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, April 13, 2010

Morning Sitting

Volume 14, Number 1

[ Page 4171 ]

TUESDAY, APRIL 13, 2010

The House met at 10:03 a.m.

[Mr. Speaker in the chair.]

Prayers.

Orders of the Day

Hon. M. de Jong: In Committee A, I call Committee of Supply — for the information of members, the ongoing estimates of the Ministry of Housing and Social Development — and in this chamber the continuing second reading debate on Bill 9.

Second Reading of Bills

Bill 9 — Consumption Tax Rebate
and Transition Act

(continued)

C. Trevena: When I left off last night, I'd started to touch on the question of regressive versus progressive taxation and the need for an honest debate on tax policy. This is something that has been raised by many members in this House — that we do need that debate.

[L. Reid in the chair.]

The HST is a regressive flat tax. That means that the burden falls on consumers, and it falls unfairly. No matter what you earn, you're paying that extra 7 percent for gym membership, for newspapers, for vitamins, for a massage, for classes, to take your cat to the vet, for a bicycle, for a haircut, for a restaurant meal, for a cup of coffee, if you're buying real estate. It's all going to add up.

When it comes to taxes, for individuals it is much fairer to have a progressive system. The more you earn; the more tax you pay. It may seem old-fashioned, but it is a very good way to redistribute the wealth of our province and of our country. That is what helps to build a society.

[1005]

Instead, what we've seen over the last ten years are personal income tax cuts and fees hiked for MSP, which is going up now every time health care goes up; for other health care that used to be covered by MSP; for the use of our parks; for the use of our ferries. And with all these increases, there's the increasing cost of schooling from textbooks through to school trips, textbooks being paid for by parents, all this downloaded on parents. Then we get to post-secondary education, and the fees are once again increased.

So I'd say: so much for the claim that taxes have been reduced. These increases in costs and fees are equivalent to, or actually are, a flat tax. Whether you earn $150,000 or $50,000 or are trying to survive on the minimum wage, if you need to use a ferry or you want to go to a provincial park, have an eye test or need the chiropractor, you are paying the same.

Now, what we have here with this bill is the removal of one flat tax and the replacement with a higher flat tax on more items. No wonder that 82 percent of the people in this province think this is a tax grab by the Liberal government. It is. They are right.

Those being helped through the introduction of this tax are some businesses, some of which have already had big handouts from the government through massive subsidies and preferential treatment. This may help some already benefiting from the Liberal government largesse. It certainly won't help the majority of people in this province and definitely not those people in the north Island who are struggling, as I talked about last night — people who are still looking for work, working their way through a forest industry that has collapsed under the last ten years of Liberal government.

I had an e-mail the other day from a constituent who's trying to decide whether she should continue to work and send her child to after-school child care or quit work and look after her child herself. It had nothing to do with the philosophy of how she should bring up her child and everything to do with the fact that the cost of child care is more than she earns. She earns just a bit too much to qualify for subsidies.

As she said in her very poignant e-mail to me, she's being forced into poverty, and she is one of thousands of people in this province who are forced from what was a pretty comfortable middle-class life in B.C. to poverty, to having to decide whether she can afford to go to work or have her child in after-school care.

It's poverty that has been exacerbated over these last few years and that will get worse, without question, when there is an extra 7 percent coming through on bills and on shopping that was not there in the past. Starting in May and definitely in July, people like this lady are going to be paying an extra 7 percent.

The end of the PST, as conveyed through this bill, and the introduction of the HST is a tax grab. It is unfair, and it will disproportionately affect thousands of people in this province, who'll be much poorer and do without many, many things that they need because of it.

That is why my constituents want me to oppose this bill, why I will oppose this bill, why members on this side of the House will oppose this bill and why I hope that this bill will actually be defeated.

D. Barnett: I rise today to speak in support of Bill 9, the Consumption Tax Rebate and Transition Act. The harmonized sales tax will simplify tax collection for the thousands of businesses in this province. The savings for industry and businesses will be substantial. These
[ Page 4172 ]
savings will be passed on to consumers. Why? Because businesses compete against each other for your dollar. With a reduced burden of paying tax on their business inputs, their costs will be lower.

My decision to support the implementation of HST isn't about who is right or who is wrong but about what is best for the Cariboo-Chilcotin and British Columbia. There is so much misinformation out there regarding the HST that I feel it necessary to state some facts.

Before I continue explaining why I support Bill 9, I would like to clear up the concept of a vote on HST. Some in this House already know this, but many people in B.C. do not understand. There is no vote on the HST because the legislation introducing the HST has already been passed in Ottawa.

[1010]

The provincial bill introduced March 30 simply repeals the provincial sales tax, repeals the provincial portion of the hotel room tax and sets out regulations to ensure a proper transition to the HST. The HST is a federal creation, so the provincial bill simply eliminates all vestiges of the provincial sales tax in order to set the stage.

Lower-income British Columbians unquestionably will come out ahead with the HST and the associated tax cuts and credits. The people of the Cariboo-Chilcotin need to know this. It will cost nothing more to fill your prescriptions due to HST. It will cost nothing more to put gasoline in your vehicle due to HST.

A provincially administered point-of-sale rebate for residential energy will also ensure that the HST will not increase consumers' cost for oil, electricity, natural gas or propane used to heat or power homes. It will cost nothing more to heat your homes due to HST. Any item that presently has GST and PST in the total cost will not change due to HST.

In addition, like the GST, the HST will not apply to basic groceries and residential rent, two items which account for a large proportion of total expenditures by those with lower incomes.

Almost all other items that are currently zero-rated or exempt from the GST will also be zero-rated or exempt from the HST. There will be point-of-sale rebates similar to PST exemptions for the provincial portion of the HST on gasoline and diesel fuel for motor vehicles, and that includes any biofuel components.

HST tax credits will be paid quarterly with the GST credit to more than 1.1 million British Columbians, one-quarter of the population: a $230 tax credit for each individual that makes less than 20,000 per year, a $230 tax credit per family member for families with incomes up to $25,000. This means $920 for a family of four. When combined with the recently introduced climate action credit, low-income British Columbians will now be eligible for up to $340 a year in provincial credits.

Please keep in mind that for many persons making less than $22,000 per year, you have 100 percent MSP subsidy, 80 percent subsidy for those from $22,001 to $24,000, 60 percent subsidy for those from $24,001 to $26,000, 40 percent for those from $26,001 to $28,000 and 20 percent for those from $28,001 to $30,000.

[C. Trevena in the chair.]

Since PharmaCare was introduced by this government, low-income families earning $14,000 or less per year pay absolutely nothing for prescription drugs. Any person born before 1939 and who earns less than $33,000 per year pays no deductible for PharmaCare.

The deductible for a family with a net income of $30,000 was $1,000 prior to Fair PharmaCare. Today that deductible is $600. The maximum that same family would pay in one year prior to PharmaCare was $2,000. Today that family pays only $900.

For example, a single mother with one child, earning $28,000 per year and with $2,000 in annual drug costs pays 29 percent less under the PharmaCare plan than she did in 2001.

For these reasons and many others, I support Bill 9 and the implementation of the HST. It simply makes sense to reduce the complications and redundancy of paying tax on tax.

I'd like to outline how business small and large in the Cariboo-Chilcotin will benefit from the HST. HST benefits business and the employees of all businesses. Employees are also true beneficiaries. When companies gain competitive advantages, they can grow and expand, hiring more people for the long term.

[1015]

Currently PST is applied at every step in the creation of a product. Those multiple PST charges are embedded in the price you pay at the store, even though you can't see it, and of course, you pay PST on the final purchase price.

Under the current PST system embedded PST results in higher production costs, less investment, fewer jobs and lower wages. Under the proposed HST system those embedded costs are removed for savings. The proposed HST will remove about $2 billion worth of embedded PST and will result in more investment, jobs and higher wages.

Costs of doing business will come down as the 5 percent GST rebate on business inputs increases to a 12 percent HST rebate. Currently only GST taxable items are refunded. Under the HST, the full 12 percent comes back to the business through the input tax credit system.

Due to our tax structure in 2001, small business was leaving British Columbia almost daily and setting up in Alberta. Today they are starting to move back due to the fact that we are now competitive with the Alberta rate and will have a zero small business tax rate by 2011. Large corporations were also leaving British Columbia and moving to the east in the '90s. Today we are starting
[ Page 4173 ]
to see them come back as we now have one of the most competitive tax structures in the world. This is the right step to take for B.C.'s economy, as it will encourage a competitive business climate here in B.C. and make our exports more competitive abroad.

Not only will the provincial portion of HST become reclaimable for business; HST will lower the cost of goods and services. This will result in additional savings, which increases the buying power of your dollar. All things considered, the HST will mean savings, benefits and jobs for all of the people of British Columbia.

B.C. will save approximately $30 million in administrative costs because the federal government will administer the HST at no cost to the province. This will result in additional funds available for social programs such as health, education and social assistance. It will attract new investment as it increases productivity, and it will create jobs and long-term economic growth. It is predicted that there will be 113,000 new jobs created in B.C. over the next decade because of the move to HST.

HST will save all of our industries millions of dollars. These savings will make the difference between some businesses staying open rather than shutting down. Every time one of these businesses decides to stay open, it means they will save and create jobs. Every time a new business opens, because it can see the savings as a result of HST, it creates more jobs.

An overall boost to the economy and employment provides an indirect benefit to industries such as homebuilders, realtors, restaurants. When people are employed and earning higher wages, they spend more money.

The harmonized sales tax will reduce costs for B.C.'s small and medium-sized businesses by eliminating the PST on business inputs, generating about $2 million in savings from all businesses that can be passed onto consumers. Currently businesses pay PST on most of their inputs that go into producing or selling their products and services — for example, taxes paid on office equipment, supplies and furniture, telecommunications, equipment and services, vehicles, and energy to heat and light their buildings and power their equipment.

Under the proposed HST all B.C. businesses will no longer pay tax on these input costs, resulting in savings. To use an example from my riding, think about a logging contractor. Under the GST-PST system he buys a pickup truck and a trailer worth $100,000. He now pays 5 percent GST, 7 percent PST.

[1020]

At tax time he can claim the 5 percent GST back as a credit, but the 7 percent PST is not refunded. He has to build that cost into his final product for sale as overhead. It's a cost of doing business. With the HST he'll now be able to claim the full 12 percent back, leaving more money in his company to be invested in new equipment, employees and technology.

More than 130 countries, including 29 of the 30 OECD countries, have adopted similar taxes. B.C.'s move to implement an HST will bring us into line with what is viewed as the most effective form of sales taxation in the world.

Although the idea of harmonized sales tax has been around for years, it was only this year that the federal government finally made it attractive and flexible for our Finance Minister to decide that now was the right time.

These changes allow B.C. to set its own tax rate, and ours will be the lowest HST in Canada. Newfoundland and Labrador, Nova Scotia and New Brunswick all have HST. Quebec has a VAT called the Quebec sales tax, and Ontario plans to introduce an HST as of July 1, 2010. Each of these provinces has a rate of 13 percent. B.C. intends to have its rate set at 12 percent, the lowest in Canada when combined with the federal GST.

Almost every credible leading economist in the country agrees that harmonizing sales tax is the best way we can do to strengthen our economy, improve our competitiveness and create jobs. Who am I to argue with leading economists about improving and modernizing our tax system?

The decision to update and improve our tax collection may be seen as unpopular, but that's not what leadership is about. Leadership requires tough decisions to be made, sometimes with unpopular short-term consequences. The long-term benefit from introducing the HST will be seen.

The leadership demonstrated by the Leader of the Opposition has been deplorable at best. The opposition was opposed to the carbon tax, opposed to the income tax reductions, and they're opposed to the HST.

The HST is an opportunity to encourage investment and long-term economic gains for this province. This is an opportunity to solidify our competitive advantage and modernize our economy. I find it a sad day when the opposition and the former Premier of the province do not support economic growth, do not support mining, forestry, agriculture — the jobs that support rural B.C. and the economic engine of our province, the dollars that provide for education, health care, social services and other amenities.

As I travel through my riding and discuss HST and other issues with my constituents, I ask: what services should we cut? No one has an answer. It is a sad day when the opposition and the former Premier of B.C. take good tax policy and use it for their own opportunist political gain.

Will the HST be eliminated? Will the opposition stand in this House today and commit that if they did form government, they would eliminate the HST? Will the former Premier of B.C. also commit to eliminating the HST if he is back in government? Will the former Premier and the opposition leader promise that now to the people of B.C.?
[ Page 4174 ]

B. Simpson: What is a sad day is when a government says in its election platform that it will not impose the HST and then, when it gets elected, does a 180-degree turnaround and jams it down the throats of British Columbia consumers whether they want it or not. That's a sad day.

What is a sad day is when a member of the government espouses all of the stuff given by the public affairs bureau, when, in fact, 4,000 signatures have already been tabled in this House opposed to the HST from that member's riding. That's a sad day.

[1025]

Our job is to represent the people who elected us and brought us into this House. Our job is to make sure that we have taken the time to understand what their real issues are, and our job is to bring those issues into this House, not the government's rhetoric and not the government's spin, and that's the problem in this debate. What we're getting is the spin.

Now, I will have some more comments to make, but I would make a challenge to the member for Cariboo-Chilcotin. I am happy to take this debate outside of this House.

We share common areas of this province. The population doesn't often discriminate between who represents them in the Williams Lake–150 Mile House area. I am happy to have this debate within the public domain in front of the constituents who have the ability to vote in the next election, and my office will be in touch with the member to see if we can effect such a debate in the public domain.

We've heard about tough decisions. We've heard about leadership. We've heard about all of those things. The reality is that we live in a democratic society where tough decisions should be made in a transparent fashion, with full public disclosure of the reasons for that decision and with full public disclosure of the implications of that decision on taxpayers, on businesses and on the general public, and the implications for our economy.

That's the problem with this debate, because what we have gotten since the election is disinformation. We've been given disingenuous reasons as to why HST is coming into British Columbia, and all we've gotten is spin. So again, and I've said it many times in this House, let's table this bill. Let's put it in abeyance. Let's go have the debate in public.

If the government truly believes that this is a good tough decision that demonstrates leadership, then show that leadership and join with us and come out and have the debate in the public domain. Let's talk it out. Let's explain both sides of our arguments. Let's truly honour and respect our democracy by engaging citizens as informed, intelligent human beings, not as people who don't understand the difference between spin and reality.

That challenge isn't being taken up. Not only have we got this bill in front of us, not only is the bill going to be ramrodded through here, but we've got this fake timeline that somehow we have to adhere to because we've got to rush it through for some reason. Again, the government could allow us full debate and not put that self-imposed timeline, could let us have the debate in a fulsome manner. Not happening.

We also have a problem in British Columbia with how we create legislation, because we create legislation in the isolation of the government in the cabinet room or, in this case, in the Premier's offices, with the public not involved and not engaged. As a consequence, we have fewer and fewer people who are engaging in our democratic process year over year, election over election, because we don't engage them in the process.

Once again another option is available to this government: take this bill to a legislative committee and have that legislative committee go around and hold public hearings, hear from all of the sides involved in this debate, hear what the implications are and have the opportunity to tailor the bill accordingly, if in fact we're going to pursue this path of HST. There are options available to democratize this debate that the government is not taking.

What they did was reverse their clearly stated position from the election. They reversed it for a bunch of reasons, which I'm going to get into, that change on a daily basis. We just heard some changes in the latest speech from the government member.

They're not allowing the people of British Columbia to engage. I think that's a shame, and I think it drives the cynicism that's out there already. If the government truly felt that HST was the way to go, they should have run the election on it. Then we would have seen what would have happened in the election. In some of those tighter ridings, there might have been a reversal of positions in this House.

What we've got from the government since they introduced HST is a whole bunch of rationalizations that I'm going to walk through to show how disingenuous this whole debate is.

[1030]

The first that I want to address is the Finance Minister coming into this House and making claims about what I've said about HST as a way to try and deflect some of the criticism that we've been lodging in question period.

The Finance Minister has raised on the public record that somehow the member for Cariboo North has indicated he's not opposed to taxes, and he's not opposed to harmonization, as a justification and a rationalization for why they're right and we're wrong and, also, to attempt to create a wedge on this side of the House. They've named other members that have supposedly supported their position.

So let me finish the statement for the Finance Minister. I have indicated that taxes are not wrong, and we need to
[ Page 4175 ]
stop responding to taxes in a knee-jerk fashion because we need a public debate on the role of taxation in good public services and the role of taxation in having a progressive society.

So this cannot be, pure and simple, a tax revolt, and I hope that Mr. Vander Zalm and others that are out there are crystal-clear about that in the initiative. In a debate around harmonized sales tax, in the collection of signatures on the petition, this is not simply a tax revolt in an uninformed fashion. It is about the wrong tax at the wrong time.

So that's the first thing. I am not opposed to taxes. People need to understand taxes differently. I do agree with the member for Cariboo-Chilcotin. I often say that to folks when they come into my office and they complain about road maintenance, they complain about the state of health care, they complain about education. Then I ask them what they feel about taxes, and somehow taxes are bad.

That thinking has to change. Those are two opposing thoughts because all of those public services have to be paid for somehow. So it can't be a tax revolt, and our stance against HST is not a stance against taxes.

Secondly, it's not a stance against harmonization per se. Harmonization, in and of itself, is not a bad thing. I was on the Finance Committee for two years. We heard from all kinds of people that they want us to look at harmonizing all of the tax regime between the federal and provincial governments, between the municipal and regional governments, because they feel burdened by multiple layers of taxation and multiple bureaucracies. So looking at harmonizing taxes and doing some harmonization of taxation is not a bad thing.

Again, there's a disingenuous argument being made by the other side that somehow a recommendation from the Finance Committee to explore and examine harmonizing sales tax somehow is this side supporting HST. Again, that is a fallacious argument. It is an argument made in desperation by the government, because all we said as members of the Finance Committee is that it's worth exploring. That's all we said. We didn't say: "Jam it down the throats of British Columbians."

What I went on to say in the statements about: "This isn't about a negative response to taxation; it isn't a negative response to harmonization." I went on to say that what it is, is a response to a government that was not truthful with the public about what they were doing with HST, and it's a response to the timing of harmonization and the way that the tax is being formed. We totally disagree with this tax at this time in this way.

I will make that crystal-clear. It is on the public record, and I hope the minister stops using the first part of my statement unless he's willing to read the rest of my statement on to the public record, in which I make claims against this government that I will be ruled out of order if I make them in this House. So I challenge the minister to read the rest of the statement. So that's the first thing. It's disingenuous to misrepresent members' views in here.

The second rationale we got from the government after the election was that HST was not on the radar. Our Finance critic and others have hounded this government for what, then, were the studies that were done, immediately post-election to the announcement of HST, that indicated that it needed to come on the radar and needed to be imposed and needed to be imposed as quickly as possible.

They haven't been made available to us. In fact, the only study we got was a study that was done recently by an Albertan economist that suddenly became one of the world's leading economists overnight. So those studies don't exist.

So the question still remains in the public domain. The question still remains in this House: what was it that changed that caused the government to reverse its position after the ballot boxes were sealed? What caused them to think that this is the way we had to go? What caused them to think that this was the right time? What caused them to think this was the right tax?

[1035]

I think the people of British Columbia have a right to know what the government was thinking in order for them to make this decision. That is something that this government has not been able to disclose to us, and it appears as if that kind of thinking doesn't exist.

The second argument that we got from the government on the heels of what was on the radar was that we have to be competitive with Ontario. All of a sudden now, Ontario is our biggest competitor on the global scene and with Canada and everything else. We have to be competitive with Ontario. Okay. If that's the case, let's be competitive with the Ontario minimum wage.

Oh silence. Let's be competitive with Ontario on minimum wage. Silence. If Ontario is our benchmark and Ontario is imposing a consumer tax that's going to hit the pocketbooks, they at least are raising the minimum wage to a reasonable standard of living where at least there's a capacity to absorb some of this incremental hit on the consumers. This government is dead silent when it comes to being competitive, when it amounts to making sure that the people of British Columbia get a living wage. They still have the $6-an-hour training wage, and they still have an $8-an-hour wage — the lowest in Canada.

If that's the rationale…. I'm not sure why Ontario all of a sudden is a big deal. Yesterday we were debating the western economic union. We've got TILMA with Alberta. In fact, if you look at what's happening — Alberta, Saskatchewan, Manitoba, Washington State — where consumers have the ability to get in their car and go spend their dollars, they don't have HST. That's not on the price point in those areas.
[ Page 4176 ]

It's easy for the consumers to take that little bit of disposable income they've got and go over to Alberta or go down to Washington State and spend their money there. How does that help small- and medium-sized businesses in our small communities that are in border towns, in the Peace and the Kootenays, down along the U.S. border?

If it's about competitiveness, then let's have the debate about who we are trying to be competitive with, at what level, on what goods and services and what this means in terms of the ability of British Columbians to take their dollars out of this province and spend them in other provinces.

Then the next argument we got from the government was that it was going to be revenue-neutral. Well, we've found out that that's not true. Again, a typical argument from the government members — the member for Cariboo-Chilcotin put it forward — that the money saved from the harmonization in administrative costs will somehow accrue to better public services and goods.

Yet, as we've found out subsequent to the budget speech and the bill being introduced, the government actually loses money and loses more money in the revenue collection on HST than will be saved from the administrative savings. Help me with the logic there. They're going to collect less, so how can you offer better public services? How can you do more with less?

So it's not revenue-neutral. But the argument of revenue neutrality is quite bizarre. It's revenue neutrality supposedly to the Crown, revenue neutrality to their treasury, but it's a $1.9 billion shift — from the government's own documentation — off of corporations and businesses and on to consumers.

Yet, speaker after speaker on the other side and the Finance Minister, both publicly and in this House, all claim that somehow the consumers in British Columbia, the citizens of British Columbia, are not going to be impacted by that. It's all going to be happy and good. They're not going to actually feel the impact of that $1.9 billion shift off of corporations and businesses and onto their backs. How is that so?

I would like one of the members over there to stand up and actually explain that. Are there, then…? They talk about people who earn under $20,000 or families under $25,000, who get a small return on the rebate. Because I can tell you this: most of the seniors in my community make more than that, but they are on fixed incomes. As a consequence, because they have no more earning power and their income is fixed, they will not get the rebates. They will have to absorb all of the tax implication — every penny of it.

[1040]

I'll talk more about disposable income in a second and more about what the implications of that are. Something the government isn't explaining is where that $1.9 billion is going to come from and who's going to bear the burden of that.

They claim that costs will be reduced because the businesses and corporations that are getting the benefits of the input tax credits will send those cost reductions on in terms of pricing. I don't think so. There's no substantiation of that in any of the studies that have looked at HST. The prices have not changed.

Now, the Finance Minister did indicate one of his logics is that he thinks that the price of food produced in British Columbia should come down as a result of the input tax credit.

I suggest that the Finance Minister needs to get out more and go talk to the apple growers, go talk to the egg producers, go talk to the milk producers about how they are losing money month over month, year over year, and any bump that they get from input tax credits is to help them remain solvent. It will not make its way to the consumers, because they have no room in their pricing to actually reduce their prices and absorb that cost.

The Finance Minister should go and have those discussions. We raised it in estimates yesterday and asked the Agriculture Minister to go have a discussion with them, because the blowback from the Finance Minister's comments that somehow B.C.-produced food will now go down as a result has reverberated through that sector. They're all going: "Hang on a second. That simply is not the case."

So prices are not going to come down. That $1.9 billion is going to have to be moved onto the backs of consumers, and in particular, our concern is seniors on fixed incomes above that cutoff who do not get the rebates. It's another incremental cost to them, along with all of the other costs that this government has put on them as well.

The next one is job creation. Job creation is the big mantra of this government when it comes to tax policy. Everything's about job creation. Again, I challenge the government to do one simple thing. Take one tax policy, the 50 percent reduction in the industrial tax rate for the property taxes in our communities.

I asked the government to table in this House the report that shows how many jobs that 50 percent reduction in industrial tax rate created in the province of British Columbia. How many jobs? Where were those jobs created? What kinds of jobs were they? Table the report.

It's one thing for these economists…. By the way, I think economists are people that need to start rethinking their models and start rethinking the way that they understand the world.

We're getting all of this noise about B.C. in recovery, Canada in recovery, etc., yet we know that we are shifting people away from high-paying jobs to low-paying jobs, to service jobs, to self-employment — unbenefited, unpensioned jobs. We know that the household debt in British Columbia and Canada is on the rise, and we know
[ Page 4177 ]
that job creation has not kicked in, in a way that will give people the kind of living income that they need.

All of these economists that talk about recovery based on a couple of numbers on a piece of paper need to get out more, too, and go talk to the households that are struggling to make ends meet on a day-to-day basis and are looking at, effectively, a jobless recovery saddled with debt and no earning power. How is that a recovery, Madam Speaker? These same economists then take their little models, put some numbers into the model and spew out 120,000 jobs to be created from HST. Again, I challenge that.

We've got one of the lowest corporate tax rates. We hear that from the government on the other side. We have given a 50 percent reduction in property tax rates. Where are the jobs?

Now we're going to give a $1.9 billion tax break to these same companies that didn't create jobs, didn't invest. In fact, they've been blasted by their own peers for not investing in this province when they've been given the tax breaks. So they haven't invested to date, they haven't created jobs to date, and we're going to give them another $1.9 billion in tax breaks.

Again, validate the claim. Validate the claim based on what's already been done and the claim on the go-forward strategy. I'll close with those comments shortly.

Then the final one is funding health care. Again, as we heard today, it's now funding health care plus whatever. MSP increases were supposed to fund health care, etc. As was pointed out by the pundits, the government moved off the funding health care fairly quickly — although they have the embarrassing clause in the bill that they are going to table the report — because nobody buys it.

[1045]

General revenue funds health care and education and roads and everything else. I mean, an HST becomes part of general revenue. It's not targeted funding to fund health care. It's a nonsense argument. It's another rationalization.

So what I want to simply state is — all of those rationalizations aside: let's go have the public debate. Put the bill in abeyance; go have the public debate. If the government's still enamoured with this tax and wants to go down this path and adjust it in accordance with public input, then swallow the tough pill and show leadership, but at least have engaged the public in the debate.

Now the argument that we've got and the final argument from the government — and we just heard it from the member who spoke before me — is that the HST is a federal creation, that HST somehow has nothing to do with this government. It's a federal issue. The Finance Minister even said on CBC radio, in response to questions about the initiative and the vote against the HST: "Oh, I'm not sure that it actually applies, because it's a federal initiative."

Well, let me set the record straight. The federal government does not impose HST on any province. There is no imposition of HST. This piece of legislation, Bill 9, that we have in front of us enables and makes way for HST to be invited by this government to be imposed on the people of British Columbia. It's more rationalizations. It's more obfuscation. It's more disingenuous communications. Let's not have the debate on those terms. Let's have it on real terms.

What really is happening here is a further erosion of the middle class. It's a further erosion of the disposable income, and let me suggest to the members opposite that they really need to sit and think about how an economy works. I know it's a bit of a wake-up call for the Minister of Health, but the British Columbia economy is 80 percent based on consumer spending. Consumer spending: 80 percent.

So you take MSP away from disposable income. You take B.C. Hydro away….

Interjection.

B. Simpson: Madam Speaker, I'd like to set the public record straight. We actually voted for the tax cuts in the Premier's stimulus bill.

Interjections.

Deputy Speaker: Minister.

B. Simpson: MSP increases erode disposable income. Hydro tax increases erode disposable income. Natural gas increases erode disposable income. Increased ferry costs erode disposable income. Increased costs for coffee and magazines and all that, by taxation, erode disposable income. Increasing carbon tax year over year erodes disposable income. Increased property taxes that are coming up, and particularly if this government gives way to the industrial tax rate, erode disposable income.

Increased fees for sports and camping, increased cuts to funding for the arts all erode disposable income, and that's what the HST does. It adds to the erosion of disposable income. And yet 80 percent of the British Columbia economy is dependent upon disposable income.

As a consequence, that is what's going to hurt the economy. The major players that get the benefit from this are export-oriented businesses that haven't created jobs in this province — new jobs in this province — for some time, and the projections forward are that they're not going to do it any more. They've been given all the tax cuts that they can handle, and they still haven't invested. They still haven't created jobs. In fact, they're still all downsizing.

So the critical issue is disposable income, and on the other side of that is that we have seen significant downward pressure on wages and benefited jobs. So it's a
[ Page 4178 ]
double whammy. You're taking out of their pocket with all of these fee increases, all of these taxes that are coming out of their pocket. You give some people, who make less than 20 grand, a little bit of a bump back. You give a little bit on raising the income tax level for the credit.

It's not enough, given the sum total of household impact of all of the fee increases, all of the energy price increases, all of the tax increases from a direct consumer tax that HST will impose. It's the wrong tax at the wrong time, and that's why we stand against it.

[1050]

Now, I challenge the government to take a look at what they've got in the bill around the reporting, because I believe that democracy requires transparency, accountability and absolutely transparent accounting.

So the bill here that has this nonsensical report on health funding relative to HST…. Let's get a jobs report. Let's get an investment report. Let's get a price reduction report. Let's take every claim that this government has made about the benefits of HST and put it in this bill as an accountable measure to measure the net impact of HST on the general consumer in the province of British Columbia.

Let's tie the government to be transparent and accountable on what this bill will do. If the government is determined to drive this down people's throats, then instead of this nonsensical…. Let's show how it funds health care.

Interjection.

Deputy Speaker: Minister.

B. Simpson: Let's show how it actually benefits British Columbians. They won't do it….

Interjections.

Deputy Speaker: Member. Member, one moment, please.

Interjections.

Deputy Speaker: Members. Members, order.

Continue, Member.

B. Simpson: Thank you, Madam Speaker.

So my point remains. The health care report that we're going to get — that HST somehow funds health care — is an exercise in cynical, petty politics. That's all it is. There's no need for it. It is nonsensical relative to how the treasury works and how general revenue works.

Again, if we're going to get this rammed down our throats, if the people of B.C. are going to get this rammed down their throats, let's get a real report on HST that takes all of the claims the government has made — takes all of the claims about job creation, about investment, about benefits on costs, about small- and medium-sized businesses in small communities — and actually makes the government accountable to report out on all of those. Did prices drop? Did we get investment as a result of HST? Did we get jobs as a result of HST? That's the way government holds itself accountable to promises that it makes and then imposes additional cost burdens on the people of British Columbia.

It's the wrong tax at the wrong time. It's being forced down the throats of British Columbians who never got the opportunity to say yea or nay to this in the last election. It would have been a different election result if this government had the courage and the leadership at that time to say: "This is the path that we need to go on." So let's add accountability to it.

Failing that, if the government is not willing to do that, withdraw the bill, and let's take this out to the public and have a fulsome public debate one-on-one with individuals who have territories that cross each other either through a legislative committee or in public forums of some kind around the province.

Let's go talk to the public about that. They are intelligent, they are the citizens who have the right to vote for us, and they are the ones who are going to bear the burden of this additional impact on their disposable income and on their household debt that they've already accrued.

G. Gentner: I take leave to make an introduction to the House.

Leave granted.

Introductions by Members

G. Gentner: In the House today in the gallery are the students and staff from Delview Secondary high school from North Delta: Mark Robinson, the vice-principal; Yvette Livingston, career counsellor; and Harjit Uppal, who is a teacher. Delview is the home of the Raiders, and without question, they participate in the largest food drive of all high schools participating in the province of B.C.

I would also suggest to the House that this is the last class that will have a yearbook that will not be hit by the HST — just to put that on the record here. It's interesting enough. They saw the full banter and discourse here in the House, so would the House please make them welcome.

Debate Continued

D. McRae: Today I'm going to speak on HST. I had a speech prepared, but then I had the opportunity to listen to some of my colleagues from across the way speaking, so I thought I would address.

[1055]
[ Page 4179 ]

I could not believe that the member for North Island is against the HST. She talks about the added costs of things like coffee and haircuts. But you know what? I know the North Island. I know the economy there isn't built on coffee and haircuts. The economy was built on industry, primary industry. It was built on the back of the forests, the logging and the fishing industry. But let's see how this PST tax affects the North Island.

I'll use a little story here. We'll talk about something called the 2-by-4. Let's talk about logging. I know a little bit about logging. Lots of my friends have logged, and family members have logged in the past. How do you log? The first thing you've got to do is you've got to build a road. What do you use to build a road? Well, you've got to buy a bulldozer.

Now, I don't buy a lot of bulldozers. But you know what? It costs about half a million dollars to buy a new bulldozer. If we were to work out the PST on that half-million-dollar bulldozer, it's only $35,000, but that money will just disappear. We won't worry about that part of it.

You know what? When you're building a road, you've got to get the workers actually in to build the road. How do they get there? Well, I think they take pickup trucks oftentimes.

A pickup truck, if you're buying one, is going to cost you about $40,000. I'm not even going to talk about putting the little crummy box on the back to actually drive the guys in on that part of it, but just a basic, old pickup truck that is going to get you to work is going to be a $40,000 cost. Well, is there any PST embedded in that cost? Well, let's do some math.

Deputy Speaker: Member, one moment.

Point of Order

J. Kwan: On a point of order. The member, actually moments ago, mentioned yourself, referred to yourself, in his speech. It is completely inappropriate for the member to do that. It is out of order for the member to do that, to make reference to the Deputy Speaker's comments outside of this House. We on this side of the House never make comments about the Speaker or anybody in such position around partisan political issues.

I ask for your guidance on this issue, please, Madam Speaker.

Deputy Speaker: Thank you, Members. I would advise the member to tailor his remarks in accordance with the rules of the House.

Thank you, Member.

D. McRae: Am I allowed to mention the member for North Island who was speaking earlier? Am I allowed to make reference to the person?

Deputy Speaker: The member is allowed to make reference to members who have participated in the debate, yes.

Debate Continued

D. McRae: That's exactly what I did earlier. Thank you, Madam Speaker. We'll see how it goes.

Anyway, as I was saying, when the member for North Island was speaking earlier, we were talking about the forest industry. We were talking about things like logging trucks, and we were talking about things like pickup trucks and the costs associated with that.

Well, you know what? When you actually get the workers to the cutblock where they're actually going to cut the tree down, they need things to do that with. One of the things they need to cut a tree down with is a chainsaw.

Well, you know what? You can go down and buy an electric chainsaw for $100. But you know what? They don't use those chainsaws. They go out and actually buy a pretty expensive chainsaw, a chainsaw that might cost anywhere from $700 to $800. But is there PST embedded in that? Yes, there is, and that could be, again, a $50 or $60 charge. That's a fair bit of cash. And you know what? Chainsaws don't break if you don't use them.

So what happens is that if we don't have a logger working, we don't have to worry about this cost, but the reality is we want loggers to work in this province. So they're using the chainsaws, and the chains get worn down, and they actually break, and they have to take them to a mechanic to get them fixed. It costs money for all those parts, and there's PST embedded in that. You know, let's not talk about the safety equipment they wear and the chaps and all those kind of items.

Then when they cut the log down, the log has to go somewhere. The log is too heavy to carry, and we're not in the days of using horses anymore to pull it out. We need a logging truck, and a logging truck is fairly expensive. You can buy one for about $150,000. If you do, the PST embedded in that cost, well, that's another $10,000. I'm not talking about the train to pull it out in there; I'm just talking about the rig that pulls. So you add another $10,000 cost there.

You know what? I've been to Campbell River, and I've looked around. And they have a lot of heavy-duty-equipment mechanics. Why? Because when you use a logging truck and you're driving on a logging truck road, you break the logging truck.

So what do you do? You need to buy other parts to put on this truck. You need to do things like buying tires and axles, and you need to buy, basically, engine parts, and those parts actually have PST embedded in them as well.

[1100]
[ Page 4180 ]

Let's assume the log now has magically got from the cutblock to a sawmill. Well, sawmills actually pay PST as well. What do they pay them on? Well, they pay on power for their machinery. They don't use…. It's not the old days where you have the water going over the water mill anymore and you make your own power. You actually have to pay for your power. It comes in. When you're doing things like that….

You know, mills also have things — we call them furniture — where people have to sit. You've got these big boards with the computers that the employees work at. The chair has a PST-embedded cost, and the oil and the lubricants, and the PST dollars just keep adding up over and over again.

But then the sawmill needs to do something with that log. We've got to sell it. So let's pretend now it somehow gets again…. Somehow they buy a truck — probably a big rig being pulled from a sawmill to, maybe, a company. It could be Slegg Lumber or a Home Hardware or whatever mom-and-pop store you wish to talk about. Somehow it gets there. There is PST embedded in that transportation cost.

Then when they get it there, they're paying PST on things like heat for the facility, to keep the lights on.

You know, basically, I haven't been to a building supply store that doesn't have things called forklifts. Forklifts, again, are fairly pricey. You could spend between $20,000 and $50,000 for a forklift, and there's PST embedded in that cost.

You know what? How many times do you drive around a community and you actually see a building company with a vehicle on the road? Oh, they have some of those as well — everything from a small, little vehicle to a pickup truck to maybe a flat deck to deliver items. You know what? They have their big name on all these items, and there's PST embedded in that.

The shelving that comes in a store has PST there as well, but I've never received a brochure in the mail that actually says: "Company X is selling this 2-by-4 for this price." But there's PST embedded in that cost when we have some advertising.

Most of these stores actually have their employees wear some form of uniform. Sure, they may have jeans on and such, but there's usually a proper shirt to identify that you work in the store so that customers can come and figure out exactly who to ask questions of. There's PST embedded in that.

In this little 2-by-4 story, it's embedded over and over and over again. Then when you actually get to the end and you've got to buy the stuff at the store, you pay PST again and GST again. Well, the whole idea is, instead of having this magically embedded PST, which never gets passed on to the consumer — it never does — what happens now is that we don't take it time and time and time again. What we do is actually just charge it once — once at the very end.

We charge it at the end, because that is probably the most efficient way of doing it. So you don't have this cascading tax upon tax. And you know what? It will work. The reality is that the north Island will benefit, because I know that the logging industry needs assistance. We can sit there and have platitudes, and we can fearmonger, but the reality is: what do we do to put loggers to work? This is an exact thing we need to do as a government to put the logging industry back to work.

It's basically a $140 million help up for the logging industry. That is what we need to do. If the opposition had better ideas, I'm sure I would like to hear them. But you know what? In all my time sitting here, all they do is complain and use anecdotal evidence.

If they had some better solid ideas — policy, perhaps, something we could actually analyze — we might be able to have another discussion. What we do is just, basically, get some rhetoric but no solutions. But I digress, because I actually had my speech that I wanted to talk on, but I was just taken aback by the north Island.

You know, lots of us run for various reasons, and one of the reasons I ran is for something that's very important in the Comox Valley that really, directly, has nothing to do with the HST. I ran because we need hospitals — not just in my riding but across British Columbia.

What happens is we have the Campbell River Hospital, which was built in the 1950s, and it needs to be replaced. We also have the Comox Valley hospital, St. Joe's. I was born there, my daughter was born there, and my wife was born there. It's been around for 80 years. Both hospitals are staffed by fantastic health care workers, whether they be doctors, nurses, care aides — everything all the way through the system. The hospitals are amazing.

The downside is the hospitals are aged. They're aged and do not meet the needs of a modern health care system. So we're talking about building a new hospital. Let's see, the Comox-Strathcona hospital board has been working diligently, working with VIHA. We're not close yet, but in terms of working hard and getting the groundwork done, we've done a fantastic job.

You know what? We understand that the hospitals — one for Campbell River, one for Comox — could cost upwards of $500 million to $650 million. Now, that is really expensive, obviously.

[1105]

There are two ways we can pay. One is right on the backs of the residents of British Columbia. Let's just raise taxes. Let's raise taxes, and we'll get more money, and we can afford to pay for it. That's one way to do it. Or there's another way. You can actually grow the economy of British Columbia. Do you know what? If you grow the economy of British Columbia, you don't need to tax residents excessively.
[ Page 4181 ]

Interjections.

D. McRae: I must be hitting a turn; I must be getting something here, gentlemen, on this side, and ladies, because you know what? They're starting to chirp at me over and over again. But at the end of the day, I think I know how to grow the hospital.

Interjections.

Deputy Speaker: Members. Members, would you just let the member continue with his remarks, so we can all hear them.

Member, continue.

D. McRae: So what could we do? We could follow the opposition's strategy and raise taxes. They could raise taxes on individual income tax, small business tax. They even could talk about the death tax. They could talk about that. This is one way of putting dollars into the government revenue stream, but it comes at a price.

Interjections.

Deputy Speaker: Members. Members.

D. McRae: It drives workers, it drives companies, and you know what?

Interjections.

Deputy Speaker: Order, Members.

Member, could you take your seat for a moment. Thank you.

Continue, Member.

D. McRae: It drives investment from the province. We know it does this, because I'm a student of history. I know what happens when you raise taxes and you make an unfriendly business climate. They go away. How do I know that? Well, I don't want to bring up the 1990s, because I get upset sometimes when we do that. In the 1990s we saw what happens when you don't have a competitive environment and you keep and attract businesses. What does everybody do? They leave. And we don't want to see that happen again.

What do we do? How do we attract companies? We attract companies who bring employees, we bring investment, we grow provincial revenues, and we can make sure people have a greater quality of life in the province.

I want this hospital built in Comox Valley, I want it built in Campbell River for the north Island, but I do not want to build it on the backs of taxpayers of this province. I want to build it and pay for it by growing the economy of British Columbia into the future.

One of the things we can definitely talk about, and I think we'd all agree, is that B.C. residents do not like taxation, and I don't like it either. The B.C. Liberal Party has a proven record of lowering taxation in all sectors of this province, but don't take my word for it. Let's look at some facts. Facts are always important here. Let's go look at some facts.

Let's pretend I was making $40,000 in 2001. If I was back in 2001, I'd be paying just over $3,000 in provincial taxes. Now, assuming that in 2010, I made that exact same wage, I would only be paying $1,450. This means that in the last nine years, this government has put $200 a month in my pocket every month and every month into the future.

The most amazing thing is that we lower taxation and we grow the economy at the same time. How is this possible? Well, don't ask the NDP. They were against these tax cuts, because their math just doesn't compute.

Let's not limit ourselves to those making $40,000. Let's just pick another number. Let's say $70,000 in these same time periods. You'd only have had a 46 percent tax decrease in nine years, but let's not just worry about talking about those in the upper level of wages. Let's visit the lower-income workers as well.

[L. Reid in the chair.]

If you were earning $20,000 in 2001, you know what? We couldn't get to 100 percent, opposition. I'm sorry. We only got a 91 percent tax cut over that period of time. Instead of paying over a thousand dollars in taxes for that $20,000-a-year wage earner, you're only paying $91 today. Maybe this tax cut wasn't enough, but give us time. We can do better in this province.

One of the other sorts of givens is that if you want people to pay income tax, you need something. What is one of those things you need? You need a job. Jobs are important. You have to create a climate where business comes and invests these dollars. We've done this in the past; we're committed to doing it in the future.

[1110]

The heart and soul of B.C. is centred around small business. From 2001 through 2008 the B.C. Liberal government reduced the small business tax rate from 4.5 percent to 2.5 percent. But it's not enough. We can do better. That's why we're committed to reducing the small business tax rate to zero in 2012.

You know what? This is a great idea. How many people know someone in this province who has a small, little business in a small, little town, probably providing an income for themselves, maybe having as many as four or five employees? No one is getting rich, but they are actually creating a lot of economic realities around this province, growing the business and making a good quality of life.
[ Page 4182 ]

We're reducing small business taxes because it's the right thing to do, and it's too bad that the opposition voted against it.

While small businesses are essential to the economic well-being of this province, corporations also play a major role. These are the companies that employ the largest number of people, make the biggest investments and pay the largest tax bills. If we want the economy of B.C. to grow and be vibrant, we need to attract this corporate investment to this province.

Every government entity across North America is thinking the exact same thing we are: how can we get business to come to this province? Because when business comes, we know they bring dollars, and more importantly, they bring jobs, and jobs help pay taxes and grow the economy of this province.

In 2001 the corporate tax rate was 16.5 percent. By 2008 we got it down to 11 percent, and the downward trend continues. Oh, but the NDP, they voted against that tax cut too. We grew the economy at this time, so we were on to something. But this NDP math, I'm just not sure where they're coming from.

Let's recap the opposition's taxation record. In late 1990s for B.C. corporations and small businesses, income taxes were amongst the highest, not just in this country but in North America, and jobs and businesses were leaving the province en masse. We saw it.

I saw nurses saying: "You know what? I can easily jump ship and go to Alberta, go to Texas, go left and right." Businesses were leaving en masse to go to places where they could have corporate headquarters in a better taxation model. What was the blame? The blame was the high level of taxation.

We also had the dubious distinction of becoming a have-not province. We had to suffer the indignity of having to receive federal transfer payments when we should have been enjoying the economic boom the rest of North America was enjoying. But we were suffering.

The B.C. Liberals were elected in 2001 and — you know what? — the B.C. economy did a U-turn. We lowered the personal income taxes. Opposition voted against it. B.C. Liberals lowered corporate taxes. Opposition voted against it. B.C. Liberals lowered small business taxes. Opposition voted against this. We even came up with the carbon tax, and you voted against that as well.

This B.C. Liberal economic craziness must have left the province's revenues in a horrible state. But we better look at facts to make sure we know what we're talking about.

So I went back in history, and I found out that before we came into government, the last budget tabled by the then government, the opposition of the day, the Finance Minister tabled a budget with $24.3 billion and a $1.35 billion deficit.

Now, with all these tax cuts, what happened to our budget? Oh, we grew our spending to $40 billion, and we did it not on the backs of the corporations and the people of this province. So whose math are you going to trust — a proven track record from a government that has put more money into everyone's pocket or take math lessons from the opposition that seem to actually make up their facts as they go?

What saddens me the most, though, since I've been given the privilege of sitting in this House, is that I thought — and you know what? I'm only a high school teacher by trade who teaches government — the opposition's job was to provide alternative policy choices to government, to provide an alternate point of view.

I've seen little in the way of policy, but I've seen a lot in the way of fearmongering and a party that is grasping for political leverage but actually hasn't come up with any real solution about what we need to do in this province to help the province and the economy of British Columbia increase and get better for the benefit of everybody in this province.

Now, when Ontario made the move in the late winter, early spring of 2009 and moved towards the HST, the playing field of how provinces — not this province, all provinces — do business changed completely. The easy thing is to do nothing. One of the reasons I ran for this party is that it refuses to sit back and do nothing.

The idea of consulting, consulting, committee work, committee work, let's form a task force over here.... In the end we won't make any decision, but in the end we need to have decisions about what's going to happen.

[1115]

If this party was purely concerned about doing what's popular, we would not have gone down the HST path. Right now B.C. needs political leadership, and the opposition cannot provide it.

Let's look at what Ontario did. Ontario — it's nothing special, you know. It's this little province to the east of us. You might have heard of it. It's the biggest economy in Canada. It has the largest population. It has the most manufacturing, and it also has the best access to eastern United States American markets. So they can't have any impact on our economy whatsoever.

Now, I realize that Nova Scotia, Newfoundland and New Brunswick moved towards the HST earlier — and no disrespect to those provinces; they are absolutely amazing — but they are far, far away from us, and their economies were not on a level to be competitive and have a direct negative impact on this province. They went with the HST model because they knew it would help build their economies, and they're staying with it. We did nothing that we didn't need to do.

Why did Ontario go this way? This has some evidence here. Well, if you look at some of the speakers in Ontario about why they've gone down the HST model, you can actually understand why B.C. needed to be reactive. One of the comments from Ontario, from their Finance
[ Page 4183 ]
Minister, is this — and you know what, it's about Ontario, but it will ring true for British Columbia as well.

"The world has changed. We've witnessed the biggest global economic downturn in 80 years, and if we want Ontario to remain strong, we must change too.

"We need to be more competitive. We need to attract more investment and jobs. We need to protect important services like health care and education that we've worked so hard to build.

"…economists and businesses agree that a single value-added tax, like the HST, is the most important thing we can do to strengthen Ontario's economy.

"We have a choice: we can refuse to fix what's broken, resign ourselves to the idea that Ontario will be less competitive, and watch our province move backward. Or we" — being Ontario — "can move forward, embrace change and hold firm to the conviction that Ontario can emerge through this stronger than ever before."

This is why they're doing it, and if we don't listen to what they're doing and react accordingly, it will be at our peril. But let's just not listen to the government of Ontario. Maybe their statement is self-serving.

Let's listen to the people's responses to their decision to move towards the HST. You might have heard of a man named Roger Martin who is dean of the Rotman School of Management. Now, you might not be familiar with the Rotman School of Management. If you aren't, that's okay. I'll tell you what they are. It's one of the most prestigious MBA programs in Canada, and by some surveys it's one of the top ten business schools in the world.

Roger Martin, the dean, who is very well respected throughout business, supports the HST in Ontario because he knows that it will enable Ontario to become one of the most competitive tax jurisdictions in the world. He knows the HST attracts jobs and investments, money that will not be coming to B.C. or, even worse, if they go to the HST model and we don't, it will leave our province and go and benefit their residents and hurt our residents.

He's just one person, an academic. How about a chief economist of the TD Bank, Don Drummond. He says: "The basic change from the existing retail sales tax to a harmonized single tax with the federal government is that all of the tax will be put on the final point of consumption."

We talked about that earlier with that 2-by-4 story. You probably got it. "The unfortunate thing" — this is him speaking — "and why I think people do not understand the existing tax's name is called the retail sales tax, but it's not really...." Almost half the revenue coming in from the retail sales tax in Ontario comes from business inputs. "In particular, it comes from things like machinery equipment, and of course, that discourages machinery equipment; that makes Ontario's economy less competitive."

So under a new sales tax, a single tax, where a tax applies at each stage of production, you keep getting input tax credits until you get to the final point of consumption.

"Now of course, that leads to" — and this is him saying — "I think, an incorrect interpretation of people that now the taxes faced by consumers will go up, but we have seen, when the GST was introduced at the federal level…"

And again, this isn't government speaking. This is Don Drummond, chief economist of the TD Bank. He says:

"…and then in Quebec and with three of the Atlantic provinces, businesses do, and fairly quickly" — he adds — "pass through the tax savings as the tax is taken off their inputs. So it really doesn't increase the overall tax; it just makes it a more efficient and competitive economy."

But maybe Don Drummond doesn't know what he's talking about.

Let's talk to a construction company — a guy named Martin Grant. I don't know him, but he heads a very large construction industry company in Ontario. He says: "The proposed HST is much flatter and removes a lot of the bias and a lot of the uncertainty that comes with the current tax scheme. It's cheaper for us overall and encourages investment in construction equipment."

How about a law firm? Jack Millar, senior partner at Millar-Kreklewetz: "Not only do we compete against law firms in Ontario, but also we compete with law firms from other Canadian provinces that do not have the RST cost." So we're not talking just people who are actually building things. We're talking here, again, in the information age about a company that uses basically high-end skilled labour.

[1120]

He says: "By removing the embedded RST, it's going to mean we can be more price-competitive, hopefully, attracting and retaining more of that business in Ontario." When they say attracting business, that means taking it away from places like British Columbia.

How about Bernard Courtois, president and CEO of the Information Technology Association of Canada? His statement:

"The harmonization of sales tax is very important, because it is key to making the investment environment in Ontario competitive with all the jurisdictions for us. So for years we've been looking at the key elements that really enhance Ontario's competitiveness and our industry as a particular perspective on that, and the HST turns out to be the last remaining, the biggest component.

"Our government in two levels has been working on corporate tax rates on capital and…making our tax rates on investment more competitive. The HST was the last big remaining block, and it's a barrier to people investing in the kinds of things that will make them more competitive, attract more investment and grow faster.

"So by having a harmonized sales tax, they can save lots of money on the administration of multiple sales taxes. They have the kind of sales tax that makes the whole investment scenario much more competitive so they can devote their money to investing in things that will make them grow."

But this is just basically the president of the Information Technology Association of Canada. Maybe he's not too sure.

Are there other examples? There are lots. I could have picked many, industry after industry. The one theme that is recurring over and over again is that Ontario's actions have made them more competitive on the national and
[ Page 4184 ]
international scale, and if we don't listen to what they're doing, it will be at the peril of our residents.

The Finance Minister, in March, was tabling our 2010 budget. In my grand scheme of things, my perfect world, I wish it was a better time for everybody. In British Columbia sometimes we lose track of how rough it is in other parts of the world. My father just came back from Mexico. Tourism there is down 70 percent. The Mexican economy is suffering greatly.

Another friend of mine just came back from Palm Springs, and she says she couldn't believe it. When you go down there — the housing crisis, the debt, unemployment — and then you come back to British Columbia, you feel like a cloud has been lifted. It is really good here.

But let's look across the other jurisdictions. Let's take a look at Alberta. In Alberta, with their budget, they're talking about slashing spending across 15 ministries and cutting jobs, not to mention that they're planning on running a deficit of $4.7 billion. The government of Alberta is hoping to return to a balanced budget by 2012, and I hope they make it. However, it all depends on the price of oil rising and the province needing to drain its $15 billion sustainability fund down from $15 billion to $2.8 billion. They saved it for a rainy day, and goodness knows, it's rough right now, and they're needing it.

I'm sure Alberta feels it's in a better place than Ontario. Ontario is forecasting a deficit this year of $24.7 billion and sees a best-case scenario of returning to a balanced budget by 2015, but it may be as long as 2017.

Newfoundland — also facing a substantial deficit this year. Like many provinces, they're concerned about being competitive, and they're in the midst of lowering taxes in an attempt to lure new professionals and stay competitive with the other Atlantic provinces and the rest of Canada. This is a recurring theme. Every provincial government in the country understands the necessity to be competitive.

Nova Scotia as well. They're in a particularly tough situation. Not only did they table a budget with a projected deficit of $488 million for the year; they're also in possession of a study that states that unless the province increases provincial revenues and decreases spending, they could face an annual budget deficit of $1.3 billion by 2012-2013. They don't see a sign in the near future of when they're going to see revenues and expenses come together.

What about Quebec? Well, Quebec has a deficit of $4.5 billion this year, to help pay and meet their needs. Not only do they have the highest debt-to-GDP ratio in the country at 53 percent, to meet their needs they have to raise fees lots of different ways. They're forced to raise health care fees by 800 percent over the next two years. They're forced to raise their PST by 2 percent by 2012. By 2012, between the GST and their version of the PST, you'll be paying 15 percent tax in the province of Quebec. The price of gas is going up by one cent a litre. They're raising tuition fees.

In British Columbia we are going to be poised to be so competitive as the world emerges out of this economic recession. We are in a better place because of the work that was done in the last eight years, the work we are doing today to make sure that this province and the people of this province, the businesses of this province are going to be vibrant for generations to come.

[1125]

The worst thing we could do in this Legislature is do nothing. It's a disservice to our residents, our businesses and our children. And so when I sit here and speak…. You know what? I like being popular, but at the expense of being popular, I will do the right thing. I will grow the economy of this province. I will make sure that we are in a better place.

If the opposition has better ideas, I would love to see some policy. When you start talking about things like anecdotal evidence and little old ladies in Kelowna and a bike store owner in Nelson, this isn't stuff that's going to actually convince anybody that you're doing the right thing. It just adds to the fearmongering.

At the end of the day, I challenge the opposition to come up with some ideas that you think we could debate in this chamber and make B.C. better. If you just want to talk and throw little stories around, that's not going to put food on anybody's plate.

Madam Speaker, thank you very much. I've enjoyed myself today. Obviously, the opposition was listening to me. I like getting heckled, and I feel like my colleague who's not here, from Coquitlam–Burke Mountain, the hornets' nest. At the same time, I wish the speakers coming up the best of luck. I'm interested to hear what they have to say.

H. Lali: It's totally unbelievable. You know, when they made the movie Clueless, they must have had the member for Comox Valley in mind because this member, when it comes to the HST and just politics and actually looking after the interests of British Columbia, is absolutely clueless. I could not believe that he would stand here in this House, actually….

Deputy Speaker: Member, take your seat, please. It is possible to oppose, hon. Member, without resorting to personal attack. I would ask you to withdraw.

H. Lali: Withdrawn, hon. Speaker.

Anyway, just to continue, this member across the way, in at least half a dozen instances, argued for the rationale of why the HST should not be brought in. This member did that. You know what? Does he even realize that he's done that? I don't think so. I don't think that this member even realizes it.

To top it all off, when he finished with his closing remarks, it was unbelievable that he would actually stand
[ Page 4185 ]
there and denigrate, in his own words, little old ladies and women pushing strollers. How condescending is that — condescending to British Columbians?

Members on this side of the House, on the New Democrat side, have been going out there and listening to constituents. It's those — and I use his words — little old ladies and people with strollers and the poor and all of the folks that are seniors and women and First Nations who are telling us their stories and telling us to come out here and talk about their stories in this Legislature.

That member across the way is condescending to British Columbians. Unreal that a duly elected member of this House in this day and age would stand up here in this House and show the kind of condescension that that member for Comox Valley has shown in this House. Unbelievable. Unbelievable that this could happen in this day and age.

You know, I can stand up here and be emotional about it, because when I go out there and talk to British Columbians and to the people in Fraser-Nicola and the folks in my hometown of Merritt, it evokes emotions — this HST that the Liberals are trying to ram down their throats. It evokes all sorts of emotions from people.

One would have thought that when the Liberals' corruption scandal came out, a.k.a. the B.C. Rail scandal.... It evoked a whole lot of anger and some real negative emotions — the only kind of emotions that this Liberal government could actually bring out. One would have thought that that was the limit. But with this introduction of the HST bill….

Deputy Speaker: Member, you are debating Bill 9.

H. Lali: With this HST bill that is here before us, Bill 9…. Well, actually, I'll talk about what it's really called. It's not even called an HST bill. The kind of anger that it evokes from people in my riding and across British Columbia, everywhere I go, far surpasses the kind of anger that people get when they think of the Liberals' corruption scandal with B.C. Rail — far outweighs it.

Hon. Speaker, you know the kind of emotions it evokes. I know that some of the members on this side of the House have talked about it, and I'm going to add a few that I hear from people. Double-crossed is one of them. The people of British Columbia feel that this Liberal government double-crossed them. That's how they feel. You hear the word "blindsided." That's another word that people say.

[1130]

They also talk about being deceived by the Liberal government. They talk about being misled by the B.C. Liberal Party. They talk about being hoodwinked as well. You see that word being used in western movies. That's how they feel. They feel like they've been bushwhacked. That's when somebody is going on their merry little stroll across the bushes, and all of a sudden, somebody jumps out from those bushes and attacks them. That's how the people of British Columbia feel right now.

Pearl Harbor is another one they use. They feel like they've been in Pearl Harbor. Everybody remembers December 7, 1941, when the Imperial Japanese Navy attacked the United States. That's how they feel. They feel like they've been stabbed in the back, because they were told one thing during the election and the Liberals did exactly the opposite right after the election.

To sum it all up, they feel betrayed. They've been betrayed. The trust that they put into this Liberal government at election time last May, that trust has been broken, because this Liberal Party has betrayed them when it comes to the HST. All sorts of things were said by the Premier and the Minister of Finance at the time, when the questions were asked.

The Liberals said something else during the election. They basically went out to the public and said: "Trust us. We're not going to bring in the HST. All you have to do is trust us." When asked point-blank, the Premier and the Minister of Finance both denied that they were going to bring in the HST. That's what they did, because they wanted the people of British Columbia to trust them. They wanted them to put their trust in them. They even put it into writing to the B.C. restaurateurs association. "It's not even on our radar," is what they said. "It's not even on our radar."

If I went out, or any member on this side of the House, if we went out during the election and said what they did and then we did something exactly the opposite after an election when it came to the HST, they'd be calling us liars, hon. Speaker, the members on the opposite side. That's what they would be calling us. Unbelievable.

The problem with the "Trust us" philosophy of the Premier, the Minister of Finance and every one of these Liberal candidates in the election is that no one believes them. I say this to the members opposite: no one believes you with all your rationalizations about bringing in the HST, when you said you weren't going to do it during the election, and I say these remarks through the Chair, hon. Speaker.

Basically, why would this be any different for the Liberals? They've always said one thing during an election and done completely the opposite after an election. They were caught in 1996, during that election, when they said they weren't going to privatize B.C. Rail, and then repeated that in 2001. It's a history of broken promises. Why should the HST be different for the Liberals? It's the way they operate. We know what happened with B.C. Rail. It was sold, and now that is mired before the courts with the label "corruption scandal" attached to it.

They promised during the 2001 election that they were going to go out, and they were going to spend all this money. They were going to balance the budget. They were going to give all these huge tax breaks to their friends who financed their election campaigns, but they
[ Page 4186 ]
also promised: "Oh no, we're not going to do it by putting in any kind of cuts to health care, to education or to social services." Well, we know what happened with that promise. They ripped it up. They broke it. Why would the HST be any different?

We saw the budget that came down — what was it, just before the election? Yes, just before the election. It was around this time last year, before we broke for the election itself. You will recall, hon. Speaker, that we both got elected in 1991. Both of us were elected at the same time. In this House, right where…. Well, I might have been sitting about over here at that time. But on this side of the House, I was standing right about where I am right now, and I stood up here when the Premier, through the Finance Minister and this Liberal government, tabled that budget.

Every single member on this side of the House and the folks that sit up there, that write about what's going on in this House, the folks up in the press gallery — do you know what they said? I'm going to tie this into why it's no different from the HST.

[1135]

When that budget came down, no one believed the Liberals. We didn't believe the Liberals. Folks that sit up there and write about it didn't believe the Liberals. Folks that are watching through that television camera out there — they didn't believe the Liberals. No one in British Columbia believed the Liberals that the deficit was only going to be $495 million. No one believed them. No one believed the Liberals.

I stood right here and I said that the Premier, before the election, goes up to the chalkboard and takes the chalk and he writes down his budget. He writes down his election promises in the budget — the election that was coming up. He wrote it all down on the chalkboard, but I warned right here, as I was standing right here in this House at that time, that after the election the Premier was going to go up to that chalkboard. He was going to take his sleeve and hold it like I am holding it, and he was going to go up to the board and he was going to smudge it.

He was going to smudge that blackboard. I called it a smudge-it budget, and that's exactly what the Premier and the Liberal cabinet over there did. They went out before the election, presented a smudge-it budget so they could come back into this House and turn around and say: "Oh my god. Hallelujah, hon. Members of the House. We didn't know the revenues were going to tank. We didn't know there was going to be an economic or a financial tsunami that was going to hit British Columbia."

Those were the words in the throne speech that the Premier wrote for the hon. Lieutenant-Governor to read, sitting right where you are, and in those words it said: "We didn't know there was going to be a financial, economic tsunami."

When everybody else in this universe knew that there was going to be a financial tsunami, the only people in British Columbia who didn't know, or didn't admit to it, were these Liberals occupying the benches on the government side. Sure enough, after the election, the Premier went up and smudged that budget and presented a new one and said: "Oh my gosh, the deficit now is" — what? — "$3.6 billion, but hey, hold on for a minute. We found a way to actually lower that so it's below that magic marker of $3 billion. We're going to bring in the HST."

That's what the Premier said: "We're going to bring in the HST because we're going to get all this money from the federal government in transfer payments — $1.6 billion.

And you know what the Finance Minister and the Premier said? "You know what we're going to do? We're going to do a little sleight of hand here. We're going to take these bowls that are upside down with the shells that are underneath. We're going to switch it around, play a little shell game and fool the heck out of the people of British Columbia. We're going to take $800 million of that money from the federal government because we're going to do the HST. We're going to bring it into our budget. Ah, presto! It's only $2.7 billion."

Amazing — the kind of shell game that these Liberals have been playing. It's absolutely amazing, but I stood here and I warned the people of British Columbia, and so did my colleagues — that the Premier was going to bring in a smudge-it budget. So why would it be anything different for the HST? Why would it be different? Nobody in British Columbia believed the Liberals then. No one believes the Liberals now when they stand up here and try to rationalize their broken promises.

Let's have a quick look at what is being taxed. Well, one thing is clear, before I go into the specifics of what is being taxed. This Liberal government, through the introduction of the HST, the harmonized sales tax, are going to tax you from birth until death. That's for sure. They're going to tax you from birth until death.

You know, you want to go out there and get a birth certificate after you're born? Your parents will pay HST on it. When you die — and we're all going to go from this place one day — and there's a funeral service, you know what these Liberals are going to do?

You know, it's sort of like that Ghost Whisperer, where they see the light and they cross off into the other world. Before you cross over to the other world, there's the Premier and the Finance Minister. They're going to be standing at the gates saying: "Nuh-uh, nuh-uh. Before you cross over to the other world, when you see that nice, shining light, pay up your HST before you go from this world."

[1140]

That's what they're going to do. They're going to tax you from birth until death. They're going to tax you when you're born; they're going to tax you when you die, hon. Speaker. That's what this Liberal government is going to do. Unbelievable, unbelievable.
[ Page 4187 ]

And you know, if you happen to get married somewhere in between birth and death…? Ha, ha, ha. Guess what. The Minister of Finance is going to be standing there right beside you just before you're going to say your "I dos." "Yes, I love you till death do us part. Yes, I do, I do."

Before you say all that good stuff, you know what the Minister of Finance is going to be sitting there doing? He's going to be up there, going: "Ah, ah, ah, ah, ah. Not so fast with the 'I dos.'" Both the bride and groom are going to sit there, and they're kind of going to go: "What are you talking about? You weren't even invited as a guest to my wedding. What are you doing, Minister of Finance? What are you doing, uninvited, standing here, when we're about to say our 'I dos?'"

He's going to sit there and kind of go: "You've got to pay that harmonized sales tax before you're legally married, otherwise you ain't getting married." That's what they're going to do.

They're going to tax you when you're born, they're going to tax you when you get married, they're going to tax you when you die, and they're going to tax everything in between — birth until death do you part. That's what this Liberal government is going to do — unreal what they're going to do.

Here, I'm going to read out some of the stuff. Restaurant meals and catered foods are going to be taxed. Many groceries such as snack foods and other prepared foods like salads, sandwiches, heated food or beverages — all these good things, the healthy stuff…. How is that going to healthy living and sport? They're going to tax you. Muffin and coffee — they're going to tax you.

School supplies. "We're the best educated jurisdiction in the universe." Isn't that what the Liberals out there are saying? Well, guess what. They're going to tax your school supplies. They're going to tax all of that. You're going to go to school, and they're going to tax you for that.

Services such as taxi fares are going to be taxed. You tax taxi fares, and somebody says: "I don't want to pay that tax. I'm going to drive my own car." Yeah, but it doesn't help the greenhouse gases. But the other thing also is folks that are drinking and driving. You know, folks that drink and drive instead of paying the extra HST on the taxi fares. How does that prevent drinking and driving in this province?

Recreational services like live theatre, movie tickets, amusement parks, campground fees, museum admissions and even whale-watching tours — they're going to tax you 12 percent on that.

Accounting services like tax preparation, mutual fund management fees…. Not only are they going to tax you from birth until death, but when you go to get your taxes done, they're going to tax you on top of that. How unreal is that? A tax on tax. What do they call it? They call it a supertax. When you go to pay your taxes, they're going to tax you. They're going to tax you to collect taxes from you — unreal. Just unbelievable what the Liberals are going to do.

Veterinary care is going to be taxed and other professional services like architects, real estate agents and appraisers are all going to be taxed. Classes for yoga, dance, cooking, martial arts and all those good, healthy things…. They're going to tax you to be healthy.

On the one side, the Minister of Healthy Living and Sport stands up in the House day after day and goes out there and says: "Go out there and exercise and do all these good things. Go out and get membership fees, because we want you to be healthy in order to lower the health care costs." Well, you know what they're going to do? They're going to tax you to do that. They're going to tax you to do that — unreal.

Facilities and ice rink rentals are going to be hit hard. B.C. minor hockey — they're going to be hit hard with that.

Massage therapy, acupuncture and alternative medicine are going to be taxed. Haircuts and other professional personal care services like beauty salons and spas are going to be taxed by the Liberals.

Your vitamins, dietary supplements and other non-prescription medicinal products are going to be taxed by this Liberal government. How does that play into healthy living when they're going to tax you?

Magazines, periodicals, newspapers, newsletters, student yearbooks are all going to be taxed, and they want people to be more educated in this province? You want to read? You want to learn something? Ah, ah, ah, ah. Before you go out and buy a book and you want to learn something, pay up that HST to the Premier and the Minister of Finance. He's going to tax you.

Bicycles, bike repairs and parts, wedding planners and caterers, funerals, repairs to home appliances — they're going to be taxed. Energy-efficient home appliances are going to be taxed. How does that reduce greenhouse gases if energy efficiency is going to be taxed?

[1145]

Laundry and dry cleaning, carpet and upholstery cleaning are going to be taxed — car washes, basic residential telephone service, your cable TV service, Terasen Gas, residential smoke and fire alarms, work-related safety equipment.

Yeah. We know they gutted the workplace safety legislation a few years back, so what matters to the Liberal Party to go out there and tax them too?

Energy-saving building materials and devices for vehicles, automobile towing and emergency roadside services are all going to be taxed by the B.C. Liberals.

You know, there are a whole lot of people that are up in arms against the Liberals. I think I talked about gym membership fees. Oh, yeah. They're also going to tax beer. The HST is a beer tax. Used car tax — I'll have a little more to say about that.
[ Page 4188 ]

And First Nations. Let's not forget the First Nations who enjoy a tax-exempt status. It's part of the deal that was imposed upon them under the Indian Act and that whole residential school system way back, decades and decades back. A century or more back, they enjoyed that status. But guess what? First Nations will be paying 12 percent.

The poorest lot in our society, the people who have the least, the least chance to actually access educational and economic opportunities, and guess what this Liberal government is going to do. They're going to come up to First Nations, the poorest people in British Columbia, and they're going to say: "Pay up 12 percent on everything that you buy and purchase." Isn't that a shame?

What happened to the new era of reconciliation and all of that other garbage that they put out? Nothing. They're going to be taxed. That's really putting people from the First Nations communities into colleges and universities and actually also into economic opportunities. Unreal. Unreal is what this Liberal government has done.

There are a whole lot of other groups that are against it. I talked about the restaurant tourist association earlier, B.C. Restaurant and Foodservices Association. There's also the Canadian Restaurant and Foodservices Association. They're going to lose 31,000 jobs as a result of that.

The homebuilders and real estate industry, Council of Tourism Associations of B.C. are against it. The B.C. Association of School Business Officials, B.C. Care Providers Association, Federation of Community Social Services of B.C., Child and Family Counselling Association — all of these people are against. The Rental Owners and Managers Society of B.C. are against it. The B.C. Housing and Provincial Rental Housing Corporation, municipalities, environmentalists, First Nations — I already talked about. You know, unreal.

The list just goes on and on of the people that are against it, but they don't want to listen to them. They don't. They don't have a problem with this. You know why? Because it's a $1.9 billion per year tax shift, in addition to the billions that they've already given away to their friends. It's another $1.9 billion tax break for the big corporations. They're rewarding their friends. These are the same guys who financed their election campaigns. So they're rewarding their friends.

You know what the burden is going to be on the average person? It's $430 per person — each and every British Columbian every year.

The Minister of Forests was up here. He stood up and he actually challenged me "to stand and support the HST." He actually challenged the opposition to "support the HST to make B.C. the most competitive environment in Canada." That's what he said.

It's a little hard to take. This is coming from the most out-of-touch, do-nothing, hide-your-head-in-the-sand Forests Minister in the history of this province, with, of course, the exception of the previous two Liberal Forests Ministers who came immediately before him.

[Mr. Speaker in the chair.]

I am standing up here to proudly vote against the HST bill. I want to put a challenge to the Minister of Forests, who comes from a forest-dependent community like myself, to stand up for his constituents in Prince George and his constituency and vote with the 87 percent who are against the HST. Show something on behalf of those people rather than reading from a text that was written by the public affairs bureau.

I can't believe how a minister could be so misinformed. He said: "I went into Merritt," and he talked about Aspen Planers. I'd like to know: what does he really know about Aspen Planers?

[1150]

That's my community. I've been living in that community for 45 years, and I know those boys that run the Aspen Planers sawmill — Paul and Surinder Ghog. We grew up together. We lived on the same street. Our parents were friends. We watched his father build it from the small, portable sawmill into the big industry that it is. I think there are about eight or nine operations that they own.

The minister talks, tries to take credit for the good work that Aspen Planers is doing in Merritt, while he doesn't even know a thing about the Ghog brothers and the Ghog family. I've got to tell you. Tara Ghog, the father…. He's deceased now. He had a philosophy. Unlike this Liberal government, he didn't carry debt. He believed in paying as you go.

This Liberal government has been putting on massive debt in this province since they got elected. As a result of the pay-as-you-go philosophy, every one of their operations is paid for through their own hard earning and the work that their employees put into it. They're proud of the work they do.

Despite all of the negative policies of this government — the do-nothing policies and the softwood sellout…. The boys, the Ghog brothers at Aspen Planers, managed because of their own money, despite the punitive policies of the Liberal government. Without even a single penny from this Liberal government or any help from this government, they built that empire on their own. They should not take credit for the great work that my friends in Merritt are doing. The Minister of Forests ought to know that.

You know, the member across the way…. I see he's smiling at me — the member for Coquitlam–Burke Mountain. He talked about the boogeyman. He says the NDP are talking about the boogeyman, as if the HST is the boogeyman. You want to look at the boogeyman, hon. Member? Take a little look to your left. Take a look at the Premier. And take a look at the Finance…. They're
[ Page 4189 ]
the ones who brought the boogeyman into this province, when 87 percent of the people of British Columbia are against it.

I heard the member for Cariboo-Chilcotin. You know, the hon. member from the Chilcotin had a profound moment in this Legislature. She got up here, and she spoke, and she had a profound moment. You know, I would think it was an epiphany. She had an epiphany right here in the middle of this Legislature.

You know what she said? I quote her directly. This is what her epiphany was, the member for Cariboo-Chilcotin: "When people start earning higher wages, they spend more money." Well, hallelujah. Hallelujah. All hail to the member for Cariboo-Chilcotin, because she had an epiphany right here. Right here.

I want to thank my colleagues from the Liberal benches, because they were thumping their desks while I quoted the epiphany that the member from Cariboo South — it used to be called that — had. She said: "When people start earning higher wages, they spend more money." That was the quote.

I want my colleagues from across the way to get ready to start thumping their desks, because I want them, on behalf of the people of British Columbia, to raise the minimum wage. Raise the minimum wage. I don't see them thumping their desks. The lowest-paid workers in society, and this mean-spirited, uncaring Liberal government, for almost ten years now, has not raised the minimum wage.

You know what? I take a look at their faces now. How come they're not clapping? I'll tell you what. If you raise the minimum wage for the lowest-paid workers in society right now instead of imposing the HST like you're doing, those people will be earning more wages and they will be able to actually spend more money to buy basic necessities like food and clothing and maybe even pay a little extra for rent to get a better place to stay.

How come you're not clapping? I don't hear them clapping right now. How come they're not clapping? I don't hear them clapping. Because they don't care. They only care about the people who are the big corporations. They don't care about the lowest-paid workers in society, because if they did, they'd be standing with us New Democrats and asking to raise the minimum wage.

You know, we heard one of the other members that got up here, the one member immediately before me, say — and others who've said — that we need to be competitive with Ontario. Well, Ontario has raised their minimum wage yet again, and you sit as the lowest of all provinces in the country and haven't raised the minimum wage for almost ten years now.

[1155]

I didn't know that the Finance Minister was such a good dancer, and I didn't know the Premier was such a good singer. All you get from these folks every time they get up and talk about the HST…. You get a song and a dance. They do a song and a dance every time — every time.

First they said: "Oh boy…." You know, they brought it in as a PST bill, not an HST, and now they're trying to link it and say: "We're going to put all of the money into health care." Oh yeah? I've got a thing to tell you, hon. Speaker, through you: "No one believes you Liberals. No one believes you."

They went out and actually hired this guy named Jack Mintz to come out and put a positive spin, after Jack Mintz was the very guy who came out and actually said there were going to be 38,000 jobs lost as a result of that. But do you know what? No matter what positive spin you put on it, whether it's putting it into health care, whether it's saying they're going to look after greenhouse gases, whether you say you're going to talk about the environment and other things — guess what — no one believes you Liberals.

The B.C. Liberals of this province are a laughingstock in British Columbia. Every time they come out and they talk about defending the HST or anything else, no one believes you. No one believes the Liberals. Nobody in British Columbia believes you. That's why I'll be voting against this HST bill.

H. Lali moved adjournment of debate.

Motion approved.

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

Hon. G. Abbott moved adjournment of the House.

Motion approved.

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

The House adjourned at 11:57 a.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF HOUSING
AND SOCIAL DEVELOPMENT

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

The committee met at 10:08 a.m.

On Vote 39: ministry operations, $2,719,996,000.
[ Page 4190 ]

The Chair: Good morning, everyone, and welcome to the Douglas Fir Room. Committee A is doing the budget estimates on the Ministry of Housing and Social Development.

Hon. R. Coleman: I am joined today here, behind me and with me — plus some folks who will come forward depending on questions — by Cairine MacDonald, my deputy minister, and Sharon Moysey, who is the assistant deputy minister of regional services. Molly Harrington is the ADM, policy and research. They are probably within the camera shot.

In addition to that, I have Alison Bond in the gallery, who is the ADM of employment, labour and market services; Jill Kot, who's the ADM on the integrated case management project; and Wes Boyd, who is the ADM, management services.

S. Simpson: Thanks to the minister and the minister's staff for being here. Just again, so I know. We've sent this information off to the minister's office, but today we'll be dealing mostly in the morning with sort of general issues related to the service plan and those matters.

[1010]

If we get through all that this morning, we'll start into the employment training. Otherwise, we'll get into employment training, CLBC and the non-profits and volunteers this afternoon. That will finish out today. It will be liquor and housing tomorrow, and then we'll move on to other things after that related to the Lottery Corporation and gaming and grants on Thursday.

I'd like to start just with some general questions that relate to the ministry and some of the specific numbers around the ministry. So that the minister knows, what I'm going to be doing here is looking at the service plan for this year and comparing back a little bit to last year's service plan to get some comparators.

I'd like to start, if we go to the resource summaries in the back…. I think it's page 20 in the current service plan and page 24 in last year's service plan. The core business areas are broken down, and then there are budget numbers that relate to those core areas. So what I'm going to be looking for is a little bit of information from the minister in regard to some of those. We'll just walk through some of these areas.

The minister will know that in the income assistance area the original estimates for this year would have been about $1.44 billion for income assistance. That's now up to about $1.58 billion. Could the minister confirm that that is essentially a result of the economy and, largely, that that's employables? Is that almost entirely employables who have now fallen off of EI or whatever and are now collecting assistance?

Hon. R. Coleman: It is increased, probably because of the economy, and what happens is that it goes up, and then it probably lags behind any economic recovery as well. By our experience, that's usually what the trend lines are over time.

Basically, the member is right. Primarily it is people who would be employable. At the same time, though, we have seen a bit of an increase, but not as large, in our people with disabilities.

S. Simpson: Could the minister give us numbers for the increases in terms of folks receiving assistance in both the category of employables and those with disabilities?

[1015]

Hon. R. Coleman: As of January 2010 there are 177,526 recipients who are receiving income assistance, compared to 154,378 in January 2009. The disability assistance caseload is expected to increase from 72,344 — as part of that number — to 76,190 in 2010-11.

S. Simpson: Thanks to the minister for that. I notice that in '11-12 and '12-13 the ministry is projecting that the numbers will drop by about $32 million, $33 million in terms of income assistance.

Could the minister tell us where, on what basis, on what analysis they're expecting…? Presumably — I'm assuming, and the minister can correct me — a number of those employable folks will be back in the workforce, and there'll be jobs for those folks, and that will take about $30 million off the case roll. Could the minister tell us on what basis they're making those projections?

Hon. R. Coleman: Yeah, I can. The budget reflects a $36.4 million — 1.3 percent — decrease from 2010-2011. This includes a reduction in income assistance, including temporary assistance, disability assistance and supplementary assistance.

What we do is that we actually take historical trends going back a number of years, as rolls change based on the economy. At this time we anticipate the temporary caseload will decline by approximately 12.9 percent between 2010 and '11, and that will reduce the overall cost of providing income assistance, obviously.

The projected decline in the caseload is attributed to an improving labour market beginning in 2010 and declining unemployment, which — just so the member knows — usually lags behind. Even though the economy changes, you notice a hiring…. Particularly small businesses will come back and hire slower because they're trying to, obviously, hedge against the recession or any other downturns. This, in turn, brings us a gradual reduction in temporary assistance.

Between 2010-11 and 2011-12 we expect that the disability assistance caseload, as it has historically, will grow slightly and slowly, because we do see that traditionally. Historically, decreases in temporary assistance, income
[ Page 4191 ]
assistance lag behind improvement in the labour market, as I stated.

We can review the caseload forecast and make adjustments during the 2011 and '12 budget process if the unemployment situation shifts dramatically in a way not currently anticipated. What we do is that we actually track these month to month, and as we're building into our budget for each year, we do a year-over-year comparison. Then we come in and give our best data, based on historical trends and what's happening, to Finance as we build our budgets.

S. Simpson: I'm going to stay with the income assistance area a little bit around some of these numbers. The minister will know that the service plan that came out in February 2009 would have been the last service plan where FTEs were actually included. In the current service plan that was released in March 2010 there is no calculation of FTEs in the ministry.

I want to pursue that a little bit to understand what's happening with staffing levels. The February 2009 report suggested that for this year there would be 1,347 FTEs and that that number would continue in 2011-2012. Could the minister tell us whether there are any projected changes in those numbers from the ones that were released in February 2009?

[1020]

Hon. R. Coleman: I'm sure the member recalls that we canvassed this in some detail last fall. We've not impacted front-line services. I don't have the exact number of FTEs just in social services. I have the larger number, which is the ministry number, and we'll endeavour to break that out for you. We'll try and get that number for you some time today.

We've made no staffing changes in 2010-11 or '11-12. We have not impacted front-line services whatsoever. Our changes when we did workforce adjustments were actually done last fall, and those have all been completed. That was about 200 people that were impacted by workforce adjustment. Those were not in front-line services but people in other jobs within the ministry — reducing certain things like administration departments, that sort of stuff, and managing our offices a bit differently.

As of February 2010 only seven of those 200 people remain to be placed within government. We're optimistic that all impacted staff will be placed by the fiscal year end, which was March 31. I don't know if we accomplished that by March 31. I'm getting a nod, but I will confirm that for the member in the next question.

S. Simpson: We'll be talking more about some of the staffing, just so the minister knows, and we'll talk about this in general terms. But if the minister would know that the core business areas…. Previously there had been staffing numbers for that. Any information the minister can get us about those staffing levels in those core business areas for this year and projected out would be helpful.

Just in reference to that answer, the minister, I believe, said there are about 200 positions now. Just to confirm, is that 200 positions throughout the ministry, or is that 200 positions within the income assistance core business area?

Hon. R. Coleman: That is 200 people across the entire ministry. That's out of the 2,500 staff we had. We did not touch front-line services with regards to any of our social services. I'm advised that as of today four staff out of the 200 staff that were affected by our workforce adjustment remain to be placed within government.

S. Simpson: Moving down to the next business area, employment is the next area on the page. Employment shows a reduction from what was initially projected back in February of 2009. It was going to be about $94.8 million in employment. This is provincial dollars, not the dollars that have been transferred federally. In provincial dollars, it was to be about $94.8 million.

That number has been adjusted down in the current service plan to $71.8 million — a significant cut, a cut of over $21 million. Could the minister tell us where those areas of that cut are?

[1025]

Hon. R. Coleman: The actual number in '09-10 estimates, as the budget came through, is $82 million versus $94 million that was there. The reason for that is because of the restating of the ministry to a large part, which means basically the Ministry of Citizens' Services took back some of the Shared Services costs, and it's now over in their budget versus ours.

The balance of that is actually a reduction in employment programs at the ministry level. That's because we were taking on the labour market development agreement with the feds, which allowed us to gain some efficiencies. Blending the two programs together allowed us to actually serve more clients but with a little less money.

S. Simpson: So with this now, my understanding — and we'll get into more of this detail this afternoon when we talk about employment — is that the federal pot of money that transferred over was something in excess of $300 million to cover EI part 2, essentially, which now is falling under the province. A couple hundred staff came with that from federal staff, as I understand it.

What I hear the minister saying, then, is that that allowed, for any number of reasons, the provincial share of provincial dollars to be reduced as this gets blended together. It was my understanding though, and the minister can correct this, that that program still continues to
[ Page 4192 ]
be fairly separate and distinct under the agreement until, I believe, 2011, when it fully transitions into an entirely provincial program, with provincial priorities and such.

[1030]

If that's the case, maybe the minister could tell us if there are programs or initiatives the province would have been paying for that are now off the table because of the reduction in dollars — considering, I thought, that the federal dollars were pretty dedicated, for the moment.

Hon. R. Coleman: I'm going to try to explain this. This is almost getting to be a technical briefing level.

Basically, the labour market development agreement that we have is for EI, part 2, but in addition to that, there was stimulus money that came through of about $10 million for other programs. There was some labour market agreement funding for employment-related initiatives that came through in addition to that. Then there was some federal strategic training and transition funding that came through.

That, coupled with us being able to find efficiencies within our own operation because we had a number of programs that we could match up with now, found us some savings. Basically, this didn't mean that we served less people. We actually served more people, because of the ability to leverage funds. I don't have the breakdown of that leveraging in front of me, but that would be the explanation.

S. Simpson: I know that in the pot of money that was the transferred federal dollars…. There was a pot, and then I know there was an additional pot of $30 million, $40 million, $50 million. I'm assuming those are these additional dollars, over on top of what were the program dollars. This is the combination of those dollars that make up what the minister was talking about, I suspect, if he could just confirm that.

A question relates. When I look back again to the February '09 service plan, it showed there that in '08-09 there were 302 people employed in this sector. I'm assuming those were the provincial employees. Then it jumps to almost 600 people, and that's when they pooled all the federal people in, the people who administer that program, so we now have a number of 599 — 600 less one.

Could the minister tell us two things. First, has there been a reduction in the number of employees who were here before the federal people transferred over? And second, is this number expected to stay pretty much current at 600, roughly, for the next couple of years that were reported in this report?

[1035]

Hon. R. Coleman: I'm going to try and clarify the numbers first for you. The 300-plus that the member had mentioned on the social development side that were doing employment were caught in the fact that they were also doing some other service delivery at the office level with regards to other jobs they were doing. So it was all about…. It wasn't separated out before all the FTEs were there.

Now that staff is still over there — some of them — and a bunch of them moved over to do delivery directly of the programs, because by merging the two operations, we had some changes. There's no reduction of services with regards to this. There's no reduction of staff positions. The only reduction was one staff position, which was an ADM position. There will be no reductions in '10-11 and no reductions in '11-12.

In '13-14 the administrative dollars from the federal government change, or they run out. There may be adjustments that have to be made, depending on the economy and how many people are unemployed and that sort of thing and how many people need training in the year 2013-2014. At this stage there are no reductions to staff during this period.

S. Simpson: We'll get to more detail about that when we get to talking about employment.

The next area in the resource summary is the housing area. The housing area shows, from what was the restated '09-10 number…. We know that the housing number, the restated number, I think, here was $357,528 for '09-10. Then it shows about a $9 million reduction into the current year and then a couple of million dollar reduction for the next couple of subsequent years.

Maybe the minister could first briefly explain the difference between where this housing budget is versus the budget in B.C. Housing itself, which we'll talk about when we get to B.C. Housing tomorrow. What's this money versus the $800-odd million in B.C. Housing's budget, just to distinguish the difference, and what's that $9 million cut?

[1040]

Hon. R. Coleman: It's all B.C. Housing, but it would be more appropriate with the present CEO, Shayne Ramsay, here. The operating subsidies change on…. This would be the operating subsidies, but they also receive capital funds. They get matching funds from the federal government. They receive other funds from the ministry when they're doing something like putting supports in a place that we would fund over to them to deliver the supports — let's say in a place that's doing some mental health and addictions — and also the federal-provincial partnerships and that sort of thing. So these are the operating funds.

The reason — and I remember asking this question before, but we can get into more detail when we have the CEO here — is that each year our operating dollars change because we might have paid down a mortgage,
[ Page 4193 ]
or our interest rates have fluctuated downward. A lot of this is operating subsidies for non-profits to pay mortgages and what have you. As mortgages get paid down or principals come down or our reserves aren't necessary at certain levels, they will adjust their budget.

My understanding of this is that some mortgages actually no longer needed to be funded because the price had come down, but I think that it would be better to get into more detail when we have Mr. Ramsay here. He is in Victoria. I can get him, if you need, today.

S. Simpson: What I'm really looking for here…. And I'm happy to certainly get into the detail. If there are questions, it's much more appropriate with Mr. Ramsay here. That makes sense to me, and we'll get to those tomorrow afternoon.

Without getting to the numbers and the details, I'm just trying to understand if it's operating. So there's a budget that sits within the ministry of $346 million, $347 million, whatever it is there, and that's the housing budget within the core business areas.

Then we have B.C. Housing, which has a budget of its own, and we'll get to the B.C. Housing budget. So these are operating dollars and subsidy dollars — these dollars here, the $346 million.

Hon. R. Coleman: The bulk of the money that you stated here gets transferred to B.C. Housing. It comes through the ministry budget, flows to B.C. Housing. We don't touch it. It's just basically their operating dollars, but when we state it in government, I understand we state that it was coming through our hands to them. Then they do their budget based on what dollars flow to them.

There would be a small piece of this that wouldn't go to B.C. Housing, and that would be money that would be funding things like the building standards branch and residential tenancy. The rest of it would all flow to B.C. Housing.

In addition to that, then they receive the capital that they're investing in new builds and then capital that they would receive in matching funds to do with the feds for the other things we're doing and some other funds that would be for operating costs for people who have different multiple barriers and stuff like that. For that piece, I think we should probably wait for Shayne.

S. Simpson: Moving on, the next item on the list is Community Living B.C. We'll talk about that quite a bit more this afternoon. The budget did increase. This was one of the areas, I know, within the ministry where there was a budget increase this year.

[1045]

I've been told that the purpose of that was to try to deal with wait-lists and get reduced wait-lists. Could the minister confirm that that's what the intention of the increase of $15 million, whatever that increased number, was?

Then just as a second question that relates to that, I see that number stays static for the next couple of years. Is the ministry anticipating, then, that they may very well be back into a wait-list situation just because there isn't a further increase to cover additional growth in the sector?

Hon. R. Coleman: I think Community Living B.C. has made some significant strides in the last couple of years, with both contract management and how they're going to deliver services in the future, in addition to having the additional funds to try and deal with the wait-lists.

I think that as we get into those discussions, when the CEO is here, with regards to Community Living later today, you'll find that we're finding the savings we need by actually running our contracts differently and in a more modern way than maybe how we were traditionally with regards to people with developmental disabilities. We have found there are levels of what would be called….

Today it would be more the quality of service that can be done differently. There's actually a way to deliver services better, so they are doing a contract review and doing some changes. They're pretty comfortable that they're finding the savings they can operate with and accomplish the goals that they've set out for themselves.

S. Simpson: I have had the opportunity to have quite a few discussions with people in the community living sector, who work in that sector. I do look forward to continuing these discussions when the CLBC officials are here. We'll just move on, and we'll get back to that number in due course.

The gaming policy and enforcement. The numbers have stayed at about $17 million. Then they drop a little bit after that, and they continue to drop a few hundred thousand dollars. Just curious: is there anything in particular that gets lost in that $300,000 or $400,000 of cut in funding, or is it administrative?

Hon. R. Coleman: It's all administrative.

S. Simpson: Could the minister tell us…? We know that the government had spoken before…. I believe that this is certainly the case in the Ministry of Children and Families, and I just want to know whether this would be a similar situation in Housing and Social Development.

There are a number of areas, I believe, in Children and Families where the ministry has made the determination that there are programs that were with contracted agencies that the government would pull back in-house and conduct itself more directly, rather than having them delivered by contracted agencies. I know that's the instance, in some cases, with Children and Families. I'm
[ Page 4194 ]
wondering whether that is also the situation with the ministry.

Hon. R. Coleman: Not on the adult side, no. I can't speak for the Children and Families side, other than the fact that in some of the changes you'll see in the restated budgets, you'll note that there's a transition of the children, on recommendation from the children's advocate, children's commissioner…. The services to youth come back into Children and Families. They're doing their own work on that. We're not changing our contracting, and we're not bringing a bunch of stuff in-house.

S. Simpson: We'll just talk a little bit more about that in a bit, but at this point I wondered if the minister could tell us…. I know there was an announcement. I believe it was in February. Then I think there was a release shortly after that in regard to integrated case management systems within the ministry, and I believe that the ministry announced the letting of a contract for the first phase of this.

Could the minister tell us what the cost of that was and what in fact this…? Maybe the minister could just give us a little bit of a background about what this new case management system is, what it hopes to achieve, and then we'll talk about what it costs.

Hon. R. Coleman: We'll get into the details and the dollars. The staff are coming in behind me.

[1050]

The reason for the integrated case management project is to basically have a new system in place for government, particularly at this stage, for Children and Families and for the Ministry of Housing and Social Development.

The member is probably aware that we are operating on a significantly old system, probably in the age of over 30 years. That old system doesn't even have the expertise, without maybe some personnel in government that are due to retire in the next few years that would actually know how to adapt it, fix it or deal with it, because it's actually outlived, basically, the technological age completely.

There's always been a concern that at some stage the system will not be able to continue and that we would not be in a position to even do so much as issue the cheques every month. There is a challenge even with the cheques today. Because of the pressure on the system, we actually have to stop doing a number of functions each month while we do the social assistance payouts.

So that's the reason for it, and I'll get some…. Maybe the member wants to start asking some specific questions, and I'll take you through what the project is.

S. Simpson: I believe that this was back about three years ago when this project was first conceived. The projected budget was about $107 million. I now understand that the overall budget for this is getting more into the range of $180 million. Could the minister tell us what the figures are in terms of that increase over what was the original projection of $107.3 million to what it is now and why the increase in costs?

Hon. R. Coleman: I will apologize to the member in advance if I take a bit more time than usual between questions, because my technical ability on some of these is way beyond the scope of the minister. I can operate a BlackBerry, but I don't think I could program anything.

Just for the member's information, the original budget and associated costs were developed based on assumptions informed by a variety of factors, including the experiences of B.C. and other jurisdictions in implementing case management systems, the costs of commercial software and the advice from external experts such as the Gartner Group, a global IT advisory and research firm.

[J. McIntyre in the chair.]

In March 2008 — the member is right — the capital budget for this integrated case management was $107 million over five years from procurement to implementation to integration. The overall budget for the project increased for four primary reasons.

First, more functionality will be delivered by the project, which means it can actually integrate more across ministries and have more functional services for the ministries that want to use it, and over time it will be adaptable, quite frankly, into other ministries across government.

A more conservative phased approach has been adopted, increasing the length of the project and increasing testing and training costs associated with each phase to make sure that we're getting what we wanted for what we're paying for. The outcomes are there, which allows us throughout the project to take a step back and have the ability to adapt it.

The project contingency was increased to make sure that we would cover the costs going forward, and for the system integrator costs, the bids actually came in higher than the original estimates. So approximately $38 million has been spent to the end of December 2009. The overall budget for the project is $181.7 million, with $86.8 million of that for system integration services.

S. Simpson: The decisions to do this…. The minister certainly will know this. The minister will know that there have been concerns raised about the move to this system, or the process, I think. I'm not so sure that the criticisms that I've heard are so much about the principle of having an improved and integrated management system but about the complexities of doing that. We've seen numerous governments across this country and
[ Page 4195 ]
elsewhere who have had real challenges, both in terms of spiralling costs and in terms of security and management of information.

[1055]

The minister will know that the Freedom of Information and Privacy Association, Darrell Evans, raised concerns about this, and Mr. Loukidelis, when he was in his former role as Information and Privacy Commissioner, raised issues about this. In his annual report that he released in 2009, Mr. Loukidelis suggested that "government not move forward with any legislated changes in this area unless and until there has been a full public consultation in the form of a position paper published by the government, followed by meaningful, extensive stakeholder consultations." Could the minister tell us what consultation has occurred prior to moving this forward?

Hon. R. Coleman: I think I'll answer it in a number of ways for the member, and maybe I can get to where we can get to on this. I think I'll just start by reading into the record, because the Minister of Citizens' Services answered a question with regards to this in his estimates. They are actually the ministry responsible for the technical side of government, and we're the client in partnership. We're delivering the project.

His comment with regards to the report was:

"I think…the report that the member refers to is in the annual Privacy Commissioner's report. It doesn't relate to this particular project, because this project has only just recently been announced and was in the formation stages when the report last came out.

"I just want to refer to what the ICM project is really about just so that the opposition members clearly understand why this is genuinely needed. Government is committed to ensuring the privacy and security of British Columbians' personal information. We're also committed to the reforms to address the repeated calls for changes in how we share information. These calls are included in a number of reports written in response to tragedies affecting citizens, including our most vulnerable.

"The integrated case management system will initially serve the Ministry of Housing and Social Development and the Ministry of Children and Family…. The project's longer-term vision is to serve government's social services sector. It's important to note that the people using the system will only have access for the information necessary to fulfil their responsibilities, and privacy is paramount."

I know that when I became the minister responsible in 2008, one of the real big concerns that existed within this ministry was the old technical systems that existed out there with regards to our ability to serve our clients, because we were still having trouble with integrating the information so we could actually serve our clients more efficiently and get the services to them and have the records to deal with them in the best place, whether it be doctors or employment programs or whatever the case may be.

The second thing was obviously the concern over the aged system and the fact that if it ever did go down, we were going to be in a significant challenge with regards to being able to serve just a simple process of providing financial assistance to our clients. As we do this, though, it's always been that we're going to protect the personal information of citizens that is held by government.

The ICM system will enhance the privacy and security of information through the use of modern technology and best practices, because the system we have today doesn't actually allow for some of the things that we're able to include in this system. Some of the things that are included in this system that we don't have today because of the functionality would be things like role-based access for workers, thus restricting access to information to only those who need it; enhanced audit abilities with regards to who's using the system and how; and multilevel security capabilities.

[1100]

As the member knows, we have some pretty stringent privacy legislation in British Columbia with regards to these types of things, and we've been working with the provincial chief information officer as well as the Office of the Privacy Commissioner to ensure that the ICM system meets all of these requirements.

Our front-line workers, for instance, in the Ministries of Housing and Social Development and of Children and Family Development only have access to information that is necessary for a specific purpose and for them to do their jobs and deliver services in an integrated manner. They will not have wide-open access to all the information in a case management system. Access to the system will be through password-protected authorization with multiple security checkpoints at each level — for example, the network, the application, etc.

The ministries currently share information between existing systems, and the service providers are contractually agreed to. ICM will enable real-time access to existing information for more efficiency, and information collected will only be accessed by people who have the right to access it to do their daily jobs.

S. Simpson: I appreciate that, and as we know…. We'll talk a little bit about the other system, the PARIS system that CLBC uses, when the CLBC folks are here — and some of the challenges there. But the minister will probably know that system, the PARIS system, is also one that is used by Coastal Health, and there were some significant criticisms of that system by the Auditor General. They really revolved around some of the questions that I think the minister quite rightly is saying he's looking to address here around need-to-know access and need to know and those things.

What the Auditor General said in the case of Coastal Health using that system, in their audit, was: "Based on the conclusions of this audit and other work performed by my staff, some of the fundamental security weaknesses identified in this information system may be present to some degree in other government systems." So the Auditor General flagged a problem he saw.
[ Page 4196 ]

I don't think there's any question that if we can get to a system that everybody is comfortable with, which allows the access of information for those who should access it quickly and efficiently, that's all a good thing. If we can do that, that's better than following around pieces of paper.

But we also know that this is a very expensive thing to do, and we know that a number of other governments have had more than their challenges with trying to implement information systems both in terms of costs and in terms of some of these questions around security and privacy rights and all that.

So I get back again to the question that Mr. Loukidelis raised in his annual report, which was to push there for a level of consultation — a position paper, I believe he called for at that time. I think what Mr. Loukidelis was saying, from my understanding of reading this, is that there's nothing wrong with going in this direction, but that it really is something that affects the public in a unique way in terms of their own privacy of their own personal information and that there needs to be some extra due diligence around that because you're dealing with people's personal information.

We know that because of illegal activity, we've had some challenges around that. But these are questions of illegal activity, I believe. We'll let the courts decide that.

Has there been or will there be any consultation and discussion around that, particularly as the minister said that they're pretty early in this process — I think step one, the first $25 million, $28 million in this first contract as the system plays out? So is there a plan for any kind of further consultation or discussion based on the recommendations of Mr. Loukidelis?

Hon. R. Coleman: Yes, there is, but I'll just touch briefly because I know that we're going to do CLBC later. On the PARIS system, in February 2010 the Office of the Auditor General raised concerns about the security controls and procedures in place to protect health information contained in the primary access regional information system, which PARIS is the acronym for.

The Auditor General did not find fault with the system. Rather, the issues were specific to the Vancouver Coastal Health Authority's access and security controls. Community Living B.C. is thoroughly reviewing the Auditor General's report where appropriate and will enhance the controls in place to protect their client information, subsequent to that report.

The interesting thing about consultation on some of these things is that you could consult with you and me about what system was necessary to run a $4 billion or $5 billion operation within government. We wouldn't be able to give very good input with regards to that, unless maybe the member opposite is more technically inclined than I am.

[1105]

Basically, what we're doing on that is working on a plan for engaging our various stakeholders — i.e., community partners, contracted service providers, clients, etc. The approach and timing of the engagement will depend on where we're at in the project. In future phases we anticipate providing some client self-service features, such as the development of the client service features. As the development of these plans progresses, the ministry will consider the best approach to get input from our clients prior to designing the self-service features.

Information about the project has been shared with a number of service provider groups, and stakeholder engagement strategy of that is already underway. The integration with the broader social sector ministries is anticipated in the future phases of ICM beyond phase 5. At this stage the detailed information requirements have not been developed, and it will require further consultation with those organizations at that time.

S. Simpson: I think it is interesting, as the minister points out, that the advice of the Auditor General in his report when he dealt with that question around the PARIS system in health said: "The adoption of a comprehensive and strategic approach to information security is critical for securing the environment and protecting sensitive personal information. I would encourage other organizations in the health industry and similar sectors to review the report, as our findings and recommendations may be useful to them as well."

I'm pleased, and I'm sure the minister and his officials will be paying attention to the advice that the Auditor General gave in his audit and his recommendations.

I would tell the minister that I think I can program my BlackBerry, so I may be a step ahead of him on that stuff.

Interjection.

S. Simpson: Hey, you're pretty good.

We'll get to more discussion around this as it relates to CLBC later this afternoon. There's been the transfer, just more recently, of some areas. I know that the youth and children around the CLBC, developmental disabilities, have transferred over now to MCFD.

Have there been any other program areas of the ministry that have transferred to other ministries in the last year or so? And if so, what are the financial or staffing implications of that?

Hon. R. Coleman: In '09-10 the only transfer is the ICM projects being sent here for the management of the projects. So we have the ADM now housed in this ministry that will oversee the project, because we're the first clients. We'll work with Children and Families, and the Ministry of Citizens' Services will basically be working with us on that.
[ Page 4197 ]

A year or so ago the funds for transition housing and programs related to people claiming abuse and that sort of thing were transferred to us from community services. We took the transition houses by agreement to the management of B.C. Housing, which was doing a lot of their management of properties anyway at the time. We took those dollars that were there and made sure they stayed with B.C. Housing.

[1110]

Then we transferred the program dollars to the Solicitor General because they have victim services, and we felt it was a better fit within government to have them delivering those services.

The only other thing that moved around is…. Obviously, there's the shared services stuff within government that has been moved so that some of the shared services things that we would be responsible for are now with Citizens' Services.

S. Simpson: The ministry, like all ministries, I know plays a role around the climate initiatives to make the ministry as close to carbon neutral as it can be. Could the minister tell us what initiatives and what the costs related to those are for the ministry to meet its responsibilities under the government policy?

Hon. R. Coleman: First of all, we as a ministry have focused on energy efficiencies on the equipment that we purchase and the stuff that we use within our own operations. We've reduced the number of computers that were spares by cutting them all back as much as possible. We've gone to multi-functioning devices so that there's not a printer on every desk versus they're all massed up, so you're not running the same number of printers.

The vehicles that we now have are all hybrids, and we've been working on the reduction in the number of square feet required per staff member in some of our offices to get the savings on energy efficiency. We're doing more things on line and by phone as much as possible, given that some of our clientele don't have access to that. We want them to actually have some direct connection with us, as the member would understand, because they have, in some cases, multiple barriers and services they need.

The ministry is also responsible for the built environment project, which is a project within the ministry to identify how future subdivisions and those sorts of things for energy efficiency — use of water and sewer and those sorts of things — and the integrated project across government can be managed. That is work ongoing.

We've been greening the building code. We went to low-flush toilets not too long ago. We've been changing the rules to get more green and efficient buildings and allow for the greening of the building code. We actually changed the code for six-storey wood-frame construction, which is a more carbon-neutral product but also brings a higher efficiency to the buildings.

Each of those things, the last three I mentioned, doesn't affect the budget at all. They're all being done within the building standards branch which we have within the ministry, and they're able to manage all of that within their budgets.

The Crown corporations that we have each have plans with regards to their own energy efficiency, and I'd suggest that we could canvass those with the individual Crowns when they come through for the estimates in the next couple of days.

S. Simpson: Could the minister tell us: have there been any changes in the budgets for the minister's office or executive services in this budget year?

[1115]

Hon. R. Coleman: The ministry's budget is actually status quo. The minister's office budget is up slightly to reflect what was an understated number from the previous year with regard to some travel and some other costs, and to anticipate the costs related to a maternity leave.

S. Simpson: I take from that that there has been no change in the FTEs in the minister's office?

Hon. R. Coleman: No.

S. Simpson: I should know the answer to this, but does the minister have a parliamentary secretary?

Hon. R. Coleman: No, I do not.

S. Simpson: We're just cooking with gas here, so to speak. You knew that one right off the bat. It wasn't a technical question.

Could the minister tell us: have there been any areas of the ministry or of ministry programs that have been audited in the last year?

[1120]

Hon. R. Coleman: We've had the usual financial statement audits, and we've engaged the Auditor General to do the audits of the LMDA expenditures because that's part of the agreement with the federal government.

The comptroller general has had some cross-government reviews that included things like risk management and contracting and that sort of thing which we participated in, but they weren't focused on our ministry. So we participated by providing information to an overall larger review done by the comptroller general.

S. Simpson: Does the ministry have an engagement relationship with Partnerships B.C.? And if so, has it done any business with Partnerships B.C. this last year?
[ Page 4198 ]

Hon. R. Coleman: No, we haven't.

S. Simpson: Has the ministry done an assessment of what the potential impacts of the HST will be on the ministry and on its Crowns and that, in terms of potential cost pressures or required changes within the ministry to meet obligations around the HST?

Hon. R. Coleman: While my folks are looking for the stuff related to the ministry, I'll just mention to the member that each one of the Crowns has done this. As we get to each Crown we can make that question applicable, because I don't think we have that level of detail here today. We will get the information, and I will read it into the record.

Just dealing with this first — and then the member can decide where he wants to go from here with regards to Crowns or other questions — anything that we pay as a ministry is recovered through a program through the budget process. So we're kept whole with regards to our HST through a process that I think has actually been done through the comptroller general's office.

[1125]

S. Simpson: The work that the ministry does on this, and it makes itself whole…. The ministry has a whole range, obviously, of contracted agencies — that dollars flow through the ministry to a wide, wide range of service providers who deliver services on behalf of the ministry or the agencies. Has the ministry done any assessment of HST impacts on those organizations and affected their budgets in any way to reflect additional costs related to the HST?

Hon. R. Coleman: The provincial HST rebates are being designed to ensure that eligible entities, municipalities, local government organizations, registered charities and qualified non-profits pay no additional tax due to harmonization. Basically, they will submit, they will get rebated, and we'll keep their budgets whole.

S. Simpson: Could the minister tell us: what was the advertising budget for the ministry for this year? I suspect he's going to tell me all the Crowns have separate advertising budgets. If they do, we'll have that discussion with them — but the budget for the ministry.

Hon. R. Coleman: Our advertising budget is $18,000.

S. Simpson: So $18,000 — okay. Presumably, the agencies and organizations all have budgets of their own, and we know that some of those are considerably more than $18,000.

When they're advertising, and they put…. Are they then, when they tag the ministry's logo to that, simply doing it because it's the connection to government? I think I've seen what looks like more than $18,000 worth of advertising with the Ministry of Housing and Social Development identified on it — and much of it statutory kinds of advertising to public service kinds of advertising and not necessarily promotional advertising.

So are those agencies and organizations then covering that off in their budgets for what is essentially advertising that also reflects the ministry?

[1130]

Hon. R. Coleman: The member is correct. The Crowns do have their own advertising budgets. We can deal with those when they come forward. It's not uncommon that if we're a funding partner, they would put our logo on it.

We actually only spend $18,000 a year, and it's on information pamphlets. Anything that is public, that is statutory advertising, that sort of stuff, is all done through Citizens' Services, through the public affairs bureau. We don't drive that advertising. They do it for government as a whole. That's why we only have the small amount for the advertising within the ministry itself.

S. Simpson: So through Citizens' Services, presumably the public affairs bureau, who manages that for Citizens' Services. They drive all that advertising out of their budget. When they do that, though it is their budget, do they break out how much of that is attributable to separate ministries and are able to say: "Housing and Social Development, we delivered X dollars' worth of advertising that would kind of fit there"? Do they do that, and can you get that information?

Hon. R. Coleman: I've never had that question before, so I will see if I can endeavour to get the member an answer to that question. It is through the public affairs bureau, through Citizens' Services. We'll check on that.

I do know that they have staff that are assigned to basically deal with our public affairs over there for each ministry. We know that each of us has communication director, and then there are some staff that deal with things, if there are events and things coming up, that they would plan and work with us on. I'll see if that breakout is available.

S. Simpson: I appreciate that the minister had said previously around some of the FTE questions where there weren't…. The minister at the moment doesn't have specifics. We'll get more specifics on what those FTE breakouts look like based on the core business areas of the ministry.

With that, what I'm going to do at this point, hon. Chair, is turn some questions over to my colleague from Burnaby–Deer Lake, who has some questions of a gen-
[ Page 4199 ]
eral nature. Then after the lunch break we'll be back and dealing with employment matters.

K. Corrigan: I have some questions about the Olympics for the minister. My first question for the minister was: did the minister or any of his staff receive Olympic tickets?

Hon. R. Coleman: None of my staff, to my knowledge, received any tickets for the Olympics. I did attend I believe it was five events in my role as minister responsible for the B.C. Lottery Corporation in a hosting situation.

K. Corrigan: Did the minister attend any other events not in his role as the minister responsible but paid for by the taxpayers of British Columbia?

Hon. R. Coleman: I just forgot one, and that was the B.C. Day Victory Ceremony at B.C. Place. I did attend as a member of the government, and that was the only other event that I attended where the taxpayers were involved in any purchase or payment of the ticket. That was all that I was involved in.

K. Corrigan: I'm wondering if the minister took any guests, and if so, who they were.

[1135]

Hon. R. Coleman: Yes, I did. On the five occasions that I went with regards to the Lottery Corporation, I took my spouse.

K. Corrigan: Were your spouse's tickets paid for by the taxpayers?

Hon. R. Coleman: No. I reimbursed the entire value of the tickets to the B.C. Lottery Corporation.

K. Corrigan: One of the things I've wondered about when I've been looking at this with various ministries and ministers is I'm trying to get a sense of where the plan was made about the decision to host and what the hosting looked like.

I know that yesterday I was with the Minister of Agriculture, and the minister was talking about various events to promote agriculture, which seems quite legitimate. So in terms of the events that this minister went to, I'm wondering if the minister made the decision about what events to go to or whether that planning and the distribution of tickets took place in another ministry or by someone else.

Hon. R. Coleman: Neither, actually. The Lottery Corporation asked if I would be available to host any events during the Olympics, and they actually picked the events and invited the guests. I attended as a host with the Lottery Corporation.

[H. Bloy in the chair.]

I know that they're preparing a report of all their use of tickets and who attended. I don't have that here today, but I know that that's being done, similar to what's being done elsewhere in government. Other than that, that's the only….

That's the description, I guess, of how the tickets were done with regards to me, and I chose to do that because the Lottery Corporation felt it would be beneficial if the minister attended some events.

K. Corrigan: Okay, so the minister spoke about the Lottery Corporation tickets. Then how many tickets and what value of tickets did the Lottery Corporation have to distribute?

Hon. R. Coleman: I don't know the number off the top of my head. The Lottery Corporation, with the agreement of the critic, is here on, I believe, Thursday. I'm sure they would have that. Their tickets came as part of a sponsorship agreement.

They were one of the official sponsors through VANOC with regards to some other things — I think SportsFunder was part of that — and for athletes and some of the other things with regards to their participation. They would be more qualified to answer those types of questions.

I know that I don't have that information here today, but I'm sure that they'll have no problem providing it. Since the member has asked the question well in advance, I'm sure we'll have the information when the Lottery Corporation comes.

K. Corrigan: Thank you. I appreciate that.

I'm wondering if there were other expenses related to hosting the Olympic Games. The minister mentioned the tickets, and I'm wondering if it's possible, with regard to the tickets, to find out what the value of the tickets were as well as any other expenses incurred, such as meals, hotels, travels or other costs that were associated.

Hon. R. Coleman: I'm sure that we can get the same thing on Wednesday or Thursday. We can get you the value of the tickets. The face-value, I imagine, was identified. With regards to any other travel, hotel costs, meal costs, there were none.

K. Corrigan: Sorry, I missed the last part of that with respect to the other costs. I'm sorry. Could you just repeat it?

Hon. R. Coleman: What I said was that when the corporation comes, I'm sure they'll be able to tell you the
[ Page 4200 ]
value of the tickets, etc., and what have you. With regards to personal expenses, there were no other expenses.

[1140]

K. Corrigan: I wanted to ask a couple of questions about the employee loan program. My question to the minister is: were there any employees from this ministry or from the Crown corporations — from the Lottery Corp or any other entities controlled by the ministry — that were loaned to VANOC as part of the employee loan program?

Hon. R. Coleman: It's more complicated than just giving you a straight number, I understand, but it was about 65 employees, in total, from the ministry. We're still reconciling some manual time sheets and information from VANOC, because VANOC paid for some of our staff, and others were there in other capacities. So we're reconciling it from here.

The estimate today, right now, is about 65 employees, and all of that will be reconciled into government, into the overall report. That's where we're at with ours, and we would expect the balance of the information to come through from VANOC in the not too distant future.

K. Corrigan: I've heard that there is this report coming, and I think we in opposition all appreciate it, because we want to find out what the overall costs of the Olympics are. My concern about that report is that we haven't been able to receive assurance of exactly how detailed the breakdown is going to be. That's why I've been asking the questions of the ministers in the individual ministries, to try to parse it out a little more in each ministry.

I'm wondering if it's possible, if we don't have the information right now, to find out what the value of those approximately 65 employees are, how much that is going to cost and be worth. If we can't have that today, it would be fine. I don't mind waiting for a few days for it, but I would appreciate getting that information.

Hon. R. Coleman: I can give you what our estimate is. The estimated total cost was about $80,600, keeping in mind, when the reconciliation comes in, that if VANOC paid for somebody, it would be offset against that. That's the information we're working on. That's the estimate we have today.

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

Motion approved.

The committee rose at 11:44 a.m.

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