2010 Legislative Session: Second 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)

Tuesday, March 30, 2010

Afternoon Sitting

Volume 13, Number 2

[ Page 3873 ]

TUESDAY, MARCH 30, 2010

The House met at 1:36 p.m.

[Mr. Speaker in the chair.]

Routine Business

Introductions by Members

R. Sultan: Mr. Speaker, visiting us today is a constituent, Jim Cairns, who wants to be described as an expert on sustainable conservation, which I loosely translate into recycling. He's one of these unpaid, very expert people that appear in your constituency office and who in fact can be enormously helpful in trying to understand the entire issue of recycling in our society.

Accompanying Jim today is Steve Norris, who lives in Comox. He's chair of the Plastic Processors Environmental Association of B.C., very much engaged in the same issues. Would the House please make them welcome.

Hon. B. Lekstrom: Joining us in the gallery today — no stranger to this Legislative Assembly and a friend to many of us, if not all of us — is Mr. Bill Belsey and his wife, Lonie. Will the House please make them very welcome.

M. Elmore: I'd like to welcome two friends here today from Vancouver, my friends Aman Gill and Awit Marcelino. They are third-year political science students at Simon Fraser University, great examples of leadership in the student movement and very active with me in my office in the Youth in Action group. I ask everybody to please make them feel very welcome.

R. Sultan: Also in the precincts today we have 67 grade 9 students from West Vancouver Secondary School, on a tour accompanied by Ian Brown, their teacher; Chris Davidson, a student teacher; and parents Trish Hunt and Daniela Tana. Ian teaches a course on social justice 12, and he hopes to learn something by watching our Legislature in action. Would the House please make them welcome.

N. Letnick: In the precincts today I have the pleasure of introducing my daughter Melanie Letnick, especially since today is her 25th birthday. Would the House make her please feel welcome.

J. Horgan: I was hoping to say "joining us in the galleries," but they clearly haven't made it from the restaurant downstairs yet. We have Doug and Jan Foreman, constituents of the member for Esquimalt–Royal Roads but parishioners in the same United Church congregation that my wife and I go to. Escorting them from the restaurant is my able and charming — and, as everyone knows, sainted — wife, Ellie, who clearly is lost. Would the House nonetheless make the three of them welcome.

Hon. I. Black: Hon. Speaker, it seems like it's a little bit of a family day theme here. I am thrilled to have my eight-year-old son, Jordan, with us in the precinct yesterday and today to enjoy his first couple of days of spring break hanging out with dad and understanding a little bit of the business that gets done in this fine House.

Hon. B. Bennett: I understand that just before I came into the House my colleague already introduced the former MLA for North Coast, Bill Belsey, so I won't do that. I'll just say hi to him and his long-suffering wife, Lonie. Bill was a great MLA, and he wasn't a bad roommate either.

Also, I'd like to recognize the B.C. Wildlife Federation, which is in the precincts today, led by their president, Mel Arnold, who is outgoing after two years of great work. The executive director, Patti MacAhonic, is also here and two of the vice-presidents and a couple of other folks from the B.C. Wildlife Federation. I'd like the House to help me make them feel welcome.

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Ministerial Statements

REMEMBRANCE OF CANADIAN
PARTICIPATION IN WORLD WAR I

Hon. G. Campbell: I rise to make a ministerial statement.

On February 18 we lost the last known Canadian veteran of the First World War, 109-year-old Jack Babcock. His passing marked the end of an era — the end of those from a generation of Canadians who were instrumental in building our national identity, who shaped and defined our country by their sacrifice and their commitment to duty and to honour.

In 1914 Canada entered the world with one division of citizen soldiers under the command of a British general and emerged as one of the premier forces in the world under the command of a native son of Victoria, Gen. Sir Arthur Currie.

Canada entered the war as a country that was thought of as a colony but emerged in 1919 as a signing nation of the peace treaty. Canada had become a nation in her own right during the war, largely because of people like Jack Babcock, who committed themselves to serving their country and to meeting the duties of citizenship.

That nationhood came at great cost to a generation. We owe an enormous debt of gratitude, unfailing gratitude, to almost 620,000 Canadian men and nursing sisters
[ Page 3874 ]
who answered the call to serve overseas. The rallying cry of "Off to England" signalled the beginning of a journey that would end in sacrifice for many who arrived untrained, ill-equipped and unprepared for the horror that awaited them.

Almost 30 percent of them, 173,000, were wounded. Included in that number was my great-grandfather, who often talked of the incredible misery that was faced by every one of those troops. In rat-infested, squalid trenches, rain-soaked, they carried on. They defended and they seized ground at Beaumont-Hamel, at Passchendaele, at the Somme and on Vimy Ridge.

One out of ten Canadians who went overseas to the First World War never came home. They lie in Commonwealth graveyards throughout Belgium and France and are memorialized on monuments in towns they struggled to save.

The Great War was a proving ground of sacrifice for a young nation and her soldiers, and there were no finer soldiers on the ground, on the seas and in the air than Canadians. Four of the top seven British aces were Canadians — Billy Bishop, Bill Barker, Nanaimo's Ray Collishaw and Burnaby's Don MacLaren — and 70 Canadians were awarded the Victoria Cross for bravery. These are Canadian battle honours. They are Canada's sons.

Almost 100 years after that call to arms, we look back with more appreciation than words can express on the people who helped define Canada. We're grateful for that magnificent example and for the magnificent country that we inherited from them. They were confident, loyal, determined young men and women who willingly volunteered to defend against tyranny in the world.

Today a book of reflection has been created to allow British Columbians to show their appreciation. It is here in the Legislature. It is an opportunity for us to pause, each of us as British Columbians to pause, and to reflect on the incredible gifts that we have been given, to reflect on the sacrifices of the veterans of the First World War. That book will be open until April 9, Vimy Ridge Day in British Columbia.

There was a poem that we all memorized in school, In Flanders Fields, and the last stanza of that poem says:

To you from failing hands we throw

the torch. Be yours to hold it high.

If ye break faith with us who die,

we shall not sleep, though poppies grow

in Flanders Fields.

Over a hundred years ago men and women from our country decided to answer the call of freedom and democracy in response to the needs of the people of the human race. They have thrown us the torch. The last Canadian has passed the torch on to each of us.

[1345]

May we honour his example, and may we all reflect on the duty that he showed in creating an incredible country for us all to live in. May we each try in our own way to try and respond to that example and to hold up that honour, to hold the torch that he passes to each of us high.

C. James: I also rise to speak about April 9, which has been declared a national day of remembrance for our veterans. As was said, it's also the anniversary of the Battle of Vimy Ridge, a significant and hard-fought battle for our Canadian troops in the First World War. Most of the people who fought in that war were volunteers.

Our forces accomplished what French and British forces could not. They took Vimy Ridge in a lengthy battle in which the Allied forces were victorious. More than 3,500 Canadians were killed at Vimy Ridge, and on April 9, we all have an opportunity to honour their memory and their sacrifice, and the sacrifices of all the veterans of war.

This national day of remembrance takes on a special significance. As the Premier said, John Babcock, the last-known Canadian veteran of the First World War, passed away recently in February. He was 109 years old.

We know much about his service to Canada, because John Babcock shared his story about donning a uniform at 16. He lied about his age to be able to enter the war. While he didn't ever see combat — the war ended before he was brought to the front lines — he was committed to serving his country.

In later years he shared his stories and his memories with all of us, and as Canadians, we mourn his passing, and we honour his service.

There is a story behind every veteran of war. Many of these stories are never told. Some of them are lost in battle. Others are lost to a proud and profound silence. My grandfather was a veteran of the Second World War, and as children in his family, we never heard those stories.

Veterans of that era, including my grandfather, put those memories away. They came back, and they got to work supporting their families and supporting their communities.

I believe our challenge today is to make sure that we keep their experiences and their memories alive. We need to capture those memories, those reflections, the stories who lived through war in order to ensure that those important lessons are passed on. It's important for all of us to learn from that history and to ensure that all of us never, ever forget.

Introduction and
First Reading of Bills

Bill 9 — Consumption Tax Rebate
and Transition Act

Hon. C. Hansen presented a message from His Honour the Lieutenant-Governor: a bill intituled Consumption Tax Rebate and Transition Act.
[ Page 3875 ]

Hon. C. Hansen: Bill 9 has one primary objective — that is, to provide for the winding down and elimination of the provincial sales tax. It also provides for the elimination of the 8 percent provincial hotel room tax. By passing this bill, it will ensure that British Columbians are not subject to these taxes as the harmonized sales tax takes effect pursuant to the federal legislation, effective July 1.

Eliminating the PST and replacing it with the HST will make B.C. more competitive, it will stimulate the economy, and it will result in more jobs…

Interjections.

Mr. Speaker: Members.

Hon. C. Hansen: …in every region of the province. It will result in the saving of $30 million of administration costs in the provincial government each year, and it removes an additional $150 million per year in compliance costs that burden our companies, including the thousands of small businesses that are the backbone of the B.C. economy.

[1350]

In addition to winding down these taxes, this bill does several other important things. First, it provides for an HST tax credit to 1.1 million low- and modest-income British Columbians. Every three months they will receive a cheque that, in most cases, will more than offset any incremental costs they face from the HST.

Second, it will provide a provincial credit to offset the provincial portion of the HST on residential energy and provide point-of-sale rebates of the 7 percent portion of the HST on motor fuels, books, children's-sized clothing and footwear, children's car seats and booster seats, children's diapers and feminine hygiene products.

Before closing, I must advise the House that some of the provisions of this bill must be enacted prior to May 1. We will therefore be seeking passage not later than the last sitting day in April.

In summary, this is a bill that modernizes and enhances the competitiveness of the provincial tax system by eliminating the old, antiquated, inefficient and job-killing PST.

I move that the bill be read a first time now.

Motion approved on the following division:

[1355]

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

Mr. Speaker: Hon. Members, you've all heard the motion. All those in favour say aye. Those opposed say nay. The ayes have it.

An Hon. Member: Division.

Speaker's Statement

MOTION TO PLACE BILL ON ORDERS OF
THE DAY NOT SUBJECT TO DEBATE

Mr. Speaker: Hon. Members, first reading is purely formal, subject to practice recommendation 5 — no debate, no amendment. After the motion of first reading is passed, the second motion is then made by the sponsor of the bill that the bill be placed on the orders of the day for second reading at the next sitting of the House after today. The second motion is purely procedural and not subject to amendment or debate. So the motion is passed.
[ Page 3876 ]

Bill 9, Consumption Tax Rebate and Transition Act, introduced and read a first time on a division and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Statements
(Standing Order 25B)

ROBERT BATEMAN CENTRE
AT ROYAL ROADS UNIVERSITY

M. Karagianis: Robert Bateman has dedicated his life to soaking up the natural world, understanding it as well as he can and then expressing it in his paintings. The world-renowned B.C. artist turns 80 this year. He has inspired people the world over, and now the inspiration will have a home right in my constituency.

The Robert Bateman Art and Environmental Education Centre at Royal Roads University will be, as the university puts it, a place where art and science merge, where cultures overlap and where relationships between the university and community leaders are forged.

The centre will become the centrepiece of the university's plans to transform the Royal Roads campus into a living, learning laboratory for sustainability. It will contain the world's most comprehensive collection of Mr. Bateman's astonishing body of work. Lovers and students of art will be able to explore his paintings, sketchbooks, personal journals, photographs, films and private collectibles.

In 2006 Mr. Bateman and his wife, Birgit, gave an $11 million gift to the university that includes artwork, archival material and a cash bequest. Many generous citizens have since come forward with donations, and the fundraising effort is continuing full tilt. I'm hopeful that the provincial government will also contribute to the $18 million cost.

The centre is being built as a living building, entirely self-sufficient in energy and water use and constructed from local materials. It will be a place of learning where educators, guest lecturers and artists will deliver programs with hands-on lessons about the environment.

In our collective journey towards establishing a healthier and more sustainable future, it will help us understand stewardship and how to best protect and nurture our precious planet. The Robert Bateman Centre will be a place to appreciate the work of a master wildlife painter, to find inspiration in his creative genius and to find it in ourselves to turn reverence into action.

ARTISAN DISTILLERIES IN B.C.

D. McRae: After being sworn in as a new MLA last June, I had the honour of visiting a distinct part of the Comox Valley riding, Hornby Island. Hornby Island is a very special place. It is populated by artists and craftspeople, is incredibly self-reliant and eco-sensitive, and is home to some unique businesses.

On that visit I was fortunate to have my first tour of the Island Spirits Distillery, one of only eight artisan distilleries in B.C. This particular business creates artisan gin and vodka. I'm proud to say that they have won international awards and are a great example of value-added agriculture in the province.

But this is not the only artisan distillery in the region. Soon to begin distilling its first spirits is the Shelter Point Distillery. This distillery is the only single malt distillery west of Cape Breton Island in Nova Scotia and one of only two in Canada. This business will not only be an excellent example of artisan distilling industry but will also be a unique tourist draw that promotes B.C. agriculture products.

I'm also proud to say that quality artisan distilleries are not exclusive to the Comox Valley. There are also fine distilleries across this province from south Vancouver Island to the Okanagan.

[1400]

I would be remiss if I left out the Sea to Sky region, in particular the Schramm Vodka company. I know that the MLA for West Vancouver–Sea to Sky is very proud of the agricultural products of her riding, and this vodka distillery from Pemberton was the world's first to be certified 100 percent organic. In March this year Schramm Vodka was awarded Double-Gold and Spirit of the Year at the 2010 World Spirits Awards, held in Austria.

I ask the members of this assembly to congratulate all of B.C.'s artisan distillers, and if they are so inclined, raise a glass to their future success.

MAYWOOD COMMUNITY SCHOOL

K. Corrigan: At Maywood Community School in Metrotown three-quarters of the students speak English as a second language, with over 40 languages spoken at the school. Many of the families are refugees, and many live in poverty, but those students and their families lucky enough to come to Maywood find a warm, vibrant, diverse, welcoming and successful community school.

Community schools like Maywood are often the heart of the neighbourhood. They serve and improve the quality of life for residents and for students and their families. They maximize the use of our public schools, with programs offered in the evenings, on weekends and during the summer.

In addition to the regular K-to-7 program at Maywood, there is a StrongStart learning centre, before- and after-school programs for school-age children, well-attended youth programs for students of all ages. There are ESL classes for adults. There's a quilting club, an English conversation club, a clothing room, a lunch program and a breakfast club.
[ Page 3877 ]

Many partnerships with government, non-profits and the private sector enrich Maywood. I want to highlight two of them.

CH2M Hill is a civil engineering firm located across the street from Maywood in the towers of Metrotown. Not only has CH2M Hill provided financial support, but many of its staff and leadership have become involved in the school in a very personal way. For example, Sharon Summerfield regularly works with grade 1 readers. Some of the engineers help students with math and science. There are many more examples.

Thank you to CH2M Hill for the commitment it has made to Maywood.

I'd also like to recognize the Burnaby Fire Fighters Charitable Society. The firefighters make regular deliveries of cereal bars, fruit leather and arrowroot cookies to Maywood and several other Burnaby schools so that any students who miss breakfast or are otherwise hungry can get a snack. In addition to the major commitment by the firefighters, sponsor PriceSmart Food provides a generous discount on the snacks for the society's purchases.

Maywood is a wonderful success story, where every child and community member is valued, and its many partnerships are an integral part of that success.

SENIORS MOBILITY ISSUES AND
SAFERHOME STANDARDS SOCIETY

E. Foster: As we strive to enhance the quality of life for the people of British Columbia, we need to recognize a major shift in the demographics of our country. According to StatsCan, by 2032, 48 percent of all Canadians will be over the age of 65, almost half the country's population. Declining mobility is a major concern for an aging population, and in many circumstances loss of self-sufficiency and independence are attributed to aging.

Protecting the rights and ensuring the comfort of our senior citizens and those with disabilities is a moral duty as well as a professional obligation for us all.

Recently I had the opportunity to attend a presentation by SAFERhome Standards Society. SAFERhome is a not-for-profit organization committed to creating a better standard of living for senior citizens and those with mobility challenges through implementing effective and affordable change that meets the needs of both consumers and developers alike.

SAFERhome encourages developers to build truly sustainable community models through policy options that include a human element. By following 19 simple steps, it offers the opportunity to build housing that works for a multitude of potential buyer groups — seniors, young, multigenerational families and anyone with any form of special need.

This program has proven to have an on-site construction cost of less than $1,100 per housing unit for a single family and less than $700 for multifamily, as compared to $100,000 to retrofit an existing house, or $40,000 for a multifamily.

These changes do not require legislative change but education of our developers, as a safe home is generally worth more in the housing market. It is therefore a cost-effective and efficient measure which ensures that we respond to the changing dynamics of our province with prudence and sensibility.

[1405]

HAITI EARTHQUAKE RELIEF WORK
BY NELSON RESIDENTS

M. Mungall: Well, 45 minutes after arriving in a community just west of Port-au-Prince on January 12, 2010, three teachers and 17 students from Mount Sentinel School along with four volunteers from Kootenay Christian fellowship, including my neighbour Jim Reimer, were shaken out of their hostel. They were at the epicentre of the 7.0 earthquake that has rocked Haiti to the ground.

As they ran into the street, they left behind $10,000 of raised funds for community supports. Amidst the chaos, that money was stolen. However, the high school students still had the money in their pockets, and it was with both this money and their spirit that the Nelson region began its direct role in rebuilding a devastated Haiti. The students pooled their pocket money to buy rice so that they could give it to those who had nothing. Days later all 17 students arrived home safely.

Three other Nelson residents were caught in the quake, and they, too, survived to then turn around and help many of the injured people in Port-au-Prince. Since January several locals have journeyed to Jacmel, including two midwives and a local paramedic, Alon Gelcer. They are building and operating a clinic for women and children. And today another two Nelson residents are in Haiti contributing their medical skills to the national university hospital.

This one particularly hits home for me because one of these residents sits across the kitchen table from me. Over the next two weeks my partner, Zak Matieschyn, is joining Dr. Joel Kalia in Haiti's busiest emergency room. Although the earthquake has left the headlines, the need and the devastation remain. You can be sure that where there is a need, there is definitely a Nelsonite.

WORKER TRANSITION ASSISTANCE
PROGRAM AND PROJECTS

J. Slater: I am pleased to say that the community development trust program has been benefiting out-of-work resource workers in many B.C. rural communities. We are helping unemployed forest workers, their families and communities to get through these tough, challenging times in the forest industry.
[ Page 3878 ]

This program creates new job opportunities, assists laid-off workers in upgrading their skills and eases the transition of older workers who are leaving their forest sector jobs. The job opportunities–program portion of the three-tiered trust will fund projects that create community-based jobs for up to six months in and around forest-dependent communities.

These jobs will create short-term employment and income while providing the communities the benefit of improving local recreation and tourism infrastructure. Over 3,000 jobs thus far have been created. In the Boundary area of my riding 23 jobs have been created and $500,000 has been invested in urban tree planting, mountain pine beetle surveying, and range fence clearing and repair.

I would like to highlight four projects that have been funded under the job opportunities program. Dennis Contracting will be receiving over $100,000 to clear range fencelines and repair existing fencing in the Rock Creek and Westbridge area.

Whitewater Forestry Consulting is receiving over $200,000 to complete mountain pine beetle star probe surveys, which will include falling and burning infected trees in the Christian Valley–Kettle River area. Jackass Logging Ltd. will receive approximately $133,000 and employ four workers to complete range fence clearing, repairs and fence removal on range units in the Grand Forks area.

The job opportunities program was first announced in May 2008 as one component of the federally funded $129 million community development trust. In July 2009 the provincial government committed an additional $30 million towards the program, which the federal government is matching on a project by project basis.

Mr. Speaker: Hon. Members, earlier on the division vote on Bill 9 the numbers were correct, but there were some names missed. They will be corrected on the record.

Oral Questions

REMOVAL OF SALES TAX EXEMPTION
FOR ENERGY-EFFICIENT APPLIANCEs

C. James: The HST threatens to cost families and small businesses millions of dollars a year, but under this government, British Columbians don't have to wait until July 1, the tax's proposed implementation date, to start paying more.

[1410]

Effective April 1, the B.C. Liberals have cancelled PST exemptions for Energy Star appliances, making consumers pay more for green choices. My question is to the Minister of Finance. Will he admit that his government's HST betrayal will cost B.C. consumers and our environment?

Hon. C. Hansen: The PST as it applies to Energy Star appliances was scheduled to expire on March 31, and that is the case. It's not a case of eliminating something earlier. It is actually what was originally built into the program.

The Leader of the Opposition is flat wrong, because the HST is the single biggest thing that's actually going to stimulate the economy and create jobs in this province.

Mr. Speaker, if you look at the track record of this opposition over the last nine years, they were wrong in opposing the reduction in personal income tax. They were wrong when they opposed the reduction in the small business tax rate. They were wrong when they opposed the implementation of the carbon tax in British Columbia, and they are wrong when they oppose this transformation — the elimination of the PST and the transitioning to the harmonized sales tax.

Interjections.

Mr. Speaker: Members.

The Leader of the Opposition has a supplemental.

C. James: I'd like to remind the minister about who's wrong. The B.C. Liberals are wrong about the HST. That's who is wrong. How quickly this government changes their view. PST exemptions were at the centre…

Interjections.

Mr. Speaker: Members.

Continue.

C. James: …of this government's so-called climate action plan. The government thought PST exemptions were terrific then. They spent millions of dollars advertising those incentives. "You choose, you save," they told consumers. Well, it's the B.C. Liberals who chose not to renew those PST exemptions and to bring in the HST. That's what's wrong.

So my question, again, is to the Minister of Finance. Why is he punishing consumers for making environmentally friendly choices in British Columbia?

Hon. C. Hansen: That's a bit surprising coming from this Leader of the Opposition, who actually opposes the clean energy agenda that this government has put in place, which is being celebrated around the world.

This is a government that has done more to drive a clean climate action agenda than any other government in the history of the province. We're going to continue to drive that agenda, and the transition to harmonized sales tax is one that's going to ensure that even our clean energy sector in British Columbia is going to be able to benefit and create jobs for British Columbians.
[ Page 3879 ]

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

C. James: I'll tell the minister and this government what's clear. What's clear is that they threw their climate change agenda out the window and brought in their HST agenda, and that's what matters to this government.

Even appliance companies are sending out last-minute flyers to consumers. "Last chance," the flyers say. "One shopping day left before the B.C. Liberals make you pay 7 percent more."

Again, my question is to the Finance Minister. Why won't he just admit that his HST betrayal is hurting consumers and hurting the environment?

Interjections.

Mr. Speaker: Just take your seat, Minister.

Members.

[1415]

Hon. C. Hansen: I think the Leader of the Opposition has an obligation to ensure that only factual information is circulated. I will give her an example of something I think she should follow up on with her caucus member from Delta North.

When he talks in here about "the additional 7 percent is on top of the present PST," it is that kind of factual misinformation being circulated by members of the official opposition that is just blatant fearmongering.

APPLICATION OF HARMONIZED SALES TAX
TO GREEN PRODUCTS

R. Fleming: Here's the fact of the matter. This is why the Minister of Finance is doing what he's doing. It's because his deficit deceit trumps the environment, and that's the reason why the HST is being introduced.

Beginning on Thursday the B.C. Liberals' HST is going to mean that green products like Energy Star appliances will cost more for British Columbians. Other tax exemptions for energy-efficient heating, green building products, insulation will be gone by the end of the year.

My question is for the Minister of Finance. Why is he using his HST agenda to punish British Columbians who want to make choices that help the environment?

Hon. C. Hansen: I think that's another example of the kind of misinformation that's being spread by members of the official opposition. I will point out to the member that heating oil for residential purposes is exempt. So I think they should get their facts straight.

But Mr. Speaker….

Interjections.

Mr. Speaker: Members.

Continue, Minister.

Hon. C. Hansen: There are literally tens of millions of dollars of additional funding in this year's budget to support clean energy technologies, to support a clean climate action agenda in British Columbia. I think that perhaps this member and his colleagues for once can actually stop being hypocrites, stop pretending that they're supporting one thing and then voting against it. This is actually an opportunity for them to stand up and vote and support the budget measures that actually provide for that clean action agenda.

Mr. Speaker: Member has a supplemental.

R. Fleming: What British Columbians clearly understand is the hypocrisy and misinformation that come from that minister and this government, who promised something before the election, and that was that they would never introduce the HST. Here we are on the eve of the HST being introduced by this minister and this government. That's hypocrisy, Mr. Speaker.

Let's be clear. The B.C. Liberals' HST means that green products will be taxed more from here on in, and it means that oil and gas get a break. The minister referenced that a minute ago. It gets worse. Under the B.C. Liberals' HST, luxury cars get a tax reduction while hybrids, electric vehicles and even bicycles get a tax increase.

So the question for the minister again is: why is he using his HST agenda to exempt high-end gas guzzlers while taxing green vehicles and consumer products, and how does that help B.C.'s environment?

Hon. C. Hansen: It's true. Actually, this government did introduce measures to temporarily exempt PST from certain products, including Energy Star appliances. The question is: why did the opposition vote against that measure?

[1420]

Interjections.

Mr. Speaker: Members.

B. Ralston: Back in 2008, when the so-called green budget was before the Legislature, the minister certainly at that time never said anything about green exemptions being temporary. This was a step on the way to the green New Jerusalem that we heard about back in 2008.

The HST will eliminate…

Interjections.

Mr. Speaker: Members.
[ Page 3880 ]

B. Ralston: …the power of the province to create those kinds of sales tax incentives in the future. In fact, in the election, in writing, the B.C. Liberals said that was one of the reasons — this lack of flexibility for the province — why they, back then before the election, said they opposed the HST.

To the Minister of Finance: why is he making it more difficult for British Columbians to make green choices?

Hon. C. Hansen: Quite frankly, I'll put the environmental track record of this government up against the NDP's track record anytime. But Mr. Speaker….

Interjections.

Mr. Speaker: Continue, Minister.

Hon. C. Hansen: When we have an analysis that's done by one of North America's leading tax economists, Jack Mintz, who actually says that the shift to the HST alone is going to generate more than 113,000 jobs in British Columbia over the next decade….

When we look at the benefits that the HST will have in ensuring that our clean technology and clean energy industries in British Columbia are going to be more competitive and able to drive those costs down so they'll be more affordable to consumers and, also, more competitive on the international markets, there is no question in the minds of any of the leading analysts that have looked at the HST. It is the right thing to do for jobs and for the economy in British Columbia.

Mr. Speaker: The member has a supplemental.

B. Ralston: Mr. Mintz, back in 2008, did another paper. He wasn't paid by the B.C. Liberals to do that one. What he said there, in a simulation for the first four to five years of implementing an HST, was that it would lose jobs, that it would cost the economy of Ontario jobs. So I guess it depends on who's paying the bill what opinion comes out of Mr. Mintz's mouth.

But why does this minister insist on forcing consumers to pay more for green products?

Hon. C. Hansen: It's a shame that this member would actually choose to denigrate the reputation of one of Canada's leading economists, who has an international reputation for excellence in tax accounting.

But let's talk about some of the organizations that are 100 percent in support of this shift to the HST. We've got the Institute of Chartered Accountants of British Columbia. We've got the Canada West Foundation. We've got the certified general accountants of British Columbia.

We've got the Law Society, which I think the member may even be a member of. We've got the B.C. Chamber of Commerce, which has been endorsing and supporting HST now going back to the mid-1990s. We've got the B.C. Agriculture Council. We've got the B.C. Construction Association. We've got the B.C. Pulp and Paper Steering Committee. The list goes on and on.

Why do these organizations support it? Because it's going to be good for the B.C. economy. It's good for the ability to create jobs in every single corner of this province, and it's going to be the single biggest thing that we can do to stimulate the economy and create jobs.

[1425]

EDUCATION FUNDING
AND SCHOOL CLOSINGS

R. Austin: This government's decision to underfund the school system has left districts with little choice except to close community schools. More than 49 schools face closure. My question is to the Minister of Education: how many schools have to close before this government fulfils its promise to parents and protects education?

Hon. M. MacDiarmid: As the member opposite is well aware, British Columbia has had a substantial decline in enrolment over the last ten years. We have lost — well, not lost…. We have 56,000 fewer students attending school. We are concerned not about the students who are no longer attending schools; we are concerned about the students who are currently in schools.

We have a proven track record. We have increased education funding every single year, and not only that, the member opposite is well aware that we are investing in new schools and replacement schools — $1.7 billion since 2001.

Mr. Speaker: The member has a supplemental.

R. Austin: Less than two weeks ago the Premier told media in Prince George that we should "never underestimate the value of a school in a small community." Yet this government hasn't lifted a finger to protect schools in small communities like Big Lake, Lac la Hache, Buffalo Creek, Topley, Hixon, Malakwa, Mackenzie and Hazelton. Again, to the Minister of Education: if this government values small community schools, why are they bolting their doors shut?

Hon. M. MacDiarmid: Certainly, the member opposite has referred to Prince George. This is a school district that has been one of the most affected by loss of students. This school district has declined from over 18,000 students to 14,000.

But this school district…. There's a recognition of the challenges they face. They will be receiving $6.4 million in this district to address the unique features that they have. This is no different from the other rural districts.
[ Page 3881 ]
This district is receiving funding for small community supplement — for climate, for sparseness, for rural and low enrolment factors and also over $4 million to address their needs in transportation.

CLOSING OF RURAL SCHOOLS
IN PRINCE GEORGE SCHOOL DISTRICT

B. Simpson: The Prince George school district has already closed 15 schools since 2002. Tonight the future of another 15 schools hangs in the balance.

Austin Road Elementary, Nukko Lake Elementary, Springwood Elementary, Salmon Valley Elementary, Shady Valley Elementary, Central Fort George Traditional School, Giscome Elementary, Hixon Elementary, Peden Hill Elementary, Dunster Elementary, Mackenzie Elementary, John McInnis Secondary, Lakewood Junior Secondary, Heather Park Middle School, Central Fort George Middle School — all slated for potential closure tonight. Many of those are in small rural communities, which the Premier says deserve a school.

This government will have effectively engineered the end of rural education in the Prince George school district.

My question to this minister is: if this minister knows that the small school funding is insufficient to keep these schools open, will she commit today to make the decision tonight easier for the school board by committing to increase that funding to keep these schools open?

Hon. M. MacDiarmid: I think perhaps the member opposite wasn't listening when I spoke before, so I'll just go over these things again. We recognize absolutely how difficult it is when school districts are faced with these kind of decisions — that the school is the heart of many communities. But the school district in Prince George is dealing with a difficult situation where they previously had 18,000 students, and they now have less than 14,000.

[1430]

There is definite attention paid to the unique factors that they have in Prince George. They are receiving $6.4 million this year as part of their funding over and above their per-pupil funding, which has gone up by 32 percent since 2001.

Mr. Speaker: The member has a supplemental.

B. Simpson: Will the Minister of Education please tell this House what the educational value is of a child sitting on a bus for three hours?

Hon. M. MacDiarmid: As I've said, we are certainly working with this school district and all of the school districts to help them address what they have to deal with in the districts. We absolutely are providing funding in this district and in other districts for the unique geographical factors that they have.

Interjections.

Mr. Speaker: Members.

Minister, take your seat.

Interjections.

Mr. Speaker: Members.

Continue, Minister.

Hon. M. MacDiarmid: We in British Columbia face exactly what many jurisdictions across North America face, and it is the reality of the demographics. We have fewer students in schools. By the end of next school year we believe we'll have 60,000 fewer students in our schools than we did.

What we need to do is do our best in each and every school district for the students who are still in our system. That is why we are once again providing record funding for education, why are we going ahead with programs like full-day kindergarten. It is because of our commitment to education in the province.

SURREY SCHOOL DISTRICT
COSTS AND FUNDING

J. Brar: The Surrey school district has grown by 2,700 students since 2005, yet Surrey schools haven't seen a penny more for schools since then. This year the Surrey district is being forced to cut $2 million from classrooms just to pay for more portables. Because portables are not energy-efficient, the district will have to cut even more from classrooms to pay for carbon offsets mandated by this government.

My question is to the Minister of Education. Why should children in Surrey suffer because of this government's shortsighted decision to freeze construction of new schools?

Hon. M. MacDiarmid: I think the member opposite is well aware, as we all are, that the district of Surrey is the most rapidly growing of all our school districts. In fact, we have 52 of the 60 where enrolment is declining. Operating funding in the Surrey school district is up 56 percent since 2001. Of the 60 school districts in this province, there is no school district where we have invested more in capital than in Surrey — $202 million.

The member opposite is well aware of this, because he was there for the ribbon cutting when we opened Cambridge Elementary in Surrey and when we opened Panorama Ridge Secondary School.

Interjections.
[ Page 3882 ]

Mr. Speaker: Members. Members.

S. Hammell: Not one new school has been funded in Surrey since 2005-2006 — not one new school. I'm not quoting myself. I'm quoting the chair of the Surrey school district — not one new school since 2005-2006.

[1435]

Next year Surrey will have 7,300 students in portables, enough to fill 12 large elementary schools — 12 schools. If the government doesn't start funding schools and building them now in Surrey, that will rise to 8,500 by 2015.

Again to the Minister of Education: how many schools have to be in portables before this government takes action and gets our children into classrooms?

Hon. M. MacDiarmid: Well, here are the facts about Surrey. We are working very hard with the Surrey school district to accelerate school construction to address the steadily increasing number of students. Here's what we've done since 2005. We completed three new schools: Cambridge Elementary, an investment of $8.4 million; Panorama Ridge Secondary, a 1,100-student school, $27 million.

EMERGENCY ORTHOPEDIC SERVICES

A. Dix: On Friday the Interior Health Authority, as a direct result of decisions taken by the Ministry of Health, will downgrade orthopedic emergency services in Kelowna, Kamloops and across the region as a result of changes that the authority is making to the MOCAP program, the doctor-on-call program.

Can the minister explain what evidence there is, if any, to justify the decision to downgrade emergency services under this program?

Hon. K. Falcon: For the benefit of members, the medical on-call availability program was introduced by this government in, I believe, 2003. We spend $126 million a year, and what that does is provide doctors payment for being available and on call. Once they are called in, they also receive additional payment, of course, for the work they do.

Under the physician master agreement we negotiated with the B.C. Medical Association, what happens is there are MOCAP committees in every region, as the member would well know, where doctors sit on those committees with administrators. They determine what level of MOCAP funding each of the different doctor groups receives.

It is entirely appropriate that those decisions are made, according to the physician master agreement, by those committees. I agree that every time a decision is made, there are some that like it and some that don't like it. But I can tell you this much. The decision will not be made here in Victoria.

Mr. Speaker: The member has a supplemental.

A. Dix: On a provincewide program, the minister is justifying a lower level of service in Kelowna and Kamloops and Surrey than exists in Vancouver and Prince George and Victoria. It makes no sense.

If he doesn't want to hear it from me, if he doesn't want to hear the logic from me, why doesn't he listen to Peter O'Brien, the head of orthopedic trauma at the University of British Columbia, who says: "A plan that designates orthopedic surgeon response time at two hours is inappropriate"? Why is it inappropriate? Because we're talking about compound fractures — two hours. We're talking about…

Interjections.

Mr. Speaker: Members.

A. Dix: …pelvic fractures — two hours. We're talking about necrotizing fasciitis and femur fractures. That's what we're talking about.

How can the minister justify a lower level of service in Kelowna, in Kamloops? How can he justify a lower level of service there than he does in other communities in British Columbia?

Hon. K. Falcon: I would encourage the member to come and receive a briefing on the MOCAP operation. I think it might actually be helpful to the member to inform himself.

These decisions are best made by the health authorities in the committees that are available, and doctors sit on those committees.

[1440]

Interjections.

Mr. Speaker: Members.

Hon. K. Falcon: Well, I appreciate the interjection from the member from Powell River. Maybe the member can explain what MOCAP is. I rather doubt the member is, probably, even remotely familiar with it. But the essence of the situation is this. Under level 1….

Interjection.

Mr. Speaker: Member.

Continue, Minister.

Hon. K. Falcon: I haven't heard that this is an issue in Powell River–Sunshine Coast, but I'd be interested in
[ Page 3883 ]
hearing from the member if the member believes it is. These are decisions that are appropriately made by the MOCAP committees, made up of physicians and administrators. They make their decisions based on the needs of the region.

The member should know that in the area to which he refers, they made the decision that interventional cardiology is actually very important to have quick service, and they made that decision appropriately, by the committee.

[End of question period.]

Orders of the Day

Hon. M. de Jong: I call Committee A, Committee of Supply — for the information of members, the continuing estimates of the Ministry of Small Business — and in this chamber, continued committee stage debate on Bill 6.

Committee of the Whole House

BIll 6 — FINANCE STATUTES
AMENDMENT ACT, 2010

(continued)

The House in Committee of the Whole (Section B) on Bill 6; L. Reid in the chair.

The committee met at 2:43 p.m.

On section 30 (continued).

B. Ralston: Can the minister explain the purpose of this particular…?

The Chair: Excuse me, Member.

Can I invite members having private conversations to take them outside the chamber?

My apologies. Please proceed.

B. Ralston: Can the minister explain the purpose of this amendment of section 243?

Hon. C. Hansen: To put it simply, it extends the immunity protection to cover persons appointed under section 277.2 to assist the administrator of a credit union in difficulty.

Section 30 approved.

On section 31.

B. Ralston: This proposed amendment repeats some of the language that we discussed in an earlier amendment. I'm taking it that this is a consequential amendment arising out of the choice of this language in the previous section.

[1445]

Hon. C. Hansen: This section parallels the provisions we discussed earlier around the removal of a director and officer. This gives the commission the powers to actually order a person to cease doing an act and to take out specific actions as a direct result to provide remedy in a situation.

B. Ralston: Can the minister explain what the consequence might be should a person disregard an order from the commission?

Hon. C. Hansen: It could be determined that it is an offence under the statute, which could lead to prosecution, or there could be administrative penalties that could be brought down as well.

B. Ralston: In some statutes — I think it's in the labour relations act — I recall that a refusal to follow a direct order from the administrative body in question can lead to the order being filed with the Supreme Court and thereafter enforceable as a Supreme Court order, with all the power that that implies.

Is there a provision in this set of amendments or in the act itself that permits that?

Hon. C. Hansen: The answer is yes. It's in the statute. It's section 246.

Section 31 approved.

On section 32.

B. Ralston: Can the minister just confirm that it uses the same language as just used in the previous section (5)(a) and (b)? Can the minister confirm the purpose for which this amendment is proposed?

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

Sections 32 and 33 approved.

On section 34.

B. Ralston: This proposed amendment is a substantial rewriting — at least a complete repeal of the existing 253.1 — of the area entitled "Administrative penalties." Could the minister set out, perhaps in an overview, what the significant changes are that are proposed in the area of administrative penalties? These are obviously powers given to the commission to administer the act.
[ Page 3884 ]

Hon. C. Hansen: This particular section replaces the current provision with an efficient and effective administrative penalty framework and creates a streamlined process for minor administrative penalties. So section 253.1(5) provides that where the amount of the administrative penalty is less than $5,000 in the case of a corporation or $2,000 in the case of an individual, a person who wishes to dispute the penalty will continue to be provided with an opportunity to be heard, but submissions must be in writing only.

It also extends the limitation period for imposing an administrative penalty from six months after the date on which the contravention is alleged to have occurred to two years after the date. It makes further technical amendments to approve and clarify the process for issuing administrative penalties.

B. Ralston: In section (10) there is a maximum set on the amount of an administrative penalty — $50,000 in the case of a corporation or $25,000 in the case of an individual.

[1450]

Earlier the minister spoke, in reference to other sections, about a principle-based administration. Why are these amendments not simply proposing to let the commission, in its discretion, decide the appropriate amount of an administrative penalty with no upper limit rather than limit the maximum that might be imposed as an administrative penalty?

Hon. C. Hansen: It is necessary for there to be a limit established in terms of what those penalties should be because this is a penalty that is assessed by the regulator, not by a court. Therefore, it is not appropriate for unlimited powers to be granted in that case.

B. Ralston: A question with two aspects. Can the minister give a sense of the rough range of penalties that have been assessed up till now and then perhaps an explanation of why this particular choice? It would seem on the surface to be arbitrary. Why not $100,000? Why not $200,000? Why not $10,000? There doesn't seem to be any particular magic to this choice of numbers. Perhaps the minister could explain that.

Hon. C. Hansen: What this does is continue the levels that were established in the previous legislation. There have not been penalties assessed under these sections in the past. One of the reasons for that is the six-month time limitation.

It's felt that with the longer time there is for imposing administrative penalties after a contravention, that will allow for that work to be done. We anticipate that this section would get used more in the future, and once we have an experience with that, we'll be able to better determine whether or not these particular levels are appropriate. We believe they are. But once we have more experience with the section, we may come back and revisit.

B. Ralston: In subsection (11) it says that an order must specify, among other things, a person's rights to appeal. To what body is an appeal made? Is it made to the commission on the basis of a rehearing, is it directly to the superintendent, or is it to some other body?

Hon. C. Hansen: If it's a decision of the commission, then the appeal would be to the courts. If it is actually a decision of the superintendent that is being appealed, then the appeal would be to the Financial Services Tribunal.

Sections 34 to 36 inclusive approved.

On section 37.

B. Ralston: This is a proposed amendment to section 289 to add some further paragraphs. Can the minister explain the purpose of adding those, other than consistency with the section 253.1 that we've just debated?

[1455]

Hon. C. Hansen: These changes are just to establish the regulation-making powers pursuant to the other sections that we've already dealt with.

Sections 37 and 38 approved.

On section 39.

B. Ralston: Perhaps we could deal with these as a group, section 39 through section 42. They deal with amendments to the Home Owner Grant Act. I believe that in his initial explanation the minister made some comments that this was, really, regularizing the manner in which the forms for this were prescribed. Perhaps he could just confirm that.

I believe my colleague from Stikine has a question on section 41 as well.

D. Donaldson: This section 41 deals with the homeowner grant and is an amendment to section 18 of the Home Owner….

The Chair: Member, we're dealing with section 39. Is that your desire, to comment on 39?

D. Donaldson: Thank you, Chair. I don't have any questions on section 39.

Section 39 approved.

On section 40.
[ Page 3885 ]

B. Ralston: I apologize. I may have inadvertently confused my colleague. What I was proposing was that we deal with the three together or the four together. I don't know whether that's possible — to take the questions on all four and have the vote on all four at once. If that's not the case….

I would like the minister, then, briefly to explain the purposes of section 39 through section 42. After that's done, perhaps we can deal with section 39 and section 40.

Hon. C. Hansen: These sections, the amendments to the homeowner grant, simply provide for the ability for the minister to approve changes to forms. As is currently the case, every single change has to go to cabinet for approval by Lieutenant-Governor-in-Council. There are sometimes numerous changes, especially as we get into on-line application processes. This actually will streamline that.

D. Donaldson: Just to clarify section 41, which is an amendment to the wording to section 18 of the Home Owner Grant Act, regarding who can make regulations respecting who may certify that a person is a person with disabilities. Could the minister advise? Section 18(2)(a) states that there can be prescribed "persons in addition to medical practitioners who may certify…."

Is this a change, then — adding people other than medical practitioners who can certify that a person is a person with disabilities?

The Chair: If it's the will of the House, when we call the vote, we'll call the vote on 40 through 42.

Hon. C. Hansen: This extension of the powers, really, is just to enable additional medical professionals to be designated, to allow them to make these approvals. For example, it may be appropriate for nurse practitioners in some cases to approve this designation. This simply allows for the power for that scope of who can do that to be expanded.

[1500]

D. Donaldson: Thank you for that. I'll describe a situation, and maybe that will clarify it for me further. If a person with a disability is not certified by a person other than a medical practitioner under this amendment, then what is the appeal process for that person, if they dispute who's been prescribed to certify them if it's not a medical practitioner?

Hon. C. Hansen: It would be to the administrator of the homeowner grant who could review that decision.

Sections 40 to 42 inclusive approved.

On section 43.

B. Ralston: This section commences a new series of amendments to the Personal Property Security Act. Section 43 is an amendment to section 7, which is the law applicable to mobile goods and intangibles and the poetically named "etc." Can the minister explain…? There's a reference to a registered organization. This appears to make it easier to define the law that applies in the case where the personal property, I think, either originates from or the debtor originates from the United States.

Hon. C. Hansen: These amendments will harmonize the debtor location rule with the rule in the U.S. commercial code. It will provide more certainty, and it will reduce costs for the secured parties. To keep Canadian provinces harmonized, the change will become law when the other provinces make the same change. This is really to provide for common definitions throughout North America.

B. Ralston: Is this code sometimes called the Uniform Commercial Code? I think that's the term that I've heard it referred to by. That's the first part. Then the second part is: are there any other Canadian provinces that have instituted this definition?

Hon. C. Hansen: First of all, the Uniform Commercial Code is what we're talking about. It's the same thing. Secondly, there is one province that has currently already passed these amendments, and that's Ontario. In Saskatchewan it's before their Legislature.

B. Ralston: We used to hear more about TILMA. We haven't heard so much lately. Is this not something that would fall within the ambit of the relationship between Alberta and British Columbia in an effort to coordinate laws, particularly as they apply to business?

Hon. C. Hansen: This arises out of national initiatives under the Uniform Law Conference, not out of any particular bilateral relationship with Alberta. They have not yet introduced their amendments, but they are expected to do so.

Sections 43 and 44 approved.

On section 45.

B. Ralston: These are all entitled "Transition," so I assume from that that sections 7.2 through 7.6 are there to guide the transition to the new definition when it becomes law. Is that correct?

Hon. C. Hansen: That is correct.

[1505]
[ Page 3886 ]

Sections 45 to 50 inclusive approved.

On section 51.

B. Ralston: These next two amendments are to the separate act, the Repairers Lien Act. Can the minister explain the purpose of those amendments?

Hon. C. Hansen: The same changes that are being proposed will be made to the same processes under the Repairers Lien Act and the Personal Property Security Act. The two steps will be combined into a single 40-day demand period. A 15-day demand period in section 5(2) becomes a 40-day demand period.

Just let me correct this here. The two steps will be combined into a single 40-day demand period, plus ten days for deemed receipt of notice. The 15-day demand period in section 5(2) becomes the 40-day demand period.

Changes to section 5(3) enable the person making the demand to register a financing change statement amending or discharging the registration upon providing satisfactory proof that the demand was given to the garage keeper, if the garage keeper does not comply with the demand or register a court order.

Sections 51 and 52 approved.

On section 53.

B. Ralston: The next series of amendments are proposed amendments to the Securities Act. The first one is a change in the definition of "forward-looking information," striking out "results of operations" and substituting "financial performance." Obviously, it's felt that this better and more accurately describes forward-looking information. Can the minister explain the significance of that substitution?

Hon. C. Hansen: This is simply a change in terminology. The amendment replaces the term "results of operations" with the term "financial performance." Both terms are accounting-related terminology, and the change to financial performance is necessary to facilitate Canada's changeover to international financial reporting standards as of January 1, 2011.

Section 53 approved.

On section 54.

B. Ralston: This is an amendment to section 55, and the substantive part seems to be adding "a credit rating organization or a credit rating" to an area where the heading is "Approval of commission or executive director not to be represented." I gather it's simply to add that as one of the enumerated heads that can't be…. One can't represent that the commissioner or the director has passed on any of the merits of such an organization.

Hon. C. Hansen: What this amendment does is add the credit-rating organizations to the list of market participants. The regulation-making authority proposed in this bill will allow for the development of regulations to regulate credit-rating organizations. This amendment ensures that a person cannot improperly use any status a credit-rating organization may achieve under those regulations.

B. Ralston: I note, looking at the definitions section in section 1, if I have it correctly, that a credit-rating organization or a credit rating is not a defined term. Can the minister explain why it's not necessary to define it and what is meant by those two terms?

[1510]

Hon. C. Hansen: It was felt that a specific definition is not required, as it is commonly understood in the securities industry — those companies that provide credit ratings and what constitutes a credit rating.

Section 54 approved.

On section 55.

B. Ralston: This amendment proposes an amendment to section 83. That's entitled "Obligation to send a prospectus." Can the minister explain? It appears to simply add the phrase "other prescribed document" to each subsection. If there's something else there, then perhaps the minister can elucidate.

Hon. C. Hansen: This amendment will facilitate the development of disclosure rules tailored to specific kinds of securities such as point-of-sale disclosure regime for mutual funds.

Sections 55 and 56 approved.

On section 57.

B. Ralston: This is a repeal of section 135(a). It appears to make reference, the same reference, to "other prescribed document." It appears to be, I guess, the gravamen of the amendment. Can the minister explain if there's anything other than that change?

Hon. C. Hansen: Again, this is to facilitate the development of these new disclosure rules. This specific amendment will extend the right to rescind or seek damages to purchasers who do not receive disclosure materials prescribed by the regulations.
[ Page 3887 ]

Section 57 approved.

On section 58.

B. Ralston: This amendment falls in the section or part of the act entitled "Civil Liability for Secondary Market Disclosure." It's a proposed amendment to section 140.1 in paragraphs (a) and (b) of the definition of "core document." That appears to be a minor change substituting "an interim financial report" for "interim financial statements." There's the similar term of "results of operations" and substituting "financial performance."

If there's any further explanation, perhaps the minister can provide it.

Hon. C. Hansen: No. It is simply a change of terminology, again, to facilitate Canada's changeover to international financial reporting standards.

Sections 58 to 60 inclusive approved.

On section 61.

B. Ralston: Section 148. This is a section now entitled "Evidence not to be disclosed." It would appear to be a section protecting the confidentiality of an investigation insofar as the commissions undertaking investigation. Can the minister explain? It appears to be a more detailed section proposed with this amendment. Can the minister explain the purpose of the change?

[1515]

Hon. C. Hansen: This change is in response to a court ruling from last July. It was a decision of the B.C. Court of Appeal where this section was declared invalid in 12 months due to its overly broad application. The current provision that we are changing creates a general prohibition against a person disclosing evidence or information related to an investigation by the commission.

What this amendment does is replace the general prohibition with a provision that enables the commission to make an order prohibiting a person from disclosing, but only for the purpose of protecting the integrity of an investigation.

B. Ralston: Sometimes in court decisions there's a suggestion as to what might be more acceptable wording. Is that the case? I'm not familiar with the decision. Is that the case here, or is this an effort by the drafters to craft a broader response to the decision itself?

Hon. C. Hansen: The court did not suggest or prescribe language. This language, we believe, achieves the intention of the court and will address that specific issue.

B. Ralston: Just for those who might look for this passage in search engines, perhaps the minister could just briefly give the legal citation of the court decision so that it's easy to locate this section.

Hon. C. Hansen: It is Shapray v. B.C. Securities Commission.

B. Ralston: I'm sure the Clerk will confirm that a little bit more is required to locate it. Perhaps the full citation might be read. I'm sure those there can provide that.

Hon. C. Hansen: The specific information that I have, or the most specific information I have, is that it is a July 8, 2009, decision of the B.C. Court of Appeal, and it's Shapray v. the B.C. Securities Commission.

Sections 61 to 65 inclusive approved.

On section 66.

B. Ralston: This is a proposed amendment to section 183. It appears to be a slightly more substantive one. This deals with the power of the Lieutenant-Governor-in-Council — that's the cabinet — to make regulations. Can the minister, then, explain the purpose of this proposed amendment?

Hon. C. Hansen: This proposed amendment will provide the power to make regulations to regulate credit-rating organizations.

B. Ralston: Is there a proposed draft of what might be required in order to regulate credit-rating organizations? I suppose with that might come…. Has there been some regulatory difficulty that gives rise to this concern? I understand that it's proposed to incorporate credit-rating agencies into the legislation, but this is a different power. I'm wondering what gives rise to the request for these powers.

Hon. C. Hansen: The short answer is, no, there's not a draft regulation yet. This is an initiative that's being undertaken by all provinces — not just the passport provinces but Ontario, as well — to ensure there is a common regulatory framework for credit-rating agencies right across Canada.

Section 66 approved.

On section 67.

[1520]

B. Ralston: One is tempted to refer to Sigmund Freud and the definition of a cigar, but I'll forgo that particular pleasure. Can the minister explain what is
[ Page 3888 ]
proposed here in an amendment to the Tobacco Tax Act?

Hon. C. Hansen: The purpose of this is to make sure that we have the ability to collect tobacco taxes appropriately as they are assessed against cigars. That required a definition for "cigar." Rather than trying to invent one ourselves, we have made the decision to use the same definition as is used in the federal Excise Act, which defines cigars for the purpose of importation of cigars into Canada.

Sections 67 and 68 approved.

Title approved.

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

Motion approved.

The committee rose at 3:21 p.m.

The House resumed; Mr. Speaker in the chair.

Report and
Third Reading of Bills

Bill 6 — Finance Statutes
Amendment Act, 2010

Bill 6, Finance Statutes Amendment Act, 2010, reported complete without amendment, read a third time and passed.

Hon. G. Abbott: I call second reading debate on Bill 8, the Energy, Mines and Petroleum Resources Statutes Amendment Act.

Second Reading of Bills

Bill 8 — Energy, Mines and
Petroleum Resources Statutes
Amendment Act, 2010

D. Donaldson: I rise to address the second reading of Bill 8, the Energy, Mines and Petroleum Resources Statutes Amendment Act.

[L. Reid in the chair.]

I'm very happy to address this act because it has implications not only provincewide and especially in the areas of the province that are impacted by oil and gas exploration and development right now but also in my area with the potential development of coalbed methane in the Sacred Headwaters region and around Telkwa, as well as the potential for the Enbridge Pipelines project. So I'm very happy to rise to discuss this bill.

The first area I'd like to talk about is the introductory remarks by the minister regarding this act, where he said that the changes in this bill are "a positive step forward toward a more balanced approach between industry and the affected landowners in the region." This was in regards to the oil and gas activities part of the act.

I'm happy that the minister made those comments, because he's recognizing that the approach right now is unbalanced. We've heard that throughout the region, and we've heard that throughout the province, that more balance is required, that the Oil and Gas Activities Act that came into effect in 2008 — and I'll have a bit more to say about how it came into effect — is unbalanced. The minister is recognizing that now.

So that's a positive step forward, and I look forward especially to the committee stage, where we will be looking at this act, this bill, on a section-by-section basis for some of that. But I'll make some more general comments right now.

[1525]

The act — the part of it that deals with the oil and gas activities section — talks about the Oil and Gas Commission having expanded.…

Deputy Speaker: Hon. Member, may I ask you to hold your remarks in abeyance. The minister needs to move the bill.

D. Donaldson: Certainly, hon. Speaker.

Hon. B. Lekstrom: I am pleased to present the Energy, Mines and Petroleum Resources Statutes Amendment Act. Through this act, the ministry will amend provisions in two statutes, the Oil and Gas Activities Act and the Petroleum and Natural Gas Act.

The first set of amendments is to the Oil and Gas Activities Act, which received royal assent in the spring of 2008. The Oil and Gas Activities Act consolidates and modernizes the regulatory structure for British Columbia's oil and gas sector by improving permitting, improving environmental regulations, encouraging innovation, enhancing compliance and enforcement powers, and enhancing the Oil and Gas Commission's powers to respond to landowners' and stakeholders' concerns.

The regulations for the new act have been under development for the past two years. During this work minor issues were identified with the new act which, if amended, would strengthen the operation of the act and the regulatory structure. These are the changes which are proposed to the act today.

The oil and gas industry in British Columbia employs thousands of British Columbians and is the largest resource contributor to B.C.'s provincial revenues. In fiscal
[ Page 3889 ]
year 2008-2009 the oil and gas industry generated over $2 billion in Crown revenues. Since 2001 the industry has invested over $37 billion in the province.

The oil and gas industry has an exciting future for British Columbia as world-class unconventional gas plays are being discovered and developed. The Oil and Gas Activities Act will continue to drive the investment in the development of these resources while safeguarding our environmental and social values.

The second set of amendments under this bill is to the authorities and mandate of the Mediation and Arbitration Board under the Petroleum and Natural Gas Act. The board's role is to facilitate in the resolution of issues related to access by industry to private land. With the significant growth in the oil and gas activities in the northeast of the province, the role of the board in dealing with access issues by oil and gas companies is becoming more important every day.

The amendments are designed to strengthen the authorities of the board so that dispute resolution processes will be improved for both landowners and industry. The name of the board will be changed to the surface rights board to reflect the authority of the board, which is to deal with competing rights to the surface. The processes that the board will follow will continue to include mediation and arbitration.

Key changes to the authority and mandate of the board will allow landowners to initiate the process with respect to the right to entry, will allow the landowner or oil and gas company to bring forward a surface lease compliance complaint and will allow for disputes to be resolved through mediation or, if that fails, through an order for compensation.

It enables neighbours and tenants to bring forward claims for compensation for damages arising from oil and gas activity. It will allow the board to consider the real costs of negotiations to a landowner when issuing an award cost and enables the board to impose penalties or suspend an operator's right of entry to land for failure to comply with a board order or a provision of the act related to the rights of entry.

The proposed amendments to the Petroleum and Natural Gas Act were developed following consultations with the Northeast Energy and Mines Advisory Committee. The amendments to these statutes will enhance our competitiveness and support our thriving oil and gas industry while ensuring responsible development.

With that, I would move second reading.

J. Horgan: It's indeed an interesting turn of events that would have me standing in my place today as the official opposition Energy, Mines and Petroleum Resources critic speaking on amendments to the Oil and Gas Activities Act. Why that's interesting….

[1530]

My friend from New Westminster, who was a new member to the Legislature, will have to hear a bit of the history of this act before we get on to the substance of Bill 8.

The Oil and Gas Activities Act was introduced by the government in 2008. It was done so at the high point of the hysteria at that time on the government side with respect to carbon offsets, carbon taxes and reducing our greenhouse gas emissions.

Of course, we on this side of the House found it passing strange that in the midst of all of the furor and celebration by members on that side of the House and their desire — and ours, as well, on this side of the House — to reduce our carbon footprint, to reduce our greenhouse gas emissions…. The government and the minister of the time, Richard Neufeld — now ascended to the Senate, the lofty Red Chamber in Ottawa — introduced a 207-clause bill that was going to accelerate and expedite oil and gas development, mostly in the northeast but right across B.C.

When I rose to speak to what was then Bill 20, hon. Chair — and you would have remembered this, I'm sure, at the time — I spoke briefly at second reading. I said, at the end of my remarks, that I looked forward to the detailed clause-by-clause discussion, the meat and potatoes of legislation — the work that's just been done by my colleague from Surrey-Whalley and the Finance Minister from Vancouver-Quilchena with Bill 6.

These are substantive pieces of legislation, a number of clauses that have impacts on our daily lives with respect to the finance bill, but certainly the Oil and Gas Activities Act is going to have a significant impact, not just on landowners but also on industry.

When I took my place in 2008, I had every expectation that my colleagues and I would have an opportunity to go through each sentence in what was then Bill 20. You can well imagine my surprise on the 29th of May when in one minute — one minute — the government passed the Oil and Gas Activities Act without any debate at third reading. They used a vehicle called closure, or the guillotine. They stopped, suspended debate and passed the bill in one minute.

Here I am a year and a bit later having an opportunity to speak at second reading on the Oil and Gas Activities Act, which is an amendment to a bill that I never had an opportunity to speak to at third reading.

When I go through…. This is not really a prop. It's a weighty book of statutes here in the province of British Columbia. I have a wall of them beside me. The cameras can't pick that up, but there are numerous books holding all the statutes in the province of British Columbia.

When I turn to the Oil and Gas Activities Act section, it's but one page. Now, it was a 207-clause bill in 2008, when it was passed here with closure. When you read the one page, it says: "Parts 1-10, sections 1-118, not in force."
[ Page 3890 ]

So we used closure because we didn't want to debate these issues any longer. We didn't want to slow down the process. Closure was introduced. The bill was passed, and here we are a year and a half later, amending the bill. We're amending sections of the bill that are not in force.

You needed closure, hon. Minister and members of the government, to pass this bill because it was so important. All the work had been done. All the homework was…. There was no need to go clause by clause, page by page through this very thick tome which was then Bill 20. Here we are a year and a little bit later, and we're amending that bill because the homework wasn't done.

I give credit to the current minister for recognizing the glaring error of the time that his predecessor, Richard Neufeld, ascended to the Senate…. I'm hopeful that he has the parliamentary channel there. If he's awake in the Senate today…. It's getting late. It's close to the dinner hour in Ottawa, but I'm hopeful that he's tuning in to see what he has wrought here in the Legislature.

He introduced the bill. We had a brief discussion at second reading, anticipated third reading — committee stage — and final passage of the bill, perhaps with amendments — reasoned, thoughtful amendments that we would have brought forward on this side of the House after consultation with people in the community.

Well, the current minister went back home. We have to remember, and certainly it's no surprise to the minister because he lives in the heart — his constituency, Peace River South — of the oil and gas industry…. His neighbours were none too happy about this. At its core, the Oil and Gas Activities Act is about landowner rights and subsurface rights.

[1535]

Quite often, we have…. Of course, in 2002-2003 the revenues from oil and gas surpassed forestry here in the province of B.C. That was a monumental moment. It was passed without much fanfare. There was an expectation — I see the former Minister of Forests — that forest revenues would increase, get back to traditional levels. Unfortunately, that's not happened, and we've seen a downward spiral in the forestry sector as we've seen an increased activity in the oil and gas sector.

Revenues from this industry, this sector of the economy — fundamental to our social programs. That's why, in the 1990s, the New Democrat government of the day created the Oil and Gas Commission to try and accelerate activity in this region. The minister is well aware of that, and I have heard him on occasion give credit where credit was due and commend the NDP government of the time, back in the 1990s, generating and stimulating economic activity.

I tip my hat to him, because I know he will, when he wraps up the bill, be reminded of that and pay homage to minister Dan Miller for introducing the bill and creating so much wealth and economic opportunity in his community.

But ultimately, it's about landowner rights and subsurface rights. This is the interesting thing. I come from southern Vancouver Island. I grew up watching The Beverly Hillbillies. There's an expectation, an understanding, I think, in the general population that if you hit oil, "up from the ground comes a bubblin' crude" and everybody gets rich. Not so here in the province of British Columbia.

If you don't own the subsurface rights, you could have the largest pool of natural gas in the universe under your homestead in Dawson Creek and that is no value to you whatsoever, save and except what pennies fall off the table from those who own the subsurface rights.

Now, this is a longstanding debate. In the five years I've been in this place, we've had a couple of debates around how we protect or further protect landowners from those who have the good fortune of owning subsurface rights, whether it be for mineral extraction or whether it be for oil and gas.

I know that I speak from an inferior position in this matter with respect to the minister, because it is his back yard. His neighbours are involved in this, whether they be landowners or subsurface rights holders. It's a challenge finding that balance. Unfortunately, in 2008 the then minister, now a senator loftily ascended to the Red Chamber, didn't take the time to do his homework and do the due diligence required to try and find that balance.

I'm advised that I am to take the minister's word on it that we will be able to get back to clause-by-clause discussion of these amendments, and I'm hopeful he'll be able to keep that, although I know it's not up to him. The Government House Leader sets the agenda. He was the one who introduced closure. It wasn't the Minister of Energy and Mines at the time.

We're at the whim of the Government House Leader. I know he monitors the debates very closely, and I'm fairly confident that he will allow us the opportunity to do the due diligence and the work that we're required to do as legislators to go through this bill piece by piece.

Again, it's passing strange, and I know my esteemed colleague from New Westminster, a former Member of Parliament, would be shocked and appalled to think that you could pass a 200-clause bill in one minute. But that's British Columbia for you. That's the parliamentary tradition in this place. Let's use whatever vehicle is at our disposal to ram through legislation, contentious and otherwise.

Why this was contentious at the time — and I know my colleague from Stikine is going to talk about this and my colleague from Maple Ridge–Pitt Meadows — is that it was at the very time that the government was professing to have an interest and a concern about greenhouse gas emissions.
[ Page 3891 ]

There is no greater source emitter as a sector in this province beyond the oil and gas sector. There's a gas plant proposed in Fort Nelson that if completed and fully operational will increase our greenhouse gas emissions by up to 3 percent. We've passed legislation here — hon. Speaker, you know that; you've been in the chair or voted in favour of it — to reduce our greenhouse gas emissions by 33 percent by the year 2020. Now, how we do that in 2010 by increasing our greenhouse gas emissions in one sector is a mystery to me, but I look forward to more magic and conjuring and pixie dust from the Minister of Environment and others on that side of the House to somehow find a way to get to that conclusion.

I want to talk, in the time I have remaining, about just what we're doing here in general terms, as we do at second reading.

The Energy, Mines, and Petroleum Resources Statutes Amendment Act, as I said, is designed primarily to fix the problems that exist in the Oil and Gas Activities Act. At that time it was consolidating or amending four pieces of legislation — the Petroleum and Natural Gas Act, the Oil and Gas Commission Act, the Pipeline Act, and sections of the Forest Practices Act. So it wasn't an insignificant piece of work.

[1540]

It was actually a dense piece of work. I know. I met and had a very thorough briefing from the deputy minister at the time — still is the deputy minister — and his staff. They walked me through the bill. They assured me that consultation had been exhaustive and complete and there was little or no opposition to the substance of the bill. Of course, that turned out to be incorrect. Here we are, a year and a half later, amending that bill that has not yet come into force.

As we go through the bill, there are two significant sections. One is amending the Oil and Gas Activities Act. The other one is amending the Petroleum and Natural Gas Act, if I'm not mistaken. I'm looking at the minister. He's nodding his head.

If those who are following this at home want to go to their interwebs and go searching for those two acts, they'll have a better understanding of what we're trying to do. At its core it comes down to how we balance what is traditionally, I think — and the minister can correct me or will correct me, I'm sure — agricultural activity in the Peace country.

Homesteaders didn't come to northeastern British Columbia to look for oil and gas. They came for economic opportunity through the land, whether it be through livestock or wheat and various other agricultural activities — the member for Saanich South is well familiar with this — and during that time there wasn't a lot of thought given to "up from the ground comes a bubblin' crude." There wasn't a Jed Clampett mentality there at the turn of the century, but that did develop over time.

Of course, now I've been to the Peace many, many times. I've visited with the minister in his hometown. Virtually everything there is driven by the oil and gas sector. Every family is touched in one way or another by that activity, for better or for worse.

I would think that on balance it's generally for the better, but I have also met and discussed and consulted with many, many landowners who are concerned that their agricultural existence is wildly disrupted when an oil and gas company makes a claim and brings their industrial activity into what has been a relatively tranquil and pastoral setting of many, many sections of farmland.

The trick here, I think, is the amendments that the minister is talking about — changing a name, changing the Mediation and Arbitration Board to the surface rights board. Now, I'm hopeful that we're not just putting new paint on an old building — and I'm getting a headshake on that — and when we get to third reading, which I know I've got a solemn commitment to do, we'll be able to have that discussion in more detail.

The challenge for the landowners, the farmers, the homesteaders, generational residents in the Peace country…. Their concern is that the compensation they receive for this sometimes massive intrusion on their way of life, their farm, their home is in agricultural terms rather than industrial terms. You're bringing, in some cases, trucks, wellheads, drill equipment, a significant footprint in an agricultural setting.

The cows apparently don't like it. Who could blame them? Who could blame any of the livestock for being concerned about massive industrial activity taking place in what used to be a place you would graze a little bit, maybe lie down, walk around, stick your nose up in the air? Well, now you've got to be very careful, or you're going to step into a wellhead, and down you go. I'm exaggerating, hon. Speaker. I know you'll find that surprising. But I'm exaggerating, although I might be getting a note from the Ag critic here any minute. Apparently not.

There's a massive intrusion in the agricultural life and quality of the people in that area, and when they are compensated, in some instances it's pennies on the acre. In other instances farmers have done very well, and in fact they're able to subsidize their…. In some seasons with drought conditions — it becomes subsistence farming rather than a business — they're able to offset their losses, or their lack of income from the land, through cheques from oil and gas companies that are accessing the land for industrial purposes.

Quite often, as has been pointed out to me, this compensation from oil and gas companies is greater than any compensation they'd get from the governments, whether federal or provincial, for the agricultural activity that's taking place there. We all need food to eat.

There was a member that used to say that all the time. It bugged me at first, and then I started saying it as well, because she headed out the door — Val Roddick, of
[ Page 3892 ]
Delta South. She had this mantra that she would go on about. Some members are nodding. And it was annoying at first, but it became something that I also joined in on.

We need food to live, and the Peace country has been historically the breadbasket of British Columbia. But now it is the oil basin and the natural gas home for many, many industries and many, many billions of dollars in revenue to the Crown.

[1545]

What we need to do…. I'm going into territory that the member for Saanich South would prefer to tread, I believe. We need to somehow find a balance not just between the industrial activity versus the agricultural activity, and have compensation, as we should, from those industries and those companies that are benefiting, but also a recognition by government that those agricultural values are valuable in and of themselves and should be protected and encouraged through programs and initiatives at the provincial level. I know my friend from Saanich South is tireless in her promotion of that.

The other issue that we've been talking about — and I had some questions for the minister earlier on in the session — was the issue of orphan wells. The Auditor General issued a scathing report. The minister dismissed it, alleged that staff had been working on it, and I think we see some of that work in this bill.

I look forward again to committee stage to ensure that the suggestions and recommendations that the Auditor General brought forward in terms of trying to manage and deal with potential environmental catastrophes in communities throughout northeastern B.C. can be addressed by the amendments that are proposed in this current bill.

I want to talk a little bit about NEEMAC, which is the Northeast Energy and Mines Advisory Committee. It consists, as the minister knows and many members may know, of landowners, industrial representatives and other stakeholders. Those other stakeholders — who are they? They're usually non-governmental organizations with an interest primarily in protecting and advocating for landowners as opposed to subsurface rights owners.

That balance is usually tilting towards those that have the most money. I don't know if that's a new phenomenon. I rather doubt that it is. I think that as long as there has been money, those that have it tend to do better than those that don't.

In the course of doing business in the northeast, landowners have been at a disadvantage historically and certainly were not aided and assisted in any way by Bill 20, which was brought forward and passed by closure in this place.

The minister advises me and has committed to ensure that the consultation that NEEMAC has been part of — or that the Northeast Energy and Mines Advisory Committee has been participating in — with the Oil and Gas Commission and others has been fulsome. And you don't always get what you want. Everyone understands that. You have to put a little bit of water in your wine, particularly at this season of the year.

The challenge, I think, for legislators and certainly for those of us on this side of the House is to ensure that industry doesn't have an upper hand in these negotiations and does not have the pen when legislation is being written.

I think there were many, when they came to see Bill 20 passed by closure, that were concerned: "Well, if this was such a good bill, if the Oil and Gas Activities Act was so important.…" Consolidating archaic and outdated language is an important thing, and the bulk of those sections that were passed by closure really did have nothing, really, to do with today. They had everything to do with modernizing language and ensuring that industry and landowners had one place to go to exercise their rights.

I think that when a bill is passed with closure, you have to have a pause. Any democrat, any parliamentarian will tell you that it's not a left and right issue. It's not an NDP or B.C. Liberal issue. If a government, any government, decides that they do not want to have fulsome debate on a piece of legislation, that's cause for pause.

It is with some satisfaction and comfort…. And I'm not trying to be too smug, hon. Speaker; you know me to be a humble fellow. I find it delightful, I have to say, to be standing here rubbing someone's nose in this.

I'm not going to bother rubbing the new minister's nose in it, but I certainly will take the opportunity to rub a senator's nose in it. What the heck. He's not here. He doesn't have to defend himself ever again. He doesn't have to talk to a constituent for the rest of his natural life. That's good for him. He makes more money. He's got a nice, I think, indexed pension.

I saw him at a conference the other day. He looks really good. So Richard Neufeld, good on you. You must be doing just fine there in Ottawa in the Red Chamber until you're 75. I think: "Thank goodness, they have to retire now." They can't stay there until they drop.

I do want to rub the former minister's nose in it, because I have the opportunity. What the heck. I'm on my feet. The Minister of Aboriginal Relations isn't even heckling me. I feel a little bit alone here without some input from him.

[1550]

Interjection.

J. Horgan: Oh, thank you, hon. Minister. Thank you very much. Very kind.

Again, I'm not going to take up any more time. I've got other business to attend to. There are other members who wish to speak.
[ Page 3893 ]

I just want to again commend the minister for bringing forward amendments to a bill that has not yet been proclaimed, or it has been proclaimed but is not yet in force. I think that's rapid response. When you find that something is not working before you've even implemented it and you take steps to fix it, I think you should pat someone on the back.

D. Black: It might go in Guinness records.

J. Horgan: It might go into it. Well, we had a Guinness Book of Records here for things being before the courts, but they didn't end up printing that.

It is a unique opportunity, and there are some people in the gallery. I don't think you'll ever see this again in any legislature anywhere in the world — where someone will bring forward amendments to pieces of legislation that are not yet in force.

With that final comment and a tip of my cap to Senator Neufeld and a gracious thank-you to the minister for assuring us that we will not see closure on Bill 8, I will take my seat.

P. Pimm: It certainly is refreshing to listen to the member for Juan de Fuca and how he goes on about the Senator. It's a very interesting debate, I must say. I think, in fairness, that the Senator, if he were here to speak for himself, would certainly have a fairly decent argument for you. I won't take his spot, because I don't think that's my duty.

As you all know, the oil and gas industry is huge in my area. As the member for Juan de Fuca said, it touches nearly all of the people one way or another, whether it's the farmers or the people in the agriculture industry, where they have to get a second job to make their income through the winter to keep their summer jobs on the farm available for them. Lots of times that's what they have to do.

Anyhow, the government has created one of the most competitive environments for natural gas in the petroleum exploration in North America right here in the province of British Columbia, and I think that's very important. Certainly, with the resources that we have — the Horn River and the Montney coming up in the future — I think we have to make it attractive so that we can all benefit from the oil and gas industry.

The oil and gas industry, like I said earlier, is the largest employer in our area. Most people in northeastern B.C., one way or another, are involved in the oil and gas industry.

[C. Trevena in the chair.]

B.C.'s natural gas and petroleum industry is the largest source of resource revenue. In 2008 it was the largest resource revenue for the province. It generated over $4.09 billion worth of revenue. That's pretty amazing, because when I first walked into this building, it was…. It's not even one of the resources that are identified in the halls of the Parliament Buildings here. I think maybe that's something we need to have a look at, and maybe we need to get the oil and gas industry up on the walls of this building, along with agriculture and forestry and that sort of thing.

The province is continuing to attract new investment through the innovative infrastructure and royalty programs that they've introduced. In 2008 industry capital investment was estimated at $8 billion. That's three times the amount invested in 2001.

In fact, since 2001 the industry has invested almost $38 billion in British Columbia. I think that's something we can all be very proud of, and it certainly goes a long way to helping out our health and education systems. The oil and gas industry certainly is an important part of the provincial coffers.

The natural gas and petroleum industry creates 34,000 direct and indirect jobs. That goes to show that it really is an important part of our industry and a major employer for the province.

The province continues to provide incentives — and I might underline the word "incentives" — not subsidies for natural gas and petroleum development. New royalty programs were developed to encourage summer drilling and production of wells that were previously not economical. Basically, a lot of that goes a long way in the summer drilling program.

[1555]

One of the things that a lot of you from down here and, probably, my colleague from Juan de Fuca…. He probably doesn't understand that half of our country up there is what they call muskeg. It's not even accessible through the summer months unless you put these incentive programs in place.

That's one of the things the incentives have done. It's allowed us to have a year-round program where we can actually get into the areas, where we can keep contractors working year-round rather than the three…. We used to call it the 90 days of hell, actually, where you started January 1 and you went till the end of March. Some survived, and some may not have. But this summer drilling program has certainly changed that a lot, and we now have a year-round industry that provides more certainty for our employees for the benefit of all.

This act includes amendments to the Oil and Gas Activities Act and the Petroleum and Natural Gas Act. The bill allows for significant enhancements to the regulation of the oil and gas industry. The changes will allow for a positive step forward to a more balanced approach between industry, landowners and stakeholders.

Through these changes, the name of the Mediation and Arbitration Board will be changed. It's going to be changed to the surface rights board, and I think that
[ Page 3894 ]
is important. I do want to note that the changes came from an advisory group called NEEMAC. NEEMAC is a board that consists of area landholders. I meet with these people on a pretty regular basis, and they're pretty happy with some general direction that they've had and the input that they've had into this particular bill.

One of the major changes under the bill is that it will allow the landowners to request mediation for surface access, giving the board authority to deal with issues related to compliance by either party. It also extends the board's authority over compensation claims and for damages arising from the oil and gas activity. It also empowers the board to include real costs incurred by the landowner at the end of the process.

These are all very important changes. There's stuff that wasn't in the last act. Certainly, the minister has taken the advice of some of the people that were on NEEMAC and others in the industry, and I think it's going to be very positive for all.

This act is going to increase the regulatory powers of the Oil and Gas Commission and enhance the government's ability to protect the environment from potential impacts of natural gas and petroleum development. The OGC will have expanded powers to use money from the orphan site reclamation fund to clean up sites where no oil and gas owner can be held accountable.

They can't be held accountable because they can't even be found. These might be companies that have disappeared or have sold off their assets or whatever. It's very important to note that the industry is going to be paying for the orphan well fund, and I think that's a very positive step in the right direction.

Like I say, the orphan site reclamation fund is created through tax on industry only. It's important to note that it used to be funded through the government coffers, and it's now going to be borne by the industry — so another change in the positive for the people of British Columbia.

All elements of the upstream natural gas and petroleum sector activities are regulated under the Oil and Gas Activities Act.

This bill allows for the amendments regarding approvals for pipeline crossings of roads. This will better accommodate community interests and government transportation objectives. Where a pipeline permit holder requires access to land within a highway or municipal road, the pipeline permit holder must obtain an authorization under the Transportation Act or other appropriate enactment.

[1600]

Let's talk a little bit about the role of the Oil and Gas Commission. The Oil and Gas Commission was developed, as the former speaker said, in the late '90s, and it certainly has been a great organization over the years. They've streamlined the industry. Actually, they do an extremely good job, and they do it in a very timely manner as well. It's an independent, single-window regulation agency with responsibilities for overseeing natural gas and petroleum operations, including exploration, development, pipeline transportation and reclamation. That's what the OGC does.

Regulatory responsibility is delegated to the commission through the Petroleum and Natural Gas Act, the Pipeline Act, the Forest Act, the Forest Practices Code of B.C. Act, the Heritage Conservation Act, the Land Act, the Environmental Management Act and the Water Act. Certainly, it takes in all of the organizations that are out there, looking after the environment and making sure that things are done properly. Again, the OGC does an extremely good job as the independent board.

The Crown corporation and commission's accountabilities extend to affect the communities — First Nations, client companies, their representative associations. Among its more specific objectives are public safety, conservation of petroleum resources, fostering a healthy environment and ensuring equitable participation in all production.

The commission's core roles include assessing applications for natural gas and petroleum activities and issuing approvals when appropriate; ensuring industry compliance with legislative, regulatory and permit-specific requirements, in part through inspections and other monitoring enforcement activities; and actively consulting, like I said, with First Nations on applications and operations. They take that role on.

The other thing that you might want to note is that the OGC is funded through the fees that are collected when you do a permit application. The industry actually pays for all the services that the OGC delivers.

The thing we must understand is that the oil and gas industry is vital to northeast B.C. and to British Columbia as a province in general. I think we all like the revenue that it brings in and, certainly, we have to bring in that revenue in a way that works well for all the stakeholders — for the landowners, for the industry, for the province. It has to work for everybody.

I think this bill goes a long way to doing just that. It's going to keep our industry strong, it's going to keep our environment solid, and our landowners will have more input into the process.

I'll let the next person take his place.

D. Donaldson: I am very privileged and happy to rise to speak to second reading of Bill 8, the Energy, Mines and Petroleum Resources Statutes Amendment Act. I'll describe a few general remarks. I want to say that I look forward to the committee stage on this bill, when we can go through it section by section and get some more specific answers and details about the act.

As my colleague and Energy critic from Juan de Fuca earlier remarked about what this bill does, and he was eloquent and detailed in his comments about that, it
[ Page 3895 ]
introduces amendments. Some of the areas that it introduces amendments to are in the Oil and Gas Activities Act. This is an act that was introduced in 2008 by closure, meaning debate was limited. There was no extensive debate on the actual intention of the act, and then the details, the sections of the act, were never brought into force.

[1605]

This led to a comment by a lawyer from the Pembina Institute who closely follows these matters. He said that bringing in this act now, which creates amendments to an act that was never enforced, doesn't reflect particularly well on our law-making process in B.C. — that we need to amend an act before it has even come into force. Obviously, it was a rush job, bringing the original act in. Now I'm glad we're going to be able to actually talk about the intent of that act through this Bill 8, which is an amendment to an act that was never enforced.

This bill applies to a very important sector for provincial revenues. This bill applies to oil and gas, and that brings significant revenues into the provincial treasury, and it has a substantial impact across the province as well. That's why I'm very happy to speak about it, because it's not only in the northeast but across the entire province that we feel the impacts of the oil and gas industry, both positively and sometimes negatively.

The bill deals with the Oil and Gas Commission, and the Oil and Gas Commission authorizes and issues essential permits and approvals necessary for exploration, drilling, pipelines and processing in the oil and gas sector. That's important not only, as I said, across the province but in my area as well, in Stikine, where there are proposals for two coalbed methane projects — one in the Sacred Headwaters and one in the Telkwa area — and where a broad spectrum of people have voiced their opposition to these projects.

They'll require drilling and pipelines. If it comes into effect, it will be under the Oil and Gas Commission, and then this relates back to Bill 8, as well as the Enbridge pipeline, which we've seen widespread opposition to across the province.

I'm very happy to be speaking to this bill generally in second reading, because it covers topics such as these that are very important to Stikine and important to the rest of the province.

In his opening comments the Minister of Energy, Mines and Petroleum Resources introduced this act in first reading. He talked about new compliance. This act will create new compliance and enforcement tools for the regulator, the Oil and Gas Commission. That may be so — and we'll get into that, and we'll see, when we go through committee stage — but a compliance tool is only as good as what you have on the ground to enforce it and to regulate it and to monitor it.

What we've seen in the past are circumstances where there aren't enough compliance people on the ground to monitor what needs to be monitored under the act. So it might be nice to create tools, and we might be doing that with this act. We'll see. But I look forward to budget estimates with the minister, when we can actually talk about the compliance resources which are under the Ministry of Energy, Mines and Petroleum Resources.

In fact, it's been pointed out to me that in years gone by, in the last several years, recorded compliance infractions in oil and gas activities have actually decreased. Others have pointed out to me that so have the people on the ground to enforce the compliance.

If you don't have the people on the ground, then you don't know if companies are adhering to the act. The Oil and Gas Commission may have these regulatory tools, but they don't have the people on the ground to monitor them. Nothing changes practice-wise, but the actual infractions decrease because there's nobody out there to report on them.

The minister also described in his introductory remarks that Bill 8 is a positive step forward to a more balanced approach between industry and the affected landowners in the region. I think that's a statement well worth analyzing. It gives the background or the impression that there has been an unbalanced approach. I think, hearing from people across the province whose land is impacted by these projects, that there has been an unbalanced approach.

[1610]

I look forward to the committee stage debate where we can get into what the minister proposes is going to be a more balanced approach in this. I recognize that he has now said by extrapolation that there has been an unbalanced approach, and it needs rectifying.

He also discussed in the introductory comments that there are some gaps and that this act "will ensure that there's a robust and comprehensive regulatory structure applicable to the oil and gas sector." Again, to me that indicates that there hasn't been a robust and comprehensive regulatory structure yet applied and that he does admit that there are gaps. We'll be looking forward to going through this bill in detail at the committee stage to really see if the robust and comprehensive regulatory structure is addressed.

Finally, in the introductory comments this bill also deals with changes to the Petroleum and Natural Gas Act, and the minister said that some of the changes would give authority to deal with issues related to compliance. Compliance requires resources, resources on the ground, and so once again in the budget estimates — where compliance under the Ministry of Energy, Mines and Petroleum Resources will fall — we'll be looking forward to the minister answering questions about how the resources will be there to ensure that there are people on the ground to monitor the compliance that this bill will eventually be dealing with.

The bill will deal…. It says that some of what's going to be addressed is that the Oil and Gas Commission
[ Page 3896 ]
"will have expanded powers to use money from…orphan site reclamation funds to clean up sites where no oil and gas owner can be held accountable." Well, that's an interesting proposition, because it relates back to just last month when the Auditor General, John Doyle, issued a report on oversight of orphan wells as well as what's been going on with oil and gas sites in particular.

An independently issued report by the Auditor General said that the B.C. Oil and Gas Commission must "improve its oversight" of oil and gas sites in order to adequately manage the risks of contamination during drilling, production and final site restoration.

The Auditor General also pointed out in his report that corporate liability for site restoration at B.C.'s approximately 20,000 past and present wells exceeds $1 billion. The orphaned sites are part of that, and the bill says that it will address orphaned sites, so we look forward to the committee stage when we'll be talking about how it does that specifically.

The Auditor General also noted that a junior exploration company pays only a single one-time restoration deposit of $7,500, although the minimum cost to restore just one individual well site is $100,000. Again, the issue of orphan sites and the fees that can be charged by the Oil and Gas Commission regarding this is something that needs attention and that we'll be pressing the minister on — whether this bill addresses that.

Additionally, the Auditor General's office first reviewed the government's oversight of the oil and gas contamination risks in 2002-2003, so seven to eight years ago. The Auditor General had said he expected more progress on this. We hope that Bill 8 is something that we can point to as more progress on the contamination risks, especially with the orphan well sites, but we'll wait to see if that's the case during committee stage.

[1615]

Finally, the Auditor General pointed out that the Oil and Gas Commission isn't providing enough information on its oversight of the industry. The very commission that this bill is hoping to give more tools to is not, in the Auditor General's opinion, providing enough information on what it's actually doing. Therefore, it's difficult for the public and people who have concerns to actually find out what the Oil and Gas Commission is reviewing, what they're finding faulty, what they're not finding faulty and how they're doing their job.

Bill 8. Again, we just received it yesterday, but in reviewing it…. During the committee stage we'll have more time to review it, but in this second reading of the bill…. From what I understand, under this bill the Oil and Gas Commission will have a broader authority to collect fees and levies that support it in regulating the industry. The previous member alluded to this, that the Oil and Gas Commission activities are paid for by the fees and levies that it collects from industry.

In fact, the Oil and Gas Commission Act sets out that the commission is funded with revenues from levies on production and fees for approval. This has been pointed out to me by a number of people who were concerned about the oversight of the Oil and Gas Commission as a fault and as a trap, a potential trap. They liken it to the fox taking care of or overseeing the henhouse, in that if you are dependent on your funding from the very industry that you are supposed to be issuing permits to, then there's potential for decisions not to be made in the best interests of the public.

If you have to depend on revenues from levies on production, then what if there's concern about the production? Are you free to speak about and report on those concerns? Would you suggest or recommend that production be curtailed in certain areas if your funding depended on that production? It's just not a very good model to be putting forward when it's so important.

It's so important that this agency, the Oil and Gas Commission, have the trust and the faith of the public because it doesn't force the regulations that government puts before us like in Bill 8, and it has the authority to issue fees and levies.

We have to have the utmost faith in those kinds of commissions, and right now, with the revenue generated from levies on production and fees for approvals…. There's another example. If I have the authority to approve certain projects, but my financial existence is beholden to those approvals, then somebody viewing from the outside and looking in would say: "Well, that leaves open a lot of leeway for, perhaps, decisions not to be made in the best interests of the public."

I look forward in Bill 8 to the committee work where we will explore further what the minister has put forward in the hopes that some of the amendments will address these concerns that I hear from the public on a regular basis around the issues I've described, around the credibility of the Oil and Gas Commission.

I'm not casting aspersions on it. I'm just trying to help the minister and the government come up with the best model that will have the most faith for the members of the public who have concerns about projects that proceed on land that is part of the commons, part of our legacy and our heritage and what we pass on to future generations. This is especially true when it comes to coalbed methane exploration in my area and the Enbridge pipeline.

[1620]

With those comments, I will conclude my remarks around the second reading of Bill 8, and I look forward to the committee stage where, with the minister, we can get into detailed specifics on clause-by-clause.

D. Barnett: I rise today to speak in support of Bill 8, the Energy, Mines and Petroleum Resources Statutes Amendment Act. As I have mentioned before, the economic engine of this province is powered by small
[ Page 3897 ]
business and the resource industries — forestry, mining, oil and gas.

The oil and gas industry is very important to the economic well-being of British Columbia. Why? Jobs and revenue. B.C.'s natural gas and petroleum industry provided the single largest source of revenue, $4.09 billion, for the province in 2008. Natural gas and petroleum revenue has increased by nearly 60 percent since 2001 and is now more than three times the average in the 1990s. In northeast B.C., where most natural gas and petroleum activity is focused, the unemployment rate in 2008 was only 4.8 percent.

These numbers illustrate the importance of the industry to the entire province and how much work this government has done to make B.C. one of the most competitive environments for natural gas and petroleum exploration in North America.

There are several regions in North America where energy companies operate. The investment conditions in B.C. have drawn capital in. This keeps people employed. The province provides incentives, not subsidies, for natural gas and petroleum development. New royalty programs were developed to encourage summer drilling and production of wells that previously were not economical.

Summer drilling benefits not only the energy companies, but also the numerous service sector businesses operating in northeast B.C. These are small businesses that clear and build access roads, conduct seismic testing, prepare drill sites, drill wells, service rigs and camps, provide safety services and ship supplies around the place, to name a few. This adds up. The natural gas and petroleum industry creates 34,000 direct and indirect jobs.

Previously these activities would only be going on during the winter, when the ground is frozen, but with summer drilling incentives, mats are used on lease sites to prevent equipment from sinking into the mud, and the jobs are less seasonal.

To attract global energy companies to B.C., this government created new innovative infrastructure and royalty programs. In 2008 industry capital investment was estimated to be $8 billion, which is three times the amount invested in 2001. In fact, since 2001 the industry has invested almost $38 billion in British Columbia. Jobs and revenue. This is what the natural gas and petroleum industry means to British Columbia.

Currently most natural gas and petroleum activity in B.C. occurs in the northeast. This is where the western portion of the Western Canada basin stretches into B.C. Extracting oil and natural gas from this area is easier than in unconventional basins.

This government is encouraging the development of the province's vast yet untapped sources of natural gas. The development of unconventional and frontier sources of natural gas, such as tight gas and shale gas, are especially of interest. My riding, the Cariboo-Chilcotin, includes part of the vast Nechako basin — the basin we'll be discussing, among others, at the upcoming Unconventional Gas Technical Forum being facilitated by the Ministry of Energy, Mines and Petroleum Resources.

Bill 8 contains amendments to the Oil and Gas Activities Act and the Petroleum and Natural Gas Act. This legislation will provide greater certainty for industry, improve environmental protection and make dispute resolution more balanced and effective for landowners and industry.

[1625]

These changes are proposed with the input of the Northeast Energy and Mines Advisory Committee. Since June 2006 the Northeast Energy and Mines Advisory Committee has engaged communities in dialogue on key issues related to oil and gas development in the region. The Northeast Energy and Mines Advisory Committee is a broadly representative stakeholder group for dialogue focused on resource development in northeast B.C.

As a result of these changes, we will have a more effective process for resolving disputes, one that equally balances the rights of landowners and industry. I support Bill 8 for this reason. An amendment that balances the interests of landowners and industry is good for the entire province.

The changes to the Oil and Gas Activities Act will not significantly impact the industry. These changes are primarily targeted at improving the operation of the act, while the act itself will continue to have an important impact on industry.

The act will increase the regulatory powers of the Oil and Gas Commission and enhance government's ability to protect the environment from potential impacts of natural gas and petroleum development. The Oil and Gas Commission is an independent regulatory agency with responsibilities for overseeing oil and gas operations, including exploration, development, pipeline transportation and reclamation.

With the amendment, the Oil and Gas Commission will have expanded powers to use money from the orphan site reclamation fund to clean up sites where no oil and gas owner can be held accountable. This is an unusual circumstance. Currently there is not a significant problem with anonymous dumping of natural gas and petroleum waste, but should an unfortunate situation arise, the Oil and Gas Commission will have access to the fund to clean up those sites.

The orphan site reclamation fund is created through a tax on industry. In 2006 the B.C. Liberal government created this fund that taxes the industry, where before, all reclamation costs were borne by government. The reclamation of lands is important, and I fully support the orphan site reclamation fund.

The amendment also gives the Oil and Gas Commission broader authority to collect fees and levies that
[ Page 3898 ]
support it in regulating the petroleum and natural gas industry. All elements of the upstream natural gas and petroleum sector activities are regulated under the Oil and Gas Activities Act.

B.C. is like many other jurisdictions in that the upstream sector of the natural gas and petroleum industry is geographically far removed from the downstream sector. To briefly summarize the terms, upstream is drilling, midstream is processing and transport, and downstream is gas stations and home heating. Because the industrial activity is in the northeast, about 1,600 kilometres from Vancouver, it's easy for people in the Lower Mainland not to realize where these resources come from and how important they are to the economy.

Bill 8 is necessary because the changes to the act ensure that the commission has the authorities it requires to impose the fees and levies on each part of the sector to an extent that is sufficient to fund its operations. The fees will ensure the smooth operation of the regulation of this industry. Most fees currently come from the operators of wells, pipelines and facilities when they apply for a permit to begin these activities.

These amendments will not jeopardize the environmental objectives in any way. The province will have the authority to set environmental objectives for the Oil and Gas Commission to incorporate into their permitting decisions.

Amendments regarding approvals for pipeline crossings of roads will better accommodate community interests and government transportation objectives. Where a pipeline permit holder requires access to land within a highway or a municipal road, the pipeline holder must obtain an authorization under the Transportation Act or other appropriate enactment.

[1630]

Environmental objectives for the Oil and Gas Commission to consider when issuing a permit will be comparable to those currently applicable to the forest industry. This will help to increase the protective measures in order to benefit and protect wildlife in the northeast.

Industry will be subject to specific requirements with respect to the environment, some of which will be new or stronger than in the past, and industry will be held accountable to these through the new offence structure and administrative penalties. Offences can attract the maximum penalty of $1.5 million if found in non-compliance with the requirements set for environmental protection or an order made by the Oil and Gas Commission to address a problem at a site. Lesser offences will see a maximum penalty of $500,000.

Also included in Bill 8 are amendments to the Petroleum and Natural Gas Act. These changes will support landowners in resolving conflicts with industry, making the dispute resolution process more balanced and effective.

As with any industrial development, sometimes there are disputes between industry and landowners. Natural gas and petroleum development are unique in that subsurface rights are different compared to surface land rights. Landowners in British Columbia do not have subsurface rights to minerals, including petroleum, natural gas and coal.

This is the case in most western jurisdictions, and in B.C. the Crown has retained all subsurface rights.

The Mediation and Arbitration Board will be renamed the surface rights board to clarify the board's purpose consistent with boards in other jurisdictions with similar mandates. Currently landowners are unable to ask the board to assist in the negotiation of surface access. Only industry can.

Under this amendment landowners will now have the right to request mediation in surface access disputes. Neighbours and tenants will now have the right to request mediation for claims related to damage caused by a natural gas and petroleum activity. The board will have authority to deal with disputes over the operation of a surface lease.

I believe these changes will be beneficial to both landowners and industry involved in surface rights disputes, and I commend the ministry for addressing this issue.

Madam Speaker, I support Bill 8, the Energy, Mines and Petroleum Resources Statutes Amendment Act, 2010, and realize the importance of this legislation to the people of British Columbia.

M. Sather: It's my pleasure to rise on second reading debate of Bill 8, the Energy, Mines and Petroleum Resources Statutes Amendment Act, 2010.

Having been in this House back in 2008, this bill looks familiar to me. That's not surprising, because a large portion of it is, in fact, familiar to those of us that were here in 2008, including the member for Juan de Fuca, who spoke about this bill earlier.

The first iteration that we saw back then was called the Oil and Gas Activities Act. The disappointing thing about the introduction then of the Oil and Gas Activities Act is that we in the opposition — and that means on behalf of the people of British Columbia — did not get to explore the specifics of that act for whatever reason. The government simply didn't call committee stage debate of the bill.

It didn't, though, die on the vine, as it were, because at the end of that session back in 2008, the government invoked closure on some ten bills, including that bill. So it was basically rammed through at the end of the session without any debate.

[1635]

However, most of the provisions of that bill were never brought into force. Now we're in the somewhat peculiar or awkward position of seeing a bill come before the House that proposes amendments to an act
[ Page 3899 ]
— to wit, the Oil and Gas Activities Act — whose provisions are not in force.

We're confident…. Well, I shouldn't say we're confident. We're hopeful on this side of the House that this time around, on take 2 of the Oil and Gas Activities Act, that we will indeed get to canvass the government in full on the details of the bill. It's a fairly large bill, and it deserves that kind of scrutiny.

I think the minister is confident, I hope, that we're going to get to committee stage on this bill unless…. I know the government is very, very keen on another piece of legislation that was introduced in this House earlier today, in effect the HST bill. I suppose it has another name, repealing the PST.

Should that knock us off the agenda once again, and we can only hope that won't happen, eventually, at least, we should get back to discussing the important aspects, the nitty-gritty, the details of the Oil and Gas Activities Act. I, like other members on this side of the House, have expressed our interest and the fact that we're looking forward to that debate.

Several members — it could include the minister; I'm not sure — have talked about the robustness of natural gas exploration almost entirely on the other side of the Rockies in this province and the northeast part of this province, Peace River North and Peace River South constituencies. They have made mention, too, of the aspect of some of these gas deposits becoming more difficult to get at, in particular the shale gas deposits.

The shale gas deposits at Montney and Horn River up in the Fort Nelson area — or at least I believe Horn River is…. It kind of raises a bit of a problem. The government is apparently greasing the skids, if you will — if that's not an impolite phrase to use, Madam Speaker — to enable development of those shale gas deposits by dropping royalty rates on wells drilled between September of last year, I believe it was, and June of this year to a meagre 2 percent. I guess the costs are high.

The industry has been given an incentive. A member opposite, I think from Cariboo-Chilcotin, said it's not a subsidy but an incentive subsidy. It's an encouragement — let's be charitable and call it that — to the oil and gas industry to proceed with those shale gas deposits. I think this bill is part of that encouragement. I expect the minister would readily admit that, and I expect he feels good about that.

As we've talked about when some of us discussed the bill at second reading, the Oil and Gas Activities Act back in 2008, the whole idea of the pursuit of the exploration of conventional fossil fuels is problematic. I think it should be problematic for this government. I mean, the Minister of Finance earlier today stood in this House and vigorously said: "We'll defend our environmental record against yours any day."

[1640]

But Madam Speaker, how does the government reconcile their professed interest in combating climate change? I know that the Premier's focus tends to shift a bit from one thing to the next, but we still hear about clean and green and so on from the other side, so I expect that commitment, in theory at least, is still there.

I don't know what the minister thinks or what the government thinks or what the Minister of Environment thinks, but I think that provides a certain amount of discordance in the government's message, because the shale gas deposits have a couple of problems with them.

Number one, they take a lot of energy to extract. It may very well be that the minister is talking to, I think, his good friend and former colleague Richard Neufeld about extraction or the development of Site C electrical resources, some of which — in fact, according to the now Senator, more than half of which — would go to extract these very shale gas deposits.

The companies involved say: "Well, it would be a good opportunity, were we to develop those gas deposits, to ship that gas or a good portion of it over to the tar sands to develop the tar sands." Well, that's problematic, I think, for this government that professes to be clean and green, because certainly tar sands development is anything but clean and green.

No less than Peter Lougheed, a former Premier of Alberta, even chastised his province for their haste in developing the tar sands. In fact, he questioned whether it made sense to be using much cleaner natural gas to extract a much dirtier form of energy.

These are all questions that I think the government has to address when we're looking at a bill like this — the minister, I guess. There are somewhat wide-ranging opportunities in committee stage, so he will do that, I'm sure. I know the minister is very fond of supporting, and so he should be supporting, the oil and gas sector. It's his ministry, and it's his role to do that.

I wanted to talk for a minute about the orphan wells that are covered under Bill 8. The orphan wells are well sites that, hey, have become orphaned — somehow abandoned or left on their own — and are out there in need of reclamation. This bill has some things to say about that.

I think the member for Stikine mentioned some of this material, but I want to bring it up again. With regard to the costs of reclamation, well operators have to pay a security deposit of $7,500 to the province. Whereas, in fact, a report of the Oil and Gas Commission in 2006 concluded that there may be well over 5,000 wells that are not yet assessed and that the cost runs around a hundred grand, as a more realistic amount. There's a real shortfall there between $7,500 and $100,000.

Of course, if we get to clean up these sites, to reclaim these sites, as I hope we certainly will — and I know the minister will want to do that as part of the clean and
[ Page 3900 ]
green agenda of the government — it's going to end up, by estimates, costing over a billion dollars.

[1645]

We're not talking about a minor endeavour. It's going to have to be significant. Nonetheless, it's work that needs to be done.

Apparently, the site classification guidelines were not in place by March of last year, which is fairly recent, resulting in many of these sites not being assessed. There are currently 20,400 wells in B.C. — 4,300 are inactive sites, 2,000 are now decommissioned, and 38 are orphan sites. So there is some work to be done there, and I look forward to that work being done, because it certainly needs to be.

Now, the report that the Auditor General did — it was just recently; I believe it was last month that it came out — said that we lack baseline studies for monitoring and effective safety mitigation for air quality in and around the oil and gas industry.

Madam Speaker, you will know, I'm sure — as most British Columbians do that have been watching the news or reading the papers, whether it's on line or in the old-fashioned way — that there is a lot of concern on both sides of the border, actually, in the Peace River country about the safety of oil and gas emissions, particularly the sour gas, which can be quite deadly.

I remember the admonitions about sour gas when I was a young man growing up in the Peace River country and working on the rigs out there. It can kill. There have been some really strong feelings expressed — too strong, most of us would say, I'm sure — with regard to some of the actions that have been taken to sabotage pipelines in the Peace River country.

But when you talk to folks up there, a lot of them — particularly landowners, farmers and the like — are really concerned about these emissions and what risk it puts them at. So the baseline studies need to be done if that work is going to be done properly.

The Auditor General was fairly definitive in his comments. He said that the British Columbia government is failing to meet its responsibilities to manage human health, environmental and financial risks associated with oil and gas resource development.

He goes on to say that contaminants found at the sites "include various types of hydrocarbons, naturally occurring radioactive substances, trace metals, salts, various process chemicals and herbicides." Well, that's a toxic mix there, and we want to be sure, and I'm sure the minister does, that these sites are dealt with. I hope that they will take the Auditor General's report seriously and work diligently to find a solution for these considerable issues that we're facing.

I wanted to talk a little bit, too, about right of entry to lands, because there's a lot of conflict, notwithstanding that oil and gas — gas exploration in particular, in the Peace River country — provides, definitely, a lot of employment for folks up there. But with landowners there tends to be a fair bit of conflict, and they feel oftentimes that the industry has a lot of power and doesn't try to accommodate their interests that well.

[1650]

A comment from a member — the chair, actually — of the Northeast Energy and Mines Advisory Committee with regard to the right of entry, which is still, she says: "Available to industry, even if the mediation and arbitration process has not been completed." That's kind of like shoot first, and ask questions later.

No one wants to see, I don't think, any process drawn out. You know, you have to come to a conclusion. Nonetheless, if the oil company is already moving in on your land while that process is in place, that could be a little bit disturbing for people.

There are expropriation parts of Bill 8 as well. One of the residents up there commented that they actually felt that expropriation would be an improvement to the process that's in place now and that maybe they even feel than the process that will be in place when, presumably, this bill is passed. If that's the case, I hope that expropriation does work well, and I hope it works a lot better than what I have seen in terms of government expropriation in my community.

In this case, it was a transportation corridor. They came in and expropriated farmers' properties, at great disruption to them. In one case, they very nearly destroyed the farm, and the prices they paid were half or less of what the going rate for farmland was in Maple Ridge and Pitt Meadows. I hope that's not happening to the poor farmers up in the Peace River country, because having been a Peace River country farmer myself, I know it's tough up there, and they need all the help they can get.

The farmers tend to be a little bit left behind in the discussion. When you've got a huge industry like the gas industry that has and, I guess, will continue to produce a lot of revenue and possess quite a lot of power, sometimes the farmers are kind of left, maybe not as second-class citizens but just about.

Now, the bill itself says that the land that may be expropriated must not exceed, and this is with regard to pipelines, 18 metres in width. It goes on to say that "…the commission may authorize, on any conditions the commission considers appropriate, an expropriation, in accordance with the Expropriation Act…."

Well, I would worry a little bit about the phrase "any conditions the commission considers appropriate." I think if you're being expropriated, you're looking for a little bit of more clarity with regard to what kind of process you're facing. I hope that the government might improve on that, or at least the minister can let us know what folks have to expect in that regard.

We have the Expropriation Act, the expropriation provisions. The government talks a lot about this helping to create certainty for industry, and I can understand
[ Page 3901 ]
this from the industry's point of view. But I mean, we hear that a lot from this government, about certainty for industry. We hear it also with the harmonizing of the environmental assessment acts, provincially and federally. That one is causing some concern. I hope that the interests of other stakeholders, particularly residents and landowners in the area, aren't being sacrificed at the altar of certainty for the industry.

[1655]

In a press release that was put out, "Act Supports Environmental Protection, Landowner Rights," it says: "Amendments to the Oil and Gas Activities Act increase the regulatory powers of the Oil and Gas Commission and enhance government's ability to protect the environment from potential impacts of natural gas and petroleum development."

I'm not at all sure yet. What I want to hear from the minister during committee stage is how, in fact, this bill protects the environment. It says: "The province will have the authority to set environmental objectives for the Oil and Gas Commission to incorporate into their permitting decisions." What environmental objectives? I find that a vagueness of Bill 8, and I hope that we're going to get more clarity.

Again, it may come, if it comes at all, in the form of regulations down the road. That always makes it difficult for members of the opposition to be supportive of legislation in which a great deal, apparently, is going to take shape by regulation which will be brought in by cabinet. So we won't be a part of those discussions.

I'm hopeful that in fact the government is going to protect the environment. They say that they're committed to protecting the environment. I will wait for further elucidation of that.

With regard, again, to "Entry on unoccupied Crown land," which is under part 16 of Bill 8, it says: "…an applicant for a permit under the Oil and Gas Activities Act, and on submission by the person of plans or other information required by the commission, the commission, subject to any terms or conditions the commission considers appropriate, may authorize the person to enter, occupy or use unoccupied…land."

Again, the vagueness, "any terms or conditions the commission considers appropriate," to me doesn't sound like really strong legislation. It sounds a little loosey-goosey.

Some of the residents in the northeast are jaded about the process. They say that it's very much tilted in favour of industry against them. They'll be looking for some assurance that there's going to be improvement not just in providing surety or certainty for industry but that their interests are going to be protected.

I see my time is getting fairly short. I want just finally to mention something else, and that's about safety. Now, I don't see — or if it's there, I missed it — any aspects of Bill 8 that deal with safety in the industry. It may be that that's covered off elsewhere and that it isn't required of this bill. But I do know from past experience, having worked in that industry, that it can be and is very dangerous. I had a good friend who was killed in the gas industry.

We need to be sure, for those people that are rushing out there and working overtime and double time and not getting a lot of sleep sometimes, that there are safety regulations there to protect them as well. Hopefully, the minister can assure us that things are improving. I haven't any particular cause to believe that they haven't. The incident I'm talking about took place some many years ago.

With that, Madam Speaker, I will cede the floor. If there are any members on the government side or on this side that want to talk about Bill 8, I'd be glad to hear them.

[1700]

R. Cantelon: I rise to speak to Bill 8, and I sense from the comments from both sides of this House that there is general agreement and support, notwithstanding some considerations and reservations that the members opposite may have. Of course, that not only is their right; it's indeed their duty to express these reservations as this bill moves forward.

Nevertheless, I'm sure that both sides of the House recognize the importance of the oil and gas industry to this province. Indeed, it has been a considerable source of revenue over recent years and has been very important to sustaining programs in health care, education, advanced education and the many programs that this province supports.

We need to continue to be alert to the bill and to continue to advance improvements in how we deal with the industry and, indeed, how we deal with the landowners and other stakeholders in the industry, to make sure that there's an equitable, fair and open playing field for everyone to participate in.

That, indeed, has been the case. It's certainly been a source of great employment for the people in the north. Some 34,000 direct jobs are involved in oil and gas exploration and delivery of minerals to refineries, and this is extremely important to employment in the north.

However, in saying so, I also want to acknowledge the generosity, in effect — or at least, perhaps, the implied generosity — of the people whose houses and homes are on these natural resources. The revenue from these natural resources accrues to the general benefit of the entire province, to the programs I mentioned in health care, education and social support.

It has produced nearly $4 billion for the province in 2008, and despite a very competitive market and uncertain prices, it will continue to provide an important source of revenue for the government and for the social services and benefits that those revenues provide.
[ Page 3902 ]

It's a very competitive industry, and I want to salute the minister and staff for making sure that we remain competitive and continue to attract the investment that we have seen in the past. As I mentioned briefly, there are 34,000 direct and indirect jobs. These are all high-skilled jobs, they're all high-paying jobs, and they provide stability to the communities in the north and, indeed, throughout the province in terms of head offices and other facilities, even in the Lower Mainland.

I think that if people had a full appreciation of how many jobs in the Lower Mainland are actually derived from the exploration — the funding and so forth in the Lower Mainland — they'd have a much better appreciation of just how important the natural resource sector is.

As I've said, it's a very, very competitive industry, so it's certainly necessary that we review bills such as Bill 8, the statutes under this, to make sure they're applicable to today's world, because it's an increasingly competitive world. We hear about shale gas exploration off the east coast of the United States. So if we're not alert, if we're not continually adapting, to make sure that we continue to be as competitive as possible, we'll lose that competitive edge, and we'll fall behind and lose opportunities.

In fact, I would like to salute the ministry before…. They've provided incentives — incentives, I hasten to qualify, not subsidies — to the oil and gas industry to encourage drilling by offering incentives and royalties to do drilling and exploration during the summer.

Technically speaking, there's no reason they couldn't have done that earlier. It had been a tradition in the oil and gas industry to do a lot of drilling in the northern areas in the winter, when the ground was frozen, but now technology makes it possible to do year-round drilling, and we've opened that opportunity up to the industry, and they've responded.

Of course, the drilling and the exploration are the key high costs to the industry and high revenue to the province in terms of job creation, immediate job creation. So it's been successful, and we need to do that. That is what this bill continues to do.

It's going to change a lot of ways that we deal with people, with landowners, with the industry to streamline it and to provide certainty to make sure that this environment we've created will continue in the future, because the environment — basically, the platform that we create for the industry — is all that government can do.

[1705]

We can't and, I think, dare not make direct investments or participate in the highly speculative nature of the resource industry, but we can ensure that we create an environment that's very competitive with other jurisdictions, that encourages people to do the exploration, to mine the resources and to deliver them to the public. We're changing the act to do just that.

Some of the amendments to the act will expand the powers of the Oil and Gas Commission, which is an independent commission, and will provide them with more flexibility, firstly, in dealing with the stakeholders and with the drilling companies.

These also will expand their powers in dealing with disputes among landowners and, indeed, tenants and neighbours — people who may be directly or even indirectly affected by the exploration activities — so that there can be more harmony and peace, if you will. It's never been exactly unpeaceful, but disputes will be minimized so that drilling operations can proceed.

These changes are primarily targeted at improving the operation of the act, while the act itself will continue to have an important impact on the industry.

The Oil and Gas Commission, as I mentioned, will have expanded powers. It'll be able to use money from the orphan site reclamation fund to clean up sites that have been long since abandoned, where no owner can be held accountable. Unfortunately, these types of abandoned wells, these orphan wells, still exist and need to be cleaned up. It's certainly not acceptable any longer from an environmental point of view to leave these sites in an abandoned state of disuse.

The orphan site reclamation fund, indeed, was created through a tax on the industry. In 2006 the B.C. Liberal government created this fund that taxes the industry, where previously all reclamation costs fell to the government to do. This, of course, indirectly — well, directly — affects our ability to provide funds for other social programs. It certainly seemed the proper way to do it, to tax the industry that directly benefits from the exploration, and tax them at the point of source. They collect and levy the fees. They'll have broader powers to do this, and it will make their operation more efficient.

One of the ways that the fees will be changed, however, is that currently most of the fees come at the front end — that is, at the fee and application permit stage — which is actually a deterrent to the investment in drilling and exploration. Basically, by front-ending the cost, it adds a disincentive to carry on with drilling exploration.

Now it's going to be balanced throughout the industry and provide a more equitable manner, to balance it by revenues collected against royalties throughout the industry and, in this way, ensure that the operations of the Oil and Gas Commission are funded.

The province, of course, will have the authority to set environmental objectives and will do so.

Certainly, everyone appreciates fully the beauty of British Columbia. I know that where I reside in Parksville-Qualicum, the voices of concern about environmental degradation are raised very prominently. If you want to fill a house in Qualicum Beach or Parksville, all you need to do is raise the spectre of degradation or damage to the environment, and you can pretty much fill the House up with people who are concerned.
[ Page 3903 ]

Those concerns are rightly felt, and I share those concerns. I think any industrial development or project throughout the province needs to first listen to and be able to, on a scientific basis, answer and address all those concerns raised by the citizens. We often refer to it as "Beautiful B.C.," and I think that is our first and most important resource that we need to protect for ourselves, for our children and for our grandchildren while we extract these necessary and very useful revenues through resource extraction.

The amendments, though, will also make it easier for the exploration to proceed. For example, previously it was necessary to get rights-of-way when you were crossing the roads. I mean, this goes back to very traditional systems of surveying and rights-of-way. From my previous life and previous background, I understand how that used to work. They used to then have rights-of-way, fundamental registered right-of-way easements, that would go over the surface of land.

The Torrens system and old surveying and land registry systems did not anticipate new drilling technology. They basically expected that a drill would go straight down, and the resource you were looking for was in a completely vertical extraction system, with the well going straight down.

[1710]

But as you well know and the House well knows, Madam Speaker, it's now possible to angle these drilling procedures and tap resources underneath things and in areas that once were obscure to previous drilling techniques.

When you did that, of course, there was an implied easement over the surface under which you were going. Now this act enables the drilling to proceed without obtaining an easement above the land when indeed the land above the drilling, although it may start vertical and end up horizontal, is not impacted or affected at all. Nor are the rights of the landowners or the tenants or the neighbours.

The resource can be extracted without any disturbance to the surface. Therefore, this new act reflects the technology today and reflects the fact that no longer is it necessary to require easements over the surface of the land.

These are all good amendments. Certainly, when you're doing these kinds of easements, it's awkward, it's difficult, and it's time-consuming. Consultation is difficult, because when you're putting an easement over the top of the land, people wonder why we are doing this and why it is necessary. Indeed, it calls into question in their minds that perhaps their rights are somehow going to be compromised, which of course is not the case and not the actual reality of new, modern drilling techniques.

This will enable more extraction to take place in a variety of ways. It makes it simpler for the industry and easier and also, therefore, makes the competitive field that we have, the competitive opportunity that we offer very comparable to what's offered internationally, which we have to do if we're going to continue to attract investment into the industry.

Now, having talked briefly about environmental concerns…. That also is an area which the act is going to improve and expand on. When a permit is going to be issued, it'll now be comparable to standards we apply in the forest industry. Of course, we're very sensitive to the forests, because we're much more aware of trees falling on the ground and the impacts to watersheds and so forth. But when a drilling rig goes out into an area, they aren't necessarily made aware of it — the general populace. It's often in remote areas, but nevertheless, they'll be required to be held to comparable environmental standards.

There are significant penalties, up to a million and a half dollars, if there's non-compliance, so this will certainly be a major deterrent to anyone considering or contemplating any discrepancy with the rules of the act.

Most fees currently come from the operators of wells or pipelines. When they apply, they add it. As I mentioned, it's going to be spread more evenly across. The Oil and Gas Commission will have the right to collect the fees as they see fit to administer the act.

The member opposite raised some questions earlier about concerns that there will be insufficient resources. In fact, that's a fairly common theme we hear often from the other side of the House — that there aren't sufficient resources to fund the necessary activities. In this case they're supervisory activities. This is not the case here because this will be self-funding. The Oil and Gas Commission will have the opportunity to raise funds as they see fit to maintain their operations.

I'd like to point out that we know — and it's generally acknowledged on both sides of the House and certainly within the industry — that the Oil and Gas Commission, an independent Crown corporation, does perform an excellent job in service to the community and to the industry.

I would like to point out, too, that there's always some concern that…. Are we locating these where we need to? Are the bodies on the ground? Are the soldiers in the field sufficient and properly deployed to come to the service of this task? Indeed they are. I'd like to note that we've recently opened an Oil and Gas Commission office in Dawson Creek so that we're located more directly adjacent to the activities themselves. They'll continue to do that. They'll continue to respond to the needs of the industry.

I think one of the major concerns that has been heard through this consultation process, which involved the industry, landowners, stakeholders, everybody involved in the industry…. One of the main concerns expressed, and legitimately so, was the inability of people to consult the board directly. They seem to be, I would think — in
[ Page 3904 ]
some minds, at least — more oriented towards industry concerns, perhaps, than they were to the community.

[1715]

I think of one thing we've learned as governments. We need to be more alert and more sensitive and to consult with the community as we change the acts. So we listened to them, and one of the things we did hear was that landowners, neighbours, want to be able to approach the board in resolving conflicts when they occur.

The Mediation and Arbitration Board will actually be renamed the surface rights board to clarify the board's role in handling these disputes. Currently landowners are unable to ask the board to assist in negotiation. So we have a board to whom the final authority flows, but they have their hands tied, in effect, because they're not able to enter directly into negotiations and mediate the situation.

Of course, as the Oil and Gas Commission, they're in the best place to be informed about the circumstances of the dispute as they arise — disagreements between landowners or neighbours or tenants, for that matter, and the oil and gas industry. They're more apprised of all the facts.

It can be a very costly matter to try and find independent people to plead cases to the board, and that expense can be a deterrent to the landowners, to the people who feel their rights are being disabused. The deterrent does have the aspect of seeming to be unfair.

Now they'll be able to assist in the actual negotiation from their perspective of knowledge, and I'm sure this will make a more amicable relationship between the landowners, neighbours, tenants and the oil and gas industry.

Then on the other side, this makes it much more appealing to the investor, to the developer — that they're able to have a structure in place whereby disputes, should they arise and when they arise, can be accommodated by a more open process basically facilitated then, in effect, by the Oil and Gas Commission.

The board will have the authority to deal with disputes over the operation of a surface lease. The board very significantly will now have the expanded authority to award costs. It's one thing to sit there and be able to negotiate, but now the board itself will have the ability to enter into the dispute, enter in the negotiations and award costs, should costs be applicable to one party or the other.

It is quite an anomaly that in our jurisdiction, of course, most citizens in the province do not have the right to subsurface rights. That's retained by the Crown. We're really dealing with the surface rights and the surface interruption to the enjoyment of property on land in British Columbia.

There is an anomaly, which I'll comment on very briefly. That's, of course, on Vancouver Island. When Vancouver Island was brought into Confederation, Robert Dunsmuir was awarded a 20-mile swath roughly — not roughly; pretty much exactly — up the middle of the Island for which he was granted rights and title not only to the land to build his railway, which connected Victoria to the CP line and connected Victoria, the new capital of British Columbia, to the rest of Canada…. No, not only that. The E&N Railway was granted the subsurface rights.

Briefly, anecdotally, it was always a bit of an anomaly. When you sold the property, you would sell a property with this addendum all on subsurface rights to the E&N Railway, of all things. But they actually retained, and I believe — although I've not been in the business for some time — they still retain the subsurface rights to the land, to all the mineral rights below that 20-mile swath.

Of course, Robert Dunsmuir, in Nanaimo, was the great coal baron. He was very well aware, having gained his considerable wealth through coalmining, of the value of subsurface rights. He very shrewdly retained it to the benefit of him and apparently to the benefit of the company in perpetuity.

The commission now is basically an independent, single-window regulatory agency. I think this, again, is very appealing to the industry as well. They don't have to go into four different places to make their applications, to seek their approvals. They basically deal with one independent — and independent is absolutely key — regulatory body. This makes it certainly simpler to move forward with projects.

The Crown corporation extends to the affected communities, First Nations, client companies and their representative association.

[1720]

I think we're very well aware that community values and local values are extremely important. Yes, it's important to maintain revenue, and yes, it's important to develop revenue streams for the government to maintain revenues for our ever-growing and rapidly growing health care costs, our cost of education pressure, but it must be done in consultation with the communities.

The days are long gone when you could go ahead and assume consent and just drill wells wherever you wished or pursue resources without consulting with the community. I think, certainly, a very important part of that community spectrum now is First Nations — that we have to consult, partner and reach agreements with First Nations as we proceed with these developments.

The commission's core roles are assessing applications for natural gas and petroleum, using approvals when appropriate; ensuring industry compliance with legislation, regulatory and permit-specific requirements through inspections, monitoring and other enforcement activities; then, as I mentioned, actively consulting with First Nations on applications and operations. The commission is delegated by duty to consult with First Nations on a project-by-project basis.
[ Page 3905 ]

I think it's very important, therefore, that this legislation reflect the modern reality of how we deal with communities, how we deal with First Nations and how we deal with companies. We want to make sure that we still have a structure in place that's encouraging to companies to come to invest, to explore, to extract and to pay due royalties which certainly support and to a large extent have supported to the tune of several billions and will continue to support our social and other programs.

I certainly speak in support, and the orphan site reclamation fund is extremely important. It's to pay for the cost of reclamations of sites that had been abandoned. I mentioned this earlier. The orphan fund will be payable by the producers on a monthly production. I think that's a fair way to do it. It's a balanced way to do it — as their revenues accrue, as they pay money into government revenues, that a portion pay for the reclamation fund. These costs can be very expensive, and well reclamation costs can exceed $100,000.

As I summarize, I'd like to come back to the point that resource revenues…. We have recently taken a hit in that quite severely. They have been as high as several billion dollars. They have been as high as over $4 billion in 2008. They employ 35,000 people — an extremely important part of the industry to people in the north, whose sufferance we appreciate.

It's been often said by members representing northern parts of the community that the revenues coming out of the ground benefit the people in the Lower Mainland and throughout the province, without direct benefits necessarily going to them — though I'm sure they're very appreciative of the many, many jobs they get.

With that caveat, I'd hasten to add that the province should also be well aware that the jobs created in the Lower Mainland — in terms of managing the companies, investing in the companies, raising the funds — support an entire economy in the Lower Mainland, an entire climate of investment and opportunity.

It's that climate of investment and opportunity that's critical to B.C.'s growth. That's why it's important that we review these acts, that we modernize them, that we bring them into step with modern requirements in the province, that they enable consultation with all the community groups, that we hear local concerns and that we have dispute mechanisms that are built to handle and address local concerns and disputes.

I think it's very important that the commission have that power, that it be able to act independently and be seen as independent, that it has the resources to maintain its operations according to what it sees as its needs, and indeed, that it has the opportunity to raise its revenues accordingly to maintain those good offices.

This, of course, is very important to maintain the competitive balance in the industry so that we are seen by outside jurisdictions, other countries, as a friendly place, as a welcoming place to invest for our resource extraction.

[1725]

I think one of the main advantages we have, as we look around the world, comparing…. I'll ask you, Madam Speaker, to put yourself in the place, perhaps for a few minutes, of an executive of a multinational investment company, mining company. I won't suggest that's comfortable or not comfortable, but if you would consider that for a moment.

Where would you go in the world to invest if you see what unrest there is both politically, internationally? Politically from the point of view of unstable governments. We sit in one of the most stable governments in the world, and I think within that jurisdiction of Canada we certainly have, probably, one of the most friendly investment climates in the world. If you had to invest your money somewhere, you'd look to Canada as a place to invest it.

Therefore, we want to make sure that all the barriers, perceived or unreal, are removed, and I think the changes to this act will certainly enable us to do that.

As we have with investments, I want to reiterate incentives, not subsidies, that are payable only when the well is successful and the royalties come forth. That's the way to go. We certainly want to take a position that creates a friendly, competitive environment for investment, because that investment is very important to the province of British Columbia now and going forward.

Despite the downturn in resource industries, we know that will change. We must continue to present a competitive opportunity, an attractive opportunity for investments and investors to come to this country.

With that, I will relinquish the floor, and I know that members on both sides of this House are supportive of the bill. I would once again accept the criticisms and alert comments from the opposite side of the House. I know that they will give this bill, as it moves through clause-by-clause consideration, proper scrutiny. I know that the minister will be very appropriately answering and addressing each of those concerns as this moves through to passing.

I know, in the end, that this is the right bill. This is the right time for this bill. I'm sure all members of this House will give it their support.

J. Rustad: I am pleased to stand today and to join in speaking on Bill 8, the Energy, Mines and Petroleum Resources Statutes Amendment Act, 2010.

Just before I get into a lot of comments about the act itself, I wanted to start talking a little bit about the importance of the oil and gas industry. Much has been said by both sides of the House about that importance and what that does in terms of the overall province.

You know, it's critical to consider that in 2008, B.C.'s natural resource and petroleum industry provided the
[ Page 3906 ]
single largest source of resource revenue of over $4 billion for the province. That's about 10 percent of our budget. That means directly from natural gas, directly from the oil and gas revenues, one in ten students receives their education. One in ten people in health care receives their services. One in ten families on social assistance receives their support because of what is happening with oil and gas.

That's phenomenal, when you think about how important that industry is for our province and the role that it plays. One of the things that I'm particularly proud about from this side of the House when we talk about this — this bill and the amendments it's bringing forward, but the industry as a whole — is that the natural gas and petroleum revenues have actually increased by nearly 60 percent since 2001 and are now more than three times what the average was in the 1990s.

We've taken this industry a tremendous way in terms of what it's able to do, the jobs it's able to support, the families it supports in the northeast and indeed around the province. It's something, actually, that all of us on both sides of this House should be proud of in terms of what the industry does and what the people in the northeast do for us.

I think about it in terms of that and in terms of attracting new dollars. The province is attracting new investment through what we've been doing with the innovative infrastructure and royalty program to the tune now that in 2008 the capital investment was estimated to be $8 billion, which is three times the amount invested in 2001. In fact, since 2001 the industry has invested almost $38 billion in B.C. That's a number that's hard to imagine that's coming primarily through to the northeast of the province.

[1730]

The natural gas and petroleum industry creates 34,000 direct and indirect jobs. It's enormous and plays an enormous role for us in terms of the province. What we have done in this province to create one of the most competitive environments for natural gas and petroleum exploration in North America doesn't come by accident. It's something that we intentionally set out to do. We set policies in place. We put incentives in place. We created the right environment to be able to attract that kind of capital.

It's important to note that. When we're talking about Bill 8 and trying to set the right environment, being able to make sure that we've got the right settings for land, that's important to note because of the difference of B.C. to our neighbours.

[L. Reid in the chair.]

During the last election campaign I found it quite interesting that the opposition had suggested that we should be increasing royalties, that we should be increasing taxes on our oil and gas industry. They were quite vocal about wanting to do that and figuring that that would be the right thing to do for our province to try to drive some extra investment and dollars in our province. But I want to state an example of why that is the wrong way to think about this industry.

In Alberta a couple of years ago they changed their royalty regime. They upped their royalties, and there was a public outcry. They thought they should be getting more from the resources. Well, from that royalty regime change that happened in Alberta, they noticed that….

Here's a quote from the Energy Minister, who said in a statement in the Globe and Mail from Thursday, March 11, 2010: "We can't pretend that the oil and gas investment levels haven't eroded or that we don't have a responsibility to current and future generations of Albertans to address that." The provincial reinvestment levels had fallen off nearly 30 percent since 2006 and, just how important that is for Alberta, a 2 percent increase would be worth more than $700 million a year. They've dropped 30 percent.

The reason for that was because of creating an uncompetitive tax environment, something that the opposition was calling for in the last election. It's interesting. "The industry has blamed the higher royalties for driving investment to B.C. and Saskatchewan." Once again, I'm quoting from the article in the Globe and Mail, which was published on Thursday, March 11, 2010. "Both the provinces" — of B.C. and Saskatchewan — "have lower royalty rates and until last fall saw financial windfalls as companies diverted money to secure land outside of Alberta."

When you think about that over $4 billion a year in revenue coming in, the one in ten services in this province being supported by oil and gas revenues — all of that potential in this province — a big chunk of that is because of changes that Alberta made in the royalty regime, changes that the opposition here suggested we should be doing in the last election. It's a shame. When you think about that type of irresponsible policy, it shows a total lack of understanding of rural B.C. and of what's important, particularly up in the northeast of the province.

When you look at this bill and what the bill does, the legislation provides greater certainty for industry and improved environmental protection and makes the dispute resolution more balanced and effective for landowners and the industry. The importance of that….

A couple of years ago now, when I was chair of the northern caucus, I got a chance to go up to the northeast several times. I went up and talked to ranchers and landowners, had an opportunity to talk to people in the oil and gas industry as well as municipal officials throughout the area.

They commented to me about the importance of the industry. They also commented about the importance
[ Page 3907 ]
of being able to find that balance, making sure there are opportunities for the landowners, making sure there is the responsibility…. Of course, they have a natural concern for the environment. It's in their back yard. They want to make sure things are done right.

What I'm really pleased about is what this bill does. We had the Northeast Energy and Mines Advisory Committee, where our government consulted with landowners and industry and stakeholders throughout the northwest. Going through that process really allowed us to be able to come forward with these changes, and as a result of these changes, we have a more effective process for resolving disputes, one that will equally balance the rights of landholders and industry. Those are the types of things that I heard when I was travelling up through the northeast.

[1735]

One other thing that I really found quite interesting was the amount of enthusiasm up there for the industry. People wanted to see it successful. They want to see that investment. They enjoy the benefits that are coming to the province and to families, to individuals, to workers. They really enjoy having that and having that ability to contribute to the province and, certainly, to provide for their families. Going through this process and having those discussions and being able to bring this forward is the right thing to do.

The member for Juan de Fuca earlier was going on and waxing about this and talking about how we should have had this as part of a bill that came in, in 2008 and that there was a forced closure to pass the bill. Well, it only tells part of the story.

If you sat down and looked at Hansard from spring of 2008 and looked at the lengthy delays and the great pontification that the NDP had brought in on a number of bills, which then created the problem of not actually being able to have debate on this, it's pretty clear to show where their priorities were. They weren't really interested in talking on this bill, because they had far more important priorities.

Like I say, it's a shame when you think of an industry that is contributing that much to our province and has that much significant importance to everything we do. I find it somewhat disingenuous when they say that it's too bad they didn't have more time to debate. They had tons of time. They just chose to take their time and debate other things in this Legislature.

The amendments in this act will not bring any significant impact on industry. In fact, these are primarily targeted at improving the operations of the act, while the act itself will continue to have an important impact on industry. That's important because when you look at our industry, when you look at what we need to do in this province, we want to continue to encourage that investment, particularly in rural B.C.

In my area of the province, Nechako Lakes as a riding, we have an enormous potential in the Nechako Lakes basin, or the Nechako basin. I like to call it Nechako Lakes, of course, because I like to claim ownership of it. The Nechako basin extends for a great deal of distance throughout the middle of the province and expands across three or four different ridings. However, the Nechako basin has an enormous potential for oil and gas development.

We looked very closely at what's happening in the northeast of the province. We want to know that the processes we have in place, the incentives in place as well as the opportunity for the dispute mechanisms, are right. I have a lot of ranchers in my area and people that live off the land base with forestry and other resource activities. When the time comes and the Nechako basin is explored and we have the opportunity to develop it, we want to know that the regulations and the process that we have in place are right.

This bill, which amends the original bill that was brought in, clearly takes some great steps towards making sure that we take everything into consideration and that things are balanced. From that perspective, it is the right thing to do.

This act also increases the regulatory powers of the Oil and Gas Commission and enhances the government's ability to protect the environment from potential impacts of natural gas and petroleum development. It's important to note that when we're talking about doing that, there currently is not a significant problem with many of the challenges, many of the things that happen in terms of the industry. But it's important to make sure that we have the regulations in place to be able to manage that.

One of the other things this act does is expand the power to use money from the orphan site reclamation fund to clean up sites where an oil and gas owner can be held accountable. It's unfortunate that there are a few of those sorts of challenges that happen, but that's why you have these sorts of regulations in place to be able to deal with it.

I think the most important components of this act are really the changes that support landowners in resolving conflict with industry and making the dispute resolution process more balanced and effective. When I went up in the northeast and had the chance to talk to many people up there, that was one of the things they brought up that they had concern about. They wanted to make sure there was a balance there.

The Mediation and Arbitration Board will be renamed the surface rights board to clarify the board's purpose, consistent with the boards in other jurisdictions with similar mandates. Currently landholders are unable to ask the board to assist in negotiations on surface access. Only industry can.

[1740]

What this amendment will actually do is allow landowners to now have the right to be able to request
[ Page 3908 ]
mediation in subsurface disputes. It brings that kind of balance that is so important. The member for Peace River North as well as the member for Peace River South have already talked about the importance in that, because they live there every day. Their neighbours and friends, their business associates…. They know the importance of the industry, and they want to make sure there's the right balance with that.

Neighbours and tenants will now have the right to request mediation for claims related to damage caused by natural gas and petroleum activity. The board will have the authority to deal with disputes over the operation on a surface lease. The board will also have expanded authority to award costs.

All of that, once again, is designed around trying to make sure that there's a right balance, to be able to make sure that we try to encourage activity in the industry but also have that balance with the rights of landowners.

You know, it is interesting to note…. Of course, a lot of this, when you think about this, is landowners actually do not have the subsurface rights to the minerals, including the petroleum and natural gas and coal. The member from Nanaimo was just talking about how there was some land in this province that had those rights for both surface and subsurface, but it's extremely rare. As a matter of fact, in just about every western jurisdiction, as well as in B.C., the Crown retains those subsurface rights.

The changes to this act ensure that the commission has the authority to require and post fees and levies on each part of the sector to the extent that is sufficient to fund its operations.

When you think about the importance of that…. When you want to see things being able to flow and to be able to see, particularly, something like the Oil and Gas Commission or any sort of commission in the province, it's important to be able to make sure they've got those revenue flows. I think there was somebody — I can't remember who it was — that was talking about how there could be a conflict there. I don't see any conflict in it at all. It's a clear tie. It makes things flow appropriately.

One of the other things, of course…. There's been a huge amount of discussion from both sides of the House, and it's been in the media, around pipelines — the Enbridge pipeline project that's controversial, but other pipelines.

Of course, throughout the northeast there have been many pipelines put in place throughout that area because of oil and gas development. You need to be able to move the product to market. You need to be able to move things along, and it's an important part of the oil and gas industry.

It's a shame when you look at the opportunities for revenue for municipalities, for revenue in terms of the potential for First Nations and others, that the opposition won't support the idea of the energy corridors going through to the coast. I think we want to make sure that that goes through a proper environmental process. If it proves out that they can meet the environmental standards, I think they should have the opportunity to be able to put that case forward, not just have debate cut off arbitrarily by political decisions.

One of the things that this amendment does is…. It amends regarding the approvals of pipeline crossings of roads and better accommodates community interests and government transportation objectives. Where a pipeline permit holder requires access to land within a highway or municipal road, the pipeline permit holder must obtain authorization under the Transportation Act or other appropriate enactment.

All of those things were in place, and this simply just enhances what we're trying to do with that.

I still look at this bill and what we're trying to do with this bill as just another step towards encouraging oil and gas development, encouraging that right environment and making sure that all stakeholders have the opportunity to be able to have their say, to be able to make sure they have their rights protected and to make sure that as we try to continue to encourage development, that opportunity will be there.

Just in conclusion, when you think about those benefits to the province, when you think about those benefits to us as taxpayers, to us as receivers of services, to the people in my riding and to the people in the Lower Mainland, the oil and gas industry clearly is critical for us. It is clearly very supportive of the services that we do.

We need to make sure that we do what we can to encourage it. We want to make sure that it continues with its record in this province, that it continues with those opportunities. We also want to make sure that when you think about the revenues we get, we don't create an uncompetitive environment.

[1745]

I just want to reiterate that point. In talking with industry up in the northwest, when they talk about the possible development of the shale gas that we have…. We are still, even with the competitive regime, one of the higher-cost producers, simply because of the expense and the challenges that we have with our industry. It's important that we do everything we can to make sure those costs are kept in line, to make sure we can be as competitive as possible.

People want to come and invest in this province. They look at our oil and gas industry as being something that we support, that has a great future and that we encourage. We'll continue to encourage the types of activities we've had to try to make sure that it's not just a winter activity but that it can be done year-round, so that we have the summer exploration, we keep people working and we support communities.

All of that is very, very critical, and that's why bringing in Bill 8, bringing in these amendments, is so important
[ Page 3909 ]
— to be able to make sure that we carry forward with the importance of the industry to the province.

With that, Madam Speaker, I look forward to hearing other debate on this as well as to the future readings on it.

M. Farnworth: It's my pleasure to rise and take a place in this debate on Bill 8 to make a number of comments on what is an important piece of legislation and to take an opportunity to correct some of the comments that the previous speaker has just made, which I think do somewhat of a disservice to this particular piece of legislation and to some of the positions that have been taken in this House and by previous governments.

We all, I think, in this House recognize the importance of the oil and gas industry to British Columbia. We recognize how it has gone from being an important but minor player in the province's resource sector to a multi-billion-dollar industry in British Columbia. It's done that, literally…. Just over the last 15 years it's really taken off.

One of the things that occurred that I think we should recognize is that there were some significant changes that took place in the late 1990s around oil and gas which really allowed the industry to start to realize its full potential. It's not something where those changes that took place at that particular time are responsible for all of the tremendous growth that has taken place, but it is certainly a key part of the success of the oil and gas industry. I think it's something that we should recognize.

When the member makes statements that it's irresponsible of the opposition to make comments about royalties in this province, I think that's disappointing, because it fails to recognize that this is our resource. The public expects us to get the best value for that, and they also expect the best regulations in place, so I think it was disappointing to hear that type of shot taking place.

Perhaps even more — I guess, a bit — disturbing is the idea that somehow we should not be really debating or discussing this legislation and addressing it in a fulsome manner, and the comments that the opposition is wrong to draw attention to the fact that the last time oil and gas regulations were up for debate and discussion in this chamber, the bill was implemented through closure. That's unfortunate.

If the member were to acknowledge how government policy and how this place work…. He knows that it's the government that makes the decision of when to call bills. It's the government that makes the decision when to introduce bills.

When you introduce, as happened in that session, a significant number of bills — many of them important, controversial bills that should be scrutinized thoroughly — just a few weeks out from the end of the session and then you ram eight of them through by closure, that's not good government. That's not how good public policy is developed in British Columbia.

[1750]

Oil and gas — the oil and gas regulations and the oil and gas sector and the mining sector — deserves full scrutiny here in this House, because it is such an important part of our economy today, our economy in the past and our economy in the future not just in the northeast but, in terms of mining, throughout significant other parts of the province.

It's incumbent upon us as legislators to make sure that we are, in fact, ensuring that the regulations that are going to be in place are regulations that when you pass a bill such as this, cabinet can then put in place without coming back to the chamber, without significant debate.

It's important that we have a really good opportunity to explore what those regulations are. Are they going to meet the needs of the industry? Are they going to meet the needs of the public? More importantly, are they also going to deal with some of the criticisms that have been levelled against government and against issues that experts and independent officers outside of this chamber feel need to be addressed?

I'd just like to briefly mention one of them, and that's the issue of orphaned wells. The Auditor General's report stated that the number of suspended wells in B.C. doubled — from 2,000 in 1990 to 4,000 in 2008 — and that the Oil and Gas Commission did not have sufficient information regarding the wells.

Currently, in terms of dealing with orphaned wells, there's a levy that's been collected by the Minister of Finance. It currently generates $900,000 a year, and the fund balance as of March 2009 was $2.6 million. Yet to date we've only spent $200,000 on 38 orphaned wells.

That says that there's a real problem there, that there is an issue that needs to be addressed. It's not a case of assigning blame to here or there. What it's recognizing is that there's a problem. We need to know…. That's a serious problem that has been identified, in this case, by the Auditor General. It's not been refuted by governments as being an issue. It's a fact; it's a problem.

So the question becomes: how are we going to deal with that? The question becomes: what regulations are we going to be putting in place to deal with that issue? What changes are going to be made? Is there going to be a change made in the levy structure, for example?

Those are issues that we should be exploring in committee stage. We won't get answers to them here in second reading debate, and there's nothing wrong with that. But what's important is that we have the opportunity in committee stage to go through this bill on a clause-by-clause basis and ensure that those concerns and criticisms and critiques of the industry and some of the problems it faces are being dealt with by this piece of legislation. So I think those are questions that we have.
[ Page 3910 ]

The other thing that's important — and I know that the member for Nechako Lakes raised it — is about the issue of conflict around surface rights, because there's a very key point that's made. If you have issues around sour gas wells, around orphaned wells, around exploration and yet, at the same time, you have other users of land, of those surface rights — legitimate users of those surface rights — how are you resolving conflicts?

This is a government that a number of years ago came forward and said: "Regulations are bad. For every regulation that we bring in, we've got to eliminate two regulations." It was done with a very, I don't know, ideological "We're just doing this" approach. The Minister of Health kind of spearheaded that.

The funny thing and what I found really interesting about his exercise in terms of, "We're going to deregulate; we're going to do away with the regulations because we're overregulated," was this: what were his showpiece regulations? What were the regulations that this province was going to do away with that were so bad, that needed to…?

R. Fleming: Property rights.

M. Farnworth: My colleague from Victoria-Hillside says, "Property rights," and one may think that that may have been something. Somehow, I don't think so from the Minister of Health. No, it was the cutting of rhododendrons. That was the example that he pointed to, and I have never forgotten it, because that strikes most people as just absurd.

[1755]

Yet what has happened since then is this aversion to recognizing that there are problems with regulations. I think it's one of the reasons that have resulted in situations today where we are dealing with issues seven years out after he did his great deregulation exercise.

There are some important areas of B.C.'s economy that contribute significantly to the wealth of the province, where there have been advances in technology, in exploration techniques, in the way we extract these resources.

At the same time, there are issues around conflicts involving different users of the land base that need a regulatory framework in place, need the bodies that not only have the ability to deal with these issues and have regulations that are clear and straightforward but that are also funded — that have the funding and ability either to do enforcement or the study or the work that's required to make things effective.

Hon. Speaker, I don't want to take up too much more time. I just wanted to make some points. I think it's important that we have a thorough discussion around this particular bill and that we are able to deal with all the sections of this bill. I look forward to that — unlike the last time we were dealing with this issue, when it was rammed through. I think a disservice was done not only in terms of the chamber but, I think, to the industry itself in terms of ensuring that the framework and the legislation that we have in place is the best possible that it can be.

We have a lot of questions that we want to see answered in the committee stage of this bill, and we look forward to that discussion. It's been a pleasure to make a few points on what I think is an important piece of legislation. With that, I take my seat and let others comment further.

T. Lake: It's a pleasure for me to stand and support Bill 8, Energy, Mines and Petroleum Resources Statutes Amendment Act, 2010. I want to thank the members on both sides of the House for their comments this afternoon.

One of the great pleasures of being in public life is the ability — or the opportunity, at least — to learn about so many different areas in our economy and our province and how things are intertwined. It really is something that I've appreciated through my public life, working in local government and, of course, learning what actually happened when you flushed the toilet and what happened to that stuff as it went through the system and eventually out into the environment, hopefully — and certainly, in our case in Kamloops — in a very sustainable way.

You learn a lot of different things that you don't really get to learn when you're in private life. When it came to oil and gas, I must admit that I didn't really appreciate the difference between orphan wells and Orson Welles. Today I'm learning a great deal from my colleagues on both sides of the House. As a veterinarian in my former life, natural gas had a different meaning, working with cows, than it does when it comes out of the ground.

I want to talk, just as some others have previously, about the importance of the oil and gas industry. When people that live in the city…. Much of my life has been spent in Canada living in urban areas, a short time living in a smaller community in the Okanagan when I was going through high school, but most of my life has been spent in the Lower Mainland. In fact, a part of that time was as a constituent of the member for Port Coquitlam, who just spoke previously to this bill.

Like many urban dwellers, I often don't appreciate the resource industry in the province and what it does for us, how much it provides. The member for Nechako Lakes talked about the $4 billion brought in to government revenues in 2008 from the oil and gas industry — fully 10 percent of our budget — and since 2001 about $38 billion, which is almost equal to the annual budget of the entire province. That's what the industry has invested in that time period.

I do appreciate the contribution that not only the oil and gas industry provides but also that of the forest industry. In my constituency of Kamloops–North
[ Page 3911 ]
Thompson, certainly the forest industry is an important industry facing some challenging times right now, but we do appreciate those resource industries.

[1800]

Mining — as I had an opportunity to speak about earlier in the House — is hugely important to my riding with the Highland Valley copper and molybdenum mines. We appreciate those resource industries, and it's important that we work with the industries to make sure that while they're providing this great source of revenue to finance our health, education, social services and all the other things that people in British Columbia have come to expect, that we also provide some regulations, some smart regulation, around these industries to make them sustainable.

That's certainly what this statutes amendment act does. It provides greater certainty for industry, it improves environmental protection, and it makes dispute resolution more balanced for landowners and also for industry.

The amendments to the Oil and Gas Activities Act will increase the regulatory powers of the Oil and Gas Commission. As mentioned, the Oil and Gas Commission is an independent body, a regulatory agency that's responsible for overseeing natural gas and petroleum operations, which include exploration, development, pipeline transportation and reclamation.

The act will be amended so that the Oil and Gas Commission will have expanded powers to use money from the orphan site reclamation fund to clean up sites where no oil and gas owner can be found or held responsible. It increases the regulatory powers. We know that regulation is important, smart regulation, so it will enhance government's ability to protect the environment from potential impacts of natural gas and petroleum development.

When we think about industry today and industry in the past, certainly times have changed a great deal. When I came to Canada in 1967 from England, we lived in Calgary in an area called Ogden, which was downstream from an oil refinery. The Bow River flowed past that refinery and past our community.

As young boys, we often went down there to hunt gophers — well, others hunted them; I had a hard time finding them — and also went down to the river to try and enjoy ourselves and try to stay out of trouble. But sometimes we would go fishing, and I remember one day catching a fish from the Bow River. The Bow River at that time — you could see the oil sheen on the surface of the water. People didn't think a whole lot about pollution in those days, or at least our sensitivities were just being tuned into pollution in the late '60s.

I remember catching a fish from that river and taking it home to fry. We thought this would be a great treat for my mom, who was working. My dad worked at CPR; my mom also worked to support the family. We thought it would be a great treat for her to come home and find that fish for supper. She was not impressed when she came home and the whole house smelled like an oil refinery, because of course, that fish was full of the products of the refinery upstream.

In fact, that refinery was reclaimed and turned into a subdivision later. Hopefully, that refinery was reclaimed in a way that makes the land where it sat sustainable.

It certainly shows you that regulation in those days was not like it is today, and I think we can be proud of the working relationship industry and government have in Canada in particular, and B.C. specifically, to protect the environment from the kinds of things we used to see in the past.

The orphan site reclamation fund is created through a tax on the oil industry. Other speakers have spoken about it being entirely appropriate to have an industry that reaps great benefit from the resources that are found beneath the soil. So that fund is created, and the commission now will have broader authority to collect fees and levies that support it in regulating the industry. I think that that is, in fact, a very good thing.

I want to talk about the amendments to the Petroleum and Natural Gas Act. Again, I don't want to spend a great deal of time, but I'm enjoying this debate we're having today and learning lots from it. I don't have a lot of experience with oil wells on my property in Kamloops, but my brother who lives in Alberta has some property around Drayton Valley. The countryside there is dotted with oilwells, as I'm sure you're well aware.

[1805]

In fact, on our annual summer trips with the kids out to my brother's cabin near Drayton Valley, one of our favourite games was spotting the pump jacks. Whoever got the most number of pump jacks was the winner when we got there. But there was a catch. You had to have an active pump jack. If you claimed one that wasn't working, that was a deduction. We used to really enjoy that game on the way to Drayton Valley.

My brother's property had two pump jacks on it, and certainly, it brought home to me that when you have those surface rights and the ability to go into people's property and access the rich resource that is below, it's important that landowners have the ability to have a fair hearing and an opportunity to negotiate with the oil and gas industry. This act now changes the Mediation and Arbitration Board to the surface rights board, to clarify the board's purpose that makes it more consistent with boards in other jurisdictions with similar mandates.

Currently, landowners are unable to ask the board to assist in the negotiation of access to the areas of their property, but under this amendment, landowners will now have the right to request mediation in those disputes where they can't find a resolution with the industry by themselves. A lot of those landowners are ranchers and farmers.
[ Page 3912 ]

I certainly know from my experience with the Ranching Task Force that many ranchers and farmers depend on working off of their farm or their ranch in order to keep their operations going, and many of them work in the oil and gas industry. They certainly understand the benefit of the oil and gas industry, the benefit to working with industry, but they want to be treated fairly. The changes to the act to create the surface rights board, I think, are certainly a great step to make sure that people are dealt with equitably and fairly.

With that, I'll conclude my remarks by, again, speaking in support of these changes and, also, reaffirming our appreciation to the ministry and the natural gas and petroleum industry in British Columbia, which has done such a great job of supporting all of the services that we've come to expect in the great province of British Columbia.

R. Fleming: I'm pleased to be able to say a few things this afternoon at second reading on Bill 8 and to follow after members on both sides have had a chance to make some comments about the direction of the legislation.

I think I will keep my remarks brief this afternoon because I look forward to the committee stage of debate when the minister and ministry officials can answer more detailed questions about how the legislation will make some changes that certainly this side of the House has argued for some time are overdue around oversight and around capacity for the Oil and Gas Commission.

The devil really is always in the details of legislation. In order to make sure that some of the mechanisms that are spoken to in this legislation are in fact going to be effective and that some of the regulatory changes adding these new layers of regulation and powers to the commission and to the surface rights board are going to do the job that we need them to do — are going to speak, for example, to some of the recommendations made very recently in the Auditor General of British Columbia's report that was tabled in the House about a month or a month and a half ago.

There's a little element of déjà vu in Bill 8. I can remember when we had a bill tabled by the government, Bill 20, just a couple of years ago that proposed changes to the oil and gas sector in B.C., to the legislation that governs that sector. As my colleague from Port Coquitlam mentioned, it was brought into effect by the use of closure.

[1810]

At that time the opposition — and, indeed, all sides of the House, all members — were prevented from debating fully the merits and the contours of the legislation. What I well remember is the package of bills that was brought in with closure at that time. I realize that the minister now was not the minister then, so these comments are not directed to him.

There was a whole raft of bills at that time, and my colleague from Port Coquitlam was just getting started, I think, when he referenced them. Changes to the Election Act that made it more difficult — tremendously more difficult — for people without an address to prove their eligibility to participate in an election…. Unbelievable.

That was not backed by the Chief Electoral Officer of British Columbia. There was no pattern of vote fraud or any documented reason from our independent authority to support that change, and then there was no debate in this place to approve it. It was brought in with closure. There was also legislation to make it more difficult to conclude police complaint commission inquiries so that officers that were no longer employed….

The Chair: Member, I would draw your remarks back to the consideration of Bill 8.

R. Fleming: I will bring my remarks back, as I recall the context in which the previous amendments to the original act were made, Madam Speaker, and take the point.

Let me just echo the comments that have already been made by a couple of members about the importance of the oil and gas sector and the increasing importance of the royalties that accrue to the province of British Columbia now from the maturation of the industry, from its expansion — now eclipsing forestry and other important resource sectors that have been traditional mainstays of B.C.'s economy.

That is all true, and I think people have spoken very eloquently to the benefits and to the employment on the land base that this provides, to the revenues that flow into all parts of the province, urban and rural alike. I think, in fact, there's an argument that, fiscally, the province may be at risk — and this isn't the industry's fault — of an overreliance on oil and gas revenues.

Because oil and gas are finite fossil fuel resources that our province has had the good fortune of having as a product of its geography and its accessibility to be exploited, there is probably a very good case to be made — in fact, many people have made it — that if we are going to transition to a stronger renewable energy sector, if we are going to use royalties from resources that inherently we can only burn once or consume once to a stronger development and a diversification of renewable energy in B.C., we should look at developing investment mechanisms through the Crown that we see in other countries like Norway where they have an enormous amount of wealth that has been generated through companies like Statoil and others.

[Mr. Speaker in the chair.]

I want to extend the courtesy of allowing the minister to be able to make some comments towards the end, so
[ Page 3913 ]
I will try and be brief here as I just conclude. We will be able to have more detail at committee stage.

When one looks at the issue that has been uncovered most recently by the Auditor General around the orphan well liability that has accrued to the province, we want to see the Oil and Gas Commission have the capacity to deal with that. We want to remove that liability from taxpayers. We want the industry to pay its fair share to help do that. We want to have an independent authority to be able to manage that problem.

The other conflict that has come up again and again is around competing uses of the land base and disputes over private land use. We sincerely hope that the surface rights board is going to be able to manage better and provide a fairer process for people who lodge complaints. We sincerely do, and we will be pursuing that line of questioning later on in debate.

[1815]

Other colleagues on my side have remarked on the remarkable about-face that government has done in this case. Here's a government that sought to deregulate almost every aspect of legislation in British Columbia, which has now come to realize that perhaps in the case of the oil and gas industry, we have been in a situation where we're under-regulated and that there are environmental liabilities accruing to the province and that industry in fact has obligations and responsibilities to people in British Columbia.

This legislation states its intent to deal with that — to deal with that deficit, if you will. We will want to see on this side of the House that the bill is in fact adequate and is up to the job to be able to accomplish that.

I thank you this afternoon for the opportunity to make a few brief remarks at second reading.

Mr. Speaker: Seeing no further speakers, the Minister of Energy and Mines closes debate.

Hon. B. Lekstrom: I want to thank all of the speakers on both sides of the House who spoke to this bill this afternoon at second reading. I think it is an incredible step forward that this bill brings. I have heard a great deal this afternoon that I think is in much agreement on both sides.

This is about finding the balance. We use that word quite often. It's about finding the balance between the oil and gas industry and our landowners — primarily the agricultural sector, many of whom work in the oil and gas industry themselves to help offset, in many cases, the losses they incur on their farms as they develop the food that you and I enjoy on our plates.

As I look to the discussion that took place here this afternoon, I'm encouraged, and I'm looking forward to the discussion that we will have at committee stage, where we can get into more detailed questions regarding each section of the bill. But I do want to talk just briefly on a couple of the comments that were made, maybe to bring some clarification.

The issue of industry funding the Oil and Gas Commission, for example. I do think it's appropriate that they pay through their levies versus the general taxpayer of British Columbia funding that. I know there was a comment made there.

The other issue — and we will get into it, I'm sure, in discussion at committee stage — is orphan wells. There is a distinct difference between an inactive or decommissioned well versus an orphan well. We only have 38 orphan well sites in the province. I think both sides would agree that we're going to do what we can.

Our government actually has already begun the process of working in cleaning up some orphan well sites that were 50 and 60 years old. They weren't even in the northeast part of the province. They were actually, I believe, in the Kootenays — some of the first wells punched in this province decades and decades ago.

You know, I think there's a great deal of unity on this bill. I know my critic is here, and I know that he's sitting eagerly watching as I speak. I'm looking forward to that discussion that takes place.

This bill is about a number of things, but to sum it up — and I know we'll have a great deal of time at committee stage — it's about finding the balance between, as I said, the oil and gas industry and the landowners in the northeast part of the province. Primarily that's where the activity is taking place today, but this bill would transcend any boundary, whether it be the northeast or the northwest.

It's about finding the ability to take the challenges that have developed, and challenges I say in a good sense. We have an industry that is developing natural gas, primarily, for us. We talk a lot about oil and gas. I do want to state that this is primarily about natural gas production in British Columbia.

We have the ability not only to have that industry work for us, to create opportunities for the men and women and their families that work in this industry but to develop this industry and let it move forward in a way that is safe, is sound, is responsible and that looks after the rights of both industry and the landowner. It's very important that we find that equitable distribution.

This is not a result of an industry that I think has not lived up to many great commitments that they've made. I've lived there all my life. I have watched this industry grow. I have watched friends of mine work from rig hands right up to owning their own service companies. I have watched it do incredible things for all of us, not just in the northeast but in this province.

It has helped fund our education systems, our social programs, our health. But I'm also a big supporter of making sure that as we extract resources in this province, we don't do it at any cost. You know, I think that vision is shared by all, to be honest with you. It's shared
[ Page 3914 ]
by industry. I work closely with industry in my capacity as the minister responsible for the oil and gas industry, but I worked with them in my previous capacity as the mayor of the city of Dawson Creek and as an MLA.

In closing, I do want to state that I think there is a lot of common ground from both sides of the House on this bill. I'm looking forward to the members' questions during committee stage.

[1820]

With that, hon. Speaker, I would move second reading of Bill 8, the Energy, Mines and Petroleum Resources Statutes Amendment Act, 2010.

Motion approved.

Hon. B. Lekstrom: I would move that Bill 8 be referred to the Committee of the Whole for consideration at the next sitting of the House after today.

Bill 8, Energy, Mines and Petroleum Resources Statutes Amendment Act, 2010, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

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

Hon. I. Chong moved adjournment of the House.

Motion approved.

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

The House adjourned at 6:21 p.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF
SMALL BUSINESS, TECHNOLOGY
AND ECONOMIC DEVELOPMENT

(continued)

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

The committee met at 2:47 p.m.

The Chair: Good afternoon, everybody, and welcome to the Douglas Fir Room. If I could remind all members and individuals in the gallery that with any electronic devices, there's no audio to be used. And there's no correspondence with members verbally over that invisible wall in front of you. The gallery has the same rules as in the big House.

We're doing the budget estimates for the Ministry of Small Business, Technology and Economic Development.

On Vote 43: ministry operations, $47,426,000 (continued).

J. Kwan: Earlier in the day we were dealing with the Asia-Pacific budgetary items. I think I finished off with the question to the minister around the Asia-Pacific Business Centre and its activities and budgets related to that and the programs and so on.

I think the minister committed to that. I'm not sure if that was actually on the record. I know he nodded, but if the minister can actually put that on the record so we can have it for Hansard, that would be great.

Hon. I. Black: Yes, I can confirm that. It's relatively straightforward. We can forward that to the member.

J. Kwan: Also, comparing this year's budget — when I say this year, I mean the '10-11 budget — versus the '09-10 budget in terms of the trade missions that were undertaken…. I received a list from the minister. This was arising back in November of last year. I received the documentation from the minister about the activities that were undertaken, but I do not believe the expenditures associated with each of the trade missions were outlined in that document.

So I'd be interested if the minister can provide to me, in the '09-10 budget, the dollar figures associated with each of the trade missions that were undertaken by his ministry.

[1450]

Hon. I. Black: The accounting system we have doesn't track the expenditures to the granular level of a trip-by-trip basis, but we can certainly get the information to the member about the costs associated with running trade missions through the course of the year.

J. Kwan: Sure, we can start from there, and I'll receive that documentation. Then if I need further detailed breakdown on who went on those trade missions, for example, and the further breakdown of those figures, I take it that the minister would be agreeable to providing that information. I'll take a look and see what he's got to start off with, and then we'll take it from there.

Hon. I. Black: Yes, we'll forward the information we have to the member, and if there's a different view on it that the member needs to see, we'll try to accommodate.

J. Kwan: Excellent. I'd like to move on to another area now, if you please, Mr. Chair — discretionary spending
[ Page 3915 ]
in the ministry. I told the minister after we adjourned earlier in the morning that I'd like to go into this discussion this afternoon.

I know there is an increase in money spent on professional services from $5.3 million in the September '09 budget to $9.4 million in the March '10 budget. This change largely, I think, is accounted for by the Asia Pacific Trade and Investment account, which more than doubled from $4.1 million to $8.3 million spent on professional services. This is information from the budget documents tabled in the House.

I wonder if the minister can expand on what professional services we are talking about. Can he define that for me, and what…? Well, let's have the answer for that first question.

[1455]

Hon. I. Black: Approximately $4½ million of that is allocated towards our existing trade and investment reps that we discussed. There's another approximately $2 million earmarked for the other three offices, for the trade and investment reps that we discussed earlier today. Then the bulk of the balance of it is spent on external consulting and guidance fees associated with things like developing asset maps, which is a phrase used in our ministry.

Basically, it's a very, very thorough and in-depth analysis of various industry sectors around British Columbia, positioning them both within Canada and internationally for the benefit of potential investors. It's an ongoing effort in our ministry, as they have to be refreshed. It's an enormous amount of work, and we do use third parties to help us with that.

There's also work with third-party consultants with respect to various trade matters and other investment analysis. It's work that gets done by third parties to help the ministry in the work that it does, trying to attract investment from around the world.

J. Kwan: Could I get a list of those, I guess, contracts that were let to these various consultants or consultant groups and how that was tendered — the process that the ministry followed, the value of the contracts and the product that was delivered with these contracts?

Hon. I. Black: The member's question was, as I understood it, to 2010-2011 numbers. That was the budget breakdown I just gave in my previous answer. The contracts involved in those expenditures are actually ahead of us. They don't actually exist yet, but I can confirm for the member that they are all subject to the procurement standards of the province of British Columbia with respect to going out to tender.

J. Kwan: Is the minister then saying they have not yet secured those contracts and that they're in the process of procuring them? Or have they secured the various consultants for these contracts already? And do they follow the rules of the procurement process of government?

Hon. I. Black: It's actually a blend of the two. I mentioned the existing trade and investment representative offices. Those contracts do exist — for clarity.

Interjection.

Hon. I. Black: The member asked for confirmation that it's effectively continuation of the existing services, and yes, that is correct.

[1500]

The other contracts under question are proposed as part of the budget that we're working our way through right now, and as such, they have not been tendered at this stage.

J. Kwan: Well, then we'll save that set of questions for next spring, I guess. We'll come back to it, no doubt.

Let me turn to another area of interest, and that is the ICE fund within the ministry. In the document, the ICE fund, which is the innovative clean energy fund, was created back in 2007. The stated purpose was "to encourage the development of new sources of clean energy and technologies to help support local economies and livelihoods in communities across B.C."

In the Keep B.C. Strong document, there was a $100 million, four-year commitment made to this fund. Could the minister please advise where that money is now in this year's budget? I'm trying to follow it through. Is it still with this ministry, or is it gone? I'm not sure where it actually is in the budget documents. If the minister can elaborate on that, that would be appreciated.

Hon. I. Black: I can confirm for the member that the $100 million in question around the ICE fund is contained within the budget of the Ministry of Finance.

J. Kwan: That seems to be the pattern of this ministry. It seems like nothing is really housed in this ministry; it's always somewhere else. Finance it is, then — $100 million in the ICE fund. Okay.

The budget commitment in this budget book, though, indicates that the funding commitment has gone down from $25 million to $15 million. Could the minister please explain why?

[1505]

Hon. I. Black: Apologies for the delay to the answer. First of all, it appears that I answered a different question than I thought was asked in the previous question, which perhaps will clear up the issue on the $100 million. The $100 million was for the clean energy fund. That is what is held in the Ministry of Finance. The ICE fund is held within this ministry.
[ Page 3916 ]

To the member's question about the change in expenditures: the ICE fund is currently funded by a levy which comes to a conclusion at the end of June of this year, I believe. At that point the $15 million that is forecast to be expended in this area in '10-11 and on a go-forward basis comes from the remaining $51 million balance that's currently in that fund.

J. Kwan: Okay. The funding commitment for ICE went from $25 million to $15 million, so that's a $10 million drop. Now, my understanding is that the funding comes from a levy on the energy products, as the government describes it. Is the amount, the reduction in $10 million, a result of the drop in the levy collected from energy products? Why is there such a drop in this fund of $10 million? Can the minister explain?

Hon. I. Black: The difference between the $25 million and the $15 million reflects partly the learning curve of the ministry as to the demands on the $51 million balance in that fund. It was anticipated that the fund would draw down approximately $25 million in fiscal '09-10.

[1510]

Based on what we're seeing from the applications that are coming through and the timelines that it's taking the applicants to bring their deals together and actually move forward after they've been conditionally approved by the ICE fund for partial funding, it is our expectation that only $15 million would be drawn down during the '10-11 year.

J. Kwan: Can the minister explain, then: how is the ICE fund levy connected to the fund itself? Or is it? Maybe it's a separate thing altogether.

Hon. I. Black: To try to explain the relationship between the levy and the budgeted line items in the budget. The levy was used to build up the cash account in a special account designated specifically for this purpose. What the member sees in the budget documents is the proposed usage of that cash on a go-forward basis, based on the experience of project proponents, their applicants, the demand on it, the milestones and the length of time it takes these proponents to meet those milestones as they bring their projects to life in the various regions around the province.

J. Kwan: What happens to the money that's collected through the levy then? Does that go back to general revenue? If it's collected and put into a special account for the purposes of the ICE fund itself…. Now, the ministry has said that it's going to come to an end in June, that the ICE fund initiative is coming to an end in June. So what happens to that money that is collected through the levy? Where does it go?

Hon. I. Black: The ICE fund levy, as described, goes into a special account. The special account is designated specifically for the purposes that the ICE fund itself exists for. The cessation of the special levy does not make the special fund go away. The special fund is topped off with cash, and it will be drawn down upon, according to the budget documents that the member has, on a go-forward basis.

J. Kwan: What's the balance now in this special account that holds this levy? How much money is in there?

Hon. I. Black: I'm advised that the projections for the ICE fund cash balance will be $51 million at end of June 2010.

J. Kwan: So $51 million sitting in this account with the program coming to an end in June. What happens to that money?

Hon. I. Black: The money is used then to fund the expected demands against that fund in — as we're talking about right now — 2010-11, which is about $15 million against that $51 million.

[1515]

J. Kwan: Okay. So $15 million against $51 million still leaves a surplus in that account. What happens to that money — some $36 million?

Hon. I. Black: The balance — presuming that the demand on the money is as we are forecasting, about $15-odd million this year — under that scenario, yes, would be around the $36 million mark, which would be the starting, opening balance of that fund going into the subsequent fiscal year, against which the project proponents during that year will draw down against the money.

J. Kwan: The proponents who apply for this fund, presumably, who bid for this fund…. Is the reason why the ministry projects that the amount for this fiscal is at $50 million, ballpark, because there's a deadline for application and that deadline has now closed, so therefore, it's capped at the $50 million? Why does it not continue beyond June? If that money is going to be held for next year, why would you have sort of a break period where, at the end of June, the funding stops going forward, then, till next year?

Wouldn't it make sense to be continuous in terms of the flow for opportunities when they present themselves? Maybe there's one that shows up on July 1 or something. Must they wait another year in order to access that fund for that next fiscal year to kick in?

Hon. I. Black: No, the mechanics of the ICE fund work as follows, although in past years there's been
[ Page 3917 ]
effectively one call per year. There's a public announcement made that those who have projects that may be eligible for ICE funding are welcome to apply and see if their project meets the various criteria for conditional funding.

In this past year, actually, we had three separate calls, perhaps identifying some of the challenges that the member might be noting. If you come up with your great idea a week or two after the deadline, you could be facing sitting for another 11-and-change months until you get the chance to revisit the opportunities presented by the ICE fund.

In this most recent year there were actually three separate calls put out to various proponents soliciting interest and making the ICE fund benefits available to qualifying proponents. Those proponents, once they are successful, would draw down on the money the way I have described.

J. Kwan: I have a bunch of questions arising from that. The three proposal calls per year — is that consistent since the beginning of the fund, when it was established? Is that the case for the 2010-2011 year as well, or is it just for the election year?

[1520]

Hon. I. Black: The anticipation at this stage is that the three calls which took place through the fall and winter of this fiscal will, over the next number of years, actually draw down the remaining $51 million over the three-year period starting in '10-11.

It is not anticipated at this stage that we do another call against that $51 million, unless we find that some of the project proponents withdraw their applications or their projects don't come to fruition or they don't meet the criteria that we have for them actually drawing down on the money in the first place.

J. Kwan: So for the '09-10 year there were three proposal calls out. For this year, this fiscal '10-11, it sounds like there's going to be one proposal call as the government moves towards winding down this fund and drawing down on the $51 million in that account. That's what I'm hearing from the minister on the fund itself.

Going backwards first, and then I'll go forward. Prior to '09-10 the ICE fund that was established…. Were there three proposal calls as well? Since the beginning of this fund being established within government, has it been the case that each time there were three proposal calls per year? That's going backwards. I'll wait to ask going forward later.

Hon. I. Black: Just by way of history, the ICE fund started its collecting of its proceeds in October of '07. So the process of putting out calls — or intakes, if you will — started in '07-08. There was one intake in '07-08, which was a very general one and which was, I suppose, the first attempt at trying to understand what we might get back in this new and emerging industry.

In '08-09 there were two intakes, one that was specifically focused on rural communities and another one that was focused on liquid biofuel. Then in '09-10 there were three intakes, as I answered previously.

J. Kwan: Interesting. In '07-08, one intake; two in '08-09; and reaching its optimal number of intakes in '09-10, which happens to be an election year — also an optimal number of dollars available, $25 million. Then in '10-11 moving it down to one intake and the dollars reducing to about $15 million as well. Interesting to note.

[1525]

Does the minister have a list of the projects that were announced? Does the minister have a list of projects in this initiative for each of the years that the fund has been active? I have some of the press releases from the government — probably not all — and I don't think that I have a comprehensive list of all the announcements made under this fund. Does the minister have that available?

Hon. I. Black: All of the successful proponents under the ICE fund were announced by way of press release, and I would be pleased to get copies of all of those press releases sent to the member's office.

J. Kwan: Going forward now, the minister says basically that the fund is going to wind down. There's $51 million in the account at the moment, and they're going to keep on drawing against it until, I guess, all the funds have depleted. Am I understanding that correctly — that the account would not be replenished with new dollars from the levy?

Hon. I. Black: Yes, the member is correct that the vehicle of collecting the levy associated was used to top up the ICE fund account. As that ceases, the objective at that point is to use the vehicle…. It will wind itself down in terms of its natural life going forward. Then that is to be….

The work done by the ICE fund is envisioned to go forward. I'll quote here from the fiscal plan, where it says:

"Government continues to encourage investment in a more energy-efficient economy through the establishment of a new climate action and clean energy allocation in the contingencies and new programs vote, providing $100 million over the three years" — which I believe is the $100 million that the member first asked me about when we started here this afternoon.

"The allocation will support investment in the following areas" — and these are very, very similar to the areas that the ICE fund has been focused on — "partnerships in infrastructure to support cleaner transportation choices; support for the production of biofuel from wood waste, including ethanol and wood pellets; and further encouragement of new forms of electricity generation,
[ Page 3918 ]
including wind, solar, geothermal, tidal, wave and run-of-the-river applications. This new funding will complement the anticipated clean energy act to be introduced into legislation in the near future."

That is the go-forward plan for our investments in this area. The vehicle known as the ICE fund, as it stands right now, will execute on the projects that have been already approved and announced and those that lie ahead for formal announcement.

[1530]

J. Kwan: I wonder if the minister could tell me: would he deem the ICE fund — the initiatives under the ICE fund and the fund itself — to have been a successful venture for the government in terms of capitalizing opportunities in this area?

Hon. I. Black: I think that there's no question that this ICE fund has indeed driven forward a lot of initiatives that I think are very, very important as we look to things like the green economy and its various subsets — alternative sources of energy production and the technology that makes that energy production possible as well as, if you will, greening up existing operations that are done today across different traditional industries throughout British Columbia.

At this point we've got over 41 projects approved, and I think this is where the math begins to make a lot of sense. The $60-odd million that will be used to fund those 41 different projects is leveraged, resulting in a total investment of over $220 million into this area that we deem to be very important as we go forward in the province.

By the measurements we're seeing, by the types of projects we're seeing coming forward and by the ambitious entrepreneurial spirit that's driving a lot of them, as well as the science coming to the forefront in a lot of these areas…. Insofar as this fund was designed to encourage investment in these areas, to encourage taking the concepts out of the laboratory and into an innovation cycle, to bring them to life and actually see the benefits materialize, then yes, I do believe that the ICE fund, as it continues to go forward, will be a success.

J. Kwan: Why would the government wind it down?

Hon. I. Black: As I mentioned, the type of work done by the ICE fund is not stopping. As I mentioned, I think the commitment of the government to continue the work done in this area and to push it forward has been reflected very clearly in the three-year commitment of $100 million that was announced in the budget.

J. Kwan: In some instances, for government, if a program has been successful and deemed to be successful, especially when you can lever money from another sector to continue growth in those areas, oftentimes the government will say: "Hey, that's a worthwhile investment, and we're going to actually renew that fund" — right? — "We're going to go beyond the three-year commitment that was originally made." But that's not the case here.

The minister, by his own admission, says that it's been a successful initiative and continues to be successful. Why, I even have a press release here from the minister stating: "Business-Hosting Program Wins Gold for B.C. Economy." It goes on to say, "British Columbia is already reaping the rewards from the province's 2010 Olympic and Paralympic business-hosting program, with a dozen partnerships that will create jobs and build a stronger economy, says the minister by name," etc.

Then it has a backgrounder that lists 12 projects. Virtually all the projects are recycled projects, and I'm not quite sure how many of them really have to do with the Olympics. Notwithstanding that, though, one of the items listed here comes from the ICE fund initiative as well — joint press releases on both items relating to this.

As far as I could see, on all accounts, the minister and the government claim it to be a success, yet we're seeing the end of this fund. I have different press releases that talk about the number of jobs that were created — "750 temporary jobs and full-time jobs in over 25 B.C. communities" — related to the clean energy projects. That was in April 2009, a press release from the minister and the Premier's office, for that matter.

[1535]

Anyway, I've got a whole stack of them. I'm not going to go through each and every one of them for the sake of repetition. So why are we winding it down, and why wouldn't we actually increase the fund or continue the fund? Why are we not doing that if it's been successful?

Hon. I. Black: I am of the view that government has appropriately recognized the success of this fund and the initiatives that were done within it. What is coming to a conclusion is the winding down of the levy associated with topping up this particular fund.

In response to that, government has said that the work that is done in this area is very, very important and should continue. So despite the fact that the existing mechanics of collecting money to top up the investment fund that we use to drive successful initiatives in this area are winding down at the end of June, there will be $100 million put into this area over the next three years.

I believe that speaks volumes for the confidence that our government has in this sector in terms of developing this as part of our economy. As the member may know, we have the third-largest cluster in the world right now in green energy in British Columbia with respect to the various scientists, the entrepreneurs, the companies and the employees that are involved in this area.
[ Page 3919 ]

There have been remarkable strides made. We want to see that continue. I think a commitment of $100 million over three years that is identified in advance of other mechanics winding down speaks volumes for the handoff that will take place from one existing funding mechanism to another to ensure that the work in this area continues.

J. Kwan: It actually sounds more like the government is winding down, really. I mean, the minister can sort of spin it however he wants to spin it. The fact is that the levy would not go into the account, so the initiative will come to an end once the moneys in that account are depleted. There's just no way to go other than that, unless it's that magically — somewhere, somehow — funds end up being in that account to continue the program. That, to me, in my definition, would be a winding down of the program.

Okay. The levy, the minister says, will not be topped up anymore. Was the levy brought in by statute? I believe it might have been the Social Service Tax Act. Is that the case? So to wind down this account and the levy being set aside for its purposes — would that require legislative amendment?

Hon. I. Black: I suppose the member and I have to disagree on the commitment of $100 million representing somebody walking away from an area that interests them. Where I come from, if somebody throws $100 million at a particular initiative, that to me is a very, very sincere and material and measurable indication of support, not one of walking away or somehow dismissing the results of the program. So we have to agree to disagree on that point.

Moving to the member's question about the social services tax, I can confirm that this is absolutely part of that mechanism. As that mechanism is now being repealed as part of the legislation currently before the House, that would explain the mechanics coming to an end on that particular point.

The ICE fund itself, however — under the Special Accounts Act, I believe it's called, and I stand to be corrected on this — won't actually come to a conclusion until its balance reaches zero, so the only thing that ceases at the end of June is the current mechanism used to fund our initiatives and our priorities in this area.

J. Kwan: I do love estimates, I've got to say. You find out a lot of information.

Now I see. Effectively, the levy that was designated for the ICE fund has gone off towards a different course, and that is that it's been derailed, basically, with the government's HST agenda. That's really where that money has now gone to. Now I see, and I can see the dots being connected and why it makes sense for the government, I guess mostly for the Minister of Finance and the Premier, on that score.

[1540]

No matter how you slice it, when you don't replenish funds in an account for a particular program and let the money run out as the program continues, then you're winding down a program. That's the way I see it. We can mince words however you want, but it doesn't change that fact. That's where the levy dollars have gone to.

So it would be repealed. Then, presumably, the money from that levy would go back to general revenue in support of the HST agenda the government has put forward. Is that correct?

Hon. I. Black: The member is incorrect on that point. I'll try to explain that to her.

First and foremost, if one contemplates that the ICE fund has been topped up at an approximate rate of $25 million a year, given that the $100 million is over a three-year period, it will, at an average, be about $33⅓ million a year. In my view, that represents an increase to the financial commitment that government is making in this area. Again, we just stand to agree to disagree as to what "more money" means when you're putting it towards various initiatives, irrespective of the mechanics by which it ends up getting there.

With respect to the cessation of the social service tax and the levy, effectively no levy means that the tax burden associated on a hydro bill goes down. There is no rerouting of money collected on a hydro bill, because the levy we're talking about goes away. Thus, there is no money being collected and sent into any other fund of government, because it is not being taken from the ratepayers — or the taxpayers, for that matter.

As I repeated before, the existing ICE fund, expected to be at the $51 million level come June of this year, will not be allocated or sent to any other fund in government either. It will remain as a special account and will wind down according to the act that governs such things.

J. Kwan: I do have a question on the number of applications that come in for the fund at each intake. Could the minister please tell me how many applications came in for each of the intakes since the fund had started? Then out of each intake, how many were awarded?

Hon. I. Black: I can advise the member that in the first call of '07-08 there were 60 applicants, of which 15 were approved. In the year '08-09, which the member has referred to as the election year, there were two intakes — one of 64, within which 19 were approved. The second within that year had 17 applicants, of which eight were approved. Then in the intake done thus far in '10-11 there were 24 applicants in the first intake, of which two were approved.

[1545]
[ Page 3920 ]

If the member does the math on the approvals, she will note that there is a discrepancy of three in terms of the projects that have been approved. That reflects three of the approved projects withdrawing after the point of being approved.

J. Kwan: Why did they withdraw? Is it because they couldn't get the matching funds?

Hon. I. Black: I'm advised that that is, by and large, one of the primary reasons. When we give conditional approval for this funding, the proponents are responsible for bringing together financing from other sources, and I am advised that that is the primary reason behind the three that withdrew from the process after they were approved.

J. Kwan: Of the applications that were submitted but not selected for approval, does the ministry go to revisit those applications, or would the proponent have to reapply for those applications to be considered?

Hon. I. Black: If there is a proponent who is unsuccessful in one of the calls, then the proponent must reapply in subsequent calls if he or she wishes to have his or her project considered.

J. Kwan: The projects that withdrew or didn't meet the criteria. The funds allocated or set aside for those particular projects would then go back into the account to be drawn down for the following year or the next intake or whatever the case may be?

Hon. I. Black: That is correct. The funds would then be made available for any other applicants on a go-forward basis.

J. Kwan: Just so that I'm completely clear on where the money comes from to support the ICE fund program. It comes from the levy that's charged, by and large. What other source of funding tops up that ICE fund beyond the levy? Is there another source?

Hon. I. Black: The ICE fund was built up exclusively using the levy associated with the B.C. Hydro bills.

J. Kwan: Right. There's no other top-up mechanism for that fund except for the levy itself, so when the levy's not going to be replenished, then we are at a stage of winding down the program. I just want to establish that, to be clear, because at one point it sounded as though the minister was somehow suggesting that there was another source of funding for the ICE fund initiative, which is not the case.

Finally, the minister said the Social Service Tax Act would repeal the levy for this fund and that that levy comes from, as I understand, a variety of sources. The minister mentioned one, which is Hydro bills, but it comes from other sources, as well, aside from electricity — natural gas, fuel oil, propane and what the government describes as other energy products.

Is the minister saying that the levy that's collected from these sources, these energy products, is only specifically designated for the ICE fund and no other purpose? Therefore, when this fund ceases operation — that is to say, the levy's not being collected for this fund — the government cannot access the money that's yielded from these energy products.

[1550]

Hon. I. Black: Yes, the legislation requires that the money collected under the levy goes specifically into the special fund. There's legislation that governs this, I'm advised. The fund itself will then be drawn down using the proponents that exist both now, which have been announced, and those that are in the calls still ahead of us. Then the work done by this fund will be continued by the $100 million, as I referenced earlier, that's been put aside over the next three years.

J. Kwan: Okay. I guess I have to go look at the newly tabled legislation. Presumably, it would spell out the Social Service Tax Act — repealing that act and, therefore, the levy in this act. It would then indicate that all these energy products that were yielding the levy for the ICE fund would no longer be in force and that there will be no collections made for any of those moneys for any other purposes of government. Is that correct?

Hon. I. Black: That is correct. The tax burden on the ratepayer or taxpayer will be eliminated as part of that move.

J. Kwan: Mr. Chair, I am noting the time. As they say, the fun must end at some point — to my dismay, I have to say. The estimates process for this ministry is — fortunately, I think, for some and unfortunately, perhaps, for others — coming to an end, mostly because time is of the essence, in the sense that there are many sets of estimates which we need to get through before June 3.

I do note that there have been times where…. Well, actually, there continue to be. As I said, I love estimates debate. There's something weird about me, I guess, but I do enjoy it, because it is an opportunity to really get down to business, to get some answers on some pertinent government policies and decisions and programs that the various ministries are embarking on.

Having said that, unfortunately we spent a whole big chunk of time — unnecessarily, in my view — debating something that the minister should have been forthcoming about right from the get-go, and we could have gotten onto having fruitful discussions and useful discussions on
[ Page 3921 ]
behalf of British Columbians. But that was not to be, and we wasted a whole chunk of time for, well, reasons that people can define for themselves.

With that, I do note that the minister did offer opportunities for us to follow up with him in a variety of areas in terms of written information to be presented to the opposition. I look forward to receiving that information.

I thank his staff in advance for compiling that information. I do know it's a lot of work for ministry staff to do that, having been a minister and having sat on the other side of this table, so I appreciate that from the staff side. I know it's not an easy task, but I do look forward to receiving that information from the ministry.

I would also say that I look forward to the opportunity, upon receipt of this information, to review it and to see what other follow-up information I would like to have, from the opposition's perspective.

We talked a lot about the Olympic spending and expenditures around that for the hosting programs within this ministry. Unfortunately, the minister was not as forthcoming as I would have liked and, I think, as taxpayers of British Columbia would have liked the minister to be.

Nonetheless, we will look to other ministries and ministers to answer questions in a forthright manner in providing that information, and in due course I hope that transparency will prevail and that openness will prevail in the interests of all British Columbians. Certainly, from the opposition's perspective, we'll endeavour to continue to do our work to that end.

With that, I'd like to thank the minister and the minister's staff for their patience, for their time and for their commitment in moving forward B.C.'s economy on behalf of all British Columbians and the good work that they do each and every day in the name of all the taxpayers in B.C.

I would like to wrap up our estimates debate and hand the floor over to my good colleague, who's been waiting ever so patiently for me to finish — my colleague from Vancouver–West End, who will carry on the estimates debate for the Ministry of Tourism. No doubt, he'll have a lot of fun in that process as well.

[1555]

Hon. I. Black: I'll start where my colleague the member opposite began, by thanking my team, who have been just terrific over the last number of days, as they have since I was first given the honour of being Minister of Small Business, Technology and Economic Development.

I have, in the years that I've come to know the member for Vancouver–Mount Pleasant, had the opportunity to engage in many a passionate discussion. We've agreed on some points, and we've agreed to disagree on many others. But while we both reserve our right to our various points of view and our politics and our perspectives and our characterizations of what represents good news and bad, I must say that I have never and will never call into question the passion and commitment that she brings to this House.

To that end, I would thank her for the time that she's invested into this process as well, as well as her colleagues, some of whom were asking questions earlier, and thank them for their interest in what I believe is a very, very crucial part of government's work, which is that of developing new areas and new opportunities for British Columbians across the province in both existing and emerging areas and industries.

On that basis, I would move the vote.

Vote 43: ministry operations, $47,426,000 — approved.

The Chair: Committee A will recess for five minutes.

The committee recessed from 3:57 p.m. to 4:01 p.m.

[H. Bloy in the chair.]

ESTIMATES: MINISTRY OF
TOURISM, CULTURE AND THE ARTS

On Vote 44: ministry operations, $113,617,000.

Hon. K. Krueger: I would like to welcome my critic and his colleagues and introduce the people that are with me. I do know their names, but I don't want to mix up their titles, so I'm going to look over my shoulder.

To my left is, as we all know, Deputy Wanamaker, the deputy minister. I'll introduce the folks from the critic's right: Peter Walters, and his title is the ADM of tourism development. Next to Peter is Shauna Brouwer. Shauna is the ADM for management services, and we share her services with the Ministry of Community and Rural Development. Next to Shauna is Raymond Chan, and Raymond's title is strategy and policy. He is an ADM as well. Next to him is Susan Rybar, the ADM for tourism partnerships. Next to Susan is Grant Mackay, the ADM for consumer marketing.

I'm not going to take people's time up with a preamble. I want to accommodate the critic's questions and his colleagues. I believe that we've agreed that we will go with Arts and Culture first. Oh, we went back to Tourism. I remember now.

S. Herbert: Thanks to the minister and the staff for being here today to go through this line of questioning. I'd also like to thank all the tourism stakeholders and arts and culture, archaeology, heritage and film and folks interested in PavCo — all those folks that I've communicated with in the last number of weeks to facilitate
[ Page 3922 ]
their, in a sense, being able to ask questions directly of the minister.

Some of the questions I will ask come directly from stakeholders out across the province. I'd like to thank them for sending in these questions as well.

[J. McIntyre in the chair.]

I guess before we really get into the thick of it, I just wanted to ask some questions, more general questions, so we can kind of illustrate the ministry — kind of the top-line questions.

The first question I wanted to ask was about the new divisions. In particular, I know there are tourism partnerships, consumer marketing, and strategy and policy. I just wanted to ask if the minister might be able to outline the specific responsibilities of each of those new divisions.

Hon. K. Krueger: Three of the assistant deputy ministers that I just introduced were vice-presidents with the Crown corporation Tourism B.C., which as the opposition knows, we made a decision to meld with the ministry. Raymond Chan is the ADM for strategy and policy. That includes tourism policy, cultural services, the B.C. Film Commission, research and planning. It included the Olympics and still does to the measure that we're concluding things on that wonderful opportunity, and Raymond has responsibility for the secretariat for the minister's council on tourism.

Grant Mackay is the ADM for consumer marketing, and that includes responsibilities for North American marketing, overseas marketing, marketing communications, e-business and the marketing information technology strategy.

Tourism partnerships is Susan Rybar's responsibility as ADM. It includes visitor services, the world host programs, tourism product management, partnership marketing, sector development, city destinations and British Columbia Magazine.

I think that the member asked for those three, but I perhaps should just complete the circle by saying that Peter Walters as an ADM is responsible for tourism development, which includes that matter — tourism development, resort operations, heritage, archaeology, recreation sites and trails, the B.C. Arts Council, the Crown's Royal B.C. Museum and the Provincial Capital Commission.

[1605]

Shauna Brouwer, as I said, somehow covers both ministries. I very much appreciate that. Shauna is responsible for corporate policy and planning, finance and administrative services, information systems, strategic human resources and the Crown's B.C. Pavilion Corporation.

S. Herbert: I wonder if we could first just go through what appeared in the service plan for the ministry — just go through each of the lines under 2010-2011. I'm curious. If we can just go through what each number pays for, in a broad stroke. We will get to the more detailed strokes, I guess, later on as we go through this process. So of course, starting with tourism development and then on down would be very helpful for me.

Hon. K. Krueger: I should have probably just clarified this to begin with, but we think that the member is referring to the resource summary table — is that correct?

S. Herbert: That's correct.

Hon. K. Krueger: Thank you. So the first, then…. Tourism development has a $9.235 million allocation for the coming year. The B.C. Arts Council has $9.379 million and so on.

Go ahead.

S. Herbert: Yes, I can read the numbers on the page, so I don't need the minister to do that. But the question was specifically…. For tourism development, it's $9.235 million. What does that cover?

[1610]

I'm just recognizing how much time this is taking and realizing that we do have a short amount of time. I know you're working through an answer on this one, but rather than go through each one by one, because that may take a little too long, and we'll run out of time for all the juicy questions I want to get to. What I'm hoping is that we can…. Maybe what I'll do is….

I understand that in the vote descriptions of the Ministry of Tourism, Culture and the Arts there is a bit of a description of what each amount of money is to fund, so for now that'll be appropriate, and I can just move on to other questions. I thought it might have been easier than it looks like it is over there.

Hon. K. Krueger: One of the staff just whispered to me, "This is the year we didn't break them down that way," so that's merciful. We can flesh out numbers after estimates if something is unclear.

Some of the numbers have been prepared as you were waiting. The resort development branch program profile, for example, is $1.14 million. Rec sites and trails branch program profile is $4.297 million, plus whatever we can garner from the job opportunities program and so on. I'll gladly work with the critic later on that if he likes.

S. Herbert: Yes, that would be very helpful. I've got the general outline of what each vote goes to, but if it's possible, maybe tomorrow or possibly the day after. I think we're not going to finish Tourism today, given the hour, and I understand there is a staff party, a retirement party, for somebody in the Tourism Ministry tomorrow. So we
[ Page 3923 ]
may have to get to this, I guess, on Thursday morning, if we can get those numbers for that time.

If I can get a copy maybe by end of day tomorrow, that would be great — just if I could get confirmation.

Hon. K. Krueger: We'll work on that. If not by end of day tomorrow — since some of the staff do have to be in Vancouver part of tomorrow — then early Thursday, I expect.

S. Herbert: All right, moving to those juicy bits that I mentioned earlier. I wanted to speak with the minister about the HST, in particular the impact on the industry and in relation to this budget and how the ministry might be working on this issue.

As the minister well knows, the Council of Tourism Associations of B.C. says that the HST will cost up to 10,000 jobs, lower tourism industry revenues by up to $545 million per year and reduce government tax revenues by up to $157 million.

The minister had said in previous media exercises that he would work to mitigate the damage. The industry is unsure what that looks like, given that this budget has a $6 million cut in marketing for tourism. I'm just curious if there are measures that I can't see in this reduced budget for mitigation. Would the minister tell me what those are?

[1615]

Hon. K. Krueger: The Minister of Finance has requested that questions with regard to the HST be deferred to him. I am willing to answer the member's question in a general way.

A lot of the initial upset about the HST, I believe, was misplaced. It was something of a shock, obviously, to the tourism industry — the Minister of Finance and I have met with their representatives a number of times — in that there was no PST applicable to a lot of what they do, so they were alarmed at the prospect.

People didn't realize initially that with everything they do in building the tourism industry henceforward, whether they're building a new café, a new pub, a new motel, a new hotel or new tourism venues, there'll be a tremendous savings with regard to the harmonization of the sales taxes.

There'll also be a tremendous effect on job creation; we believe hundreds of thousands of jobs. The Professor Mintz report said 117,000 jobs by 2020. Those jobs are all going to be paying income to potential customers of the tourism industry.

The fact that we have the lowest income taxes in Canada on up to $118,000 in income; the fact that the harmonization creates tremendous efficiencies and keeps us in a very good competitive position with Ontario, which we would not have been if they'd harmonized and we didn't — all of these factors combined, we believe, will help lead to a more robust tourism industry.

S. Herbert: Well, I think that answer will be cold comfort for many of the small businesses in tourism that I've spoken with, and many of the large businesses. I think of Butchart Gardens for one, which has great concerns, and they've continued to raise them, that they may be forced to either lay off a bunch of staff or close their doors.

The Council of Tourism Associations continues to speak out about how they will get hit very hard by the HST. They've talked about how the HST will dampen demand. They've talked, again, about how up to 10,000 jobs could be lost, I guess, for them.

The minister may refer to 2020 and that maybe some jobs will be created by 2020 — if you believe a report which suggests this, when the same author suggested that the HST would cost jobs. You know, do you believe one report, or do you believe the other? They're wondering whether or not they're going to survive into the next year.

I think about small tourism operators up in the Chilcotin that I met with. I think about tourism operators in the north, in the south, all over the province, on the Island, here in Victoria, who have approached me to express their real concern. I think that they're thinking about surviving the year, especially when for much of the province there's been a reduction in the number of visits from America as well as internationally — aside from the Lower Mainland, which saw the blip around the games.

I'm shocked, really, that the only mitigation attempt that this government has made for the tourism industry is to cut the marketing budget by $6 million. There's nothing here. It's all well and good to say that sometime in the future there'll be happy days again, but we need to ensure that these businesses stay successful now, especially with unemployment at the level it is.

I'll give the minister another opportunity to tell the tourism industry how they're going to be helped, because according to them, they're not building a restaurant every day. They're not building a new hotel every day. Much of their costs are staff. The majority of their costs, I've been told, are staff. They're going to be devastated by this.

I'll get to the next point of this after I give the minister an opportunity to respond.

[1620]

Hon. K. Krueger: The wonderfully successful staging of the Olympics in British Columbia, I can assure the member, is far more than a blip. British Columbia has been marketed in a way that no government of British Columbia would ever have been able to afford. That free marketing, far and away, makes up for the temporary setback in revenues.

As the member knows, Tourism B.C. and the marketing of tourism in British Columbia have been funded for years as a share of the hotel room tax, and it's more
[ Page 3924 ]
of a blip, the reduction in those revenues. The Olympics themselves are so much more than a blip.

The member and his team have never really embraced the Olympic opportunity or the enthusiasm, it seems to us, but it's there, and it's real, and we're going to be harvesting the afterglow for a long, long time. We have plans that we can discuss with the member, when he gets to those questions, as to how that's going to happen.

I think the future is very bright, and I think that people are taking that attitude and really rolling up their sleeves and capitalizing on the opportunity presented by the Olympics — the fact that awareness of British Columbia and interest in British Columbia are very high.

I talked to a business last week which has launched a special marketing plan in Los Angeles, following hard on the heels of the Olympics. That business said that California is in love with British Columbia and Vancouver. After the first four days of their marketing campaign, they'd had 500 booking calls to their Vancouver office, where they would normally expect three or four calls in that time frame at this time of year.

S. Herbert: I guess when one does go and do marketing in a place like Los Angeles where you didn't before, you would see an increase in business. But that aside, I think, just to lay out a marker, when we see the questions and the answers going into just rhetoric rather than actual hard numbers, I do get concerned, as does the industry, because they actually want to see the hard numbers. They actually want to see the hard plan rather than: "Just hope, and someday you'll get there."

I think that in the last estimates process I said to the minister — when he told me, about arts and culture, "Just hope" — that you can't eat hope, and for these industries, that is a big concern for them.

I was going to ask the minister whether or not his ministry had done any studies on the impact of the HST on tourism businesses in B.C., but unless that has been done since the last FOI request I did — which indicated that there were no records for any study being done on that — then, I guess, there has been no study. If the minister does have one, please let me know in your next answer.

The minister made a comparison about Ontario. He said that we've got to compete with Ontario. Well, tourism businesses in B.C. are largely, from what I'm told, competing with Alberta, competing with Montana, competing with Idaho, competing with Washington — all provinces which don't have an HST, which don't have that kind of sales tax.

Yes, we compete with Ontario in a wider discussion, not tourism. I think about the southeast of British Columbia. If you're going to Panorama, you're going to Kicking Horse or you're going to the resort of the Rockies, much of that business is from Alberta. Maybe they're not going to come this far because it's going to cost more for them to come to B.C. — and that is a big concern in that area — or you go to Washington State.

Seattle Post-Intelligencer said to hold on to your wallets, hold on to your purses, because British Columbia was bringing in an HST. So when we've already seen a massive decline in American business from 2001 onwards under this government, my question is, again: why isn't this government more concerned with the competitiveness of the tourism industry here with our neighbours?

[1625]

Hon. K. Krueger: The ministry, and Tourism B.C. before it, has been working for years preparing the way to market British Columbia once we had the province in the world spotlight, which we did through the Olympics and still do. The member is worried about competition from the States and competition from other provinces. We actually have tremendous relationships with those jurisdictions. We market what's known as a two-nation vacation between British Columbia and the states to the south of us.

We have very good relationships with the other provinces. I met with a number of them during the Olympics. The TILMA agreement has opened the borders in a way that they've never been opened before. We have collaboration with them. There are many tourists who come from outside of Canada who already have very firmly in mind what they'd like to see. Japanese tourists tend to want to see Prince Edward Island because of Anne of Green Gables. They want to see Banff and Jasper and Lake Louise in Alberta. They want to see Whistler, and they want to see Vancouver.

We have worked very long and hard and successfully on relationships with the travel industry. I met with the German delegation — tremendously excited about the opportunities in British Columbia. They're looking for totally different things than the Japanese tourists are. We have a number of marketing programs in different countries around the world. The more I'm briefed and the more I see of the work that our people have been doing, the more comforted I know the industry should feel — that the future is in very good hands.

We have a lot of market-ready product in British Columbia. I've spent a lot of time with the Aboriginal Tourism Association of British Columbia. They work throughout the province. They work helping aboriginal people develop their businesses and marketing them. Aboriginal tourism is growing faster than any other segment of our industry, and they're ready to host tourists.

We have a quality of product and a quality of service that is second to none. We have friendly, welcoming people. That was commented on over and over throughout the Olympics in the international media, and I could read the member pages and pages of editorials and positive comments about our province and our people.
[ Page 3925 ]

There was a British delegation at the Olympics that I met with. They wished to talk about signing a memorandum of understanding so that the people in our ministry could train their workers for the upcoming Olympics in 2012 because of our customer service performance and the results that were manifest to everyone who visited us during the Olympics.

S. Herbert: Thanks to the minister. I don't know that that was the answer that I was looking for or that the industry has been looking for because they already understand that.

[1630]

They've been raising the concerns despite the fact that they know B.C. is a great place to visit and we've got nice people and it's a fabulous place. We all understand that. That's not the question here.

The question is: is the minister hurting or helping the industry? And so far the B.C. Liberals, from what I've been told by the tourism industry across the province, have been hurting the industry with this latest budget and with the budget implementation of the HST. So that's the question that I think the industry is asking.

[D. Hayer in the chair.]

Now, the minister has said that the future is bright ahead. I'm glad that he has that opinion. I'd love to say: "Just forget what studies have shown. Forget those kinds of things. Everything is happy days here again." Maybe I could just throw away the studies and say that, and I'd feel really good.

Central 1 Credit Union released a report where they suggested that for the rest of the year tourism numbers are going to decline. So my question is to the minister. How does he respond to that?

Hon. K. Krueger: I'll respond by, as I said at the beginning, deferring to the Minister of Finance if the member wants to talk about studies about the HST.

S. Herbert: That wasn't the question I asked. Central 1 Credit Union released a report which said that tourism numbers were going to decline this year. Has the minister read this report? Does he comment on this report? How does that square with his vision for a superbright, wonderful future?

Hon. K. Krueger: If the member is still referring to his gloom-and-doom predictions of the HST effect on the industry, then I ask him to put his questions to the Minister of Finance.

My point of view is that the tourism industry is going to grow. We are very diversified with regard to our markets. America has a severe problem with the recession. There's also a thickened border and a rising Canadian dollar, and those are affecting the numbers of tourists that come from the U.S.A. to Canada and to British Columbia and to a lot of other places, I suspect.

We have robust markets elsewhere. We have countries from which many tourists come to visit British Columbia whose currencies are strong. We're on the brink of signing the ADS agreement with China. We have a whole lot of things going for us.

To answer the member's question on whether the B.C. Liberal government is helping or hurting — helping every day, absolutely. Employers, by and large, in British Columbia have been very pleased with the policies of this government, and the proof is in the pudding. There are hundreds of thousands more jobs presently in British Columbia than there were when the NDP were in office, in spite of a worldwide recession that is the worst economic condition we've seen around the world since the Great Depression.

S. Herbert: Again, the minister misses the question. The question was about Central 1 Credit Union. They suggested that it could be a 7 percent decline in tourism this year.

Now, I'm not a member of Central 1 Credit Union. If the minister suggests that this report is mine, it's not. Maybe he would like to take it up with them and their doom and gloom, as he suggested it. I would be honoured to be a member of Central 1 Credit Union, and I'm glad that the minister thinks that I would maybe be affiliated with such a respected institution. But I think it's a credible source that deserves more than just: "Everything's going to be great."

Maybe the minister or his staff can tell me that their numbers are wrong, that they don't know what they're talking about. I'd like to understand, given the rosy picture the minister paints, where they're wrong.

[1635]

Hon. K. Krueger: Initial 2010 Olympic Games statistics indicate a very large positive impact to the games. Foreign visitors to B.C. spent $115.3 million U.S. on Visa cards during the 17 days of the Winter Games, which was up 93 percent from the same period in 2009.

Americans actually took the gold medal in spending. They parted with $61.1 million U.S., according to Visa. Chinese visitors were a distant second, spending $7.8 million U.S.

But there are many studies done, and the ministry tracks where we have a reasonable expectation we are going. The ministry's forecast is an increase in tourism revenues of 4.2 percent in the coming year.

The Conference Board of Canada said the games would bring an additional $770 million to B.C.'s economy this year alone, 2010, with B.C. leading GDP growth at 3.7 percent this year. That's on top of the $884 million and over 20,000 jobs created between 2002 and
[ Page 3926 ]
2008 before the games had even started, according to a PricewaterhouseCoopers report.

There's a study by InterVistas that said that a total of $4 billion in investment is expected by 2015 as a result of the 2010 games. The delegations of sponsors and suppliers, networking businesses, athletic teams and visitors are adding over $2 billion in spending to the economy, and that's substantially spent now.

S. Herbert: I guess the minister doesn't want to address that one report because it doesn't square with his picture. Instead, he'd like to read from a press release. Well, I guess he did mention a PricewaterhouseCoopers report and talked about how proud he was of that. It's interesting, because that report actually shows that instead of getting the $500 million we could have got in tourism business, we got $5 million. What's the minister's response to that?

Hon. K. Krueger: Even before we won the games, the Premier and our government have always believed that the major positive impact economically of the games would follow the games, and that is the gist and the prediction of the PricewaterhouseCoopers report as well.

There are many reports, and if a person wants to take the most negative possible course in making predictions…. If people who had that attitude were in government, they'd have become a self-fulfilling prophecy. We have every reason, and so does the tourism industry, to feel assured that having staged what pretty much everybody is saying is the most successful Winter Games ever and having the kind of industry and venues and people that we do, the future looks very bright. And certainly the present looks very bright as well.

I don't think it's going to be all that productive for the member to rake through the tea leaves and try to find negative predictions in various reports and mesh them. We have a lot of positive indicators. We have a very positive team. We have a lot of great people in place. We're looking forward to really positive things, and the industry is taking us there.

S. Herbert: Well, the report that I referenced, the PricewaterhouseCoopers report that the minister himself quoted and talked about what a great thing it was, which predicted the business…. Well, it wasn't a prediction. It was actually a study of what the real numbers were in the lead-up to the games — in the lead-up to 2008. That study showed that instead of $500 million in business, we got $5 million.

[1640]

The tourism industry has said to me that if the government had predicted $500 million as the possibility but only got $5 million, they're very concerned about what happens post-games. They tell me if you botched that job that badly — you only got $5 million when you could have got $500 million — what's going to be happening post-games? And they're very concerned about that.

I give them credit. I don't think it's a matter of saying "predictions" or "there are lots of studies." This is the government study. This is the study commissioned by this government so that they could actually see what happened before the games. And that's what happened. That's not something that you can wish away. It's what happened.

So I have great concerns that with the introduction of the HST, with the elimination of the industry-led Tourism B.C., we could continue to see this record of mismanagement of tourism in this province. That's a big concern, and I think it's worthy of discussion. I don't think it's a matter of being doom and gloom. You can be happy. You can be positive. But you can also recognize that there are realistic challenges.

The minister recognized some of them himself, with the high dollar, the thickening of the border, the passport requirements, those kinds of things — those challenges that are out there. We have to recognize those challenges.

There was a huge problem in the lead-up to the games, and unless we acknowledge that, I'm concerned that we're going to repeat it. So maybe the minister can tell me what the ministry has learned from the failure of pre-games activity and how they've changed course to come up with a solution so that they don't fail again after the games.

[1645]

Hon. K. Krueger: I'm just going to start with one of the comments that the member made. He referred to the elimination of the industry-led Tourism B.C. Three of the five assistant deputy ministers that I just introduced to the members opposite were vice-presidents of Tourism B.C. We have the same people. Very few people from the Tourism B.C. team have left.

I mentioned to the member that one individual, really prized individual, is leaving us, and that's because he's retiring. Everybody retires, hopefully, sooner or later. But we have most of the Tourism B.C. people. This is the track record of the B.C. Liberal government with these people helping us with marketing tourism.

In 2004 we saw revenues in tourism grow 9.4 percent above 2003; in 2005, 7.2 percent above that total, above 2004; in 2006, 8.2 percent above 2005; in 2007, 6.3 percent above 2006; in 2008, 4.2 percent above 2007, even though the world was hard hit by the big recession in 2008, and it hit us hard in the last quarter of 2008 as well. In 2009 we believe we experienced a reduction in revenues of 6.1 percent. The final numbers are still being tallied.

I think most of the world, most jurisdictions would probably give their eye teeth for a performance like that. There's no reason for anyone to predict doom and gloom
[ Page 3927 ]
for British Columbia. Our predictions are that in 2010 we'll see revenues rise by 4.2 percent; 2011, another 5.1 percent; 2012, 8.2 percent; 2013, 9.3 percent; 2014, 9 percent; 2015, 7.8 percent.

We're very confident that British Columbia's future is very bright. I think it would be helpful, and I said this to the opposition before, if they'd have a little faith or if they'd at least accept that we're doing very well compared to the rest of the world. Nobody in British Columbia needs to anticipate some sort of Armageddon when we're doing so much better than most places, in spite of a worldwide recession.

We always said, and our Premier has always said, that the benefits of the Olympics would follow the Olympics and that we'd see far more economic growth post-Olympics than leading up to or during the Olympics.

S. Herbert: I guess that $500 million that never materialized, or the $495 million that never materialized, in the pre-games period is just loose change. It doesn't matter. We won't reflect on the reasons why that didn't happen. That was the question: how can we learn from that unless we understand what happened there and move forward from there?

I'm disappointed in that. I'm not questioning the staff. I'm questioning the governmental leadership. I think the minister himself needs to be careful. In fact, I think there was a questioning of the staff within the B.C. Liberals, and that's why they did away with the industry-led Tourism B.C. and took direct political control.

Tourism B.C. was an award-winning agency, and you've heard me talk about this many times before. But if we want to talk about numbers rather than faith and hope and Armageddon, as the minister referred to…. I'm curious.

In September the minister and the B.C. Liberals said that we would have $13.3 billion in tourism revenues for 2009 and $14.4 billion for 2010, largely because of the Olympics. In this current budget released just a day or two after the Olympics, it suggests that we actually would get $12.9 billion in tourism revenues for 2009 and targeting $13.4 billion for 2010.

That's about a billion dollars less this year than previously pledged — a billion dollars less into our economy than what the B.C. Liberals predicted in September. What accounts for $1 billion in lost business in the span of six months?

[1650]

Hon. K. Krueger: That question was partially answered in my previous answer. We had a worldwide recession in 2008 and 2009. Our February service plan in 2009 set a target.

The member seems to use terms like "pledged" and "predicted" interchangeably. A target is a target. It's not a pledge. It's a target. But we believed that we were heading for $12.6 billion. By September when we did our service plan update, we were considerably more optimistic, and we increased our target to $13.3 billion.

In fact, in March 2010 we believe we're coming in at $12.9 billion, which is still better than our February 2009 service plan target but not quite what we optimistically hoped in September 2009.

S. Herbert: We already talked about the recession. The recession was well into effect before the budget that was brought in, in September last year. That's what I'm interested in — the September budget and how it relates to the budget that was introduced in March.

The minister hasn't spoken about the $1 billion in lost business that the ministry had targeted, which happened between September and right after the Olympics. That seems like a pretty massive target to have missed, you know. "Oh, we're going to get a billion dollars in new business. Oh, earlier we talked about: 'We're going to get $500 million in new business, pre-games.'"

So we're talking about a billion and a half dollars that the ministry and this B.C. Liberal government said was going to happen, which they're now saying, in the $500 million case, didn't and in this billion-dollar case, I guess, didn't as well, because they've changed the targets in just six months. How is this possible and how is it credible that the ministry and the minister would make such a flub-up?

Hon. K. Krueger: Well, some people aim high, and some people aim low. If you don't aim at anything, you hit nothing. The member apparently suggests that we should have stuck with the lower target, the one that we started with in February '09. We didn't do that, and we ended up $300,000 above that target.

The member talks about a billion dollars of lost revenue. What nonsense. It was a target. It wasn't a pledge, as the member said. It wasn't a prediction. It was a target. It's clearly labelled as a target.

We both have track records, these two teams. In the 1990s we went from the best-performing economy in Canada to the worst-performing during a continental economic boom. Since this government has been in place…

Interjections.

The Chair: Order, Members.

[1655]

Hon. K. Krueger: …we went from the worst-performing economy, which we had inherited — a $3.8-billion-a-year structural deficit — to the best-performing economy in Canada.

Interjection.
[ Page 3928 ]

The Chair: Order, Member. If you want to ask questions, you'll have your turn.

Hon. K. Krueger: Yeah, I think the member has to not keep talking while the Chair is talking to us. These things you should have learned some time ago.

Interjection.

Hon. K. Krueger: I'm talking to your teammates.

Interjection.

The Chair: Order, Member.

Hon. K. Krueger: We're back to the best-performing economy in Canada. We're performing far better in a worldwide recession than the NDP enabled the province of British Columbia to perform during a continental boom. So $300,000 better than target from where we started out last year at this time. That's a pretty significant achievement in the face of the worldwide difficulties.

The Chair: Members, when the minister has the floor, you can keep the comments to a minimum or stand up and ask the question.

S. Herbert: I guess my question is about what's going on in the minister's office and with the B.C. Liberals that they would think: "Oh, we're going to aim for a billion dollars more. Ah, we completely missed the target, but it's not a big deal. Oh, we're going to hit $500 million in pre-Olympic spending. Oops, we missed the target; we got $5 million. Well, whatever, it's just a target. We don't need to worry about it. Yeah, so we should aim lower."

What I'm talking about is that you've got to have credibility in your targets. So my question is, again: how is it possible to miss it so badly? That's a billion dollars we're talking about. It's not like, "Oh, instead of $13.1 million, we got $12.8 million," or billion or trillion — whatever you want to go. We're not talking about a tiny: "Oh, I just got a couple hundred thousand off here." We're talking about a billion dollars. I think it's important because we saw what happened with the $500 million target that they had said was going to happen, when we got $5 million.

I'm just concerned that something is going on in the minister's office that we're missing here.

Interjection.

S. Herbert: That was the PwC report. That's right. The minister can recall that. I'm glad to hear that. It was $500 million, $5 million. He also cited the InterVistas report, which had that $500 million study and said that that was what was going to happen.

Again, what went on in the minister's office that somehow we lost a billion dollars and the target was either so misplaced or the work wasn't done to reach that target?

Hon. K. Krueger: Nobody on this side is really sure where the member is plucking his numbers from. They seem to shift and be a collage of things that he's read or thinks that he's read.

[H. Bloy in the chair.]

We'll go over the facts again. We had a service plan in February 2009. We set a target for 2009-10 of $12.6 billion. In September we were optimistic because things were growing — a little too optimistic, as it turned out. We set a target of $13.3 billion. There's not a billion dollars difference between those numbers, and now we believe it's going to be $12.9 billion, a very healthy number — $300 million higher than what we initially forecast for 2009.

For the member to say that we lost a billion dollars is just bizarre. That might explain why our credit rating for British Columbia went south the way it went through the 1990s, where the B.C. Liberal fiscal plan and results have us at a triple-A credit rating — the best that a province can enjoy.

[1700]

S. Herbert: I guess the minister was interested in responding to my earlier point and then decided to try and change the channel and confuse the issue. What I'm talking about are the numbers for 2010-2011. That's where we see the change in the predictions. I don't understand what's going on over there, because they changed the predictions, but now they don't know what predictions they even put forward or what targets they set.

Then instead, the minister…. I guess it's an instinctive urge, anytime he gets into hot water, to go back to the '90s when he was a critic because he enjoyed that time better. I guess if the minister wants to go back to that time, he could happily go back to the opposition. I guess maybe that'll happen soon enough.

It's just bizarre to me that we can't seem to get a straight answer about what happened between September and then this update. I'll just leave that on the record — that the minister has changed the target from what happened in February and then September, in the updated plan, to what happened in this latest budget. That is of a big concern, because if they can't even get the numbers straight on that side there, where are we going to go and how are we going to actually reach targets, and credible targets?

Maybe the minister has an answer ready for that now.

Hon. K. Krueger: I think when the member reads his Hansard, he'll see. We believe that he was talking about the 2009-10 targets.
[ Page 3929 ]

If he's talking about the 2010-11 targets as set previously and set now, in February 2009 we set a target of $13.3 billion. We upgraded that in September 2009 for the 2010-11 year to $14.1 billion. Again, things not having tracked as optimistically as that. In March 2010 our target has been set at $13.4 billion.

Now, if that's what the member was talking about, it wasn't clear to us. These numbers are in the service plan. They're simple to read. To try and pre-empt another confusing discourse by the member, let's talk about the 2011-12 target, which is now $14.4 billion.

S. Herbert: Well, I read directly off my question here. I talked about 2009, but then I went to 2010, and I spoke directly about what had happened in 2010-2011. That was in the question, and I read it directly here. So yes, I'd be happy to read the Hansard back to the minister if that's helpful.

But we're not getting anywhere here, because the minister doesn't acknowledge or hasn't come forward with how they missed the target so badly, aside from to say: "Oh, the recession was worse." Well, everybody knew the recession was tough. The tourism industry said that the recession was tough.

Interjection.

S. Herbert: Oh, so the minister is suggesting that I would predict zero growth. Well, no. That's not what would have happened, Minister. We would have actually worked with the industry as opposed to what this government does — imposing the HST without talking or consulting or even really, for the first while, acknowledging there were any problems.

What else did they do? Oh well, the industry…. They got rid of Tourism B.C., the industry-led board. They decided: "No, the minister knows best." Well, as we see here, the minister in fact didn't know best.

The Chair: If I can remind all members to please direct their comments through the Chair.

S. Herbert: Thank you, hon. Chair.

We're going to move along. My colleague is here, the critic for the Olympics and Paralympics — the spending related to that.

I know that the minister has got a great urge to get up and speak rhetorically about how the NDP and the opposition is somehow always against everything. "They're negative people," and that kind of stuff. I just put that on the record that that's what the minister would talk about, so maybe he can save those tirades, and we can get to actual questions and answers.

We're going to move into direct costs because I think it's important to have it on the record. Did the minister or any of his staff receive Olympic tickets?

Hon. K. Krueger: I bought some tickets for myself. I hosted guests to British Columbia on three occasions, and I received tickets from the ones that the government had purchased for those purposes: the February 18 men's preliminary hockey game between the U.S.A. and Norway; the February 19 men's game between Czechoslovakia and Latvia; and the February 23 figure skating, the ladies' short program.

[1705]

S. Herbert: I thank the minister for that straightforward answer. I guess it's a lesson that's been learned from previous estimates, so that's good. I, too, bought tickets for the Olympics, Paralympics. I guess it's a lesson that's been learned from previous estimates, so that's good. I, too, bought tickets for the Olympics and Paralympics.

So we've got the events. What was the stated purpose of those three events that the minister mentioned?

Hon. K. Krueger: They were hosting opportunities. I hosted a number of people in various ways through the Olympics. I don't think that they would necessarily want us to be talking about a list of their names, but there is a full report that is going to be issued, as the member knows. The Ministry of Small Business has canvassed that very thoroughly.

I met with people from other countries. I met with the travel industry from Korea and from Japan and from Germany. I often had never met the people that I was hosting before. One group was a group of largely American venture capitalists interested in helping new businesses in British Columbia — so quite diverse groups.

S. Herbert: I guess it's important…. Rather than just, "I hosted a bunch of people…." And I understand. I appreciated talking about the Korean tourism official that the minister spoke about and the venture capitalists, but I'm curious. Who invited them and what was the stated purpose? Not just, "I was hosting them," because hosting could mean a no-host bar or things like that — you know, "I'm hosting a party," which is a lot of fun but doesn't necessarily generate new business for B.C.

So I'm curious about the stated purpose of each of those visits. Was it successful in growing tourism, arts and culture in this province?

Hon. K. Krueger: There is a full report coming out. It's a little early to try and put dollars and cents on the economic benefits that will flow from these hosting activities. People contacted the Olympic Games secretariat about the fact that they were coming to British Columbia and would like to meet with government officials. People were also invited by various organizations.

When we have the PavCo officials here later in the estimates, they may have a report ready for me to relate
[ Page 3930 ]
to the member, although I suspect it'll need to be rolled up with the overarching report that the Ministry of Economic Development is going to do.

A week after an evening where I was asked to host convention centre guests and B.C. Place guests, I was told that PavCo believed that we had garnered three conventions in the week following from people who were in those encounters — two of them up to 18,000 delegates and one smaller. I hope that PavCo will have some numbers for us, but it might be a little early.

[1710]

We're eager to quantify those things. We're eager to build some optimism in the member opposite. Most people in British Columbia are pretty optimistic already, because it was very obvious what was going on in Vancouver at the Olympic Games if you were there. It was a whole lot of people very enthused about the best place on earth.

S. Herbert: I understand the minister maybe wants to suggest, maybe, that I'm a negative guy, that I'm always sad and I'm so upset and concerned and angry all the time. That generally is the tack that he's taken with just about every member of the NDP and anybody who decides to make criticism of certain aspects of the government's plan.

I would say that I'm one of the most positive people. Certainly, I would think that's what people would suggest. I'm very positive about the future that we've got, but I think that in positivity, that doesn't mean blind faith. It also means looking at what's happened and looking at the actual….

Interjection.

S. Herbert: Oh, okay. The minister says: "Look at the record." Yeah, I looked at the record. We talked about that earlier, if you remember — the $500 million versus the $5 million that actually happened. We're talking about this current government that's in place. I know that the minister likes to reminisce about the old days when he wasn't responsible.

Anyway, I digress. I know the minister likes to try to get me to digress so that I don't get into these questions, which actually should have credible answers. But so far a number of them have been left wanting.

I guess I'm moving on here. Did any of the tickets provided to the minister or staffers go unused, or were they all used?

Hon. K. Krueger: I was issued three tickets. I used three tickets. I didn't take any staff with me and didn't expect to.

S. Herbert: I guess the question is: were there other staffers from the ministry who may have been at some of these events or any other MLAs who may have attended with the minister? If you could let me know which ones they were.

Hon. K. Krueger: The answer is no, we didn't have any tickets for staff. Staff didn't expect to go.

S. Herbert: I hear that about the staff, but there wasn't an answer to the question about the other MLAs. Maybe the minister could let me know about those other MLAs who may have attended with him.

Hon. K. Krueger: There was one MLA that came to one event with me. That's the only one that I recall, and this will be in the report.

S. Herbert: I get that the minister doesn't want to share that MLA's name or constituency. I think it would be very easy to say Vancouver-Quilchena or Vancouver–Point Grey or something like that, if that was what happened. But he won't do that.

What expenses were incurred for these hosting events — hotels, meals, travel, other costs?

Hon. K. Krueger: The ministry did not incur costs for my hosting activities. My expenses will be accounted for in the normal way through the comptroller — hotel and per diems, some travel.

[1715]

S. Herbert: I guess a final question on the tickets before we move on to other questions. Were the tickets paid for through this ministry, or who paid for them?

Hon. K. Krueger: The ministry did not pay for any tickets, and the report that is forthcoming will cover that subject. I think the Olympic Games secretariat would account for them.

S. Herbert: What is the total number of paid employees this ministry loaned to the games?

Hon. K. Krueger: The ministry had six people that assisted with the Olympics. Varying numbers of hours, varying numbers of days, often doing their normal job in part while assisting with Olympic activities, but we had six individuals involved in one way or another.

S. Herbert: So I guess the questions…. They all are sequential, so I'll just ask the three of them. How were they paid? Who paid them? I'm assuming the ministry, but I'm not sure, or was it the government in general or VANOC? What was the pay for them, and where did it come from?

Hon. K. Krueger: They were paid by ministry through the normal payroll processes.
[ Page 3931 ]

S. Herbert: The question is: what is the cost of the loaned employees? How much did that cost for them to do that work? Does that include their benefit package, and from what areas of the ministry were they loaned?

Hon. K. Krueger: We don't have that level of detail, but we will write a letter to the member and give him that when we have it together.

S. Herbert: As we're coming back to tourism Thursday morning, I guess it would be, I don't think it would be that difficult to get six employees…. The minister knows who they are, and the ministry can figure that out fairly quickly. If I can get that by end of day tomorrow so that I can probe a little further on this on Thursday, I would appreciate that.

[1720]

Hon. K. Krueger: We'll give it a try. It might have to be an approximation. We're coming up on year-end, as the member knows, March 31, so people are working hard on completing the books. But if we have to do an approximation, that's what it'll be, and then we'll try to give an exact number subsequently.

S. Herbert: I appreciate that commitment from the minister to get me approximate numbers by end of day tomorrow and then the fuller numbers down the road, if there's some slight tweaking. Maybe they didn't make quite this much, maybe it was a little bit less, or maybe it was a little bit more. That would be very helpful. And also, of course, from what areas of the ministry were they loaned?

All right. I guess the question is: they were paid for from the ministry, but was that included in the province's suggested $765 million Olympic budget? Were those costs included in that budget?

Hon. K. Krueger: We're not sure of that. It's a pretty small number when you talk about that global number, but again, we'll do the accounting for the member subsequently.

S. Herbert: Well, six staffers at maybe, let's say, a very lowball…. Let's say maybe it's $50,000 a staff. It could be up to $300,000 in a year — which is a big number, I'm sure the minister agrees. It could be more; it could be slightly less. Who knows?

I guess we'll find out by end of day tomorrow, but I think that it's important to have that on the record and understand that if that is part of the Olympic budget, as the government suggests, it's only that much. But then, of course, there are these employees that were loaned to the games, which don't seem to be a part of that, but we shall see.

I understand that there was the volunteer leave matching program, wherein the government could contribute an equal number of hours of paid leave to the number of hours the employee contributes of their own volition to volunteer at the games and the Paralympics. How many ministerial employees received additional time off in this program to volunteer or partially volunteer for the games?

Hon. K. Krueger: We did have employees that wished to volunteer. We had employees who exercised that opportunity under the matching program. The best number we have thus far is that it totalled about 313 hours of time for employees of this ministry.

S. Herbert: There was a big takeup, I think, on that matching program, it seemed, because the minister is right. People did want to be part of it. Certainly, I was myself wandering the streets of Vancouver and getting involved in that kind of thing.

That's 313 hours. I guess — just so I understand — that's the paid portion of their leave? Or that was the total, and then I would cut that in half to find out the paid portion?

Hon. K. Krueger: We believe that we paid 313 hours and the employees volunteered 313 hours.

S. Herbert: If it's possible to get the total value that it cost in that letter tomorrow, that would be great as well. I guess the other question was: is that part of the $765 million Olympic budget, or was that just covered by the ministry as an additional Olympic cost?

[1725]

Hon. K. Krueger: We're not certain of that. We're not preparing the final report, and we didn't prepare the global number either, but there's been a commitment repeatedly that there will be an accounting of the Olympic expenditures, and that will be coming.

I want to remind the member that I didn't and couldn't promise that I'd give him these numbers tomorrow. We'll do the best that we can during these estimates.

S. Herbert: I know that the minister is correct. He didn't promise the volunteer leave matching numbers. He said that he would get me an approximation of the other numbers by the end of day tomorrow, and I am hoping that we can get an approximation of these numbers, because I know the 313 hours came pretty quickly. Hopefully, we can get an approximation of that included in that.

Interjection.

S. Herbert: Okay, so the minister is suggesting that he won't be able to get that number by end of day tomorrow.
[ Page 3932 ]
You know, I would think that it would be fairly simple, because you could choose the employee, look at their wage and then subtract out the number of hours and what was paid. It's not that difficult, I wouldn't think. So I would really hope that the minister can be upfront about that and include that in the package to the best of his ability in terms of approximate numbers.

I don't need down to the final cent or the final thing, because I understand that will be coming later. But for me to do my estimates, I need to understand that, and I do have the leeway to inquire about the 2009-10 budget. So I hope that the minister can give me that assurance that there will be an approximation on that volunteer leave matching program in the letter by end of day tomorrow.

Hon. K. Krueger: I'm trying to be accommodating for the member, but referring to what he just said, he doesn't seem to understand that we're talking about the 2010-2011 estimates — not Olympic spending, really. That's not what we're here for.

He's asking me to commit staff time to go over minutiae that are going to be reported regardless, so I don't like any suggestion that I'm not being upfront. I'm bending over backwards to accommodate the member on something that really isn't the subject of these estimates.

S. Herbert: I don't want to have to remind the minister of the Chair of the committee's ruling that the 2009-10 budget is more than open for discussion because what was decided to be spent in that year can affect what is decided to be spent in this year. Of course, we know that money doesn't grow on trees, and it's not infinite.

I think that the ruling here is that it has been the common practice of the Committee of Supply for many years that we're able to talk about the 2009-10 budget year. So I don't know if the minister has read the Chair's ruling, but I'd like to remind him of it and see if he might reconsider his answer to the last question.

Hon. K. Krueger: The member can budget his time as he chooses. The clock is ticking.

S. Herbert: I guess that the minister has decided to…. I'm wondering if a point of order is necessary, because I've asked about the Chair's ruling, which said that that's a legitimate question, and the minister has said that it's not a legitimate question. I'm wondering if the Chair can provide further direction.

The Chair: It's not a point of order, and the minister has answered the question. You may not always like the answers, but the minister has answered the question, so if you would continue, Member.

S. Herbert: Well, I guess that the answer is that that won't be coming, but that will come sometime in the future. I do have a question on that, because maybe the Chair can allow me to understand. Am I allowed to ask about 2009-10, as the Chair ruled in a previous session of the estimates, or is that off-limits now?

The Chair: Members may ask questions, but all questions are to be brought back or tied back to the budget estimates that we're discussing for 2010-11 — so in a comparison.

S. Herbert: So then the comparison would be how much was spent in 2009-10 on the employee loan program — the volunteer leave matching program, sorry — and how much will be spent in this next budget year?

[1730]

Hon. K. Krueger: I noticed the member didn't come to the event — at least one event, and maybe more — that I invited him to during the Olympics. I have a sad news flash for him: the Olympics are over. There will be zero expenditures in 2010-11 on the Olympics. I've already answered him as best I can for what was spent during the actual Olympics, which is the 2009-10 budget.

S. Herbert: I appreciate the condescension. It's touching at this time of day.

I understand that the Olympics are over. I'm interested in understanding…. Yes, there's zero cost this year. What was the cost last year? That's my question. The minister said that…. He started into it by talking about 313, but then he went away from it and has now decided to close that.

Did the ministry incur any other Olympic costs, and what were they compared to this year?

Hon. K. Krueger: The only other expenses that we can think of, brainstorming between us, are the travel and accommodation expenses for the staff that we've already been discussing. Those will come out in public accounts.

S. Herbert: My colleague the member for Burnaby–Deer Lake, the critic on some of these questions, is going to take over for a few minutes here.

K. Corrigan: Just to follow up on just a couple of the questions. I do appreciate that the minister has been quite forthright in many of the answers, but we did go through the same difficulty — or far more difficulty — when we were in estimates last week. We ended up getting a ruling that said:

"It has been the common practice of Committee of Supply for many years that in pursuing questions relating to the forthcoming fiscal year or prior, discussions also typically take place regarding the current fiscal year by providing a forum for detailed examination of fiscal plans for a ministry. Committee of Supply debate is often informed by including comparative information from the present fiscal year."
[ Page 3933 ]

I recall also that the member from Mount Pleasant, when we were in estimates — both of us were asking questions of the Ministry of Small Business — pointed out that she had never experienced, in 14 years in estimates, ministers trying to suggest that it wasn't perfectly appropriate to have discussion, to ask questions about the present year, particularly if you're going to tie it to next year's budget.

She did press, and that was the ruling that was handed down. So I'm just going to ask a couple more questions along that line just to try to tie it down.

[1735]

I do appreciate what the minister has provided already, but what I would like to know is what — and if it can't be today because we don't know…. But I would like to know the cost associated with those 313 hours of volunteer time, the leave matching program.

Hon. K. Krueger: The member is welcome to ask her questions. I'll try to accommodate, as I did with her colleague. I've already given the best answer we can. I gave the number of hours that we believe it was and that it was six employees. We'll try and actually come up with a number during these estimates. It might have to be an approximation followed by a letter subsequent to the estimates.

The members are asking for detail on an event just concluded when obviously the focus of the ministries has been preparing the budget for 2010-11 and our predictions for the out-years, not so much having Olympic accounting completed and tied up with a bow before we focus on the matters that we're actually here to discuss. But she's welcome to ask questions. That's a question that I've already answered.

K. Corrigan: As far as I'm concerned, that's fine as long as it's all right with my colleague. If we don't get it before the end of these estimates, it will be coming within a very few days after that? Is that reasonable? I'm just trying to get a time frame — within, say, a week?

Hon. K. Krueger: We'll try. I'm not playing games. I don't really know what's realistic, but we'll try.

K. Corrigan: In addition, the minister spoke about travel and accommodations. I would like to also have an estimate of what the costs of travel and accommodations were associated with this ministry during the Olympic and Paralympic Games.

Hon. K. Krueger: It's really the same answer. We are actually working on the estimates for 2010-11. We're happy to give those numbers. I've already said that. Those expenses are claimed in the normal way. They're involved in the public accounts process, but we will try and give a supplemental number to the salaries question and answer that was put and make at least an approximation of this.

These are very small amounts compared to the event that we staged, and it seems to me that it's the same tedious, old exercise by the opposition of trying to suggest that we shouldn't have spent money hosting the Olympics, even though the rest of the world is still celebrating them and they're over.

K. Corrigan: I don't think I have ever said that we shouldn't have hosted the Olympics. I've been very supportive of the Olympics, amateur sport and high-class sport alike. Certainly, I had a great time myself going to a couple of events that I paid for with my own money.

Just to be clear, I'll ask the question. The minister paid for some events himself, but I want to be clear that the three events we're talking about were ones that were paid with taxpayers' money.

Hon. K. Krueger: That's already been canvassed as well. Yes, those were three tickets purchased that were provided to me for the hosting responsibilities that I already described.

K. Corrigan: I apologize for us being tedious and taking this time and asking for this level of detail. One of the problems that we've had — what happened in the Small Business Ministry — is that we were told to have faith and that there was going to be a report. But the problem was that when we asked what level of detail it was going to have and what specific information it was going to contain, we were repeatedly told that the minister in that case didn't know what that detail was and what the report was going to look like.

I feel that as the critic responsible for the Olympics, it's my obligation on behalf of the taxpayers of British Columbia to try to be as precise as possible. It is impossible from my perspective to evaluate the benefits that are going to be achieved from the Olympics without, on the other side of the ledger, understanding what the costs are.

[1740]

We had a government that said, "$765 million and not a penny more," which suddenly morphed into: "Well, there's $765 million for staging the Olympics, but that doesn't include all these other costs."

My obligation, in trying to protect the taxpayers of British Columbia, is to find out exactly what those costs were that were associated with the Olympics and what was and wasn't included in that $765 million so that the people of this province can say: "Yes, we had a wonderful event." Nobody is denying that — and credit to everybody involved in putting that on — but they also need to know how much the costs were associated with it. When you have people being lent to the Olympics and not being considered part of the Olympic cost, then
[ Page 3934 ]
it's my job to ferret that out, and that's the reason I'm asking these questions.

S. Herbert: So moving along here, one question that I've been asked a number of times by tourism stakeholders is…. We know in other jurisdictions, and I believe that the minister said it himself, that they regretted reducing their marketing activities post-games. They regretted cutting back, doing that, and the minister said basically that he would learn that lesson and that this government would not make those same mistakes.

I'm curious. Given that we have cut back $6 million of the tourism marketing budget right after the Olympics, what is the plan to actually propel us up as opposed to either maintaining the same level or going downwards? What is that plan, and when will the tourism industry be shown it?

[1745]

Hon. K. Krueger: Our consumer marketing budget for 2010-11 is pretty much status quo with what was provided in 2009-10. The member can see on page 28 of the resource summary, the one we started out talking about, $26.959 million. Just to try and give him some heart balm, the sorts of plans that we have for post-games marketing campaigns include a comprehensive post-Olympic marketing strategy. It's already being actively deployed in key markets around the world to capitalize on the vastly increased awareness of British Columbia because of the Olympics and to target a broader spectrum of consumers.

Here in North America we have an integrated campaign extending the "You gotta be here" campaign creative, which has been launched this month. We're working with regional, community and sector partners to target near-in markets to promote B.C.'s tourism product, and we're continuing all the relationships with the regional destination marketing organizations and the DMOs in individual communities.

We're enhancing worldwide consumer websites by adding content and improving functionality. The critical connection point where consumers get inspiration, detailed trip-planning information and the ability to purchase their trip is through the websites, and we're coordinating websites of community DMOs, regional DMOs and the ministry. We're deploying direct database marketing activities to engage interested consumers in a long-term, two-way dialogue, encouraging both first-time visitation and repeat.

I'll digress for a moment there to talk about the convention centre. That repeatedly comes up in opposition questioning as if it's a negative. We have close to $3 billion in convention business booked. The PavCo stats are that 40 percent of people who attend for conventions come back to visit again. Those are all very encouraging things. Over 80 of those conventions, which are included in the $3 billion projection for revenues, we would have never had in British Columbia if it wasn't for the new convention centre, because we had nothing large enough to host them.

In overseas markets we have a cooperative advertising campaign with key tour operators. That's been launched. They contribute. We contribute. We're advertising B.C. We're doing it to their databases as well as our own, and that's to increase B.C. products sold through these key accounts.

S. Herbert: I understand much of this kind of marketing is stuff that we would do last year, the year before, that kind of thing, and I understand the budget is pretty much status quo, although we did see the reduction. I know of $6 million. I know that the Council of Tourism Associations expressed concern about that, given that they were hoping for an increase to kind of capitalize, as they suggested, on that post-games stuff, on the post-games possibility.

A question. Will the ministry be spending another $6 million out of the ministry's ad budget, as it did in 2009-2010, on advertising focused on British Columbians with the "You gotta be here" campaign?

[1750]

Hon. K. Krueger: We might have heard that incorrectly. All of us think that the member said that he believes that we're going to be spending $6 million within British Columbia on a continuation of the "You gotta be here" campaign. We have no such intention, and it's not in our fiscal plan. But we may have misunderstood the question.

S. Herbert: I guess the question was the $6 million on the "You gotta be here" campaign. I understand that's what was spent in '09-10, but I'm understanding that that's not being spent in 2010-2011. Is that correct — on the "You gotta be here" campaign?

Hon. K. Krueger: We're really not sure where the member got that understanding that $6 million was spent internally on the "You gotta be here" campaign, because it just isn't accurate. We also have zero intentions of budgeting that for the coming year.

S. Herbert: So if it wasn't $6 million that was spent on the "You gotta be here" campaign — marketing to British Columbians on billboards, on bus shelters, on the radio, on television — what was it?

Hon. K. Krueger: The expenditure and the budget for the "You gotta be here" campaign continent-wide was $38.6 million. It'll be fully accounted for in the public accounts. Those aren't finalized yet.
[ Page 3935 ]

S. Herbert: The question is: in British Columbia, how much was spent domestically, within B.C., on the "You gotta be here" campaign?

I think it's important because last year in estimates, in October 2009, I asked the minister about spending on the Olympics targeted at British Columbians, and this is what the minister said. The minister said last year: "We are not spending any money on a marketing campaign within B.C. There is expected to be a small amount of money spent on what is referred to as citizen engagement within B.C., and that is expected to be on social media." So the minister said there wouldn't be any money spent on marketing.

Well, I know how much a billboard costs. I know how much a television ad costs; they're expensive. I know how much bus shelter ads cost; they're expensive. I know how much radio ads cost; they're expensive, and internet advertising as well.

So the question is: in comparison to 2010-2011, how much was spent in 2009 on the "You gotta be here" campaign within British Columbia? How much will be spent in the 2010-2011 budget focused on British Columbia?

[1755]

Hon. K. Krueger: The answer that I previously gave stands with regard to the $38.6 million. It is generally about 22 percent of our marketing expenditures that we spend within British Columbia. That's where we expect to land for 2009-10. But once again I'll seek your direction, hon. Chair. The member seeks to have me give detail on the public accounts for 2009-10, which have not yet been concluded, let alone audited, and I'm really not here to do that.

As far as what we will market in the coming year in British Columbia, what we'll spend, and what we believe we have spent in the past year, the number is 22 percent of our consumer marketing funds in both cases.

S. Herbert: I'm not sure if I'm being tried to be played as a patsy or confused or just ignored or what, but the minister in this very place last year said that there wouldn't be any marketing spending focused on B.C. during the Olympics — wouldn't be any.

Can the minister tell me how, after October last year, all of a sudden we decided to spend massive amounts on billboards, massive amounts on bus shelters, massive amounts on television advertising within British Columbia, when the minister committed to me in this very place that we wouldn't be spending any? I asked specifically about billboards. The minister said: "No, we weren't spending any money on billboards."

Hon. K. Krueger: Our ministry did not pay for the billboards. The billboards, in any event…. We had at least a quarter million international visitors during the Olympics. We were not trying to market B.C. to British Columbians for Olympic purposes.

We had 14,000 foreign journalists in British Columbia. We had international media, international broadcasting. Those images went around the world. They were seen by 3.5 billion people, and we had close to a billion of what the advertising industry calls impressions of the "You gotta be here" ads. An impression is each time an individual viewer looks at an advertisement.

The $38.6 million budget was to market British Columbia to the world, and it was tremendously successful. But the billboards weren't something that our ministry paid for, is how I'm briefed.

[1800]

S. Herbert: But again, we've still got the problem that the minister, in this very place, in October last year committed to me that there wouldn't be any money spent marketing the games to British Columbians, wouldn't be any money spent during that period on British Columbians. Yet bus shelters had the "You gotta be here," and it had its own website. You had billboards in the south terminal, in the Downtown Eastside, all over the Lower Mainland — billboards which, I'm told, VANOC couldn't sell, so maybe that's who supplied it.

Maybe the minister can provide us with some acknowledgement of what that arrangement was. Surely they understand where that came from. It's just confusing to me how the minister could say, "We wouldn't be doing this," and then there's all this ad spending — including television advertisements to British Columbians who were sitting at home. I know I saw that ad a couple of hundred times, watching the games from home.

Can the minister explain to me what he said last October compared to what actually happened? Otherwise, what's the point of estimates, if the answer that the opposition is given just isn't the one that actually happens?

Hon. K. Krueger: I've actually already answered that question. I don't account for VANOC's budget. I account for this ministry's budget. I just told the member that those ads were not from our budget. In any event, they were marketing British Columbia to the world, and the world was here. It's sad that the member apparently missed it.

S. Herbert: No, there wasn't an answer. There absolutely was not an answer to explain how we went from zero to 22 percent, which, it looks like, could be about $8.5 million spent within B.C. marketing this to British Columbians. I don't understand that.

Did the ministry not pay for the "You gotta be here" television spots that aired in B.C.? For the radio? For the billboards? The minister says, "Not the billboards," but what about the other ones? What were the costs of those, and are we going to be spending the same amount
[ Page 3936 ]
marketing to British Columbians, "You've got to be here," when they're here, again, in this budget year?

Hon. K. Krueger: We need a point of clarification for the member, who is misunderstanding two different numbers. Our normal share of our core consumer marketing that we spend within British Columbia is 22 percent. That's what it'll be in the coming year that we're supposed to be talking about. That's what it'll be in the year that we're just wrapping up. The "You gotta be here" campaign, the $38.6 million budget, was for marketing British Columbia to the world, not to British Columbians, and that's what it did.

S. Herbert: Well, there's some…. I don't know what's going on here, because whether or not it was sitting at home any place in British Columbia, those people were British Columbians that the "You gotta be here" campaign was targeted to.

Whether or not it was sitting waiting at the bus stop at Main and Hastings, that was a British Columbian being marketed to. Whether or not it was driving a car throughout the Downtown Eastside littered, just completely covered, with those billboards, it was just about everywhere you went — North Van, all over the Lower Mainland.

Again, I asked specifically, about the $38.6 million: would it be spent in British Columbia, domestically? Well, the answer was no. Yet it was out of that….

Interjection.

S. Herbert: Oh, so it wasn't spent. The minister says: "No, it wasn't spent within British Columbia." So I guess all those ads that were on the television, that were on the radio, that were on the billboards, that were on the bus shelters, were provided for free? Maybe the minister can provide that clarification.

Hon. K. Krueger: They weren't paid for by this ministry — the ads that the member is talking about. Now, when he bridges back to television, if he's watching CTV and we've done a national buy, he's going to see the ads.

[1805]

But the billboards, all of these things that he's describing, were not paid for by this ministry. That was not part of the "You gotta be here" $38.6 million budget.

S. Herbert: I'm given to understand that the "You gotta to be here" campaign targeted on tourism, as was the suggestion, was not paid for by the Ministry of Tourism. Is that correct?

Hon. K. Krueger: Hon. Chair, I was being briefed, and I missed what the member asked. Would he ask it again, please?

S. Herbert: Okay, I think if we go back and reread through the Hansard, we'll see that the minister said that the billboards weren't paid for. But then I talked about the television, which was within B.C., and the minister said: "Well, that was part of the $38.6 million." So that's why when he said last year that there was not any money spent marketing to British Columbians, that actually, technically, still is true.

There has been a lot of money spent marketing "You gotta be here" to British Columbians. The ads are still up after the games. In fact, we still had the radio on with that ad as well. I think it's completely within the purview of the estimates to find out what those costs were and whether or not we're going to see that cost on that specific campaign continue.

Hon. K. Krueger: I don't know how much more clear I can be to the member. We didn't pay for the ads that he's referring to at bus stops and so on. We didn't do any radio buy, from the ministry. If the member is suggesting that we ought to have somehow blocked British Columbians from seeing CTV ads that were purchased as a national buy across Canada, that's just ridiculous.

S. Herbert: Well, the way I understand it is that VANOC had a whole bunch of extra ad space. They then sold it to sponsors. One of the sponsors was the "You gotta to be here" campaign. Tourism British Columbia's little logo is right on there.

Maybe the minister can explain to me who gave the space to the ministry and who paid for the billboards, because they're not free. You get the space you pay for, but you also pay to create the thing to put on the billboard. If it wasn't the ministry, who decided to give a great donation, a great amount of money in a donation form, to the ministry to pay for these ads for Tourism British Columbia? It's right there on the logo.

Hon. K. Krueger: Well, the things that the member says he understands about VANOC he'll have to take up with VANOC. I account for the budget of the Ministry of Tourism, Culture and the Arts.

We're still spending all our time so far on '09-10 instead of '10-11. The fact is, as I've already told the member, that we had a $38.6 million budget for the "You gotta be here" campaign. We didn't spend it on advertising British Columbia to British Columbians.

There was collaboration right across the board where we helped VANOC in many intangible ways. They helped us. They were absolutely free to put our logo — and that's a good thing if they did — on their materials.

I account for the $38.6 million, and that was not spent on advertising B.C. to British Columbians.

We did creative work for years leading up to the Olympics. We provided images, and we still are, to NBC
[ Page 3937 ]
and CTV. We provided video. We provided still photography. We provided written stories. We had employees who were embedded in those news organizations. They did a wonderful job.

[1810]

For the member to suggest that because someone helpfully had our logo on the work that they did…. So what? This was Team B.C. doing a tremendous job with a tremendous result, and the member can comb through the tea leaves all he wants. Some 4.4 million British Columbians, minus about, I guess, three dozen in the opposition caucus, think that it was a wonderful job, well done, and a wonderful result that will benefit British Columbians for many years.

S. Herbert: It continues to surprise me that the minister decides, rather than dig into the numbers and try to work through the issue…. I've got a question that I need an answer to. Rather than just saying, "Oh, somebody took the Tourism B.C. logo and put it on something…." Well, if the minister was in Vancouver, he saw those ads. He saw those ads for the "You gotta be here" campaign, which was targeted, he says, for tourism development everywhere else but not within B.C.

Yet those ads were in B.C., and he would have seen them. It was at the SkyTrain stations. It was at the south terminal, so anybody flying to rural B.C. would have seen them. Those were British Columbians.

They were on the television. They were on the radio and then the bus shelters. So the minister may say they weren't paid out of the $38.6 million. Were they paid from any other part of the ministry budget?

Hon. K. Krueger: I've answered the question.

I move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 6:12 p.m.

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