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)

Thursday, November 19, 2009

Morning Sitting

Volume 8, Number 6

[ Page 2549 ]

THURSDAY, NOVEMBER 19, 2009

The House met at 10:03 a.m.

[Mr. Speaker in the chair.]

Prayers.

Orders of the Day

Hon. M. de Jong: In Committee A, I call Committee of Supply — for the information of members, the estimates of the Ministry of Energy, Mines and Petroleum Resources — and in this chamber, Committee of Supply, the estimates of the Ministry of Health.

Committee of Supply

ESTIMATES: MINISTRY OF HEALTH SERVICES

The House in Committee of Supply (Section B); C. Trevena in the chair.

The committee met at 10:05 a.m.

On Vote 34: ministry operations, $14,008,318,000.

Hon. K. Falcon: I'm joined today by members of my staff. I'd like to take a moment to introduce them now. I'm joined by my deputy minister, John Dyble. I'm also joined by my executive financial officer, Manjit Sidhu. I'm also joined by my assistant deputy minister of health authorities, Wendy Hill, and Executive Director of Health Authorities Rebecca Harvey.

I'd also like to recognize the Ministry of Health Services staff for the excellent work that they do every day, not just the staff in the ministry but really the staff throughout all the health authorities, who each and every day, particularly now in trying circumstances dealing with the H1N1 pandemic, I think, have responded as they always do and have done an exceptional job of dealing with what has been a real challenge to the system. We could not provide any of the services that we provide without their dedication and hard work.

Just briefly, I want to touch on some of the health achievements that we're very proud of. Since 2001 we have performed thousands of more surgeries. Since 2001 we've invested over $5 billion in capital investments to expand, modernize and upgrade our hospitals and facilities. We have increased access to health professionals and doubled the number of training spaces for doctors and nurses.

What that has meant in real terms is that between 2001 and 2008, the number of doctors in the province of British Columbia has increased by 14 percent, while at the same time the population growth has increased by 7 percent. There are 22 percent more nurses practising today in British Columbia than there were in 2001.

We have supported our B.C. seniors with the addition of more than 6,000 new beds and units across the province of British Columbia to provide more and complete housing options for seniors. We've completely renovated or replaced an additional 6,000 units, which will provide a level of service and an upgrade that will more accurately reflect the reality of the care that's necessary for those in our senior population.

We're very proud of the fact — and all British Columbians, I think, are proud of the fact — that we have the most favourable cancer outcomes in North America right here in British Columbia.

We do have an outstanding health care system in the province of British Columbia that we can all be proud of, but we also still face significant challenges in ensuring a health system that is sustainable in the long term. Total health care spending will rise this year to over $15.9 billion and to $17½ billion by 2011. That is an 87 percent increase since 2001.

What is clear is that there's not necessarily a correlation between better outcomes and more money, and I always believe that the United States is the best example of this. They certainly have the most expensive system of advanced nations in the world, but in spite of having the most expensive system, they also have some of the poorer outcomes on some of the key indicators that one would look at to determine whether the investment is achieving the results one would like to see.

So for example, on issues like life expectancy, if you look at the Organization for Economic Cooperation and Development countries, you will find that in Canada we rank No. 8, while in the United States they rank 22nd. So that is a very important principle — that there is not a direct correlation between the total dollars spent and the health outcomes one wishes to achieve.

It's one of the reasons why government is continuing to be committed to bringing innovation and fresh thinking to the delivery of our health care system. Innovations in areas like purchasing, for example, can play a critical role.

[1010]

By requiring that there be a joint procurement process between all the health authorities on shared services contracts, we have already seen savings of just over $89 million over the next five years. That is $89 million that can be reinvested into providing improved care for patients. Those kinds of initiatives we are going to continue. We're also helping to make our health care dollars stretch farther and to preserve the priority health care services that patients depend on.

Innovative, rapid-access breast cancer clinics are changing the way patients access the health system and reducing wait times from referral to diagnosis. In some parts of B.C. we're redesigning the way that emergency
[ Page 2550 ]
patients are assessed and treated by directing patients with less serious needs to separate areas of the ER, which reduces wait times for all patients.

Pay-for-performance initiatives are rewarding hospitals for meeting patients needs by getting patients care faster through the emergency departments. That increases patient satisfaction, but it also improves throughput and, ultimately, the benefit that flows as a result of that to patients.

Through various investments that we've made in surgical innovation — for example, at St. Paul's Hospital — we've seen referral wait times that are down, surgeries that are up and recovery times that are shorter for patients in need of distal extremity surgeries. It's an operation that I had the opportunity to tour recently and was extremely impressed with the work that's been done.

We're looking at other ways to reduce the strain on our health system. One of the things we all recognize is that we see more chronic conditions. The cost of treating those diseases obviously costs the province and our health system billions of dollars every year. A study published in the Archives of Internal Medicine just this year found that certain factors can dramatically decrease the chances of developing chronic disease.

This is something that I am very passionate about and something that I think government really has to reflect on and drive our system to recognize the reality of what this study has determined. Essentially, it says that individuals who exercise for about 30 minutes a day, control their weight to a healthy level, don't smoke and stick to a reasonably healthy diet can reduce their chance of developing chronic disease by up to 80 percent. That is the whole range of chronic disease, from cancer to cardiac to Alzheimer's to hypertension and all of the diabetes.

All of the chronic care issues that we deal with in the health system…. Many of them can be dramatically reduced through changes in behaviour. It's something that I think we have to take serious note of and improve on some of the many initiatives that we've undertaken to try and deal with that.

A sustainable health care system is really the challenge of our current generation. As I mentioned in my opening remarks, just two years from now, in 2011, we will see total health care spending in B.C. that has increased since 2001 by 87 percent. That is not a braggart's statistic; that is a worrisome statistic in many ways.

I think we owe it to our children and our grandchildren to make sure that the excellent system of health that we have today will also be there when our children and our grandchildren grow up and have the opportunity, hopefully, to receive the same kind of excellent care that British Columbians receive today.

So with those, hopefully, brief opening remarks, I welcome any questions that the opposition Health critic or other members of the House may have in respect to the budget and programs of the Ministry of Health Services.

A. Dix: I just wanted to congratulate the new Minister of Health Services, because this is his first set of estimates, on his appointment, and the new deputy minister, Mr. Dyble, and welcome him and congratulate him for this appointment. I think one of the most difficult, challenging and important jobs in government is Deputy Minister of Health. I just wanted to congratulate him. You know, the nice thing about it is you get to instruct a lot of people who are paid more than you. So it's good.

[1015]

Just for starters, just kind of a curiosity question: can the minister tell me where the B.C. family residence program is at?

Hon. K. Falcon: The B.C. family residence program, for the benefit of members, is essentially a travel assistance program to help children with their travel and accommodation costs for families that are required to travel for specialized medical care that's available in the Lower Mainland. This is a service that will available for families from across the province. We're working with a number of non-profit service providers right now, and we will be launching the program on April 1 of next year.

A. Dix: I just want to ask about this, because as the minister will know, the program was committed to in September 2008. It was committed to now 14 months ago by the Premier in his UBCM speech as an essential priority. Then in the budget of February 2009, and I'll just quote from the budget: "The ministry will be required…." For this year — we're talking about this fiscal year, in the budget year we're debating, because apparently the program won't be up this year.

"The ministry will be required to achieve administrative savings of $48 million, of which $35 million will be redirected to health authorities to enhance patient care and the remaining $13 million will be allocated to establish a B.C. family residence program for family members travelling to regional health centres."

I guess what I'm asking is: were those $48 million achieved? Because if the reason…. What is the reason why the government has not fulfilled its commitment — its budget commitment, the Premier's personal commitment at UBCM and its election commitment — to bring in this program this year?

Hon. K. Falcon: This isn't a budget issue. Actually, the budget dollars that were committed by the Premier will be there. They are there. It's really a question of making sure that, before we launch the program, we get it right. We're working with a number of service providers in terms of how best to deliver the service. Those discussions are informing us to make sure that we get the project right and make sure it meets the needs of families from across the province.
[ Page 2551 ]

As I say, we will be launching that program on April 1 of next year, and we're very excited about getting that project underway, fully funded for the delivery and benefit of families right across the province.

A. Dix: Presumably though, given that the Premier announced it in his UBCM speech in 2008…. Then the government was very specific in its budget about the money this year and that it would be in this year's budget, and they were very specific to the number as to where the savings in the Ministry of Health would be found to pay for the program. They're very specific about that, $13 million — right? — for this year.

Let me just read to the minister from his platform, the B.C. Liberal campaign platform. By the way, this campaign platform was released at VanDusen gardens, I believe, in April, six months after the Premier announced the program — at least. Seven months after the Premier announced the program.

It said: "A B.C. Liberal government will create a new program to provide new travel and accommodation assistance to families that must travel long distances." This is a campaign commitment for this year by the government. "The new $13 million B.C. family residence program will be launched this summer to provide those families with new travel and accommodation support, starting at B.C. Children's Hospital." So that's on page 17 of the minister's election platform.

[1020]

In other words, the Premier announces it. We have a budget. They're specific as to the number in the budget — right? Then they announce, in the election campaign seven months later, that it's going to start…. In the election campaign, this was the promise they made to people in rural B.C.: "It's going to start this summer."

You know, I understand that programs are difficult to start, but presumably, when the minister and his colleagues and the Premier made this very specific commitment in the election campaign for this year, they knew all that.

I'm just curious to know when the decision was made — given the April promise that the program would be starting this summer — not to go ahead with the promise. Can the minister maybe detail for us the $13 million in savings that the Ministry of Health made in order to pay for it?

Hon. K. Falcon: Look, Member, I'm very proud of the fact that we did make a commitment and we're delivering on that commitment. We are making sure that there will be a program in place that will serve families right across the province of British Columbia. But I'll tell you this. We're not just going to stagger forward and throw something out there without making sure that it's done properly.

I don't make apologies for that. There are logistics involved to make sure that you put the program in place so that the day it opens, it is going to be serving families appropriately and it's going to work for the benefit of families.

Sometimes we would hope that you can get those logistics worked out very quickly. Sometimes they may take longer. But I'll tell you this: it's better to make sure you get it right. I make no apologies for that.

We're keeping that commitment. On April 1 of next year, families across the province can look forward to just a fantastic program of subsidized travel and accommodation for those families that have children that are dealing with issues and complications of illnesses that need to be treated in the Lower Mainland. We're going to deliver on that.

A. Dix: The commitment was specific, and it was for this summer. So that commitment has been broken. I mean, it was. It's in the platform. I could list off probably 50 campaign websites it exists on that said they'd be starting the program this summer.

I mean, what are these logistics? Presumably, there was policy work done on this, because that's the way these things work. You know, there's a UBCM speech. It's a major policy announcement by the Premier of the province — right? — in September 2008. Then they're specific in the March budget, and they say it's for this year — $13 million for this year. Oddly, it disappears in the September budget. It's one of those things that's not there in the September budget.

So I'm just curious to know: at what point did they decide? Presumably, the minister is saying that they decided after May 12 not to go ahead in the summer, because the Premier would have informed people that he was going to change that promise if he'd made that decision before May 12.

Given that this was a platform commitment, to start this summer, I'm curious to know — because lots of people need travel right now as well — at what point did they discover…? Because what the minister is saying is that nine months into the process, they discovered that it was too complicated for the Ministry of Health to figure out this year. At what point in the process did they give up on this campaign commitment?

Hon. K. Falcon: I'm kind of fascinated by this line of questioning. It's interesting that during the entire decade that the member was part of a government, there was no program available whatsoever. In fact, there wasn't even a program up in northern B.C. to actually provide travel to get people back and forth to some of their scheduled medical appointments, which we now have — called Health Connections.

So you might not be surprised to find that I'm not going to take too well to a lecture about the timing of our implementing a very important program. The fact of the matter is that we're working with volunteer organizations to make sure we maximize the benefits and the service
[ Page 2552 ]
that will ultimately be delivered for the benefit of families right across the province.

It is this government that is bringing in the program. It is this Premier that announced it, this government that said we're going to do it. I make no apologies for making sure we do it correctly. I mean, I would certainly expect that British Columbians would want to make sure we do that.

One of the ways we want to make sure we do it correctly is working with volunteer organizations to maximize the benefit and the services that can be delivered to families right across the province. We don't entirely control that agenda, because we're working with volunteer organizations.

I can tell you this. When we launch this program in April of next year, it is going to be a program that, like the Health Connections program, will deliver very beneficial services for the people of this province, delivered by this government.

[1025]

Again, Member, you were involved in the last government. You had a decade to do this. I'm not sure why you decided not to. But we are actually doing that, and I'm proud of that.

A. Dix: It's not a lecture; it's a question. The minister didn't answer it. The question, precisely, is: at what point did they decide to abandon their election campaign promise to start this program in the summer? Announced in October….

I guess the second question is, because it's very specific here: who will be funding the program when it's put in place? Will it be funded, because it's a Children's Hospital program, by Provincial Health Services Authority, or will it be funded directly by the Ministry of Health?

Hon. K. Falcon: It will be funded by the ministry. And as I say, we're very proud of the fact that we're going to be launching this incredibly positive program for the benefit of families across the province.

When you understand that this is added on to our Health Connections travel program…. This, to remind the member, provides $6 million annually to four health authorities to provide transportation options for rural residents.

This is part of an effort to ensure that the services that many in the Lower Mainland or on Vancouver Island take for granted are readily available and respectful of the fact that for families with young children that are ill that are having to receive medical services in the Lower Mainland, we'll have a program available for them that will subsidize travel and accommodation costs. I think it's something that is going to be a very, very good program that we're proud to deliver.

Again, I know the member is excited about the fact that…. Why didn't it launch immediately? Well, because to do so would have been irresponsible. We want to make sure we launch the program, make sure that we do our homework, that we work with the volunteer organizations to ensure that we maximize the benefits and the service that will be available to families that will utilize the program.

A. Dix: Well, you know, somebody is going to be disappointed with the minister calling a specific campaign pledge on timing irresponsible. But this question doesn't come from me. It comes from his platform, his commitment to British Columbians.

Just with respect to the money. So $13 million — is that annual funding from the Ministry of Health?

Hon. K. Falcon: The answer is yes. That is our estimate of the annualized cost.

A. Dix: It was suggested this year that the ministry was going to save — and this was a budget commitment by the ministry — $13 million this year. So is the money going to be forwarded prior to — in this budget year?

In other words, when the ministry made its commitment in the February budget commitment this year…. They're talking about this year's budget, the one we're debating in this Legislature — or at least its predecessor document, you understand.

"The ministry will be required to achieve administrative savings, and that $13 million will be allocated to establish a B.C. family residence program for family members." Is it the case that the administrative savings were…? They went ahead with those because those didn't involve any consultation with non-profit organizations — right?

Did they take the $13 million? Did they put it away in this year's budget? Did they save the money, put it away, and are they providing it for this program in advance of April 1, 2010? I'm just trying to establish when the program will start. The minister made a commitment to make these administrative savings, and I'm just trying to establish where those are.

Hon. K. Falcon: The member should know that I think it's a responsibility of government to constantly be doing everything it can to try and generate administrative savings. We always must be challenging ourselves to try and do more with the dollars that we have available.

We start from that position that we have a responsibility to try and do better with the dollars we have. There are massive amounts of dollars — I enunciated those in my opening comments — that are going into the health system. I can tell you this. We have got to challenge ourselves and challenge the health authorities all the time to make sure that even with the dramatic increases in budget lifts that they're receiving…. There are always demands. You know, in the health system there will never be any shortage of demands, but we will be challenging them to try and do more with the dollars they have available.

As I mentioned, this is a $13 million annualized program. We have the dollars available for the program. The program will launch on April 1. The moment that
[ Page 2553 ]
program launches, the dollars are there, and we will continue to fund that into the future.

[1030]

A. Dix: The minister again didn't answer my question, so I just wanted to ask it again, and maybe be more precise. Perhaps it's the case that I wasn't sufficiently clear, and that's the reason he didn't answer that question. That's at least in the range of possibilities.

The February budget, which the government campaigned on, said that the ministry will be required to achieve administrative savings of $48 million, and $13 million of those would be applied to this program in this fiscal year. Can the minister detail what those $48 million in savings were?

Hon. K. Falcon: Of the $48 million in savings the member itemized, $35 million of those savings that we've generated we have forwarded to the health authorities in additional funding, and $13 million is available to fund this program once this program begins on April 1.

A. Dix: That $13 million — that's why I asked the minister this precise question. Is the $13 million in this year's budget or next year's budget?

Hon. K. Falcon: We've got the dollars in savings this year, but the program doesn't actually start until April 1 of next year.

A. Dix: Are the dollars being put into a special account for next year's first-year operating cost launch, or will they come out of the ministry vote next year? That's the question. Apparently, the savings were found this year — the $13 million savings. So what happens to that $13 million in savings, in fact?

Hon. K. Falcon: There will be some expenditures undertaken this year — things like making sure there are specialized motor coaches purchased, etc. But the balance of the savings that we have generated for this year will be utilized to manage pressures.

Next year on April 1, when the program is up and running, they will get the full $13 million necessary to get the program operational — except, of course, for some of the sunk dollars that we put into it now to ensure that it's going to be up and running April 1.

A. Dix: Just to finish on this. This is presumably why, in the September budget, this requirement for the ministry to save this money was deleted. The ministry discovered at that time that the government wasn't going to follow the commitment.

[1035]

I just want to ask the minister to detail what those $48 million in savings were. I'm sorry — to the minister. I know this is a ministry matter, so we can also defer it until later, because we're going to go to the health authorities in a second.

Hon. K. Falcon: The main savings were realized through reductions in budget as a result of a recruitment lag; reductions in travel budgets, contracting services — both professional and IT — and office and business expenses. These are the areas that were administratively reduced to help meet those targets.

A. Dix: This is just out of curiosity, because the minister is so ably assisted. What's the total travel budget for the ministry?

Hon. K. Falcon: The total budget is $3.3 million.

A. Dix: Presuming there's still travel going on and even though the minister mentioned travel first, I'm guessing that if you're trying to find $48 million in savings, the $3.3 million line item is not the first or the majority or even anything more than a puny percentage of those actual savings. In any event, these savings always appear to be somewhat mythical.

We'll move on to something else, with respect to the health authorities. The minister will know that since the election, the government has made the decision to proceed with the harmonization of sales taxes. All of those questions and the detailed questions about the HST, of course, will be appropriately asked to the Ministry of Finance, but there are a couple of detailed questions around things that are specific expenditures of the Ministry of Health.

Principally, I would like to ask the minister whether the Ministry of Health has met with health authorities about the consequences on their budgets in this year. Have they met with health authorities? Have they done a report as to the cost of the HST to health authorities this year, and have they met with health authorities about that cost?

Hon. K. Falcon: There is no cost impact in '09-10. Of course, the HST would be implemented on July 1 of next year. We are working with the health authorities and with the Ministry of Finance to determine what the possible policy impacts of HST would be. Obviously, Finance takes a big lead on that, but we're working with the health authorities now to try and determine what that would be. Then we would have a discussion with Finance in terms of what measures, if any, Finance may or may not take in terms of remediating whatever the impacts may or may not be.

[1040]

A. Dix: Was a report or an estimate shared with the health authorities by the Ministry of Health with respect
[ Page 2554 ]
to the cost to health authorities of the HST in the coming years? Remember that the report would be generated in the money spent in this year's estimates, including the money, staff time and so on of the Ministry of Health.

Has an estimate been shared with the health authorities around the overall cost of the HST?

Hon. K. Falcon: I'm not sure what report, actually, the member is referring to. There is no official report that I am aware of. I know there's work being done. The health authorities are doing some work to try and determine, from their perspective, what they think the impact is likely to be.

As they develop that information, we will certainly aggregate that and share that with the Ministry of Finance, which is the lead ministry on this. The Ministry of Finance will consider that as part of all the submissions they'll be receiving from different groups — from education, health care, etc., — and then make policy decisions on how they wish to deal with it.

A. Dix: Just to be precise, then. This work being generated in using the moneys paid for in this year's vote of the Ministry of Health, and then it's a vote assigned to the health authorities…. What is the best estimate on the cost of the HST as reflected in those reports? Presumably, we're well along in the process now, and these are empirical questions that you can find answers to.

What estimate is there of the net cost of the HST on the health authorities in the short year, which would be 2010-11, and the following year, which is 2011-12? Given the work that's been done, what's the best estimate of the net cost to the health authorities of the HST?

Hon. K. Falcon: I'm informed by staff that they're not aware of a report yet because the work is still ongoing. Really, what is happening is that as they work through to try and figure out what the impacts may or may not be in terms of the health authorities…. They're currently working on that and trying to generate that information. Then we will share that information with the Ministry of Finance. The Ministry of Finance, as they're working through their policy decisions around the HST, will be informed by the different sectors, including health care.

But that work is not yet complete. I'm told that they're still generating and working on that effort, at least at the health authority level, which will ultimately be shared with the ministry.

A. Dix: Just to be precise, then. Presumably, this work has been done, even if there isn't a final report. We're living in an age of draft reports. You know, "draft" remains on reports for a long time. I think it has something to do with freedom of information and privacy.

I guess my question to the minister is: is it the case that at meetings involving his staff and the health authorities, there's an estimate for 2010-11 — generated, again, by the vote in this fiscal year — of between $35 million and $40 million net impact of the HST on health authorities? Is it the case that that annualized would be between $50 million and $60 million?

Hon. K. Falcon: Staff advise me that it's very, very difficult to make that quantification, because the Ministry of Finance ultimately has to make policy decisions about how the HST will be applied. There's a theoretical exercise you can go through, and I think that's what the health authorities are likely working on. But again, we could not even responsibly say what we think the impacts may or may not be without knowing from the lead ministry and the minister, the Minister of Finance, what policy decisions they're going to make in terms of the application of HST.

That work, I'm led to understand, is still ongoing. The Ministry of Finance is working their way through that. Obviously, once the Ministry of Finance is fully informed and has listened to all the different stakeholders, it will make some final decisions on the policy application of HST. Then we will be far better able to share that with the member opposite.

[1045]

A. Dix: Presumably, estimates have been made, because we're talking about this process now. As the minister will know, this process now, because of changes made in the health authority budget submission process…. I mean, the Health Ministry and the health authorities are already presenting their budget to the government for next fiscal year. That's what they're working on. They're using this year's dollars to prepare the budget for next year. That's the planning process that the minister is all too familiar with.

I'm asking what the estimate is now. What has been produced in this fiscal year — what estimates to guide the health authorities as they prepare budgets and present them to Treasury Board, which they now have to do for next year? This isn't about care providers or all that stuff. We'll talk about that and the impact on long-term care later. What estimates have been made this year?

Is it accurate to say it's between $35 million and $40 million next year and $53 million annualized?

Hon. K. Falcon: The member knows me well enough to know that I'm certainly not one to skirt answers. I always give the answers if I have the information, but I'm responsible about it. I just don't have the answer for the member. Not that I don't want to give an answer, but as I said, what I do know is that there's no impact on this year's budget, on which we're here debating the estimates.

I also know that the member is right to point out that there's a planning process underway in the Ministry of
[ Page 2555 ]
Finance. I honestly believe that's probably a question for the member to direct to the Minister of Finance in the Ministry of Finance estimates, because that is a policy process and a planning process that they're currently going through.

I can't speculate on what the impact will be next year until we have some clear direction from the Ministry of Finance in terms of how they're going to resolve the different policy issues they're no doubt studying right now.

A. Dix: Would the minister endeavour — I know he desperately wants to answer this question — to ask the health authorities what their best estimate right now is — we've got several days — on the impact of the HST on them from the work they're doing now and report to the House during these estimates?

Hon. K. Falcon: The health authorities, of course…. The decisions they make and the planning processes they would make for future budget would be predicated on the policy decisions made by the Minister of Finance and the Ministry of Finance. Prior to having that information, Member, it is a theoretical exercise really and truly.

Even given that we would all like answers to everything right away, I do think in fairness that is a question that is best directed to the Minister of Finance. In the Ministry of Finance they will, as they work through that planning process, no doubt come up with some direction that will help inform the health authorities to then better understand what the impacts may or may not be.

Without having that information, I'm not sure what exercise we could ask them to do, because it would be merely theoretical and speculative.

The Chair: I would like to remind the member that in most other estimates debates, questions about the HST have been deferred to the Ministry of Finance.

A. Dix: That's right, so I'm specifically asking about the money spent by the health authorities to estimate the impact of the HST on them this year. I'm just asking if the minister could bring that information back to the House.

I wanted to ask the minister, because he mentioned in his opening statement the issue of shared services, what he believes….This is obviously in more than a planning process, any new future Shared Services organization…. What impact would the HST have on that planning process?

Is it in fact the case that the HST might well change the organizational expression of the Shared Services organization? Effectively, is the ministry not constrained by the HST to bring that, in a fashion, in-house to the health authorities and exclude options that might make it external to the health authorities — if he understands that question?

Has the HST decision by the government affected the Shared Services organization decision?

[1050]

Hon. K. Falcon: Again, I think that's an interesting theoretical question and actually an important one. I don't want to minimize that. Again, it is something that the Ministry of Finance, in determining how they are going to apply policy direction on the HST — what is going to be included and not included in the HST determinations — would allow me to answer that question…. But I don't have that information. I do think it would be a good question for the Minister of Finance.

A. Dix: But the question for the Minister of Health is in terms of the development of the Shared Services organization, which is something he mentioned in his opening statement and is a key priority of the Ministry of Health in their service plan and the service plans of the health authorities. Is the Minister of Health waiting for those policy directions in developing the Shared Services organization? I'll put the question the other way.

Hon. K. Falcon: I was just checking to make sure I heard the member's question right. I'll rephrase it to make sure I'm getting this right, because I don't want to put words in the member's mouth. He's saying: "Is the HST going to impact what the structure of the Shared Services organization may ultimately look like?" The answer to that is that in some ways, it will depend on what information we are informed of by the Minister of Finance in terms of the rules they are going to apply and the policy decisions they make around application of the HST.

Until we get through the planning process…. My staff advised me that we would not be able to make that determination now, because we're working in the planning process with the Ministry of Finance.

A. Dix: But the minister is also working on the Shared Services organization, I presume. Is the minister saying — because I think his answer to the question was yes — that they're going to have to wait for that information from the Ministry of Finance before they make their decisions in the Ministry of Health about the Shared Services organization? It's those latter questions that I want to ask.

It seems to me that the answer he's saying is yes — that until there's clarification on that…. You know, there are all kinds of versions of a shared services organization that in effect might…. Presumably, these are services right now, because they tend to be in-house services of a health authority in which no such tax is paid — they're in-house services — or at least not the services tax on them. Presumably, he's saying there's a delay in that development until those decisions come forward.
[ Page 2556 ]

Hon. K. Falcon: Thank you to the member for clarifying a little bit what he's looking for. I think the short answer is yes, we're still moving forward with the Shared Services organization. To be honest, it wasn't a great surprise to me. But there was a lot of pleasant surprise amongst the health authorities on the handful of products that they've already gone out for in terms of joint procurement — realized savings to the tune of just over $89 million over a five-year period.

Of course, the Shared Services organization was predicated on a business plan that suggested there could potentially be savings in the $150 million range over a five-year period. The very fact that they are already well past the halfway mark on the first bundle of services that they jointly procured suggests the enormous benefits that can be derived from the organization. So it will continue to move forward.

[1055]

What will the implications of HST be? The member is correct to point out that there will presumably be some, but until the Finance Ministry concludes the planning process and policy development around that, I wouldn't be able to itemize that. But I will be able to say with great confidence to the member that regardless of how all of that policy development unfolds, we absolutely remain committed to the shared services model and moving forward with the shared services model.

A. Dix: We won't belabour it, because I don't think the minister is going to answer it. Which shared services model? I think that was the question. You can call any model a shared services model, I guess, but it really depends on how you want to structure it.

I think that's a reasonable question, but we'll move on because I don't want to get stuck with the minister. It's our first time together in estimates, you know. We want to move the debate forward.

I just want to ask the minister in terms of this year because, of course, we're talking about this year's budget. What is the percentage lift of the Fraser Health Authority this year as compared to last year's income from provincial government sources?

Hon. K. Falcon: This year the percentage budget lift for Fraser Health is 4.9 percent. Last year the percentage increase for Fraser Health was 8.9 percent. The difference is primarily being driven by the fact that last year the Abbotsford Regional Hospital and Cancer Centre came on line. That was the first new regional hospital and cancer care centre in 35 years in the province of British Columbia, something of which we're very proud.

A. Dix: So the chair of the Fraser Health Authority was wrong when he said that the lift was in fact 2.9 percent this year. In fact, if you look at the health service plan, the lift is 2.9 percent. Just to share this with the minister…. The actuals in 2008-2009 in the service plan are $2.270 billion. The budget this year is $2.338 billion, so that's a 2.9 percent lift.

It's not my mathematics. It's the chair of the board of the Fraser Health Authority who disagrees with what the minister just said. In fact, there's no real disagreement. It's 2.9 percent.

Hon. K. Falcon: We are calculating, of course, based on base budget one year to base budget the next year. It's in the blue book. The numbers are very clear.

I suspect what the chair was probably referring to is that there were one-time dollars that the health authorities received last year. He's probably calculating those one-time dollars and making that part of the base budget calculation. It would be easy to make that calculation, I suppose. But base budget to base budget is 4.9 percent.

[1100]

A. Dix: The minister is…. The service plans that presumably he approved, which came forward to him…. Presumably, the minister approves the service plan. The service plan gives last year's actuals and this year's budget, and they say it's a 2.9 percent lift. It says so not somewhere else in the service plan, but on the front page of the service plan, in the letter from the chair of the board of the Fraser Health Authority. It says it's 2.9 percent. So you know, it's the way it goes.

With all of that allocation in 2008-2009, the health authority and, cumulatively, the health authorities ran deficits. If you add the two that ran deficits, which are higher than the four that just barely balanced, it's a cumulative deficit amongst the health authorities — right?

With all of that money, all of the actual allocations from the Ministry of Health last year, the Fraser Health Authority, essentially, was right on the number. So when you remove some of that money, obviously you're starting from behind. That number — you add 2.9 percent, and that's what it is.

I guess I'll just ask the minister, then, the same question for the Vancouver Coastal Health Authority, and I'll give him a little hint. The number that I think he'll come up with, because it's the one that's in their service plan which the minister approves, is 2.4 percent.

What does he suggest? These are the dollars that they actually have to work with and the increases they actually have to work with. Does he not agree with me that the actual increase, as found in the service plan documents for the Vancouver Coastal Health Authority, is 2.4 percent?

[L. Reid in the chair.]

Hon. K. Falcon: The lift for Vancouver Coastal was 4.3 percent year over year. Again, that's base budget from one year to base budget the next year. Same thing, just to the member's previous answer.
[ Page 2557 ]

I want to emphasize to the member that you do not include, nor do we include, one-time funding that was provided partway through the year to the health authorities as part of their base budget. It is not part of their base budget.

They or he may try and consider that it is, but I can tell you that is one-time funding, as I say, added partway through the year to provide for the health authorities, to allow them the opportunity to do one-off initiatives that can provide some improvements to the health system. It's up to them to figure out what to do with that.

But the base budget lifts for both the Fraser Health and Vancouver Coastal are base budget lifts from last year's base budget to this year's base budget.

A. Dix: The minister simply needs to talk to the health authorities about that. They're the ones, in the service plans that he approved, that put the numbers — last year's actuals and this year's budget. They're the ones that tell us what the actual budget increase is.

Remember, with that money last year, in the case of Vancouver Coastal Health, and the minister will agree with me, for the third consecutive time they ran a deficit.

I won't have this discussion, because it was a little bit like a Beckett play we used to have with the previous Minister of Health, where we'd say: "Are they allowed to run the budget deficits?" "No." "They are running budget deficits." "Yes." "Are they allowed to run budget deficits?" "No."

We won't go through that, but it's the case that with the one-time funding, they still ran an $11 million deficit. If you look at last year's spending as compared to this year's allocation, it's probably even less than 2.4 percent.

But does the minister agree that if you take those numbers — and they're right here in his document — between last year's actuals and this year's budget, the increase for Vancouver Coastal Health is 2.4 percent?

[1105]

Hon. K. Falcon: Look, I know the member's going to want to try and convince himself that regardless of what it says in the blue book in terms of what the budget increases are for the health authorities, it's somewhat different. It's not. The fact of the matter is that the budget lifts are exactly what they say in the blue book.

For Vancouver Coastal, as I mentioned, year over year, base budget over base budget was a 4.3 percent lift. I will also say with respect to the health authorities that it is the position of this minister that health authorities will live within their budgets and they will balance their budgets.

It is a position of the Finance Minister, no doubt, and also government that even in an era where almost a 20 percent budget increase, in operating dollars only, over the next three years is still having a system say to us, "We would like more, please," we are saying, "No, we actually expect you to live within that almost 20 percent budget increase over the next three years," particularly given that we find ourselves in an economic environment where we have seen the most difficult economic drop-off in 30 years, not just in British Columbia but in Canada and indeed around the world.

I recognize that that requires the health authorities to really look hard at what services they are providing. Are the services direct services that are providing patient care? Do they have to think about doing things differently?

The shared services model we touched on just a moment ago was a very good example of that, where we say: "No, actually, instead of you all sort of doing your own joint procurement with your own departments doing procurement, we're going to have you work together as one organization, do those procurements jointly." The savings that have been realized, almost $90 million, will be utilized back into the system to provide direct care.

That is the obligation that we are putting onto the health authorities and ourselves. I think it's the right thing to do. I do think that in an era where a 20 percent budget increase is still a challenge for us as a society, it really requires us to say how we are going to do more with the current dollars that we have in the system, billions and billions of dollars by 2011, as I mentioned to the member in my opening remarks — an 87 percent increase in health dollars from 2001, when I was first elected as a member of this government.

I know the member would agree. We both routinely look at the system south of the border and shake our heads in the sense that it is the most expensive system. They spend the most dollars, there's no question, but I would not agree that they get the same outcomes that we see here in British Columbia and in Canada.

A. Dix: Of course, the reason is that they actually get…. It's right here in the budget presented by the Ministry of Health and released by the Ministry of Health. The Vancouver Coastal Health Authority had a 2.4 percent lift. Now, the minister will know that in 2008-2009, in those service plans, which were, oddly, more fulsome than the service plans presented by this minister — I guess it's innovative to provide less information — in all of those service plans, all of those health authorities stated that there would be a shortfall this year.

All of them stated that except the IHA, I think, which didn't state that. They implied it, but they didn't add the number in. In the case of the Fraser Health Authority, for example, I think they said the shortfall would be $98 million this year. So one is perplexed a little bit about the way the government manages these things, because the government was informed in March 2008 that the health authorities would have significant shortfalls, and they made seemingly no effort to address that until this summer, when major cuts started to take place.

Can the minister take me through that process? Fraser Health, for example, was $98 million short. I think
[ Page 2558 ]
Vancouver Coastal Health was $78 million short — in that range. Vancouver Island in 2008-2009 told the Ministry of Health it would be $52 million short this year. So that would imply some action.

Instead, what happened was, including cuts to services, which, of course, have happened since then…. But they started happening only this fall. They didn't start happening when you would expect them to happen after one year of warning at the beginning of the fiscal year.

[1110]

So they were made more extreme or more intense, if you will, by the fact that the government seemed to take no action and was denying that those cuts were going to come in March, prior to the election. I won't bore the minister with the dozens of quotes from his predecessor saying there would be no cuts in services.

But the government was aware in 2008-2009 of these shortfalls. What action was taken in order to deal with those shortfalls in advance of the fiscal year? They were clearly aware of…. I mean, it's on paper.

I know that the minister doesn't count the numbers that exist in the health service plan when he's calculating the budgets and so on, but they are official documents of the health authorities. They do have a purpose in the process, and they are on his ministry website. Maybe he might comment on what steps were taken.

My understanding of the process is that they told the ministry 18 months ago that there was a big shortfall. Then they went to Treasury Board because there was a new process set up by the former Minister of Finance, the former member for Vancouver-Langara for the health authorities to come there and then to deal with some of these matters because of her frustration with it. So I wanted to ask the minister what steps were taken, because this shortfall was coming from a long way off.

I guess the final thing I'd point out to him on deficits…. He may say that the health authorities aren't going to run a deficit. The health authorities haven't run cumulative surpluses since 2005-2006. It's something to say it; it's another to do it.

I would ask the minister specifically: what happened when the health service plans came in '08-09 for this year saying that there was a big shortfall, and why was it the case that nothing happened? No action was taken on that until July 2009.

Hon. K. Falcon: I've listened to this line of reasoning from the member for some time now. The member has gone around trying to say that before the election there was no talk about this. No one knew that there were going to be any pressures on the system, and oh, big surprise after the election, suddenly there were.

That's actually not the case at all. Page 45 of the budget in February of 2008 very clearly pointed out that there was a 3½ percent pressure that the health authorities were going to have to manage. A 3½ percent pressure is about $360 million. That is about as upfront as you can make it, Member. It's right there in the budget for everyone to read.

What we have said to the health authorities is: given the fact that over the next three years we will be increasing your budgets by almost 20 percent….

We made a conscious decision in government. In spite of the fact that we faced one of the most serious economic declines that we've seen in a generation in the province of British Columbia, we made a decision — a pointed, very clear decision as a government — that we were going to focus our dollars on health care and education. In health care we said to the authorities that although over the next three years….

The member knows that the CEOs from all the authorities have acknowledged that they are receiving dramatic increases, but in spite of that, there are still pressures. There's never been any mystery about the fact that there have been pressures. As I say, on page 45 of that February budget, it pointed out: "We have pressures. They are 3½ percent of our budgets."

It would appear to be…. No, I don't want to put words in the member's mouth. I don't think the member is saying that government should just provide that additional 3½ percent without asking any question or without asking them to do anything differently.

What we have said to them is: "We want you to manage that." If a 20 percent budget increase just in operating funds…. I want to emphasize that, because capital is a whole different thing. That's another almost $2.9 billion over the next three years, a record level of capital that will also be going into the health system.

There's almost $3 billion in capital, a $2.4 billion increase in operating over the next three years — almost $5½ billion new dollars, additional dollars, into the health system — and there are still pressures. So we have said to the health authorities: "Given that we are in the midst of the worst economic downturn in a generation, we are asking you to manage 3½ percent of your budget."

Now, I can tell you that there are a lot of businesses and small businesses and families that…. To manage 3½ percent of their budgets would be a treat, to be honest with you. That doesn't mean it is easy. It is not easy. It is difficult.

In fact, I commend the health authorities. I think they are doing an exceptional job, and I want to say that on the record here today. They are doing an exceptional job of managing that pressure within their budgets, even with the almost 20 percent budget lifts.

You know, Member, we were as upfront about it as you could…. I don't know how more upfront you can be than having it right in a budget that is presented in the Legislature and is there for the world to see. We couldn't have been more upfront about it.

[1115]
[ Page 2559 ]

We've said to the health authorities that they will have to manage that 3½ percent pressure and stay within the budget increases we've provided them. That's what they're doing.

A. Dix: On the day the budget came out, I did a press release about page 45 of the budget. I'm well aware of page 45 of the budget. What we're talking about are the consequences of that.

The consequences have been…. The predecessor Minister of Health and the B.C. Liberal Premier and the government explicitly denied before the election…. Not just them but Mr. Waldner, Mr. Ramsden, Dr. Murray and others explicitly denied that there would be cuts in surgeries, cuts in MRIs, cuts in seniors programs and so on. What have there been? There have been cuts in surgeries, in MRIs and in seniors programs.

The day that budget came out, I raised this issue of the shortfall. I said that there would be cuts in services, and the government explicitly denied it. What I'm asking is that if they knew it was coming…. They had the budget, and they prepared the three years. The government knew it was coming. The Treasury Board knew it was coming.

There wasn't going to be any relief in this fiscal year, as there had presumably been in the last fiscal year. The government and the minister were talking about the increase — that Vancouver Coastal Health was going to have to live within a 2.4 percent increase, given collective agreements, some of which are in the 4 to 5 percent range.

If they were going to live with that, why wasn't it the case that the government presented a plan and the health authorities presented a plan so that they dealt with those shortfalls in February, March and April? Why were they instructed — because they were instructed — not to provide their plans to the government until on or around or just after May 12, 2009?

Hon. K. Falcon: Again, in the February budget it stated very clearly that there was a 3½ percent pressure on their budgets that would have to be managed. I don't know how much more clear that can possibly be. The member is wrong to mention Vancouver Coastal's 2.4 percent increase. It's 4.3 percent; I pointed that out. The member can go to the blue book, and he can look at it.

He can try and pretend the blue book doesn't exist and try and pretend that it doesn't actually say 4.3 percent, base budget over base budget, but it does. That is an increase. So the member now is exercised, apparently, by the fact that we have said to the health authorities: "We expect you to manage that 3½ percent pressure."

Well, you know, Member, you're right. We just went through an election campaign. Member, I recall that in your budget in the election campaign, you added $100 million to our budget. I'm sitting here doing the math, saying: "Okay, so the NDP also knew there was a 3½ percent pressure." The critic goes around bragging about how he secretly knew that, even though it was in the budget on page 45, but put that aside for the moment.

Knowing that there was a $360 million pressure, I am interested in the fact that the NDP only added $100 million to the budget for this year in their election platform. Member, maybe you can tell me where you were going to find the $260 million worth of savings. What were you going to do differently in the health care system should you have — and thankfully you didn't — formed a government?

I can tell you what this government said. We said: "With a 20 percent budget increase over the next three years, just in operating dollars, we are asking the health authorities, in the midst of one of the worst economic declines we've seen in a generation, to manage that pressure."

Is that an easy thing to do? No, it isn't an easy thing to do — just like it is not easy for families to manage in challenging times or for small businesses to manage in challenging times or even, in some cases, for big businesses to manage in challenging times. But that's what we've asked them to do. Does that mean they have to do things differently? It does.

The NDP and the critic have opposed every single one of those initiatives that we have asked the health authorities to try and do, to better manage the existing dollars they get. I just gave an example, on the shared services side, where savings of almost $90 million have been realized by them joint purchasing on their shared services organization.

That is actually a change. That is something that was driven by government saying: "We expect you to do different, because the taxpayers do not have an unlimited capacity to fund every increase that is desired in the health authorities."

That is not easy, but I think we owe it to the public. I can tell you that when I speak to the public or front-line workers or go tour hospitals, I always hear about how there are ways that things can be done better. Many of those very good ideas can actually come from workers in the front lines of the system.

[1120]

We have to listen to that. We have to say: "We will support you when you try to manage the dollars that we're providing you — even the increased dollars we're providing you — to ensure that they go further, to ensure we try to maximize the services and the dollars that are being put into the system." Dollars which, by the way…. There's no such thing as government money, I like to remind people. There's only the money that we take from taxpayers and that we then spend on behalf of taxpayers.

When taxpayers have provided us dollars that allow us to increase the health budget by almost 20 percent over the next three years — just in operating dollars, not
[ Page 2560 ]
including capital increases — then I think we owe it to the public, to those taxpayers that work hard to generate those dollars, to make sure we do everything we can to maximize the benefit of those dollars in the system, to make sure we do everything we can to ensure the system is sustainable. That's what we're trying to do, and that's what the health authorities, I believe, are doing very successfully under difficult and trying circumstances. They're doing a very good job.

A. Dix: So the minister has decided that the audited statements of the health authorities don't matter, that the service plans of the health authorities don't matter, that the actual increases they get don't matter. He's just going to ignore the fact that Vancouver Coastal Health got 2.4 percent, and Fraser Health — not according to me, according to Fraser Health — got 2.9 percent this year. He's just going to ignore that.

I have a strange thing, but I don't think even if I asked the question one more time that he would acknowledge the facts that he himself has presented to this Legislature. So I don't think we'll do that.

I think I'll ask the minister another question. That question is: why is it the case that those health service plans — the same health service plans that say he's giving Vancouver Coastal Health 2.4 percent, Fraser Health 2.9 percent — have dramatically fewer performance targets this year than they did two years ago? Why is it that the minister thinks it's innovative in health care to tell the public less in service plans?

Hon. K. Falcon: With regards to the performance indicators in the service plans, one of the things that we are trying very hard to do is standardize the performance indicators across the different health authorities so that whether one is looking at a service plan of Coastal or Fraser or Interior or Northern, there's a standardized approach that is being utilized that, frankly, doesn't make it a very, very complex and confusing exercise for people that are trying to look at data and make comparative analysis of data between health authorities.

This is actually part of a trend that is a governmentwide effort to ensure that we try to standardize our service plan performance indicators so that even within ministries you start to see some similarities so that it is easier for people to read and understand what the performance indicators are and how those measurements are shaping up year over year.

[1125]

It is something that has changed, but in an effort to try and standardize and bring, frankly, less complexity and more understandability for those that are trying to look at the service plan indicators.

A. Dix: I generally think that the public likes more information, not less information. You know, you can standardize in all kinds of ways. For example, the minister could have said to the health authorities that provided less information before, "Standardize up to the level of the health authorities that provide the most," but he didn't do that. In fact, every health authority saw a dramatic decline. It went from, roughly speaking, 240 performance indicators to a grand total cumulatively of about 72, or 12 per — right?

So the question is…. It's a reasonable question, I think, to ask of the Minister of Health. Why did he choose to, in fact, gut the performance indicators and level down? Why is the lowest-common-denominator standard the right standard? Why didn't he maintain what our…? He will have to agree with me that….

We can list off the performance indicators that he decided to cut. It's information that's readily available to the health authorities, because presumably they were keeping it before. Why did he decide that it was a good thing — that it was innovative, that it was smart — when he talks of standardization, to provide the public with dramatically less information? If you want to take them cumulatively and you don't want to quantify these things too much, why did he decide that 75 percent fewer performance indicators was a good thing?

Hon. K. Falcon: In some ways I think the member answered his own question in the question itself. I mean, 240 indicators is borderline ridiculous. You can't just overwhelm people with a whole bunch of indicators that are very difficult to allow someone, any reasonable person, to try and ascertain or make comparatives between health authorities. We actually think the quality of the information is far more important.

One of the things we have tried to do is to make sure that the indicators that are there are evidence-based, and also to take what used to previously be in the government letter of expectations to each of the health authorities — take that information — and make that part of the service plan performance indicators. Then you have a situation where you can look and do comparative analysis in a manner that is much easier, particularly for the public.

Not everybody is going to be fascinated trying to look at 240 indicators and try and figure out what that means in relation to their health authority compared with another health authority. That's a very, very difficult exercise to expect the public to go to.

One of the things we are trying to do in government is make the service plans actually mean something to people that may take the time to read them. Part of that is trying to reduce the utter complexity — which was always a challenge in Health; I acknowledge that — and trying to give something that are meaningful indicators, that are evidence-based indicators, that the public can readily and more easily understand.
[ Page 2561 ]

A. Dix: I don't know if I should be surprised that the minister doesn't think that providing information to the public is a good thing. Even in health authorities that, say, had 20 indicators, which seems like a reasonable number for a health authority, even they had the number of indicators reduced dramatically from 20 to 12. Those are the least ones.

[1130]

So what you have are service plans that used to tell quite a bit about what goes on to the health authorities, and we've moved to service plans that tell almost nothing but government spin.

Even then, they provide government spin, like the chair of the Fraser Health Authority saying: "We've got a 2.9 percent increase this year." Even the minister doesn't believe that. He denies what the head of the Fraser Health Authority says is actually true.

The documents have become kind of, surprisingly, meaningless. Presumably this sanitizing, this stripping of anything of interest in the documents, is an innovation by this minister and a disappointing one at that.

I guess I wanted to ask the minister a little bit about those Fraser Health Authority questions. We'll start there, and we'll try and work our way through. We'll start with Fraser Health because it's the minister's home authority, so he will have particular interest, I'm sure, in these questions.

The Fraser Health service plan — which, yes, I acknowledge that the minister doesn't think matters, because they only represent the budgets of the health authority for which he is responsible in the House — says that in acute care this year there will be a 2.19 percent increase in Fraser Health acute care. This inevitably, of course, has meant that in services, because of lifts and so on, there are cuts. I want to ask the minister, particularly now, about elective surgery cuts.

Is it the case that each hospital within Fraser Health…? There was a debate about how they were going to manage the cuts in elective surgery, I understand. There were a number of proposals put forward to focus them on certain hospitals and to not focus them on certain hospitals.

Was it the case that the final decision in terms of cutting elective surgeries in Fraser Health was that it would be 14 percent at all hospitals in all periods? Was that the decision that was made on or around the middle of August?

Hon. K. Falcon: Just to the member's first comment about the service plans. The member was talking about how the service plans are made up of spin. Actually, I thought the member's comments kind of sounded like spin to me.

[1135]

But I do think there are two comments I would have to make about that. For the benefit of the members that are in the gallery here or in the Legislature, there were never any service plans under the NDP government in the entire ten years they were in power. You could have searched day and night, and you would not find a service plan anywhere. Why is that? That is because we actually introduced service plans.

I'm quite okay with the member taking exception or us having a debate about what should or shouldn't be in a service plan. But I'll tell you, I can go only so far before I have to remind the member that they had absolutely no information available to the public or to the opposition at that time. So I am very proud of the fact that we do have that information.

With respect to elective surgical volume reductions in Fraser Health. As the member knows and as I've indicated, Fraser Health will be receiving a 20 percent funding increase over the next three years. Contrary to what the NDP has repeatedly tried to say, the acute care budget is increasing this year. It's not decreasing. However, even with those record levels of funding, there are still pressures. We talked about the 3½ percent pressures.

Fraser Health is taking every possible action to try and mitigate that, and 91 percent of what they're doing in terms of reduction in costs to try and make sure that they can manage that 3½ percent budget pressure is being done by administrative reductions and clinical efficiencies, which I think is appropriate.

In fact, I am advised that only 6/10 of 1 percent of their almost $2½ billion budget will actually have any kind of impact on a core service delivered directly to a patient. Elective surgery is one of those areas where there will be about a 4.6 percent reduction in elective surgical volumes in Fraser Health Authority to help them manage their 3½ percent pressure.

To put that into perspective — and this is a very important perspective — the levels of surgical procedures that have been undertaken, not just at Fraser Health but indeed across the province, are at record…. We are coming off of record levels of surgical procedures. In '08-09 there were 83,600 surgical procedures performed in Fraser Health. Of those, 65,716 were elective. I say that because it allows a perspective.

What we're talking about with a 4.6 percent reduction in elective is about 3,000 fewer elective surgeries. For the benefit of those paying attention today, anyone with urgent or emergent surgical requirements gets them right away. They always have, in our health system.

Elective surgeries are generally dependent upon the direction of the physician and the specialist in consultation in terms of the time frame in which individuals will receive those. But at the end of the day, a 4.6 percent reduction in elective surgical procedures is about 3,000 out of the 65,716 performed annually.

A. Dix: The question to the minister was…. We're presumably talking about the period from roughly September
[ Page 2562 ]
18 to March 31, 2009-2010. If they're keeping track in the back rooms, that's period 7 to period 13 of the fiscal year. The decision by Fraser Health — and this is what I'm asking — was to reduce OR hours by 14 percent at all hospitals during that period.

I'll just give the minister an example of what that means. At Surrey Memorial Hospital that would mean going from the base for that period of 10,109 hours to a new base of 8,694 hours. That is a reduction of 1,415 hours or 14 percent. That was the instruction from Fraser Health, and what Fraser Health instructed the hospitals to do is make these reductions hospital by hospital.

I don't think we need to discuss the nature of it. It's happened. The decision was that the cut would be felt equitably across hospitals. That was the decision. I'm asking the minister to confirm that, in fact, that was the decision and that the decision was taken to essentially do the cut equitably across hospitals.

[1140]

I'm delighted to hear that the government isn't considering cutting emergency surgeries. I would think not. I mean, who would consider doing that? But elective surgeries, the minister will agree, are all serious, all medically necessary. If you're having the surgery, including elective neurosurgeries, which are among the things being cut here…. They have real impact on people. Because the government decided not to announce these or deal with them prior to the election, they're being focused in the period of September 18, 2009, to March 31, 2010.

So that's my question. Were the hospitals ordered to reduce their OR time by 14 percent at that time, and was it equitably spread amongst the hospitals in the Fraser Health Authority?

Hon. K. Falcon: What happened, as I understand, is that the surgical chiefs, the medical directors, the OR managers and the hospital directors worked together to implement a reduction at each of their sites in a way that works best for their hospital, for their patients, for the surgeons and the staff. Decisions had to be carefully weighed in the context of the Fraser Health, in the context of an evidence-based process that protects patient quality and care as much as possible.

Obviously, as you can see by the individuals that were involved — right from the hospital directors all the way up to the medical directors, surgical chiefs — they all worked together to make sure they did this in a manner that was consistent with the evidence-based process that will protect patients and ensure that those requiring the surgeries first — of course, they prioritize, as the member correctly pointed out — will receive surgeries based on their acuity level and move down the line.

The member is right to point out that elective surgeries are very much on a continuum. It can be anywhere from elective surgeries that are medically urgent to those that are less serious and in some cases even optional. What the surgical chiefs, the OR managers, the medical directors and the hospital directors do is work together in each OR facility to manage those patients in a manner that is in the best interests of the patients and also, of course, in the evidence-based process that Fraser Health is working their way through.

A. Dix: Well, let's be specific then, because I think it's pretty clear that they were all instructed…. All the hospitals said: "Your budget has got to be reduced by this amount — your elective surgery budget." That amount for the remainder of the fiscal year was approximately 14 percent. Fraser Health has said elsewhere 10 to 15 percent, but I think the number is actually 14 percent, which is between 10 and 15 percent. That works out rather well.

So let's start and ask — the plans for each of the hospitals, because I think the people in those communities want to know what the impact of these cuts in surgery, which I think are pretty significant, have on each of the hospitals.

Let's start in Chilliwack. In Chilliwack, apparently, there's a decision to close an operating room. They're closing one of three operating rooms in Chilliwack. I'll just quote Dr. Richard Schwarz. He calls it an 18 percent cut and says: "Patients who would have had their surgery done on a scheduled basis could become emergency cases because of the long wait, which will then increase health care costs."

In terms of Chilliwack, let's be focused. How many operating rooms is the Fraser Health Authority closing in Chilliwack, and what impact will that have on elective OR hours in Chilliwack?

Hon. K. Falcon: Staff will gather the information for me on Chilliwack General. One thing I do want to emphasize to the member…. I think he's confusing figures. It's important that he not do that.

As I pointed out, Fraser Health will see a 4.6 percent reduction in annual elective surgeries this year compared to last year. Remember, last year, coming off a record year in terms of the volume of surgeries that were performed — in fact, at a level that has never been performed before.

Clearly, excellent work has been done. Although that is somewhat less, I think it is important to know, Member, that through efficiencies and other savings that Fraser Health has very competently worked on, they actually reduced that from an approximate 7.7 percent reduction that they had initially been contemplating.

[1145]

The member has to be careful when talking about 14 percent. A 14 percent reduction in OR budgets does not translate into a 14 percent reduction in the number of patients that will be dealt with through the number of procedures they actually perform.

One of the things that they have been doing, again, is working with the surgeons and the OR directors and
[ Page 2563 ]
managers to say: "How can we try, with the infrastructure that we have, and do things better with the dollars that we have?"

I know the member doesn't apparently believe that it is possible to actually do more even with existing dollars, but that has been demonstrated. The public health system is capable of innovating and doing more.

I just want to correct that for the member. It is not a 14 percent reduction in the number of elective surgeries. It is a 4.6 percent reduction in elective surgeries. Though that is a reduction, and I acknowledge that, it is a reduction coming off record levels of surgical procedures that have been performed in Fraser Health.

A. Dix: The reason it's 14 percent, the minister will of course know, is that the health authorities weren't allowed to submit budgets before the election. They weren't allowed to spread this 4.6 percent cut in elective surgery that he's talking about across the fiscal year. That's why Fraser Health itself calls it a 10 to 15 percent cut from September 18 to the end of the fiscal year.

The reason for that is we're a good way through to the end of the fiscal year. Presumably, that doesn't include the period of spring break and Olympic closures.

We asked about Chilliwack. Perhaps we can ask the minister…. We'll go through it, because Fraser Health, when they sent the instruction, said to the Chilliwack main hospital that they should reduce by 424 their elective OR hours in the period.

Let's go to Abbotsford where they go from a base of 4,424, which includes what would be expected in this period, to a new base of 3,805 surgical hours. What changes are being made specifically at Abbotsford?

What changes are specifically being made at Burnaby, where they're losing 811 elective OR hours? What specific changes are being made in Delta, where they're losing 296 OR hours? What changes are being made at Eagle Ridge and so on?

I don't want to belabour this. The minister has said that he'll get the specific information about what specific surgeries are being cut; what number of OR times are being cut — according to Fraser Health, that's in the range of 6.5 average ORs per day — how many FTEs that means they've lost and all of this information per hospital. Each hospital — and this seems to me to make sense under the circumstances — has a different kind of patient load and is making a different level of cuts.

Will the minister provide — I'm happy to do it today — the information about all of these hospitals, and how these 14 percent cuts are being implemented in all the hospitals across Fraser Health?

Hon. K. Falcon: That's why I say that what Fraser Health has actually done is gone through, I think, a very thoughtful and responsible process of ensuring that these surgical chiefs, the medical directors, the OR managers and the hospital directors all work together to determine and apportion how they are going to manage a very modest but indeed a reduction of 4.6 percent of elective surgeries, given their effort to manage a 3½ percent cost pressure.

They are doing that, working with the people in each of the facilities who understand exactly what their patient requirements are and what their needs are, and they work with the surgeons.

As I said to the member, you may be and apparently are surprised to find that in some cases, they get some pretty good ideas that come forward in terms of how they think they can do more surgeries, based on the dollars they have, by trying different approaches. We certainly encourage them to continue to do so.

I'll tell you, those are decisions that are appropriately being made by the surgical chiefs, the OR managers, the medical directors and the hospital directors working together to make those decisions. They're certainly not going to be decisions being made by the Minister of Health.

[1150]

I certainly would rely on the expertise and professionalism of the medical professionals at the health authorities to make sure they manage those decisions, as they do every year, by the way — always manage their surgical slates in a manner that will ensure they are ensuring that the patients who are receiving surgical procedures are done in an evidence-based process that recognizes acuity levels and organizes the procedures from the highest level of acuity to the lowest. That's what they're doing here.

A. Dix: Of course the Minister of Health is responsible in this House for reporting on what those decisions are. That's why we're asking what the decisions are.

I guess my question to the Minister of Health is — or we could go through them all, and he can answer them all individually: will he provide to us today the decisions that were made in terms of reductions in elective surgery by hospital so that we can see those decisions and see their impact on those hospitals?

We know that an operating room was closed in Chilliwack, because that's been a public issue. We know operating rooms were closed at Surrey Memorial. We know operating rooms were closed at Eagle Ridge.

Will the minister commit? I didn't ask him how the decisions were made. I understand how the decisions were made. What I'm asking him is what the decision to implement this cut in elective surgery was, by hospital.

Specifically, because he keeps referring to 4.6 percent…. I think he'll agree with me that that means a larger than 4.6 percent cut — a cut between 10 percent and 15 percent for the remaining period of the fiscal year in order to make an annualized figure of 4.6 percent, because those cuts started on September 18.

I'm asking the minister if he'll provide the information for Abbotsford, Chilliwack, Burnaby and all the other hospitals of the health authority to this House.
[ Page 2564 ]
Specifically, what's the plan in each hospital, what surgeries are being cut, and what types of surgeries are being cut, etc.?

Hon. K. Falcon: Again, I have to put some perspective on this for the member opposite, because I know the members opposite love to talk about cuts. They're fascinated with that word even in an era where the budget is going up 20 percent. Some perspective might help the member.

First of all, it is important to know that Fraser Health has actually done an exceptional job in reducing wait times, particularly in the areas of hip and knee surgeries. The member will be, I'm sure, interested to know that the wait time for hip surgery has been reduced from 19 weeks to ten weeks. Knee surgeries have been reduced from a 21-week wait to 13 weeks, a significant and dramatic improvement.

Yes, they are having to see a 4.6 percent reduction in elective surgeries in an effort to manage some of the challenges they face. The member is asking me for a breakdown on every single hospital and which patients. I'm advised by staff — not surprisingly, perhaps — that of course we don't have that information. That information would be information that I imagine the authority themselves could gather after spending some time.

But it doesn't take away from the fundamental premise that in an era where we've seen dramatic improvements in wait times as a result of an average reduction of 50 percent in hips, knees and cardiac surgeries, they are still on the elective basis going to be reducing by about 4.6 percent.

Noting the hour, hon. Chair, I move that the committee rise, report progress and seek leave to sit again.

Motion approved.

The committee rose at 11:54 a.m.

The House resumed; Mr. Speaker in the chair.

Committee of Supply (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.

[1155]

Statements

Correction to comments
made in the House

J. Kwan: Mr. Speaker, I wish to correct for the record a comment I made in the November 3 Committee of Supply where I stated that Mr. Francis Chen, who is representing the Chinese Consumers Association, is against the HST.

I should have said instead that Mr. Chen, who is a director of the Canadian Chinese Consumers Association, is against the HST.

Hon. B. Penner moved adjournment of the House.

Motion approved.

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

The House adjourned at 11:56 a.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF ENERGY,
MINES AND PETROLEUM RESOURCES

(continued)

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

The committee met at 10:05 a.m.

On Vote 24: ministry operations, $67,793,000 (continued).

J. Horgan: I just want to pick up where we left off last evening with a few questions for the Minister of State for Mining. I wanted to start off the top, if he could give us — the committee and other members — an analysis of coal prices and how those prices have affected revenue over the past six months.

Hon. R. Hawes: The contract price now for coal is running in the $128-to-$130 range, which is higher than the average over a number of years. In terms of revenues, the Finance Minister will be issuing his quarterly review here in the next little while, and we'll all see what the revenues to government are from coal.

J. Horgan: I'll ask the minister, then, if he could provide this information for the Committee A. What were the budget projections for coal for '09-10? As well, when we're getting out our pencils, perhaps we could have what the budget estimate was for the price of copper for '09-10, whether we're on target and what, if any, options or impacts that will have on revenues, if the minister cares to speculate on that.
[ Page 2565 ]

Hon. R. Hawes: Last year, I think the member knows, copper was running at about $4. In December it fell to about $1.30. It's now trading at around $3 or just over, and our projections are in the mid-$2.50 range. We can provide you with exact details, if that's what you wish, but we don't have them here today. That's pretty approximate, but it'll be not too far out.

[1010]

As I said earlier, the contract price right now for coal is $1.28 to $1.30, and that's set for the year. That would be where we would have planned, because it is set a year at a time. The date that the next setting is…. We'll make plans from there.

J. Horgan: It's interesting to note that the low point for copper is still twice what it was in 1997-98. I have, with the previous Mines ministers, made the point — ad nauseam, I would suspect, from the government's perspective — that commodity prices have never been so sweet for the copper sector here in British Columbia, and yet we still can't seem to get cement in the ground and mines up and running.

But I want to just go back to coal one more time, and perhaps I can get to what I want to know and what I think will inform the committee. Have volumes increased? Decreased? Are they on target?

My concern is that we've seen prices that are positive, one would assume, for the treasury, but if we don't have volumes, I assume, then, that the revenues are lower than expected. Are we on target in terms of price and volume, and will that lead to meeting our revenue targets by the end of year?

Hon. R. Hawes: In terms of volumes for coal, we had projected about 25 million tonnes. We are looking at an actual this year of about 22 million, and for the coming year the industry…. We're accepting that as somewhere between 25 million and 27 million. They'd love to see 27 million tonnes.

I do want to also speak for a second to the comment about there being…. Given the price of copper and the fact that we haven't got a new copper mine, there are a number of factors at play here. Our staff have worked very hard with the industry to try to get approvals through.

In fact, we've worked hard on our permitting process and the environmental assessment process for British Columbia, which is an extremely developed process. It's very thorough. In fact, we believe that that is the best environmental assessment process in the country.

We have been working with Canada, as the member I think knows, to try to get to a one-project, one-assessment basis, because Canada takes an awful lot longer. We have a number of mines that we have actually permitted, and we are waiting and waiting for approval from the government of Canada.

Now what's disappointing to me, very disappointing, is that, as the member may know, in the Finance Committee, as it travelled the province, this did come up a number of times. I think that the members from the opposition on the Finance Committee voted against supporting a resolution that would call for one-project and one-assessment, so, you know, that's been one of our problems.

[1015]

I will say that New Afton, as I mentioned yesterday, is about 40 percent built and soon will be ready to go into production, and Copper Mountain is pouring concrete, as we speak, for the footings for their mill. So these are two mines that are extremely close, and there are others that are in the process. Some have even been permitted by us and are awaiting federal approvals.

Point of Privilege
(Reservation of Right)

J. Horgan: I want to reserve my right to a motion of privilege with respect to potential in-camera discussions of the Finance Committee being revealed here in committee. I'll review the Blues and take a look at that and come back to it another time.

Debate Continued

J. Horgan: I don't disagree with the member on the Canadian process. It has been a challenge for the sector, and I don't disagree with what the minister just said, but I'm concerned how he said it.

I want to go back to the question of revenues from coal. If we estimated 25 million in terms of volumes and we're down to 22 million, what impact will that have on revenues to the treasury?

Hon. R. Hawes: The quarterly report from the Finance Minister will be available very soon, and those revenue figures will be included within the quarterly report from the Finance Minister.

The Chair: Before I recognize the speaker, so noted, the comment from the member for Juan de Fuca.

G. Gentner: I want to return to mining issues relative to the Flathead. I take note of what the minister was suggesting relative to relationships between the state of Montana and British Columbia, the United States and Canada and, of course, the United Nations. I'm not here necessarily to pursue that, but I am here to pursue some of the details relative to the industrialization within the Flathead Valley.

Very quickly, I'd like to know whether the ministry has been in fact involved in a draft plan to establish that that is part of a joint action plan pursuant to the 2003
[ Page 2566 ]
environment cooperation agreement relative to a plan that puts into perspective the industrial applications within the Flathead Valley. My understanding is that this was supposed to begin in 2006, and my understanding is that the plan is complete. My question, therefore, is: did the ministry involve itself in that plan?

Hon. R. Hawes: To the member: I wonder if you could just elaborate. When you talked about a plan, I'm not quite sure what plan. Do you have a name for the plan? I'm not quite sure which plan you might be referring to.

G. Gentner: The plan is a development plan that was put together. I don't have the name of it, but I do know the fact that it's referenced in documentation I have from 2006, a joint action plan pursuant of the 2003 economic cooperation agreement. The plan is complete at the staff level. However, it has not been released. It was to establish water quality objectives for the Flathead River, re-establish long-term monitoring and also increase knowledge of regulatory practices in B.C. relative to mining.

Hon. R. Hawes: I'm, frankly, not familiar with that. If it is with respect to water quality issues, that would be something that would have been led by the Ministry of Environment, and they would be best to be looking at questions such as that.

The Chair: Before I recognize the member, I want to remind all members that the questions relate to Vote 24 for this ministry.

Member, if you could take your seat for a second.

Also, I wanted to remind all people in the committee about guidelines for the use of electronic devices. Ministry officials present to assist a minister on the floor during the Committee of Supply proceedings are permitted to use hand-held electronic devices such as smartphones, BlackBerrys, handhelds to access textual information only.

[1020]

Please note that electronic devices must be programmed to operate silently and that cell phone conversations are not permitted at any time, whether in committee or in recess in this room. Observers in the gallery are not permitted to use electronic devices at all. The same rules apply here as they do in the big House.

G. Gentner: Gold mining in the Flathead. Before we were able to pursue this further, we came to a close yesterday. We adjourned yesterday afternoon, and I still want to pursue it, because there are some questions here that have not been answered.

I'm intrigued by the fact that there was a group called Ecojustice that asked for documentation relative to Max's permitting. When did the ministry allow exploratory permits for Max Resources Corp.?

Hon. R. Hawes: The first application that Max made was in 2007. They did no work under that permit. They reapplied and were issued a permit in early July 2009.

G. Gentner: Moving along, I'd like to know: has the ministry agreed to a non-staking reserve, or are they considering a non-staking reserve this time, for any mining activity in the entire Flathead Valley?

Hon. R. Hawes: There is currently no staking reserve in the Flathead Valley. As the government moves forward with plans, they would be announced, if there were such plans, at the time they were to be implemented.

G. Gentner: Can the ministry tell me a little bit about, let's say, coal mining? New projects and mine expansions under 250,000 tonnes per year — are they exempt from the environmental assessment?

Hon. R. Hawes: If the member's question was, "Is coal mining exempt from the environmental assessment process?" I would say that there is a threshold. If they are looking at doing something that's under that threshold, then there would be a very extensive environmental program run through the ministry. If it's over the threshold, which is 250,000 tonnes, at that point it would be a referral to the environmental assessment office, and it would be a full environmental assessment.

J. Horgan: I'd like to thank the minister of state for his participation in the estimates this year, and now I'd like to, then, direct a series of questions to the Minister of Energy and Mines. We're going to start with some discussions on the Oil and Gas Commission, if staff wanted to make ready.

Before we proceed with those, I have a couple of questions that I did ask yesterday to the minister of state that I'd like to also pose to the minister. I'll start with a simple one, which would be: what areas of the ministry have had budget reductions from last year to this year?

[1025]

Hon. B. Lekstrom: The '08-09 budget of the ministry was $90.594 million, the February budget was $73.212 million, and the September update runs at $72.693 million.

J. Horgan: If it runs at 72, why are we debating a vote at 67?

Hon. B. Lekstrom: There are actually two votes. We will move the second vote at the end of this.

J. Horgan: Again, I'm looking at estimates for fiscal year ending March 31, 2010, and on the page for Energy, Mines and Petroleum Resources I have a final number with vote 24 and vote 25 that is $69.668 million, so what happened?
[ Page 2567 ]

Hon. B. Lekstrom: I will apologize. I gave you the wrong answer on my first answer. The restated numbers for the February budget were $73.023 million, followed by the September update of $69.668 million.

J. Horgan: Just so the committee is aware, and in the minister's defence, the budget estimates this year, because of the election, make it very difficult for the public and members of the Legislature to understand what has happened in the past 12 months, because in that time we've had two budgets.

[1030]

The documents that I have before me, and I assume the ministry as well, show me the estimates for '08-09 and the estimates for '09-10, but we have the February numbers. Now could the minister advise why we went from $73 million in February to $69 million in September, and what areas of the ministry were affected by that reduction?

Hon. B. Lekstrom: The adjustments were…. There was a reduction of $600,000, centralization and administrative functions within the ministry. Moving on, there was a reduction in the hydrogen fuel cell work of $2.2 million roughly, and in the oil and gas roughly $600,000 — $577,000.

J. Horgan: I'll pick up on the hydrogen fuel cell reduction. I recall, throne speech after throne speech, that the hydrogen highway was going to be here. We were going to be riding the new Sea to Sky Highway to the Olympic Games on hydrogen buses. I'm wondering. I know that's not within the purview — before the Chair corrects me — of this set of estimates, but the reduction of $2.2 million in the hydrogen cell section…. We had so much success that the reduction is appropriate, or is it such a disaster that we were wasting the money?

Hon. B. Lekstrom: The hydrogen highway is still active and going. These adjustments were additional program funding. In the reality of today's economic environment, the money just wasn't there to continue on with those programs.

J. Horgan: Well, in light of the economic environment, does that mean that the hydrogen highway and the technology are delayed, or are we proceeding but we're proceeding with less money? Have targets changed as a result of this reduction, or are the benchmarks that have been set by the Premier and the government still in place?

Hon. B. Lekstrom: The hydrogen highway is going ahead still, and the commitments that we have made — the Premier and the government have made — will be going ahead, as I stated earlier. There were some additional programs that were outside of that that would have been beneficial had the availability of revenue been there. As our economic recovery takes place, they may still be able to go ahead, but the commitments made by the Premier and the government are going ahead. The hydrogen highway goes ahead as well.

[1035]

J. Horgan: Again, with this year's estimates, FTE counts are more difficult to find. I know that the minister and his staff will have those numbers at their fingertips, and I'm wondering if they could provide for the committee FTE numbers for '08-09, the February interregnum and then the '09-10 budget for the ministry.

Hon. B. Lekstrom: The '08-09 FTE count was 337 employees. The February budget had 341 FTEs, and the September update 339.

J. Horgan: That's good news for staff and the ministry. That makes me happy.

I asked some questions yesterday of the minister of mines about the ministry's climate change initiatives. I'm wondering, for the benefit of the committee…. The minister quite rightly confined to just the minerals and titles area of mining and didn't have those numbers at his disposal.

You've had the full night to find those figures. So could the minister provide for the committee the benchmark, where we're starting, with respect to the baseline for GHG emissions resulting from ministry activity, and how we're going to proceed from there to reduce them — I believe it's this year — to become neutral?

[1040]

Hon. B. Lekstrom: Our baseline from '07-08 was the 1,146.4 tonnes. For this current fiscal year, our plan as outlined is to reduce by 300 tonnes, and we are on target to be carbon-neutral within the 2010 year coming up.

J. Horgan: Can the minister explain to the committee what steps they're going to take and what the costs, if any, will be to reach those targets and what service delivery may suffer as a result?

Hon. B. Lekstrom: We have taken on a number of initiatives. I will list a number here.

We have taken a lighting retrofit pilot project at the Jack Davis Building. I know that the member is aware of that building. As well, an energy monitoring system has been installed at the Jack Davis Building to help us.

More than 63 percent of staff has participated in what we would consider workstation tune-ups, coordinating and making them more efficient.

We have reduced emissions from business travel by 50 percent. We are still accomplishing our goal through live meetings and video conferencing.
[ Page 2568 ]

A number of good initiatives are taking place. The costs that you associate…. These are non-cost items, at the same time maintaining our ability to provide service and do it in a more environmentally responsible manner.

J. Horgan: The Minister of Mines made a reference to hybrid vehicles at various regional offices with respect to mining. Has the ministry directed that hybrid vehicles be purchased by other regional offices? What's the differential cost between those hybrids and a normal lease arrangement with a traditional gasoline- or diesel-fired engine?

Hon. B. Lekstrom: We have no vehicle purchases in this year's budget or in the years out. A couple of innovative things that the ministry has done…. I'll pass this on to the member.

The ministry has four bicycles in Victoria here for in-town work. The actual staff are utilizing those when they can to go to their meetings. It is the small things that are going to make the difference that each and every one of us can do.

[1045]

The use of mountain bikes in place of trucks and, in some cases, helicopters for our field work with the geological survey branch is another effort we're doing. As well, the ministry provides the bus tickets for public transportation, something that I think is on everybody's mind — how do we better utilize that? So we're very progressive, and we're seeing some good results.

J. Horgan: Well, I'm delighted that I have the minister on side for advancing commuter rail service here in the south Island for his staff to get to and fro from my constituency into town in a carbon-sensitive way. You know, I smirked — the camera doesn't pick that stuff up, as you know, Chair — at the four bicycles. I urge you to get 40 bicycles and pass them around. It's a great idea in a city like Victoria that's very, very bike-friendly, and something that we should see more of.

But, again, my question….

Interjection.

J. Horgan: Except, if you live in Langford, you'd rather get on the train than ride your bike.

But my question was really directed…. Everyone understands that there's a cost to adaptation in a carbon-constrained environment, but this ministry is perceived by the public, rightly or wrongly, as the genesis of dirty economic activity, whether it be mining or whether it be oil and gas development.

We're going to have some suggestions about how we feel about the offshore oil and gas development moratorium and the tankers along our coast. These are all huge environmental issues, and when the public thinks about those challenges, they think of this ministry. As much as I do genuinely appreciate the small steps that are being taken internally to reduce the impact of staff, the sector which the ministry and the minister are responsible for is perceived to be among the dirtiest in B.C.

I am wondering if, with these small steps, the minister can give us a price on what the impact is if we're not buying vehicles this year or looking outward, if we're reducing our reliance on helicopters and so on to do field work. What is the increase in budget pressures as a result of moving to carbon neutrality? Has the ministry been able to quantify that, or are we just proceeding to get the GHG number down and worrying about the cost at another time?

Hon. B. Lekstrom: I'll first start by…. I know you talked about how the public perceives this as the genesis of the dirty….

Interjection.

Hon. B. Lekstrom: Of evil, as he says.

I mean, when we talk about natural gas, I think that most British Columbians, particularly those in the northeast where this is centred, recognize that natural gas is the cleanest burning of fossil fuels. I do want to point that out. We think it has a great future, and mining as well. Both of these industries have come a long way over the last decade in how they do business, their environmental footprint — just like all of us all. We all pay more attention because we learn each and every day that what we do leave a footprint on the land base and that by working together we can actually make a better future for our children.

[1050]

I want to point out that, although being in front of the mining and the oil and gas sector, the alternative energy sector falls under our ministry as well. We have some incredible stories there. With the clean technology industry that's here in British Columbia growing at a pace that is significant, the opportunities are just tremendous. I know the rest of the world — and I think the member would agree — will look to British Columbia with envy for the opportunities we have in that sector.

You did ask on the detailed costs. We will commit to get you that. It is back at the ministry. We will get that breakdown to you as quickly as possible.

J. Horgan: I thank the minister for that. I do agree with him that British Columbia has an embarrassment of riches when it comes to alternative fuels. I would also suggest that natural gas does have a great future, just not at Burrard generation station. That's, of course, something we'll get into in the afternoon. It's that sort of contradiction, and I'm not catching the minister out on this.
[ Page 2569 ]

It's obvious to all British Columbians that we generate enormous revenue through oil and gas exploration in the northeast, which is the area we're going to be moving to in a few minutes. Yet we're piping it past Burrard Thermal on its way to provide energy and electricity for air conditioners and heated swimming pools in Los Angeles, which I'm certain is important. But it does seem to be a bit of a contradiction, and we'll touch on that later.

I just have a few questions about order-in-council appointments within the ministry. Could the minister give me an inventory of the number of order-in-council appointments in his ministerial office as well as any that are in the deputy minister's office or within the ministry?

Hon. B. Lekstrom: Within my office we have my ministerial assistant, one MA, and one EA, executive assistant, and we have two administrative assistants. Within the ministry we have my deputy minister, four assistant deputy ministers, and then we also share one assistant deputy minister with STED on that.

J. Horgan: When we get to the Oil and Gas Commission, of course, there are orders-in-council there. There are orders-in-council at some of the other agencies and commissions that the minister is responsible for. I'll leave that, and perhaps the minister can provide that information at a later date.

[1055]

I do want to go back, though, to the ministry for a moment. There are no OICs beyond the deputy, the four ADMs and the shared ADM for administrative services, or whatever the title is now for joint financial activity? That's it?

Hon. B. Lekstrom: Yes, that is it.

J. Horgan: We'll go to consulting contracts, then, just for a moment. There are two mechanisms to circumvent the Merit Commissioner. I've been an order-in-council appointment in the past, so I don't say that in a derogatory way. One of those ways is consultancy and contracts.

Could the minister provide for me the number of individuals making over $100,000 a year on contracts to the ministry, working on various special projects or other activities?

Hon. B. Lekstrom: We actually provide that information annually through the public accounts. It's an ongoing basis. I know that information is readily available when those accounts are published.

J. Horgan: The minister is quite correct, technically, that those numbers and those individuals are inventoried in the public accounts, but there is no way for the public or this committee to connect the dollar figure and the individual to the ministry.

They are published, as I understand it. I know the deputy has experience in this area. As I understand it, when I go to the public accounts I can get an inventory of dollars spent to individuals, to companies and so on, but there is no link from that to the activity.

That's why I'm taking the opportunity during these estimates to ask the minister what the quantum is for public dollars expended on professional services to consultants over $100,000. I'm hopeful that that's a small number and that it would be readily available.

Hon. B. Lekstrom: I certainly understand the question. I will take that under advisement. I will endeavour to get you the information as you've asked for it there, with the breakdown.

J. Horgan: This is an example of the new standard that the minister and I are setting: ask a question and get an answer. I appreciate that. Thank you very much, Minister.

I want to then just briefly ask another question where you'll have to get back to me later. I did seek from the minister's office an organization chart for the ministry with names attached. I don't know if there's a privacy issue there. They undertook to get me that information. They may well have got it for me, and it's in my in-box. But I'll ask again to the minister for an organization chart for the ministry with individuals attached to activities and functions.

Hon. B. Lekstrom: I will commit to find out where that's at within the ministry and if it is out. It may be in your in-box, and if not, I'll find out where that is at.

J. Horgan: I thank the minister for that.

I'd like to ask just a brief question before we get to the Oil and Gas Commission. Are there any audits completed or underway of ministry activities?

[1100]

Hon. B. Lekstrom: There are two. There is a completed financial audit that is done, the annual financial audit. As well, the Auditor General has started an audit looking at the royalty credit programs.

[C. Trevena in the chair.]

J. Horgan: Can the minister advise the timing, from the Auditor's perspective, on when we would see a completed audit in terms of the royalty permit?

Hon. B. Lekstrom: It's very early. It's at the beginning stages of this. There is no time frame set yet, but if those become available to us, we can certainly share those.

J. Horgan: I thank the minister for that.
[ Page 2570 ]

Just one last question before we get to the Oil and Gas Commission — a series of questions, potentially. Can the minister give me a figure on advertising contracts or advertising expenditures anticipated in this fiscal year?

Hon. B. Lekstrom: We have zero budget for advertising in our ministry.

J. Horgan: A trend that should be emulated by other ministries. I applaud Energy, Mines for resisting the temptation to blow its own horn.

I'd like to now move to a series of questions around the Oil and Gas Commission. I have the orders-in-council for the appointment of an Alex Ferguson and the appointment of a John Jacobsen.

[1105]

I'm wondering if the minister could advise me what Mr. Ferguson's and Mr. Jacobsen's expertise is in the area of oil and gas?

Hon. B. Lekstrom: For our commissioner, who you asked about. Prior to his appointment as commissioner he served approximately two years as the deputy commissioner of the Oil and Gas Commission.

Mr. Jacobsen, his background. He is the retired CEO of Precision Drilling. That's a mouthful, but one of the largest drilling companies in western Canada.

As well, I will point out that the expertise that the member looks at…. The Oil and Gas Commission is really focused on a regulatory environment. That is, they are regulators of the oil and gas industry. Their expertise truly falls in that, as well as the knowledge of the oil and gas industry as a whole.

J. Horgan: Could the minister advise the committee how the Oil and Gas Commission is funded?

Hon. B. Lekstrom: The Oil and Gas Commission is funded through a transfer of money from the CRF, or consolidated revenue fund, of government. That money that the CRF receives is through permit fees and production levies that were established, I believe, while the member was part of government during the 1990s, late '90s.

[1110]

J. Horgan: I was around at the time and had a little bit to do with it. As I understand it, there's an operating loss in '08-09, and I'm wondering how, with all of the activity we've had…. I understand that there will be reference to the downturn, but as I understand it, there's an operating loss of about $3.7 million in '08-09. I'm wondering: is that being paid for out of CRF?

Hon. B. Lekstrom: No, it doesn't come from the consolidated revenue fund. Over the years the Oil and Gas Commission has accumulated a surplus, and for that $3.7 million in '08-09, they drew down on that fund to bring their budget to a balanced position.

J. Horgan: How many staff were working for the Oil and Gas Commission in Victoria in '08-09 as opposed to those working in Victoria in '09-10?

Hon. B. Lekstrom: In '08-09, Victoria office, there were 39 employees. In '09-10 that number rose to 44.

J. Horgan: Well, can the minister explain: are all of these staff housed at the Jack Davis Building, first of all? And can the minister explain why we would have an increase in staff in Victoria when virtually all of the activity that they're responsible for takes place in the minister's region?

[1115]

Hon. B. Lekstrom: The employees here and the increase are primarily dealing with the engineering side of the oil and gas reservoir management, as well as regulatory development. That is why those staff are located in Victoria.

J. Horgan: Are they housed at the Jack Davis Building?

Hon. B. Lekstrom: No, they are not located in the Jack Davis Building at this time or anymore. They have moved to a facility at Dockside Green.

J. Horgan: Was there a savings to the Crown by moving staff from the consolidated location of the Jack Davis Building to a different location at Dockside Green?

Hon. B. Lekstrom: Yeah, there is a realized savings under that. The staff were located not just in the Jack Davis building; they were located in two separate buildings. There was a consolidation when we went to Dockside Green, which makes things far more efficient, as well as the operating costs, because of the green nature of that facility, as I know that the member is very well aware. The operating costs have gone down as well.

J. Horgan: Well, I'd like to go back to the Oil and Gas Commission service plan update. On page 29 we have revenues of $28 million in '06 and $28 million and change in '08-09 — an increase from '07-08 — but we have a massive increase in expenditures from $26 million and change to $31 million and then a further increase in actuals in '08-09.

Can the minister explain how we have an agency that's supposed to be run by the benefits or the advantages we have in terms of the royalty and the commodity…? We've got revenues that are not keeping pace with expenditures.
[ Page 2571 ]
What steps is the minister going to take to rectify that situation?

[1120]

Hon. B. Lekstrom: The increase that the member refers to…. We were getting ready… I say we, but the commission, obviously, was getting ready for the unconventional gas development. I think the member is well aware of the opportunity there, as well as that the increase would reflect bringing in of the new and preparing for the Oil and Gas Activities Act.

I think it's fair to say that as we watched the global economic situation take place, things levelled off, so we had to really harness some of the discretionary funding, as well, to help offset that. But the increase he refers to definitely is looking at the preparation for the unconventional gas. Certainly, as we look to the future, we're well positioned, but it did put the brakes on a number of the investments for a short time, and that's the number reflected there.

J. Horgan: Well, it's difficult to reconcile an increase in revenue, a reduction in well applications and a fairly significant hole in what is a modest budget for an organization that is designed to generate revenue. So again, can the minister explain in more detail than just "anticipating activity" how we ended up with a $4½ million hole in a budget when work was down and revenues were up? I don't know how you do that.

Hon. B. Lekstrom: There are a couple of issues here. First, the OGC doesn't generate revenue for the consolidated revenue fund of government. We'll make that very clear. Actually, the revenue it generates is utilized to drive the Oil and Gas Commission. But the difference would be….

When you look at that, we did ramp up. The Oil and Gas Commission did ramp up in preparation for the unconventional gas, but certainly, as the economic challenge faced the world, that activity didn't materialize to the amount that we thought it would in that year. So the activity was less.

Also, we haven't had a fee increase in two years on this, and this is a fee-based revenue source. So they drew down on the surplus revenues that we talked about in earlier questions to meet that difference in the budget versus revenue and expenditures.

[1125]

J. Horgan: It just seems to me…. I know that the chair of the organization is a certified chartered accountant. I would think that if you have a fee-based activity, you would match your expenditures to your revenues. I can understand that there was an expectation. That expectation wasn't realized.

We can all speculate on what will happen with the commodity price, whether the Horn River basin is going to go at the rate we would want it to go in the years ahead. But we have a pretty big hole.

We have an increase in staff, as you say. The commission ramped up for activity. The activity didn't come in the door, so what are those people doing? Is there a plan to try and deal with these expenditures to bring it into line with the fee-based activity? What plan does the commission have to match revenues with expenditures, which they had been doing a pretty good job of up until the past couple of years?

[1130]

Hon. B. Lekstrom: Well, as we said earlier in a couple of the points we talked about, these were some…. Definitely, we had to look at sound fiscal management within the Oil and Gas Commission. The determination…. When we look back, there were no fee increases, so the surplus was drawn upon to do that.

Going forward, we're certainly looking at what's taking place with our…. We're managing employee turnover, which in the northeast is fairly significant. I think the member is aware of that. As well, part of the challenge was we ramped up for activity within the Oil and Gas Commission to meet what — we looked forward to and had the outlook — was going to be an increase in that activity and then reflected on what took place with the economic global downturn. The best economists in the world didn't predict what was going to happen.

So we're going to manage through this. We are going to do it through sound operational management, deal with our employees and manage that properly, and move forward.

J. Horgan: Can the minister advise if there is an audit committee on the board of the Oil and Gas Commission? If there is an audit committee, why haven't they taken steps to manage the discrepancy between revenues and expenditures?

Hon. B. Lekstrom: Yes, there is an audit committee. That audit committee, through the board, has given direction to manage this discrepancy through employee attrition, as well as their discretionary spending, to get a handle on that and deal with the difference that we're talking about here through this line of questioning.

J. Horgan: So has the audit committee provided the minister with a three-year plan to bring the discrepancy between revenues and expenditures into line? I mean, all I have to go by is we in the opposition get the paper that's published. The service plan, as I have gone through it, gives me no assistance in coming to a conclusion that things are in hand.

I understand that some of the employee satisfaction issues, which are important…. Just for the record, I use that as a benchmark that is appropriately put in a service
[ Page 2572 ]
plan and one that we would want to see achieved. But when we have what is perceived by many as the goldmine of government not mining enough gold to pay for their expenses, it leads people to ask questions as to how the management is going and what the plan is three years out to balance the imbalance. I don't find that in the service plan.

Perhaps the minister would provide the committee, either today or at some future point, with some details. I don't want to spend a whole lot more time on this. We've got a lot of staff here. We've got a lot of questions to deal with. But it's a problem. I don't see a solution in the service plan, and I haven't heard a solution from the minister yet.

I'm certain there is one, and perhaps he can either stand today and wrap this section up, this section about revenues and expenditures, by giving me the answer to how we close that gap with sound financial management and what the plan is to do that, rather than just hoping that activity meets our expenditures. We ramped up, and attrition might not be the best solution to meet that balance in the short term.

[1135]

Hon. B. Lekstrom: I think that in the essence of time, as you've indicated, we will take you up on your offer, Member, to sit down and get you the information that you've requested.

J. Horgan: I thank the minister for making the right call. We were saying it was fourth and ten there — either punt or pass. The pass is a good idea.

I want to talk just briefly. For the benefit of members and those who may be watching, as a southerner…. I think that most British Columbians have a vision of the oil and gas sector as a Beverly Hillbillies sort of scenario where "up from the ground comes a bubblin' crude." Everybody's getting rich. Well, if you own your subsurface rights, that's a good thing.

But a small, small fraction of the people who live in the Peace do own their subsurface rights. The minister knows this very, very well, as a lifetime resident. In my trips to the Peace I've become increasingly aware of the challenges that agriculturally-based individuals have when someone strikes it rich on their property. I know.

I have before me a delegation agreement between the Agricultural Land Commission and the Oil and Gas Commission. It's comprehensive. I've read it. The minister knows it very well.

I'd like to take this opportunity, hon. Chair, to have the minister rise. These are his constituents, as well as his ministerial responsibility. He knows better than I the enormous challenges of having industrial activity on agricultural land, and those who own the land being compensated at agricultural levels rather than industrial levels.

This is not the Clampetts, for those paying attention and the members of the committee. If you have the misfortune of having a large oil and gas company discovering enormous wealth underneath your property, it can be an enormous headache. The minister knows this very well.

I have a two-part question. The one is: does he believe that the delegation agreement between the OCG and the Agricultural Land Commission is working for his constituents and the people in the region? Then beyond that, what steps has he taken to try and address this imbalance of agricultural land being used for industrial purposes and the individuals being compensated as if it was wheat they were growing, not cubic feet of natural gas?

[1140]

Hon. B. Lekstrom: The delegation agreement — is it working? There was an audit just recently completed by the Forest Practices Board. That audit provided favourable information on how the delegation agreement was working. I think we have made a number of steps towards finding the balance. As the member rightfully said in his question, this is about a balance. This is about the people who live on the land base. This is about the companies that come to extract that resource.

We have initiated issues that build that balance. We have a flaring reduction strategy that is in place today. We have an independent farmers advocate. We are just in the process of hiring that position. That is taking place. That is something that has been on the minds of many of our farmers and ranchers in the Peace country for a long time.

We are looking and working towards a land agent code of conduct and new licensing requirements as well — again, something that has been on the agenda of many in that area. We have established a standard surface lease agreement, which has been completed, and an enhanced mediation and arbitration board, which is dealing with the ability to find the balance between the company and the landowner. It was always felt by the landowner that there was an imbalance there. We're correcting that.

As well, we have initiated the good neighbour program, which is really talking about the social licence of the industry to work in an area and to recognize the issues — whether it be road issues, dust…. Really, respect is what it's about. I think it's working very well.

I do want to go back to one of the comments the member made about if a landowner has the misfortune of a company having a find on their land. I do want to point out that many of our farmers and ranchers actually offset their income by working in the oil and gas industry to help keep those farms afloat. I think it's fair to say that agriculture has faced some significant challenges over the last number years. So is there room to improve? Every day. I try and improve what I do. I know the member does as
[ Page 2573 ]
well, and I think we have made tremendous progress in that field.

B. Ralston: I want to ask a question about a related topic. As the minister will be familiar, the technique of drilling called hydraulic fracturing, or fracking, has revolutionized the ability of companies to drill in the shale formations of the Montney and Horn River in his part of the world.

I'm interested in finding out, though, from the minister: is he or the Oil and Gas Commission aware of…? There are some concerns that have been expressed in the United States, and there has been legislation tabled, I understand, in both the House and the Senate in the United States to regulate hydro-fracking under the Safe Drinking Water Act.

Apparently, not only is water used, but there's a combination of sand, water and chemicals. There have been some concerns expressed in some American states about the actual composition of those chemicals and their impact upon drinking water. I'm not taking a position on that. I'm wondering if the minister is aware of that legislation. Has the Oil and Gas Commission received any complaints of that nature? And if so, what is the proposed course of action?

[1145]

Hon. B. Lekstrom: You raise a good point. We are aware of the issue and the questions that have been raised around fracking. We are working right now closely with different states and provinces to find a collaborative way to meet any of the challenges. The one thing that I will point out is that in British Columbia the formations we're talking about in our geology are far deeper than many in the U.S., for example, and other areas. The aquifers and so on that people are worried about…. It is a different geological formation, so we do recognize that.

But we are aware of this. The Oil and Gas Commission is monitoring the fracks as they take place. As we see more activity, it's going to be an issue that we think we can actually monitor very well and look after. As I said earlier, this is not about extracting a resource at any cost. This is about the balance of maintaining a quality of life and maintaining a strong environmental standard in our province and at the same time having this resource work for British Columbians.

D. Donaldson: Hon. Chair, thanks for the opportunity to ask a question here to the minister. It follows along the theme of unconventional gas — in this case, coalbed methane exploration and development. The minister is aware that Shell has a tenure for 412,000 hectares for exploration and development of coalbed methane in the area called the Sacred Headwaters, the birthplace of the Stikine, Skeena and Nass rivers.

I have an order-in-council in front of me that was put in place by this government prohibiting Shell from exploration and development in that tenure for a two-year period. We're coming up to the one-year anniversary. December 5 is the one-year anniversary, and the order-in-council was for a minimum of two years.

I believe the order-in-council acknowledges that perhaps the government proceeded too quickly when they issued this tenure in 2004. The issue behind the order-in-council, according to the news release issued by the government, was to have a break to have more discussions with first nations and communities about that tenure and about the activities of Shell.

My question is…. I've been up in that area recently, hearing from the first nations and communities about the lack of progress around having that discussion. I'm wondering if the minister would advise us. This order-in-council is for a minimum of two years, but it can go up to four years according to the order-in-council. Would he be looking at an extension of this order-in-council to prohibit Shell from exploring and developing coalbed methane in the Sacred Headwaters for a four-year period now?

Hon. B. Lekstrom: As the member rightfully pointed out, it is a minimum of two years. The OIC is written in a way that after that two-year period there will be a review. We are presently in discussions with the Tahltan on this very issue, and it's an important issue. So no determination yet. We are, as you said, coming up to the one-year anniversary. We will continue discussions on this issue with the Tahltan. Following the two years, the review, a determination will be made at that time.

J. Horgan: Noting the hour, I'd just advise the minister and his staff that we'd like to continue on for a few more moments on oil and gas and then proceed to B.C. Hydro, B.C. Transmission Corporation and Columbia Power Corporation.

With that, I move that we rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 11:50 a.m.

[ Return to: Legislative Assembly Home Page ]

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

TV channel guide • Broadcast schedule

Copyright © 2009: British Columbia Hansard Services, Victoria, British Columbia, Canada

ISSN 1499-2175