To answer the member's question, an appropriation means a dollar amount specified. What we have, by way of tracking the expenditures that the province has made on tourism promotion over the years, is in the public accounts.

In 2005-06 it was $50.237 million; in 2006-07, $57.511 million; 2007-08, $52.433 million; 2009-10 estimate, $92.9 million because of the additional appropriation to take advantage of the Olympic opportunities; estimate for 2010-11, $55.175 million; 2011-12, estimated at $58.208 million.

[1600]

When the NDP was government, the amount that was allocated was about $25 million, and that was by direction of the Treasury Board of the day or cabinet, not by legislative obligation such as the one that we are setting out. It was this government, as I mentioned to the member in our last discussion of this, that set up the revenue stream that has been funding Tourism B.C. and will continue to fund tourism promotion.

S. Herbert: That's helpful, and I thank the minister for putting those numbers on the table. I guess the big question that I have…. I understand the minister has
[ Page 908 ]
charted out to the future here. Now, if hotel revenues were to go up and the tax brought in more, I would understand it that those revenues would flow through to tourism promotion. Or would they be used for some other purpose?

Hon. K. Krueger: Well, as I just pointed out, we've substantially more than doubled the funding that the NDP government of the '90s was providing. It's certainly our intention to continue to do so in reflection of the growth of the economy, which I certainly think is going to happen in the years ahead. Our intent is certainly to continue to flow funding for tourism promotion, using the mechanism of revenues from hotel room taxes.

S. Herbert: Now, intent and action are different, and I understand the minister says that this is his intent. Is that because it's just good will, or is that because it legally has to happen?

Hon. K. Krueger: This is getting very repetitive. It's because there is a legislative obligation.

S. Herbert: I'd like to thank the minister for sharing on this section 13. I do see that my colleague here from Victoria–Swan Lake has arrived, the former critic for Tourism and a big supporter of the sector. I wanted to make some space so that he could ask a couple of questions as well.

R. Fleming: I would like to ask the minister: following July 2011 what will happen to the certainty that the tourism industry needs around revenues that have previously flowed to them independently of government, away from general revenue, to fund tourism marketing purposes for the province of B.C.?

Hon. K. Krueger: The critic introduced this member saying that he has just arrived. We have covered this ground substantially today and last debate. This amendment imposes a legislative obligation to flow these moneys for the raising of revenue for the purpose of promoting tourism.

Madam Chair, I trust we won't have to cover all the same ground again because a new member has arrived.

R. Fleming: I just wanted a simple answer from the minister on the question of what he anticipates is likely to happen when it will be up to his government to decide beyond July 2011 how hotel room taxes will be collected and remitted.

Hon. K. Krueger: Well, if the member would please read section 13…. What will happen is the raising of revenue for the purpose of promoting tourism, under this amendment.

R. Fleming: Would the minister allow a purpose of raising revenue for the promotion of tourism…? Would he allow in that definition debt-servicing of the trade and convention centre in Vancouver as an inbounds part of the definition?

I am aware that this question has been asked, but it wasn't answered definitively, so I want to give the minister a chance to do that again.

Hon. K. Krueger: It was definitively answered, and the member would know that if he had read the Hansard.

[1605]

Sections 13 and 14 approved on division.

On section 15.

S. Herbert: Speaking of section 15, and I mentioned it earlier, I'm curious how the minister thinks a handpicked group of advisers is better than a board of directors setting the targets for tourism in this province.

Hon. K. Krueger: The Crown corporation that was known as Tourism British Columbia obviously is being dissolved, and that process will be complete April 1, 2010. In the meantime, the people who work for Tourism British Columbia — all but one — have the management structure of the ministry.

Additionally, I have committed publicly to a minister's council on tourism. At least two of the people on that council — people who have agreed to serve on it already and whose names I won't be divulging until all the members of the council are named — were members of the Tourism British Columbia board before we dissolved it.

S. Herbert: I raise this point because it's one that I've heard from many people who work in the tourism industry, from small organizations to the very biggest and from all corners of our province. They liked that they had a board of directors who was watching out for them. They liked that they had a board of directors who actually set direction and were able to be held accountable for their decisions. They liked that that board of directors was made up of their industry and actually had power. They thought that was important to the marketing of our province and to the way forward. I agreed with them, and I still do.

I think it is important in terms of marketing our province that the people who rely on that industry be the ones who are most involved.

Now, I'm very curious. I would like to know. Would the minister tell me: would his minister's council have any sort of official decision-making power, or are they advisers?

Hon. K. Krueger: Since the announcement of the changes with Tourism British Columbia, I've had a
[ Page 909 ]
great deal of interaction with the representatives of the Council of Tourism Associations — COTA.

Our government, unlike the previous government, has its ear to the ground across the board. Nobody has to hire a lobbyist to be able to provide input to this government. Whether it's COTA, whether it's any of a whole range of people in the industry and other industries that want to express an opinion to government, they're listened to. The minister's council on tourism is going to be a group of people with a great deal of experience in the industry, and they'll be listened to closely.

[1610]

When the member says that he's talked to people who liked what they had, I don't doubt that people say that. I wonder if the member asked them if they liked what his leader said at the UBCM convention about changing the tax cuts that their businesses and their industry have enjoyed or the NDP's pledge to legislatively increase the salaries of their entry-level employees.

Government doesn't always do what select groups of people want. I don't think that the tourism industry liked any of those changes at all. The fact is that, as I explained at the beginning of this debate, presented with the biggest marketing opportunity British Columbia will ever have in our lifetimes, which is through the Olympics, and the biggest challenge economically that most of us have seen in our lifetimes, which is a worldwide recession, we decided that we needed to make these changes in order to maximize the use of our resources — financial resources and human resources — to eliminate administrative overlap where it exists and to use that money, also, for marketing.

We've seen a $38.6 million lift in the September 1 update for these purposes of tourism promotion. So the proof is in the pudding. The interactions that I'm having with representatives across the board of the tourism industry are very positive.

S. Herbert: Well, I thank the minister for sharing, but as they say, sometimes there's a whole bunch of bluster — what's the quote? — but not a lot of meat, signifying nothing. I think that's the quote. I asked a very specific question. The minister decided to talk…. Well, let's start. He talked about the Olympics.

Okay, if he wants to talk about the Olympics, why would you take the axe to the industry's leader right before the Olympics? People are flabbergasted. They say: "Okay, let's destroy morale in the tourism marketing industries. Let's throw it all into confusion. Let's take it to a place where people don't know if they're coming or going." They don't know where they're going to be able to get marketing support next. They don't know why the minister has done it.

They look to the response from the minister. He says: "Uh, well, okay, it's about administrative savings." Then the reporters ask him: "Oh. Well, what are the savings?" Well, they're not really able to share how much in savings because he doesn't have the figures.

So let's just talk about the Olympics. It is a great marketing opportunity. I don't get why the government has decided to go after our marketer right before the Olympics. It doesn't make a lot of sense to me. The minister then goes on about how his government is so open and so listens. You would never have to hire a lobbyist to talk to this government.

Well, I don't know if anybody watching the news, anybody watching anything related to B.C. politics would know…. This government has seen probably more lobbyists than any government in history in B.C. You look at it, and sometimes it's former members. Sometimes it's others related to the political party.

You talk to the universities. They've hired lobbyists because the government isn't listening. You talk to Whistler. Oh, they've hired a lobbyist because the government isn't listening.

I think the minister needs to think a lot more about his remarks before he makes them, because lobbyists are one of the only things this government seems to listen to. Oh, and you talk to the arts community. They've hired a lobbyist because this minister doesn't listen to them. He knows that.

I don't understand why he would make such a claim, aside from trying to get off the fact that the question I asked cuts to the meat and really cuts through to the bone of the issue with what he's talking about here with tourism marketing in our province.

Then the government…. Oh, another distraction. The minister decides to talk about the '90s, and he talks about a previous government in the '90s. Reverting back to what I think has become almost an instinctual reflex for this government, if you ever get close to an issue — which actually hurts, because they know it's true; they know that they're actually in trouble on this issue — instead, they throw stones. They instead point the other way. "Oh. Well, you were bad. So we're not as bad, but we're still kind of bad."

Well, that's not how you move forward, I don't believe, in politics. You say, "Where do we need to go? What are the best practices?" rather than saying, "Well, you suck, and you suck, so we're not quite as sucky." Sorry, that's not good leadership for me.

The Chair: I'm sorry. Member, please, could you watch your language.

[1615]

S. Herbert: Thank you, Madam Chair, I will.

So I would like to ask the minister again, and maybe this time he will give me an answer: will the minister's council be able to provide direction, be able to actually tell them, by law, what he has to do or what the ministry has to do in terms of supporting tourism marketing? Or
[ Page 910 ]
will they just merely provide advice, which can be followed or not, based on what the minister says?

Hon. K. Krueger: What a lot of nonsense. So 146 of the people who were working for Tourism B.C. before the change are now working for government — same people, same high skill sets, same competence, same enthusiasm. There's no demoralization. These people are committed. They're working hard and hand-in-glove with the people who were already employed in the ministry. The minister's council on tourism will give the minister counsel. The minister's council on tourism will not direct the ministry.

S. Herbert: Well, I'm sorry. I don't think it is a bunch of nonsense — what we're hearing from tourism officials provincewide.

Interjection.

The Chair: Minister.

S. Herbert: I don't think it is a bunch of nonsense that we're hearing from councillors at the UBCM, saying that they're very upset about the dissolution of Tourism B.C. I don't think that's nonsense at all. I don't think the Council of Tourism Associations are speaking nonsense when they're calling for pretty much exactly what Tourism B.C. was — to have that again. That's not nonsense to me.

I know the member…. Again, he's provided the exact reason why they're upset. So maybe he thinks that it's nonsense, but I don't think it is. When they had a board of directors made up of industry officials, industry experts setting the direction….

Now we have a minister, a partisan minister — a very partisan minister, as we've seen — providing the shots, no longer hearing from the industry through their direction. They can advise him, but if he decides to do something that they think is completely ridiculous or that they don't like, the minister can do it as he will.

Now, in the old way, we would realize that this is an industry that is marketing itself. They're standing up for our province, and it's their livelihoods at stake. I take that pretty seriously. I take that more seriously than a minister who likes to bluster and likes to say things like: "Their concerns are a bunch of nonsense."

Again, can the minister tell me why it's better for him to make the decisions than a board of industry professionals?

Hon. K. Krueger: I challenge the member to read his Hansard from our last encounter and the twisted ways that he says things. It was the member's words that I referred to as nonsense.

Whether the member likes it or not, the public made a decision, for the third time, that the B.C. Liberals would form government. When the Premier appoints a minister, he certainly expects the minister to fulfil the role of leading the ministry.

I've answered the member's question. The council on tourism will provide counsel.

R. Fleming: I just wanted the minister to advise this stage of debate on how this governance model was arrived at and what the timeline is for its development. So if the minister could tell me at what time his ministry staff proposed that Tourism B.C. be wound down and no longer operated as a Crown corporation and be replaced by the minister's advisory council — the new governance model.

If you could just tell the House on which dates that was first advanced, because he mentioned that it was part of the mandate of this government. It certainly wasn't part of the election campaign. So if he could tell them when this was devised in the summer, reviewed by himself, the ministerial decision arrived upon and then the announcement made.

[1620]

Hon. K. Krueger: The order-in-council was passed, enacted on August 17, 2009. The effective date for the dissolution of Tourism British Columbia is April 1, 2010.

R. Fleming: Just to follow up on that. That fills in a couple of dates on the timeline. I wonder if the minister could share with the House when he first ordered a review, an internal one, looking at the replacement of Tourism B.C. At what point in the summer that we've just had did he do that? When was the report given to him, presumably by his deputy, and what was the interim period between receipt of that advice and a decision made by himself?

Hon. K. Krueger: I think the member knows better than to ask me questions that are about matters subject to cabinet confidentiality.

The Chair: Member for Victoria–Swan Lake, bearing in mind that these issues can also be discussed later on in the bill.

R. Fleming: Did the minister consult with the industry? And are there any industry associations, destination marketing organizations or tourism organizations that were able to provide input on this new governance model that was brought in through order-in-council on August 17? And is there a single organization working within the tourism industry in B.C. that recommended and endorsed this new governance model?

Hon. K. Krueger: I've been consulting with people in the tourism industry since pretty much the day I was appointed to this position.

R. Fleming: Can the minister identify a single endorser or validator for this new governance model — somebody who represents a destination marketing organization or a tourism association? That was the question, Madam Speaker.

Hon. K. Krueger: I've repeatedly advised the critic and would suggest to the member opposite that there's more latitude in estimates debate to ask questions. This is very specific legislation, and the member is way outside.

In any event, I wouldn't name names of individuals or organizations to the members opposite. I hear horror stories of how business people were treated when the party on the opposition benches was in government. They had some very bitter experiences.

R. Fleming: I wonder if the minister could advise this House whether part of his decision which was arrived at before August 17 had the benefit of any advice from a consultant or a review that was provided to the minister that in essence, I suppose, recommended this new governance model.

Hon. K. Krueger: That question has nothing to do with section 15.

Point of Order

B. Ralston: Just on a point of order. Is it not for the Chair to make rulings of point of order? The minister seems to decide points of order on his own, without any intervention by the Chair. Surely that can't be parliamentary.

You are here to preside, to make the rulings, to decide on whether or not the questions fall within the bounds of parliamentary propriety and not the minister on his own.

If that's simply another way of saying, "I don't want to answer the question," fair enough, but perhaps he should be candid enough to state that.

[1625]

The Chair: The questions which have been surrounding section 15 deal with the new governance model, and in that I accept that we can discuss that.

Other questions have been raised which relate further to sections 16, 17 and 18. I'm assuming that they will not be asked in those sections, and so I have given some latitude there. Bearing in mind that we are talking about section 15 primarily, which is the new governance model, I would hope that we can keep our focus on that and be aware that in sections 16, 17, 18 and 19 we have the opportunity to ask more specific questions about the repeal of the Tourism Act.

Debate Continued

R. Fleming: The question, then, to the minister is: how long did he and his ministry spend on devising this new governance model that they have now put into a bill to become law here in the House? That's the simple question here.

Hon. K. Krueger: Government has the right and the responsibility to make decisions about delivery mechanisms. We made a decision, which I have explained in detail on the record in this debate, that for the reasons that I've already outlined, we would make this change. As far as who said what and when, those are matters that are between the people involved, and I won't be putting names and dates on the record.

R. Fleming: This is a question for the minister, because this bill names the minister's council on tourism, of five to nine members, solely appointed by himself. Somebody who has incredible power within this organization now, immediately beneath the minister, is the president and CEO of Tourism B.C. — formerly independent, arm's length, selected by the industry and subject to things like international search committees to recruit that kind of talent from the industry itself.

My question to the minister is: in selecting the interim president and CEO, did the minister engage in an international search? Did he include representatives of the tourism industry or even any of the outgoing board members that he dismissed in making that appointment?

Hon. K. Krueger: Well, it was clear this member hadn't read the Hansard. Now it's clear he hasn't read the legislation. The minister's council on tourism is not referred to in the legislation. The interim CEO is the Deputy Minister of the Ministry of Tourism, Culture and the Arts. The two members of the interim board are senior employees of the Ministry of Tourism, Culture and the Arts.

R. Fleming: The question again to the minister is about the interim president and CEO. Was that person selected with the benefit of consultation and inclusion of the tourism industry? Because this minister's asked us to take a leap of faith in previous debates of sections of this bill that the industry will be consulted in the marketing plans and the administration of Tourism B.C., now under his ministry.

The Chair: Member, I don't see that this relates to section 15.

R. Fleming: It relates to the governance model to which we're discussing.

The Chair: Member, I don't see how this relates to section 15. If you have a question about section 15, please pose it, but I don't see how this relates to section 15.

[1630]

Section 15 approved on division.

On section 16.

B. Ralston: I just want to make sure I understand that the act will be changed temporarily, for one year, to allow the presentation of a budget at a later date, on March 2, to accommodate the Olympics. This amendment will then provide a mechanism to revert back to the previous schedule, as I understand this amendment. Is that correct?

Hon. C. Hansen: Correct.

Section 16 approved.

Section 17 approved on division.

On section 18.

R. Fleming: I wanted to ask the minister if he could advise the House on the costs of dissolution of Tourism B.C. Around August 24, when his announcement was made, he suggested that the motivation for eliminating Tourism B.C. in its current form was in anticipation, perhaps, of $100,000 of savings and efficiencies.

I wanted to ask the minister what the costs of dissolution are, mainly as a way to see what it would cost the taxpayer to restore a properly functioning, independent tourism marketing organization that is being blown up here. This is something that this government once supported when it was in opposition. It has caught everybody by surprise by doing this.

I think it's beneficial at this stage of the debate to be told what the wind-down costs are for eliminating an independent tourism marketing Crown corporation, so that they have an idea of what it might cost to restore such an entity at a later date.

Hon. K. Krueger: We expect that there will be savings in the synergies achieved by working together with the people from Tourism B.C. Again, the member doesn't appear to have read what has been said repeatedly in Hansard, which is that 146 of 147 people who were working for Tourism B.C. are now working within the ministry. Only one person left.

A severance package is being negotiated with him through the PSA, and obviously there will be a cost to that. I can't go into details, and I don't yet know the details, but we expect synergies in combining of administrative support, in combining accounting systems to sharing space wherever that is practical.

[1635]

So there is really nothing quantifiable by way of cost of dissolving Tourism B.C. other than one severance package.

R. Fleming: It's pretty clear now that this measure was about political control, not savings, because the minister couldn't outline any. He repeatedly suggests that there are no changes and there are no staff reductions. That is the conclusion that was different than his message in the summer, when he was trying to sell this manoeuvre.

I want to ask him about subsection (c) of this section around the property and assets of Tourism B.C., which are being "transferred to and vested in the government" — if he could provide, at this stage of debate, information about the value and addresses and description of the assets and properties that are going to be transferred in this manner.

Hon. K. Krueger: This is a standard clause that is used when transitioning organizations in government. The principal assets are some of the six gateway centres. Some are owned by municipalities. Also, there's furniture and the like. We don't have all of that detail with us in the chamber today, but we can provide that to the member in writing.

R. Fleming: I'm just wondering if the minister could explain in accounting terms what subsection (c) will mean to the reporting entity of government in terms of its overall influence, plus or minus, on assets. Of course, there's a subsection (d) that deals with obligations, so there is going to be a balance there.

But how does it net out for the fiscal position of the province? Descriptions of what that sum would be, I think, would be helpful before any member of this House be asked to vote on this section.

Hon. K. Krueger: There is no change. These assets remain within the reporting entity.

Section 18 approved.

On section 19.

B. Ralston: I think I understand it, but could the minister just briefly explain the purpose of this section?

Hon. C. Hansen: This reflects the fact that we have had the September Budget Update. As was the case four years ago, when the election interrupted the budget process and there was a new budget that had to be tabled, this actually sets out the legislative requirements for…. The reporting that is to be done should be reported against the September Budget Update, not against the February budget.

Section 19 approved.

The Chair: If we might pause for a few minutes while the change of staff comes.

On section 20.

[1640]

R. Fleming: I wonder if I could ask the Minister of Finance to explain the rationale for the change here in terms of making the Carbon Tax Act compliable with the new renewable fuel standards. Just briefly outline that, and then it might eliminate some questions down the road.

Hon. C. Hansen: As the member will know, there were announcements made around the exemption for biofuels as part of the renewable fuel standard. Part of that was to mandate that, first of all, biofuels would be exempt from the carbon tax and, secondly, that at least 5 percent of fuels in British Columbia would be required to have minimum levels of biofuels in their content.

In terms of administering the exemption, that became extremely complex if you were to try to ascertain what the percentage of biofuels would be in any particular litre of fuel that was sold in the province. So what these amendments accomplish is basically saying that in achieving the objectives of the renewable fuel standard, the exemption would be applied on a broader basis rather than trying to do the assessment on a litre-by-litre basis.

R. Fleming: I wonder if the minister could describe how the 5 percent renewable content was arrived at. I realize that it's referenced in other legislation, but I wonder if the minister could describe the minimum 5 percent renewable biofuel category.

Hon. C. Hansen: The 5 percent was a decision by government. It came forward on recommendations as part of the B.C. energy plan that were put forward by the Ministry of Energy, Mines and Petroleum Resources. The role of the Ministry of Finance is to implement the renewable fuel requirement regulations.

R. Fleming: I realize it's difficult to approximate, in the definition of carbon neutrality, where over the life cycle a fuel becomes carbon-neutral. In this case the amendment here is attempting to recognize the biocontent that is carbon-positive, taking carbon out of the atmosphere — plants and the photosynthesis process.

Now, that may well occur outside the province of British Columbia, but the fuel exemption is granted for fuel and the emission of carbon into B.C.'s atmosphere that is burned here. I'm wondering how the ministry arrived at this formula for the exemption.

First of all, if the minister could comment on where the biocontent and additives for the fuel will come from, maybe that would solve the question as I was posing it.

[1645]

Hon. C. Hansen: In terms of the energy policy and this change to legislation, it does not matter whether it is a biofuel that is produced in British Columbia or a biofuel that's imported from another jurisdiction.

R. Fleming: Following on that logic, currently in British Columbia you can mine coal. If you were to burn that coal in British Columbia for domestic consumption, you would pay the carbon tax. But if you were to mine coal, export it, and it was released into, say, China's atmosphere, no carbon tax at all would be paid.

I'm just trying to put it on the other shoe here in terms of this biofuel standard. If you were to burn the fuel in British Columbia, but the carbon credit, if you like — or what triggers the fuel exemption, the bio-additive — is grown elsewhere, I'm just wondering how that reconciles in our atmosphere here in British Columbia for our jurisdiction where the carbon tax applies.

Hon. C. Hansen: The last time I checked my world geography, there was one atmosphere for the entire planet, and I think that we obviously have to look at it from that perspective.

But I think the other side of it is that by the same token, we have an increasing demand for wood pellets that come from British Columbia and that are displacing coal-generated turbines in Scandinavian countries. So in terms of the wood pellets that are exported from British Columbia, it is actually those countries that are importing our wood pellets that are using it to avoid the carbon taxes they have in those countries.

Clearly, we're at the early stages globally of developing a carbon-conscious global economy. I think through measures like the ones we have before us today and the Carbon Tax Act that we have, British Columbia is certainly doing its part and will continue to encourage other jurisdictions to do likewise.

J. Horgan: I, too, am pleased to enter into the debate on Bill 2 and particularly section 20. I did have a chance to speak with the minister off line last week or the week before about section 34 and how this illustrates some of the challenges he spoke of — the table in schedule 1, the changes.

But again, now that he has the advantage of his staff present, I'm wondering if he could assist me in understanding what the…. We talk about revenue neutrality. What's the revenue impact of this decision to not exempt biofuels, ethanol and biodiesel?

Hon. C. Hansen: As the member probably knows, as is stated in the budget documents, we produce a chart or a table at the time of each budget that shows how much has been collected on carbon tax, how much is being provided in terms of tax reductions and other measures that provide for that revenue neutrality. As the member
[ Page 914 ]

This change will make a very slight difference in how much we would collect in carbon tax revenue were we to tax all of this at 100 percent rather than the 95 percent. But we will still more than offset that amount with the other measures we take to achieve revenue neutrality.

J. Horgan: I thank the minister. He worked hard for that answer, and it wasn't one I was looking for.

[1650]

I wanted to know if he could quantify for me the impacts on revenue from the carbon tax, not the neutrality. It was a good answer. It was a very good answer, but it wasn't the answer to the question that I wanted to ask you. That might be a better way for all of us to save face on this.

What is going to be the revenue impact on the carbon tax as a result of this change?

Hon. C. Hansen: Currently, because biofuels are exempt from the carbon tax, there is obviously no carbon tax revenue that flows from biofuels. At the same time, the actual consumption of biofuels is relatively low compared to what we will achieve by the new requirement that there be a 5 percent biofuel component to it. So if we were to continue with our existing structure, whereby gasoline and diesel were taxed at 100 percent of carbon tax, we would actually realize about $19 million a year of additional revenue compared to what we will achieve under this new measure.

J. Horgan: So then, if I understood the minister correctly, I could reverse that and say that there's a $19 million reduction in the carbon tax because of the blending of the exempted fuels with the existing fuels. I'm getting a nod, so I thank the minister for that.

And I appreciate my colleague from Swan Lake. He and I were just conferring. Is the biofuels act that was passed in the last parliament, which mandated levels by date certain, not affected at all beyond the rejigging of the tables that we'll come to in section 34 and a reduction in revenue to the Crown as a result of this blending of the exemptions and the non-exempt fuels?

Hon. C. Hansen: This does not change at all the requirement that a percentage of all gasoline and diesel fuels must be biofuel. That does not change. All that changes with the amendments before us is how the carbon tax is applied to the combustion of those fuels.

Sections 20 to 23 inclusive approved.

On section 24.

J. Horgan: I'm wondering if the minister could assist us in understanding the difference between a collector and a refiner-collector.

Hon. C. Hansen: I think maybe what I'll do is share with the member the note that I have on this. I'll just read it: "This section authorizes the director to appoint a collector to be a refiner-collector. Refiner-collectors are a special class of collectors who may sell fuel to other collectors within the class without paying security on those sales. To qualify as a refiner-collector, the collector or an entity within the collector's appropriate corporate family must own and operate a crude refinery in Canada."

[1655]

J. Horgan: I do thank the minister. I listened to his second reading debate. I read his second reading debate. I've read the bill. I've listened to his note from his able staff, and I'm still no further ahead.

Again, I'm wondering if the minister could try. For those at home who are riveted to the television at this point in time, Ellen is not starting for another five minutes. Perhaps he could give us an answer as to why we need a new category of refiner-collector. What motivated this policy change to create a new class of tax collector?

Hon. C. Hansen: I'm going to try. This change of wording to provide this new class does not change the treatment. What it does is give more clarity to who is eligible for this particular class of collector. The existing exemption from security for sales between collectors that both own and operate refineries in Canada was too narrow to include all of the major oil companies doing business in British Columbia due to the complexity of their corporate structures.

The exemption continues the longstanding tax treatment of sales between eligible collectors provided under the Motor Fuel Tax Act to maintain consistency between the two acts. What it is trying to do is confirm the existing practice but give more clarity and more certainty to who is actually eligible for this provision.

J. Horgan: That, believe it or not, helped. I appreciate that, Minister.

I do then want to ask: if this is just clarification, then there won't be a net increase in the number of collectors, whether they be collectors or refiner-collectors. Will that number remain more or less constant?

Hon. C. Hansen: That is correct.

Sections 24 to 30 inclusive approved.

On section 31.

J. Horgan: I'm wondering if the minister could assist me. The explanatory note in the bill says that this will expand "the regulation making power with respect to appeals related to exempt fuel retailer permits so that the director's decision to set or change the percentage of fuel the exempt fuel retailer may buy without paying security or the decision to refuse to change that percentage may be appealed as intended." Could he explain that clause?

Hon. C. Hansen: This change pertains to the exempt fuel retailer program that allows retail dealers on first nation reserves to purchase a percentage of their fuel without paying security. In recognition of that, a percentage of their sales will be to persons who are exempt from the tax under section 87 of the Indian Act. What this change recognizes is that there should be the same kind of appeal process that would allow for an appeal to the minister in certain circumstances as would be provided in other cases.

[1700]

This is basically about making sure that the appeal powers and opportunities are consistent with other aspects of the act involving the payment of securities.

Section 31 approved.

On section 32.

J. Horgan: I wouldn't be doing my due diligence if I let section 32 pass, particularly section 32(a)(a): "a distillate of crude oil that has a viscosity of not greater than 14 centistokes at 50°C."

[L. Reid in the chair.]

I'm wondering if the minister could enlighten us on what the differentiation would be if it were 15 or 16 centistokes or 49 or 51 centigrade.

Hon. C. Hansen: When the member asked if I could explain, my first impulse was to stand up and give the honest answer of no. But with the help of staff, I now am more enlightened.

Basically, this is the industry standard that differentiates light fuel oil from heavy oil. So it is this viscosity standard that the industry uses to make that differentiation.

J. Horgan: Of course, I knew that was the right answer. Minister, well done.

But it's the differentiation, I think — for those that aren't able to follow at home with access to the Carbon Tax Act, the Motor Fuel Tax Act and now these amendments. In general terms, you're creating new classes and new measurements. Or are these just confirming in-statute measurements that are already in existence with respect to the tax?

Hon. C. Hansen: In terms of issues around the viscosity, that does not change. That is the industry standard. This change that is here before us simply recognizes the fact that renewable biofuels are now part of what could be classified as light fuel oil. But in terms of the viscosity standards, that applies to the light fuel oil definition regardless of whether it's from a fossil base or from a biofuel base.

J. Horgan: Further, in the explanatory note there's reference…. We could have touched on this in an earlier section, but I thought I'd try and do these both at the same time. It's the elimination of distinction between raw natural gas and marketable natural gas.

I'm sure you've got a note there on that question. I'm wondering if you could enlighten members of the Legislature on what the distinction is and why the change was made.

Hon. C. Hansen: Basically, raw natural gas is unprocessed gas. In British Columbia there is very little difference between raw natural gas and market natural gas, so the distinction was felt to be unnecessary. Therefore, we are simply streamlining those provisions of the legislation to reflect simply natural gas, whether it's raw or otherwise.

[1705]

J. Horgan: So absent the passage of this section, there would be no impact on the carbon tax?

Hon. C. Hansen: That's correct.

Section 32 approved.

On section 33.

J. Horgan: I'm hopeful that the minister…. Again, I'm having to refer to his remarks during second reading debate, and it's specifically with respect to aviation fuel.

It may be that the table in schedule 1, or section 34, is the right place for this question, but during the debate at second reading, the minister said: "Other exemptions to the Carbon Tax Act clarify the exemption for fuel brought into British Columbia in a supply tank of a non-commercial aircraft or ship to restrict it to craft used solely for personal use. Separate rules are provided for commercial aircraft and ships to ensure that their domestic emissions are subject to carbon tax as intended."

I'm wondering if, in making those comments at second reading, the minister was referring to section 33 or 34.

Hon. C. Hansen: It was actually with regard to section 22, but with the indulgence of the Chair, I will certainly speak to it, if the member wishes.

What we had initially was a definition of a non-commercial aircraft or ship, which means an aircraft or ship that was "not used to" — so it's in the negative — "(a) transport goods for members of the public, (b) transport members of the public, or (c) provide a service to members of the public for a fee."

We felt that what would actually accomplish what was intended would be to simplify that and to say that a "non-commercial aircraft or ship" means an aircraft that is used solely for personal use.

Just as an example, it was never the intent that we would be exempting the application of the carbon tax from a corporate jet. But if you look at the previous definition, it was debatable. What we have done with this is make it very clear that that exemption applies solely for personal use.

J. Horgan: I think that's exactly what I wanted to hear. But there is an exemption for personal use. If I were to leave Langford international airport and fly to Blaine and fill up and come back, the fuel in that storage tank would be exempt. But if I flew down in the member for Juan de Fuca corporate jet, the fuel would not be exempt. Is that what the minister said?

If I went down on my own just for a day of shopping, filled up my tank and flew back, that fuel is exempt? If I went down for business purposes or on a corporate jet that I was writing off for whatever reason, that fuel is subject to the tax?

Hon. C. Hansen: I'm glad to hear that the member for Juan de Fuca has a personal jet. I know he's….

Interjection.

Hon. C. Hansen: In our dreams. That's right.

It's much the same application as a motor vehicle. If you take your personal motor vehicle down to the U.S. and fill up with gas, and you're coming back, we're not going to measure how much gas is in the tank and apply a carbon tax to it. In much the same way, if he is flying on a corporate jet down to Washington State and back, that is going to be assessed, and a carbon tax is going to be assessed based on the fuel that is brought back into Canada.

If he was flying down to the U.S. in his personal aircraft, if it was strictly personal use…. I guess the difference would be that if he went down on a personal trip, using a corporate aircraft, then there would be lots of other issues that tax auditors would want to talk to him about in terms of a taxable benefit that he would be receiving from the use of a corporate aircraft for personal purposes.

What this is meant to capture is simply the personal use of a private aircraft that an individual might own.

[1710]

J. Horgan: Thank you for indulging me on this back-pedalling, but I think this is an important point. It's an issue that I certainly heard on the doorstep during the election campaign — not about my use of my corporate jet. It was the implementation of the carbon tax with respect to aviation fuel pending on whether the flight originated and terminated within the boundaries of British Columbia or whether it originated south of the border or some other jurisdiction with a dropping-off, picking-up point in Vancouver and going beyond that.

I'm wondering if this was in any way attempting to clarify concerns that British Columbians had about the uneven implementation of the carbon tax on aviation fuel as it pertained to domestic flights versus international flights.

Hon. C. Hansen: The purpose of this is really just to make sure that the definitions and the application of the tax are clear. I think that what we do with this amendment is actually to, on one hand, simplify it, but also to make it much clearer and much easier to administer.

J. Horgan: It didn't really get to where I wanted to go, but I'm ten sections away from where it was anyway. I'll just it try one more time, and hopefully the minister with his staff will be able to help me.

A concern has been raised with me as critic with respect to the implementation of the carbon tax on aviation fuel for flights that did not originate in British Columbia. A flight from Calgary to Vancouver — at what point is the carbon tax imposed on that flight? If there's no fill-up in Vancouver, is there no carbon tax? Or do they go back to Calgary, fill up and then fly back again?

If they spend the whole day going back and forth between Vancouver and Calgary, ten flights in a day, if there's no fill-up in Vancouver, there's no carbon tax. Is that correct?

Hon. C. Hansen: That would be correct. We do not have jurisdiction that would actually apply to flights that are going outside of the province of British Columbia or coming in. That would be the federal government. Therefore, we've extended the tax to the extent of our jurisdiction and our ability to do so.

J. Horgan: Then that brings me back to the language in that section and your references at second reading, which are that you're trying with this amendment to extend to the greatest extent possible the province's ability to tax the use of that aviation fuel — if its destination is somewhere else and the return point is British Columbia.

So you're not dipping tanks to see, if I go down on my jet, whether I'm using fuel or I'm purchasing it and coming back and forth. You're trying to extend it, to the greatest extent possible, to capture non-commercial,
[ Page 917 ]
commercial and corporate at the same time. That's the intent of the section?

Hon. C. Hansen: Yes.

Section 33 approved.

On section 34.

J. Horgan: This is the interesting part, for those who have a copy of the bill. This is the challenge the minister had, and I listened, as I said, carefully to his comments. I read them again, and we had a discussion off line.

Just for the record, could the minister again confirm that with respect to blended fuels, the attempt here with this table is to best reflect the actual impact of the fuel in terms of its GHGs and tax it accordingly?

Hon. C. Hansen: I know that when the member referenced this earlier, he referenced the fact that he and I had had a conversation a week and a half ago. He thought that now that I had the benefit of a staff here, I might be able to give him an answer that actually reflects that I might know what I'm talking about — right?

If the member looks at what the tax rate is for the carbon tax on gasoline and light fuel oil, what this change does is reflect the fact that 5 percent of gasoline and 5 percent of light fuel oil must be a biofuel.

[1715]

Therefore, instead of having what is currently the case — biofuels being 100 percent exempt and fossil-based fuels being 100 percent taxable under the carbon tax — this is to reflect the fact that 95 percent of that fuel will be fossil-based. Therefore, it is 95 percent of the previous tax rate that will be applied in each — the gasoline category and the light fuel category.

J. Horgan: I appreciate that. That was as good an answer as I got last time. So staff, you weren't needed for that one. You did a good job getting him ready for that.

On the table or the chart that is provided in section 34, item 2 and item 6 are the two that the minister referred to. Those are the two that are requiring a blended percentage by January 1, 2010.

I'm wondering, with respect to some of the other fuels on the list…. I see that for naphtha there's no change. I see that in all other categories there's no change. Is there any intention to see about blending in any other way? Obviously, jet fuel is a bit tougher. But has there been discussion within the ministry and within the Ministry of Energy and Mines to see what we can do about using peanut oil on WestJet flights?

Hon. C. Hansen: In terms of the gasoline and the light fuel oil, that is technically sound for the blending to be done. It may be that in the future, there might be some of these other fuels that could be blended with biofuels as well. We would have to deal with that when the time comes, but the opportunities that we have today for blending with biofuels involve only gasoline and light fuel oil on a commercial basis.

Section 34 approved.

On section 35.

B. Ralston: I understand this measure will cost approximately $173 million a year. I'm wondering if the minister could just advise: what's the anticipated takeup by single taxpayers? The other category is taxpayers claiming a spouse or equivalent to spousal credit. So how many individual taxpayers? How many in the other category?

Hon. C. Hansen: There are about two million British Columbia tax-filers that will benefit from this measure. About 200,000 of those would be considered as equivalent to the spousal category.

Section 35 approved.

On section 36.

B. Ralston: As I understand this section, it sets the exemption at $11,000 exactly for this year, and then the ordinary indexing would start the following tax year. Is that correct?

Hon. C. Hansen: Yes.

Section 36 approved.

On section 37.

B. Ralston: This is the flow-through mining tax credit. Can the minister give an idea of the number of individual tax-filers who are anticipated or projected to benefit from this particular program?

Hon. C. Hansen: I do not have that information with us here in the chamber, but I will get that information for the member and provide it to him.

Sections 37 to 39 inclusive approved.

[1720]

On section 40.

B. Ralston: This is increasing the amount of the basic training tax credit for an eligible employer. I'm wondering, again, if the minister could give some idea of present takeup of the program as it exists now and then of the anticipated takeup with the proposed increase in this section.

Hon. C. Hansen: In terms of apprentices, to date, including returns processed up till July 31 of 2009, there are 11,720 claims that have been processed for individual apprentices. For the employer side, it is 2,105.

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

I would also like the answer in terms of cost to the treasury. I'm told that when the credit was first introduced in 2007, the anticipated cost was $30 million a year. I believe the takeup was such that it was only $20 million a year by the 2008-09 fiscal year. I'm wondering if there has been any analysis done as to why the takeup was less than anticipated. Any thoughts the minister might have about, given the increase, whether there'll be increased takeup?

Hon. C. Hansen: Certainly in terms of the individual apprentices, that is actually hitting our targets that we had anticipated when the program rolled out. In terms of the corporate side, it has not ramped up as fast as we would have anticipated. But we also have to keep in mind that corporations are typically, first of all, filing 12 months a year. They're also filing much later, so we actually see the applications for those tax credits coming through quite a bit later than they would come through for individuals.

B. Ralston: I understand that the amounts are higher for first nations apprentices. Do you have any statistics on the takeup in that category?

Hon. C. Hansen: It is true — what the member says. The takeup is higher for first nations. I don't have that breakout with me today.

B. Ralston: The minister will provide that in due course, I'm sure.

Section 40 approved.

On section 41.

J. Horgan: Now, Minister, we're at the portion of the act where we're amending the Motor Fuel Tax Act, section 1, "Definitions." I did want to go through this just to ensure that the bulk of the changes to the Motor Fuel Act are consequential amendments as a result of changes to the carbon tax. Just stop me at any point if you think there's something I need to know.

On repealing the definition of "alcohol based fuel" with "biofuel," is there any rationale beyond a clearer definition?

[1725]

Hon. C. Hansen: This basically reflects the fact that if a fuel is at least 85 percent ethanol, it is in fact a gasoline. That is reflected elsewhere. This basically just clarifies the definition in terms of biofuel. So it is for clarity, but there's no substantive change.

J. Horgan: Well, in the definitions section of the Motor Fuel Tax Act, we have "alcohol based fuels" as a single definition, and now we're adding "biodiesel" and "hydrogenated-derived renewable diesel fuel" and "methanol based" as well as "renewable diesel fuel." Are those additions to the definitions?

Hon. C. Hansen: These changes are to reflect what is now becoming commonly used in terms of terminologies but also to reflect some of the new fuels that are coming onto the market today. This is really a case of just trying to make sure that the legislation is kept as modern as possible.

J. Horgan: That makes good sense to me, with the exception of one of the definitions. The definition of "coloured fuel" is amended by deleting the reference to alcohol-based fuel and replacing it with references to methanol-based fuel and fuel that is 85 percent ethanol.

There isn't, as I could find, a reasonable definition of coloured fuel in the previous act. Oh, there it is. Okay. It speaks to dyed fuels that are usually sold to those that are using it for farming purposes and so on. I don't see why an amendment would be required there.

Hon. C. Hansen: Earlier what we did was delete the definition for alcohol-based fuel. So now we've got to change this sentence that references alcohol-based fuel, because there is no longer a definition for it. What we had done previously is provide for…. This actually adds clarity that it is the methanol-based fuels that would apply in this case. The purpose of this change is really to reflect the fact that we're eliminating the reference to alcohol-based fuel in the act.

J. Horgan: Well, again, if we're deleting references in the Motor Fuel Tax Act that make reference as follows: "'coloured fuel' means (a) fuel dyed in accordance with the regulations, and…(c) alcohol based," I understand the alcohol-based component. That's changed in the Motor Fuel Tax Act because it's been changed elsewhere. But where is the reference to fuel dyed? Does that remain? Under the existing act, "'coloured fuel' means…." Does the (a) still apply?

Hon. C. Hansen: Yes.

J. Horgan: So the (c) is the amendment, just for clarity. The fuel remains coloured, and the (c) is to further explain what "alcohol based" is.

Hon. C. Hansen: That is correct.

[1730]

Section 41 approved.

On section 42.

J. Horgan: I'm assuming that these are consequential amendments to clarify the "collector" and the "refiner collector" that we talked about in earlier sections?

Hon. C. Hansen: Yes.

Sections 42 to 48 inclusive approved.

On section 49.

J. Horgan: I don't believe that this would be a consequential amendment. Again, under the definitions in the section's explanatory notes, section 49 is an amendment to former section 37 that says: "…provides that a registered consumer certificate issued under the Act may be suspended or cancelled if the person does not provide a collection bond as required by the director." I'm wondering why it is that we're only now coming to a point where we would suspend or cancel a certificate without a bond?

Hon. C. Hansen: The previous provision that was there was that the certificate could be revoked "if the registered consumer refuses or neglects to comply with (i) a provision of this Act or the regulations."

It was felt that that should be adequate in terms of being able to revoke a certificate if the depositing of a bond was not provided. But there have been some questions that have come up whether or not that provision is solid enough, so just for greater certainty, this amendment is being added to make it absolutely clear that a certificate can be revoked in these circumstances.

J. Horgan: So the sections that we've just reviewed are pertaining to collection, and now we're at the point where there's a consequence. Perhaps the minister can also, as we move from 49 to 50, 51 and 52, where there is an appeal right restored….

I know, hon. Chair, you want to go through these one at a time, but I just want to foreshadow for the minister that these four sections, 50 through 52…. I'm sure they're housekeeping, but I'm concerned that we have….

I've been here five years now, and there's been no attempt to amend the Motor Fuel Tax Act. I don't recall it being amended anytime in the past ten years, so what was the rationale for this? Was there a case that led staff to recommend this change? Is there a precedent or a hole that you want to close with this?

Hon. C. Hansen: These amendments flow, basically, from the introduction of the carbon tax and the Carbon Tax Act. We wanted to make sure there was consistency in the wording in the Carbon Tax Act and the Motor Fuel Tax Act, so many of these amendments that are in these sections are housekeeping, to the extent that we are trying to make sure there are parallel powers and parallel opportunities for appeal in the two pieces of legislation.

Basically, these are issues that have come up, I guess, really, with a new light being focused on this area as a result of the introduction of the carbon tax, and it was felt that these new powers to ensure compliance and provide for appeal were appropriate to be introduced. But they are primarily housekeeping.

J. Horgan: That's a reasonable response from the minister in terms of consequence. I assume that when we get to section 52 — and I apologize to the Chair — we're restoring a right to appeal.

[1735]

If we're imposing new consequences and also reaffirming a right to appeal…. I don't know. When was that right to appeal lost? Or is it that the shining of light, as the minister suggests, on this area of tax policy as a result of the carbon tax is just an opportunity to affirm rights to users and affirm consequences on behalf of the Crown?

Hon. C. Hansen: In 2008 what changed was the manner in which restricted collectors were appointed. In doing so, the appeal rights were eliminated. We felt it was appropriate that those appeal rights be in place, and therefore, we want to make it clear with these changes that those appeal rights are in fact there.

Sections 49 to 51 inclusive approved.

On section 52.

J. Horgan: I thank the minister for following the bouncing ball with me today. You've opened up an obvious question. In 2008 how were these rights to appeal removed?

Hon. C. Hansen: The appeal right that existed previously applied to a collector who was someone who was producing or importing fuel. What happened in 2008 was the distinction between those who imported or manufactured fuel versus those who were relabelling fuel. In the process of those amendments, we left those who were relabelling fuel without an appeal mechanism. What this does is actually makes certain that the appeal mechanism is there for all of the above.

Sections 52 to 55 inclusive approved.

On section 56.

J. Horgan: Again, in the explanatory notes, section 56 amends section 71 of the Motor Fuel Act, and it says,
[ Page 920 ]
as follows: "expands regulation making powers with respect to appeals related to exempt fuel retailer permits and with respect to alternative motor fuel."

[1740]

How is the ability to expand regulations going to take place?

Hon. C. Hansen: This parallels exactly the provisions that we amended earlier in the Carbon Tax Act as well. This, again, is to allow for the exempt fuel retailer program, which allows retail dealers on first nations reserves to purchase a percentage of their fuel without paying security, in recognition that only a percentage of their sales would be subject to that tax.

J. Horgan: I thank the minister for that answer. Now, this is specific to first nations reserves. Is that correct?

Hon. C. Hansen: Yes.

J. Horgan: So then there is an appeal period that's retroactive to September 2, the date the budget was tabled, provided it's made before December 31, 2009. What steps are the ministry or government officials taking to inform those on reserve who may have an opportunity to appeal, that that right exists for the next couple of months?

Hon. C. Hansen: We have contact information for all of the first nations reserves that are retailing gas or fuels on reserve. We're quite confident that a notice has already gone out. If not, it would be going out very soon, but we're pretty sure it already has.

J. Horgan: Obviously the staff would be able to do that in short order, but if there is a reserve or a seller who is not informed of the rights that are provided in this section, is there any recourse for those individuals or those sellers after December 31, 2009?

Hon. C. Hansen: This provision does not negate the opportunity for appeal after December 31. All it does is it says that this can be retroactive to September 2 if the regulation is made prior to December 31 of this year. But the opportunity to appeal that this provides for is going forward and does not expire.

Sections 56 and 57 approved.

On section 58.

B. Ralston: This section amends the Social Service Tax Act to clarify tax treatment of leased tangible personal property. Did this arise as a result of an internal review or litigation? I'm just wondering what was the reason and the purpose of this amendment.

Hon. C. Hansen: The answer is yes. It is the result of a court case.

[1745]

Sections 58 and 59 approved.

On section 60.

B. Ralston: This section makes changes to the Pharmacists, Pharmacy Operations and Drug Scheduling Act, now repealed, to a reference to the Pharmacy Operations and Drug Scheduling Act. Again, can the minister explain what is the purpose of this section and the amendments contained therein?

Hon. C. Hansen: This is a consequential amendment. There were amendments to the act that changed the title of the act. Therefore, we felt it was more appropriate, rather than naming the specific act, that we would provide for drugs or vaccines to be exempt, as prescribed by regulation.

Sections 60 to 76 inclusive approved.

Title approved.

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

Motion approved.

The committee rose at 5:47 p.m.

The House resumed; Mr. Speaker in the chair.

Report and
Third Reading of Bills

Bill 2 — Budget Measures
Implementation Act (No. 2), 2009

Bill 2, Budget Measures Implementation Act (No. 2), 2009, reported complete without amendment, read a third time and passed.

Hon. G. Abbott: I call committee stage debate on Bill 5, intituled Finance Statutes Amendment Act, 2009.

[1750-1755]

Committee of the Whole House

BIll 5 — FINANCE STATUTES
AMENDMENT ACT, 2009

The House in Committee of the Whole (Section B) on Bill 5; L. Reid in the chair.

The committee met at 6 p.m.

On section 1.

B. Ralston: Section 1 amends section 399.2 of the Business Corporations Act, and that appears to be a section that's directed to the power of the Lieutenant-Governor-in-Council concerning regulations. This subsection would be repealing section (2)(h) and makes reference to "in respect of foreign entities from a designated province" and, in this section (iii), "in respect of foreign entities from a designated province that are registered as extraprovincial companies."

Can the minister, then, explain the purpose of this amendment to the regulation powers?

Hon. C. Hansen: This change is to reflect the relationship that we have with the province of Alberta, where we are establishing a common business incorporation procedure where if you're registered in one province, you would be automatically registered as a company in the other province.

In addition to that, any necessary filings, whether it's changes towards a director, or annual reports…. If they are filed in one province, they would be deemed to be filed in the other province.

So this particular amendment — that is, to section 399.2 — is basically a consequence of some of those. This is needed to ensure regulatory consistency with the other provisions and also to ensure that there is consistency with what's in place in the province of Alberta. The reason it doesn't identify Alberta specifically is that we believe there are other provinces in the future that may wish to sign on to this common business incorporation model.

B. Ralston: The minister has spoken of the desire to have a legislative parity between the two provinces in respect of these provisions. Has the province of Alberta already passed the enabling legislation that matches this, or is that to come following passage here?

Hon. C. Hansen: I'm not sure exactly where Alberta is in their changes. In some cases, we are making changes to be consistent with what Alberta already has in place. In other cases, they would be changing legislation to bring theirs in line with what we have, depending on who has the more appropriate provisions. In some cases, both provinces are changing their requirements. But I don't have the information as to exactly where Alberta is in this particular measure that's in this section.

B. Ralston: The reference that's made in this section is to "foreign entities." Is that a broad term that applies to any measure of business enterprise or cooperative enterprise? The formulation is quite specific, and it's distinguished from "extraprovincial company" in the same phrase. I'm just wondering: what is the definition of a foreign entity in this section?

Hon. C. Hansen: It would be my understanding that it would be a company that would be based neither in British Columbia nor, in this case, Alberta, but in fact would be registered as an extraprovincial company within the other province. In the context of the B.C.–Alberta agreement, in this case, it would be Alberta.

[1805]

B. Ralston: I thank the minister for that.

The province makes money from the corporate registry in the sense that when you register a company, you have to pay a fee. How does that work in terms of revenue? If registration is in one province, it automatically has you registered in a second province. Is there a revenue-sharing agreement, or does it just depend which province you choose to make the initial application in, and then that determines who gets the revenue?

Is there any agreement, just to follow that up, on parity in terms of fees in order to, I suppose, dissuade people from heading to the jurisdiction where the fee is less?

Hon. C. Hansen: There is an effort to try to ensure that there is consistency between the two jurisdictions with regard to fees. It's my understanding that the province in which the application is made is the province that would collect and retain the fee.

B. Ralston: I appreciate that. That's probably easier for administrative convenience.

Is it thought that there will be any significant revenue impact, given…? Relative preferences of corporate lawyers, I suppose, would be the determining factor. Is there any anticipated revenue loss over what's received now for this kind of service?

Hon. C. Hansen: There would be some revenue impact, but we anticipate it would be minimal. What this will facilitate is greater flexibility on the part of companies registered in one jurisdiction to actually do business in the other jurisdiction. We anticipate that this will lead to increased interprovincial activity rather than simply….

We expect that the size of the number of companies that will want to operate in the other jurisdiction will increase significantly over what is currently happening and that the revenue impact, therefore, would be quite minimal.

B. Ralston: Obviously, this follows the broader legislative scheme. Can the minister advise if there's an actual demand for it, or is it simply expected that if these provisions are enacted, there will be a response, but there's no
[ Page 922 ]
assessment at this stage of what the likely demand might be for this?

Hon. C. Hansen: Certainly, it's there anecdotally. Particularly if you visit some of the communities on the B.C.–Alberta border, the ease at which those companies can actually do business in the other province would be greatly enhanced by this. It reduces the amount of paperwork; it reduces costs. In many cases, you will wind up with B.C. companies.

I have received some stories anecdotally of companies that would love to be able to bid on a tender, for example, at the municipal level in Alberta. Yet they realize that in order to do so, they would have to go through all of the extra paperwork and cost and time it would take to register in the other province.

This actually simplifies it. If they're registered in British Columbia, they have the ability to do business in Alberta without having a separate and additional company registration requirement.

B. Ralston: Is there any impact in terms of provincial corporate income tax or small business income tax based on the choice to register in one jurisdiction or in another?

Hon. C. Hansen: No. Nothing would change in that regard. If a company is doing business in the other province, they would be subject to all of the taxes that would be imposed by the other province.

Sections 1 to 3 inclusive approved.

On section 4.

B. Ralston: These are amendments to what's called the Business Number Act. The present section 5 is to be repealed and a new one substituted. The changes appear to be minor. Perhaps the minister could just explain what the Business Number Act does and why this amendment is necessary to section 5.

Hon. C. Hansen: The amendment is very minor. The current wording of this section is: "If a business entity provides a public body with information under a designated enactment, the public body may require," etc. What this does is it simply adds a subsection (b), so it will add "or supplies or intends to supply goods or services to a public body."

[1810]

Basically, it is quite minor. I'll read the explanation for the amendment, if that might help the member. "If a business entity supplies or intends to supply goods or services to a public body, this section provides the minister with the authority to collect a business information number to authenticate the identity of the business through the business number database prior to entering into a supplier contract with them."

So I guess the most important part is the fact that this company supplies or intends to supply goods or services to a public body.

B. Ralston: Who maintains the Business Number Act registry? I think I took the minister to be saying that. Is that something maintained by the Ministry of Finance?

Hon. C. Hansen: Yes.

B. Ralston: The addition of "or intends to" presumably means that the information can then…. It creates an obligation to supply this information in advance of making a sale to a public body, whereas previously, without that phrase, you'd only be able to, I think, collect it legally after the sale had been completed. Is that the purpose of it?

Hon. C. Hansen: That's correct. So this would actually allow us to collect a business number or to require a business number to be submitted as part of, say, a tendering process rather than waiting until the contract has actually been granted and the company providing those goods and services has been accepted as a supplier and starts the process of supplying goods or services. This actually allows us to collect that number in advance of that.

B. Ralston: Then is this part of the further due diligence in terms of a review of a prospective supplier to the purchasing? I don't know whether it's the purchasing commission or an individual ministry that wants to buy a service or goods from a supplier. Is that the purpose, then — to just make the due diligence that much easier?

Hon. C. Hansen: Yes. Essentially, the Business Number Act is meant to simplify in terms of a variety of supplier information that was gathered in the past. This allows for simplification of that. It would, with this provision, actually give the ability for government systems to be able to identify if this company had previously been a supplier, for example, before a decision is made to let a particular contract.

B. Ralston: I take it by the reference to business number that that's a unique number, obviously, within the government database and would be readily identifiable and, therefore, would facilitate not only the making of the contract but tracking payments, tracking collection and any other aspects of the contract that were to be administered along the way. Is that a fair summary?

Hon. C. Hansen: Yes.

Sections 4 and 5 approved.

On section 6.

B. Ralston: This is a proposed amendment to the Cooperative Association Act, and it seems to be similar to the proposed amendment that was in section 1 under the Business Corporations Act because there are similar references to extraprovincial corporations from a designated province. So is that expanding the powers of this act to authorize similar regulations? Is that correct?

Hon. C. Hansen: Yes. That's correct. It's for consistency between the two acts.

Sections 6 to 8 inclusive approved.

On section 9.

B. Ralston: Looking at section 9, this is an amendment to the Financial Institutions Act. It amends the definition of "insurance business," as I understand it. Can the minister explain the reason for that amendment?

[1815]

Hon. C. Hansen: If I can share with the member the reasons for this amendment. It says that the words "the business of" in the definition of "insurance business" are removed because that language is not consistent with the 1998 amendment to the definition to capture insurance offered on a non-profit basis.

The wording also causes difficulties in enforcement because the regulator must not only prove that insurance activities are taking place but that the persons are in the business of providing the activities, which may be difficult in some circumstances. This also allows us to be consistent with the wording of legislation in Alberta as well.

B. Ralston: The minister knows, of course, that there's a new insurance act before the House, which we will probably deal with in due course. Are these definitions then consistent with the new insurance act, or is there any necessity that they be consistent?

Hon. C. Hansen: They are consistent.

B. Ralston: These amendments also make reference to the insurance of risks in British Columbia by insurers outside the province. Can the minister explain what's required of insurers outside the province that this amendment might help facilitate?

Hon. C. Hansen: This subsection (5) that is being added is to address concerns about regulatory gaps that may exist. Changes to the federal Insurance Companies Act, which have been enacted but are not yet in force, will narrow federal requirements. Our concern is that this may allow some companies that insure risk in British Columbia to withdraw from both federal and British Columbia regulation.

The change means that insurers insuring a risk or peril in British Columbia will be required to obtain a business authorization under the FIA unless an exemption is available. Again, this exists in line with similar requirements they have in Alberta.

B. Ralston: So is it meant, then, to capture the operations of federally chartered insurance companies that would be insuring risks in British Columbia? I would be surprised if that was a regulatory gap. Surely that had been contemplated before.

Hon. C. Hansen: This is where you would have a company that is based outside of British Columbia and operating outside of British Columbia, but they are insuring a risk in British Columbia. So what this does is make it clear that those companies must require a business authorization under FIA.

B. Ralston: This might be one of those cases where an example is helpful. Insuring a risk suggests to me that…. It's implying that the contract of insurance is drawn and executed in another province, that all the business operations concerning the contract of insurance are executed in another jurisdiction, yet the risk is located in business operations — say you have a mine or something like that.

You're running a mine, and you're insuring against a collapse of the mine or a death or injury on the mine site. The head office of the company is in Toronto. The office of the insurance company is in Toronto. The office of the insurer is in Toronto. The entire transaction takes place in Ontario, yet the risk is located here. Is that the kind of circumstance that this is designed to deal with?

Hon. C. Hansen: Yes. That's probably not a bad example. There has been a case, actually, that triggered this change. It wasn't involving the mining industry. But certainly, this amendment is not being brought forward in abstract. There have been actual incidents in British Columbia that we felt needed to be addressed.

[1820]

B. Ralston: I don't want to pursue this much longer, but I'm just interested in…. The minister, in the initial explanation that was provided, spoke of a regulatory gap that might arise by changes in, I think it was, the federal insurance act. I'm still not clear what that gap might be, so I'm wondering if the minister could perhaps offer that explanation again or perhaps offer it in a different way.

Hon. C. Hansen: What the changes in the federal legislation will do is narrow the federal requirements. Once that is enacted, we would need provisions in our own legislation to deal with circumstances like this, because the existing federal provisions are much broader and would actually allow for us to deal with circumstances where an external company is insuring risk within the province of British Columbia. Given that the federal act may no longer provide us with that vehicle, we felt it was important for us to have our own legislative provisions.

B. Ralston: Perhaps again, then…. Just to follow that briefly, can the minister then explain why the federal jurisdiction would be retreating or receding and requiring provincial legislative intervention? It doesn't seem a terribly efficient way to operate.

If the federal government has occupied the field, and they're retreating, then necessitating a chain of similar amendments in the provinces across the country doesn't seem very efficient as a form of federal-provincial cooperation as a way to proceed. Can the minister offer any comment on that?

Hon. C. Hansen: I don't think the federal government would define it quite the same way the member has, in that the legislative changes that they are making they feel, obviously, are appropriate for their jurisdiction. That has consequences for us and perhaps creates a gap that we feel needs to be filled. These amendments would fill that.

Section 9 approved.

On section 10.

B. Ralston: This section amends section 76 of the Financial Institutions Act, and it refers to those carrying on the insurance business. Can the minister explain the repeal of paragraph (c) and the proposed amendments (c), (d) and (e)?

Hon. C. Hansen: Again, this change is triggered by changes to the federal Insurance Corporation Act. With those changes it is expected that there will be more insurers which seek to offer insurance in Canada without being licensed. These proposed amendments, therefore, establish a framework in which insurance may be provided by unlicensed insurers through properly licensed insurance agents.

Section 10 approved.

Hon. C. Hansen: Noting the hour, I move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 6:24 p.m.

The House resumed; Mr. Speaker in the chair.

Committee of the Whole (Section B), having reported progress, was granted leave to sit again.

Committee of Supply (Section A), having reported progress, was granted leave to sit again.

Hon. I. Chong moved adjournment of the House.

Motion approved.

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

The House adjourned at 6:25 p.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF FORESTS
AND RANGE

(continued)

The House in Committee of Supply (Section A); H. Bloy in the chair.

The committee met at 2:42 p.m.

On Vote 31: ministry operations, $464,137,000 (continued).

N. Macdonald: I just wanted to thank staff for providing the information on the communities that had community wildfire protection plans. I appreciate that. I will be coming to that in a while, and just some follow-up questions from the Filmon report.

Before that I just want some background on some of the initiatives that the government has had over the past number of years, and to try to get an understanding of some of the research or the studies that have been done around some of those initiatives. I just want to go back to the early part of this government's first mandate, which is where there was an initiative to cut PST. That was something that was put forward as an initiative that was going to create jobs.

So one question is: how much has been saved by industry since that initiative was put forward?

Hon. P. Bell: I'd just ask for a little more clarity on what the member is seeking on this. Is he referring specifically to the removal of PST on production equipment and machinery for the forest industry?

N. Macdonald: Yes. Just to give it some context, I wanted to go through some of the initiatives that have been put forward where there were reductions in cost, and it was put forward as a job creator.

I wanted first to get information on the sums that we're talking about. It can either be broken out by year or in total. I guess it would have been 2001 that the initiative was put forward. It was certainly early in the first term of the government, and as you say, it was a PST reduction — a significant one.

Like I say, it can be either expressed as…. You can break it out into years or as a total, but essentially, what was the revenue that was lost by government with that initiative, or what was the amount that industry benefited?

[1445]

Hon. P. Bell: The question the member asks is a taxation question, and it's probably more suited to ask of the Minister of Finance during his estimates process. I think the specific nature of the question is also difficult to answer, because it presumes that investment would be the same regardless of whether there had been a tax reduction in that area or not and would also compile with other tax decisions that this government made early in its term around things like corporate capital tax reductions in overall corporate tax rates and so on.

It would be, I think, complex, or you would be trying to answer a question that presumes everything would be status quo in that nature. So it is generally a tax question and would be very difficult…. There would be many assumptions made in the process of trying to arrive at a numeric quantifier for the question that the member asks.

N. Macdonald: Well, part of what I'm trying to understand here is: very clearly there is a set of initiatives that the government has put forward related to forestry. That has predominantly been around cost reductions relative to taxation cuts, and in fact, that is still largely the argument made around the HST.

What I would expect that the Ministry of Forests has done is to look at some of those initiatives and to see whether the ideas that are put forward are either successful or not successful. One of the early ones that was put forward was on the PST reduction.

I guess the question would be: how has this been studied by the Ministry of Forests? Clearly, the ministry would want to know, first, how much is invested in cuts to revenue, and — presumably, since this is going to be driving job creation — how many jobs did the initiative actually create?

Hon. P. Bell: We're just trying to source a document that I've seen before that articulates the investment in the forest industry and capital over the last 15 or 20 years. I don't remember the exact number of years, but it shows the numbers pre those tax changes and post those tax changes.

[1450]

I think that that probably is best able to respond to the member opposite's question. It may take us a while to source that document, so I would suggest that perhaps we move to another topic, and then I can come back to that prior to the closure of our estimates today.

N. Macdonald: I guess, just following on that — while you source that document; I understand that's going to take a bit of time — what I'm looking for is not only just the information but…. Many of these initiatives are premised upon the idea that they're going to create jobs. So there's going to be investment, and tied to that, there's going to be investment that also creates jobs — right? So that's how, almost always, these initiatives are put forward.

Now, I don't have the figure in front of me, but it's not an insignificant amount of money. I think that in 2001-2002 it was in the neighbourhood of $70 million or $80 million. As you say, that's complex. It could be that that caused a spike in investment. That's a possibility. Nevertheless, that's a significant investment.

I guess that the question I have is: does the ministry then do studies and look at the number of jobs that are created? Is there a process where initiatives that are significant and costly are examined to see if it's an initiative idea that makes sense and that jobs are actually produced?

Hon. P. Bell: The member has, really, moved into the realm of the Ministry of Finance's work in terms of the detailed economic analysis. The Ministry of Finance is the entity that makes all of the taxation decisions around government. That has clearly been the process for all governments, regardless of what political stripe they have, and that really is the type of question that the Minister of Finance would have to answer. That tracking would be done within that portfolio.

N. Macdonald: So the expectation that one would have is that — whether it's produced by the ministry itself or if it is something that is simply provided to the minister — this is one of a series of initiatives that are similar. Has the minister been given reports that would indicate whether this PST break…? As I say, just off the top of my head, it seems to me that it was significant each and every year.

Did that actually lead to increases in jobs? The Minister of Forests, as you know, is responsible for making sure that the industry stays healthy. If the way of producing
[ Page 926 ]
jobs is to go with these tax cuts, how does the minister know whether that's a successful model or not?

[1455]

Hon. P. Bell: I'm just going to backtrack. The member asked the capital investment question. Clearly, there are many implications to capital investments. I understand that. It's very hard to look at any single period of time and suggest that it was entirely a reflection of any sort of a decision.

I think that, overall, one has to look at market share and the impact of market share. We're actually working to pull that information together, and I should have that, hopefully, in a few minutes, or within an hour or so for the member opposite — the market share that British Columbia has over the last number of years relative to the period of time those taxation decisions were made.

I'm working from a graph here, so these numbers are going to be a bit rounded. I haven't actually done the exact math, so the member will accept that I may be out by a little bit.

Through the period '98-2001, the four years kind of leading up to when those taxation decisions were made, the average capital investment in B.C.'s forest industry was about $675 million per year, certainly between $650 million and $700 million — about $675 million. In 2002 it was just under $600 million. In 2003 it was $700 million, and then the average for the 2004-06 period was about a billion dollars in capital investment per year. Now it's tailed off, of course, as a reflection of the overall global economic environment. But clearly, an inclining trend through that period of time.

However, I will provide the member with the numerics around the percentage of B.C.'s market share, particularly in the U.S. market — which, of course, has been our dominant market up until now. I think that also supports the work that's gone on.

N. Macdonald: In that period how many jobs were created? How many new jobs were created with those investments? Even though there, the link, again, would be perhaps something that would need further study….

I guess two questions. Firstly, how many jobs were created, as a raw figure? Then secondly, what's the mechanism for a Minister of Forests to go through and look at a policy like this to see if it's successful or not? As I said, it's not an insignificant amount of money that's been invested. It was sold as something that was going to provide jobs.

How does the Minister of Forests know whether that's successful or not? Do you have reports that either are generated by your ministry or by other ministries that would give you that information? This is just the first in a series of initiatives that are essentially along the same line. Surely, as a government would move along that line, there would be time to go and check and be reflective about whether the policies work.

So a couple of questions then. What are the numbers on how many jobs were created? Secondly, does the minister have a report that is given to him on initiatives like this that would give information about whether the initiative is successful or not?

Hon. P. Bell: I guess first of all I should say that the member opposite assumes that new jobs will be created. I would point to the Adams Lake mill that had a $100 million investment in it, and there were no new jobs. There were the construction jobs, of course, of the mill being built, and I think that 98 percent of that mill was manufactured in British Columbia. What it did, though, was secure the jobs in the mill for the long term. So it ensured that, in fact, that mill would be competitive with the other global leaders.

The member is linking a little bit to increased jobs. I would suggest that it's just as important, particularly in today's marketplace, to protect jobs, and I suspect that the member opposite would agree with me on that. I don't think that there's any disagreement there.

The real measure, and I think this is the root of the question that the member is asking, is: how do you measure success? What does success look like, and how do you know whether or not you're achieving it? I think that's a fair question.

The answer is quite simply that I look at market share. I look at how B.C. is doing competitively across the globe in our market share. Are we improving our market share, or is our market share getting worse?

[1500]

If we're improving our market share, then that says to me that the decisions that are being made are blended to be the right overall decisions. If you're losing market share, then you'd better look at what you're doing, and you'd better start analyzing: is there a better way of doing business?

We will provide those numbers to the member opposite. They should be here in the next little bit.

N. Macdonald: With the reductions in the PST, there are aspects of that that make sense in a way. I couldn't completely figure out the next initiative, which was the 50 percent of the school tax. Now, I don't see how that…. I guess what I want to know is, first, how much money that represented in terms of lost revenue for the government or as an opportunity for industry. Maybe that's the first question. Is that something that's readily available?

The second question would be: what are the mechanisms that the Ministry of Forests put in place to make sure that some of that money would lead to employment? It seems to me that if you had properties that weren't active at the end of the day, you might reduce taxation, but it wouldn't necessarily lead to any investment at all, because where are the protections or the mechanisms that the ministry would put in place to see
[ Page 927 ]
that something that aligned with the ministry's goals actually took place? That's a fairly broad-ranging and many-faceted question, but if the minister could provide that information.

Hon. P. Bell: The member asks a couple of other good questions, and we're going to dig down deep in our binders to get those numbers. However, I can respond to a previous question that the member asked, and that was with regards to market share.

Unfortunately, again, a graph and not numerics. We can certainly get this translated into a numeric graph form for the member opposite.

I can tell him that, traditionally, British Columbia has had more than 50 percent of the softwood lumber exports from Canada going into the U.S. That has been a longstanding tradition. Typically, about 60 percent of the total lumber exports out of Canada going into the U.S. marketplace are from British Columbia.

[1505]

There is a four-year period at which that did not occur historically. That period was from 1997 to 2001, at which point B.C. dropped underneath the rest of Canada for total lumber exports into the U.S.

I apologize to the member, because I'm using a graph and trying to extrapolate out precise numbers, which is always dangerous from a graph. But it looks like we dropped down to about 45 percent of the total lumber exported. So our market share in the U.S. dropped significantly relative to the rest of our competitors here in Canada.

That bar crossed again in about 2002, where B.C. went back to about 50 percent of Canadian lumber shipments. It continued to grow, and it peaked out in about 2006 and has continued to maintain a pretty significant gap where, I think, we're back to the more traditional kind of 60-40 that we were historically.

Certainly, my assessment of success always comes to market share. I think if you have more market share, you are doing well. If you have less market share, clearly you better look at what you're doing. I would think that the share of U.S. lumber consumption certainly supports that.

However, we will look…. The exact number on the industrial tax rate I don't have, and I hesitate to jump into an estimate of a number. I will explain the logic behind it, though, to the member opposite. We will get the exact number; $25 million sticks in my mind, but I could be out. I might be wrong on that.

But the logic behind the school tax, and particularly for the pulping industry. This is important. It's important for the sawmill industry and the pulp mill industry, but it's particularly important for the pulping industry. When a company is bleeding red ink, when they're losing money, fixed costs become very, very important.

Variable costs are always important, but fixed costs become very, very important, because once you're losing money, every dollar that you have in fixed costs is a dollar that is unrecoverable. So when property taxes are at very high rates and companies have to pay that even when they're losing money, it requires them to go out and borrow money in order to pay that property tax rate.

The decision that our government made across all the industrial sectors was to reduce taxes by 50 percent — that's growing to 60 percent in another year — on industrial properties. We think that was the right decision. Again, it speaks to competitiveness and getting those mills to reinvest and make sure that they are operating at the highest possible efficiency and that those mills are the last ones to close, not the first ones to close.

We will get the global number that the member was looking for in terms of tax dollars, though.

N. Macdonald: So the minister will provide the numbers and how much has gone that would have been collected. Even though it's called the school tax, of course, it goes into general revenue. So what the minister is saying is partially that it's an attempt to save mills, and in that way it maintains jobs.

The other thing that I want to understand is: if you're providing this break to industry, what sorts of discussions go on to make sure that the things that the government wants to have happen, presumably around retention of mills or retention of employment…? What sorts of discussions took place to make sure that the tax cut, which the industry would have likely identified as something that was needed, actually led to the outcome which the government has indicated was important, which is not only about the mill's staying but is also around job creation or job retention?

Can the minister walk through what sorts of discussions took place and what is the quid pro quo that's there?

[1510]

Hon. P. Bell: I think the member is referring perhaps a bit to something that was called the jobs and timber accord, which operated under a little bit different model and didn't appear to have a huge amount of success. The member opposite does ask a valid question, though, which is: what sort of consultation process would government go through prior to making a decision of this nature?

There are a series of them. There are two in particular that are, I think, of significance. That's the B.C. Progress Board and the Competition Council. Both of those entities provide advice to cabinet, to individual ministers, to Treasury Board on key decisions that they believe would improve the competitiveness of the B.C. environment and ensure that our businesses are the survivors in particularly challenging economic times. But at any economic time we want to make sure that we are the industry that leads the world.

So our objective is very clear here. Make no mistake about it. It is for us to be the most productive, the most competitive industry that we can be. In a period of time that we're in right now, when our primary marketplace is operating at about 25 percent or 30 percent of what it was just a few years ago, is when the rubber really hits the road and we know whether or not we're achieving those objectives.

Clearly, the mills that are the high-cost operators are the ones that are going to close first, and the ones that are low-cost operators are going to sustain themselves. Those are the jobs that have got to be protected, and that's the model that we operate under.

So the Progress Board and the Competition Council. The other one that does…. You know, what the Minister of Finance looks very closely at every year is the work of the Finance Committee.

The Finance Committee — I've never had the honour to sit on it, but I do follow along the work that it does. I know that each year it produces a report and tables that report. I know that the Minister of Finance takes it very seriously and tries to accomplish objectives that are articulated within that Finance Committee report. That is, of course, a joint committee of the House. It's not specific to one party. It's not a cabinet committee. I think it has done some good work.

One of the areas that they do talk about on an ongoing basis is property taxation — as well as, of course, the harmonization of the sales tax. Two of the areas. Those are the sorts of areas that we look to for advice, and in terms of the measure of success, the area that we look to is our market share.

N. Macdonald: So the minister is going to provide figures for the PST and figures for the 50 percent cut to the school tax.

The next one is the cuts to corporate tax in general, significant cuts. How much was saved by the forest industry with the corporate tax cuts? Or another way of putting it: how much was lost in terms of government revenue with that initiative?

Hon. P. Bell: I have done my best to answer questions that relate directly to another ministry, the Ministry of Finance, up until now. I just think that if I try to go any further down this road, we are not prepared to discuss those issues here. It is the purview of the Ministry of Finance, and the corporate tax question gets very, very complex and would be best asked under that minister's estimates process.

N. Macdonald: As I say, it just seems to me that the consistent initiative that the provincial government has taken related to forestry…. We'll look at it later, but I don't really see the whole series of areas that you could have gone into in terms of value-added, in terms of…. I mean, there's a series of things that people may have looked at to see initiatives that could produce jobs and could produce income.

It seems that there's a consistent pattern of depending primarily on cuts in taxation to industry. As the Forests Minister and representing the ministry, if that is the initiative, then…. I mean, the next question would be: how much has been invested with the corporate tax, and is it actually producing the results that mean it's the way to go? Where we're going next is with the HST.

[1515]

So far we've had significant investment through PST reduction, we've had significant investment through a 50 percent cut to school taxation, and we've had significant investment, as a province, with corporate tax cuts. I guess the question is: does the minister have any indication that those initiatives are producing jobs?

Hon. P. Bell: I believe I already provided the answer to that question. The typical British Columbian market share of the U.S. shipments of Canadian lumber has tended to be globally, over the decades, something well over 50 percent of Canadian lumber shipments.

There was a period of time when that was not accomplished, and that period of time was between 1997 and 2001. Since then our market share has continued to grow, and I think the numbers clearly demonstrated that we are out-competing all the other competitors, particularly in Canada.

N. Macdonald: Well, I suppose it is a statistic that the minister is providing, but the question was clearly around jobs and around the first priority that is almost always laid out. These are public lands, and there has been a tradition of the public lands producing public good, which is usually measured in terms of jobs.

If one were to look at the public good, if we were to look at jobs, clearly it's a series of initiatives that have not worked, by that accounting. I mean, these jobs have for the most part disappeared. If there's another measure of success, it would be interesting to hear it. It certainly isn't with revenue, since for the first time we're not able to cover the costs of the Ministry of Forests with the revenue that we generate. Is that an accurate statement? It seems to me that that's what's reflected in the estimates that are here.

The other question I have is on the energy contracts that are provided for the forest industry. As I understand it, it's at 3.63 cents per kilowatt. Other usage, residential usage, is at 6.5 cents. Now that may be an old figure. That might be from 2007. Are there, again, any studies done by the Ministry of Forests to see if providing power at that rate has been a successful strategy? Has it led to either the retention or the growth of jobs?

Hon. P. Bell: I would point out to the member opposite that those rates are established by B.C. Hydro
[ Page 929 ]
through an application to the B.C. Utilities Commission. There was a point in time when those rates were actually set by government — that was through the 1990s, not since then. The B.C. Utilities Commission is the one that determines whether or not that is a reasonable rate, whether it's appropriate, and we accept that notion.

Again, these items are falling into another area. I think what the member is trying to get at is: how's our industry doing relative to other jurisdictions? I would expect that's what he's trying to get to.

Pretty clearly, our industry is doing well in very difficult times relative to other jurisdictions. I appreciate, actually, the member pointing out all of the various initiatives that can pile upon each other and that this government has worked very hard to deliver on, because oftentimes what I hear from the member opposite, as well as from the previous critic, is that this government has done nothing. When you hear all of the various comments that the member opposite pointed out, it is substantial.

N. Macdonald: Well, the minister has talked about all of these initiatives and somehow pointed to them as in some way succeeding, but he cannot give me anything other than a measure of market share. How many jobs has it actually created? I think that's what British Columbians expect from the forest industry. It has traditionally provided work. The initiatives that we've talked about this afternoon have clearly not produced the type of jobs that we would want.

Can the minister tell me what the jobs are per cubic metre this year? What's the number of jobs that we get per cubic metre in British Columbia?

[1520]

Hon. P. Bell: We would be in a position to provide the member opposite with that information. We'll have to do some quick math here because it's not calculated on a per-cubic-metre basis.

The original question that the member asked me was: how do I as Minister of Forests and Range measure success? I think my response has been pretty clear. My measurement is the market share — if we are gaining market share or losing market share. If we're gaining market share, then I think that our actions are successful. I know the member opposite does not see it that way.

I think there's no question that the industry needs to continue to be more productive. A greater level of productivity sometimes means just protecting the jobs that were in place in a mill. It doesn't necessarily mean more jobs, but it means that the mill will operate when it wouldn't operate otherwise.

N. Macdonald: Just to understand it: the minister is going to provide, at a later point, the jobs per cubic metre. I appreciate staff doing that. Could there also be a historical comparison to jobs per cubic metre that would have existed before the present government took over, perhaps in 2000 — as I say, a representative figure that would be a reasonable indication of how many jobs were created per cubic metre? Just with the idea that….

Interjection.

N. Macdonald: I see the minister is nodding and agrees to that, and I thank him for that.

I want to go into areas, perhaps, that are more around forest policy.

[The bells were rung.]

N. Macdonald: Okay. Well, I believe we're being called to….

The Chair: Committee A will recess.

The committee recessed from 3:22 p.m. to 3:33 p.m.

[J. Thornthwaite in the chair.]

N. Macdonald: Some of the initiatives that are more specific, then, to the ministry would be from 2001 or…. Well, it's certainly before my time, but it was in the first term of the government. There were cuts. The appurtenance was cut, and $250 million was provided for the creation of B.C. Timber Sales. You had what the government would describe as getting rid of red tape. Others would describe it as cuts to safety and environmental standards.

You had significant changes in the way forestry was done, and I guess the question there is: has that been studied as to whether it provided the jobs that were promised? How many jobs were created with those initiatives?

Hon. P. Bell: The member continues to ask the same question that I've answered, which is that the measure of success that I use as Minister of Forests and Range is our global market share and our market share of our largest customer. I've already provided that data to him.

N. Macdonald: Then let's move to something that was very specifically laid out with the schedule A lands, where the minister — your predecessor — was very, very specific. I think he even used the number of jobs that it would create — very specific.

[1535]

Do you have any studies or any information or any belief that there were the number of jobs created, or indeed any jobs created, with the release of the schedule A lands in any of the circumstances where they were released?

Hon. P. Bell: We're here to discuss the estimates of the Ministry of Forests and Range for the period 2009-10, and I fail to understand how that question relates to those debates.

N. Macdonald: The explanation that I would give is, of course, that the Auditor General reported on that. The minister responded to that this year, and there is the ability to really go and look at things that came from this year.

The predecessor to this minister was very clear that that would produce jobs. These are initiatives that have simply not produced jobs. If the minister thinks that the release of the schedule A lands did produce jobs, then that's something the minister can share with us. Is there evidence that schedule A lands being released created any jobs at all?

Hon. P. Bell: The member indicated in his comments that the Auditor General reported out earlier this year. In fact that was 2008. It was about 16 months ago or so now, perhaps even a little longer ago than that. Again, I fail to see how that's relevant to this discussion.

N. Macdonald: Well, the repercussions for those decisions are being felt.

We have a series of initiatives that have been laid out. All of them were put forward as initiatives that were going to create jobs, yet there's no clear indication that any of them actually succeeded in producing jobs. That includes the schedule A releases.

We would move, then, to the HST. It again is being sold as a creator of jobs, and the question is, first, how much money will be shifted from the forest industry in the first year the HST will be introduced?

Hon. P. Bell: The initiative that the member is referring to still needs to go to the House. It has not been debated in the House yet or approved. In fact, it's not part of the 2009-10 budget at all. It does not come into play in the budget of the Ministry of Forests and Range for 2009-10. There will be plenty of time to debate this when it goes forward to the House or even in the estimates next year. But this is the 2009-10 estimates that we're debating here, and I don't believe that it has any relevance to the discussions around HST.

N. Macdonald: Has the minister had any discussion with industry about how, as the Minister of Forests, he's going to ensure that jobs come with any sort of initiative? Surely it's an initiative that the ministry is in the midst of dealing with. It has been primarily put forward as an initiative that would benefit forestry.

As the Forests Minister responsible for looking after the industry, has the minister been in discussions with the industry to make sure that the benefits the government is touting around jobs are benefits that are actually going to be realized? Have there been any meetings with the minister and the forest sector talking about how you ensure that those benefits actually happen this time?

Hon. P. Bell: As the member opposite will know, this is a recently announced initiative that this government is moving forward on. Certainly, since the announcement I've had discussions with a variety of individuals in the sector, including the value-added producers, the log-harvesting community, the silviculture community and the manufacturing community. They are all quite excited about the initiative and looking forward to significant investments as a result of it.

[1540]

N. Macdonald: What we've seen with a number of these initiatives is that as you go through, the actual benefit to most British Columbians is not clear. Clearly, the revenues for government are not there. They've fallen off. All of the initiatives that we've talked about this afternoon simply have not succeeded in what most British Columbians, I think, would say are the true measures of a forestry policy. They haven't produced revenue for running the province. They haven't produced jobs, and they haven't produced community support in the way that you would expect.

I guess the question is: with HST, what are the discussions? What are the things that industry is telling the minister will flow from this sort of initiative? Obviously, companies are going to — with all of these initiatives, I'm sure — be thankful to get more money in their pocket. But it doesn't necessarily mean that it's going to be invested at all. It doesn't mean that it's going to be invested here in British Columbia. I think that if you look at many of these investments these companies have made, many have been offshore.

Surely there are studies that you do before you enter in and sell an initiative like this as primarily benefiting the forestry industry. So what are those discussions? What are the commitments that you have from industry that are going to deal with the public good?

Hon. P. Bell: The member opposite raises two issues, and I'll respond to both of them.

In the first one he continues to suggest that the policies of this government failed to make sure that our industry is the most competitive industry. That is incorrect. I'm happy to continue to share that data with the member opposite. He can continue to say what he likes. However, that doesn't make it true. The numbers, the statistics, behind the competitiveness of our industry are clear. That is a direct reflection on the protection of jobs in very challenging markets.

The second question the member asks is about the HST. That is not under debate. It is not under the esti-
[ Page 931 ]
mates of the Ministry of Forests and Range for the 2009-10 fiscal period. It is legislation that will have to go to the House. There are still lots of issues that need to be dealt with in terms of transitional issues and implementation issues. Taxation is under the auspices of the Minister of Finance, and it does not make any sense to be discussing that here. It's not part of what we're here to debate.

N. Macdonald: How much did the B.C. pulp industry get from the federal support program for that sector? The minister will remember the black liquor issue. How much has B.C. received?

Hon. P. Bell: B.C. has not received anything yet. That program is still in the formulation stages by the federal government.

N. Macdonald: Does the minister have a clear idea of a possibility? Does he have a projection of how much of those funds B.C. can expect to receive?

Hon. P. Bell: B.C. has about 45 percent of the pulping industry that involves this particular process, and we would anticipate that we would acquire 45 percent of the value of that decision.

N. Macdonald: Has the federal government indicated that that's what you should expect to receive — about 45 percent of the funds available?

Hon. P. Bell: To actually formulate a specific amount of money that will come to British Columbia is complex, because it is based on investment decisions by each individual company and how they make those investments. However, it is based on 16 cents per litre of black liquor produced. If one does the math and looks at the amount of black liquor that is produced in B.C., one would estimate that about 45 percent of the money would come to British Columbia. I know that industry is in the process of looking at what sort of strategic investments they can make to fully utilize that fund.

N. Macdonald: Is the initiative being disputed by the Americans in any way?

[1545]

Hon. P. Bell: While international trade is the authority of the federal government, we try and keep track of any decisions that would be particularly relevant to British Columbia. We are not, at this point, aware of any questions that the Americans have raised on this issue, although I'm sure there are discussions, and I know that there have been briefings of the USTR on this issue.

N. Macdonald: Now, despite many of the initiatives related to taxation, pulp mills are still taking municipalities to court. Obviously, the lead ministry is a different one than this one, but I think, just as clearly, the minister will have an interest on this issue. Has the minister intervened in the court case, or does he know if the province is intervening in the court case in any capacity?

Hon. P. Bell: No and no.

N. Macdonald: What's the rationale for not participating? Why is the minister not interested in the issue or in participating in what is going on with the court case?

Hon. P. Bell: The province of British Columbia recognizes the authority of municipalities in this area. In fact, we just completed a week at the Union of B.C. Municipalities, where I know this was discussed. The Union of B.C. Municipalities has said that they believe this is their area of authority to deal with and that they would appreciate being allowed to do that.

N. Macdonald: Does the minister see any role at all in this issue for him? Does he anticipate taking this on in the future?

These are businesses that have had a series of cuts. Obviously, the health of the industry would be of interest to the minister if it's reflected in tax policy. I mean, one part of this clearly has to do with setting up a tax regime that is going to be effective for the industry, so there must be some role that the ministry is playing in terms of either providing advice to other ministries…. Is that not the case, or is there absolutely no part of this that the ministry and the minister are playing?

Hon. P. Bell: I apologize to the member opposite. I may have misunderstood his previous question.

In fact, we did meet. I personally…. We did, at staff level, meet extensively, particularly between Catalyst and the communities where Catalyst operates — the four communities. We had a meeting here in Victoria with them on a number of occasions collectively and individually. Certainly, all the communities have expressed a couple of interests.

One is that they want to resolve the issue themselves. They understand that they need to develop a model that is sustainable over the long term. They recognize that it's important for them to be competitive and that they try and achieve a favourable tax rate and still provide for their constituents. We certainly have had discussions with Finance, discussions with Community Development. The Minister of Community Development has been involved in those meetings as well. So there's always that role.

I apologize if the member may have asked the question in a different way, and I was unclear as to what the member was asking. Yes, I'm certainly very concerned about this.

I think the member also asked: is there a role for the ministry to play in this? I would remind him that the round table report actually articulated that municipal taxation is a very important issue in the view of industry, that this is one area that needs to be addressed. That's not the only time this has been pointed out. It's been pointed out at different venues.

At this point in time, the general direction I think we're getting from municipalities is that they want to work through the process and try and resolve it. Clearly, that was the direction at the Union of B.C. Municipalities over the last week. It was the advice that this is an area that UBCM wants to take a lead on and hopefully resolve.

It is a complex one. It comes from many years of a profitable industry, and they are facing economic challenges as a result of the overall global climate right now.

I hope that answers the question more effectively for the member opposite. I didn't mean for the first one to be curt in any way.

N. Macdonald: I think I moved from a court case to a more general statement about being involved. I think that that was part of the confusion.

[1550]

I'm going to move from this pretty quickly. Does the minister see the role of the ministry as an intermediary to bring these areas together, and is government talking about a larger discussion on property taxation in general? I mean, it seems to me that there's a certain logic in, at the same time as we deal with this issue, trying to solve a number of issues that tie in for how municipal government is funded.

With this particular issue, do you see an ongoing intermediary role for the ministry as this starts to be dealt with, and is part of that discussion looking at bridging financing for some of these communities? What sorts of things are on the table and being considered?

Hon. P. Bell: I can answer part of that question, and part of it I'm unable to answer because it doesn't fall under my purview.

The part that I can answer is that I believe, and it is quite clearly articulated in our service plan, that we believe we have an advocacy role on the part of the forest industry with other levels of government and with other ministries internally within government, and we take that role very seriously. That would certainly answer the question of: do we believe that we have a role? The answer is yes.

In terms of — I think what I heard was: is there a broader discussion around taxation of industrial properties, municipalities, and should there be other taxing formulas or other possibilities? That clearly would fall outside of the scope of this debate today. There are a couple of places the member opposite could bring that up. Finance clearly is responsible for taxation. Community Development might be on the periphery of this, as well, if it's a broader question around industrial taxation strategies or opening up taxation authority for municipalities and other areas.

B. Routley: Minister, forest workers in communities throughout British Columbia are really suffering today, and they're feeling that they've been abandoned first by the federal government. There was more than $56 billion in the EI program, which has been virtually stolen from workers across Canada, and as you know, EI is not providing the level of service that's needed for forest workers.

We've got workers in communities that are really suffering today, and yet I see, throughout British Columbia, issues like forest health and preparing communities for protection against fires, particularly the interface lands.

My question is: how much money in this budget has been allocated to wildland-urban interface areas to utilize B.C. small businesses and small contractors who are hurting or displaced forest workers in communities throughout British Columbia? Again, there are the two issues, forest health and fire interface. But I want to start with: how much has been allocated to help put forest workers and small contractors back to work?

[1555]

Hon. P. Bell: This is a bit more of a complex answer, and I apologize for that.

The member asked what sort of dollars are available to put people to work on the ground in, particularly, contract-type services — so that displaced forest workers, people working with small pieces of equipment, that sort of thing, could go back to work.

I'll try and articulate some of the specific funds that are available in that area. The forests for tomorrow program, clearly, is one of those areas. That's $42 million. The land base investment program — this involves a number of initiatives — is $20.2 million.

There are forest health initiatives, $1.5 million; a fertilization program, $2.5 million; and fish passage, which is changing over some of the old culverts and that sort of thing that were installed that are not allowing for appropriate fish passage — I think that would fall in the category the member opposite is asking about — $3.3 million. So there are a variety of funds there.

There are also two others that don't fall in this ministry that I can guide the member opposite towards. One is the job opportunities program that has delivered, I think, about $5 million in fire interface management work. That program continues, and there's money available in that. That probably directly relates to the fire interface management, in particular, that the member asks about.

He can get more details on that through the estimates at the Ministry of Community Development. That's the ministry that actually manages that fund. A good chunk of that money ends up, I think, addressing the member opposite's concerns.

Then finally, the Union of B.C. Municipalities that we had originally allocated $37 million to. There remains $14½ million for fire interface work. The member opposite will likely know that UBCM made the decision late last week that they would accept funding requests that included up to a 75 percent payment from that fund to work that is done, with 25 percent being provided from the community. That's a change from the previous 50-50. Of course, that decision was made by UBCM.

That's a variety of the programs that are available. I didn't do the math and add them up — but somewhere upwards of, I guess, approaching $100 million or $80 million.

B. Routley: Well, interesting. There are all these programs that people can apply for, but we've got a serious forest health issue in the province of British Columbia. We've got serious interface issues that…. We've had a report since 2003 that suggests there's a whole series of work that needs to be done. We're hearing that largely it's incomplete. It's just not being done.

The minister knows himself that his 50-50 plan was a failure, so he came up with this new model, hoping to attract 25-cent dollars and wring that out of the community somehow. But really, it's a provincial responsibility.

[1600]

You're talking about programs that people can potentially apply for. I'd like to have a list of the names of those individuals who were displaced, forest workers who have actually been put to work for various programs, and what regions of the province they come from. If you can't give names, give us a list of what regions of the province these people potentially came from.

On the other hand, the small contractor. Surely, was there a tendering process? How did that come about? We've just seen a whole long list of contractors that have been put into bankruptcy in British Columbia. We're aware of groups like Forest and Marine right here on Vancouver Island, now under bankruptcy protection. They used to finance many of these contractors.

If there were all these programs to help these contractors through — you know, transition somehow through this — how do you explain that that can be happening, that there are all these contractors…? If there's all this money available, who is it going to? It doesn't seem to be translating into real work for real people on the ground.

Maybe you could help us out. Could you give us a list of the communities that are being helped? On the other hand, what communities…? We've heard there are over 189 communities in B.C. or thereabouts. How many of those communities have displaced forest workers and have small contractors put to work doing the work that needs to be done?

Hon. P. Bell: I have to correct the member opposite because he made a couple of statements that are completely incorrect.

The first one. He said of the Filmon report — which is, I assume, the 2003 report that he was referring to — that virtually no work had been done on that. That's absolutely incorrect. There were 43 recommendations in the Filmon report, and 26 of them pertained specifically to the Ministry of Forests and Range.

We reported out to the Auditor General, who has not particularly been a friend of this ministry. He's been very critical. Fair enough. That's his role, and I understand and accept that. We provided a detailed report to the Auditor General as recently as this June on the actions that have been taken, and the Auditor recognizes the value of the work that's been done.

[1605]

The member either hasn't taken the time to do the homework that he needs to do to understand what work has gone on, or he's ignoring that.

The second thing he pointed out. He said that the minister's program of 50-50 cost-sharing was a complete failure. Those decisions are made by the Union of B.C. Municipalities, not this minister or any other Minister of Forests. That was an unconditional grant that was provided to the Union of B.C. Municipalities, not a conditional grant that had specific requirements around it.

It is absolutely within the purview and authority of the Union of B.C. Municipalities to make those decisions, and they made the decision, and I'm happy they've made that decision. The member opposite, again, either isn't doing his homework, or he's ignoring what the facts are.

The member opposite also says that it's strictly provincial responsibilities to deal with fire interface. In fact, if the member would take the time to read the Filmon report, he'd know actually that's not what it says. It says in the Filmon report that it's everyone's responsibility to manage fire interface areas.

Pretty clearly, either the member is again not doing his homework and taking the time to pay attention — and I understand that he's new to the House, so I accept that; I understand that it is new for him and may take him awhile to get his feet on the ground — but I think he should pay attention and make sure that he does his homework.

He asked some pretty broad-ranging, expansive questions with regards to people working. The member opposite may not have noticed that there's actually a global recession going on right now. The member may not have noticed that the U.S. housing market went from two million homes per year down to 500-some thousand homes per year.

He may think that doesn't have an impact. Well, it does. I know that's not his world and what he would like to think about, but it does. I think actually the province is faring reasonably well considering the circumstances that are being faced.

He did ask a specific question, although very broad ranging, about specific names of individuals that are working in the various programs. The programs that I articulated are roughly $100 million worth of programs. That would be a tremendous amount of work. I don't think that's something that is reasonable to ask of staff to go and track that all down.

However, I think that the point that the member is trying to get to is: what are the tendering policies of the ministry as it relates to contractual relationships that it enters into with individuals and/or companies? We'd be happy to provide that policy document to the member if he'd like it.

B. Routley: Well, that is a fairly insulting and condescending statement from the minister, although he couched it in words that somehow I was to be forgiven for being new. Just so the minister knows, I have read the Filmon report. It seems that you're so confident that you're up to date and that all the forest health issues in the province of British Columbia are being taken care of, and all the communities.

You're supposed to…. By the way, if you've read the report, it says you're supposed to take the lead. You're supposed to take the lead, and at the end of the day, you're the lead. You're falling behind, and those are the facts. The fact is that communities throughout British Columbia are not anywhere near complete — the work that needs to be done.

As the minister ultimately responsible for forest health issues and fire prevention, I would…. All the professional foresters I've been talking to are saying that the province is in a desperate situation really, that you really missed the bullet this time around.

But anyway, back to the issue. Are you prepared today to suggest that you will do a…? Mr. Minister, are you prepared to go and have the Auditor do an updated version of the Filmon report?

The Chair: Can I just remind the member to address your comments through the Chair.

Hon. P. Bell: Thanks, Madam Chair. I know that there are lots of rules in this place, and some of them are complex.

So the member opposite asked the question, and it's not…. We, in fact, do a detailed review through our wildfire management branch every year on any significant fires. Particularly this year, I think that it's going to be very, very important that we do that work because of the number of interface fires that we had this year and the challenges. I think it's a real opportunity for us to learn again.

While I will not be asking the Auditor General to do the report, I have already asked our protection branch to do that work once the season is fully complete. I want to make sure that we're through it. I don't want to pull staff off of any of their important duties to have them do that in the interim, but that'll be engaged shortly after.

[1610]

Of course, the Auditor is free to make whatever decisions that the Auditor sees fit in terms of audits. I have a tremendous amount of confidence in our staff in the protection branch, and I'm sure that they will do an assessment that will guide us in terms of the directions that we pursue going forward.

B. Routley: Does the minister have any new money available for the transitional assistance program under community development trust? I know that may be another ministry, but is this minister in consultation with the minister talking about any further money for the forest worker transitional assistance program?

Hon. P. Bell: The member opposite is quite right. That is the responsibility of the Ministry of Community Development.

B. Routley: Okay. The minister, I'm sure, will agree that the future of B.C.'s forest industry is going to require that we maintain some of the skilled and competent and qualified forest workers. We've got a large workforce — people that are anywhere from 40 to 55 to 60 years of age that didn't qualify this last time around and that are sitting on the sidelines, running out of EI.

What steps is the minister taking to ensure that we retain a skilled future forest industry workforce?

Hon. P. Bell: I think that the member is aware of the work that's being done through the Ministry of Community Development. It does fall to that minister's purview, their area of responsibility, and I'd encourage the member to pursue that line of questioning with that minister.

B. Routley: Well, the bottom line is that thousands of forest workers throughout British Columbia…. That includes contractors that have been dependent on the forest industry. It's been an industry that's contributed, at its peak, more than a billion dollars to the provincial coffers. Really, other than a few band-aid programs, there is no help from the ministry in dealing with the forest health issues. It's virtually nonexistent. There are a few band-aid programs to speak of.

But what plans to help small and medium-sized logging contractor businesses to weather the current market downturn…? Does the minister have any new money to announce in that area?

Hon. P. Bell: The member will know there are a variety of programs available for community development, so I'm not going to touch on any of those programs. The way that the ministries have divided up areas of responsibility, those particular initiatives do fall to the Ministry of Community Development. They have the authority over that budget line. However, there are a number of programs that we're looking at to help incent small players in the industry and create small opportunities for new producers.

[1615]

Those include…. We opened up the category 2 program so that people who want to get into small milling facilities will have access to incremental volume through that. That was previously frozen.

We have introduced a small volume sales program through the B.C. Timber Sales program, so instead of selling all larger sales we also sell smaller volumes of wood. Each timber sales manager looks to their particular area to see what the interest is in this area. They try to work with people at craft sales that would make sense for those.

We have been in the process of reviewing the small-scale salvage program, and we're going to be making some changes to that program. Those changes will be in place for this winter in an endeavour to encourage more harvesting in that particular area.

The other programs I mentioned already in terms of the dollars spent in a wide variety of programming — retraining programs and so on. I think the member opposite would do better to ask the Minister of Community Development. All of that money rests in that minister's budget line.

B. Routley: I understand that there are somewhere around 14 million hectares of dead and damaged pine wood in British Columbia. To the minister: how many hectares have been brought back to health?

Hon. P. Bell: The 14 million hectares that the member refers to fall into many different categories of mortality. So it could be — in fact, it is — in some of those stands that there is a trace level of mortality — and that is considered one of those hectares — up to 100 percent impacted. The member for Cariboo North — there's certainly lots of that kind of volume in that member's riding, and he knows what that looks like.

[1620]

It's a variety of impacts. A trace level of impact wouldn't necessarily be an area that we'd be focused on going in, where the majority of the stand might be spruce, fir or balsam, and the pine components are relatively nominal components.

So you have to be a little bit careful about this 14 million-hectare number and using that as a global number. But that said, there are a couple of other pieces that I want to touch on here. I'm sure the member will have more specific questions, and I'd be happy to answer those as well.

One of the things that we do every year is go out and do surveys of blocks that we are anticipating would be harvested when we think there is sufficient natural regeneration in that stand. The natural regeneration should be protected.

The mountain pine beetle epidemic has been going on in the neighbourhood of 20 years at this point. Some of those stands have had sufficient natural regeneration now that, you know, with another 30 years of growth will be back to a merchantable stand. It would be inappropriate to go in and smash all the natural regeneration down, so you want to protect that. So there's kind of a very logical, thoughtful inventory process that goes on each and every year.

I guess the final thing — and I would welcome other questions on this. I'm not trying to be evasive, but we can take time on this if the member wants to.

The third thing that we are looking at internally within the ministry right now is how we extend the shelf life of that mountain pine beetle volume. I know that the member from Cariboo North in particular will be very concerned about this issue because he is in a TSA that has been…. Seventy percent of the timber was mature pine. The member has a large sawmilling industry in his riding, and I know that he wants to see those sawmills be as viable and have jobs in them for as long as is possible.

So one of the things that we are very active in is looking at how we meter out that wood and how we protect the stands that have viability for the longest possible period of time and keep those jobs in the member's riding and then, of course, bring on the second-growth stands earlier.

I think, in answer to the member's question — 14 million hectares. That ranges from just a trace level of impact up to 100 percent, so it's difficult to kind of quantify that. The surveys go on in terms of determining whether or not the stand has reached a level where the natural regeneration dictate that we should not enter that stand for harvesting purposes or for further planting. And then also we're looking at how we extend the shelf life to maximize the viability of the pine over the longest period of time possible.

B. Routley: I would really like you to answer or at least take a stab at answering the question of how many hectares have been treated. If it's true that we've got 14 million hectares under, as the minister puts it, anywhere from traces to they're completely destroyed…. And I've also heard the minister make various assertions that 70 percent of the pine forest is dead, and there are other percentages.

We heard alarming news recently about how the pine beetle epidemic is somehow over because it's eaten all
[ Page 936 ]
there is to be eaten, and yet I've talked to silviculture folks who say that there are new forest health threats. There is the weevil that's killing second-growth stands right next to beetle-kill wood. If there's a second-growth stand 20 years and under….

And I'd remind the minister it was the government of the day suggesting that: "Oh, the pine beetle doesn't attack trees that are 20 years and under." And now we're finding that, yes, indeed the pine beetle does impact trees that are 20 years and under.

So when I'm reading these, as this new greenhorn that you suggest that I am — and I'm okay with that…. But I have been doing a lot of reading, and when I read about these forest health issues, they alarm me. So I say to myself: "Well, boy, the minister had better know how many hectares we have returned to forest health" We've got 14 million hectares in the province of British Columbia that are in some form of decay. They're falling down — a potential for forest fire.

[1625]

I mean, when you think about that — and I've talked to foresters who are telling me that we missed the bullet — there could have been, in some areas, catastrophic fire with the amount of dead and dying wood. And we've heard up to 70 percent.

I'm asking a fairly simple question. How many of the 14 million hectares have been rehabilitated, that you are sure of — that you know it's not some second-growth stand that's dead, by the way? Because there are lots of second-growth stands out there, I'm hearing, that are under attack from forest health, too.

How many hectares have been rehabilitated?

Hon. P. Bell: I'm going to take a stab at the member's question, and then I'm going to also assure him that I'll provide a more fulsome answer tomorrow morning. I understand that we're going to be back again, so I can provide more detail to him at that point, and if he'd like, we can go further.

The question he asked is: how many hectares have been treated? Now, that question, I think, was based on the assumption that there are 14 million hectares to be treated. I think that's an incorrect assumption — to suggest that there are 14 million hectares to be treated — because as I've pointed out, a stand that had 2 percent or 3 percent or 5 percent dead pine would be considered to be within the 14 million hectares. Yet we would not propose to go into those stands and treat those 2 percent or 3 percent or 5 percent of the trees.

I think that the real question, perhaps, that the member is interested in is, first of all: how many hectares have been impacted at a higher level of mortality? Were the decisions made in terms of…? How do you prioritize those?

We have actually done that virtually on a TSA-by-TSA basis for the 22 primary mountain pine beetle–impacted zones. We have detailed maps that have all of that information prioritized. It also has the year of mortality, the site productivity. It asks all kinds of questions in terms of: when is it appropriate to go in and harvest those stands? So it is a fairly in-depth discussion to have. It's not a simple one.

[1630]

The member opposite also commented on the mortality of younger trees and the fact that there are some younger trees that get hit by mountain pine beetle or root weevil.

What we've generally found is that it's the diameter of the pine tree that determines whether or not it is hit by beetle, not the age. Usually that's about a six-inch-diameter, breast-height tree. If it's larger than that, they are susceptible to attack, even though it might be a relatively young tree. It might be a 25- or 30-year-old tree. Under 20 is a stretch — to suggest that there's much pine that's been killed under 20.

I'm sure that a forester watching this on TV at home will be pleased to take me out and show me where I'm wrong. He'll find an individual tree that was attacked that was 18 years old and say: "Aha, we've found one." But from a practical perspective, it's pretty limited, the amount of trees that are attacked in that younger age class.

I think the other part, as well, that's worth knowing is, oftentimes that's the crash of the epidemic in a given area. When beetles run out of more mature wood to nibble on, they go to the younger wood. They typically don't have the hatch rate from very young stands that they do in the older age class stands. Typically that comes at the end of the epidemic period and is a sign that the beetle is no longer viable.

[J. McIntyre in the chair.]

So in terms of the 20 year issue…. Forest health is an ongoing issue. I don't want to dispute that at all with the member opposite. There are, I think, always issues that we need to continue to manage.

The member did ask specifically in terms of rehabilitation of stands…. There are kind of two particular areas. Again, this is not saying that this is a representative value of 14 million hectares, because as I've pointed out, there are many of those hectares that you would not ever go into. You would save those to try and protect them for the long term and allow the mills to continue to stay open, especially if the stand is 95 percent spruce-balsam and 5 percent pine. You wouldn't go into those.

So those numbers will change, and we're happy to provide a detailed briefing for the member. If I can get more information for the member by tomorrow, I'll do that as well.

In an average year right now, we are harvesting about 100,000 hectares of mountain pine beetle–impacted
[ Page 937 ]
stands in the central Interior. So each year it's about 100,000 hectares. Those, of course, are regenerated by the licensee under their area of responsibility. The forests for tomorrow program, as of next year, I think will be at about 62,000 hectares — somewhere in that range — and we continue to build on that each and every year.

So those are a couple of numbers for the member opposite. I'd just remind him that to look at the 14-million-hectare number I think is a bit misleading, because it suggests that you would go in and treat all those stands, where in fact you wouldn't ever do that. You would only treat the ones that are most impacted.

B. Routley: If I have this right, we only have 100,000 hectares out of 14 million? Is that correct — 100,000 hectares out of…? And that work is supposed to be done by the companies, and we've got 62,000 out of 14 million hectares in the province of British Columbia that are dead and dying, as reported to me by the professional foresters that I've talked to. That's it?

Hon. P. Bell: The member opposite was in conversation with his colleague through my answer, so I'll just try and repeat what I said for him.

Each year we are treating about 100,000 hectares in the pine stands. That's the normal level. We have treated so far, total, through the forests for tomorrow program, about 62,000 hectares. That continues to grow.

But the important thing is — and this is what the member may have missed — is that the 14-million-hectare number is not 100 percent killed. There are stands that have 2 percent mortality in them that you would never go in and treat. You'd never go in and do anything with those stands, because you want to save those stands for harvesting when you run out of mountain pine beetle volume as a result of the uplift program.

The information that I think the member is looking for and we're happy to provide — and I hope to have it for the member tomorrow; but if not, we certainly are willing to do a very detailed briefing for both their critics on this issue — is to look at the percentage mix in each of the stands.

[1635]

How many of the stands have a 100 percent mortality rate? How many have an 80 percent mortality rate? How many have a 5 percent mortality rate?

That changes the numbers completely in terms of the 14 million hectare dynamic. It wouldn't be fair to look at the 14 million hectares and say: "That's the objective." That's clearly not the objective.

B. Routley: I'm even more alarmed and concerned that we've got a hundred thousand a year that…. Really, this minister is relying on companies…. The companies that I've talked to…. In a lot of cases they're relying on natural regeneration, so they're not even planting. It's just natural regeneration that they're counting on, and I'm assuming that's part of the 100,000 hectares per year.

What's the latest forest health inventory that the minister has done in the province of British Columbia? I'm also hearing that inventory information is outdated and that we don't have up-to-date inventory information, particularly on forest health. Could the minister tell us exactly when was the last review done of forest health? I'm not talking about from satellite or by flying over it. I'm talking about feet-on-the-ground inventory that really tells the story.

I'm sure the minister would agree — he's been telling us how bad things are out there — that we could lose eight to 12 mills, by the minister's own assertion, with the pine beetle wiping out the forest of British Columbia to such to an extent that we're going to be in serious trouble for wood supply. I've been watching the minister's news releases faithfully to try to glean some kind of information from them.

Could we get back to: when was the last time that the minister actually did an up-to-date forest health inventory?

Hon. P. Bell: A couple of questions. Actually, I'm not sure that the first one was a question, but I feel the need to respond to it anyways.

The member opposite suggested that many companies are relying on natural regeneration for much of their work, and while it is possible for companies to utilize natural regeneration, there are very clear prescriptions that are required in terms of their obligations to regenerate the stands, and if they do not meet those tests throughout all levels of the time that is required for a tree to grow, then there are penalties that come to bear with that.

I'm not aware of huge volumes of ground being naturally regenerated, although I will give you that there are times when industry decides to utilize that technique based on the risk that would be associated with it if they fail to achieve their objectives. So I don't think that it is as rampant as the member opposite suggests.

[1640]

In terms of the general question that I think was a question: how often do we inventory? The member actually asked: do I inventory? I have to be honest. I don't walk the entire province each and every year myself. I do enjoy getting out to the bush, and I still know how to fire up a chainsaw, and I still have my class 1 licence. I'm not a very good faller, but I can get trees on the ground if I have to.

I can tell the member, though, that we do spend about $7 million per year on inventory. That is all done virtually in the forest health areas. While we do use a combination of aerial information systems, we do ground-truth all of that work to validate that the information that's
[ Page 938 ]
being acquired as a result of the aerial work is valid and legitimate.

There are 22 TSAs that are considered to be mountain pine beetle–impacted. We do all of those 22 TSAs and others each and every year. Those decisions, in terms of where we go and what we do, are made on the ground by forest health professionals, and we certainly accept their advice. They're the ones to direct this activity. They're the professionals that understand what needs to be done.

If the member opposite wanted a breakdown of the number of hectares, I think we could probably get that information for him. We don't have it here, but I think we could probably get that for him. But it's a substantial budget, about $7 million per year.

B. Routley: Again, we get this condescending kind of attitude from the minister suggesting that…. You know, when I think about…. This minister is one of a series of Ministers of Forests that have overseen major layoffs of forest workers, shutting down mills — mill after mill — and bankruptcies of all kinds of longstanding forest communities and forest contractors, and this minister wants to joke about whether he actually went out and did inventory of forest health.

The minister knew exactly what I was talking about. If he wants to play those games, that's up to him, I guess, but I think it's a far more serious situation. We've had one catastrophic fire in the province of British Columbia, back in 2003, that came up with a whole series of recommendations. We had more fires this year.

We've got a budget that doesn't even have sufficient money to come close to the kind of fire that we had this last go-round — not even close. You're budgeting for failure again, basically. You don't have funding in there to even meet the kind of money that you spent this last year.

The minister is off giving speeches on climate change, talking about how climate change is a real issue that needs to be addressed, and then cuts the budget by $10 million. That's the reality of what's going on.

I want to know how much money the ministry has put aside, given that there are forest communities all over B.C. that this minister says are going to be impacted because we're running out of pine, and we're going to have eight to 12 mills impacted. He says he can maybe mitigate it by some 25 percent.

How much money is in this budget to help those forest workers in those communities that he's talked about impacting, or are they just abandoned yet again?

Hon. P. Bell: I've already answered that question. The budget rests with Ministry of Community Development.

N. Macdonald: Just going back to the service plan and some of the opening statements from the minister, as well, around utilization and talking about the waste issue and the possibilities around a bioenergy strategy that would address that.

The minister claims that we need better utilization, and I think the exact words were that "for a long, long time better utilization has not been a priority for the industry."

[1645]

I guess the question is: will the minister clarify what he means by utilization — so his definition of utilization — and who determines utilization standards?

Hon. P. Bell: I appreciate the member bringing this up. I think it's a very important topic for us to discuss. The member utilizes the term "utilization standards." So I think it's worth just touching a little bit on that for a moment.

The traditional thinking behind utilization standard is largely around merchantability. I think that's what we're trying to change, because merchantability previously has always been considered to be harvesting a log to a certain top-size diameter or certain quality of log, and if the log doesn't meet that test — either size or quality — then it's not considered to be merchantable and is discarded or has historically been discarded.

My interest is to find out how we can expand that opportunity to utilize that residual fibre and capture full value from stands that aren't currently considered to be merchantable, but perhaps there is another opportunity to utilize that material.

The member quite correctly points out that biomass or bioenergy is one of the clear opportunities, but there are actually other opportunities. Post-and-rail fencing, as an example, would be another area that is an important opportunity.

If you get into the coastal stands, sometimes there are other reasons why a log doesn't reach a merchantability test. Yet it may be a log that could be utilized for other products.

In terms of the utilization standard, I think the member asked: "Where do you find that descriptor?" Under the existing model, in terms of merchantability, that's found in both the appraisal manual and the waste manuals. That's where that's located.

[1650]

But I think my description and, I suspect, the member opposite's description of utilization goes far beyond the notion of simply using the material that we've conventionally thought of as merchantable. It starts using the entire tree far beyond what is simply considered to be a merchantable product.

The member asked: what has changed — I think I heard that question — and why are we starting to see some progress in this area? I think there are maybe three things that have changed, perhaps, in this area.

One of them, as this member will recall, is that about 16 months ago a piece of legislation passed that allowed
[ Page 939 ]
for that material to be sold a second time off a harvested site. That was introduced by the previous Minister of Forests and Range and passed in perhaps May of 2008, if memory serves me correct. That tenure allows the Ministry of Forests and Range to go into a site that had been harvested by a licensee and to resell any residual biomass from that site to someone else. So that's one. It has created a significant incentive.

The stand-as-a-whole pricing that we implemented in the fall of 2008 for the first time, where it's a different model of selling timber…. You sell the stand for a single lump price. It is 100 percent a sunk cost at that point in that particular stand, so it is a huge incentive for the licensee to try and recover any value that is available from that stand. I think that's been a very progressive step.

Then the emergence of the pellet sector, the pellet industry and the bioenergy industry. Some of the initiatives around the phase 1 call for power have certainly been an encouragement for people to more fully utilize the stand. So that's a broader kind of a range.

I apologize — maybe a little bit of a rambling response to the member opposite. But I think that touches at least on some of the key points as they relate to what my definition of utilization is and how that material is being used.

N. Macdonald: The comment that started off debates was: "For a long, long time better utilization has not been a priority for industry." But one of the questions I asked — and I didn't hear the answer from the minister, although implicitly, I think, he answered the question — was: is it accurate to say that the government determines utilization standards? Is that an accurate statement?

Hon. P. Bell: I'm going to try and answer this question two ways, if I can, because I think there are two components to the question.

The government does determine the utilization standards from the perspective of writing into an appraisal manual, in collaboration with all the other participants at the table, what is deemed to be a merchantable standard.

The practice in British Columbia stems back to a rule that we call take or pay. When a licensee goes in and harvests a stand, anything that is deemed to be merchantable that is not removed from that stand the licensee pays for anyway, regardless of whether or not they took that volume from the stand. So that tree may still be standing, or it may be on the ground, but they would pay the stumpage rate that's associated with that particular stem, regardless.

The rules around it…. Really it is, I guess I would argue, the economics of utilization that historically have driven this, and we're trying to craft a set of rules and tenures and opportunities that encourage a much higher standard of utilization.

Again, I'm a little careful when I use the term "utilization," because that doesn't pertain just to the merchantable component of the tree. In my books, that relates to what is conventionally thought of as the non-merchantable component of a tree as well.

[1655]

N. Macdonald: I think, from the minister's answer, that the scenarios the minister lays out around merchantability of lumber really cloud the fact that it's government policy. I mean, that's the answer that I took from you. It's government policy that sets utilization.

The minister has identified that waste left in the forest is a problem. In his statements he said that it hasn't been a priority for the industry, but the industry is just moving within the framework that his ministry has set. So it is entirely the government's responsibility to deal with the waste issue.

Would the minister agree that relaxing utilization standards in 2003 is part of the problem here? Is the minister accepting that that's a starting point for some of the problems?

The waste that he's identifying as areas that need to be utilized better…. This waste is not historically beyond this government. Is the minister accepting that the relaxed utilization standards from — I think it was — 2003 are part of the problem here that we're dealing with?

Hon. P. Bell: In fact, the member is incorrect. This is a problem that expands far beyond this government to all governments.

The member may recall that part of my resumé includes working in the log-harvesting community. The waste levels that I saw, certainly, I was very uncomfortable with. I've been very clear in my speeches. It shouldn't be a secret to the member opposite that that was a personal priority of mine on the stands I was involved in harvesting, to maximize utilization. That's one of the biases that I bring to this job.

Clearly, this is not an issue for any one particular government. I'm not placing blame on a previous government or this government or any other government. I think there's a huge opportunity for us to capture here, and I'm not embarrassed to chase that opportunity.

N. Macdonald: I would accept that the minister is concerned about this issue, but it seems to me that if you could relax utilization standards in 2003, and if government is solely responsible for setting those standards, the minister could, through regulation, change immediately the allowable waste. Why doesn't the minister move to do that? Why don't you set regulations that actually will force waste to come out of the forest?

Hon. P. Bell: Actually, I appreciate the member bringing this up, because it very clearly articulates the differ-
[ Page 940 ]
ence between the policies of our government and the policies of the NDP.

I appreciate the fact that the NDP, as the member just pointed out, believes that you should regulate decisions of this nature and that that would best achieve the outcomes, which I think we actually both agree on.

Interestingly, I think, as this discussion goes back and forth, that the member opposite and I would agree on the end state or the end objective, which is to fully utilize the resource and create whatever we could out of that that has the highest potential value. I think the member and I are very much aligned in our views of the destination.

The member just suggested, and he may correct me if I heard this wrong, that he believes that regulating that is the best option. We believe that incenting that behaviour and creating the market environment to allow that to take place is the best option.

The challenge I have with regulating, as the member opposite points out, is that that would have other potential unintended consequences, including the risk of jobs being lost at mills that are currently open because they have the opportunity to harvest some of that volume.

I think this is a point of disagreement between the two parties. Clearly my view, our view, is that having the right economic environment to stimulate that sort of activity is the way to go. I understand and accept that the member's view is that it should be regulated. If I'm wrong about that assessment, I'm sure he will tell me that.

N. Macdonald: There's no question that it is regulated. What we're discussing is the level of regulation.

[1700]

What the minister has done is that the minister has been part of a government that has relaxed that regulation, and what we have is an outcome that the minister has indicated he's not comfortable with, which is that we have waste left in the forest.

Let's be clear about the definition of waste, because many of these logs that are defined as waste are logs that are left there but could be utilized. You know, these are merchantable logs. They simply are logs that a company chooses to leave in the woods and would rather pay the stumpage as a penalty. It's not as if these logs are not logs that are not of some use.

Just a question: what is the makeup of the wood waste that's left behind? Just for the minister's…. What is the makeup of the wood that is left behind?

Hon. P. Bell: The problem sometimes with consulting to answer the question is that you don't always get to the entire question. I'm going to ask the member opposite's indulgence, and perhaps if I missed components of his question, he can re-ask the parts that he feels I've missed.

[1705]

The policy change in 2002-2003…. Again, we're reaching a little bit outside of the bounds of the estimates of the Ministry of Forests for 2009-10, but so be it. I think that the real theme here or the real focus here is: what changed from 2002 to 2003? While there was a difference in the way that waste was calculated and assessed, there was no change in terms of the size of the top or the grades of the tree or any of those sorts of things. So four-inch top, pre–2002-03; four-inch top, post–2002-03; grades; the sawlog grade…. Grade 3 actually was the grade at the time before, after.

The primary difference was that if a licensee chose to leave some timber standing in the bush, they were still billed for that standing timber. That was the primary difference between those two points.

Previously it would have been waste-assessed, and the licensee would have paid that waste assessment. Now it falls in the take or pay, so if they didn't take it, they pay for it anyway. The rules and themes are largely the same between the two.

If the member is trying to get at: was there a change in the grading rules through that period of time? There wasn't. And was there a change in the specifications around the size of the log? There wasn't.

But I may not be getting at the question. I just ask the member to re-ask it if I've missed it.

The Chair: Just before I recognize the member, just a gentle reminder that we are discussing Vote 31.

N. Macdonald: The minister has identified in the opening statements that utilization and waste in the woods were a major concern. He's pointed to industry, but in fact, industry is simply playing by this ministry's rules. I would agree that there is a problem with waste and a lack of utilization.

But just so the public understands, we are talking about leaving lumber behind that can be used. Is that accurate? Are we leaving logs behind that are usable? Is that part of what's going on? Are we leaving usable logs in the woods with take or pay?

Hon. P. Bell: I think that the answer to that question is that if a harvester chose to leave some logs behind, they would pay the normal stumpage-bearing rate for those logs. Previously if they had chosen to leave those logs behind, they would have been waste-assessed for those logs.

I think that the answer to the question is that a harvester could choose to leave merchantable logs behind, but once they'd signed off on that permit, if they make that decision, they would still have the obligation for stumpage on those logs.

N. Macdonald: What is the basis for billing for waste? Is it usability?

Hon. P. Bell: I think I'm answering the question when I say it's the grade of the log. There are different rates depending on the grade of the log, and that stems to the merchantability — if it's a merchantable log versus a non-merchantable log. So it does come down to the grade, and there's a prescribed stumpage rate. For the low-grade logs, it's all 25 cents. For the high-grade log, it's whatever the market price in the system articulates for that block, based on the input data that's provided.

N. Macdonald: So just to be clear, then, the figure that we're going to look at…. We are using, essentially, figures that are based on billable quantities. So when we're talking about waste, we're not talking about branches or any of these other things.

The context for what I'm going to be talking about is logs that are marketable. They do have a function. They could be pulp, and they could be taken out for the sawmill, but the company chooses instead to leave them in the wood and pay, very often, what is 25 cents a cubic metre. Just for the public to understand, a cubic metre is the size of a telephone pole. So that's the context for the numbers that we're talking about.

[1710]

I guess that the first question is: assuming that that's what we're talking about, how big is the wood waste problem? The minister has characterized it as a huge problem, so how big? What sorts of numbers are we talking about when we talk about waste? Then in this case, these are logs that could be used. What is the scale of that problem?

Hon. P. Bell: I want to just start out by saying that my definition of increasing our utilization spans beyond what I think the numbers that I'm about to provide the member opposite really speak to. The numbers I can provide the member opposite are the value of the wood under the take-or-pay clause. So for the logs that the member opposite mentioned — merchantable sawlogs last year and previous years — we have the data available, if the member wants it.

However, I think that the bigger opportunity exists around the non-merchantable components of the forests — so the tops and the branches and all of those components. That is really, I think, the bigger potential number for us.

So in 2008-09 B.C. Timber Sales billed out a value of $4 million in the take-or-pay clause. If the member wants the exact number, it's $4,054,029. Major tenure holders were billed out in that year $4,274,994. Then there was another category called "others." It would be any other tenures that weren't major tenure holders or BCTS — so woodlots, community forests, some of the first nations work and other small tenures — $823,542. Roughly, if you add those three numbers together, you're at about $8.35 million or so.

Now, the member opposite had raised the point earlier on that in his view, he didn't believe that the waste numbers were as high under other governments. I'd just point out that in the fiscal year '97-98 major tenure holders were billed out $15.8 million, in that particular year, of waste. That's just one number, and you know, there are years that are much lower than that and years that are…. So it's a mix.

I'm not trying to particularly point anything out, other than to say that this has been an ongoing issue and that this is something I think we collectively need to resolve. I'm not accepting that …. I think that all governments should be held to account for this issue, and I certainly hope to resolve it with some of the advice and submissions that the member opposite, I'm sure, will be providing me over time.

N. Macdonald: Obviously, as an elementary teacher and principal, I would never accept "You did it too" as an excuse. I think that when the minister moves to numbers like that, there's a confusion that's bound to arise in the public mind.

You are talking about stumpage rates that are dramatically different. We are talking about, for the most part, 25 cents a cubic metre, which is dramatically different than anything in any other period.

For the minister to go to dollars is one thing, but let's go to what the question was, which is about cubic metres, remembering that one cubic metre, for the public to understand, is a telephone pole.

We're also talking about waste only in the definition of logs that are left that can be used for something else. As the minister said, that could be a very small percentage of what somebody out in the woods would look around and see as waste. We're not talking about branches or stumps or anything else or about logs that don't meet some commercial test.

The question was: how many cubic metres were left as waste by that very narrow definition last year?

[1715]

Hon. P. Bell: My ears must be playing tricks on me. I was certain that I heard the question: what number of dollars were billed out? I apologize for that if I was incorrect.

The member, I'm sure, understands that waste actually should be much lower when stumpage rates are higher. The penalty for not utilizing that log is more significant when stumpage rates are higher, so you're going to try and do whatever you can with that.

The answer to the member's question. In 2008-09, 656,954 cubic metres through the B.C. Timber Sales program; 2,148,394 cubic metres through the major licensee category; and 315,535 million cubic metres in the "other" category, which is the small licensee category.

The Chair: Member, just a reminder to direct your questions through the Chair.

N. Macdonald: This is a quote from one of the studies that was done, and the minister will be responsible. It's the Ben Parfitt work that was done, and this is what he's saying. He says that over a five-year period "more than 17.5 million cubic metres of usable wood was abandoned at logging sites. That is enough material" — and this is his analogy, just to give the public an idea of what we're talking about — "to fill a line of logging trucks lined bumper to bumper on the Trans-Canada Highway from Vancouver to Halifax and almost all the way back again."

That is an incredible amount of logs that are actually merchantable. We're not talking about waste by any wide definition. We're talking about wood that was left even though it could be used for pulp or for sawlogs. That is just an incredible amount of material. Is there anything in there that the minister would contest as inaccurate, or is this a report that the minister has seen and accepts as accurate in many of the assertions?

Hon. P. Bell: I think if the member goes back and looks at the record…. My recollection is that when I first heard about the numbers, I said that I think, actually, that the problem is even worse than that — that there's more potential volume for us to capture. That's why I'm so focused on improving utilization.

I can tell the member opposite that over the last year, as a result of the initiatives that we've taken, we've gone from ground zero in terms of utilizing residual biomass to a point…. It's hard for us to get to the exact number on this, but we think it's going to be between two and three million cubic metres this year, and that number continues to grow. I see a day not so far in the distant future where slash piles will be a thing of the past and we'll be fully utilizing the resource. I'm sure the member opposite agrees with me that that would be a very good thing.

N. Macdonald: Okay, so the minister accepts those as accurate numbers. The volume of the problem is something that I hear him agreeing with, and I share his concern.

As we were talking about, Parfitt's work only looks at the billable waste, not the total waste. What would the total waste be? What does the ministry estimate that the total waste left by companies in the forest is?

[1720]

Hon. P. Bell: The question the member asks is something that we are still in the process of determining the answer to. This is a question that B.C. Hydro has been quite keen on understanding the answer to as we move into a phase 2 call for power — understanding how much residual biomass is available in each area in order to figure out what contracts are reasonable in terms of putting out electrical purchase agreements.

I am on the record in a number of different events as saying that I think there could easily be ten million metres of tops and branches. Now, that falls outside the normal realm of merchantability or anything that's been considered as merchantable in the past. That's based on harvesting 70 million cubic metres per year with an average piece size of 0.4 of a cubic metre at the top of the tree. It works out to about 12, 13 or 14 percent. That's kind of how you get to a ten-million-metre number. That's work that we're doing right now to determine….

There's one other point that I think is important to be made here. There are certainly people that would suggest — and I believe this is correct — that it is appropriate to leave a certain amount of coarse, woody debris behind in the forest and that that is good for biodiversity.

I would be happy to have that argument and get to the point where people are saying: "You know, you're taking more than you should." I think that would be a good place, and then we could work back to wherever we need to be. But that'll happen over the next number of years.

However, this is one of those areas that I think we're in raging agreement on. We want to see full utilization of the resource. It's better for rural economies and it's better for the forest industry if we can achieve that.

N. Macdonald: Does the ministry have an idea of the fibre available for biofuel? Do you have an idea of how much is actually there and available?

Hon. P. Bell: I think I just answered the question, but I know that the member is busy conferring with his colleague, so perhaps he didn't hear the answer.

That work is ongoing right now. We do have a calculation of what's available in terms of standing dead and dry biomass, but in terms of the real opportunity, which I do think results from the tops and branches, that work is ongoing with B.C. Hydro right now. We're gradually developing an answer on a TSA-by-TSA basis.

N. Macdonald: When will the ministry have an accurate fibre analysis for B.C. Hydro? What's the expected timeline for that?

Hon. P. Bell: The answer to that question is actually over a period of time, because the work is ongoing in different TSAs right now. The answer will come on a TSA-by-TSA basis, but we're expecting most of that work to be completed through the fall months. We're focusing on the priority areas where we think that the opportunity is the highest at this point.

N. Macdonald: Anecdotally, what we're hearing are complaints just about the accuracy of data. Has the min-
[ Page 943 ]
istry heard those same complaints, and does he feel confident that there are accurate data on the billable wood that's left?

Is he getting that information? Is he confident that what information the companies are providing is accurate?

Hon. P. Bell: I think we may be in two different conversations here, so I just want to double-check and make sure that I'm understanding the question of the member opposite. I thought we were discussing tops and branches and residual biomass that would be available, but what I just heard the member ask was: am I confident in the billable waste numbers? I think those are actually two different discussions.

[1725]

The billable waste numbers are actually ministry data, not industry data. That's information that is derived as a result of billable waste numbers. So it's not a questionable…. It's not a number that I would have to ask industry for. It's a number that we have and own as a result of the work that we do.

Let me try and get at it this way a little bit, because I think I know what the member is trying to get at. I think what the member is trying to get at is that there is a view in industry that the opportunity around biomass is larger than the original inventory of standing dead pine that was presumed to be available for the bioenergy industry.

There were some calculations done at one point in time, a year or two ago, in the ministry in terms of how much dead pine was estimated to be not merchantable and not usable by the sawmill industry but of interest to the bioenergy industry. That data was available, and industry looked at it. It's a very small number overall, relative to, I think, what the industry believes the real opportunity is, which includes the tops and the branches and all of the other residual biomass that may be left behind.

So the answer to the question that I think the member asked is…. Am I concerned that the data that I have is sufficient? I think that the data was incomplete and that it only represented a small component of the total opportunity that existed. We're doing that work now, and we expect to have that completed through the fall months.

N. Macdonald: So it just comes back to the Parfitt report. I think we've established that we don't know the full scale of waste. I think that's something that I understand the ministry is preparing so that B.C. Hydro can put out a second call for power. I understand that.

We had used figures on billable wood. This is wood that has been left in the forest but could be used for pulp or used as a sawlog. What Mr. Parfitt asserts here is that the government oversight of wood waste is decreasing, and he questions the accuracy of even the billable wood numbers.

[H. Bloy in the chair.]

I'm just asking: does the minister contest that? Does the minister think he is getting accurate information? And just further on that, the presumption is that the minister would have those numbers. Maybe I'm wrong in this, but my understanding is that those are reported by industry to you. If I don't understand that, do you actually have people that go out from the Ministry of Forests and do that reporting, or is it depending upon industry numbers?

[1730]

Hon. P. Bell: The process that we go through in order to determine waste is that industry reports. We then review that report and make a determination of whether we agree with it or not. If we disagree with it, we would discuss it with the industry. If industry agrees with our view, then that new number, whatever it is, would become the waste assessment.

If there's a disagreement between the two parties — the individual reviewing the waste and industry — then there is a waste assessment done on the individual site by a certified individual paid for by industry, and then that is the final arbitrator of the actual volume that is assessed.

I'll walk the member through it again. Industry reports. We review that report. If we disagree with the waste assessment that's been provided to us, we would talk to the industry, to the particular licensee. If we don't come to agreement then, the licensee would then pay for an independent waste assessment to be done. That waste assessment would then be sealed by a professional forester, and then that would become the final arbitrator of the waste that was assessed. So that's the process under which waste is assessed.

I think we have reasonable confidence that the information we've presented here is accurate, and I think that actually, interestingly, if you compare it to the Parfitt report, you'll find that the numbers are relatively similar.

N. Macdonald: The Parfitt report is using these numbers, the ministry's numbers, so of course they're going to be comparable. But what Mr. Parfitt asserts is that he doesn't believe that they're actually accurate numbers, and he's saying that even if they were accurate, there would be a horrible situation. The assertion from Mr. Parfitt is that they're not accurate.

Part of this is that one of the wonderful things about this being a new file is that you learn things. It's kind of hard to believe sometimes, if you actually understand it properly. I'm just going to run through and see if this is how it works.

We have a Crown asset. We have public lands where companies go and harvest. They are allowed to leave
[ Page 944 ]
logs that are merchantable and that would be useful, but they decide instead to pay a fee to leave those good logs in the forest.

Am I to understand that what they leave is not checked every single time by ministry staff but that instead, the company reports what they've left behind, puts a value to it and that the ministry simply checks and reads that and decides whether that's accurate or not?

How often do Ministry of Forests personnel actually go out on the land and check the information that the company has provided about what they're doing on the public land? Is that something that happens not at all? Is that something that happens 50 percent of the time? Does it happen 80 percent of the time? How does that process work?

It seems to me that if we're not fairly high up with Ministry of Forests personnel actually going and doing that, a lot of the public would question the accuracy of these numbers. So maybe just lay out with a bit more detail how much of this information is actually checked, eyeballed, by Ministry of Forests staff.

Hon. P. Bell: The answer to the question the member asked is that it depends. It depends on the performance of each individual licensee.

[1735]

If you have a licensee who…. If all of their reviews have been accurate, have a good history of reporting numbers that are audited and determined to be accurate numbers, then we don't review those as frequently on a site-by-site basis. When we have a licensee whose record is less than stellar, we would review, if necessary, every single site that they harvest.

So those decisions are made by our teams in each of the respective districts, and they then will choose how to manage each of the sites, depending on the historical performance of a licensee.

N. Macdonald: Just, again, to give me an idea of how often this happens. I think one of the concerns would be around having a contractor that's actually paid by the licensee doing a judgment about whether the public interest has been served. I think most British Columbians would expect a Ministry of Forests where…. They would have far more confidence that the public good is being served by the work of the Ministry of Forests' staff.

What is the percentage of site visits that would actually determine the accuracy of what is being reported by the company? How often does that happen? Here I'm not talking about a review of numbers that have been handed in. I'm talking about ministry staff going to a site, having a look and feeling that the numbers that they were given are accurate — by looking and making a judgment, regardless of how complex the work is they do there. It might be as simple as just coming and looking. I'm not sure how complex that would be.

What's a percentage of that happening? Is it 50 percent of the time, 70 percent of the time, 10 percent of the time, not at all? Just express it that way, please.

Hon. P. Bell: I don't have a specific number, but I think I can do a bit better than that for the member in terms of his area of interest here.

We do have a matrix of the number of site visits that we would do, depending on the category that licensee falls in, in terms of some of the historical factors of the compliance and enforcement activities that we've had to participate in with that particular licensee. While we don't have that particular document here, we can provide that for the member.

N. Macdonald: Just to try one more time. I need a real ballpark sense of how this actually works. Like I say, if you were to say that 50 percent of the time ministry staff go and physically look at sites, and it turned out to be 60 percent, I wouldn't hold you to it. I just want an idea, ranging from…. Is it never? Is it 1 percent of the time? Is it 80 percent of the time? In the data that you collect on the billable wood that's left, how often do ministry staff physically go to the site and find out for themselves whether the information is accurate or not?

Hon. P. Bell: I think the matrix will answer that question for the member opposite. It will outline how often we visit each of the various categories of licensees. The member, I think, has quite accurately articulated all of the possibilities — although zero would not be a possibility — ranging from relatively few site visits up to 100 percent of the sites being visited and reviewed.

[1740]

The member also, in his description of how the activity takes place, is accurate in the sense that there's something as simple as what we call an ocular assessment, which simply requires looking at the site, walking around on it, getting a sense of: does this number look accurate? — to a far more detailed waste assessment.

Just to encourage the member, I think when the member sees the matrix, it will probably get to where he's trying to go to better understand the process under which we determine waste assessments. I think that he'll have confidence in the answer at that point.

N. Macdonald: I'll look forward to that information. We'll leave it and see if I can get the information that I need from there. My understanding is that Mr. Parfitt has registered a complaint with the Forest Practices Board about the quality of the information.

I think that we would all agree — especially if we're trying to grow a new sector, and we're trying to grow that effectively — that we would need accurate information. I know that the ministry is working to get the full picture of what's available in terms of waste. We also
[ Page 945 ]
need to make sure that the billable logs that are there — that we have accurate information there. So I look forward to seeing the information that's provided.

The next place that I'd like to move is with the massive amount of wood waste that is out there and that the minister recognizes is out there, just to see if the government has determined how much CO2 is released from the waste that is out there. As part of the climate change initiative, this is information that is relevant to greenhouse gases and issues around the carbon tax.

How much CO2 is released from the waste that's currently sitting and left on the forest floor?

Hon. P. Bell: Just quickly, before I get to the CO2 question. The member commented that Ben Parfitt had registered a complaint with the Forest Practices Board. Of course, the Forest Practices Board is doing a review of this issue, and I think the report-out is perhaps next May or June — something like that.

So that review or audit is going on by the Forest Practices Board, and I think it will be welcome, certainly, to have that information. We want to capture as much of an opportunity as we can from the residual biomass that's left behind.

The second question, on CO2 emissions from wood waste. Of course, that depends on what the material is used for. In the energy industry, as an example, it's considered to be a displacement and creates a reduction of non-renewable fuels. So there can be credits that are associated with that.

Currently, in the North American system that doesn't exist, but one of the reasons why the pellet industry is viable at this point is because there is this displacement factor. The shipping of pellets into the European marketplace displaces coal, and that's been a positive economic impact on the pellet industry.

The specific information…. I do recall seeing some information that was put together by the climate action secretariat. I hate deferring the member's questions to other portfolios, because I know it's always challenging to do that, but this is all information that the Minister of State for Climate Action would have available and be able to break down.

I think the member's point is a good one, that we want to capture value and particularly around energy opportunities associated with this. Again, we would see eye to eye on that issue.

N. Macdonald: So here, again, the percentage that we were looking at is about 5 percent of the total provincial greenhouse gas emissions. Here we're not talking about fire. We're talking about emissions that would come from uses other than wildfire.

[1745]

Just one other question, trying to understand the carbon tax initiative. How is that going to work for companies that are leaving waste in the forest? Is the government considering applying a carbon tax to those emissions? Is that seen as an initiative that would be considered for forestry? Is it something that would be applied to anyone who left that waste or burnt it? Or is that an initiative that isn't currently being considered by the Ministry of Forests?

Hon. P. Bell: The member opposite is getting into an area that's not one of our expertise in the Ministry of Forests and Range. While we do have some people that are focused on the opportunities associated with climate action as a result of forestry-based initiatives, we don't have the level of technical information that the member is asking for. But I'm reasonably confident that the folks at the climate action secretariat that report through to the Minister of State for Climate Action would be able to provide that data.

N. Macdonald: I'll maybe just take it one stage further and then just see if it's within what the minister has to consider. Is the minister considering using silviculture and other initiatives as carbon offsets, in which case, if you're going to do that, are you also going to use waste that emits greenhouse gases as something that's penalized?

I'm trying to understand the ministry's initiatives as they relate to climate change. Are these two pieces put together, or is there no consideration at all of silviculture activity as something that would be for carbon — what's the proper term? — management?

Hon. P. Bell: Again, this particular area would be an area of expertise in the Ministry of State for Climate Action. However, I can share with the member opposite that we are doing some work to look at the potential around incremental carbon sequestration as a result of advanced silviculture practices.

The Pacific Carbon Trust — which I believe operates under the Ministry of Environment, although I'm not certain of that — has an offering or will be going out in an offering for advanced silviculture activities to purchase offsets through the Pacific Carbon Trust.

So it is an important area, and I think that what the member points out is that it is an area where you need to consider all of the various impacts. It is, I think, a very exciting area for policy discussion over the next number of years and one that I think will frame the long-term shape of the forest industry going into the 21st century.

N. Macdonald: Part of what I'm just trying to understand is that if we're not going to use the regulatory approach to moving fibre out of the woods, if it's going to be market-based, then it would have to have these components, I would presume, in place — right? You have to make it so that companies are going to want to move
[ Page 946 ]
wood out of the forest and have an economic reason for doing it, if that's what you're going to depend upon.

So I guess one of the questions…. You have existing bioenergy companies that are struggling to find fibre. How many of these existing companies are having difficulty getting fibre? Is the minister aware of how many of these companies there are and where they are? And can he give an idea of how many of these companies are having difficulty?

Hon. P. Bell: I think the point that the member is trying to go down is: how do you marry up a cap-and-trade system, or how do you drive economic utilization of residual biomass, whether it be for bioenergy opportunities or carbon sequestration as a result of advanced silviculture techniques and all of those pieces of the equation.

[1750]

That relates to a couple of key initiatives by this government. One is the carbon tax — I know that the member and I see that in a different light — and the other is the cap-and-trade system that's under development. That was approved by the House, or an enabling piece of legislation came forward in the House and was approved.

The building of the cap-and-trade system really is what can drive a lot of the economic benefits associated with the types of topics that the member opposite is talking about — advanced silviculture and utilization of biomass.

That comes back…. The member asked the question: "Do you regulate it, or do you try and create an economic base for it to operate under?" The cap-and-trade system in conjunction with the carbon tax, we believe, create the economic framework for both advanced silviculture practices and a vibrant bioenergy industry, capturing all of the residual biomass. It drives those two initiatives to a successful end point.

N. Macdonald: So what we're going to do is…. We have a couple of questions here. I'm going to just ask one more, and then I'm just going to turn it over to a number of individuals. I think that there are three individuals that have questions. Then, if there's time that remains, I'll finish off. I think that we're aiming for 6:15, if that's fine.

So are there existing bioenergy companies that are having difficulty getting fibre, and which are those companies?

Hon. P. Bell: The member asks a pretty broad-based question. A bioenergy company could be anything from a pellet plant to a pulp mill producing electricity to the Williams Lake energy system and perhaps could even be expanded to talk about some of the greenhouse industry in Vancouver. So it's a broad answer to that question.

Many are having trouble acquiring residual biomass, and all of them are driving the opportunities associated with capturing the slash piles in the immediate areas in which they operate. It appears to us that the economic radius in which they can operate at this point in time is about a four-hour cycle time for a truck. That includes the loading and unloading stages, the driving loaded from the bush to the biomass plant and the driving empty from the biomass plant back out to the bush.

That would typically be about an hour and a half of physical driving time. That would depend on, obviously, the road conditions and all those sorts of things — what type of time the truck could make. It could be anywhere from an 80- or 90-kilometre radius down to a 40- or 50-kilometre radius, depending on the nature of the terrain.

The companies have been very aggressive in this area. It's been very positive. We're going to continue to pursue that activity as much as we can. But the broad answer to the question is: right now most of the biomass companies are working hard to get their requirements into their operations.

J. Horgan: It's a pleasure to be in the company of the Minister of Forests and his able staff. I just want to ask a few questions. Two years ago tree farm licence 25, held at that time by Western Forest Products, was blown asunder and the private lands were returned to the landowner.

I'm wondering if the minister could advise how many jobs were created by that decision and if he could break them down by milling jobs and falling jobs.

Hon. P. Bell: This question was asked earlier on, and I responded by saying that that is outside the purview of this particular debate — clearly not part of the ministry estimates for the 2009-10 fiscal year.

J. Horgan: Well, why don't we try this, then? In January of 2010, which would be in this fiscal year, the restriction on the export of raw logs from those lands that were removed without consultation, without compensation to the Crown, will expire. I'm wondering if the minister has any plans, or is he going to just allow Western Forest Products to do whatever it wants with its logs?

[1755]

Hon. P. Bell: That was a decision made by the previous minister — a negotiation that was entered into with Western Forest Products. I will accept the member at face value that that is the date of expiry. I don't know that to be the case, but I'm assuming that the member is correct. At this point we have not considered requesting any further extensions to that.

J. Horgan: It's startling that the Minister of Forests in the province of British Columbia hasn't informed himself on the repercussions of the decision by his predecessor that will have an impact in this fiscal year — a time in which he's responsible for managing forests in British Columbia and certainly managing forests in my community.

So, again, I'll ask the minister, with six capable staff around him: can he tell me what the plan is for the province of British Columbia when the moratorium on exporting raw logs expires in January 2010?

Hon. P. Bell: I already answered that question.

J. Horgan: Well, maybe we can come at this a different way. Accountability seems to be hard to find when it comes to discussions around what to do about the decision that was made by his predecessor — admittedly — and commented on by him when the Auditor General weighed in on the issue.

The challenge in my constituency right now is that there aren't a lot of jobs on those lands — very, very few jobs on those lands. There are no mills in the Jordan River area. There are no people in the woods today cutting down trees. At the time the decision was made by this government, by that minister's colleagues, the intent was to create employment and economic activity, one assumed at that time, in the forest sector. It turned out to be a land grab instead — a real estate venture.

We're told by another minister, who we'll have the opportunity to question in the weeks ahead, that there's nothing that can be done about it now. There were provisions in an agreement that was signed off by your predecessor that restricted the export of raw logs for 36 months. That 36 months is coming to an end. What does the minister plan to do to protect jobs and keep those jobs in my community in the next 26 months?

Hon. P. Bell: Mr. Chair, I fail to see how this is relevant to the debate of the estimates for the Ministry of Forests for 2009-10, and I'd ask for a ruling from you.

The Chair: Member, I just ask you to continue questioning and directing it to the budget estimates for 2009-10.

J. Horgan: Perhaps the minister could tell me how many staff within the ministry are monitoring and managing the outflow of raw logs from southern Vancouver Island?

Hon. P. Bell: The member should know that the export of logs from private lands is a federal affair, not a provincial affair. It falls under the auspices of the federal government. However, that said, the timber exporter advisory committee operates both provincially and federally and has about ten representatives on that committee. In addition, there are two staff in the ministry that do the work that's necessary to allow the timber exporter advisory committee to make their decisions.

J. Horgan: So let me just see if I understood the minister correctly. In a magnanimous gesture three years ago, in the interest of protecting the economic interests, the social well-being of the people in my constituency, the minister of the day put a moratorium on the export of raw logs from these now privatized lands.

The minister is now saying that it's not his problem. "Thanks very much for asking the question. It's not relevant to the operation of the Ministry of Forests in this fiscal year" — even though the people in my community, workers at Western Forest Products, shareholders in Western Forest Products, had some sense, some expectation, that the Minister of Forests had some responsibility for logs in British Columbia.

Who is responsible, if it's not you? Someone else? Well done.

The Chair: Member, please direct all questions through the Chair.

Hon. P. Bell: I'm not sure that there was a question that's relevant to the ministry debate, most certainly. But as I understand it, there are no provisions in the agreement between Western Forest Products for an extension beyond 36 months on the moratorium on exports.

[1800]

J. Horgan: So then the minister has just advised that his ministry has no plan in the next six months to sit down with Western Forest Products and try and manage our way out of a problem that was created by his predecessor. He's going to let the 36 months go by. He's going to let Western Forest Products do what it wants to do with lands that were part of a social contract — a 50-year, a half-century contract — between the people of British Columbia and those forest companies.

That's all over with? The minister is washing his hands. He doesn't care what happens in Jordan River?

The Chair: If the member would like to continue along a line of questioning that relates specifically to the budget estimates for 2009-10.

J. Horgan: I would very much, hon. Chair, like to have a minister take responsibility for the actions of his government. I would like very much for a minister of the Crown to stand in this place and take responsibility for the fiasco that he's created in my community. Three years of upheaval, three years of uncertainty, and when those three years expire, a free ride to whatever export market those logs can go to. We'll be able to cut them down, some contractors will get some work, and nothing will be milled on Vancouver Island.

The HST. How is that going to help us? Perhaps I could ask the question to the minister. What would the HST be on those raw logs that will be exported starting in January?

The Chair: Member, HST does not apply to this budget estimates debate. If members would like to continue with the questioning that relates directly to the 2009-10 budget estimates.

J. Horgan: Can the minister advise if he has any plans to sit down with Western Forest Products to come to a conclusion that's in the interest of the communities of southern Vancouver Island?

Hon. P. Bell: I always enjoy the member opposite coming in and huffing and puffing and pretending that he's offended by the actions of this government. If he would take the time to understand the responsibility of an estimates debate, he'd come in with reasonable questions, and he'd ask them here.

That is completely irrelevant to the ministry's estimates for the 2009-10 fiscal period.

The Chair: Member, please continue. The line of questioning has been along more of an administrative structure than actual budget estimates for the period of 2009-10.

J. Horgan: I thank the Chair for indulging me. My huffing and puffing is at the request of the constituents that elected me, hon. Chair.

If the minister doesn't want to be accountable to the people on Vancouver Island, that may well explain why there are so many of us on this side of the House and very few on that side of the House.

I thank the Chair for his indulgence.

I'm absolutely outraged at your contempt for the people that live in my community. It's pathetic, absolutely pathetic. Keep smiling. Keep smiling.

The Chair: Member. Member, you must remain in your seat.

J. Horgan: I will not…. I'm leaving. See you later.

S. Fraser: Hello to the minister and his staff. I'd like to begin with one topic, which I've corresponded with the minister on. It's the potential partnership with new technology out of Germany. Voith is the name of the company. As the minister knows, I had worked earlier with representatives from that company to bring his predecessor up to speed on that.

I'm happy to say that the minister did…. It took a while, but eventually we had meetings between Voith and Catalyst and the ministry — and other ministries because the new technology had implications for many other ministries; environment, for one, and on energy issues too.

So I'm just curious. Has the minister had any correspondence or contact with representatives from Voith around the potential for bringing that technology back to British Columbia? There was a chance to do that once, and I believe that door is open again.

Hon. P. Bell: I appreciate the member opposite's question. The most recent update on this file is that while there are ongoing discussions at this point between the provincial government and Voith, in particular — and Catalyst to a lesser extent — there is at this point no industry partner at the table offering to participate in the deal. If that were to happen, then there still is opportunity. But it's been an ongoing discussion, particularly with Voith.

S. Fraser: Thanks for the answer from the minister. The ongoing discussions. Now, I understood that regardless of Catalyst's position…. They did walk away from this deal right late in the day.

[1805]

With the federal money…. As the minister and I have discussed via letter, the federal money would be made available on the black liquor issue. There was a potential for that federal money to be made available. That was the context of the question, that maybe there's a chance to get this technology back. My understanding is that it hasn't been utilized yet anywhere else, with the economic situation, and so we had a unique opportunity potentially to get the company back at the table and turn around the industry here in British Columbia.

The other companies that could be involved, that could partner with Voith — has there been any discussion with them? They wouldn't naturally know about this new technology, which was done in fairly closed discussions with Catalyst and a little bit with West Fraser. For Voith to partner with a local company with the support of the provincial government and, presumably, the federal government, there'd have to be some knowledge amongst local companies in B.C. that this was even available, that the potential was there so that partnership might flourish.

I did take the liberty of contacting Voith after we corresponded, because you did say that there was a partnership required. I believed that it was the role of the minister to take the lead on that. I took the liberty of sending a letter to Dr. Sollinger at Voith in Germany to let them know that there might be a potential to come back to B.C. since they did leave the province with their opportunity.

Can the minister just let me know if there's been any contact with other companies — the industry in general — to let them know that there is the potential to partner in an initiative that could turn around the paper industry in British Columbia?

Hon. P. Bell: We did provide a grant to FPI for $10 million. FPI does communicate with all the industry players. That is their role, so I think that all of the pulp industry across B.C. is well aware of the potential that is
[ Page 949 ]
expressed in the Voith technology and that that money would be available should a partnership emerge from it.

I should also say that Voith and the ministry have been in touch on an ongoing basis. It is a discussion that is ongoing. They know that there are dollars there, that the province has provided dollars and that we would certainly be prepared to see that partnership occur in the province. I would suggest that all the pulp companies in B.C. should be aware of that opportunity.

S. Fraser: Thanks to the minister for that. I just wanted to note that the technology, if proven out, would mean that there was no recovery boiler required in the paper industry, no lime kiln required, no washing plant required. The energy consumption requirements are in the neighbourhood of more than tenfold less than the current paper industry requirements.

Air pollution — there would be none, as opposed to relatively high. Water pollution, which is relatively high now, would be dropped by 75 percent.

The potential benefits for the province are…. Primarily, I'm talking about jobs, protecting jobs in the industry, but also the industry itself, bringing it potentially into the black and helping our environmental footprint, our carbon footprint and energy requirements. I'm hoping that this will be watched by those people that you're talking about in the industry who, maybe, will be intrigued enough to consider this.

I understand that you — at least you or your predecessor — did contract FPInnovations to actually study this technology before coming to the table with a substantial amount of money, so this is not just a pipedream. This is potentially a very good project. No question there. I just want to get that on the record.

Next topic — and I'm in a hurry here because I have other members that have questions — is around the Mars water bombers. I know the issues, and the minister knows as well. He's made comments in the press.

I just want to start with the comments that he made in the press. He did suggest that this icon of firefighting in B.C. that's been putting out fires very successfully for 49 years in British Columbia was somehow past its due date, was old.

[1810]

The minister may have been misquoted in the press, but considering the huge service that the Mars water bomber is providing to the people in California during their fire season, I'd like to try to clear the air on that. It is a near and dear resource to the people of British Columbia and certainly the people of Alberni Valley. the record.

Next topic — and I'm in a hurry here because I have other members that have questions — is around the Mars water bombers. I know the issues, and the minister knows as well. He's made comments in the press.

I just want to start with the comments that he made in the press. He did suggest that this icon of firefighting in B.C. that's been putting out fires very successfully for 49 years in British Columbia was somehow past its due date, was old.

[1810]

The minister may have been misquoted in the press, but considering the huge service that the Mars water bomber is providing to the people in California during their fire season, I'd like to try to clear the air on that. It is a near and dear resource to the people of British Columbia and certainly the people of Alberni Valley.

Hon. P. Bell: I think the question is: perhaps was I misquoted? Or what are my feelings or the protection branch's feelings — which are more important than my feelings, because I take the advice of the professionals and the protection branch — towards the Martin Mars as a tool to fight fires?

We consider it to be a valuable tool in specific circumstances, just as we would consider any other tool for specific circumstances. What we have found is that in difficult terrain in some areas of British Columbia that are hard to refuel aircraft in, there are other tools that seem to be able to accomplish the task in an efficient way. Certainly, if there was a fire of the nature that the tool of the Martin Mars was useful for and the Martin Mars was available to us, we would make use of that.

I have personally spoken with Wayne Coulson. We've had a good discussion on it, and I think we both see eye to eye on this issue. He has made a conscious decision to operate his aircraft in California. It's a much longer fire season in California, and the opportunities for Mr. Coulson and his company with the two Martin Mars are probably greater there as a result of that. He is a private entrepreneur who wants to get the best return on his investment that he can, and I think we have to respect that.

Certainly, if there was a fire of the type that Martin Mars was useful for and the protection branch chose to use that, that tool is in their toolbox, and they're more than capable of making that decision.

S. Fraser: Thanks to the minister for that. I'll end here and thank him.

I'm assuming, then, that the door is not closed for future use of the Martin Mars water bombers, and that they are not — which may be a misquote, that they were not…. There's nothing wrong with their ability to fight fires, as they are showing so heroically now in California. I'm sure the people of British Columbia will be happy to know that that asset may still be available to them in the future.

N. Macdonald: Just before I wrap up, there's one request.

The Chair: Noting the time, Member.

N. Macdonald: I'll be very, very quick.

In terms of the information that was provided to me, I very much appreciated it. It was the community wildfire protection plans, and 53 of the 71 that have been initiated are completed. If it would be possible to break those out as communities — of that 53 that were completed.

Then an idea about the initiated. How initiated are they? Are they simply just started, or are they well along the way? If that's possible, that would be useful information. It's something I'll ask about tomorrow. If it's not possible, then we can have that discussion then.

With that, I move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 6:14 p.m.

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