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)

Wednesday, April 21, 2010

Afternoon Sitting

Volume 15, Number 3

[ Page 4619 ]

WEDNESDAY, APRIL 21, 2010

The House met at 1:34 p.m.

[Mr. Speaker in the chair.]

Routine Business

Prayers.

Introductions by Members

A. Dix: It's my honour to introduce today members of B.C.'s Armenian community, who have hosted members of the Legislature today at an event commemorating the Armenian genocide.

[1335]

I would like to introduce, and I have a bit of a list here, Agop Agopian, Steve Agopian, Vahe Andonian, Matilda Aslizadeh, Haig Basmadjian, Varoujan Basmadjian, Ara Bedrossian, Jack Deragopian, Joseph Egoyan, Keghart Garabedian, Liza Glynn, Narine Grigoryan, Ovsanna Kadian, Araxie Kassardjian, Parsekh Kassardjian, Sonia Kawsabian, Annie Moradian, Chelsey Papazian, Eddie Papazian, Karin Saghdejian, George Shahnazarian, Victoria Sogomonaian, Arthur Tachdjian, Lucine Tachdjian, Anna Teghararian, Astra Yaghdjian and Greg Yaghdjian.

Thank you, and I hope everyone in the House will bid them all welcome.

Hon. K. Krueger: In the House today are three gentlemen who together play a large role in keeping British Columbia's Hollywood North and our economy robust. With us is Peter Leitch, the chair of the Motion Picture Production Industry Association of B.C., MPPIA. Peter is the president of North Shore Studios.

Also, with Peter are two executives of post-production companies that are active here in British Columbia: William Baldwin, the vice-president and general manager at Deluxe Vancouver; and Scot Evans, vice-president of Technicolour Creative Services Canada — as I said, both post-production companies.

Yesterday the Premier and I were at the announcement of Pixar, together with Mayor Robertson in Vancouver — going to be another great boost to our economy. This industry, the film and television production industry in B.C., in 2009 hit $1.3 billion of economic activity, an increase of more than $100 million over the previous year.

Some examples of film, television and animation productions shot in B.C. last year include the Twilight Saga: New Moon and Eclipse; A-Team; TRON Legacy; Percy Jackson and the Olympians; Stargate Universe; Caprica; Fringe; Hiccups; 1001 Nights; and Thomas and Friends. I ask the House to please make Peter, William and Scot very welcome.

R. Chouhan: It gives me great pleasure to introduce my granddaughter Chloe, with her parents Amrita and Jamie Sanford. Please make them welcome.

J. Thornthwaite: I would like to welcome my friend and past colleague through the BCSTA, Silas White. He is a school board chair from the Sunshine Coast. Welcome, Silas.

M. Mungall: Well, all the way back from Haiti is my wonderful partner, Zak Matieschyn. He's joining us here today in the precinct, right up there. If everyone can please make him welcome.

Hon. G. Abbott: Joining us in the gallery today are some very, very dedicated members of the First Peoples Heritage, Language and Culture Council and staff for them. Among the folks gathered today are Tracey Herbert, who is the executive director for the council; Tamara Davidson, who is a board member from the Haida Nation on the council. Also, staff members from the council are here today: Peter Brand, Susan De Stephanis, Alex Wadsworth, Cathi Charles Wherry and Ian Batey.

Also, I would note that from the Ministry of Aboriginal Relations and Reconciliation, Mariann Burka is here, as well as Stephanie Gabel. I also want to say that they're here looking forward to, I think, introduction of legislation.

But I wanted to acknowledge the efforts of Dr. Lorna Williams, who is the chair of the council. She has done wonderful work in ensuring that we can preserve for the future our very rich heritage of aboriginal languages in the province of British Columbia. I wanted to thank Dr. Williams for her work, even though, regrettably, she could not be here today.

M. Elmore: I would like to welcome a number of classes from Sir Charles Tupper Secondary School that are here. They're from the grade 11 social studies class. They're accompanied by the teachers Autumn Lum and Bonnie Burnell, as well as teacher Leanna Conkie, who is doing her practicum from UBC, and student support workers Heather Paris and Katherine Olsen. I would ask the House to please make them very welcome.

[1340]

Hon. C. Hansen: I would like to welcome Mike Klassen to the Legislature. Mike is one of the founders of a very popular website called CityCaucus.com. For those of you that were looking for all of the exciting free things to do during the Olympics, that was the place to go. I know it was tremendously popular with my friends and family to find out all of the various pavilions that everybody — families — could enjoy for absolutely no cost at all. So will the House please make Mike very welcome.
[ Page 4620 ]

E. Foster: In the House today is a friend and former colleague of mine, Paul Boyd, one of the great teachers from Charles Bloom Secondary School in Lumby. I would ask the House to make him welcome.

L. Reid: In the House today I'm pleased to welcome 17 teachers from across British Columbia who have been selected to participate in the tenth British Columbia Institute on Parliamentary Democracy. They'll be with us for the remainder of this week, expanding their knowledge of our parliamentary and political systems.

They are joined by three of their peers, who are alumni and returning in the role of facilitator: Ms. Gail Scott, Mr. Paul Boyd and Ms. Lisa Read. Accompanying this distinguished group of teachers are three observers: Mr. Alain Lachapelle from the Library of Parliament in Ottawa, Ms. Tina Storer from Western Washington University and Ms. Carol Hyland from Muze Creative in Victoria.

I hope you will have the opportunity to meet with them during the institute and, specifically, the luncheon hosted by the hon. Minister of Education tomorrow. Would the House please make very welcome the tenth annual Teachers Institute on Parliamentary Democracy.

Introduction and
First Reading of Bills

Bill 11 — Miscellaneous Statutes
Amendment Act (No. 2), 2010

Hon. M. de Jong presented a message from His Honour the Lieutenant-Governor: a bill intituled Miscellaneous Statutes Amendment Act (No. 2), 2010.

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

Motion approved.

Hon. M. de Jong: Bill 11 amends the following statutes: the Adult Guardianship and Planning Statutes Amendment Act; the Community Care and Assisted Living Act; Emergency and Health Services Act; Environmental Management Act; Hospital District Act; First Peoples' Heritage, Language and Culture Act; Greater Vancouver Sewerage and Drainage District Act; Health Authorities Act; Health Professions Act; Hospital Act; Hospital District Act; Land Act; Land Title Act; Local Government Act; Ministry of Health Act; Motor Vehicle Act; Passenger Transportation Act; Transportation Act; and the Vancouver Charter. It also makes consequential housekeeping-type amendments to other statutes.

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

Bill 11, Miscellaneous Statutes Amendment Act (No. 2), 2010, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Statements
(Standing Order 25B)

BURNABY VOLUNTEER FESTIVAL AND
BURNABY FIREFIGHTERS BALL

H. Bloy: This weekend I will be busy attending the Burnaby Volunteer Festival taking place at Lougheed Town Centre. Lougheed Town Centre is a great sponsor for many volunteer events in our city of Burnaby. They're led by Beverly and Clara. This is a chance for people to learn about community groups and local organizations.

A few of the organizations that will be attending and where people can sign up to volunteer are JDRF, Juvenile Diabetes Research; Purpose Society; SUCCESS; Variety Club; Community Centred College for the Retired in Burnaby; and hundreds of other organizations.

Later on Saturday my wife and I will be busy attending the 18th annual Burnaby Firefighters Ball hosted by the Burnaby Firefighters Charitable Society. The cause for this year is the nutritional snack program at two elementary schools and a community centre in Burnaby. The firefighters are involved in purchasing the products and delivering them to these schools on a regular basis. The teachers at these schools are very appreciative of this program, as students display more focus and attention for the remainder of the day.

The Burnaby Firefighters Charitable Society is hoping to expand this program to more schools in the future. The Burnaby Firefighters Society is primarily funded through the efforts of their own members, where over half the members do payroll deduction.

I want to recognize the four organizers of the ball: Jeff Clarke, Miles Ritchie, Rob Lamoureux and Randy Delmonico. But what I really want to recognize is all the volunteers we have in this great province, for without these volunteers, we wouldn't have the communities that we have here in British Columbia and across Canada.

[1345]

SPORTS AND RECREATION
IN JUAN DE FUCA AREA

J. Horgan: This will come as no surprise to members of this House. I'm very proud to live in the riding of Juan de Fuca. And why wouldn't I be? For one of the reasons that I live there and many other people come there is the number of sporting and recreation activities that are available to the people just west of Victoria.
[ Page 4621 ]

Just this past weekend, for example, the Langford Eagle Ridge Centre played host to the 2010 Golden Gloves boxing championships. This is the first time since 1939 that the event has been held outside of Vancouver. If boxing isn't your thing, you can drop into any arena or visit any field in my community over the weekend and find soccer, football, lawn bowling, baseball, softball, hockey, roller hockey, rugby and yes, even the great game of cricket. You can take a ride out to Sooke and try the zip line.

You don't have to go to Robson Square to do that, Mr. Premier.

You can buy a ticket to cheer on the Eves of Destruction, Langford's very own women's roller derby team. I know the member for Nelson-Creston has already done that once this year. If you want a slower pace, there are multiple golf courses, numerous beaches, numerous trails to walk on.

For cyclists, the Galloping Goose is second to none, and if we can find some funds to repair our very own velodrome, a legacy from the Commonwealth Games, we'll even have that to do as well. If active sports aren't your thing, come to our recreation centre and learn about yoga, martial arts, dance courses and, even as I do, meditation. So whether you decide to participate or just spectate, come out to the west.

If these activities don't get your heart racing, I want all members to mark their calendar. May 14 will be the 60th anniversary of the Victoria Shamrocks. So come on out west. The fastest game on two feet. The member for New Westminster and her pathetic Salmonbellies are going to get a kicking.

MISSION HEALTHCARE AUXILIARY

M. Dalton: Two years following World War I, after hundreds of thousands of veterans had returned from Europe, a group of women banded together to organize what is now the Mission Healthcare Auxiliary to help support injured troops. Just a few years later they helped start the only hospital in the valley between Mission and New Westminster.

For generations, volunteers from the auxiliary have dedicated themselves to serving the sick in the community and seeking ways to bring improvements to the hospital. Nearly 150 auxiliary volunteers help with patient care in the extended care facility or elsewhere in the hospital, such as the reception desk. Others serve in the Cottage, a popular thrift store in Mission, or at a gift store located in the hospital.

Over the years the Mission Healthcare Auxiliary has raised more than $2 million, dollars which have been used to improve patient services or purchase valuable medical equipment.

Dorothy Pohoda joined in the 1960s as a young mom. She began helping by bringing a cart around to patients who wanted to buy some snacks or get a book. Doris Jacobs is in her 90s and has been a member for nearly 30 years. She made some of the auxiliary's first highly visible pink uniforms. Dozens of volunteers — such as the president, Gertrud Rummel, and others like Lillian Dudfield, Valerie Hundert and Helen Strohmaier — have been involved for years because they are compassionate people who want to help others in their time of physical and emotional need.

The work that they do is important for the people of Mission. Would the Legislature please join me in applauding the significant contribution that they make day in and day out.

ARMENIAN GENOCIDE

A. Dix: Today in the B.C. Legislature members of B.C.'s Armenian community held an event commemorating the Armenian genocide, the first genocide of the 20th century. Ninety-five years ago on April 24, 1915, some 2,300 Armenian community leaders were rounded up, in what was then the Ottoman Empire, and killed. In the eight years that followed, 1.5 million Armenians were killed because of who they were.

In April 2006 members on both sides of this House unanimously passed a motion recognizing the Armenian genocide as a crime against humanity and designating April 24 as a day of remembrance. Since then the Armenian community has joined with other groups to promote understanding of the Armenian genocide and to educate the community, in particular young people, of the ongoing need to actively oppose crimes against humanity.

Last spring the Armenian National Congress and the Vancouver Holocaust Education Centre hosted a photographic exhibit of the work of Armin Wegner entitled The Armenian Genocide and the Holocaust: One Man Takes a Stand. Wegner took photographs of Armenian deportation camps while serving as a German soldier in World War I and became an active defender of the human rights of Armenians. He was later imprisoned in Nazi concentration camps for his opposition to Hitler's racist policies against Jews in the 1930s, policies that directly led to the Holocaust.

[1350]

The exhibition inspired the many school groups who saw it last year, and Wegner's legacy is a message to all of us of the need for action against hate, whatever its origins. While the Armenian genocide was the first genocide of the 20th century, it was not the last. We need to restate on this April 24 that there is no room for dissembling or inaction in the fight against genocide and crimes against humanity.

WILDFIRE PREVENTION

N. Letnick: I rise today to recognize that the 2010 wildfire season is upon us and that we all share respon-
[ Page 4622 ]
sibility in wildfire protection, to help and protect the property and people of British Columbia.

We all remember the 2003 Okanagan Mountain fire that consumed over 25,000 hectares of forests and parkland, forcing the evacuation of 27,000 people and destroying 239 homes. Over 1,000 firefighters and 1,400 members of the armed forces risked their safety to fight the inferno.

I remember one night standing on the beach with my family and some friends, the Appleby family. We watched from a safe distance as the fire moved through their neighbourhood. You can imagine the wonder and horror of home after home igniting just like the head of a matchstick explodes when struck against an abrasive surface. They were wondering if their home would still be there after the fire was over. They were part of the lucky few in their neighbourhood.

Of the over 3,400 wildfires last year, more than 850 were found to have been caused most likely by people. With the dry season approaching, we can all play a part in preventing wildfires.

Here are some ideas: attending campfires responsibly, including respecting and following provincial fire bans; avoiding discarding cigarettes outdoors; monitoring all industrial and recreational equipment responsibly when sparks or large amounts of heat are possible; and practising common sense and being aware of our surroundings when any type of fire or potential for fire are present.

In closing, I want to urge British Columbians to enjoy the outdoors but also to practise fire prevention. I would also like to thank the many people that have helped improve B.C.'s fire management prevention programs and all those who placed their lives on the line to protect life and property for all of us to enjoy.

CANADIAN NAVY CENTENNIAL

B. Simpson: I first came to Victoria in 1974 as an able seaman fresh out of basic training to attend signal school at CFB Naden. For the next two years I spent most of my time on the water around Vancouver Island aboard the destroyer HMCS Mackenzie and was fortunate to travel to Japan and Alaska and to participate in naval exercises out of San Diego.

It is with great pride today that I stand to recognize the centennial celebrations of the Canadian navy. Canada's navy came into existence May 4, 1910, when the Naval Service Act became law. Permission to add the prefix "Royal" was granted by King George V in 1911. When the Second World War broke out, Canada had just 13 vessels. By the end of the war, the Royal Canadian Navy had grown to become one of the largest Allied navies, with 434 commissioned vessels.

In 1968 the navy was merged with the army and air force to form the Canadian Armed Forces, now called the Canadian Forces. The maritime component was named Maritime Command, replacing the title Royal Canadian Navy. Today Canada's navy plays an active role in world affairs and in securing our borders.

The aim of the Canadian navy centennial is to build and strengthen in Canadians an appreciation for their navy. The theme is "Bring the navy to Canadians." Events will be focused to honour the past, showcase the current navy and reinforce the requirement for a future navy.

There will be numerous activities marking this centennial celebration, including an international fleet review here in Victoria June 9 to 14. The CFB Naden band will participate in a travelling road show entitled Sailors and Songs — the clean ones, of course — A Musical Tribute to a Century of Canadian Naval Service. On August 1, the Victoria Symphony will perform a salute to the navy, and on August 15 the public will be able to participate in the Canadian navy centennial 10K run here in Victoria.

I hope that all members of this House will join me in recognizing the Canadian navy's centenary and members will look for opportunities to participate in this year's celebrations.

[1355]

Oral Questions

ACUTE CARE BEDS AT
ST. JOSEPH'S HOSPITAL

C. James: For years health care in northern Vancouver Island has declined because of a shortage of acute care beds. Now, thanks to B.C. Liberal mismanagement, the situation is about to get worse. The proposed changes to St. Joseph's Hospital in Comox will lead to a loss of 18 acute care beds — further damage to the health care in the region. That's a 22 percent cut at a time when the region is already reeling from years of health care neglect.

So my question is to the minister. Will he agree today to protect the services and make a commitment that there will be no reduction in acute care at St. Joseph's Hospital?

Hon. K. Falcon: Actually, what's happening at St. Joseph's is exactly what's been taking place at other hospitals whereby PATH units have been set up. These PATH units are beds that are being utilized by seniors as they await movement into residential care sector. In fact, they are organizing them into entirely stand-alone wards so that they can have the appropriate level of care they require.

The final thing I would say to the Leader of the Opposition is that the Leader of the Opposition likes to continue with this farcical nonsense about there being cuts in health care when, in fact, the health care budget is increasing by over $2 billion over the next three years.
[ Page 4623 ]

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

C. James: Once again, this minister and this government are completely ignoring the community and ignoring the facts. There are 18 less acute care beds at that hospital. That's the fact.

This impact will be felt in communities from Parksville to Port Hardy, Port Alberni to Powell River — 18 less acute care beds for communities that are already reeling with a shortage of acute care beds. That will mean longer wait-lists, more overcrowding, and it will compromise patient care.

So, again, my question is to the minister. Will he commit today to working with Comox Valley residents and health care professionals who have ideas to resolve the challenges and keep the acute care beds at St. Joseph's?

Hon. K. Falcon: As I mentioned to the Leader of the Opposition, what they are doing is recognizing that some of the beds at St. Joseph's are occupied by seniors. So what they are doing is putting them all together in what they call a PATH unit to allow them to transition into residential care. Fortunately, under this government we have constructed over 6,000 new residential care beds right across the province of British Columbia.

I do understand, given the nature of the question from the Leader of the Opposition, that it's consistent with every question I receive from the NDP, which is that any change in the health system must never happen. We must not ever change anything. Don't do anything different. Just keep pouring more money into it, and whatever we do, for goodness' sake, don't change it. Well, that may be how the NDP operated; that is certainly not how the government is going to operate.

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

C. James: The minister completely ignored the fact that the reason they've got a difficulty around seniors is that the government broke their promise to build 5,000 long-term care beds in this province. That's why there's a problem.

Mr. Speaker….

Interjections.

Mr. Speaker: Members.

Continue, Member.

C. James: The minister is well aware that there are actually right now existing residential care beds that could be opened for those seniors in that community, beds that could be used to protect the acute care beds at St. Joseph's, beds that could be used to increase residential care in the Comox Valley.

So, again, my question is to the minister. Why does he refuse to consider the proposals that are being put forward by health care professionals and the community in the Comox Valley?

[1400]

Hon. K. Falcon: Just like yesterday, unfortunately, I have another uncomfortable NDP fact. This is a new part of my answer, apparently, that is going to be consistent in future answers. This uncomfortable NDP fact is that in 1991….

Interjections.

Hon. K. Falcon: I have yet to provide it, Mr. Speaker, and already I've excited a reaction from the members opposite.

Interjections.

Mr. Speaker: Members.

Continue, Minister.

Hon. K. Falcon: At St. Joseph's Hospital in 1991 the number of acute care beds was 125. In 2001, after a decade of NDP government, it was 109. That might be a little uncomfortable for the Leader of the Opposition, though I do have good news. The answer today is that it is still 109.

A. Dix: There we all thought the minister was running to be Premier, and he's running to be Leader of the Opposition. How about that?

I've got news for the minister. It's not innovation in a hospital bed shortage to close acute care beds and turn them into long-term-care beds. This is an unassisted triple play against the people of the Comox Valley. It's going to generate longer wait times. The minister knows it. It's going to undermine patient care. The minister knows it. And it's going to lead to higher costs.

The minister is only focused on the short-term crisis this government caused in VIHA. Will the minister put on hold this damaging effort to cut 22 percent of the acute care beds at St. Joseph's Hospital and talk to the community about better options?

Hon. K. Falcon: The Health critic is apparently saying: "Certainly, don't do as we did; do as we say." Actually, that's not really the way it's going to work, Mr. Health Critic. You were the chief of staff. In fact, the chief of staff.…

Mr. Speaker: Through the Chair.
[ Page 4624 ]

Hon. K. Falcon: Mr. Speaker, that Health critic was the chief of staff to the Premier in the 1990s. They were the government that massively cut acute care beds right across the province of British Columbia. That is their record. Indeed, at the very hospital that they are alleging cuts, which have not taken place, they were the ones that reduced the acute care beds at St. Joseph's Hospital. That was the only government that reduced beds at St. Joseph's Hospital.

The Health critic should know that one of the ways that you deal with the challenges in the acute care system is by building in the residential care sector. That's why there are almost 13,000 new and entirely rehabilitated beds right across the province of British Columbia.

Interjections.

Mr. Speaker: Members.

The member has a supplemental.

A. Dix: The problem with what the minister is saying, of course, is that no one who knows anything about that hospital agrees with him — not the nurses, not the doctors, not the community. I think the only person in the Comox Valley supporting this attack on the acute care beds is the government member for the Comox Valley.

Will the minister put this cockeyed idea of cutting acute care beds and transforming them into long-term-care beds when there are other long-term-care beds available...? Will he put it on hold and meet with the community this week?

[1405]

Hon. K. Falcon: Again, just reminding the member that actually the number of acute care beds at St. Joseph's is exactly what it was when we came in, in 2001. The only cut that took place was during the ten years of that government. I know that's an uncomfortable NDP fact, but it's actually a fact.

What is happening at St. Joseph's, like many hospitals that have what are sometimes referred to as bed-blockers, is that some of those seniors are being put into a dedicated ward and are receiving the appropriate level of care as they move to transition into the new residential care beds that are being built right across the province, including on Vancouver Island.

I get that that's a change for the Health critic, and I know that for the NDP, in their world, nothing can ever change. You must always do everything the way it was always done. I get that that's the NDP approach.

That's certainly not our approach. We are working to build more supports in the community, more supports for seniors at home, more supports for seniors in intermediate and long-term care. That's what we're doing on this side of the House.

SCHOOL DISTRICT COSTS AND FUNDING

R. Austin: School boards across the province are struggling with massive shortfalls because this government has failed to fully fund cost pressures — Vancouver, $16.3 million; Surrey, $12 million; Langley, $13.5 million; Prince George, $5.2 million; Nanaimo-Ladysmith, $2.8 million; Okanagan-Skaha, $2.5 million; Cariboo-Chilcotin, $2.3 million; North Okanagan–Shuswap, $1 million; Okanagan-Similkameen, $855,000; and Vancouver Island North, $750,000.

My question is to the Minister of Education. Are trustees making up these budget numbers, or is the minister misleading parents and communities in an attempt to lay the blame for education cuts on local school boards?

Hon. M. MacDiarmid: As the member opposite is well aware, our government has, every year for the last ten years, made education a priority. At a time when governments around North America are reducing the budget, we have increased the budget for the tenth year in a row, up $112 million.

The member opposite is also well aware that coming this fall, school districts are predicting we will have 60,000 fewer students in classrooms around this province yet an additional $1.3 billion invested in this school system.

Mr. Speaker: The member has a supplemental.

R. Austin: The minister's spin does nothing to improve the quality of education our children receive in the classroom. Districts across the province are being forced to make deep cuts to programs and services that our children rely on. The Education Minister says the same thing day in and day out. Parents, quite frankly, are sick of it. Parents want a straight answer from this government.

Will the Education Minister show some respect for parents by stepping outside of the message box and committing today to ensure that schools have the resources they need to give our children the education they deserve?

Hon. M. MacDiarmid: May I say that this side of the House has enormous respect for parents. That is why we made the decision to provide funding for parent advisory committees and DPACs and why we have made every effort, through school planning councils and other areas, to include parents in their children's education.

But parents around this province have been asking questions, and they've been asking the same questions that we've been asking on this side of the House. With 60,000 fewer students in classrooms around this province, why is it that some school boards are not looking for administrative savings? Why is it that some school
[ Page 4625 ]
boards are not making the effort to look at things like shared services, like a common payroll, like a common IT system? It's time for us to start to do things differently.

[1410]

L. Popham: The Saanich district, faced with a $3.3 million shortfall, is looking at making cuts to field trips, school libraries, learning assistants and music programs. This is what the chair of the Saanich board of education says about the claims made by this minister. "The provincial government is not adequately funding its own education mandate and other costs it imposes on boards."

My question is to the Education Minister. Will this minister step outside the message box, show some respect to parents and explain why this government is underfunding education?

Hon. M. MacDiarmid: The Saanich school district will have 14 percent fewer students next year than it did ten years ago. Yet in spite of that, per-pupil funding has increased by 33 percent for Saanich.

I'll tell you what really concerns me. I am hearing from some school boards, absolutely — their willingness to go forward. They already are beginning to do things differently — to look at shared services, to look at working with their municipality.

What concerns me is the school districts who say to me: "We want more money to do things the same way. We want to do things the way we've always done them. We're not interested in looking for administrative efficiencies, and the only way we can manage our budgets is by doing things that are not in the best interests of our students."

Well, we are prepared to step in and assist these school districts wherever and whenever it is necessary.

D. Thorne: Well, here it is — another day in the Legislature and another school district facing a government-induced crisis. Once again, the Minister of Education resorts to…

Interjections.

Mr. Speaker: Members.

D. Thorne: …meaningless numbers and spin instead of answering the questions that she is being asked.

Interjections.

Mr. Speaker: Take your seat for a second, Member.

Continue, Member.

D. Thorne: Richmond is a growing district. They will have almost 250 more students this year than they had last year, yet they have been forced to lay off almost a hundred staff — staff that includes support workers for vulnerable children with special needs.

My question is also to the Education Minister. I also am wondering if this minister can step outside of her message box, get off her spin and explain to us why growing districts are facing budget shortfalls and having to lay off staff.

Hon. M. MacDiarmid: Richmond is one of the school districts that…. If we did not take into consideration full-day kindergarten, it is one of the 52 districts whose enrolment would be continuing to decline. So except for the fact that we have expanded our school system and embarked on a new program, 52 of our 60 districts are still experiencing declining enrolment. That is the fact — declining enrolment.

Schools throughout this province have 50, 60, 70 or 80 percent of their classrooms that are empty. Who do we need to look out for here? Who are we speaking out for? It's not the students who are no longer in the system. It is the 550,000 students who are still in the system. That's who we need to be taking care of.

D. Routley: This year the Cowichan school board's finance committee was asked to "cut $3 million out of a gutted system." In the face of proposals which included eliminating adult education and cutting alternate programs, the finance committee has given up. They quit. They won't make the cuts demanded by this minister.

[1415]

My question for the Education Minister — if she's willing to step outside of that message box long enough to answer to trustees, students and parents in the Cowichan district: what is she going to do to rescue our districts from her underfunding?

Hon. M. MacDiarmid: Mr. Speaker, I must say I find it shocking when the members opposite talk about our school system in this way. They are well aware and their critic is on record as saying that we have one of the best education systems in the world. Undermining the public, parents' and teachers' confidence in this system is really quite appalling. I actually met….

Interjections.

Mr. Speaker: Members.

Just take your seat for a second, Minister.

Continue, Minister.

Hon. M. MacDiarmid: I actually met just yesterday with this school district, and we had an excellent and constructive meeting. This is a district that is well aware that they are facing declining enrolment of 20 percent in the last ten years. In spite of that, their per-pupil funding
[ Page 4626 ]
is actually up 37 percent. They realize the financial resources that are being put in place and that many of their challenges are directly due to declining enrolment.

Interjections.

Mr. Speaker: Members.

H. Lali: The Kamloops-Thompson school district faced a $5.4 million budget shortfall due to B.C. Liberal education funding cuts. Even after finding $3 million in savings through school closures and other drastic measures, the school district is still facing a $2.4 million shortfall.

To submit the legally required balanced budget, they will have to cut 57 jobs, 30 of which are teaching staff, and all of this while 60 percent of the schools in the Kamloops-Thompson school district will require replacement within the next 20 years.

My question is….

Interjections.

Mr. Speaker: Members.

H. Lali: In the absence of any support from or even due to the complete silence of the two lambs, the member for Kamloops–North Thompson and the member from Kamloops South — or is it the other way around? — I ask the Minister of Education why her Liberal government is making massive cuts to education funding in school district 77.

Why is it that the minister across the way won't get out of her public affairs bureau–induced message box and answer the question?

Interjections.

Mr. Speaker: Just wait, Minister.

Members.

Hon. M. MacDiarmid: One of the things, certainly, that we are very interested in is foundational skills, and one of those is numeracy. In the world of the members opposite, you take a school system and over ten years increase the funding by $1.3 billion. That's increase by $1.3 billion, and that's a cut.

The member opposite is talking about what's happening in schools around the province. Certainly with respect to school closures, we know this is always very difficult.

[1420]

But I'd like to quote someone today, and I'd like to ask members who said the following about school closures. Who said this? "Look, if a school is so short of students it makes it educationally not sound to remain open, then obviously it had to close." Who said that? Well, it was the member for Skeena.

Interjections.

Mr. Speaker: Members.

CIVILIAN OVERSIGHT OF
POLICE COMPLAINT PROCESS

M. Farnworth: Linda Bush's son Ian was killed in a tragic police shooting. She has been waging a public campaign to get justice in that terrible tragedy. She has stopped and cancelled her lawsuit against the RCMP, but she hasn't given up waging a fight for civilian oversight when it comes to investigating police complaints in British Columbia. In a quote Linda Bush stated: "The RCMP aren't the ones fighting civilian oversight. They're quite happy to have it. In B.C. it's the provincial government that is dragging its feet in this area."

So my question to the Attorney General is this. How long does Linda Bush have to wait and the people of British Columbia have to wait until we have true civilian oversight regarding police investigations in this province?

Hon. M. de Jong: This was a tragic set of circumstances. I think the loss of a young life is always, obviously, a tragedy, and Ms. Bush, as a parent, suffers that loss more than any.

On the question of civilian oversight, though, I do want to point out to the House that in any circumstance such as this, there is first involvement by the civilian coroner. That always happens. So that review takes place.

If it involves a community police force, we have just recently made changes to legislation that involves the Police Complaint Commissioner. Discussions are underway right now as part of the negotiations with the national police force to ensure that there is civilian oversight with respect to the RCMP operating in British Columbia.

YOUTH SUICIDE AWARENESS PROGRAM

M. Karagianis: Today we learned that the Ministry of Children and Families has cut the suicide awareness for youth program, known as SAY, that is run by the NEED crisis and information line. SAY has reached more than 2,000 students each year for the past 14 years, and it has saved lives. One student said: "The stuff we learned in the suicide class basically saved my friend's life."

So this question is to the Minister of Children and Families. What kind of backward thinking is she using to cut suicide and prevention education from greater Victoria schools?
[ Page 4627 ]

Hon. M. Polak: The change that's being made to the operation of the crisis line is directly related to our contracted service delivery project on the south Island. It is, in part, in response to changes that the Vancouver Island Health Authority has made to consolidate their crisis line.

In addition, we've also made changes to the way in which we provide for suicide prevention for children and youth. Things such as, in the south Vancouver Island area, the child and youth mental health department now has a Project Alive team that didn't exist in years past, and also the implementation of important programs like Friends for Life, which is an anxiety prevention and stress prevention–related mental health program that exists in all B.C. schools in grades 4, 5 and 7.

We're changing to meet the needs of a changing group of people who live in southern Vancouver Island, and we're very proud of the investment that we continue to make in double the amount for children and youth with mental health needs in British Columbia.

Mr. Speaker: The member has a supplemental.

M. Karagianis: This is really just shocking from this minister. The savings is $43,000. Yet this vital life-saving program will be lost here on the south Island. The other tragic consequences are that the kinds of supports that go into schools after a tragedy has happened to support students and teachers will also be gone.

[1425]

We know that, unfortunately, suicide is increasing among teens and has dramatically increased over the last couple of decades. We also know that 80 percent of those students seek help from a friend. Peer-training services are also disappearing with this.

Again to the Minister of Children and Families: can she explain what in the world she is thinking by cutting a service like this to vulnerable teens and their families? What in the world can she be thinking?

Hon. M. Polak: As I said to the member, this is not a budget reduction. It's part of our south Island contracted service delivery project to better align services with the needs of the community. The member should know that since 2003, we have more than doubled the number of children we are serving with mental health services, and we have more than doubled the financial support we provide for children and youth needing mental health services.

[End of question period.]

J. Horgan: Just for the attention of members and for Hansard, in my two-minute statement I referred to the sad-sack Salmonbellies. I just want to make sure that was on the record.

Orders of the Day

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

Mr. Speaker: Could members attend to their other duties so we can get on with debate.

Second Reading of Bills

Bill 9 — Consumption Tax Rebate
and Transition Act

(continued)

On the amendment (continued).

Hon. N. Yamamoto: I rise today to conclude my remarks and to speak against the amendment of Bill 9.

[L. Reid in the chair.]

The opposition has moved an amendment to Bill 9 that is a tactic to stall. Instead of using the time during these debates to intelligently express their concerns about the HST, this opposition has had the opportunity to announce to British Columbians what their position on HST is. But you haven't heard a definitive position yet. You know why, Madam Speaker? It's because they know this is good policy. All we've heard from the members opposite are some of the items and services that, as of July 1, we'll have to charge an extra 7 percent on, and we know there are some.

It's easy and I would suggest a little irresponsible to simply note some exceptions, because for every exception, there are huge benefits that accrue from removing the PST. The public should expect that the members opposite look at the bigger picture, but I guess that's what we were elected to do.

That bigger picture is job creation. The bigger picture is productivity. That bigger picture is our economy. But perhaps the bigger question is what fuels the engine of our economy. Today the fuel is the HST, and that is simply good tax policy.

Businesses can claim tax inputs to recover all of the HST that they've paid. The transformation to HST will mean a significant savings and a boost in productivity for businesses in B.C. because they will no longer have to pay PST. They will no longer have to prepare PST remittances. They will save on consulting costs because the PST rules right now are very complicated and frequently require professional advice in their interpretation. Employees will spend much less time trying to find the answers to PST questions, and PST audits will be eliminated.
[ Page 4628 ]

This amendment by the opposition reflects their inability to address reform of any kind. This amendment by the opposition ignores the consultation and advice that numerous organizations have provided to governments on both sides of the House over the past few years. Perhaps this is indicative of the opposition's inability to listen to sound advice.

The member for Port Coquitlam has introduced an amendment to ask that a Select Standing Committee on Finance and Government Services be struck to review repealing this regressive tax we call PST.

[1430]

Business has been asking government to streamline our tax system for years. We've been listening to the people who have created jobs in B.C., and who better to get advice from and listen to than the business organizations that represent hundreds of thousands of jobs in B.C.? They represent business owners who, month after month, waste time and money complying with this outdated tax.

These are the voices of people who know how much embedded tax consumers are paying, and these are the voices of people who know that our current system increases the cost of products and services to consumers.

This amendment suggests that we haven't been listening to the very business owners and people who've been begging us to harmonize all these years. It's also becoming increasingly obvious that the members opposite don't understand what good tax policy is. It's becoming obvious that the members opposite think that B.C. exists in a vacuum.

The members opposite would like to think that we live in a country that doesn't include New Brunswick, Labrador and Newfoundland, Nova Scotia and, more importantly now, Ontario — or a world that doesn't have 29 OECD countries that have transformed their tax system to a value-added tax like the HST.

I cannot support the amendment to Bill 9. Unlike the members opposite, I don't want B.C. to fall behind the rest of the country in economic recovery, because that is what will happen if the federal government can't implement the HST in B.C. But if that comes as news to the members opposite, it's because, like for most consumers, it's actually difficult to see the PST, which is a hidden tax in all the things that we consume. We want to get rid of that.

Jon Kesselman, a noted SFU economist, said that experts who study taxation are virtually unanimous that the HST is the right direction for this province. He said: "Sales tax harmonization fulfils all of the standard economic criteria for good tax policy with flying colours."

Strong leadership isn't about what's popular. Strong leadership is about taking positions that are selfless. Strong leadership is about having a crystal-clear vision of the future of British Columbia. Strong leadership is about integrity, and for the opposition to suggest otherwise is offensive and desperate.

I've witnessed the personal attacks on the integrity of the Minister of Finance, and I stand before you to give my full support to our Minister of Finance. In the fullness of time, history will prove it fortunate that we had someone like our Minister of Finance, with vision to transform our sales tax system during these challenging times.

The opposition has moved an amendment to prevent us from sales tax reform. The opposition has moved an amendment that will delay us from improving our productivity. The opposition has moved an amendment that will kill jobs. The opposition has moved an amendment that supports an archaic and Byzantine sales tax. The opposition has moved an amendment that embraces the accumulation of taxes in the production of goods and services.

The opposition has moved an amendment that supports increased costs for business. The opposition has moved an amendment that prevents us from helping small businesses reduce the sales tax compliance costs.

I'm in opposition to any motion to stall the process of repealing the PST. We have an agreement in place to transform our archaic sales tax system, and transition work needs to take place. There are provisions of this act that need to take place in ten days. This amendment will jeopardize our ability to do this.

C. Trevena: I stand here to support the motion, and I'd like to read the motion: "Be it resolved that Bill 9 not be read a second time now but that the subject matter be forwarded to the Select Standing Committee on Finance and Government Services and further that the committee be empowered to invite witnesses to appear before it to assist in its deliberation."

I wanted to read that back into the record because in some of the debate that has been happening about the amendment, there has been a lot of, at times, hyperbole, a lot of times a lot of angst.

What the opposition is doing through this motion is looking at how we can use one of the very important tools of this House, one of the committees that this House establishes, to examine this piece of legislation. This piece of legislation has been described as fundamental, one of the most important pieces of legislation that we'll see, possibly, in this decade. It is, without doubt, a very important piece of legislation, because it is a major change to our tax structure.

[1435]

The amendment is asking that we can have, really, further deliberation among ourselves as well as going outside on the bill which will eradicate the PST and allow the way for the HST to come in.

My colleague from Nanaimo, when he was talking about the amendment, used many biblical analogies —
[ Page 4629 ]
from the Old Testament, the New Testament, ranged across the way. He was very interesting and very enlightening. I would like to use a little bit of historical context in my remarks, as well as talking a bit about the present and obviously about the bill itself.

One of the things that we have to remember when we are discussing legislation in this place, particularly when we're talking…. I think any legislation, but as we say, this is really a change to our tax structure. It's a change to the way we're going to be financing these services and the infrastructure that we expect in this province.

We have to take things, I think, in a very considered approach. So I'd like members to think a bit about the history of this place and the history of the parliamentary system in which we operate. We don't operate in isolation; we operate within a system that has evolved for over a thousand years.

I was reading the other day about how there are questions about what's happening in Ottawa and referring that back to the Magna Carta in Britain. This is more than a thousand years of history of evolution of our political system. Part of that evolution involves what we have here — which is our committee structure — which is why I think it's really important that we can use the tools that we have within this House to make sure that we have very valid, very accurate and the best-informed policy to take to the people of British Columbia.

As I say, the history of this place and the history of parliamentary democracy are very important in this context. One of the things that I would like to remind all members is that we start our sessions with Bill 1, which is An Act to Ensure the Supremacy of Parliament. I'll read this because I think it's too rare that we are all aware of this — not just us in this House, but the people who vote us into this place — which takes me on to my second point.

The Act to Ensure the Supremacy of Parliament is always Bill 1 in any session.

"This Act to Ensure the Supremacy of Parliament is an important part of our democratic process. The purpose of this Bill, and its introduction prior to consideration of the Throne Speech is to perpetuate the established right of Parliament, through its elected representatives, to sit and act without leave from the Crown.

"This Bill simply asserts the right of the Legislative Assembly to give precedence to matters other than those expressed by the Sovereign.

"Introducing it at this point in the opening proceedings of the Legislative Assembly is a tradition that dates back to the reign of Elizabeth I when, on March 22, 1603, Parliament first recorded this assertion of independence from the Crown for purposes of legislation."

I refer to that now because, as I say, I think the history of parliamentary democracy and our role within it cannot be forgotten when we're talking about the evolution of policy and how we get to a certain place. We are now talking about a bill that is going to get rid of the PST to bring in the HST.

We've seen a lot of, really, a huge populace…. There's no question about it, there is a populist movement within this province opposed to the bringing in of the HST. As some people would say, it's the imposition of the HST. We've heard various levels of language — whether it's parliamentary or unparliamentary — about what people think is happening with the HST.

But without doubt, there is a huge opposition to it outside this place. It is incumbent on us within this place to make sure we are seen to be using the best possible practice, every single tool that we have within our powers as elected representatives, to ensure that we thoroughly examine this bill which will allow for the HST to be introduced. If we don't do that, we open ourselves up for a huge amount of questioning, a huge amount of challenge. I think we open ourselves up to even greater disillusionment than we are already seeing in our political process.

[1440]

We saw in the last election the lack of interest in our parliamentary system. We saw that people didn't want to turn out to vote. We had a real decrease in the electoral turnout, and I would hope that we all learned a lesson from that. We've now seen a real engagement by clearly thousands of people across the province in their opposition to this piece of taxation policy.

I think we've got to be very mindful of those two things when we are deliberating on this, which is why I'm fully in favour of this amendment. It will allow us to use a tool that we have given to us in this Legislature.

We want to ensure that people are engaged in the political process. We don't want to see people not turning out to vote and then complaining about things, and we want to ensure that those people who have concerns can be heard. That's why I think that this amendment really does deal with both problems. It allows people who are clearly so angry with the government for the way in which the HST has been implemented, or will be implemented…. I mean, it does go back partly to the election.

People didn't vote in the election. For whatever reasons, they didn't vote — whether they didn't feel engaged, weren't inspired. For whatever reason, they didn't vote in the election. But then after the election, that sense of disengagement, that sense of disillusionment, was really exacerbated by the announcement so soon after the election that the HST would be brought in, although it wasn't in anybody's election platform.

I think in both respects, the lack of engagement before the election and now this populist engagement…. If we can bring in the Select Standing Committee on Finance, which is an already established committee of this Legislature…. It is a creation of this Legislature. If we can use that to further the debate, allow people to come and voice their concerns, I think it would be exceedingly healthy for our democratic system. Here in B.C. I think our democratic system needs that.

I was hearing yesterday one speaker saying that they were really very disappointed in the way that we work in
[ Page 4630 ]
this House. We've always got the rhetoric going. We're always confrontational. I have to agree that it's a real problem with this style of debate. I mean, this is the way that we are, but we don't advance the debate. Oftentimes we don't listen to each other.

We have our political standpoint, and we stick to our partisan standpoint. We on this side of the House will, say, rail against the government, the government will give the good policy about what they're saying, and we won't actually have any real debate.

The committee structure. One of the things about the committee structure is that because it is bipartisan and because there is a limited number of people, it allows for debate. It allows for conversation. It allows for a discussion.

I think that those of us in this House, the 85 of us who have been elected by the people of our constituencies, all do hold dear the awareness and the concept of what we're here for, our role as legislators and the importance of fully debating and discussing legislation, and the privilege that is bestowed on us by our election to this place. I think that everybody in this place really wants to have some sort of engagement, not to just have the rhetoric but to be able to fully discuss these.

Other members have said that this side of the House, by moving this amendment, that we are just stalling. It's a stalling tactic. I would disagree. I think that it's very valuable. It would be very valuable to engage the people of B.C. in a very detailed discussion about what this tax is going to mean.

We can have people come. We as legislators can sit in the Select Standing Committee on Finance and Government Services and hear from people — hear from individuals, hear from organizations, hear from the interest groups — to make sure that we are actually listening to what is heard and not just each side of the House coming out with the validators and the interest groups that we have heard from.

[1445]

On this side of the House we have heard a lot from the tourism association and from the restaurant services and food services. These are the ones that we are espousing in our debates. On the government side, we are hearing from various chambers of commerce and others who are supportive of the government side of the debate.

But to hear from more people, to actually hear from the individual business people, to discuss what their situation is; to hear from those voices from the non-profit organizations, what their experience is and how they feel, if they are going to be impacted, what their concerns are….

I really do think, because this is such an important change in our taxation policy, that it demands this close examination from both experts — from people who have expertise in tax reform, from academics, from people who develop public policy — as well as from people in the public. One of the questions that keeps coming back is: why was it done so quickly so soon after the election, and why was it only after the election that we were getting the research?

I know that various members of the government side have talked about the fact that this has already appeared before the Select Standing Committee on Finance and Government Services. I've got to say that at that time, in 2008, what was asked for was a cost-benefit analysis to be conducted to determine whether a harmonized sales tax may be worth considering.

The only cost-benefit analysis we've seen to this date is the Mintz report, which has been quoted quite regularly, but that came out after the fact that this was going to be brought in. I think that there really is a serious need to hear from other people, other tax policy experts — and there are many of them, I'm sure, both here in B.C. and from other parts of the country where there is an HST and where there isn't an HST — why different jurisdictions want to bring in such a tax and why others don't. This is all part of an informed debate that could be brought out by the select standing committee.

In our own rule book — which all members are given when we start as legislators; we're given the detail book on the standing orders of this House, Parliamentary Practice in British Columbia — when it's talking about the select standing committees, it does allow for the fact that issues that are part of a select standing committee still can be debated within this House.

It says, as part of the analysis on Standing Order 68: "The mere fact that a subject matter has been referred to a committee for investigation may not preclude a debate in the House on that subject matter after the committee has reported." So it allows for continued debate on the issue. It's not stymieing debate. It's not closing debate. It's allowing for a more informed debate, and I think that's really what is lacking.

We are lacking, clearly, in this House. I think, from hearing the arguments from both sides of the House, we definitely need a more informed debate on this.

As I say, the last time I spoke in opposition to the bill before I was able to speak on the amendment, I was speaking after the Minister of Forests and Range, who said, and I'd like to quote from him, that it was a pleasure for the minister at that stage to discuss the bill on second reading, which is "undoubtedly one of the most important debates that will likely take place in this House in the second decade of the 21st century."

Interjection.

C. Trevena: The Forests Minister likes his own words, and I'm very pleased. I'm pleased that I was able to put them back on the record, so they're quoted twice in Hansard.
[ Page 4631 ]

If this is really the most important debate in the first decade of the 21st century, it is incumbent on us to use, as I say, every tool available and to have a fully informed debate about the pros and the cons of it, the benefits, the losses and how it would work.

[1450]

I would ask that we take this motion very seriously, that we pause and, before everybody votes on party lines when it comes to the vote on the amendment, that government members actually do stop and think — as we'll stop and think, when we debate any piece of legislation — of our role here in deciding what is happening in British Columbia.

There are a number of committees in this Legislature that have been appointed. We have the Select Standing Committee on Finance. Listed in the committee structure, there should be ones on Aboriginal Affairs; Education; Finance and Government Services, this one which we want to refer the bill to; Health; Public Accounts; Parliamentary Reform, Ethical Conduct and Private Bills; Crown Corporations; Legislative Initiatives; and Children and Youth. They meet variously. Some haven't met at all; some meet very regularly.

This committee on Finance and Government Services. It's an established committee. It travels around the province before the budget, before its deliberations and hears from people.

I for a time was on the special committee that was set up by this House. It was a special committee set up by this House on sustainable aquaculture. That was set up. I think it was set up because there was clearly awareness that there was a problem about aquaculture, a huge disagreement within this province about the future of the aquaculture industry. That is very important for me because I represent a constituency where aquaculture is a major industry, both finfish and shellfish aquaculture.

I was very pleased that the government had decided to set up a special committee of this House to discuss that. As part of that committee, we travelled around the province. We talked to people literally up as far as the Hazeltons on the Skeena, so we were hearing from people who had experience of the salmon up there. We talked to people throughout my constituency, talked to people in Victoria, in Vancouver.

People were able to submit…. We had pages and pages — in fact, volumes — of submissions during that committee — people who were really engaged and who wanted to be heard, people with expertise, some people who were just passionate. That was a really worthwhile endeavour.

Sadly, the government has acted on only one recommendation of that report. I'm still hopeful that many of the other recommendations will be acted upon, but only one recommendation has been acted upon.

What I would hope would be that through this committee, a similar process can happen — that this committee can go to different areas of B.C., to places where people want their voices heard, to places where there are experts, people who are in business, people who are in the tourism sector, people who can actually participate in the debate.

It is a supremely worthwhile endeavour if we want to get this policy right, if we want to make sure that it is the right thing for B.C. — which this side of the House doesn't think of — to have that committee listen to what people have got to say.

It'll give the opportunity to hear from the different stakeholders, to hear from — as I say, we have our stakeholders who are very concerned — tourism operators. The Council of Tourism Associations has suggested that 10,000 tourism-related jobs would be lost, and it could cost the tourism industry up to $545 million a year and also reduce government tax revenues. It'd be very interesting to hear from tourism operators themselves to explain the impact on their operation, to hear from the council itself to explain these facts.

We've heard from the restaurant services association, who've called it a meal tax. We on this side have heard a lot from them. They say it's going to cost their industry $750 million a year, which is an astounding $50,000 per restaurant in B.C. Again, accepting this amendment, having this motion, would allow that industry to come forward and explain its findings, to show its accounting, to show why it feels it is going to cost this much.

[1455]

It would allow us to hear from the First Nations, who feel that they haven't been consulted fully on this and are very concerned about that. The Union of B.C. Indian Chiefs has recently written a letter where they are very worried about the "lack of any substantial consultation." I'm quoting from the letter. I assume it's gone to all MLAs, but this one was addressed specifically to me. One of the signatories to it, one of the members of the Union of B.C. Indian Chiefs, is Chief Robert Chamberlin, who is a constituent of mine.

It says that the plan to bring in the HST, which would come through Bill 9 if this motion doesn't allow for the further debate….

"There has been a lack of any substantial consultation process for the proposed HST on First Nations families and communities. The Union of B.C. Indian chiefs, UBCIC, opposes the proposed HST. To our great frustration, neither level of government has agreed to meet or speak with the UBCIC or any other First Nations group, despite the pressing and serious nature of this issue and the government's legal duty to consult."

I believe that for the Union of B.C. Indian Chiefs, the select standing committee referral may not be enough. They want specific consultation, but it would be an opportunity to go to those communities and engage with people. The government side can be talking about what the HST means. But more than anything, it is an opportunity for people to explain what they feel the impact
[ Page 4632 ]
will be, how they have done their accounting, what they see it's going to be.

I think it really is very important. I've got to say that even people who usually support the government side, the people who are usually very vociferous in saying that the government is doing the right thing on various pieces of legislation, are concerned about the allocation of the harmonized sales tax.

As was mentioned in the budget earlier this year, back at the beginning of March, the money from the harmonized sales tax was going to go specifically to health care. This has raised some concern. I'm not sure I have ever before quoted from the Fraser Institute in this Legislature, but I'd like to quote from the Fraser Institute, which is very concerned about the HST being allocated specifically to health care and is saying that such legislation does nothing to reduce costs and improve services.

I may categorically disagree with the Fraser Institute on most issues, and the rest of the article I actually do disagree with — a lot of the rest of the article. The specific concerns they have could be discussed and could be examined at a meeting of the Select Standing Committee on Finance and Government Services.

This isn't a spurious amendment. It isn't an amendment that is here just to fill the time. We all know there is legislation that needs to be discussed. We all know this is very serious legislation, and we know it's serious legislation that is concerning a huge amount of people. I think this motion would allow that debate to occur fully.

I've got to say that it would also allow maybe some more specific examination of the harmonized sales tax from different groups. For instance, we know that the harmonized sales tax will not be included in fuel. It's not there in gas, but it's going to be there — this is one thing that we on this side of the House have raised quite a lot — on bicycles and bicycle equipment.

We now are going to be paying that bit extra for Energy Star appliances. There are various levels where it is being brought in, which have been argued on this side of the House to be contrary to the government's avowed assertions that it's going to tackle climate change. I mean, the very fact that you now have HST on bicycles but there is going to be no HST on fuel for cars does seem to be a very basic contradiction.

Referring the bill to this committee would allow for that debate to be aired. It would allow people to explain why it is good to have no HST on gasoline. Why is it good to have no HST on bicycles? Let's bring forward those arguments. Let's hear them out properly rather than the back-and-forth rhetoric in this Legislature, where one side says it's wrong and the other side says it's right.

[1500]

Let's actually have a more informed discussion, a smaller discussion with the number of people who are on the committee. It's a committee chaired by the government. There is only one committee in this structure that is chaired by the opposition, and that's Public Accounts.

It's a committee chaired by the government. It has a majority of government members on it. But it would really allow for specific debate — say, a debate about climate change. How does the HST impact all our desires? I believe that everyone in this Legislature has a real concern about climate change and how we are seriously going to tackle it.

This is a serious issue. How are we going to attack it? What are we going to do differently? How are we going to look at the future of B.C. in a way that is addressing the real needs of the 21st century? This committee could be a venue for that sort of discussion as well.

I think that one of the problems, and one of the concerns that has come, is that there hasn't been a lot of scrutiny and a lot of examination. I know that we have within the structure of our own debates…. We are now in second reading of this bill, and the opposition has brought in an amendment to the bill.

In second reading we have the rhetoric; we have a debate back and forth. We all stand up. We're all standing up, effectively for half an hour each, to say what we believe is either wrong about the HST, on this side of the House, or right about the HST, on the government's side of the House.

After this stage we get to the committee stage. There is a committee stage within the bill, which allows for our side of the House to question the Minister of Finance, and he is supported by very highly qualified Ministry of Finance staff to analyze the bill.

The critic for Finance, the member for Surrey-Whalley, has the opportunity to stand in this House and question the Minister of Finance. But I think one of the issues is that that isn't enough. I think this is one of the problems that we in this Legislature have in many ways — the use of committees and how we use committees.

When we have a bill being discussed, the committee stage of the bill is restricted in that way. People who watch governments and are not really close watchers see the different ways of doing it and may wonder why in Ottawa they have a much broader system, so when a bill comes before the House, when it goes to committee stage, they can bring in witnesses.

They can bring in experts. They can bring in people to talk about it. We don't do that. We have a very structured committee stage at which we have our critics and members of the opposition directly asking the minister questions.

I think that by using this as a tool, it would allow us to broaden out the committee stage in a very healthy way. I think that the committee structure could be used to a huge extent to include people in what we are doing in this House, to get people to feel that they're involved, to allow people to bring in their expertise — and not
[ Page 4633 ]
just on this bill. I think in many bills it would be an extremely healthy evolution for us in this House.

J. van Dongen: I am pleased to speak today on Bill 9 and specifically to speak against the Bill 9 amendment tabled by the opposition.

The Minister of Finance has set out a timetable for the elimination of the provincial sales tax and the implementation of the harmonized sales tax, and I believe that timetable must be upheld in the best interests of British Columbians. The idea of a harmonized sales tax has been available for many years, but it was only recently that the federal government finally made it attractive and flexible enough for our government and our Finance Minister to decide that now was the right time.

[1505]

Any delay in implementation of this complex transition, I believe, will create further uncertainty, which is not in the best interests of workers, families, consumers or business in British Columbia.

These changes proposed by the government allow British Columbia to set its own combined tax rate. At 12 percent, the lowest in Canada, it is the biggest single thing that we can do to strengthen our economy, based on the advice of leading economists in our province and in our country. Newfoundland and Labrador, Nova Scotia and New Brunswick all have a harmonized sales tax. Quebec has a similar value-added tax called the Quebec sales tax, and Ontario, as we know, plans to introduce a harmonized sales tax on July 1, 2010.

The B.C. Agricultural Council, the B.C. Business Council, chartered accountants, the general accountants and the Retail Council of Canada are just a few of the sectors and organizations in favour of the HST. The list is actually quite a bit longer, but they all agree that the harmonized sales tax means more jobs for British Columbians. Max Logan, the B.C. director of the Retail Council of Canada, says that "The time savings of collecting just one tax versus two is really going to make life easier" for retailers.

The Chartered Accountants of British Columbia fully support the provincial government's recent announcement to harmonize the provincial sales tax with the federal GST and have repeatedly called for government to implement this policy initiative. Richard Rees, the chief executive officer of the Institute of Chartered Accountants, says: "We have been calling for harmonization for several years. Given the current economic climate.— and Ontario's recent move to harmonization — there is no better time than now to take this important step."

The NDP's amendment to stall Bill 9 and not repeal the provincial sales tax is another example of how the NDP put forward a motion but fail to state their unequivocal position on the harmonized sales tax. As legislators, we have the duty to inform ourselves and act in the best interests of British Columbians.

Under the provincial sales tax system right now, there are many hidden costs. Currently provincial sales tax is applied at every step in the creation of a product. Those multiple PST charges are embedded in the price that we pay at the store as consumers, even though we can't see it. And of course we pay PST on the final purchase price as well. The present embedded provincial sales tax means higher production costs, less investment and fewer jobs.

The harmonized sales tax will mean that B.C. businesses will avoid $2 billion in double-counted PST costs that may be passed on to consumers or used to keep small businesses in B.C. viable. That's $2 billion saved. Surely the members opposite would want that for British Columbia.

It is quite simple. Under the proposed harmonized sales tax, those embedded costs are removed for savings. Costs of doing business will come down as the current 5 percent GST rebate to business translates into a 12 percent HST rebate with harmonization. This proposed amendment to Bill 9 would keep rebates at 5 percent and not 12 percent. So not only would the businesses keep paying embedded PST; the consumer would continue to pay, ultimately, for those embedded costs.

Our government wants our province to progress, and I hope the opposition would as well. The HST will make British Columbia not only one of the most competitive jurisdictions in Canada but in the industrialized world as well.

[1510]

What this means is that British Columbia will be an attractive place for investments to create long-term, stable employment — long-term, stable employment for workers and their families — and it will help to keep businesses viable that today are struggling and trying to survive in a very competitive domestic and export market environment.

"The cost of not following Ontario into an HST system to ensure we continue to be competitive within the Canadian and world economy is too great, and the risk is unacceptable," says David Hull, the executive director of the Abbotsford Chamber of Commerce. I commend David for his leadership on this issue.

By simply lowering the front-end tax on new investments, the harmonized sales tax will encourage further capital investment, making B.C.'s economy more competitive and creating new jobs.

This amendment to Bill 9 doesn't create solutions. Just as I am against this amendment, I am concerned about the fearmongering and misinformation that some people are putting out for purely political purposes. There are a lot of myths being perpetrated, and sadly, many of them are coming from the opposition.

PST is very complex, and the harmonized sales tax is very complex. Not everyone understands it, so there can be innocent errors out there. But I also say categorically
[ Page 4634 ]
that there are groups engaged in anti-HST campaigns for political purposes.

One is the NDP, and the other is former Premier Vander Zalm, both of whom have been noted to have factually incorrect information on their websites. So I ask: is the NDP committed to putting out information on the HST that is factually correct? The evidence so far suggests otherwise.

As publicly elected representatives, we have a duty to learn the facts. On our side of the House we are working to make sure that British Columbians know the facts about HST and not the misinformation and innuendo put out by others. I am talking to my constituents, particularly to seniors and to working people, about their concerns.

Let's look at some of the myths and misconceptions around HST. Heating your house using oil, natural gas, electricity, propane or wood will not cost more with the HST. Point-of-sale rebates will be issued for residential energy. Seniors do not need to worry about higher heating and electricity costs. The cost of their heat and light will not go up because of HST. It will not cost more to fill your prescriptions due to HST, and it will not cost more to put gasoline or diesel into your vehicle due to HST.

The majority of retail items will see no tax change with HST. This includes new cars, trucks, boats, furniture, electronics, toiletries, adult clothing and pet food, just to name a few.

There are a lot of people out there who believe that books, child-sized clothing and residential heating will be subject to HST, but that is simply not correct. All of these items are also HST-exempt.

In addition, like the GST, the HST will not apply to basic groceries, residential rent or strata fees — three items which account for a large proportion of total expenditures by those in the lower and middle levels of income.

Almost all other items that are currently zero-rated or exempt from the GST will also be zero-rated or exempt from HST. What this means is that any goods or services that the consumer does not pay GST on today, they won't be paying HST on either.

It is a fact that there are some consumer goods and services — such as haircuts, movie tickets, eating out at a restaurant, bicycles, gym memberships — where the HST will add to the total price consumers pay, but it is important to note that the businesses providing these services also get the benefit of the elimination of hidden PST costs.

[1515]

With the harmonized sales tax, more sales tax will be rebated to small businesses on their business inputs, thus lowering their costs and enabling them to potentially lower their prices to consumers.

Scare tactics that claim the HST adds $2,100 to a yearly bill for seniors are also just not true. One e-mail suggests that people will have to pay more for car insurance, home insurance, home heating, gasoline, electricity, etc. This information is also incorrect. The reality of it is that the HST won't change the price of any of these items because they are either exempt, rebated or currently subject to PST and GST.

Recently Fred Armstrong, the publisher of the Abbotsford Times, put it this way in an editorial: "The HST is not hidden, it's not antidemocratic, and it's not evil. It's a harmonized sales tax with fewer loopholes than we have now." I commend Fred Armstrong for his integrity to stand up and say the way it is.

It is amazing that the opposition is actually against this tax when more than 130 countries have already adopted a similar tax policy and it is supported by all the senior, well-respected economic think tanks in our country.

All industrial sectors in British Columbia will benefit from sales tax harmonization and will see their effective sales tax costs on new investment drop by over one-third. Small businesses will also see substantial benefits, with their sales tax costs on new investment declining by almost 60 percent.

The harmonized sales tax will remove $1.9 billion in costs from job-supporting sectors in the forest industry, the mining industry, the oil and gas industry, construction, agriculture, manufacturing and transportation, allowing these industries to support local jobs.

The $1.9 billion breaks down this way: $140 million in cost savings in the forest sector, $80 million removed in costs for the mining and the oil and gas sectors, $210 million of costs removed in the transportation sector, $880 million in costs removed from construction, $140 million in double-counted PST from the manufacturing sector and about $19 million saved in agriculture.

For these reasons, I am opposed to this amendment. And there are many more reasons. Small, medium and large businesses are expected to save a further $150 million annually in compliance costs under the new streamlined single harmonized sales tax system. As I said, this applies directly to all of the industries that I've mentioned, including agriculture in my constituency.

I want to refer to a conversation that I had recently with Dave Holmberg, the owner of Bobcat Country in my constituency, and his two sons Dave and Phil, who have had to deal with the headaches of a provincial sales tax system for a long time. Bobcat Country sells skid-steer loaders and related equipment and attachments.

Dave and his two sons are thrilled about the harmonized sales tax because it means no more two sales tax systems; no more frustrating and time-consuming provincial audits; and no more very confusing rules, such as loader attachments for agriculture that are non-taxable but the same loader attachment for industry that is taxable.
[ Page 4635 ]

Harmonized sales tax is going to help them save money, keep their business viable and employ people in my constituency.

[1520]

The harmonized sales tax is estimated to also save B.C. taxpayers $30 million annually, as our province will no longer have to fund the administrative costs associated with a provincial sales tax. This means that people like Dave Holmberg of Bobcat Country and others like him will save money and not have to worry about constant PST audits because that system was so complex to enforce. These savings can make the difference between some businesses staying open or shutting down. Every time one of these businesses decides to stay open, it means they will maintain and create jobs for British Columbians.

I want to speak a little bit about our government's record of positive tax measures. Effective January 1, 2010, the basic personal amount of tax credit was increased to $11,000 from $9,373, an increase of $1,627. In addition, the spouse and equivalent-to-spouse credits were also increased over 2009 levels. B.C. lowered the small business tax rate from 4½ to 2½ percent in 2008, the second-lowest tax rate in Canada. By April 1, 2012, the provincial small business tax will be cut again to zero, the lowest in Canada.

For most taxpayers, B.C.'s personal income taxes have been reduced by 37 percent or more since 2001, and an additional 325,000 low-income British Columbians now pay no provincial income tax. As a result, British Columbia has the lowest provincial personal income taxes in Canada for those earning up to $118,000. The introduction of the HST follows more than 120 tax reductions introduced since 2001 by our government.

The proposed amendment to Bill 9 stalls our families and seniors from getting the net benefit of increased tax credits. More than 1.1 million British Columbians — that's a quarter of our population — will benefit from tax credits, thanks to the harmonized sales tax. Low-income earners making up to $20,000 per year will get an additional tax credit of $230. In families with incomes up to $25,000 annually, each family member will receive a $230 tax credit. For a family of four, that's $920 back to them.

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 in addition to the existing GST tax credit. Lower-income British Columbians unquestionably come out ahead with the harmonized sales tax and associated tax reductions and tax credits that our government has put in place.

A common complaint about the harmonized sales tax is that it benefits big business and that the average taxpayer will have to pick up all of the savings that big business will receive. That simply isn't true. HST benefits business of all sizes, and research by the C.D. Howe Institute into the effects of HST in the Atlantic provinces has shown that the net benefit to business of tax savings did flow through to consumers. That's research done by the C.D. Howe Institute into the actual implementation in the Atlantic provinces.

There are a lot of small businesses and small agricultural businesses in my constituency. For years the B.C. Agriculture Council has been filing annual submissions for additions of items and services to the provincial sales tax exemption list for bona fide farmers.

[1525]

The system has been frustrating for both farmers and farm retailers and government, so the B.C. Agriculture Council had made a considerable effort to work with government on the development of alternative options. The proposed harmonized sales tax is consistent with B.C. Ag Council requests for changing the current system, as it will significantly streamline and simplify the process. "This will have a significant and positive impact on agriculture overall, and it's consistent with what our members have been calling for," said B.C. Agriculture Council chair and Abbotsford-area turkey producer Garnet Etsell.

Country Life, a provincial agriculture-focused newspaper, featured an article where Garnet Etsell noted that the B.C. Ag Council has lobbied for PST reform for a long time and says that HST "gives us everything we asked for and more." "This is an ongoing annuity of $15 million to $23 million per year," said Garnet Etsell.

What's important here is that employees of small agrifood businesses are also beneficiaries. When companies gain competitive advantages, they can grow and expand, hiring more people over the long term. Small business is now a more viable option for British Columbians. The fact is that with the implementation of HST and the small business income tax dropping to zero next year, our local businesses will become more competitive.

We need to move forward with Bill 9 and vote down the amendment and proceed with the Finance Minister's timetable to eliminate the provincial sales tax and harmonize our sales tax system with the federal government.

Another quote from Richard Rees, the CEO of the Institute of Chartered Accountants: "Harmonization will reduce compliance costs for businesses, save consumers money, maintain the province's competitive position within Canada, reduce barriers to doing interprovincial business, improve productivity and reduce administrative costs for government." That's a quote from Richard Rees, a chartered accountant.

Hon. Speaker, a lot of work has been done by Ministry of Finance officials to estimate the effects of HST on citizens and families. I'm going to give you four examples of their calculations.

For a family of four with a $60,000 annual income, the estimated impact is $8.91 per month. For a senior
[ Page 4636 ]
couple with a $30,000 income, the impact will be an additional $1 per year, virtually a break-even situation. A family of four with a $90,000 income, a higher income level, will be impacted by an additional $15 per month. I've rounded that up a little bit. A family of four with a $30,000 income will actually benefit by approximately $45 per month because of the B.C. harmonized sales tax credit. Those are the best estimates of the expected or calculated impact on our citizens.

When I look at the list of organizations that are independent and are non-partisan which have asked over many years to our budget consultation committee and through other channels, it is a very long list of organizations that support the HST. The B.C. Chamber of Commerce, Coast Forest Products Association, Retail Council of Canada, Chartered Accountants of B.C., Canadian Manufacturers and Exporters, B.C. Road Builders Association, Mining Association of B.C., West Fraser Timber, B.C. Agriculture Council, Business Council of British Columbia.

I should say, hon. Speaker, that I regard Jock Finlayson as a very independent and competent economist who says what he thinks and speaks his mind on these issues, and he supports the harmonized sales tax. The B.C. Progress Board and the Canada West Foundation.

[1530]

In addition to these organizations, we have leading economists from prominent organizations and think tanks throughout British Columbia and Canada. Just to give you a few: Glen Hodgson, chief economist of the Conference Board of Canada; Michael Smart, C.D. Howe Institute; John Winter, B.C. Chamber of Commerce; Jock Finlayson, Business Council of British Columbia; Dr. Kevin Milligan of UBC's department of economics; Ken McKenzie, Canada West Foundation; Ben Dachis and Alexandre Laurin, C.D. Howe Institute; David Baxter, Urban Futures; and Jon Kesselman, Simon Fraser University.

All of these people support the merits of a move towards the harmonized sales tax in that it is good for consumers, good for workers, good for families in British Columbia.

[C. Trevena in the chair.]

As I approach my close, I'm going to quote further from Richard Rees, CEO of the Institute of Chartered Accountants. I believe that he sets out, in a very independent and non-partisan way, his views in an op-ed piece that was published in the newspaper. His comments include the following:

"Good public policy does not always equal good politics. Nowhere is this more apparent than in the coverage of the harmonized sales tax. From a policy perspective, it is widely understood that business input taxes are overly complex to administer and are a drain on investment" — he's talking about input taxes such as the PST — "unlike value-added taxes such as the GST and HST, which are simpler to administer and encourage investment.

"However, while harmonization is good public policy that will benefit British Columbia's economy, the transition can be challenging…. To date the debate has tried to pit consumers against business. But in reality consumers are the business community. The majority of B.C.'s businesses are small businesses employing less than 50 people. They are your neighbours, and they are the backbone of B.C.'s economy."

One final quote from Theodore Hesburgh: "My basic principle is that you don't make decisions because they are easy. You don't make them because they are cheap. You don't make them because they are popular. You make them because they are right."

I'm proud to be part of a government that is not afraid to make the tough decisions that are good public policy even though they are not easy politically. That's why I will vote against the opposition amendment, which is simply designed to delay a decision which admittedly is not easy politically but is in the best interests of all British Columbians.

M. Karagianis: I'm very happy today to stand here in the House and support the motion to refer that the member for Port Coquitlam presented to the House under Standing Order 78A: "Be it resolved that Bill 9 not be read a second time now but that the subject matter be forwarded to the Select Standing Committee on Finance and Government Services and further that the committee be empowered to invite witnesses to appear before it to assist in its deliberation."

I have stood in the House previously and made my position very clear with regard to Bill 9 and the HST that this government is in the process of trying to implement in the province of British Columbia. This amendment or this motion to refer that we have before us is, I think, the right and appropriate mechanism to be using at this time in the course of these debates.

I want to talk about why I think it is the appropriate step to take and why I would urge government to use this opportunity to take a very sound and sober second look at their intentions on Bill 9 and the HST and to take this opportunity to listen to the public of British Columbia. This mechanism offers us all of those opportunities.

[1535]

It's very interesting listening to the members of the government trying to justify, after the fact, the implementation of the HST. In fact, I've heard so many of them talk about how bad the PST was for the province of British Columbia, but it's interesting that we've never had that discussion before the HST was discussed. In all of the years in this House that the government has been in power, they have never once voiced or talked about or hinted at this widespread discontent with the PST.

Leading into the election a year ago, again we heard no discourse on the discontent with the PST. So it's not surprising that the public is very concerned about not only the deception around the intentions of the govern-
[ Page 4637 ]
ment on the HST but the fact that now we seem to be rewriting and revisiting history. The PST that the government had not one word of debate on in all of the eight years prior to the election has suddenly fallen to the axe as being some kind of heinous tax.

I've even heard members of the other side talk about the HST as a progressive tax and PST as regressive. They've got it backwards, which goes to demonstrate how very little the government has applied in the way of common sense to this. In fact, the PST has been a progressive tax system, and the HST is a completely regressive tax system.

How members on the other side have managed to flip that around to justify it, I guess, is part and parcel of the mystery of the great HST non-debate in the months leading into the last election and then, of course, the very quick about-face that the government surprised the people of British Columbia with right after the election.

I'll go back to what I said on my debate on Bill 9. I don't believe the government, in fact, even has the mandate to implement the HST. It was not something that was ever presented to the people of British Columbia. They've never had a chance to vote on it. If the government felt so concerned and very sure that this was the great saviour, why was that not delivered and debated on prior to the last election?

I think it's very clear that community sentiment around the HST is running at a very high level. In fact, I've heard people talk about being livid and furious. I hear it in my community every time I step out of this place and engage with my community. So it would seem to me that this opportunity now to refer this bill to a committee for sober second thought and for consultation and for discussion and engagement with the citizens of British Columbia and businesses in British Columbia and the tourism industry and the restaurant association of British Columbia….

This is an opportunity. This is a great opportunity. It is the absolutely appropriate mechanism to use right now in this debate in order to get the government to engage with the citizens of British Columbia and maybe listen to the citizens.

It was very interesting listening to the previous speaker talk about how these taxation issues — PST, HST — are so complex. Well, I would say it's not complex at all. The people in this province clearly understand that this is a tax shift under the HST of $1.9 billion away from business onto consumers. There's no complexity there. The voters and citizens of British Columbia clearly understand that.

I want to refer to a letter that appeared in the Times Colonist just two days ago. I think it really shows the level of sentiment running through the province right now, which I hope would urge the government to consider supporting this referral to committee. It just shows how clearly the citizens of British Columbia feel about the government's HST deception and their attempt to kind of shove this tax down the throats of British Columbians.

I'm going to quote from a gentleman, Stephen Hammond, who wrote to the TC. I will exclude names, because he certainly does refer to the Finance Minister: "The Finance Minister…says people are signing the anti-HST petition based on false information. When this marvellous invention that will save the world came to light immediately after the last election, it was clear that we were lied to. I don't like to be lied to and played a fool. He lied to us. The Premier lied to us, and every Liberal MLA stands up…."

[1540]

Interjections.

Deputy Speaker: Member, Member.

M. Karagianis: Madam Speaker….

Deputy Speaker: Member, please.

Interjection.

Deputy Speaker: Be careful that you are just quoting….

M. Karagianis: Madam Speaker, this was a letter that appeared in a public newspaper from Mr. Stephen Hammond. These are not my words. I am simply reading from a newspaper article. Madam Speaker, I continue….

Interjections.

Deputy Speaker: Member. Member.

Member, if you cannot do it directly, you cannot do it indirectly. I would like you to withdraw, Member.

M. Karagianis: In that case, Madam Speaker, I withdraw. I will read the last part of the letter instead.

This writer says: "While I hugely object to the transfer of $2 billion in taxes from corporations to citizens, I will be seeking out and signing the petition because…." I will not use the language. This writer believes he was misled.

His purpose for signing the petition and seeking to support the initiative is not about the complexity of the HST but because he felt he was misled. That is the level of sentiment. Certainly, I hear it on the doorstep as do all members on this side of the House, and I can't believe for one moment that government members are not hearing this.

I think that, again, this motion to refer this to committee is appropriate so that those people who are feeling so
[ Page 4638 ]
angry will have an opportunity to have a real and true consultative engagement with government on this. As much as we hear members of the other side talk about the minor discomfort that the HST will create, the very minor implications it will have on households, I would have to say that article after article, expert after expert has been very clear in writing, in the public, in articles that have appeared in the newspaper.

Here is one that is several days old as well, an article in the Vancouver Sun from Derrick Penner talking about: "Developers are doing what they can to beat the harmonized sales tax July 1 deadline." It goes on to say: "New homes have always been subject to the 7 percent federal GST, but the harmonized tax will add the 5 percent provincial tax to transactions.""The province included a rebate program that will pay consumers back for taxes on new homes up to $525,000."

In Metro Vancouver the benchmark price for an average typical property is $800,000. This writer goes on to say that after July 1, the HST will add $35,000 to $40,000 onto these homes.

We can see immediately that there are huge implications to new homes from the HST. As much as members of the other side want to minimize the implications of the HST, $40,000 on new home purchases is a huge hit to the purchasers at a time when we know that real estate costs are escalating out of control.

I have another article here from April 17, and this ran in the Times Colonist. This one talks about rental buildings and how rental buildings are selling slowly. I want to read from this article: "Specialist says there is cause for concern as 2010 progresses." Now we all know that rental housing and rental apartments are very difficult to find, certainly here in the capital region, but affordable rental properties are very hard to find.

"Garry Barsalou, who specializes in the sale of multi-unit rental buildings, said in his annual report there are causes for concern as this year progresses…. Increasing vacancy rates are pressuring rents downward, and the introduction of the harmonized sales tax in July will increase operating expenses for building owners."

Now, I know that often members in here like to quote that the HST is not going to be on rent, but here we have a discussion on rental buildings and whether or not there's going to be a huge implication there. We have someone — not a New Democrat, not someone in this House — writing in the paper about how the HST is going to have huge implications to operating expenses for building owners, therefore starting to jeopardize the availability of rental stock.

[1545]

That's a huge concern, I think, because rental stock, affordable rental buildings, in fact, are a requirement for a good and healthy economy for working people, for anyone who wants to live in the inner city and work in jobs within the inner city. If we see any kind of reduction or erosion of that kind of building stock, I think it's something that we should be very concerned about.

I know that the individual who wrote that, and perhaps the industry itself, would like an opportunity to present their point of view to government. So there is one more justification for this referral to committee and for support of this. In fact, I think the government would welcome an opportunity to discuss these issues with the development community, with those who are involved in rental units.

An article here that also ran in the Times Colonist, March 31, talks about how the implications for pensioners are going to be significant. HST will still make it tougher for pensioners, mutual fund buyers and those using investment counsellors to properly save for retirement. Again, an issue that is top of mind. It is an issue being debated right across this country — the issue of affordability, of retirement savings, of retirement opportunities for many of us in the working class.

So anytime you see seniors impacted on their ability to save for their retirement, live through their retirement, you have to ask yourself: is this a good move? Is the HST a good move in this particular circumstance?

I think there's an opportunity here for the government to sit and listen to experts from that field and talk with them. So I would say there's a great opportunity here for members of the government to join us in supporting this motion to refer this to a committee and have an opportunity to engage with British Columbians on their concerns and with experts in various fields on the concerns they have about how the HST will impact new buildings, rentals, seniors.

In my closing debates on Bill 9, I talked about the vast number of petitions that have been delivered here in the House. Tens of thousands of signatures were delivered in this House. Certainly, the growing discontent, the public discontent and opposition to this is very evident to everyone in British Columbia. If the government members wish to turn a blind eye to that, I am somewhat mystified as to what their justification is for ignoring constituents — their constituents, all constituents of British Columbia.

I did say: why not listen to the people? Why not have that opportunity to have an engagement with the public? The government refused to do it in the days leading into the election, when they rightly should have done it. They therefore have no mandate to institute the HST now. But they do have a chance here with this referral motion to engage with British Columbians, to listen to the people and in fact to have a second sober thought on this and perhaps repair some of the damage done.

Now, one of the things I did learn in my nine years in local government is that probably the most important thing you can do in determining the future forward for your community, or in this case for the province, is
[ Page 4639 ]
due diligence. That, I believe, is again absent from this debate on the HST.

We heard, leading right up to the election, from this government. They had put in writing that they were not supportive of the HST. They had engaged in no dialogue or debate on the PST. Yet within days of the election, they were contacting Ottawa to institute the HST in, I think, one of the biggest deceptions that the province has ever seen. So the due diligence on all of this seems to have been missing.

I know that in the months since this was announced, the government has tried numerous ploys to try and legitimize the debate or to distract from the debate or to throw red herrings out on the debate.

I think we all know that the little gimmick around "This is for health care" failed and fell apart. Now I hear members on the other side of the House discrediting the PST, although no one had heard that debate until just very recently.

[1550]

The government has failed completely to engage with the community, and they're having, at this point, an opportunity to listen to the public. That's the other rule of engagement with the public: listen to what your constituents want. Those things are missing from this debate and from the government's attempts to kind of ram this HST down people's throats.

There's such a level of angst and concern and anger in the community that I am surprised that government members can stand here and say: "You know, this is all okay. We have experts to tell us." In fact, I think the last member just said that this is good public policy. Well, how could it be good public policy when you've never engaged with the voters? You don't have the mandate to do this. You said one thing prior to the last election. You've done the complete turnabout and opposite after the election.

For most people, like the writer of the letter, it's not about the complexity of the taxation. It's about the deception. It's about the government's arrogance and belief that they can somehow do an about-face after an election and that the electorate will not be unhappy. Well, they're clearly very unhappy and are having their say.

You know, this motion to refer to committee is also appropriate, given the fact that the Finance Committee in 2008 had dealt with this issue. They had actually taken on this topic, and the Finance Committee had recommended that a cost-benefit analysis be conducted to determine whether a harmonized sales tax would be worth considering.

There was an opportunity in 2008 for the very kind of engagement that we are now asking for by referring this bill to committee. That came out of the Finance Committee and apparently was ignored by the government. It was only eight months after the debate had begun, and a firestorm had occurred because of the public concern and anger over this, that the government has looked at any kind of study. That's not what the Finance Committee asked for, and it's certainly not what the public asked for.

Again, this is an opportunity to have that second chance. Lots of times in life we don't get a second chance to go back — you know, a do-over. In all of life's circumstances, we don't get that opportunity. Some things are over and done with, irrevocable. But in this case the government has a chance for a do-over.

They could support this motion, and they could send this bill to committee, do the right thing, engage with citizens, call witnesses and talk to these experts that are clearly ringing the alarm bells about the implications of the HST on their industries, the kind of impacts it will have on affordability for families, the kind of impacts it will have on the pocketbooks of hard-working British Columbians.

I would say that the government has a chance to circumvent any further cynicism and voter apathy at this point by showing that they can stand up and say: "You know what? We made a mistake. We are willing to admit it, and we are willing to take the opportunity now on this motion to refer this." We can take this opportunity and support that, and say: "You know, we admit…."

It takes a pretty big and brave politician to say, "I am wrong; I made a mistake," but you know, the government could do that. I believe that the people of British Columbia would think better of them for it. Certainly, it would change the tone and timbre of the public dialogue that is going on right now, because the public dialogue is growing daily in an anti-government sentiment.

The member for Vancouver-Kingsway yesterday talked about the latest polls that show 2 percent of British Columbians strongly support the HST — 2 percent.

[1555]

Interjection.

M. Karagianis: As the member my friend from Port Alberni says: "Oh, that means only 98 percent of the people oppose it." That is a clear message to the government that they're on the wrong track, that they're doing the wrong thing, that the citizens of British Columbia would appreciate them standing up and admitting: "We made a mistake. We will now refer this to committee. We will try and repair the damage done with voters." But I do hear from members who stand up that they're not prepared to talk about that.

Let's look at some of the sentiment that is bubbling up right across this province. Here is the Vernon Morning Star. "Peter Dorey, Olympia Cycle owner, insists the HST will hurt his business. 'It will be a real deterrent for people to buy bikes and bike parts.'"

Let's remember that bicycles and a greener lifestyle of the future are also another promise that the government
[ Page 4640 ]
has made and touted very loudly — forgotten, kicked aside by this HST. Absolutely disregarded in this new grab for tax money, shifting it away from big corporations and big business into the pocketbooks and onto the backs of the working families in this province. The promise of a greener lifestyle snatched away as well by this. So very truly, the fact that bikes are now going to be hit by this tax….

This cycle owner says: "This is a real attack on health care, the ecology and the economy." That's what's happening in Vernon.

Salmon Arm. Ed Murdoch says: "It's my belief, well enforced by hundreds of thousands of constituents across this province, that the HST is a bad, bad move by the Liberal Party of B.C." There's a warning for the government, should they choose to pick it up.

The Peninsula News Review in Saanich North. Tracy Lawrence and her husband both work in the Saanich Peninsula and have two young children. They're worried about how the HST will affect the family's bottom line. "We don't go to restaurants a lot, but we do like to go for coffee, and that'll cost us more. It will hit every facet of our lives from groceries to activities for our kids."

I know the members will stand up and say: "Oh, there is no HST or PST on groceries." The reality of it is that this is how people feel. This is how they feel about how it will impact their lives, and the government refuses in any way to validate the concerns of the people of British Columbia.

You know, we've stood in this House and asked numerous times for the government to clarify what exactly is going to be hit by the HST, because they've been very, very cagey on revealing those details to people. People are surmising, based on their experience so far with the GST, that this is going to be how it hits their pocketbook. If the government wants to clarify that, then they should come clean on that and produce a list and assure people of how this will hit their pocketbooks.

Here's the Peace Arch News, where Pat Patton, Meals on Wheels coordinator, says: "'People are worried financially,' she said, noting that client numbers are down from around 85 to 70. 'When there's a new tax, or anything is going up, and people on fixed incomes are affected, the first thing that goes is meals.'"

There's where the government is driving this new tax into people's lifestyles. Seniors — again, many on fixed incomes — who already are very stretched…. We know. Over and over again, we've canvassed many of the issues that seniors have with costs in the province, and yet they're going up one more time on many of the things that seniors can purchase.

Why would the government not take the opportunity to support this motion to refer, go to committee, take a closer look at this, weigh up the implications of what is going to happen to families and seniors and say: "You know what? We've made a mistake. We admit it. We need to engage with the public. We need to rethink this step."

[1600]

Duane Round, building chair of the Parksville Lions Housing Society, explains that with the unexpected additional $10,000 cost of the HST onto their building fund, it looks like they would seriously not be able to construct the affordable housing in Parksville that they have planned. A $100,000 cost of HST onto a project that would have built seniors housing in Parksville. So the government cannot turn a blind eye. They cannot turn a blind eye to that. They can't overlook the implications of what that means to communities like Parksville. I mean, it's just not right.

Teunis Westbroek, the mayor — and I know Teunis quite well — has come out. He is signing the HST petition because, he said: "I think the government should own up to the fact that before the election they said they weren't going to bring in the HST and afterwards they did. The least the province can do is own up to that. To push it through the way it was done will badly impact on our local economy, both for tourism and for the housing and construction business."

That's a mayor, and he gets it, totally gets that the government has, in fact, botched this contract with the citizens of British Columbia, and he is very upset by it. Again, I think that would be a good opportunity for the mayor of Parksville to be heard as a witness, to come here to the Finance Committee — for this motion to be referred there and for the mayor to have his views heard and respected as part of the government's engagement and dialogue on this.

Hopefully the government will, again, take this opportunity. I know that so far I've heard from members speaking that they don't intend on taking that opportunity.

I'd like to read one last comment here from Monday Magazine from a woman, Doreen Marion Gee. "Being on a low income, this tax will sting me more than my rich friends. Liberal promises about throwing a few crumbs on our tax rebate cheques are a cruel joke. The first enhanced rebate will come in July 2011, a year after the HST has induced hardship, stripped my measly disability income to the bone."

I see that my time is almost over, and I think it's appropriate that Doreen's voice be one of the last things that I read here into the Hansard, because Doreen understands perfectly all of the chipping away — not only just at her measly income here with the HST but at all the other services the government has cut. We've debated it in this House.

At the same time that they're implementing the HST, they're cutting day care for teenaged moms to stay in school. They are taking away dental services for children on income assistance. There are a whole number of cruel cuts that this government is undertaking. Today we talked about the fact that the suicide prevention program
[ Page 4641 ]
here on the south Island is being cancelled, at a time when we know that youth are at higher risk of suicide.

Interjection.

M. Karagianis: The government is indifferent to the calls from the community to reverse these cuts, and they're in denial. I hear the Minister for Children and Families in denial there.

The fact of the matter is that these cuts are hurting communities at a time when they're now going to have to pay more with the HST. So this motion to refer is absolutely the most important and crucial thing, at this moment in time, that this government could determine to support.

E. Foster: I rise today to speak against the amendment to Bill 9, and I like to refer to it as the waste-of-time amendment. I'm going to speak to the importance of Bill 9 and why we need to move forward with Bill 9, which will speak to why I oppose the amendment and any delay in the implementation.

Since the HST was announced, the NDP has been unable to come up with a cohesive stance. First, it seemed that the NDP was on side with the HST, when they supported the Finance Committee's reports that called for a feasibility study into the HST on November 15 of '07 and '08.

[1605]

On August 4 of '09 we discovered that if elected to government, the NDP would keep the HST. The member for Surrey-Whalley said during an interview with CKNW: "The HST implementation is like having your appendix out. Once it's out, it's done. It's very hard to go back."

More recently, on March 10, 2010, the Leader of the Opposition overturned that remark made by the representative for Surrey-Whalley during a CKNW interview when she said: "We're locked in for five years under this agreement if it passes, and at the end of five years you have an opportunity to serve notice, and I've said that's what we're going to do if we're elected."

Then, of course, there's the typical NDP plan to raise taxes. The member for Juan de Fuca, on February 10, 2010, said: "If we can reduce portions of the HST, we have to find revenue to offset that from other taxes." But it isn't only in British Columbia where the NDP is confused about the HST. Let's take a look at Nova Scotia.

In Nova Scotia the HST was implemented in 1997. At that time the HST was 13 percent, which is the same as other maritime provinces as well as the upcoming Ontario HST. At the time of its implementation the Liberal Party was in government and the NDP in opposition. The NDP vehemently opposed the HST. Today the NDP is in government in Nova Scotia, and they love the HST so much that they've raised it by 2 percent.

Would this also happen in British Columbia under an NDP government? Would the NDP like the HST so much that they would raise it? Some of them have already admitted that they would, and I imagine that it would be very tempting for the NDP to raise taxes, especially since B.C.'s 12 percent HST will be the lowest in Canada and one of the country's most competitive tax regimes.

The HST in Atlantic Canada is an interesting one. The combining of the provincial and federal sales taxes in 1997 provided many economic benefits for the provinces. These facts were well documented by Michael Smart in his article "Lessons in Harmony: What Experience in the Atlantic Provinces Shows About the Benefits of a Harmonized Sales Tax."

I hope the members of the opposition are listening carefully, as I'm about to clarify some of the continued misunderstandings regarding the benefits of the HST. I find it interesting that when we talk about the HST, and the opponents to it and the proponents of the amendment we're speaking to today, we talk about speculation and fear. We have some good history in the country that we can look to.

During the years following the 1997 tax harmonization, Smart examined the relationship between changes in consumer prices and changes in the effective tax rates in the province which implemented the HST. Smart observed:

"Provincial retail sales taxes are remarkably high on business inputs. Taxes on capital are especially undesirable because they have long-lasting effects on the economy by limiting the growth of capital stock and reducing the long-run growth of productivity and employment. Approximately one-quarter of the marginal effective tax rate on capital in Canada is the result of taxes on business inputs. Harmonizing provincial taxes with the GST would eliminate most of this distortion."

There it is, plain and simple: "Harmonizing provincial taxes with the GST would eliminate most of this distortion."

This article was published in 2007. Smart studied the HST in the Atlantic provinces and came to this conclusion after carefully monitoring consideration for the better part of a decade. Maybe the NDP will require this much time and effort to fully understand the HST, but I'm going to try to help speed along that process a little.

Smart continues to explain that retail taxes are inferior to value-added taxes. He states reasons such as the narrowness of their base, the susceptibility to tax evasions and, most importantly, "their tendency to cascade through the value-added chain." More simply put, it is inefficient to have PST charged at every level of production. I repeat that. It is inefficient to have PST charged at every level of production.

When all is said and done the tax burdens will always fall to the consumer. Taxes are paid by people, not businesses. All of these cascading PST charges are factored
[ Page 4642 ]
into the final price of the service or product. The HST will eliminate this cost burden.

I must ask the NDP why we would force consumers in British Columbia to continue shouldering these costs when a cost-reducing and economic-stimulating option is within our grasp.

[1610]

The Atlantic provinces have already taken advantage of the HST and have seen many benefits. Smart noted, and this is very important, that overall consumer prices in harmonizing provinces fell after the HST was introduced.

Another notable observation was that before 1997, investment per capita was considerably lower in these provinces than in others. This reflected a traditionally lower GDP per capita and lower capital per unit of GDP in Atlantic provinces. After the 1997 sales tax reform, investment per capita in the Atlantic provinces began to rise, particularly when compared to non-HST provinces.

Smart even mentions British Columbia in his study. He stated that harmonization to the GST base would be approximately revenue-neutral in our province portion if the HST remained unchanged. He goes on to explain that.

"Furthermore, to the extent that a smaller portion of the value-added chain lies within the HST provinces, which are smaller and have less developed secondary and tertiary economic sectors, than…other provinces, the elimination of taxes on business inputs there…had a smaller effect on business costs than it would in retail sales tax provinces, where embedded input taxes are larger in proportion to consumer expenditures…. The elimination of input taxes would 'cascade' through the value-added chain…and so potentially result in more than proportional reductions in costs."

I'm sure my good friend the learned scholar and financier from West Vancouver–Capilano would understand that. I, on the other hand, had trouble with it.

In non-academic language, this means that the same positive results that were seen in Nova Scotia, a province much smaller than British Columbia in terms of both geography and economy, will occur here on a much larger scale. Because we already have a broad and well-managed economy, we are well positioned to fully take advantage of the HST and its benefits.

If I explained the general concept and benefits of the HST, I wish to dispel some of the rhetoric and fearmongering that the opposition continues to bring up in debate. There are a few topics which I paid particular attention to. I would like to begin with looking at funerals. The NDP would have us believe that funerals in British Columbia will cost an extra 7 percent on the total bill after the HST is implemented. This is not correct. Most funeral expenses are already taxed at 12 percent. Therefore, there will be no change to most of these costs after the HST is implemented.

I would like to go on to give an example. This example was found on www.funeralplanning101.com. It's an independent Canadian website whose goal is to provide factual and up-to-date information.

For a $7,795 funeral, here is the cost breakdown: a thousand dollars for facilities and equipment — no change; $500 for transportation — this category will also have no change; $2,545 for merchandise such as caskets, flowers and so on — again, no change; $1,950 for other cash payments, headstones, etc. — this category will have no change; $1,800 for professional and administrative services — this is the only category which will increase 7 percent after July 1. It will cost an additional $126, which brings this category's total to $1,926.

This $7,795 funeral will cost $7,921, an extra $126 after the HST. It is certainly not the doom-and-gloom story — $8,340 — that the NDP has painted. This example doesn't even consider the reduction in consumer prices due to the elimination of cascading PST. This will affect the cost of vehicles, flowers and other merchandise, which will reduce the overall cost to the operator.

Deputy Speaker: Member, just to remind you to be speaking to the amendment that's on the table.

E. Foster: Yes, Madam Speaker. Again speaking to the amendment, my concern about the amendment is the delay in the process and the cost to us.

Another area that's been fundamentally wrong is the cost of cable TV, for example. As it stands, PST is already charged on services such as on-demand, high-definition and digital television. These services will be taxed at the same rate in July of this year.

[1615]

The only change in cable costs will be for basic cable. A basic cable plan such as Shaw's cost of $35.95 per month…. After the GST is included, it will cost $40.39. This is a $2.94 increase, and again it does not take into consideration the anticipated reduction in consumer pricing after the embedded PST is removed.

Before I conclude my remarks, I would like to examine and correct another falsity that has come to surface. An inaccurate and exaggerated e-mail is in circulation. This e-mail, written and encouraged by HST opponents, outlines and estimates a $2,100 impact by the HST on a hypothetical senior couple earning $41,000 a year.

This claim is entirely incorrect. In order for this couple to incur an extra $2,100 in costs, they would need to spend an additional $30,000 solely on items which are currently PST-exempt, a very unlikely situation. I would also like to bring to your attention that this couple would likely file separate tax returns, which means they would pay almost no income tax in British Columbia. They benefit from the over 120 tax cuts that the B.C. Liberals have implemented since 2001.

There are specific details in this e-mail that are particularly incorrect. The e-mail states that you will pay more for car insurance, home insurance, home heat-
[ Page 4643 ]
ing, gas, electricity. This is simply not correct. The HST will not change the cost of any of these items. They are either tax-exempt, rebated or currently subject to PST and GST.

The costs listed in this e-mail are also exaggerated. Our hypothetical couple spends $720 on cable TV each year. That's $60 a month for the basic cable, and as I have mentioned earlier, Shaw's digital package, for cable, is $35.95 per month. Any additional services already have GST and PST included in their total cost and would experience no change.

The e-mail also mentions Internet costs at $800 per year. That would be $66.67 per month. Clearly, this couple has not comparison shopped. Again, using Shaw as an example, for $45 a month, the couple could get extreme high speed — not high speed, extreme high speed — for less than what the e-mail was quoting.

And, of course, there are also telephone costs. The e-mail set that at $600 per year, $50 monthly. I continue to use Shaw as an example. Their phone service costs $20.95 per month. With what this couple is used to paying, they could even comfortably add call waiting and voice mail for another $5.95, for a total of $26.90, just a little over half of what is in the e-mail. If this couple were to bundle these three services, a very popular and common option, it would be even less.

This couple also spends $3,000 a year on golf memberships, $840 annually on gym memberships, and we cannot forget the $900 spent yearly on haircuts. This senior couple certainly is active and stylishly coiffed. However, I do not believe that these costs are representative of a real senior couple with a $40,000 income. For that matter, I cannot imagine any couple spending nearly 12 percent of their total income on golf, gyms and haircuts.

The e-mail continues to list activities such as hockey, football, baseball tickets, theatre tickets, movies, magazine subscriptions and curling. This couple also takes an annual trip to Palm Springs, with an airfare of $900 for two. This couple seems to have no problem chipping away at their budget.

After the e-mail blows through the couple's budget on a host of activities, it does go on to say that hydro and residential heating costs would be affected by the GST. This is also incorrect. Hydro and residential heating are HST-exempt and will see no charge increase.

Deputy Speaker: Member, once more, may I ask you to relate your remarks to the amendment.

E. Foster: Yes, Madam Speaker. As I said, my concern about the amendment is the delay in implementing this very progressive form of taxation, and I speak to that in all of these articles. That's what my concern is here.

I guess I would then refer to the comments made by the member who spoke before me. She spoke of her nine years in local government. I had the best part of 20 years in local government, and I would suggest that you don't get to do things that are popular all the time. If that was the case, taxes would never be raised. It's just part of the deal. People don't want to pay taxes.

I see the member for Nelson-Creston, and she has experience on local government. I'm sure that when they had tax increases or increases to the water costs, they didn't get any thank-yous in the paper for implementing taxes.

[1620]

When employment disappears, people leave. This is not good for seniors. This whole thing is about scare tactics, about telling seniors that, gosh, they're not going to be able to live here, and those things just aren't correct. You see the real costs.

Sit down sometime. I ask you to sit down any time at all and take a look at how this is going to affect your income — truly, honestly put down what your costs are. I've done it for my own. We all know what the earnings here are, because we all earn the same amount of money. Have a look at what it's truly going to cost.

The fact is I can't get to $2,100 in additional costs, and I spend a lot of money. I certainly live a lot higher lifestyle than the people at the $40,000 mark, and I can't get to $2,100. That's with $700 a month in restaurant bills. My golf fees are higher. My travel is higher. That's why I'm talking to this. This delay tactic is the same. This amendment is a delay tactic so that there can be more fearmongering, and I just don't support it.

Then, again, I go back to comments made by…. There's another here. People were talking about the newspaper. I just want to quote this out of the paper. This was an article that was in the paper today. It was written by Jon Kesselman. He holds the Canada Research Chair in Public Finance at Simon Fraser University — not exactly a right-wing think tank.

He talks about the benefits of the HST. "At a time when there is a lot of political debate about the HST and a lot of grass-roots politics about it, we want to make a case that it actually has a strong foundation in good economic policy. We think it's important to get that story out and to allow somebody like Kesselman, of Kesselman's calibre, a scholar, to pull the arguments together." That quote was from Jock Finlayson. '"Sales tax harmonization fulfils all the standard economic criteria for good tax policy with flying colours,' wrote Kesselman."

Speaking to the motion and to the members opposite, every economic leader in this country is supporting this because it's good economic policy. It creates employment. It creates business opportunities.

I know the members opposite and the member who spoke before me talked about how it's about big business. I've spoken to many business owners in my riding just to find out what they think about it. The names are here. They're small business guys. These are guys that get
[ Page 4644 ]
their hands dirty every day. They own trucks. They own logging equipment. They're all saying the same thing: it's going to be a benefit to their business. Their profitability will go up, and they'll be able to hire more people. They'll be able to expand their business.

I would ask the opposition…. If they're opposed to the HST, then that means they support the PST. The PST has been condemned by every economist around the world. It doesn't work. It's not good for the economy, it's not good for business, and at the end, it's not good for consumers. So if you're opposed to the HST, then you've got to support the PST.

Talk to the forestry, talk to the mining, talk to the construction, talk to homebuilders. I've talked to these people. You know, I work with them. I worked in the bush. I know these guys. They're telling me the same thing. Their profitability is going to go up. They're going to hire more people. So I just don't understand why anybody would not support the forest industry, the construction industry, the mining industry. I don't understand it. It doesn't make one bit of sense to me.

We've watched this over the last while, and again, I've gone out and I've talked to a lot of people in my community that are in business. They've all said the same thing. This is a benefit to them. It's a benefit from just a bookkeeping point of view, and that's been pointed out several times. It's a benefit — the input credits that they get.

To speak to this amendment, all this does…. If we were to support this amendment, and this was to go through, it's just going to slow everything down, and the opportunities that our businesses would have will just be delayed.

[1625]

The business community supports this right across the board. Accountants are telling their customers, their business customers: "This is good for you." A lot of the people that I talk to in the logging industry and stuff don't know a whole lot about high economics. They have an accountant that does that for them, and their accountant is saying: "This is a good deal. This works for you. This makes you more profitable."

I don't understand all the fear tactics and all the fearmongering. Go look at the facts. Go to Nova Scotia. Go talk to somebody down there, talk to somebody in business, talk to people on the street.

Smart did the study on it. He did it, like, ten years afterwards. The prices came down. These people aren't…. He has no axe to grind one way or the other. He wasn't hired by anybody. He did a study — he's a scholar — just to come up with an answer. The answer was: "This is good for the economy. It's good for the consumers."

If the prices go down to the producer, the price will go down to the consumer — it's simple — because you have competition. If store A doesn't lower their prices, everybody will go to store B. It's just real simple. It's not complicated.

Again, I speak in opposition to this amendment because it just delays what is a good public policy. We need to move forward with this policy, get it implemented so that our economy will prosper and that our businesses will move forward.

M. Dalton: I seek leave to make an introduction.

Leave granted.

Introductions by Members

M. Dalton: Visiting us today in the gallery are 65 grade 11 social studies and law students from Thomas Haney Secondary School. They are here with a number of teachers, including Chris Connolly, Mark Biggar, Steve Hussey, Jenny Godfrey, Leah Slack, Todd Goodman and Catherine Ferguson.

They are on a three-day visit to the capital city. Apparently there was quite the demand among students to be able to come. They probably knew that the House was debating Bill 9, the Consumption Tax Rebate and Transition Act, and they wanted to be part of the action.

Thomas Haney is a great school and very innovative. I'm happy that the teachers and students are here visiting us. Would the House please join me in making them feel welcome.

Debate Continued

B. Simpson: Just a couple of comments. I welcome the students here. Just for your information, we have a bill before us in the House that makes it possible for the harmonized sales tax to be put in place. It takes the provincial sales tax away and makes the room for the federal government to begin collecting sales tax.

As an opposition, we've put forward a motion suggesting that that bill be tabled and not continue to be debated in this Legislature but instead be taken to the Standing Committee on Finance and be taken back to the public for more public debate, for more public information, so that the public can determine whether or not they want to support this.

As it stands just now, 82 percent of the public polled say they do not support this. In fact, more people are opposed to it than just the 82 percent strongly opposed. So that's what we're doing.

As opposition members, we are of course supporting the motion and suggesting that the government just take that breath, go to the public, see if they can get a mandate. The government members are having their say as to why they want to just get on with the bill.

Before I get started into the substance of what I have to say today, I do want to make an interesting note about the previous member's comments, the member for Vernon-Monashee, who said that really what we need to
[ Page 4645 ]
do is sit down and walk through the HST and make sure that people understand it.

Quite frankly, that's what the motion to refer would do. It would give us all the option to sit down and have a reasoned discussion, which people did not get to do during the 2009 election. That's really what the rub is here. In the 2009 election this government promised — an explicit promise was made — to not institute the harmonized sales tax.

The logic of the government at that time was that it would be too hurtful for consumers — too hurtful for consumers. The argument that we're getting today, now, is that the PST is the worst thing for consumers, always has been and has to be gotten rid of, and HST will be the best thing for consumers. That's the worst of Orwellian logic. That's the worst kind of rhetoric and spin in a democracy in which the people of the province need to be treated with more intelligence than that.

[1630]

Before I start, I want to say a big hello to my father, who is just recovering from surgery at the Kelowna General Hospital. I know that he's watching today, as much as it bothers him that he has to pay his $17 a day. It bothers his Scottish blood that he has to pay for TV. He's not buying the TV so that he can watch me; he's buying the TV so that he can watch the Canucks. But he almost blew his stitches the other day there, yelling at them because they're not doing so well. I'm not quite sure whether we should continue to allow him to have the television.

But Dad, you know I love you, and I wish you all the best in your recovery. I'll see you soon.

The other thing I want to mention, because it's context for what I want to say, is that sadly, a young woman who worked on my campaign passed away recently. She was 24 years of age. All her life she had fought for every day, to make every day count, because she was born with a congenital kidney defect. She went through two kidney transplants.

At 24 years of age she was an activist the likes of which few of us can dream of. She worked in that hotbed of socialism, Alberta. She actually ran as an NDP candidate in Edmonton and worked on campaigns in Edmonton. Then I was lucky enough to have her come and work on my campaign. She's the daughter of friends and a former colleague. Katherine died peacefully in her sleep as a result of the toxin and the electrolyte imbalance of dialysis. She will be sorely missed.

In addressing our family issues, as my dad recovers from his surgery and goes through what he's going through, and in reflecting on Katherine — I couldn't make it to Katherine's memorial service — it made me really reflect on why I got involved in politics. It goes to the heart of what this motion is.

I was a corporate manager for a large forest products company, and I did work with organizational change, in training. I had designed a training program in which I was trying to get people in our organization to understand that there are only two ways to address an issue or something that you're not happy with. The first is to do something about it and change it. The second is to shut up and live with it. Unfortunately, most of us live our lives in a third option, which is to reserve the right to complain and do nothing about it.

One day I had done back-to-back training sessions, and something that the government had done — I don't know if it was the heartlands strategy or what it was that they had done — had made me angry at what was going on. I was shaving and looked at myself in the face and realized that I was living that third way of reserving the right to complain and doing nothing about it.

If I really wanted to engage in societal change to address the things that young people need us to address, to show real leadership that makes decisions today that maintain possibilities or grow possibilities for future generations — whether that's climate change, poverty or education, politicians today make decisions that benefit future generations and don't just placate the current lobbyists of the day — then I had to get involved in the political process.

I'm five years into it now — second election. I had to think hard about running again, but I did. Five years into it, and I'm not sure even now how you go about changing this process.

We have a motion in front of us today that…. The government could actually change the game, because they did not run an election on the HST, and there's a principle in democratic politics called informed consent. This government does not have the informed consent of the electorate to impose this tax.

For the life of me, I do not understand the logic of the members of government who somehow admit that they're taking a $1.9 billion tax burden off companies and corporate entities but somehow are not transferring that burden on to consumers and households. That burden somehow disappears as it makes its way from corporations and companies onto individuals.

[1635]

Yet by the government's own stated documentation, that $1.9 billion is still coming into the government, because they claim that the tax is revenue-neutral. It has to be going somewhere, and as we contend — and the reason that the general population doesn't want it — it's going onto the backs of citizens.

Citizens are already burdened — and some of these young people are going to face this — with the highest tuition rates that we have ever seen, the highest individual debt load for students that we have ever seen. Students pay more to government through tuition fees and other fees than corporations do in our society.

How did that happen? It's because we keep unloading this burden of taxation off corporations, and we're sup-
[ Page 4646 ]
posed to get investment and jobs as a result of it. I'll have more to say about the fallacy of that logic. We have individual students in the building.

We have individuals out there on fixed incomes above the low-income threshold set by this government who will not get any rebates, either carbon tax rebates or HST rebates, and who have lost their earning potential. Either they are on disability pensions, on fixed incomes or just earning slightly above that threshold. They get no rebates.

What they get is the full force of the tax, the full force of that $1.9 billion transfer onto their household budgets. That is compounded, as I've spoken of in this House before, with natural gas rate increases, B.C. Hydro rate increases, MSP premium increases, carbon tax increases and — as a result of all of the cuts that this government is doing to education and cuts to the grants and the various subsidies that were given for sports and for the arts — a whole range of increases just to try to participate in their community or to enjoy some of the niceties of life.

It's against that backdrop that we're now going to add this tax burden of a $1.9 billion transfer onto households, and that's why the people of British Columbia are not happy with this. It's not that they're not informed. It's not that they're buying disinformation or fear tactics, as the government members would have us believe. It's because they know they're being asked to shoulder the burden of more taxes without any additional benefits from government, and that's where the problem lies.

That's where the problem lies, because this government needs to take this bill out and explain to the people of British Columbia how they're going to actually tax them more but give them less — fewer education opportunities, school closures, more tuition fee increases, fewer post-secondary opportunities, restraint in the health care sector and restraint in the ministries, especially $320 million taken out of the natural resource ministries. We've begun to see the job losses as a result of that, job losses that will impact many of our communities directly.

The people of British Columbia are being asked to take on an additional tax burden along with all of those other costs but to get no improved services from the government as a result. That's why they're upset.

In 2001 this government promised to be the most accountable and transparent government that British Columbia had ever seen. We were promised open cabinet meetings as a reflection of open government. Yet the first thing that the Premier did, of course, was not recognize the two-member opposition and give them the resources that they needed to hold the government of the day accountable.

As the First Nations leaders are pointing out with respect to the new relationship, actions speak louder than words. In this spirit of accountability and transparency, why wouldn't the government take this bill out to the people of British Columbia?

It is the Finance Committee, as the government members point out, that suggested that work needed to be done on whether or not harmonization should proceed. I was a member of the Finance Committee for two years. As the government members point out, there has been a call for harmonizing the sales tax for some time.

In fact, the call is broader than that. The call is for harmonizing all taxes. I understand that the individuals who present that see the layers of government — municipal government, regional governments, provincial government, the federal government — all imposing taxes, all imposing forms, all imposing their own level of bureaucracy.

[1640]

There's the call for harmonization. I understand that call, and I've actually been quoted as saying that we are not standing in opposition to harmonization per se.

We should have followed on the committee's recommendation. This government should actually have done that work. It should have made sure that the Finance Committee's recommendation to examine harmonization went to the Ministry of Finance as a request and that the Ministry of Finance did this work and brought it back to the public debate before this bill was brought into the House.

That's how democracy ought to work. The committee should have been heard, and the work should have been done, and the people of British Columbia should have been informed.

Instead, what the government did was bring this in as an afterthought after the 2009 election. We've since then had a series of rationalizations, and again, many people have pointed this out. We've heard it again today.

It's no longer just Ontario. It's the maritime provinces, and somehow we all have to go with the maritime provinces and Ontario, despite the fact that Alberta doesn't have it, Manitoba and Saskatchewan don't have it and they don't have it to the south of us in the Pacific Northwest of the United States. But our competitive realm is somehow Ontario and the maritime provinces. Again, the logic does not hold.

We just had a motion in this House. We have a bill that this government ramrodded through, called the Trade and Labour Mobility Agreement with Alberta, all under the guise of a western economic powerhouse, where we would align and rationalize all of our legislation and regulation and all of our trades training and so on.

What the government fails to mention is that on HST we stand alone and we stand discrete from the rest of those provinces. The Premier of Saskatchewan has indicated that he's not interested in that western approach or even looking at HST at this juncture.

We had the Ontario piece, and as I pointed out in my last speech — to silence — if Ontario is our benchmark
[ Page 4647 ]
for competitiveness, why are we not raising our minimum wage to the level of Ontario? If that's the benchmark, if we have to be competitive with Ontario, let's be competitive on wages as well, because an Ontarian making $10.25 an hour is vastly different than somebody earning a training wage of $6 an hour or a minimum wage of $8 an hour and having to bear the burden of HST. That's a fundamental difference.

It is unfair to the people of British Columbia not to have the same minimum wage if Ontario is the benchmark. But again the members opposite are silent on that, and I guess competitiveness only applies where it's a good rationalization for their argument for the HST.

We also then heard that it was the greatest single thing that could be done for the economy of British Columbia. We asked for the studies on that. We said: "Where is the proof that this is the single greatest thing?" Of course, the studies did not exist. They were not done until recently, when an economist from Alberta was paid to then take a look at HST, because he'd done work for Ontario. An Alberta economist then gave the green light and said it was going to create all kinds of jobs, etc.

Again, there's a problem in that. I think that part of what we would like to take out to the people of British Columbia by referring this to the committee — by bringing in witnesses, by actually expanding the debate — is to ask the fundamental question: do corporate tax cuts create a climate for investment? Do corporate tax cuts create jobs? Do corporate tax cuts cause corporations to grow in your jurisdiction?

According to B.C. Stats and Stats Canada, the proof of the previous tax cuts shows the opposite. Jobs in British Columbia have actually stagnated, and investments have stagnated, despite year-over-year tax cuts for large corporations.

In fact, CEOs themselves have looked at this and said: "Shame on those large corporations in British Columbia for not investing in this province, not taking advantage of some of the tax cuts and pouring it back into the province." Instead, that money has been taken out of province to benefit shareholders and to benefit head offices elsewhere.

[1645]

Between 1991 and 2001 manufacturing output in this province grew by 88 percent overall — 106 percent if you exclude the forest sector. That's between 1991 and 2001. This is factual information. This is not fearmongering. It's from Stats Canada and B.C. Stats, and it's available to all the members in government.

Between 2001 and the present we have had 1 percent growth in manufacturing output and, if you exclude the forest sector, only 30 percent growth. That's 30 percent against 106 percent despite year-over-year tax cuts.

Between 1991 and 2001 we had a 2.1 percent annualized job growth in that decade. In this decade we have a 1.6 percent decline in job growth. So the very logic of these economists who say, "Yes, tax cuts logically by their models result in job growth," is challenged by the facts. The facts do not support that.

The third rationalization we got was that health care will be funded by HST. Again, I've challenged the government and the minister to take out the piece in the bill that requires reporting on health care spending and bring in a report that says exactly what jobs were created, exactly what investment was created, exactly what happened to improve our economy as a result of HST. That's a report that I believe British Columbians would like to see.

It's something that we need to discuss with the public. Do we continue on this path of deregulation, of continuing to take the tax burden off of corporations and shift it onto the consumers and shift it onto citizens? Do we continue to do that and not afford a good public service, not afford good health care and good education and good roads?

Is that the path we want to continue on? That's at the core of the argument for HST, and it's an argument we should have in the public domain. It's an argument we can have if this referral motion passes and if we actually take this to committee and committee takes it out to the public.

Another example of the fallacy of the argument that tax decreases on companies create investment in jobs is the three amigos' tour of 2003 on the coast. Three CEOs of the three large corporations operating on the coast all went out on their own tour and said: "Look, if we get deregulation of the forest industry, if we get control over the public forest so we can treat it like a private land holding and flip it and change it and consolidate, and if we can get some of the tax burden off our back, we will guarantee you…." Three CEOs guaranteed the people of the coast that they would invest a billion dollars on the coast.

How much was invested, Madam Speaker? Nothing. Did they get the deregulation? You bet they did. Did they get the tax breaks? You bet they did. Did they get the changes to the Forest Act that allowed them to get control over the public forest? Yes, they did. They got everything they asked for, and they did not deliver on the investment.

Instead, Weyerhaeuser, one of the companies, no longer operates on the coast. Interfor, one of the companies, has basically sold its quasi-private land holdings on the coast and moved into the Interior. TimberWest prides itself…. Just go read its shareholder reports. It's all there, and I've stated it publicly with the CEO. They are now log exporters and land developers, and they have more VPs working on land development than they do on forestry.

The facts do not substantiate the claim that tax relief for companies and corporations results in investment in jobs. You need to have a government that actually sits
[ Page 4648 ]
at the other side of the table and says, eyeball to eyeball: "Okay now, how is this going to work to the benefit of British Columbians?"

[1650]

A classic example of that, which could come into the debate…. If we actually refer this to committee and go out, we can ask people to come and talk to us about the impact of the 50 percent reduction in the industrial school tax rate. That's something this government did as part of their strategic package to deal with the downturn in the marketplace.

It's a simple question to ask, to simply go and say: "Companies in British Columbia got a 50 percent break in their industrial tax rate. Now document for us every job we got, every community benefit we got from that." Document it. Put it in front of the committee. Put it in front of the people of British Columbia, and prove the case that a tax cut like that created investment and created jobs — because it didn't.

Now we have this HST promise that it will also create jobs and that it's the greatest thing to do for the economy — from a government that has a track record of tax policy that has not resulted in that at all. You just have to look at the transition of jobs out of highly paid, benefited, pensioned, long-term jobs in this province to part-time, self-employment and families having to cobble together two or three jobs just to make ends meet. That's the track record of this government and, hence, why people in British Columbia do not believe the claims they are making about the HST.

I don't understand why we're having to rush this through. It's not, as this government claims, a federal initiative. It is a provincial initiative. This provincial government could easily say to the Harper government, "Hold off a bit. We want to get some breathing room. We're actually going to go to the public of British Columbia," which Ontario did.

Ontario went to the people of Ontario. They didn't like what they heard, and they proceeded, but at least give them the credit. They went to the people of Ontario and did a public consultation process. So why don't we, then, take that opportunity? That's how a legislative democracy is supposed to work.

We're supposed to be here to represent the people. If this tax is defensible, then why doesn't the government go and defend it? Not defend it by issuing a flyer or a householder that might break the election laws in this province with respect to initiative. Don't do that. Let's go out together. The Finance Committee would have the ability to send out an information package sanctioned by both sides. The Finance Committee would be able to make sure that information goes to the general public that is not fearmongering, that is vetted.

All of that is possible if this goes to the Finance Committee, and it would be much better for our democracy than a rhetorical argument in this House and a flyer that states the government's position and that may infringe on the Election Act and the initiative.

There are a couple of other things that I think need to be discussed relative to this bill that the government is putting forward. That is: one of the arguments that they're making is that tough choices and tough leadership sometimes are unpopular. Fair enough.

I agree with the government members when they say that taxes are, in general, unpopular, because for three decades now, almost four, we have lived with that right-wing mantra of "Taxes are bad. Government is bad. Regulation is bad." So it's permeated our society.

Wouldn't it be an interesting challenge to us as legislators to go out together and talk to the people of British Columbia about the relationship between taxation and what they want from government? I get it in my office all the time. You get group after group or individual after individual coming in and saying: "I want more of this. I want more of that. I want better quality of this. I want better quality of that." Then, when I approach the tax question with them, it's: "Oh God, I don't want more taxes."

We have an obligation as elected leaders to have that tough discussion with British Columbians, to make the connection again between taxation and public service in the public good. I can't remember which writer said it, but he said: "I like paying my taxes. They buy me civilization." That's precisely what we need to start discussing with people — that it is taxation, tax policy, how we tax, who we tax, when we tax and how much we tax that allows us to have a progressive society. We need to have that debate.

[1655]

In fact, a recent poll of CEOs across this country indicated that they're ready for it as well, because two-thirds of them said: "Maybe it's time to rethink where we are on taxes." The budget officer for the federal parliament pointed out to that government that it has run against its own taxation policy because it doesn't have the revenue to deliver even on the minimum that they're offering to the people just now in the public service.

It's time for that debate. The HST bill would be a good platform for us to have that discussion and reconnect for people the relationship between what they would like their government to look like and what they would like from their government with what happens with their taxes.

A final comment. The issue for most British Columbians is not taxation. Polls show that. The issue for most British Columbians is they don't trust politicians with their taxes, and that's why they're tax-averse. We need to change that. What better way to change that than…? Instead of jamming a tax down the throat of British Columbians that was not given informed consent to during the 2009 election, that the government is having to use rationalizations and rhetoric to try and justify, let's take it out together.
[ Page 4649 ]

Let's start to change the way government operates. Let's reinstitute the legislative democracy that we've got by agreeing, as legislators together, to take this out to the people of British Columbia, do the consultation. Then we as the opposition will have to live with the consequences if an informed electorate says: "Okay, we're willing to go down this path."

But the government has to be willing to take the answer: "No, even with the information you provide us with, we still don't want this tax; we still do not agree with the tax policy." That then does not require tough leadership. What it requires is the government to think its own agenda and to actually change what it's been doing in this province for the last eight years that has not resulted in the jobs and investment that they keep promising.

Hon. K. Falcon: It's my pleasure to rise in the House to speak against the amendment, and I will be speaking in support of Bill 9 and the completion of Bill 9 as it stands.

First of all, with respect to the amendment, I'm very much against the amendment as put forward by the opposition. I actually think it's not a responsible approach to dealing with this issue, and it in fact would work against some very important provisions that are required to be in place by the end of April.

As I have sat and listened in this House very patiently to many of the concerns that are raised with respect to Bill 9, I do find myself troubled. I think that it is fair to say that sometimes on a large, complex issue like this, it is understandable that some people haven't had a chance to get up to speed, to establish the fact base. Certainly, I think that it is important that when we speak about an important and, yes, a very large tax change, we make sure we get the facts straight.

I've heard a number of concerns that are raised. One of the ones consistently bandied about by the opposition is this fixation around the issue that somehow this is a broken promise of some sort. I want to address that, Madam Speaker, if I may.

The key thing I would say is that when I ran in the most recent election campaign — this is now, I'm proud to say, the third campaign I had the opportunity to run in — we ran on a campaign of keeping this province strong. After a lot of very difficult work in the first term to try and turn around the economy, to try and reverse the unfortunate trend during the decade of NDP government in the 1990s….

British Columbia, for the first time in our proud history, became a have-not province. For listeners who are watching, that meant that for the first time in B.C.'s history we were forced to take subsidies from other provinces because of the fact that our economy was performing so poorly. The challenges that we had, the deficit that we inherited and the fact that the debt had doubled and that we had a very discouraged private sector was something that required very significant change.

[1700]

Turning the economy around was our number one priority, and in the last campaign our number one priority was keeping the economy and the province strong. That also means that we have to be realistic about the kind of world that we are living in, because the world doesn't stay static. It changes, and boy, did the world change dramatically at the end of 2008 — the largest economic reversal and the fastest economic reversal I have ever had the unfortunate opportunity to witness.

Literally overnight the capital markets virtually imploded. Construction projects that were about to begin were halted. There was an extreme loss of confidence in the private sector. We had a very difficult challenge that we were facing not only in British Columbia but, indeed, around the world and certainly in North America.

Why did we look at HST? Well, first of all, the game changer was Ontario saying they were moving forward. That's a game changer because they are the largest economy in the country, and what it meant was that Ontario would now be joining Quebec and other provinces, the Atlantic provinces, in moving towards a tax system that was going to be much more competitive than British Columbia's had we done nothing.

Some other things had changed too. One was that the federal government, fortunately, was now developing new flexibility around the rules that would involve provinces wishing to participate in HST, and one of those was $1.6 billion that would be made available to British Columbia for being part of a harmonized tax.

I can tell you that I am responsible for a ministry that spends almost $16 billion every year, and we all know the pressures on health care. Even with health care spending going up 15 percent over the next three years, there are still virtually unlimited demands on the system. Every government faces this challenge.

I can tell you that $1.6 billion goes some way towards meeting the challenges, certainly in health care, but also for a government that is respectful of the fact that every dollar we spend is a dollar that was sent to us by hard-working taxpayers.

Since the election and the victory that we enjoyed in the 2009 election, we've seen, in spite of a very difficult economic climate, 40,000 new jobs that have been created in British Columbia. That was again, I think, a reaffirmation of our commitment to make sure that we'd continue to keep the economy strong, as strong as possible, given what was happening in the world.

We often hear the members opposite talk about how unpopular the tax is. I absolutely acknowledge that. It is unpopular. In fact, ironically, I have not yet met any discussion on taxation that you will generally find much popularity around, except when you are reducing taxes.
[ Page 4650 ]

I experienced this exact same thing with the revenue-neutral carbon tax. That was something that was also relatively unpopular, at least among some segments of the population. But there are some very interesting analogies between the carbon tax and HST and the position of the opposition and the position of the government.

We always felt that a revenue-neutral carbon tax made sense for the economy. Why? Because it would start to put a cost to carbon so that people could make appropriate decisions, in terms of planning for the future, to ensure that they understand that there is a price when we burn fossil fuels — there's a price in the environment, and it's appropriate that there be a price on that carbon — but also that the revenues generated would go towards reducing taxes, both for individuals and for small businesses. That was the trade-off.

At the time, just like now, the NDP thought: "Well, this is going to be good. Let's get ahead of this break, because some of the members of the public appear to find this unpopular." So they ran a campaign against it. They would show up; they often drew crowds of 15, 20 people that would protest and say how terrible the carbon tax was.

They even came to my own community, and a half-dozen of them stood on 176th Street trying to get cars to honk about how apparently unpopular the carbon tax was. I will acknowledge that I had many members of my own riding association and constituency residents who said: "You know, we don't like the carbon tax. Why are you doing this carbon tax?"

We were doing it because it was right thing to do. It was the right thing for British Columbia, and it was the right thing for the country, and we were the first government in North America to move forward on it.

What did the NDP do? They ran an election campaign against it. That was the central part of the opposition's campaign. They felt so strongly about the carbon tax, just as they apparently do about the HST, that they were going to get in front of this issue.

[1705]

They were going to run a campaign against it. But a funny thing happened. They not only lost the campaign, but very quickly after the campaign, they completely reversed their position. They now said they supported the carbon tax.

Now, you could say, I suppose, that this was a flip-flop or that they changed their position or they completely reversed direction — all of the kinds of things that I'm hearing right now about, apparently, our government and our position on HST.

So let the record be clear for this member. I have been pushing a harmonized sales tax since I first got elected in 2001. I remember talking to Minister Gary Collins at the time and trying to encourage the minister at that time to consider a merger of the taxes, because I always felt that this was going to be good for the economy.

I think that this becomes important, because I will make a prediction. I will make a prediction that, just like with the carbon tax, the members of the opposition who pretend they're opposing it today, for short-term political gain, will, I guarantee, within a number of years be supporters of the HST. I guarantee it. As sure as I'm standing here today speaking, I guarantee that the NDP will one day find themselves in support of the HST.

After the election, when the Leader of the Opposition changed her mind, as did the party, we looked at that and we thought: "Well, that is interesting." But they are now trying to put themselves in the position once again of being sort of almost tax fighters, as if the NDP have suddenly discovered the real opposition to taxation that they have somehow harboured secretly without letting the public know.

Well, unfortunately for them, I have been in this House for almost ten years, and I have seen their position on major tax policy — for example, when we reduced personal income taxes. I remember on the first day that we came in this Legislature after the 2001 election and we reduced personal income taxes by 25 percent, every single one of the NDP members — whether they're elected or nonelected and all their big union public sector employees — all said that they were going to oppose it, and they did.

They said, and I heard it for years and years, how the cuts were irresponsible, it was going to starve health care and education of money, that we would never make up the revenue, how wrong it was that we were doing this. But you know what? They were dead wrong.

I don't actually hear many of those comments anymore, primarily because you can go into the public accounts and you can go into the budget and you will see that personal income tax revenue is actually greater today than it was in 2001, thereby putting a complete lie to the myth that if you cut taxes you somehow cut revenue. They've never understood the relationship between encouraging economic activity.

We not only cut personal income taxes 25 percent, but a further 10 percent a few years later and then a further 5 percent, for an average of almost 40 percent personal income tax reductions for British Columbians. And they opposed every single one of those.

Then we took the general corporate tax rate, which, when I got elected in 2001, was at 16.5 percent. It was the highest corporate tax rate in North America, and it was one of the reasons why Alberta was running ads telling B.C. companies: "Come to Alberta. We have a favourable tax environment, unlike under the NDP in British Columbia."

We have since taken that general corporate tax rate and we have marched it down to where next year it will be 10 percent, leaving us with the most competitive corporate tax regime in the country.
[ Page 4651 ]

What about small business? Well, in small business we inherited a tax rate of 4.5 percent. By next year it will be zero for the small business community in British Columbia.

We also scrapped the corporate capital tax. That was a tax the NDP really loved, because it taxes capital, and philosophically they are opposed to capital because that makes them think of rich people and that somehow we must go after them. But what they don't realize is that capital is actually the investment that businesses make in their businesses so that they can hire employees and expand and grow their business.

It's the mining operation buying very large mining machinery that often costs several hundred thousands of dollars, and the NDP position is we should tax them on that regardless of whether they're profitable or not. That's what the corporate capital tax was, and we got rid of it.

Now, the NDP again opposed all of the tax cuts. They said that it was going to starve the treasury of revenue. They said that it was going to kill jobs. The only problem, as I've mentioned, is that none of the facts support what they say.

[1710]

We have more revenue than we've ever had. We have more jobs than we've ever had — almost 400,000 new jobs in British Columbia since 2001.

We also — and I think it's very important — fought hard to bring back our fiscal credibility. As you know, under the NDP government, we had five separate credit downgrades. Today we've managed to get that credit rating back up to triple-A. Only Alberta, the federal government and British Columbia have a triple-A credit rating in the country. We're proud of that, and we're not going to let that go.

That ties us back to my earlier discussion about what was happening in the broader economy. When there was the capital market meltdown that affected every government around the world, I actually think many governments took it as an excuse, the crisis, to hit the spending accelerator and to run up enormous deficits, which are going to have to be paid back. There is going to be a time when all the governments that are running up huge deficits are going to have to pay them back.

In British Columbia we said we were not going to follow that path. In British Columbia this year we have a $1.7 billion deficit, as you know, and it is not something we are proud of. A $1.7 billion deficit, to put that in perspective, means that for the one million children in the province of British Columbia…. That is $1,700 per child we're spending today for services they will never use. That's what that means, and that's why we are making sure we are going to march that deficit back to a balanced budget within three years. While other provinces….

Ontario's got a $24 billion deficit. The federal government is now at a $56 billion deficit. I can tell you that the Ontario government is not over 20 times larger than the B.C. government. I can tell you that much. It hasn't got 20 times the population, but they've got 20 times the deficit, and someone's going to have to pay it back.

We believe that we have to be responsible with the dollars the taxpayers send us. That's one of the reasons why, when the world changed and we realized that we were facing some very, very difficult times…. That's why I am proud to stand here today and support the HST as good tax policy for the province of British Columbia.

Interjection.

Hon. K. Falcon: Now, the Health critic must not have been listening when I talked about how, just like with the carbon tax…. The NDP were running against the carbon tax too.

They ran against the carbon tax because they thought this was terrible for the province. How terrible it was going to be. They ran a campaign on it. They campaigned against the carbon tax. But what happened after the campaign? My goodness, they completely changed their position. Does that sound familiar? Yet these are the same critics that are somehow suggesting we have done this. They just did it with the carbon tax, so I have a little bit of difficulty accepting the credibility of the criticism.

What I will say is this. If you've ever run a small business or a large business — and, sadly, not many of the opposition ever have…. When you run a small business, you understand what is involved in paperwork when you are dealing with a PST bureaucracy administered by Victoria and a GST bureaucracy administered in Ottawa. It involves an enormous amount of cost for a small business.

In fact, it's about a $30 million cost a year just on the government and about 300 employees that we now no longer have. We will no longer have 300 employees and a $30 million expense in British Columbia to double up and load up paperwork on the small businesses of British Columbia.

One of the other major issues that I had to deal with in my first term was regulation. Now, we made a commitment to reduce the regulatory burden on the business community, on small business, on the public, by a third within our first three years. We exceeded that — a 42 percent reduction in unnecessary red tape.

That wasn't easy either, but when you get elected and you have a position that keeping the economy strong and doing the right thing are the most important things that you have to do as a leader and as a government, then frankly, you have to learn to deal with tough politics. Yes, there were tough politics with the carbon tax, but it was the right thing to do. We did it, and the public supports us for doing that.
[ Page 4652 ]

Yes, it is tough politics with the HST. It is the right thing to do, and I believe that the public will ultimately support us, particularly when they see the benefits.

[1715]

So the question really comes down to — and I think it's an important debate: is it good public policy? Is it good public policy? For me, like any tax policy, the question I ask is: is it going to create jobs? Ultimately, fundamentally, I think that is the question you have to ask. Let's look at what that says.

Interjections.

Hon. K. Falcon: Now, the opposition members like to chirp away and say, "No evidence" — just like with tax cuts. They said that there was no evidence with tax cuts, and they were wrong. They don't say that anymore, because it's inconvenient.

The fact of the matter is that evidence is important. So what's going to happen with HST? Well, the construction sector will save about $800 million in costs. The forestry sector…. I heard the former forestry critic talking about how hard done the sector is. What I haven't heard the Forests critic talk about is how $140 million of costs pulled out of the forestry sector is bound to have some positive impact on the forestry sector. Got to believe that. The manufacturing sector saves $140 million in costs that won't be there. The mining sector — $80 million in costs that won't be there.

Why is that? It's because the PST is a cascading tax. It is a tax that is paid on almost every product purchased in these resource sectors, which goes into the cost of them selling their product and exporting their product around the world. That is what it is. Those are hidden costs, but they are real costs on the people that are buying those products.

I do think that it is important to listen to members of the opposition — many of whom have never run businesses before. But I also think that it's important, when you think about the HST, what employers say about it. I do think it's important to listen to employers because they actually do create jobs, they actually do risk capital, and they do understand what a competitive marketplace is all about.

Whether it's the Agriculture Council, the Business Council, the B.C. Lumber Trade Council, the Canada West Foundation, the Chartered Accountants, the Canadian Manufacturers and Exporters, the Certified General Accountants, the Mining Association, the motion picture industry — you go through the list — virtually every single major employer supports it.

Interjections.

Hon. K. Falcon: Yes, they are business communities, Member opposite — business communities that create jobs. They are the job creators in our province. I can tell you this. If you're bringing in a major tax policy, you certainly want to know what the job creators of the province are going to say about that policy. They are saying: "This is good policy for British Columbia, this is good policy for the country, and that is why we're supporting it."

Now, why do I care about what employers think? I care because they create the jobs. I care because they pay taxes and their employees pay taxes. Those taxes go to fund important services that I always hear the opposition pretending they care about — whether it's health care or whether it's education. That's why we are increasing spending in those ministries in spite of a very difficult economic climate.

But we are only able to do that if we're generating revenue and income, and you will only generate revenue and income when you have businesses creating jobs and wealth and investment. That's what we support on this side of the House, and that's what I never hear about from the opposition. I never hear them talking about wealth creation. I never hear them talking about creation of jobs — about what it takes to actually create jobs.

I get that they like to spend money. I get that they say: "Spend more money." I get that they talk about how we must never change anything we do, but I'll tell you this. On this side of the House we need to grow the economy, we will grow the economy, and the HST will help grow the economy.

Now, you know, the NDP then like to talk about how there are some sectors…. They talk about the restaurant industry that's not happy with the HST. Well, that's true — not all of them, but some of them. The NDP will talk about how the HST is going to wreck the restaurant industry. It'll wreck the tourism sector. We've heard that many, many times in this House.

I was puzzled by that, though. I was puzzled by that. When I think about the great restaurants of the world, many of which are in British Columbia…. But they're also in London, in Paris, in Rome, and those also happen to be some of the top tourism destinations. But wait a minute. They've all got value-added taxes. How can they not have a wrecked tourism sector? How can they not have a wrecked restaurant sector? What is wrong? It doesn't make sense to me, but it would seem to follow, if I followed the logic of the opposition, that this must be the case.

But 130 countries around the world have HST. They have value-added taxes, and they have very strong tourism sectors. They have very strong restaurant sectors. They have very strong economies. They have very strong social systems.

[1720]

Again, it is an inconvenient fact for the members opposite. So it does get me wondering. Why is it that the NDP launch out into these positions that they ultimately are forced to reverse later on, as they did on the carbon
[ Page 4653 ]
tax and were forced to on the carbon tax? Because they haven't done their homework.

I totally get the appeal of something that is unpopular, wanting to run in front of the parade, as their leader Bill Vander Zalm is doing, and wanting to pretend that you're against something that you're really not. I understand that. But I do think it's important to try and look at the facts, so that's what I try to do.

Now, there are too many articles, unfortunately, that I could refer to that talk about how this makes enormous economic sense. I'm only going to touch on a few. The first one, actually, came from an area…. Frankly, it's an on-line newspaper site: thetyee.ca. The Tyee generally, I would say on balance, I don't find to be particularly favourable to government on many of our policies, but I must say that I did find an article written in the Tyee in August of '09 by Calyn Shaw that was very, very interesting.

I just want to read a couple of sections into the record, if I may, because I do think it's important. The first was…. She started out the column by saying:

"Don't shoot me. I've come to believe that the harmonized sales tax introduced by British Columbia's Liberal government was the right thing to do…And it isn't just" — I'm reading now directly from the article, if I may, into the record — "the government that believes so. Prof. Kevin Milligan from the department of economics at the University of British Columbia is an enthusiastic supporter of the new tax policy and gave it high praise when I spoke to him last week.

"'HST isn't a left-right issue, and it isn't ideological as far as economists are concerned. It is just good policy,' said Milligan. He went on to point out that 'it isn't pro-business and anti-consumer; it is the necessary modernization of tax policy.'"

Now, that's one article.

We all know about Dr. Jack Mintz and the review that Dr. Mintz did. In short — in fact, paraphrasing better — what came out of Dr. Mintz's article was that it was a game changer. It is a game changer for British Columbia in terms of having one of the most competitive tax policies in the world.

That, I think, is something that is going to be important because now, as governments around the world are struggling with a recessionary economy, with challenges of trying to create wealth, create jobs and ensure that they're going to have the revenues to invest in knowledge, to invest in education, to invest in health care, tax policy is going to become very, very important. Dr. Mintz is right when he calls it a game changer.

Why is it a game changer? Because if you are a business looking to make an investment in a jurisdiction in British Columbia, as a result of HST, your effective marginal tax rate for investment has just been reduced by 40 percent.

Now, what does that mean? Effective marginal tax rate means that a lot of the PST costs that are embedded in virtually every single step of your investment process are now gone. They are gone, and because they are gone it creates a much more competitive environment for investors. We want investors in British Columbia. At least this side of the Legislature wants investors and investment in British Columbia.

That, I believe, is so important to the debate because, as I said earlier, what I don't hear from the opposition is how they're going to do anything different. They say that they want to keep the PST. Well, that's okay. We're here actually debating that very issue. We are trying to repeal the PST, and they are fighting hard to keep it.

Put aside for a moment the nonsensical nature of that, because of course, the HST has already been passed by the federal parliament. If we kept the PST, we would find ourselves in the unenviable position of having 19 percent worth of taxes — both sales tax and the harmonized sales tax.

But putting aside that for a moment, I think what we haven't heard from the NDP are their arguments for keeping the PST, why the PST is going to be such a great job generator for British Columbia. I have not heard that argument. I have sat in this House for hours, but I have yet to hear the argument. The reason why is because there is no credible economic argument for keeping a sales tax that impacts costs every step of the way through the supply chain and dramatically increases costs, ultimately, to the end consumer. There is no rational economic argument.

[1725]

Just today I happened to read yet another voice — well respected, in fact — the chair of public finance with the graduate public policy program at Simon Fraser University, Prof. Jon Kesselman. Now, Professor Kesselman had an article with a headline saying: "HST Critics Need to Take a Closer Look at Crumbling PST." I just want to read into the record a couple of paragraphs from this, if I may.

"Many groups and opposition parties" — i.e., the NDP — "have cited deficiencies of the impending sales tax reform. But in failing to propose any alternative to the HST, they have accepted the notion that British Columbia's existing retail sales tax is a relatively desirable tax.

"After all their publicly bandied criticism of the HST, much of it misinformed and misconceived, opponents of this tax reform need to justify retention of the PST.

"Retention of the PST…would leave the province's businesses with an unnecessary $150 million of tax compliance costs" — and all the other costs that are imposed.

As I come to the end of my speaking time here, I want to emphasize and summarize two things. One is: I agree that it is an unpopular tax. But I'll tell you this. I never got elected to try to be the most popular person in government. I got elected to do the right thing in government, and I will always try to do the right thing on behalf of British Columbians.

I will also make a prediction. I will predict that the NDP's phony opposition to the HST will evaporate just as quickly as their phony opposition to the carbon tax evaporated. Just as they ran on a campaign saying they
[ Page 4654 ]
were against the carbon tax and, only weeks after losing that election, flipping their position, they will do exactly the same thing on the HST.

The one thing that I have not heard in this House…. I have not heard any of them unequivocally stand up and say: "If we ever got elected" — God forbid — "we will reverse it. You have our word. It is gone. It will be eliminated as quickly as we possibly can." You've never heard that, because it will not happen.

It is the right policy for British Columbia. I'm proud of the fact that we are a government that is continuing to try and keep this economy strong. I am proud of a government this is always focused on keeping our economy strong, our taxes low and our economy competitive and on creating jobs for British Columbians in every part of British Columbia.

D. Donaldson: I rise to speak in support of this motion and to give a balanced and reasoned approach as to why I'm going to vote in favour of this motion. That's in contradiction to the blatant, partisan approach we just heard from the Minister of Health. The people expect a balanced and reasoned approach, and they're not getting any of that from this government.

You know, I can understand the blatant partisanship that we heard from the Minister of Health, because he's obviously feeling badly. He admits that he's been in favour of the HST for ten years, and he's never actually bothered to run on it or tell the people that he would be bringing it in. That kind of behaviour makes you feel badly, and then you lash out, and you end up making irrational arguments. So I will give my balanced and reasoned approach to why I'm voting in favour of this referral motion.

The motion is: "Be it resolved that Bill 9 not be read a second time now but that the subject matter be forwarded to the Select Standing Committee on Finance and Government Services and further that the committee be empowered to invite witnesses to appear before it to assist in its deliberation."

Well, I believe that this is a brilliant idea. My opposition colleague from Port Coquitlam put this motion forward, and it's a brilliant idea — the reason being that it has the potential to renew faith in democracy. That faith has been chipped away at by the behaviour of this government around the HST.

People are angry, and they're angry with good reason. They were told one thing before the election, and another thing happened afterwards. That's around this government's intention not to bring in the HST before the election, then bringing it in afterwards.

People are angry, and they have good reason to be angry. In fact, over 80 percent of them are opposed to the implementation of the HST. It's a brilliant idea by my colleague from Port Coquitlam, because it has the ability to take some of that anger, that cynicism that this government has created, and channel it into a more productive means.

[1730]

By going to the Select Standing Committee on Finance and calling public witnesses, it reduces some of the cynicism that we've seen build up by the behaviour of this government, and I'll talk about that a bit more later.

Again, it's a brilliant suggestion, a brilliant motion. It's a legitimate tool, this motion. It's in the parliamentary tradition that allows for a second look at bills being introduced. If the government has made a mistake — and of course, the people of B.C. believe the government has made a mistake on this — it allows for an avenue to correct that.

That's what's brilliant about our parliamentary system that we have here, with the democracy that we have, is that it allows for the government to step back, when they're shown that they've made a mistake, and take another course of action, which in this case would be to vote in favour of this motion for referral and, therefore, allow people to have their say about the HST in a democratic way.

This referral motion also allows us to work collaboratively. Many people out there…. It's part of the reason I was elected. As I said, I would attempt as often as possible to take a collaborative approach with the government when it made sense, when it followed the wishes of my constituents. In this case, we're suggesting and putting forward this motion for referral because it's a good example of collaboration and working cooperatively.

If the members on the other side would vote in favour of this referral, then we would see that the level of cynicism amongst the electorate would go down, because they see the government seeing the errors of its ways and working in cooperation and collaboration with this side of the House.

Again, it's not just a delay tactic. I've heard members of the Liberal side of the House talk about this as being a delay tactic. In fact, the member from Vernon-Monashee recently said it was a waste of time. Well, I don't believe that using parliamentary traditions to increase democracy is a waste of time at any point in this Legislature, when it gives people, 80 percent of those who are opposed to the HST, a venue to express why they are opposed.

Actually, those people who are for the HST would be welcome to come before the Select Standing Committee on Finance under this referral. It allows people to have a say, and they did not have this say before the election, because the HST was not on the agenda before the election in this government's platform.

By voting for this referral motion, this side of the House and the members who can see the error of their ways and see the light on this — who vote in favour on the other side of the House — will be saying: "We believe in democracy. We believe that people should have
[ Page 4655 ]
a say over a tax that will impact them." And 80 percent of the people in this province say this tax will impact them negatively.

So it's not just a delay tactic. It's a good motion. It's a proper use of democracy, and in fact, it's in our Parliamentary Practice book. It's a way, under second reading…. For those who aren't familiar, and many people in Stikine aren't familiar with parliamentary procedures, what we're debating here is that the subject matter of a bill can be referred to committee. It's part of the second reading of the bill. That can be done.

In this case it's being referred to the Select Standing Committee on Finance and Government Services. I am the Deputy Chair of that committee, so I know the value of that committee's work in that we're one of the few committees that on an annual basis go out and solicit information from the public through public hearings. We travel the province and ask for input on the budget coming up in the next year.

As Deputy Chair, I've seen the worth, I've seen the workings of democracy, about how people can apply and have their time in front of the committee. All the committee members — there are ten of them — are.… I've witnessed how they listen attentively and then consider all the opinions that are put forward to the committee when they make recommendations to the government through the annual report. So I see the worth of the public participation in this.

[1735]

The committee is a brilliant strategy about the way for this to go as a referral in this motion. It would be, as I said, the Select Standing Committee on Finance and Government Services to which this motion would refer Bill 9, which everybody recognizes as the HST bill — a good referral for this bill to go to for a sober second look, for the due diligence that wasn't done by this government before the implementation of the HST.

[L. Reid in the chair.]

Again, for those who might be watching or listening and for those in Stikine and other areas of the province, the Select Standing Committee on Finance to which this motion is referring has six government members from the Liberal side and four opposition members. We know the stance of the four opposition members on the committee. We're opposed to the HST, and that's because we've done our due diligence. We've listened to the people.

But for the six government members, it would be a very good opportunity to gather the input and solicit ideas, which they didn't have a chance to do before the election because they never put this question of the HST in front of the electorate. In fact, we have the written documentation that they denied they were even thinking of implementing it.

So this would be a great chance to hear from the people. They could even lobby for the groups that they believe are for the HST to come in front of the committee, and then they could actually get what they would believe to be a well-rounded discussion. That's fair enough. But let's put it before the public and give the public a chance to have the input that they didn't get, because this government wouldn't put it before them before the election.

On that committee we have, as I said…. This is the referral process. It's the referral of Bill 9 to this committee. That's what the motion is. We have the member for Kelowna–Lake Country. He's also on the Select Standing Committee on Finance with myself. We've noted that according to the initiative campaign, his constituency is one of the constituencies that has met or is close to meeting the 10 percent of signatures required for the initiative, the 10 percent of registered voters who need to sign up as opposed to the HST for that initiative campaign under Elections B.C. to succeed.

The initiative campaign only started on April 6. This information is current to April 19. In less than two weeks the Liberal member for Kelowna–Lake Country…. In his constituency they've already collected or nearly collected the 10 percent of signatures.

If he would vote for the referral motion, then he would give a venue to the people in his constituency to come before the committee in a public hearing. Then he could hear from them, because obviously he didn't knock on their door before the election and say: "You know, we're thinking of putting in the HST. What's your view on that?" People didn't have a chance to express their views to him on that. They had no idea. They were blindsided by this.

By voting for this referral, he would give the people of his constituency a chance to come as public witnesses before the Select Standing Committee on Finance and Government Services and make their views known on the HST.

Another member of the Select Standing Committee on Finance that would be hearing public input on Bill 9 as a result of this referral motion is the member for Comox Valley. The member for Comox Valley on the other side would be able to hear the reaction of his constituents and others in the province to some of his comments in this House — quite disparaging comments in this House in his defence of the HST.

He talked about little old ladies in Kelowna and a bike store owner in Nelson being opposed to the HST, and the tone was not friendly.

[1740]

Well, I'd like to tell the member for Comox Valley that its seniors have grave concerns about the HST. They've come out against the HST because they know that on fixed income, it's going to impact them to a great degree. I mean, they have many seniors on fixed incomes who
[ Page 4656 ]
have no means to increase that income. They're going to suffer from the HST, and that's what they've said.

So the member for Comox Valley who made these disparaging remarks about little old ladies from Kelowna…. Well, as the Select Standing Committee on Finance, we could go to Kelowna. We could hear from seniors in Kelowna about what they think about the HST.

The member for Comox Valley, if he votes for this referral motion, could then come along because he's a member of the Select Standing Committee on Finance. He could listen to what seniors have to say about the HST. He wasn't able to hear what they had to say about the HST before the election because he never told them that his government was going to implement the HST — or was even on the books. So that would give him a chance to hear from seniors.

It would also give him a chance to hear from small business owners in the bicycle business. Again, he made a disparaging remark about one bike store owner in Nelson. Well, if he would vote for this referral motion, the member for Comox Valley, then perhaps he could suggest as a member of the Select Standing Committee on Finance that we go to Nelson or that we hook up with the people in that area of the province through video conferencing, as we did in the fall.

He could hear from the bike store owners in that region, in Nelson. As well, he could also hear from the bike store owners across the province — hear from them about their opposition to the HST.

It's not just small business owners. I've talked to the local owner or manager of a large store, a Canadian Tire store in my jurisdiction, in my constituency. He just can't understand why the HST is being applied to bicycles and bicycle accessories. He says: "That's affordable family recreation. Why would you be discouraging that kind of purchasing, discouraging bicycle sales, with the HST?" He thinks it's going to have a negative impact on bicycle sales at his store, and that's a big store. It's not simply a small business owner. It's a large store.

He also doesn't understand the rationale or the logic of penalizing people who are trying to participate in affordable family recreation by implementing the HST on bicycles when we have such a health crisis associated with being physically active. Through the figures from our health authorities, we understand that by 2014, the cost of diseases associated with inactivity could rise to $1 billion in our health system.

The Health Minister often talks about innovation and changes he wants to make. One change is that he could look at the linkages and stop sitting in a silo around health care — look at the linkages between health and recreation and taxation policy by this government and realize that by implementing the HST on bicycles, you're going to decrease affordable family recreation. You're doing nothing to encourage physical activity, and therefore, you're doing nothing to address the costs to the health care system that inactivity is bringing.

So there's a suggestion. There's what real innovation is about. Again, if the member for Comox Valley, instead of making disparaging remarks about a bike store owner in Nelson, would vote for this referral process, he could actually become better informed. Because bike store owners around the province would then have a venue to come and have their concerns around the HST heard by the government and by all members of this Legislature, through the Select Standing Committee on Finance. That's what the member for Comox Valley could do by voting for this referral motion.

There's another member from the Liberal side of the floor here on the Select Standing Committee on Finance that would be interested, I'm sure, in voting for this referral motion, and that's the member for Nechako Lakes, my neighbour in the northwest part of the province. His comments in the Legislature were quite unbelievable. He said, "Delivering on the HST is delivering on what people asked for in the election campaign in my riding" — what the people in his constituency asked for.

[1745]

Well, that's hard to fathom, because this government never put before the electorate the question of implementing the HST during the election campaign. So I can hardly understand how that was what people were asking for in the member for Nechako Lakes' constituency.

However, if he and members of the government, of the Liberal side, did vote for this referral motion, for this vote for democracy, then people from Nechako Lakes could come to the Select Standing Committee on Finance that the Nechako Lakes member is a part of. He could hear from his constituents if they actually thought he was delivering on what they asked for.

They did not ask for the HST, but he could hear from them. That way, he would actually get better informed about what the people in his constituency are thinking. I hardly think that he went door to door before May 12 saying: "Guess what. We're going to implement the HST. What do you think of that?" I don't believe that that's the situation because the HST wasn't part of the platform. So I don't really understand how he could make a statement in this Legislature saying he was delivering on what people asked for in the election campaign.

However, to give him the benefit of the doubt…. You know, he might be confused. Perhaps, to be less confused, he could vote for this referral motion. Then it would give the people of Nechako Lakes the ability to come forward in an organized fashion in a setting in front of a select standing committee of this Legislature and make their views be known on the HST, make their views be known to the member for Nechako Lakes.

Again, this is the biggest tax shift in the history of this province, from corporations to consumers — $1.9
[ Page 4657 ]
billion in tax shift. If the members of the government would vote for this referral motion, then they would be able to hear from the electorate, from the people of this province, what they think of that tax shift. But at this point, they're not hearing from them because it wasn't put before the electorate during the election campaign.

This parliamentary committee is a committee of the Legislature. This referral motion is to put Bill 9, the HST bill, before the Select Standing Committee on Finance and Government Services. It's within the terms of reference of each parliamentary committee to be afforded total independence in its deliberation. So you know, in fairness, total independence means that we could hear from all sides, whether they're for or opposed to this Bill 9, to the HST legislation.

By voting for this referral, the government, the people on the Liberal side, are not voting whether to bring in the HST or not. They're simply voting in favour of a democratic process that would afford a committee total independence in its deliberations, unlike what happened before the election and then what's happened since the election with the Liberal government.

It would be a vote in favour of democracy, a vote in favour of independent deliberations. As the legislative website says, a committee system "allows members of the public to have direct input into the parliamentary process by making written submissions and attending public hearings. Parliamentary committees may travel within British Columbia to obtain evidence."

By voting for this referral motion and by putting this motion forward, what we're saying is that people in this province can have direct input to the parliamentary process. That's not what happened before the election, around the HST. For people in this province, it's a big, big decision. It's the biggest tax shift in this province in history — a $1.9 billion tax shift. Yet, the people were never asked: "Is this the kind of tax shift you want?"

You have to trust the people of this province by being honest with them. By putting this before a parliamentary committee, you could get the public input that was lacking because this wasn't put before the public before the election. The parliamentary committee can travel throughout parts of the province. There's a budget to do that, but we can also do it by video conferencing.

[1750]

We did that as the Select Standing Committee on Finance before this year. Back in the fall of 2009 we used video conferencing. So costs can be kept down as well. Costs can be kept down, but people can still get their democratic input into something that's been foisted upon them — the HST — without a mandate. No mandate — foisted upon them.

Committees may also be referred the subject matter of a bill, and that's what we're doing here. It's Standing Order 78A. We're referring Bill 9, the HST bill, through this referral motion to the Select Standing Committee on Finance. That's a parliamentary procedure. It's a parliamentary tradition. It's not a waste of time. It's not a delay tactic. It's letting people have their say.

With the passing of this referral motion, with the assistance and cooperation of the Liberal government, which…. I believe that every member over there believes in democracy, so that's why I think they should vote for this referral motion. With their support and with this referral motion going through, who might come before the Select Standing Committee on Finance? Again, any members of the public can come, and organizations could come.

For instance, the Council of Tourism Associations of B.C. could come before this Select Standing Committee on Finance in this referral process, and what might they say? They can describe to the six government members on the Select Standing Committee on Finance the tens of thousands of jobs that they feel will be lost because of the HST in the restaurant and tourism association sectors.

They could come before the committee. They could make their case be known in a public venue. They wouldn't have to put out papers that they hope would be read by government members. They could do it on the record.

Hansard collects all the information in a very accurate and very diligent manner. I've seen them do it. They work long hours. They're there setting up before the committee meetings. They're there taking down afterwards. They're running off to try to get the equipment on the planes to the next destination. So by coming before committee, the Council of Tourism Associations could get on record in an official way, in front of this Legislature, the arguments that they have about why the HST is a bad deal for that sector.

Who else could come before under this referral motion? Who else might come before the Select Standing Committee on Finance? Well, we might see the Consumers Association of Canada come before the Select Standing Committee on Finance under this referral motion, and Bruce Cran, the president of the Consumers Association of Canada, called the HST a total disaster.

He says: "Our lines" — meaning our telephone lines — "are filling up with calls from disgusted people. Consumers are absolutely shocked. They don't know where this is coming from." Well, obviously, they don't know where it's coming from because it was never part of the Liberal platform before the election, so people didn't have a chance to express their valid views on it, for or against — for or against. We want to be fair here. It's part of my balanced and reasoned approach.

Speaking of that, no wonder people are angry. Before the election, the Premier said the HST wasn't on the radar and that the Health Minister, in his comments just preceding mine, referred to how closely this govern-
[ Page 4658 ]
ment follows Ontario because of the size of Ontario's budget in comparison to the rest of the provinces in Canada and how closely they followed what Ontario was doing.

Well, months before the election, Ontario's Premier said that his government was considering adopting the HST. In fact, on March 26, 2009, Ontario announced it was going to adopt the HST. The Health Minister, in comments previous to mine, said they closely follow what Ontario says, so it's quite unbelievable that if they were following Ontario that closely like they say they did, like the Minister of Health says they did, that they would not have been considering putting the HST in themselves months before the election.

[1755]

But the Premier says it wasn't on the radar. It was not on the radar. That's very, very hard to believe — and by the fact that we see over 80 percent of the people in B.C. are opposed to the HST, they don't believe it either. They don't believe it wasn't on the government's radar before the election.

Again, going back to who might come before the Select Standing Committee on Finance if this referral motion is brought in as it should be. Well, major developers — for instance, Bob Dominick, a major developer in Surrey and Langley…. When he found out about the HST, he said: "My own company just survived one of the worst recessions in a long time. I would think twice about paying an extra $36,000 house tax." That's in reference to the HST. He says: "Developers are saying the industry is getting quite badly hit. This" — being the HST — "will not encourage people to buy homes."

That's what a major developer in Surrey and Langley said as quoted in the Province newspaper after this government's plans were unveiled to bring in the HST.

Bob Dominic, a major developer, could come in front of the Select Standing Committee on Finance as part of this referral process and make his views known — not just his views, but his factual views as a developer. He could improve the knowledge of the committee, improve the knowledge of the six members of the Liberal side on the committee and give them a chance for a sober second thought on their implementation of the HST — the implementation with no mandate. He could do that under this referral process, and that's why I say I'm voting for the referral process as a democratic tool for the people of B.C. to have their say.

That's why I think the members on the other side should also have a chance to vote for this referral process and hear from the people of B.C., who might oppose the HST. They might be in favour. But at this point many people oppose it, and they haven't had a venue to have their views known. To be fair, perhaps the government members who maybe were blindsided themselves by this announcement haven't had a chance to listen to those people either. We lead busy lives. They lead busy lives….

Deputy Speaker: Thank you, Member.

D. Donaldson: I've just gotten started.

[Applause.]

J. Thornthwaite: Great, thank you. I don't even have to say anything.

It is my pleasure to rise in this House and speak to the motion, the amendment on Bill 9, the Consumption Tax Rebate and Transition Act. Even though it was recommended unanimously by previous Finance committees also containing opposition members, where witnesses presented to the committee, the NDP has requested that we return it to the Finance Committee. Like my colleague from Stikine across the way, I was also a member and still am a member of the Finance Committee. So we have had a minor discussion about it, even this year.

But I understand after reading some of the reports of previous years that it indeed did come up numerous times, and many, many groups did recommend the implementation of the HST. I think in this regard, it has come up — been up and discussed publicly as well as through Finance Committee members from both the government side and the opposition side, and I will not be supporting the motion to amend.

Listening to the debates that have been going on about Bill 9 over the last week or so, I must say I'm really, really frustrated. There's lots of misinformation out there. My constituents are writing me and e-mailing me and calling me and are really confused by the conflicting information they're getting. I have seen a couple of letters in our North Shore News that have questioned the accuracy of some of the reports that have been coming out. Certainly, some of my constituents have checked many, many different sources.

[1800]

I think the fact that my constituents, who I consider very intelligent people…. They like to make decisions based on sound evidence. They are checking where they're getting their information, so I'm really pleased about that.

One of the things I wanted to mention, just from the get-go. I can tell you that everybody in this House, I'm sure without exception, ran for political office because they wanted to make things better for their constituents as well as for the society in general. I'm sure that's what everybody did. I can tell you that I'm no exception. I ran for school board trustee for the reason that I wanted to make things better, and I put my name in for MLA as well.

I can also reconfirm to my constituents, because I do get asked this question, that the HST was not discussed at all during the campaign. It never came up in any of the all-candidates meetings. I never got asked any questions. So for them to infer otherwise…. It's just not true. I just wanted to make that clear and on the record.
[ Page 4659 ]

If elected officials, if the government is deciding to introduce something like the harmonized sales tax…. My constituents are asking: why would we do that if it's as horrible as the people on the other side are saying or as reports they're getting on the Internet, etc.? Why would that be?

In addition to what I mentioned before — the massive misinformation that's out there — I want to address the issue specifically of the harmonized sales tax and why it's been introduced. I'm not going to get into any of the politics about it. I just want to talk about the harmonized sales tax. Before I became an MLA, I didn't know very much about it, and I certainly know way more than I want to know about it now.

I think the main reason why the government chose to introduce the harmonized sales tax when it did was to do with timing. Timing means several things. We in British Columbia cannot take ourselves in isolation. What is happening today in North Vancouver and in British Columbia is totally different than what was happening five years ago, ten years ago or 20 years ago, and we simply cannot be doing the same thing over and over again and expect to get different results.

Everybody wants some sort of change, yet we don't actually do anything to help or implement that change. I think the worst thing that responsible governments and responsible people can do is nothing. When we are faced with a financial crisis, as we were in the last couple of years, 2008, we have to be proactive. I prefer to be proactive than reactive. That's why, again, I don't support going back to another committee and wasting more taxpayers' money talking about a topic that has come up before.

As I said, responsible governments should look at what's going on in the rest of the world and try to mitigate any problems that will make our society and our citizens come out ahead. How we respond to those issues — in other words, those issues to do with the global marketplace — is something that I just want to address right now.

What are other countries doing? What are other provinces doing? What are other jurisdictions doing in the rest of the world that will help their citizens be successful, their economy grow, jobs be provided to their citizens, etc.? What kind of tax structure do they have? What is their tax rate? What kinds of decisions are they making now that will affect British Columbians?

Did you know that there are more than 130 countries worldwide — including 29 of the 30 in OECD, which is the Organization for Economic Cooperation and Development, developed countries such as ours…? Twenty-nine out of 30 of them have adopted a value-added tax system, which is essentially the same as the harmonized sales tax system that the government has introduced.

[1805]

Why do all of those developed countries and fellow provinces consider the value-added tax a benefit? Well, those countries that have not embraced a value-added tax system have higher prices before the value-added tax at the domestic consumer level as well as higher prices at the export level, making export industries less competitive.

So why would my constituents in North Vancouver care about competitiveness and whether or not our products or businesses in Canada or British Columbia are more competitive? Because if our businesses and tax structure are more competitive, then more businesses will want to move here, and more importantly, more businesses will want to stay here. What they bring with them is jobs, and these jobs are for our citizens in British Columbia and in North Vancouver–Seymour.

"But what about me?" I get asked these questions: "What about me, the consumer? How is this tax going to affect me, the consumer?" Well, again, let's look at what other people are saying and at what is happening in other countries. Most economists agree that consumption taxes, which is what this is, are fair. In most European countries, in addition to having value-added taxes, their taxes are generally hidden. In other words, you can't really tell what, in the final price you're actually purchasing, is considered a tax.

But I'll tell you that after doing a little bit of research, most European countries have a value-added tax rate which is between 15 and 25 percent. The value-added tax in the U.K. is over 17 percent. It's 19 percent in Germany, over 19 percent in France and as high as 25 percent in Sweden and Denmark. Why is that? I know that many of the socialists in this room would look at Scandinavian countries as being a model of how to do things in the world, and a lot of our recommendations for changing our health care system come from recommendations of European countries, including Scandinavia.

If they've been living with a value-added tax for years and their tax is bigger than ours, what's going on in the rest of Canada? Well, although Quebec and the Atlantic provinces have value-added taxes, their taxes are actually higher than the harmonized sales tax that is proposed here in British Columbia. Currently Quebec's combined QST and GST is 12.9 percent, and we've just heard a recent report that it's going up to 14.5 percent in 2012.

In Nova Scotia the NDP government is raising the HST from 13 percent to 15 percent. People have talked about Ontario. Their proposed HST, which they've proposed to come in effect July of this year, is still higher than ours. It is 13 percent.

In actual fact, our proposed rate of an HST in British Columbia, which is 12 percent, is actually lower than all of the above. So I think it's a bit of a balance. We are trying to make British Columbia more competitive in the global marketplace by introducing a value-added tax, but we're trying to keep it reasonable and lower than
[ Page 4660 ]
others that have a value-added tax. In my opinion, that makes sense for citizens, and it allows us to have a balanced approach.

Nobody likes taxes. In fact, everybody hates taxes. So if we're going to start talking about taxes…. I was asked to sign a petition on whether or not I wanted any more taxes. I would certainly not be surprised if many of my colleagues across the way or friends and constituents would want to sign a petition that says no more taxes. I totally understand that. But if we get the whole story and look at it from a holistic perspective as to why this tax is better not just for our economy but also eventually, in the long run, for our consumers, I think that's something we have to consider.

The other question that I want to just go on to, as far as timing is concerned, is to talk a little bit about Ontario. We had a visit from executives from the motion picture industry here in the Legislature today, from British Columbia, and they talked about tax credits for British Columbians with regards to the motion picture industry.

[1810]

They did talk about the difference between what we're offering here and what is offered in other countries, including Los Angeles where we are trying to compete — Hollywood North here.

Also, they brought up Ontario. They were very, very pleased that our provincial government had proposed to bring up the HST, because they consider it a valuable measure to make us more competitive and be able to maintain the businesses that are here in British Columbia and also attract more businesses into British Columbia. That means a lot to me personally and should, I think, mean a lot to others in this House. What that means is jobs for our citizens. So we want to encourage more jobs to stay here and grow here, as opposed to them going to other jurisdictions where the tax structure is more desirable over there.

The last issue I just want to talk about with regards to timing is that the federal government has apparently been trying to get all provinces to adopt a value-added or harmonized sales tax. It wasn't until this time recently that we were offered in British Columbia, as well as Ontario, the flexibility to make a made-in-B.C. type of tax. A good example is the type of exemptions that we were allowed to do — including, in British Columbia, gasoline. It is classified as an exemption in British Columbia, as are home heating fuels at the point-of-sale rebate, whereas in Ontario it's not.

The greater flexibility that the federal government allowed, the opportunity for a made-in-B.C. harmonization, contributed to the reasons as to why the provincial government had chosen to introduce the HST now. Of course, we simply cannot negate the $1.6 billion that the federal government has provided to B.C. for adopting the HST. Of course, what that means, in addition to the substantial reduction in the costs of the administration of tax collection that British Columbia is now saving if they adopt the HST, is that those funds can now go directly into the services that British Columbia holds dear: health care, education and our social safety net.

What is the HST? I get asked this question all the time. Well, in addition to the majority of the leading economists stating the HST is the single biggest thing we can do to strengthen the economy and make us one of the most competitive jurisdictions, what it is, is a combination of the PST, the provincial sales tax, and the GST, the goods and services tax.

Right now the provincial sales tax is paid by every single business at every single step in the creation of a consumer product. You may not realize it, but the PST is charged multiple times during the production of a product before it reaches the store. Every business involved in the creation of the product pays the PST on almost all of the things they buy to carry on their business, from the extraction of the raw materials through manufacturing or processing, as well as warehousing, transportation, distribution and the final sale of the product.

Studies of the HST in eastern Canada have confirmed that in fact, in contrast to some of the reports we've heard, the majority of consumer costs to consumers or consumer prices to consumers will actually be lower. In addition, like the GST, the HST will not apply to basic groceries and residential rent, the two items which account for the large proportion of total expenditures by those with lower income. Almost all other items that are currently zero-rated or exempt from the GST will also be zero-rated or exempt from the HST. Any goods or services that the consumer does not pay GST on won't pay HST either.

We're providing point-of-sales rebates, similar to PST exemptions, for the provincial portion of the HST on gasoline and diesel fuel, motor vehicles, and that includes biofuel components. Point-of-sale rebates are also provided for books, children's-sized clothing and footwear, diapers, children's car seats, children's booster seats, feminine hygiene products. There will also be a refundable B.C. HST credit paid with the GST credit to those with low incomes. Tax credits will be paid quarterly with the GST credit to more than 1.1 million British Columbians, and that's a quarter of our population.

[1815]

Even with the introduction of the HST, there are savings and advantages to low-income individuals. So we're not trying to penalize low-income individuals with this tax structure.

Also, the introduction of the HST follows more than 120 tax cuts introduced by the B.C. Liberal government since 2001, and B.C. has the lowest provincial personal income taxes in Canada for those earning up to $118,000. It's more money in our pockets to spend on whatever we want.
[ Page 4661 ]

I've also got a lot of small businesses in North Vancouver, and I get asked this question. Throughout the 1990s there were punitive personal and business tax policies that drove people, companies and investments out of B.C. We have been working every day to fix that, starting with significant personal and business tax cuts. Those tax cuts directly stimulate our economy by bringing investors back to B.C. So the HST is another way of helping to build a stronger economy.

Here's a list of some of the groups that have supported the HST. I'm not going to go through the list, because it is quite exhaustive. But we did get a press release from the Coast Forest Products Association the other day, and they were very pleased. In addition to supporting it before, now they feel that the introduction of the HST will help their industry, the forest industry, offset the rising dollar. They've said:

"While many negative things are said about the HST, evidence in jurisdictions around the world that have switched to consumption taxes shows overall prices paid by consumers have gone down over time. This is because savings companies realized down through the supply chain, when equipment and supplies are purchased, are passed onto consumers in the end. But most importantly, evidence in other countries and provinces with similar tax structures shows that the HST leads to higher levels of investment, higher wages and higher standards of living."

The other group I just wanted to mention is the Motion Picture Industry Association of B.C., in addition to the many other groups that have come out in support. I did mention the tax credits that we had introduced for the film industry and the fact that the executives who came to visit us today had really, really expressed thanks that we were introducing the HST — again, to make us more competitive in British Columbia so that we can keep the businesses here and therefore provide high-quality and high-paying jobs.

What is the HST not? One of the things I've seen numerous times is this e-mail going around — everybody calls it a viral e-mail — that says the HST adds $2,100 to our yearly costs. That is absolutely false. You would need to spend an additional $30,000 on current PST-exempt items to even reach $2,100.

These are the facts. For a family of four with a $60,000 annual income, the true impact is just over $8 a month. For a senior couple with a $30,000 income, it's just over a dollar a month. A family of four with a $90,000 income will be impacted $14 a month, and a family of four with a $30,000 income will actually come out way ahead, by almost $50, because of the B.C. HST credit.

You might have heard that everything is going to cost more. Well, in actual fact, the majority will not cost more; they'll actually cost less or the same. New cars, trucks, boats, recreational vehicles, furniture, electronics, kitchenware, toiletries — all of these sorts of things are expected to be the same.

Actually, we had a talk by Jon Garson in one of the events that I went to. He's the vice-president of the B.C. Chamber of Commerce. He quoted that about 21 percent of products would go higher, but 79 percent are going to be lower.

[1820]

You may have heard that housing will cost more. There is no HST on used homes, which make up 80 percent of the total sales in B.C. There is a rebate of $26,000 for houses up to $525,000, and homes above $525,000 are eligible for a rebate of $26,000.

You may have heard that you'll pay more for car insurance, home insurance. Those items will be exempt. You may have heard that staying warm and keeping the lights on will cost more. Oil and natural gas will be exempt. You may have heard it will cost more to feed my family. I'm not going to go into all of these items, but they're all basic — groceries, zero-rated; even prescription drugs and drug dispensing fees.

You may have heard that the disabled will be impacted by additional costs for medical devices. Again, I'm not going to go through all of the list, but these things are zero-rated — hearing aids, asthmatic devices, prescription eyeglasses and contact lenses, canes or crutches.

You may have heard that children's clothes and items will increase. Children's clothing will not be subject to the provincial portion of the HST or be HST-exempt. This includes items such as diapers, cloth and disposable diapers designed for babies and children, diaper inserts and liners, rubber pants and training pants, etc. This also includes car seats and car booster seats.

You may have heard your child's music lessons will be more expensive. I was really concerned about that, because my children take piano lessons. But in actual fact, that's not true. Music lessons are not taxable.

You may have heard that the HST will hurt small business. HST will actually be good for business. It will replace the hidden sales tax, and small business will get additional tax credits.

My colleague next to me from North Vancouver–Lonsdale spent some time yesterday in the House, in her previous capacity as a small business woman, talking about all the different boxes and all the different forms that you have to fill out if you're a small business person. She went into total sales, total PST, and all the adding and subtracting and the amount of time it takes your average small business person to actually fill out these tax forms. Well, she called it archaic and regressive, this PST, where we're currently making our small business people have to fill out these forms.

So with the HST implementation, apparently $150 million annually will be saved in compliance costs alone for small businesses. I consider that a real benefit for small businesses.

For the consumer, as I mentioned before, those multiple PST charges are embedded in the prices you pay in the store, even though you can't see them. Under the HST system most of those embedded costs will be removed, and savings can be passed onto the consumer.
[ Page 4662 ]

I want to talk about restaurants just for one little minute. One of the things that rarely gets mentioned about restaurants is that many restaurants are small businesses, and they will also benefit from the advantages of filling out one form as well as being able to get the tax credits for everything that they purchase.

My colleague from the Peace River — I liked his example with regards to a renovation. He said: "Now if a restaurant is making a million-dollar renovation job, they will get a $50,000 GST credit." However, after July 1 if they do that renovation, they can claim a $120,000 HST credit. That's a $70,000 extra credit just because of the HST, and those cost savings can be passed onto the consumer.

Then the last thing I want to mention is about seniors. I have a lot of seniors in my riding. They are very concerned about what they're hearing, and they're very, very worried. Low-income families and individuals will receive an annual B.C. HST credit of $230 for those with an income of up to $20,000, and $230 per family member for families with incomes up to $25,000 paid quarterly with the GST. When combined with the climate action credit, low-income British Columbians will now be eligible for up to $340 a year in provincial credits in addition to the existing GST credits.

There's something else that I think senior citizens in my riding would be very interested to learn. Given the fact that our tax structure is encouraging business in British Columbia and the fact that we've got low income tax that their children and their children's children, their grandchildren, will also be able to benefit from, they will not be saddled with endless debt that has to be paid off years from now.

[1825]

These responsible tax structures and responsible ways of influencing our tax structure here in British Columbia I think will be an advantage to all of our citizens.

In conclusion, this is something that came up time and time again during the election. We were re-elected to manage the economy properly, and changing global circumstances mean changing the way we do things. I believe that in the long run, the HST will benefit British Columbians. Given what is happening worldwide, responsible governments can't just stand back and do nothing. We have to do something to make our province more competitive.

Now I think our job is to just try to correct the misinformation that's out there, to reassure people that the government is listening to them. We're working towards making our economy the most competitive in the world. We do support the low-income families and seniors by providing rebates and offsets, a cheque in the mail, and we encourage businesses to want to set up shop here, providing jobs for our citizens now and in the future.

N. Simons: It's my pleasure to rise and speak to the amendment proposed by my colleague here on the opposition side. Thanks to the member for North Vancouver–Seymour for her comments. I won't take too much time disputing what she says. Let me just make it simple. Most of what she says is probably…. It's a perspective that I suppose she wants to make sure her constituents agree with. I'm afraid there are factual tidbits that interfere with that message being understood that way by her constituents.

I can just say that most British Columbians are very concerned about this tax. Most British Columbians would like to see it not implemented. With this amendment we seek to find better ways of addressing the needs of this province. To start with, I think we need to remember that maybe 80 percent to 85 percent of British Columbians are opposed to the HST. I would say most of them are opposed to the manner in which it was introduced as well as to the tax itself.

I think they have good reason to be upset with the government. I think they have good reason to be mobilizing in large numbers and in force to relay their concerns to the government caucus, to cabinet, to say that this is not what we need and that this is certainly not the time for this. We've gone through and are going through difficult financial times, and adding a cost burden onto families is counterintuitive to the recovery that families and individuals in this province are hoping to see.

I know that many members in this House have listed in great detail what services and goods are going to cost more, and some have pointed out…. We could hear them again. In fact, I believe this is the opportunity to ensure that people in the province know this is not fearmongering.

[1830]

This is not political opportunism. This is the role that I was elected to fulfil on behalf of my constituents — to argue against bad public policy and to promote good public policy. Public policy includes the manner in which regulations and legislation are implemented as well as the specific contents of that legislation.

With this amendment, we are asking that the bill not be read a second time and that it be referred to a committee at which people from all sectors of our society would be able to submit their comments, observations, concerns about this tax and about taxation in general. What it would do, besides create, perhaps, better legislation, is it would also give the citizens of this province the idea — I hope more than just the idea — that their voice matters in this entire debate.

This is not just about whether we like taxes or dislike taxes. I'm concerned about the province's ability to maintain its jurisdiction over taxation. Whatever one says about the PST, that's the same PST that existed during the election as exists post-election. Now we suddenly have this revelation among 49 Members of the
[ Page 4663 ]
Legislative Assembly elected under the Liberal banner, who are suddenly vehemently and vitriolically decrying the archaic provincial sales tax.

This is not what they were saying before the election. I don't believe that…. I agree that…. The North Van–Seymour member said that it was never brought up during the election campaign. Well, it was brought up, but not by people attending the all-candidates debates at which she was present.

I'm not saying that she wasn't present at all of them. She very likely was at all, but I know some of the opponents didn't attend all-candidates meetings. Had they attended all-candidates meetings, perhaps they wouldn't have heard this issue come up, but there were industry representatives who wrote letters and put it in writing and asked the government about their intentions regarding the HST.

Some have referred to their answer about it not being on the radar as a form of wilful blindness, which is a term usually used when referring to an act that was committed by a person who wished to pretend it did not happen. When the message is that something was not on their radar, that does not mean they didn't see it. That doesn't mean they didn't hear it. It doesn't mean that their radar was functioning properly. It just means very little, really.

Clearly, tax policy implemented by the largest province in this country only a couple of months earlier would have shown up on a Finance Minister's radar had that radar been operating or had that minister been looking at his radar. So I think that I share the cynicism, I guess, of the majority of British Columbians when we hear that, in fact, this HST was just something they thought of three days after the election because of the deficit which they previously promised to be at $495 million and which ballooned to almost — well, over $2 billion, really.

[1835]

And when the government, which had promoted itself — I don't want to say prided itself, because that means it was perhaps accurate — as good financial managers…. I don't think you could probably find an example of worse financial management when you're entering an election and you choose what information you want to hear and what information you don't want to hear.

By having this amendment, we allow further scrutiny of legislation that really should have had scrutiny prior to its tabling. It's the kind of public policy that if, in fact, the members from the government side are being entirely forthright, is legislation that they would have managed to convince the public about perhaps. Not giving the public that opportunity prior to the election, I think, has led to a lot of the cynicism about the explanations or the assuaging of our concerns.

The public is not likely to accept the explanation of government, because they say to themselves: "Well, why wouldn't we hear about this before the election?" That's the kind of comment, that's the kind of input that stakeholders throughout the province would be able to present to a committee.

Now, just for the people in my constituency, Powell River–Sunshine Coast…. In order to get to my constituency, unless you're an extreme hiker or an extreme swimmer, you need to take a ferry to get there, from Horseshoe Bay to Langdale or from Comox to Powell River. Within the constituency, between the lower Sunshine Coast and the upper Sunshine Coast, between the upper Sunshine Coast and Texada Island, between the lower Sunshine Coast and Keats Island and Gambier Island and Hornby Island, not to mention Savary, up in the upper coast…. All these costs of ferries to the individual are a huge burden on families' costs.

When the goods and services we consume come over on ferries, we're seeing the increase in the tax, the increase in the cost of transportation, increase in the cost all along the line. I don't want it to be fearmongering, because I know the resourcefulness of people in coastal communities; they overcome challenges. But what I have the most difficulty with is that they're being forced to overcome challenges that were not of their asking.

They've seen 130 percent increases in ferry fares, and now we see another example of how it seems that government isn't looking at the long-term impact of their policies — tax policies, ferry policies. These are not reflecting the public interest. What is government for, other than to protect the public interest, the interests of the public, the interests of the resources that belong to the public, the services that are required by the public?

What we have, instead of a government reflecting the needs of the communities that they are supposed to serve…. They're blindsided by what they're considering a double-cross, and I'm not the one that came up with the double-cross. I'm seeing it referred to that way, and I happen to agree.

I was on the hustings during the election, and indeed, nobody asked me if we were considering bringing in the HST. However, large groups representing vast sectors in our society asked that question, asked those questions. They were told unequivocally: "This is not something we're contemplating."

[1840]

I know a lot of people determine their vote based on the answers that the politicians give. That's understandable. That's what we do. We go to all-candidates meetings to answer questions. We meet people in lineups and malls. We do a lot of communicating. When a policy is referred to by the members introducing it as the most important thing that can be done, you'd think it would have been close to crossing the lips of some of the MLA candidates during the May election — but no.
[ Page 4664 ]

A major public policy was implemented in Ontario. Nobody out here noticed. It wasn't until…. I don't mean to be disrespectful on an individual basis, but it's hard to believe that the individuals running the province…. You know, I've heard colleagues of mine refer to it as: "At best, it's incompetence." Let me put it that way. At best, it's incompetence.

I don't usually say, "That was very incompetent," and mean it as a compliment. Usually, "incompetent" means something more negative. But they were just incompetent, ladies and gentlemen. They were just incompetent. I'm not alleging anything worse. It gives me great pleasure to say that the people of B.C. maybe were not misled; they were just being run by incompetent managers. So really, the benefit of the doubt.

I am a former social worker, and I do try to hear all sides of stories, and I do try to be compassionate, but my compassion lies with the people who are going to suffer the consequences of this government's incompetence. They asked me to come here and represent their interests. Well, their interests do not include the HST, and their interests do not include an increase in the cost of living for every resident in my riding.

Just on the cost of a funeral. I looked it up. I was hoping that I wouldn't have to look it up this early — the cost of funerals. You know, on a $5,000 funeral, just as an example, I think currently the taxes are about $250.

They're asking people: "Come and prepay. Prepay for your funeral. Do it now, so you don't have to get that extra hit once you're no longer with us." I'm not sure that's the kind of argument you'd like to go around and use as a promotion, but if you wait and pay for your funeral after July, you'll be paying about $600 on that $5,000 funeral bill.

Interjection.

N. Simons: I will not even dignify that with a comment. He said something about a layaway plan.

The $600 versus $250 in taxes on funeral services is a lot of money. It's a lot of money, especially for people who are middle-income. It's not a cost you want to have to spend, but it's fairly inevitable at some point. So people can have the option of running out and purchasing their preplanned funeral.

In my riding we have a huge number of summer camps, as Madam Speaker knows well, and the kids who go to these camps aren't always very well off. The cost of summer camps is increasing. For parents, it might be dismissed: "Oh, it's $30 a week. Oh, it's only $30 a week, $25 a week."

I just happen to know, from my previous employment and from living in this province, that $30 a week is a lot for anyone living on a middle-low income. It's a lot. It's a lot of money when you want your child to experience what the Sunshine Coast has to offer. But the cost of ferries in getting to the Sunshine Coast will be higher as well.

[1845]

If parents have families that are interested in camping, those fees have gone up as well. It's kind of depressing when you put it all into one little category.

However, what we're asking for with this amendment is that these things get considered, these public policy items be contemplated item by item, because not doing that is, I believe, a failure of our role. It's a failure. It's our failure. We're supposed to debate things in this House. We're supposed to come to some agreements and find legislation that will serve all our constituents.

There are 85 ridings in this province, and maybe 49 are represented by government MLAs. The residents and the citizens of the other ridings don't expect worse treatment or better treatment. I know that in my riding, we've had some good things happen. We're still waiting for other good things to happen. It's not all good or all bad.

When you have legislation that comes out of nowhere, costs a lot for individuals…. I mean, we're talking about a $1.9 billion tax shift. This is not just pennies. We're talking about a significant change in public policy, one that other provinces have seen in various degrees of disapproval.

My particular concern — and I know I'm going to have some time to continue this tomorrow — is the issues around the impact of the HST on the non-profit and community social services sector. Maybe in order to maintain good feelings and…. Oh, I've got a couple minutes.

[Mr. Speaker in the chair.]

I'm glad to be able to continue, as you all seem to be enjoying…. I know you're expecting me to rhyme my 30-minute speech, but I don't think that would be fun. I don't think anyone would enjoy that at all.

Interjection.

N. Simons: Well, I've never been called thoughtful by a member of the government caucus. I will continue with my thoughtful comments tomorrow. I appreciate the members opposite. They appear to be getting the message, and it looks like they're sharpening their pencils, looks like they've got binders out and folders, Duo-Tangs, erasers and highlighters.

Interjections.

N. Simons: Oh, no more highlighters.

I shall continue with my comments tomorrow, and noting the time, I move adjournment of the debate. I appreciate the advice, and I look forward to continuing tomorrow.
[ Page 4665 ]

N. Simons 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 10 a.m. tomorrow morning.

The House adjourned at 6:49 p.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF
TRANSPORTATION AND INFRASTRUCTURE

(continued)

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

The committee met at 2:35 p.m.

On Vote 45: ministry operations, $752,814,000 (continued).

The Chair: Good afternoon, everybody, and welcome to the Douglas Fir Room. We're doing the budget estimates for the Ministry of Transportation and Infrastructure.

If I could just remind everybody in the gallery that they may use electronic devices but no audio portions of them, and there's no hand-signalling or waving to any of the members or the people at the table.

H. Bains: I think tonight, for the benefit of the staff and the minister, I'd just like to say a couple of things. We went through the ministry operations and the provincial transit plan yesterday. We still have a number of issues to go through — we may do it later on today, this evening — such as the B.C. Ferries and TransLink review done by the comptroller general. Then we want to talk about other issues related to that. Port Mann/Highway 1 probably will go tomorrow. If we have some time today, we'll talk about that today again.

Then tomorrow we're looking at B.C. Transit, as we said yesterday, and we have questions on William Bennett Bridge, B.C. Rail. I think those are some of the issues that we will try to get in, in the time that we have available.

Tonight my colleague from the North Coast will go through the B.C. Ferries, and then the regional local MLAs will come in and ask their questions.

G. Coons: Thank you, Minister and staff, for coming in and allowing the time. As my colleague mentioned, we'll be doing Ferries for a while, having some MLAs come in. Then, seeing the time, perhaps the critic from Surrey-Newton will get up again.

Again, as people are watching this, I always refer back to why we're doing estimates. Back in 1999 the Auditor General did a review of the estimates process in British Columbia, and I just want to get on record the role of the opposition. It states in here: "The role of the opposition parties is to extract accountability from government during the budget debate. Opposition members in the Legislative Assembly may question cabinet ministers on all matters related to policies, fiscal plans, revenues, spending proposals and underlying assumptions."

In the past four years that I've been involved with estimates, there's been quite a bit of flexibility in both our roles, as discussing B.C. Ferries and…. Again, they're the best ferry system in the world. In 2003 we had the Coastal Ferry Act come in. We're re-evaluating it. The minister asked for a review on it, and the comptroller general did that.

We just had estimates last fall — I believe, in October — where we looked at quite a few things. We looked at the Ferries budget. Back then it was more than eight other ministries, and the budget is about $169.7 million. It's more than eight other ministries, so it's quite a component going to B.C. Ferries, as far as taxpayers' money.

We also looked at the year-end results of B.C. Ferries — looking at the revenue and expenses and concerns with that. Passenger traffic is on the decline. We looked at the debt of B.C. Ferries — owing $1.4 billion, and interest expenses going up significantly in the last year, from $33 million to $50 million. Again, we're going to be looking at the year-end for this year, coming up soon, from B.C. Ferries. Hopefully, we can analyze that.

I'd like to start off with the budget for the ministry. There was a cut in this budget — from approximately $171.9 million to $169.7 million — of $2.2 million. I'm just wondering: what was the cut and why?

Hon. S. Bond: Certainly, in difficult economic circumstances, every organization is expected to look for operational efficiencies. This is no exception, and that's why the reduction was made.

[1440]

G. Coons: Again, the one concern that we have as we analyze the $169.7 million is…. When we look at the es-
[ Page 4666 ]
timates from the government, we just get a number. We don't have a breakdown. So could the minister and staff break down where the $169.7 million is going?

Hon. S. Bond: The categories that are included in that allocation are the transportation fee, social programs, unregulated routes and the federal-provincial agreement expectations.

G. Coons: What would be the amounts for each of those categories, please?

Hon. S. Bond: We want to be clear that these are estimates. So I will give the member the general numbers that are associated with each of those categories.

The transportation fee would be $127 million; the social program area, $12½ million roughly; unregulated routes, almost $2½ million; and the federal-provincial agreement is almost $28 million, when we look at the estimated number.

G. Coons: Are there any other amounts going in for any vessels that are out there, like the Northern Expedition?

Hon. S. Bond: That would be built into the transportation fee component.

G. Coons: Again, I realize that these are estimates, and I'm looking at the business plan for B.C. Ferries, their business plan for the fiscal year 2010. When they build in the social program, the federal, the ferry transportation and the unregulated routes, along with — yes — the $22.8 million that they predict for the Northern Expedition, they end up getting an amount quite a bit more than the $169.7 million.

It sounds like there's going to be a significant reduction for B.C. Ferries as far as what they were expecting and what's being built into the subsidy. What is the amount that is going to the Northern Expedition?

[1445]

Hon. S. Bond: To correct the member opposite, there is no increased pressure on B.C. Ferries. What we do is that we do not provide capital grants, but we pay the actual amortization costs, and that is included in the transportation fee component.

G. Coons: I'm just trying to connect a figure that B.C. Ferries has put out in their business plan. They say: "The ferry transportation fees will increase by $22.8 million in fiscal 2010 to reflect the increased support from the province for the new Northern Expedition vessel." I'm just wondering if that is a correct statement in the business plan from B.C. Ferries.

Hon. S. Bond: We have increased the transportation fee to cover the amortization costs, which is what we actually cover under the transportation fees. For that particular vessel, the amortization costs are included, and the fee has been increased to reflect that.

G. Coons: Does the minister or the staff know what that amount is?

Hon. S. Bond: After staff have looked at the B.C. Ferries' report, it's certainly their understanding that there may be other costs included in what is reflected in B.C. Ferries' report. But I can tell the member opposite that we actually cover the amortization cost for the Northern Expedition. That amount has been included. The reference in B.C. Ferries' report may well include additional items to the Northern Expedition.

[1450]

G. Coons: Perhaps I can continue in writing on this, but I find it interesting that you're covering the amortized costs, but you can't give me an amount — what that amortized cost is and whether it's $22.8 million. It doesn't match up. Perhaps the minister can relate to that or respond to that.

I realize a key component of what the minister and some of her staff do is they deal with the service contract. I'm going to ask some questions about how many people in the ministry work with B.C. Ferries. When the commissioner sets a final decision on the price cap for the performance terms — they just set one in 2008 to 2012 — all of the taxes that B.C. Ferries had to pay were already determined in part of the decision that went into the commissioner.

But what was not determined in the four-year performance term was the HST. It was not a factor in setting the price cap for the second performance term. Under this budget B.C. Ferries is seeing a reduction of $2.2 million from the service. I'm just wondering if the minister or anyone from the ministry looked at the impact of HST on B.C. Ferries.

Hon. S. Bond: We have not done a detailed analysis in terms of the impact of the HST, but certainly, staff advise me — and I'm sure that the member would know — that ferry fares are HST-exempt.

When you look at one of the most significant factors, marine diesel fuel…. A significant B.C. Ferries expense will be exempt from the 7 percent provincial portion of the HST. It does not impact the contract.

As I said to the member opposite, we have not done a detailed analysis on the HST.

G. Coons: Is the minister or staff aware of B.C. Ferries doing any analysis on the HST?
[ Page 4667 ]

Hon. S. Bond: The member opposite would have to ask B.C. Ferries that question.

[1455]

G. Coons: Now before I respond to that, I'm just wondering: how many FTEs or staff from the ministry work on the B.C. Ferry file?

Hon. S. Bond: We have five staff that are involved in the marine file, actually, so that is broader than B.C. Ferries. It includes coastal and inland ferries and also a significant amount of time on marine policy. So there are five people who look after our marine portfolio.

G. Coons: As far as the B.C. Ferries portfolio, what is their job, or what is their role? What do they monitor?

Hon. S. Bond: The vast majority of the work that is done on the marine file related to B.C. Ferries is regarding the administration of the service agreement. Occasionally we work with them on specific infrastructure projects but, most specifically, administering our service agreement with them.

G. Coons: Obviously, with the service agreement that I've got here, it involves quite a bit as far as having access to records. In article 6.04, "Keep…accurate accounting records, books of accounts, invoices, receipts, vouchers and other supporting documents relating to the service fees," and to permit the province or its servants, agents, employees at any time to regularly inspect, giving five days' notice.

I'm just wondering: how often do your staff inspect B.C. Ferries' records?

Hon. S. Bond: We regularly exchange information with B.C. Ferries. We also rely significantly on audits that are done. In fact, as the member opposite well knows, the commissioner actually reviews information and prepares reports as well. So we have a regular exchange of information but, again, rely significantly on audits that are performed.

[1500]

G. Coons: How often is the minister briefed on B.C. Ferries situations and issues that come up?

Hon. S. Bond: We have a practice in our ministry of holding regular executive team meetings with the ministers, so I am briefed regularly about all of the portfolios that are under my responsibility. That's no different with B.C. Ferries. Certainly, from time to time when issues arise, then there are extraordinary opportunities to have the staff provide me with additional information. But it's a regular reporting item through our executive team meetings.

G. Coons: I'll get back to the HST question. The minister said that I should ask B.C. Ferries, but I would hope that the minister would have been briefed. And I've brought it up in the Legislature — the question to her about B.C. Ferries saying that the HST will cost them an extra $6 million a year. I found that out through a Victoria Chamber of Commerce presentation to the Finance Committee on October 7.

On October 9 I brought it up with the minister — about this extra increase — in the Legislature in question period. I'm just wondering if the minister has any concerns with the impact of HST on B.C. Ferries and what it might do to their revenue and/or their fare schedules.

Hon. S. Bond: Again, I want to remind the member opposite — I know he needs no reminder, but I'll do that anyway — that B.C. Ferries is a private company. So our primary role…. The staff that works with me actually works to administer the service contract, and that's exactly what our primary function is with B.C. Ferries.

What I am encouraged by, and I know that the member opposite will be as well, is that ferry fares are actually HST-exempt. The most significant impact, obviously, with marine diesel fuel…. It's obviously exempt from the 7 percent portion of the HST.

I'm also very confident that B.C. Ferries, being as skilled as they are, will take full advantage of the input tax credit system and, certainly, the benefits of the HST that many organizations will be looking to find. I am positive that B.C. Ferries will be doing the same thing.

G. Coons: Yes, and I'm quite aware of that, as the minister said. But in the Victoria presentation they said that the HST will increase the cost of ferry services. Fares themselves are HST-exempt. However, because fares are exempt, B.C. Ferries is unable to claim back their increased HST expenses through input tax credits.

As the minister and her staff and B.C. Ferries know, there's an enormous number of materials in a year, whether it's building supplies, lumber, steel, nuts and bolts, coffee, toilet paper. The list goes on. The Queen of Nanaimo needs 1,100 life jackets, and that's all going to have an HST added onto it.

[1505]

There are significant costs, even though fares are exempt, and B.C. Ferries acknowledges that. The Victoria Chamber of Commerce acknowledged that, and they requested that the province increase its subsidy to B.C. Ferries to a level matching the increased operational cost pressures to the corporation attributed to the HST. That hasn't happened through the process of doing a presentation to the Finance Committee.

If we look at what's going on with B.C. Ferries, and I'll stay on this topic for a minute, there's an estimated $6
[ Page 4668 ]
million a year. Then the service fee is being reduced $2.2 million, and they'll have to recoup about $8.2 million. Added onto that for this year, I think, they put on some extra service for the Olympics at a loss of $2 million.

For this year alone, that's up to over $10 million, but spread out over the rest of the service term, the contract…. By the third performance term, it's going to be close to $20 million over the next 2½ years. That was not taken into account when the price cap was set, because the price cap was set without the introduction of the HST.

I'm wondering: with this extra cost, and B.C. Ferries obviously has to recoup that somewhere, would the minister consider this grounds for B.C. Ferries to apply for an extraordinary price cap?

Hon. S. Bond: Obviously, B.C. Ferries is a private company and, in the words of not only myself but the comptroller general, a well-run private company. The service contract that we have in place is unaffected.

We have also seen that B.C. Ferries, like other organizations, has managed very effectively during difficult economic times, and our service contract with them remains unaffected. The interesting part of that is that in fact we're seeing additional ferry service. We're seeing some of the best levels of service we have seen.

We are committed to the service contract. We'll continue to work cooperatively with B.C. Ferries, but they are an independent company. A debate about the HST's impact on an independent company is certainly, in my view, beyond the scope of the discussion today.

G. Coons: Yes, I do realize that it's this private, quasi-privatized corporation under the Coastal Ferry Act. But under the service contract the ferry corporation, the ministry, the minister and the commissioner all have obligations.

One of them is to consider extraordinary price increases or price caps. B.C. Ferries said that the full impact of any new taxes, whatever they may be, "will add costs to our operations, and…we are considering our options, including an application to our regulator to allow for a fare increase to recover the added HST cost."

My question was to the minister. Would the minister consider this grounds for B.C. Ferries to apply for an extraordinary price cap?

[1510]

Hon. S. Bond: Again, in terms to the scope of this discussion, I've been informed and I am advised that no application has been made. It would be under the purview of the commissioner, and I'm not going to speculate about that either. So in fact, the discussion that the member opposite is engaging in has little or no relevance to the estimates today.

The Chair: If I could remind the member to make his questions related to Vote 45 and to show relevance.

G. Coons: Hon. Chair, I believe that the relevance is that the $169.7 million that goes to B.C. Ferries as a subsidy needs to be accounted for out there. My belief is that through the Auditor General…. His report in 1998 indicates that, and that's the direction I'm working towards.

I will get to a few other issues with B.C. Ferries and their subsidy. Does any of the subsidy, any of the $169.7 million, go to management compensation, or executive compensation?

Hon. S. Bond: This is obviously a service-based contract. It is determined by the routes. It looks at both the northern and the minor routes, and it is based on the cost of providing service on those routes. So there is no direct relationship to salaries.

Having said that, one would also be able to argue that there would be administrative costs that would be contemplated. There would be fuel. There would be a formula that would look at what goes into providing service along those routes. So it's service-based, and it's based on the routes, not directly associated with salaries.

G. Coons: Does the ministry get a breakdown of the cost from B.C. Ferries? The minister said that there are numerous items. If you go to a mechanic to get your car serviced, you get a breakdown of parts and labour, so I'm just wondering if the ministry gets a breakdown of the costs.

Hon. S. Bond: We don't receive a direct breakdown of those costs. In fact, the member opposite would likely know that the commissioner actually reviews those.

B.C. Ferries comes and outlines the costs related to the route. The commissioner would verify the costs that make up those charges and would then, in fact, verify the methodology that's been used to come up with the subsidy requirement that the provincial government provides.

[1515]

G. Coons: That's a bit concerning — if the taxpayers are giving $170 million of taxpayer money to a private, quasi-tized corporation and that amount equals more than eight of our ministries in the Legislature — that there's no accounting at all from B.C. Ferries or a breakdown of what exactly that money is spent on.

I just want to clarify that. There's no breakdown available for taxpayers or for the legislators to see?

Hon. S. Bond: We are actually purchasing a service, so in fact, when that service…. Through a contract, we agree early in the process to purchase services, and that's what a service contract is.
[ Page 4669 ]

The taxpayers of British Columbia are protected by an independent commissioner who validates the methodology, who reviews the expenses as they're outlined and performs that service on behalf of British Columbians. But we are purchasing a service, not unlike other services that are purchased and arranged through a contractual agreement.

G. Coons: I would think that anybody in this room or anybody listening…. If they purchase a service for $170 million, they would expect a full accounting of what those services are, right to the very penny. I find that a bit ludicrous, where you talk about purchasing a service and not having an accounting of the $170 million, not only for taxpayers but for the comptroller general.

Also, the minister says that these numbers are validated by the commission. Through the report that the minister just asked for from the comptroller general, there's a concern. "It's essential that key information received from B.C. Ferry Services be reliable because it is the basis for fares, and in turn, fares directly affect B.C. Ferry Services' bottom line, the level of service fees being paid…. Therefore, the commission should apply an appropriate level of verification…."

It sounds like the minister is saying that all of the accountability and the necessary items are there to ensure that the service is worth the $170 million, but one of the recommendations from the comptroller general was "applying increased verification procedures to the information provided the commissioner by B.C. Ferries to ensure its validity."

Again, here we are. The minister asked for this report, and there is the concern about the verification — the validity of the information. So is the minister or her staff in the process of getting an itemized issue of all of the services that are purchased from B.C. Ferries?

[1520]

Hon. S. Bond: I think the member opposite needs to be careful about the interpretation of the comments of the comptroller general. The first and most important message that she delivered was that B.C. Ferries is a well-run company. She certainly did not indicate that there were problems in terms of the service agreement. She made suggestions for improvement.

We need to reiterate the fact that we purchase a service. We purchase a number of trips up and down a particular route, and that is laid out in a contract. The taxpayers of British Columbia are protected by an independent commissioner who reviews the methodology and verifies it. We do not look at the inputs. We actually purchase that service.

The comptroller general made it clear that this is a well-run company and that we should contemplate, potentially, some enhancement to the role of the commissioner, and we're certainly considering those recommendations.

G. Coons: Yes, the comptroller general, in a couple of areas in the report with B.C. Ferries, in the probably 25 or 30 pages…. Page 29 says, about B.C. Ferries operational effectiveness: "Overall, we found the operations…to be reasonably well run within its legislated and contractual context." That's what we're trying to discuss right now, about the legislated and contractual context as it relates to the amount of money in front of us.

She also says that the operating cost and financial management section…. "The procedures we used" — for assessing this — "consisted primarily of interviews and review of documents to assess several key components…. Based on this limited review, we conclude that B.C. Ferry Services generally uses sound financial and operational processes and controls…."

So yes, she says that it's well run as far as operational effectiveness and how it's running within the legislated and contractual context, but she also had major concerns with the governance model. It requires strengthening and improvements to provide strong oversight and accountability.

These are quotes: "Oversight over B.C. Ferry Services and B.C. Ferry Services' accountability is inadequate." There are concerns with the intentions of the model, as the Auditor General had concerns with that. They need clarification.

The authority to ensure strong accountability and oversight should be independent. It has not fulfilled its proper function to the shareholder. They're in a position of conflict. The commission — the role not broad enough to protect the public service mandate of the ferry system. They need verification and validation of reports given to them by B.C. Ferries.

Transparency and accountability. There's room for improvement. The comptroller general suggested it coming under freedom of information.

The directors. There are major concerns in there with board compensation, excessive remuneration, lack of accountability and flaws in the process.

Yes, again, the minister and I can ping-pong back and forth, picking quotes out of the comptroller general's document, but even though the operations are reasonably well run and they use sound financial operation processes, the nucleus, the main core of B.C. Ferries and the legislation, centres around the governance model, with the authority, the commission, the board of directors, where there are major concerns.

Again, getting down to the money that taxpayers are paying for B.C. Ferry Services, I'm wondering: does anybody from the ministry review or audit the $170 million to ensure that taxpayers' dollars are not being wasted?

[1525]
[ Page 4670 ]

Hon. S. Bond: We obviously audit the deliverables against the service contract that we agree to contractually. The independent commissioner looks at the inputs, the costs, and verifies them.

To the member opposite, in terms of the report from the comptroller general…. Certainly, I requested the comptroller general do the report and received it from her. She did an excellent job. Her general summary is that she actually found the B.C. Ferry Services operation to be well managed and reasonably effective. So in fact to make the suggestion that the comptroller general had major concerns is not at all what's reflected in the summary that the comptroller general provided to us.

What she did say was that there was room for improvement. I can't imagine an organization on the planet that would not have the opportunity to say that we're a work in progress and there's room for improvement. That's what the comptroller general said, and she said that B.C. Ferries' operation is well managed.

G. Coons: Again, the concern I guess…. The minister had the same concern, because she called for the review. This is a 60-year contract. As the Auditor General said in 2006 in his report on ferries, the model that was thrust upon ferry-dependent communities and ferry users and taxpayers was a hybrid model, never tested before, and suggested that there be time for reflective thought on this.

I'm just wondering: why did the minister call for this comptroller general's report?

Hon. S. Bond: I actually think it's prudent practice that one evaluates changes that have been made and looks for ongoing improvement. In fact, the comptroller general validated the reason that we asked for that review. On balance, B.C. Ferries is well run and well managed. So that's an important validation that the comptroller general provided.

I'm a believer that you take a look at the changes that have been made. It was a reasonable period of time that we should actually have a look at that process. I welcomed the opportunity to consider and potentially implement some of the recommendations that have been provided by an outstanding public servant.

G. Coons: Yes, I totally agree that there needed to be a review of B.C. Ferries, and the minister called for one. I'm just wondering: has the minister met with the B.C. board of directors about the report?

Hon. S. Bond: I have indeed. I have not met with the entire board, but certainly I have met with representatives of it — on more than one occasion, I believe. I certainly have met with them.

G. Coons: I believe that a few days after the release of the Auditor General's report, the chair put out a release saying that we're currently reviewing the report and will meet with the minister once a suitable time can be arranged.

The minister said she didn't meet with the whole board. I'm just wondering: what were the results of that meeting?

Hon. S. Bond: Well, I think anytime you ask a question of someone to actually review the effectiveness of an organization, it's pretty important to hear back from them about their input, to hear their reaction to that report. That's exactly what we did.

Certainly, in our meetings they were cordial, and I think they were constructive. I would suggest that it was an important part of a process to hear feedback on a report about the effectiveness of their organization.

I appreciated their input. I appreciated the cordial way in which those meetings were conducted. Again, I will consider their input as I have the recommendations provided by the comptroller general.

[1530]

G. Coons: Through the legislation, the province appoints two of the directors. Do the two directors report back to the minister or other staff?

Hon. S. Bond: No, they do not. In fact, they participate in the process, and they are part of the organization. They don't report to me.

G. Coons: Do they report to any of the minister's staff?

Hon. S. Bond: No.

G. Coons: When we look at quite a few of the situations that are happening…. It's interesting that the government appointees, who are appointed by the provincial government on the board of directors…. I'm just wondering: what are their roles as far as their appointment?

Hon. S. Bond: The role of the provincial government is to appoint two members to the authority. That's the extent of our role.

[J. McIntyre in the chair.]

They perform as members of the authority according to the legislation that's laid out for the role that's been outlined there. In fact, we make the appointments. They function as full authority members, and there is not a reporting relationship with either myself or my staff.
[ Page 4671 ]

G. Coons: When we look at the comptroller general's report, and we look at the intended objectives, say, on page 14….

When the Auditor General did their review — I've talked about this quite often with the minister or previous ministers also — when they were looking at the intended objectives, they had to refer to Hansard, press releases and members of the steering committee because they couldn't really determine what the real objectives were or what the objectives and/or intentions were.

The comptroller general also assumed that the Auditor General's assumptions were correct and looked at their intentions. But the Auditor General had concerns. Basically the comptroller general says that the province's current intentions need clarification. The principle of eliminating cross-subsidization needs to happen. They need to ensure that the financial sustainability of the operator as the guiding principle changes.

It's a very narrow interpretation of the principles and regulatory role that the commission takes on this. The Auditor General — also the comptroller general — wanted to include long-term sustainability of the coastal ferry system as a whole as part of the objectives.

I'm just wondering if the province or the minister is going to ensure that there's an update of the legislation to fully reflect the current intentions and objectives of the coastal ferry system governance model.

Hon. S. Bond: Certainly we are…. As I have said very publicly, I appreciate the work that's been done by the comptroller general. I think it was very thorough, and it is certainly informative and helpful.

We're contemplating all of her recommendations. Our goal is to ensure that we have a model of service in place that actually is effective, and if we can improve on it, we will certainly contemplate that. That's what the recommendations outlined would be intended for, and we are considering them as we speak.

[1535]

G. Coons: I remember, as most British Columbians remember, the throne speech promise to make B.C. Ferries more transparent and accountable. Over the last five years of working with B.C. Ferries we've seen numerous concerns with the transparency and accountability to taxpayers for the $170 million.

In section 3.2 on page 16, where they talk about the authority, it says: "To ensure strong accountability and oversight…is maintained, the authority should be independent of the B.C. Ferries Board…. The authority has not fulfilled its proper function as a shareholder. The authority's role…needs strengthening. The authority needs to act as a shareholder."

So my question to the minister is: will she require that the B.C. Ferry Authority members be independent from the B.C. Ferry Services and its board members?

Hon. S. Bond: The member opposite…. I certainly welcome his questions about the comptroller general's report and would be happy to go through them recommendation by recommendation. The answer will be the same to each of them: well-done report, contemplating all of the recommendations. In due course we will very clearly articulate which of those recommendations, if any, we'll be pursuing.

I think the member opposite talks about accountability and holding B.C. Ferries accountable. From my perspective, one way of doing that is actually by looking at the outcomes of the organization, and all of the recommendations made by the comptroller general are under the general value statement that this is a well-run organization. So any considerations that we are making are being made with that in mind. This is a well-run operation.

The most important accountability is actually the people who use B.C. Ferries, from my perspective. We need to ensure that service is excellent, and I'm really pleased to put on the record the fact that when the most recent customer service rating was done in 2009 there was a 92 percent satisfaction rate. I can tell the member opposite that I think that's a pretty high test of accountability, and I certainly wish that I could relate to the member opposite what the satisfaction ratings were in 2001, but there was no report of customer satisfaction done at that period of time.

So in fact, the most important accountability is the people who use it, and 92 percent of people in 2009 were incredibly satisfied.

G. Coons: Probably back in 2001 we didn't need to have surveys of a satisfaction level because we only needed them after it turned into this quasi-privatized model — higher fares and less service. Now, the next section of the report….

But just going back to the authority members, the comptroller general said that the authority members have placed themselves in the position of a conflict of interest. I'm just wondering: does the minister believe that the two boards should be separate to ensure that there's no conflict of interest?

Hon. S. Bond: That's certainly the view of the comptroller general, and I think it's incumbent upon us to consider her recommendations thoughtfully and carefully, including that one. That's exactly what we're doing.

G. Coons: What's the time frame for legislation from the comptroller general's recommendations?

[1540]

Hon. S. Bond: The member opposite would know that it would be inappropriate for me to actually foreshadow legislation. What I've said publicly and am committed
[ Page 4672 ]
to is that if it's necessary, it will be contemplated. That would be done in an appropriate time frame, but I certainly am not going to speculate on the timing of any legislation, should it be required.

The Chair: Member, I wanted to caution you to focus your questions on Vote 45 and not about legislation or the need for legislation.

G. Coons: Thank you so much, hon. Chair. This relates to the service contract and the Coastal Ferry Act, which fall under the $169.7 million that is being discussed today.

A key component of both the Auditor General's report and this report and a concern out there — it was a concern back in 2003 from the Privacy Commissioner — is that B.C. Ferry Services and the authority be subject to the Freedom of Information and Protection of Privacy Act.

As I mentioned before about the throne speech, there was a promise to make B.C. Ferries more transparent and accountable. When will the minister make B.C. Ferries and the authority subject to the Freedom of Information and Protection of Privacy Act?

Hon. S. Bond: Just like every recommendation that's included in the report, that one will be considered thoughtfully and carefully. In due course we will be making it very clear what our intentions are, related to the recommendations of the comptroller general.

The Chair: Member, it does appear to me that that was another request about another piece of legislation, so if I could again caution you to focus your questions to Vote 45, please.

G. Coons: Thank you, hon. Chair.

I think I'm going to move on now, because just recently, under the service contract, there's an obligation between the two parties, the ferry corporation and the province of British Columbia through the minister, to ensure that any statute or regulation of British Columbia or Canada is followed through upon and that B.C. Ferries, to its knowledge, is not in material breach of any statute or regulation.

With the recent credit card security issues that have come out, where B.C. Ferries, in an internal audit of an unknown time, probably close to six months to 12 months ago…. They did an internal audit and found out there were 45 deficiencies or gaps dealing with data being kept too long, multiple people using the same log-in ID, data duplication, non-secure access passwords, dealing with people's credit cards that use B.C. Ferries.

I'm just wondering: when did the minister first find out about these deficiencies with their security system?

[1545]

Hon. S. Bond: A member of my staff received a courtesy phone call from B.C. Ferries just prior to a potential media story that was going to articulate that there had been some concern about this issue. I was certainly not made aware of it until contacted by my staff, and they were contacted just prior to a media report appearing about this.

G. Coons: Yes, it's a real concern, I would think. B.C. Ferries…. Under the coastal services contract, which is where the $169.7 million is applicable to, it states clearly that they must fit the terms of all statutes and regulations of British Columbia, and B.C. Ferries is subject to the Personal Information Protection Act, which governs the protection of personal information in British Columbia.

Is the minister concerned about the possible breach of people's credit cards through booking fares or buying something at the concession stand?

Hon. S. Bond: Of course I'm concerned. I think anyone would be when we're concerned about a compromise of personal information. As a government, we've made that a pretty high priority, making sure we look at that in a very serious way.

What is more important is if B.C. Ferries is concerned. I think the important part of this story is that the information was actually determined through an internal audit by B.C. Ferries. They worked very hard to discover that they have an issue.

They are concerned. They are taking steps that I think are absolutely necessary and appropriate, and that work is underway. But it was as a result of the internal processes that B.C. Ferries has in place that actually discovered that this was an issue, and I think that speaks to the work ethic and the importance of ensuring that their customers are treated appropriately.

I've been assured that they are moving forward as expeditiously as possible. The key message is that B.C. Ferries has no reason to believe that any information has been compromised. In fact, this is a proactive measure, and now there is work to be done to ensure that it does not happen.

G. Coons: I'm sure the minister has received all the documents out there through her staff or through B.C. Ferries. I'm sure you've received or requested the actual audits, as you could under your service contract, where you can request things. Perhaps I'm unaware or people out there are unaware. Can the minister request the audit that was done?

[1550]

Hon. S. Bond: We just wanted to be sure that we were very accurate here. From time to time our staff does request the information that's produced in internal audits. We have not requested this audit.
[ Page 4673 ]

Again, I do need to remind the member opposite of two things. One, this is a private company, and the result…. The information about credit card security was discovered as a result of the diligence of the company itself. Secondly, this particular issue has literally no relevance to the service contract that's being discussed here today in terms of estimates. I'm happy to provide that information, but hopefully, we will return to the estimates debate that is looking at the service contract.

G. Coons: As I mentioned before, the service contract that I have in front of me refers to B.C. Ferries abiding by all statutes and regulations of British Columbia. Otherwise, they could be in default of their contract. If I'm mistaken in that, the minister can let me know.

Under article 14, under "Default and remedies," if B.C. Ferries "fails to furnish and give to the province notice that there has occurred or is continuing a default under this agreement specifying particulars of the same," there could be a concern with them not meeting the Personal Information Protection Act that they are subject to under this agreement. So I think it's quite relevant when we're talking about $170 million that we don't have an accounting for.

The comptroller general says that this information is coming to the commissioner, who has no verification or isn't validating it — or it isn't validated — to make decisions about price caps and fares for British Columbians. We don't have an accounting of that. We have a possible breach under the Personal Information Protection Act, under sections 34 and 35.

I think it's a major component of us having this debate in estimates about the $169.7 million that, possibly, B.C. Ferries and the province need to discuss and determine what's actually happening and if there is a breach under the Personal Information Protection Act.

The minister talked about the internal audit and how it was acted upon fairly quickly. Yes, there was an audit done. We don't know the date of it. The detailed business case for how to solve this problem came to the board in November '09 — so probably five or six months ago. It talks about how the situation was brought to the board of directors. On page 9 of 16 of the detailed business case from B.C. Ferries dealing with this data privacy and archiving — "Custom application" is the title — it says: "This project was submitted to the board of directors in February 2009."

This project that I'm holding right here, which is referring to the 45 breaches and gaps…. They talk about the problems of being in breach of the Personal Information Protection Act in this and what they have to do. So it sounds like B.C. Ferries has kept this quiet for over a year, if that's the case.

I don't have access to the audit. I don't know when the audit was done. The minister said she could request the audit. So my question to the minister: will she request the audit from B.C. Ferries and make that public?

Hon. S. Bond: Well, first of all, I'm going to correct the record on numerous comments made by the member opposite. First of all, the comptroller general's report clearly outlined that B.C. Ferries is a well-run organization. It also has an A-plus credit rating — which is the envy, I'm sure, of many other organizations — and it continues to see improved credit ratings, which I think speaks volumes. That's not the government of British Columbia assigning those credit ratings.

This process is one that was initiated by B.C. Ferries. They are a private company. They, in terms of due diligence, looked at what security measures might need to be put in place. The member opposite needs to be thoughtful about pursuing comments about breaches and potential breaches.

[1555]

B.C. Ferries has made it clear that this is a proactive audit looking at how to protect that information. There is no indication that breaches of personal information have taken place. My expectation of B.C. Ferries is that it do exactly what it said it would do — put security measures in place to enhance the protection of people's personal information. That's exactly what they're doing. They're actually putting a very complex, highly efficient security process in place. That is underway, and they are moving forward with that as expeditiously as possible.

G. Coons: Yes. Seven months is when the 45 gaps are going to be corrected, says the CEO of B.C. Ferries and, I guess, the minister. But also under this, which relates directly to the contract and the validity of the money flowing back and forth with B.C. Ferries, under the payment card industry data security standards, if companies are non-compliant, like B.C. Ferries, they may be subject to a million-dollar fine per year until deemed compliant, and the council — the PCI council, the payment card industry council — would conduct a level 1 audit.

Is the minister aware of any audit being done of the payment card industry data security standards on B.C. Ferries?

Hon. S. Bond: No. As I would remind the member opposite, this is a private company. I certainly am not aware of it, and my staff advises me that they are not either.

G. Coons: Does the minister believe it's acceptable for B.C. Ferries to be compliant, meaning zero gaps in seven months, next fall? Is that an appropriate timeline for B.C. Ferries to deal with this issue?

Hon. S. Bond: Well, considering the seriousness with which B.C. Ferries has treated this — and in fact it was
[ Page 4674 ]
an internal audit that led them to an improvement in this system — I would suggest that they are not only interested but that they are moving forward as quickly as possible to ensure that their customers' information is protected.

One thing I need to remind the member opposite of is the fact that it should be clear that when you look at payment card industry standards, they are continually being increased and looking at ways to improve, and organizations have to change regularly to keep up with those standards.

B.C. Ferries did the right thing. It did an internal audit. It identified gaps. I expect them to close those gaps. Certainly it's been made very clear to me that that's what they intend to do and that they will do it as quickly as possible. It's in their best interests to do that, and that's exactly what they're doing.

G. Coons: Does the minister or her staff have a copy of the detailed business case, which is dated December 1 to 3, 2009, about this issue?

Hon. S. Bond: Just wanted to confirm. No, they do not.

G. Coons: I guess what's more concerning or disturbing than this whole credit card scenario is the minister or her staff not even having the information. That's very concerning, I would think, to British Columbians.

I just want to detail something in this case. It's going to cost $566,000 to fix this — supposedly, in seven months from now close the 45 deficiencies or gaps at a huge price perhaps, you know. There are huge penalties and fines —$3 million fines if you have to replace the cards, a million-dollar fine from the industry, class action suits. And there's a potential loss of merchant status, meaning inability to process credit cards, which would be a huge concern.

I would think that the minister and perhaps whoever she is dealing with, with staff and perhaps the board of directors, who are appointed by the government, who have possibly known about this for up to 13 or 14 months, would be all over this, versus this coming up in estimates with me, the only person in the room with the document.

What is the minister going to do to ensure that B.C. Ferries is complying under PIPA?

[1600]

Hon. S. Bond: You know, I think what's unfortunate about this discussion is the fact that the member opposite might be prepared to actually condemn B.C. Ferries, but as the minister responsible, I actually have been told that nothing happened. B.C. Ferries, in fact, in a proactive internal audit, which is a responsible thing to do, actually discovered that there was a concern, and they are closing the gaps that exist.

For the member to start speculating about behaviour that implies that B.C. Ferries broke the law is, frankly, irresponsible and inaccurate. We have certainly been told that, to the best of B.C. Ferries' knowledge, nothing has happened. No breach has occurred, and in a proactive internal audit, there was concern about gaps in security. The immediate reaction to that was that this will be fixed. It certainly will require investment to do that. B.C. Ferries is undertaking that process.

G. Coons: As the minister knows, under the Personal Information Protection Act, PIPA, that governs the protection of personal information in British Columbia, the act places requirements for the protection of the information. Section 34 says: "An organization must protect personal information in its custody or under its control by making reasonable security arrangements to prevent unauthorized access, collection, use, disclosure, copying, modification or disposal."

The audit and the subsequent reports that I've got here, that I will make available to the minister, clearly look at a breach of the act. Now, I'm not saying any information has been breached. We hope not. B.C. Ferries admits that they routinely hire ethical hackers to test the system security, and so far none have successfully broken in. But again, that's irrelevant to the conversation right now that we're having.

Right now there are major concerns that the minister should be concerned about. The Personal Information Protection Act is not being followed at this particular time. In section 35 it specifically requires the destruction of personal information. It must destroy documents "containing personal information, or remove the means by which the personal information can be associated with particular individuals, as soon as it is reasonable to assume that."

The documents…. Years of data was kept. Will the minister ask for the copy of the original audit and make that public?

Hon. S. Bond: Well, to reiterate, I think what is most irrelevant today is actually the discussion that's taking place in an estimates discussion.

[1605]

What I have said clearly throughout the last half an hour is the fact that B.C. Ferries has made it clear that no breach has occurred. While the member opposite may want to continue, which is his usual practice, to cast aspersions about the management and the operation and the individuals involved in B.C. Ferries, I won't engage in that debate.

What I will ensure is that B.C. Ferries follows through with the process that's in place. They will do it as expeditiously as possible. There is no evidence at all that there has been a breach of any sort. To make those suggestions is unfortunate, and certainly I'm not prepared to engage in that debate.
[ Page 4675 ]

G. Coons: Can the minister expand on how she knows there is no evidence? Has she done her own personal audit on this?

Hon. S. Bond: B.C. Ferries is an independent company. I certainly have…. As I made the member aware of earlier, I was made aware of the work that had been done in terms of an internal audit and that there would be follow-up work.

This is an independent company that even the comptroller general of British Columbia said is well run and efficient. Yes, there's some work that needs to be done to improve on some areas of their operation. But to stand in this place and to make accusations about breaches that have not occurred — certainly, B.C. Ferries has been very clear about that; there is no evidence that any breach of personal information has occurred — I think is unfortunate. I think actually it's irresponsible.

There is no indication that a breach took place. This organization recognized the need to make improvements. That's exactly what they're going to do, and I am confident that they'll do it as expeditiously as possible. But the most important thing…. This is an independent company. In fact, that is within their domain and their purview, and I am confident that they will follow through on the commitments they've made.

The Chair: Member, I just wanted to caution you. We have canvassed this back and forth, and we're getting a little repetitious, if I may say.

G. Coons: Okay, thank you, hon. Chair.

Who is the sole shareholder of B.C. Ferries?

Hon. S. Bond: Well, in fact, we have the only preferred shares, and the authority has the only common voting shares.

G. Coons: And what's the authority's responsibility?

[1610]

Hon. S. Bond: According to the corporation's act — and, certainly, it has lined up exactly with that:

"(2) The purposes of the Authority are to do any or all of hold, administer and sell a voting share in British Columbia Ferry Corporation after British Columbia Ferry Corporation is converted into a company. (3) The Authority has the power and capacity of an individual of full capacity in relation to its purposes. (4) The Authority has no share capital."

G. Coons: Thank you so much, Minister, for this discussion in estimates. I will share the information I got. I hope you will request the audit and share that with us on behalf of British Columbians.

At this point in time I'm going to pass it to the member for Surrey-Newton.

H. Bains: Actually, I was going to ask the member for Delta South…. She has a question or two.

V. Huntington: I just have a short question on B.C. Ferries. The bulk of my questions will be on B.C. Rail when that issue comes up.

But on behalf of a constituent who went into shock after April 1 when the rates changed…. The B.C. Ferry rate changes went into effect on April 1, and the $3.60-per-foot rate for overheight vehicles was eliminated in favour of a $5.25-per-foot rate on all vehicles over 30 feet. This effectively doubled the rate for this individual and for the average traveller.

I wondered if B.C. Ferries, the Tourism Ministry or the Ministry of Transport had done any analysis of the impact of this rate, which is impacting the average traveller significantly — whether this new rate was impacting tourism or was likely to impact tourism on Vancouver Island.

[1615]

Hon. S. Bond: She's absolutely correct that there was a change in how the fares were calculated for various types of vehicles, and certainly, as an independent company B.C. Ferries is responsible for setting those fares.

To provide some comfort to the member, there was, I am advised, a very significant discussion with the ferry advisory committees about this change. They agreed and concurred that this would be…. In fact, they supported the change.

What I can tell the member opposite is that although absolutely correct that some travellers who have longer vehicles would pay some additional cost, most recreational vehicles will actually pay substantially less. If you look at it in terms of income, this is revenue-neutral, actually, for B.C. Ferries. They're not making anything additional, and it's just a change in who is going to pay more. But most recreational vehicles will pay substantially less.

V. Huntington: I thank the minister, but what the average traveller seems to be finding is that they are paying significantly more on their recreational and trailer vehicles. I'm just hoping there hasn't been a miscalculation here about the impact of it.

I'm not sure at all how the overheight rate used to be charged. Perhaps you could explain how the rate is charged on commercial vehicles now, the concern being that there might be the likelihood that the average traveller is now subsidizing the commercial vehicle.

Hon. S. Bond: These changes actually only apply to recreational vehicles. In essence, there isn't a subsidy for commercial vehicles, because it's revenue-neutral. They are making no more money with this change.

I could provide for the member opposite the fact that in looking at the list I've been provided with in terms of
[ Page 4676 ]
who pays more and who pays less, the best way to describe it is if you are smaller and longer, you pay more. There are certainly some categories that do have a fairly significant increase, but on the other hand, if you look at having a truck and camper which is 20 feet long or under, the decrease in their fee is over 36 percent. They've gone from $72 to $45.

One of the increases is if you are a mid-sized tow vehicle and you carry a ten-foot tent trailer, your rate has gone up by 80 cents. The two categories that have seen the most significant increase are actually pickup trucks with a boat trailer. If you have 20 feet plus 20 feet, you have seen a substantial increase. And a pickup trailer plus a boat and a passenger — obviously, that increases as well. So that's really the only category that has seen a significant increase.

As I said, the mid-sized vehicles went up 80 cents, and the rest of the reductions range anywhere from a 3.7 percent reduction right up to — let me see what the largest reduction here is — 36 percent.

V. Huntington: I wonder if it's possible to receive a page describing how those rates are calculated on different types of vehicles and lengths of vehicles so that I can provide the information to my constituent. It certainly didn't impact him the way that's being described. I would like to be able to understand it myself.

Hon. S. Bond: We'd be happy to provide that information. Certainly, if there is something in this particular vehicle that doesn't line up with the grid that we've been given, it would be helpful for us to know that as well. So, happy to provide it and a bit of the rationale. Our staff will do that and provide it to you as quickly as possible. Appreciate that.

K. Corrigan: I had some questions about Olympic costs for the minister related to B.C. Ferries. My first question is: I'm wondering if B.C. Ferries purchased any Olympic tickets. If so, how many, and what was the value of those tickets?

[1620]

Hon. S. Bond: I have no idea. They're an independent company, and I'm not aware of whether they purchased tickets or not.

K. Corrigan: I'm not really fully aware of the structure of B.C. Ferries, but I'm wondering whether or not the provincial government passed legislation creating the structure of B.C. Ferries.

Hon. S. Bond: Yes, we did.

K. Corrigan: I'm wondering who appoints the directors of B.C. Ferries.

Hon. S. Bond: In fact, the province of British Columbia only has two appointees out of nine. It is the authority that actually appoints the B.C. Ferries board.

K. Corrigan: Who appoints the authority?

Hon. S. Bond: In fact, the B.C. Ferry Authority actually has specific designated seats, including a position for labour, so obviously, labour chooses that person. We have two community-at-large. We have two government appointments out of nine. We have the northern coastal and north Island appoint someone, the southern mainland, the central Vancouver Island and the southern Vancouver Island. In fact, there are designated seats. Those names are brought forward from either those communities or organizations. The government has two of nine appointees.

K. Corrigan: I'm sorry. I'm confused, because I'm not really familiar. I'll just ask this one more time to get some familiarity. That was the board, I understand. My question was: who appoints the authority?

Hon. S. Bond: That is the authority, the B.C. Ferry Authority board members. There are nine of them. The government appoints two of them. The other seven actually come from the designated seats that are outlined in the governance structure.

K. Corrigan: Well, thank you for that, giving me a little lesson in the structure of the ferry board.

I'm wondering how much money the government subsidized B.C. Ferry with last year and what the budget is for this coming year.

Hon. S. Bond: The 2010-2011 number is $169.789 million, and in 2009-2010 it was $171.919 million.

K. Corrigan: The minister is telling me that with $169 million worth of taxpayers' money going into this organization, the taxpayers of British Columbia have absolutely no ability to find out through this minister how many Olympic tickets or how much of Olympic expenses were paid for by B.C. Ferries.

[1625]

Hon. S. Bond: Actually, I can precisely tell the member opposite that, because it's a private company. We purchase services from a private company. That's exactly what the service fee does. In fact, there is a contract agreed to for the number of trips, for example, made up and down the northern routes or the minor routes. It is a purchase of services, and this is an independent company.

The Chair: Member, I must caution you to focus on Vote 45, please.
[ Page 4677 ]

K. Corrigan: I thank you for the caution, hon. Chair. I'm certainly trying to determine whether or not there were taxpayers' dollars that went into Olympic tickets. It's my understanding from an earlier ruling that it is perfectly appropriate to ask about previous years' expenditures, particularly if you're comparing it with this year, and I was asking about the comparison of the subsidies. But I appreciate the advice, and I will take that into account. I certainly will.

I'm wondering if there was any discussion between the ministry and B.C. Ferries in the nature of negotiations or encouragement for B.C. Ferries to get on board, so to speak, with the Olympics by purchasing tickets, by encouraging them to be involved in the employee loan program or the volunteer program or to host events.

Hon. S. Bond: No.

K. Corrigan: Does the minister have the power or the ability to request the information that I have spoken about from B.C. Ferries?

Hon. S. Bond: No. In fact, this is a private company, and there would be nothing that would obligate them to share that information with me.

K. Corrigan: Well, isn't that convenient? So if there was an intention to hide tickets, to hide Olympic costs, to have a substantial investment from B.C. Ferries as part of the government support of the Olympics, there would be no way for the public to find out about it. I guess that's what this minister is confirming today.

Hon. S. Bond: I am delighted to be able to answer questions about my estimates and the estimates of the Ministry of Transportation. I think it is a really unfortunate day when we begin to cast aspersions, even at private companies, about their intentions related to what is probably the single largest event in the history of British Columbia.

We had no contact with B.C. Ferries. They are a private company. It would be like asking any other private company about what they contributed to the Olympics. It is a private company. I'm happy to debate my estimates in terms of the numbers that are in front of the House today. But you know, to cast aspersions on B.C. Ferries about hiding Olympic costs is simply irresponsible.

K. Corrigan: Well, the reality is that we were told a few days ago that each and every Olympic ticket would be accounted for that was paid for with taxpayers' dollars, and I have not received an assurance from this minister that 170 million of taxpayers' dollars did not go to tickets for the Olympics.

The reality is that you're right. We can have no assurance that any tickets did not get paid for with taxpayers' dollars, because the minister doesn't have the ability to control that, despite the fact that we're putting money into it. So I have no more questions for the minister, and I thank her very much for her time.

[1630]

Hon. S. Bond: I just want to clarify for the record that the $169 million that we purchase services for British Columbians for actually purchases ferry trips up and down the northern routes, the minor routes. To suggest that B.C. Ferries in some way has broken its contractual agreement with the province of British Columbia is inaccurate and unfortunate.

The money that is provided actually pays for people to be on ferry routes in British Columbia. That's the agreement, and that's what the dollars are used for.

D. Donaldson: There have been news reports dating back to last spring that B.C. Ferries is retiring a number of ferry boats. Out of the B.C. Ferries' 2006 and '07 annual report — and this relates to this budget vote — is a quote: "The company's long-lived assets include certain vessels which contain undetermined amounts of asbestos. It is the company's intention to sell decommissioned vessels into world markets for continued use in providing commercial ferry service. Under these circumstances, asbestos remediation would become the responsibility of the new owner."

[D. Hayer in the chair.]

Now, exporting vessels for scrapping overseas or for transporting overseas would be a violation of the U.N. Basel convention, which controls the transboundary movement of hazardous wastes such as PCBs and asbestos and their disposal.

My question to the minister under this budget vote is: what system is in place to ensure that the ferries do not end up being shipped overseas by B.C. Ferries or by some other company or entity to whom B.C. Ferries sells or transmits the ferries? What system does B.C. Ferries have in place to ensure that it complies with the requirements of the Basel convention?

You know, the Basel convention is an international convention. What system does B.C. Ferries have in place to comply with that, around asbestos especially?

Hon. S. Bond: B.C. Ferries is governed by Transport Canada and would be expected to adhere to all of the safety expectations and operating expectations on the ocean and any other relevant legislation, including all federal and provincial legislation. They abide by that as a private company as any other private company would.
[ Page 4678 ]

D. Donaldson: Is the minister aware of any…? Does she know of any asbestos concerns involving B.C. Ferries?

[1635]

Hon. S. Bond: Certainly, as a private company, they manage their own assets, and in fact, they would be expected to manage any safety concerns related to any issues and also related to asbestos if that existed. They're a private company, and they manage to those standards.

D. Donaldson: I understand there's a class action lawsuit around the Queen of Quadra II that's currently on Sointula in Alert Bay. Would the minister advise her knowledge of that situation as it relates to asbestos?

Hon. S. Bond: As a private company, obviously, B.C. Ferries manages through that. As the minister, I'm not aware of those details, and staff advise me they're not aware of specifics either.

H. Bains: Minister, I would like to have a few questions on the TransLink review by the comptroller general as well. My colleague asked you a few questions on the B.C. Ferries. As we all know, for way of those people who are listening, this was a request by the Minister of Transportation to do a review by the comptroller general for both entities, TransLink and B.C. Ferries, and the report was delivered in October 2009.

About six months have passed by, and those folks who are watching this debate may be wondering what has happened. The minister obviously was concerned that a review was needed. In particular, I'm talking about TransLink right now. This is the board that was put together by the previous minister. Only, I think, it was nine months that went by before the minister was appointed to this portfolio.

So that just shows and says a lot about the decision made by her predecessor, that she felt it was necessary to do the review of the work of the previous minister, of her colleague. I think that it must be a serious issue, and I accept that. It's a serious issue that the minister would ask for a review of their operations.

As the minister continued to say, B.C. Ferries is an independent entity on its own, but she still feels, on behalf of the taxpayers, that we need to do the review to make sure we're getting best value for our dollars, both in TransLink and B.C. Ferries. Therefore — fast-forward — there are recommendations, and I think there are a number of excellent recommendations.

But I think reviews are reviews, and audits are audits. If we don't follow up on them, if we don't act on them, then, it is another waste of opportunity and waste of resources. I think, in this particular case, people would be interested to know what is happening with those recommendations. Six months have gone by. I think that's long enough.

So if the minister could actually give me an overview on the TransLink side. What steps has she taken to make sure those recommendations are adopted or are on the way to be adopted? What's going on with that?

[1640]

Hon. S. Bond: I appreciate the question. Certainly, as I said in terms of B.C. Ferries, I think it is important from time to time to look at decisions that have been made and changes that have been made to see if they're working and if we can improve them. That certainly was the case with TransLink, as it was with B.C. Ferries.

We've taken some time to actually make sure that we heard back from the people about whom this report was written. We have taken time to meet with members of the B.C. Ferries organization, the TransLink commissioner. We have also talked to the Mayors Council, the board. So we've spent a fair bit of time hearing feedback.

I mean, my ultimate goal, when we looked at the recommendations of the comptroller general, is to ensure, especially in TransLink's case, that together with the Mayors Council and within the current model, perhaps…. How do we make sure that transit and transportation are well managed in Metro Vancouver? I think that's really the outcome. I know that the Mayors Council share that same hope.

So we've taken, I think, a fair bit of time so that we could talk to people about what the comptroller general said. We are considering those recommendations.

In the end of the day, my goal is to ensure a couple of things. We're going to make sure that we move forward with the Evergreen line, that we have a plan in place for other enhancements. The question is: will the current model allow us to move forward in a way that is efficient and effective? That's what we're considering.

H. Bains: I think good intentions will not bring you good results alone. I think you need to have some actions to follow. I think that's where I'm going, Minister, with all due respect. I understand, that it's a huge task, and yes, it'll take some time. But six months have gone by. No one has heard anything of what is happening on those recommendations.

I think my question is a bit more specific. There are recommendations, and the comptroller general was concerned about the financial state of TransLink and how it is run. I'll go over some of the findings of the comptroller general — how concerned, I think, the comptroller general was when they found that there are some serious concerns about the financing and the direction that they're going and, also, about the structure.

Maybe the minister could be a bit more specific, to give us some timelines. Is it a year? Is it six months? Is it going to take another four years? Is it going to take another review? What is going on? Maybe she could lay out the steps that she's going to take and the timelines to
[ Page 4679 ]
go with it. Does she need legislation to comply with all those, to make sure those changes are done? Or can she do it on OIC — you know, orders?

I think those are the questions that people have so that they understand that the recommendations and the review aren't collecting dust on the minister's desk.

The Chair: Member, I just want to remind at this time that we are not discussing legislation here or the need for legislation, and we should be focusing our attention on Vote 45.

Hon. S. Bond: Certainly, I appreciate the member's interest in the report, and I think that what is incumbent upon us is to thoroughly examine the recommendations and look at whether or not some, if not all of them, are important to implement. That's the work that's taking place.

I can assure the member opposite that this is a government, I think, that's demonstrated significant action in the Transportation and Infrastructure Ministry. We want to see that continue. So we're going to evaluate each of those recommendations.

I've said very clearly, publicly — and previously, to the previous member that spoke about B.C. Ferries — that, if appropriate and where necessary, we would contemplate legislation, if that's necessary. But I can assure the member opposite that we intend to act, and we're going to be thoughtful and careful about the degree of action and which recommendations, if any, we will move forward with.

[1645]

H. Bains: No, I wasn't actually talking about legislation itself. My question was what the minister's intentions are. How is she willing to comply with the recommendations that came? You know, it could be a whatever.

Let's just use one of the examples — whether that's one of the routes that she may need to take in order to comply or have TransLink comply with these recommendations. But I do respect the direction.

If I could draw the minister's attention to page 69 of the report. I think these are the type of things that are really of concern to the taxpayers out there. We are spending quite a bit of money out of this vote and the previous budget to have this report done.

It reads here on page 69: "As shown in figure 10.1.1(b), operational expenses increased at approximately the same rate as ridership until 2007, and then expenses surpassed ridership growth by approximately 10 percent."

I think that is something that is of concern and that that was a concern of the comptroller general. We need to make sure that that doesn't continue on.

Other recommendations were that they were a bit heavy on the upper executive side.

Those are the recommendations that need some immediate action to make sure that taxpayers' dollars do not continue to be misspent or, I would say, not spent wisely. My question is: has the minister taken steps on any of those recommendations that could require very immediate actions?

Hon. S. Bond: As I said to the member opposite, we've actually had some very productive discussions with TransLink.

I do want to put on the record that they did an exceptional job during the Olympics. We couldn't have asked for a better performance in terms of ensuring that literally thousands and thousands of people every single day took advantage of the transportation system. They did an exceptional job, and I want to make sure that is clearly on the record.

What I'm encouraged by at TransLink is the fact that we've had a number of significant discussions about operational efficiencies. I'm really pleased to report we have a new CEO at TransLink, and they've set extremely aggressive efficiency targets. I'm very pleased to say that we're seeing reductions being made. I think the comptroller general's report probably helped to stimulate that action, but I am very impressed.

They have set a very high target in terms of $30 million worth of reductions, looking at streamlining efficiencies, administrative reductions. I'm pretty pleased to see there has already been action taken. The member opposite wanted action, and we're certainly seeing it.

I think one of the values of a report of this type is that by sitting down and following through with the organization, we've already seen some marked improvement. I expect that to continue.

In terms of the actual report and recommendations, I certainly expect that within the very near term, we will be able to make further comment about which, if any, of the recommendations will proceed.

H. Bains: I do share the minister's enthusiasm about the times during the Olympics and the work done by the TransLink and its employees. It was extraordinary. There is no question about that. It's one of the largest, I would say — if not the largest — fairs that we've had here on our doorstep, and it required an enormous amount of planning and execution of that planning. I think TransLink has done good job on that. There's no question.

I say thank you to all those employees who were involved. They went extra on their time, taking extra steps to make everyone comfortable using the transit operations. So I do share that.

But Minister, I think the concern remains. I think you said that they have realized $30 million since the report. Perhaps the minister could outline, on the executive side, because the report does mention that they are a bit heavy on the executive side…. There are too many
[ Page 4680 ]
executives. What have they done as far as accommodating that recommendation?

[1650]

Hon. S. Bond: I do want to be very clear on the record that the target is $30 million. I don't know where they are in the continuum of those reductions. We don't have the specifics in terms of how many positions have been eliminated, but certainly, they have eliminated executive positions. They have reorganized and realigned the executive committees. In fact, we've seen some pretty significant recognition that there needed to be adjustments made.

I think a $30 million target is aggressive, and they're working hard to reach that target. I'm sure that further details will be made available as the organization continues to address some of those administrative challenges.

Again, I simply want to say that I think the report was a catalyst for having a look at how that organization is run. I've been pleased with the responsiveness that I've seen, certainly in terms of the TransLink operation.

H. Bains: I just want to re-emphasize again that nine months after the decision made by the previous minister — her predecessor, her colleague who put the structure in place — the minister felt that there are some serious concerns, that she has to do the review of the previous minister's decisions.

Therefore, I think the timing I'm looking at is…. Timing must be of the essence, and to delay any further kind of overshadows the minister's concerns. She was so much concerned that she had to call for the review only nine months after when the structure was put in place, and now six months have gone by.

I think it speaks volumes if we don't see action — at least a process that the actions are being taken, a process that these recommendations are being realized and changes made. I'll give you a couple more examples of how serious the situation is there.

Again, on page 67 it shows that the TransLink debt service coverage ratio — the organization's ability to pay its debt cost — has been above one, but it drops below one in 2008. "A ratio below one indicates that the earnings, after operational capital costs, were insufficient to meet debt-servicing costs." So there's a serious concern that there's a chance that they could not even be in a position to make the servicing of the debt deadlines.

Here's the next one. "Operating and administration expenses are increasing in excess of revenues, general inflation and ridership. Therefore, further increases in revenue, cost reductions and/or service reductions are needed to balance the budget." Then they continue to go, down here. "We were advised that reasons for higher actual operating expenses include expanding services faster than ridership demand, escalating vehicle maintenance costs, energy prices, policing costs and increasing costs of labour." So all of those things are there before the board.

The minister calls for a review, which is a good thing, and I respect that. But I think that now we are looking for some timelines. She said that in a short time in the future she will try to see how many, if any, of those recommendations will be complied with.

My question to the minister is, first of all: is there any recommendation that you think is not worth pursuing? Are you looking at all recommendations and what the timelines are? If you could put some real times on your actions. A short while or a short time — I think that doesn't say much.

[1655]

Hon. S. Bond: I think that one of the benefits the report has generated is that there have been actions taken by TransLink already. As I mentioned earlier, we have a new CEO who has taken very seriously the responsibility to begin to bring administrative costs into alignment, and we have seen that. He has set a very stringent and aggressive target of $30 million worth of reductions there.

I should also point out to the member opposite that $130 million supplement was passed by the Mayors Council and TransLink subsequent to this report. What that actually allowed was for a stabilization of the financial circumstances. We've seen a significant shift in TransLink's operations and management style since the report came out. I want to reassure the member that I think the comptroller general did a good job.

I think we also have taken an appropriate amount of time to talk to people, and we've actually seen action without government mandating it. We've actually seen the report stimulate changes in administrative costs.

We also have stabilization in terms of their financial circumstances, and I really do want to point out to the member opposite that the legislation that we put in place in 2007 allowed for the supplement process to take place. You know, there has been change.

The comptroller general's report was helpful. We will contemplate all of those recommendations. Certainly, I have been, as I said, impressed to see TransLink moving to make some of the changes that were reflected in the report that was presented to me.

H. Bains: I must say that, yes, I met with the new CEO, Mr. Jarvis, and I was impressed. He was very cooperative and gave a fairly good briefing to me on the state of TransLink. The minister mentioned the $130 million that TransLink received. I call that a life support. It's just to keep the status quo. Not a single new bus will be added with that money.

So I think that's not the issue; that is a separate issue. We will deal with that separate issue. What they wanted
[ Page 4681 ]
to have was a $450 million plan, in order to have the provincial transit plan implemented. They didn't get it, so now they are on life support. Perhaps it gives them some time to look at some other options. But again, that does not help the issues that are raised by the comptroller general.

Another one here: "TransLink's administration costs have been significantly increasing at a pace greater than ridership and inflation. TransLink's administration costs increased by 101 percent between 2002 and 2008." That's something that the comptroller general was concerned about.

Another one here: "Administration expenses, as shown in figure 10.1.2(b) have for a number of years been between 3 percent and 3.4 percent of the revenue but are forecast to be 4.7 percent of revenue in 2009. We would have expected that the cost containment measures identified by TransLink would have resulted in a decline in the measure."

I think these are some very, very serious red flags raised by the comptroller general, and I think it is only prudent for the opposition to ask those questions, to see what the timelines are, and get appropriate answers from the minister to show us what her intentions are, what the timelines are, rather than generalizing it. We will see which one, if any, of those recommendations will be adopted.

You were saying that in a short time you will do that. Could the minister actually pinpoint what that short time is and how many recommendations you will comply with?

Hon. S. Bond: Well, obviously I'm not going to indicate today which recommendations, if any, will be pursued. I think the report has served an important function. We actually have had an opportunity to look at two organizations and looked at where there might be areas of improvement. I think that's always a useful exercise. I think that it's already provided benefit.

[1700]

It certainly has received serious attention by both B.C. Ferries and TransLink. I've met with the organizations on numerous occasions and have had excellent, cordial and constructive discussions with them. We've already seen some improvement in terms of some of the concerns that the comptroller general identified.

Our ultimate goal is to make sure that the transportation plan moves forward and in particular the Evergreen line. We've made that clear to the Mayors Council and certainly the board of TransLink. In fact, I think we've made progress already without actually having to move specifically on these recommendations.

Again, I think TransLink has taken the report seriously. They've made administrative changes. They passed the $130 million supplement. So we have, in some ways, a significantly different organization and situation than we did when the comptroller general's report was produced.

Having said that, we're going to contemplate all of the steps that she's suggested. I can assure the member opposite that we're in the process of finalizing the look at these recommendations, and we will in due course indicate the direction we plan to take.

H. Bains: I accept that the minister is refusing to give us specific timelines to move forward on those recommendations. I think we'll be watching to see how fast she acts on some of those recommendations and see how many, if any, recommendations are adopted.

We agree to disagree here, I guess, because I think we need a timeline, because people are expecting those timelines. Six months have already gone by, and for a matter as serious as it was — that the minister has to call for a review of her previous minister's work — we cannot continue to delay in implementing those recommendations.

Anyway, we'll move forward. I have a number of MLAs here who have some questions for the minister about their particular areas. I will sit down and let them ask those questions.

H. Lali: I'd like to offer my greetings to the minister and to the ministry staff who are sitting behind her and to the left. I see some familiar faces from the past.

I have a couple of questions, actually, that are on behalf of the member for Kootenay West who, we all know, could not be here today. She passed a couple of those questions to me to ask on her behalf. Then I'll actually segue into my constituency, because some of those issues are similar.

So on behalf of the member for Kootenay West, I'd like to turn the minister's attention to Highway 3. The condition of the highway over Blueberry Paulson, between Christina Lake and Castlegar, specifically from the Paulson Bridge to Mud Lake or the Sheep Creek rest area, just west of the Nancy Greene Junction….

This stretch of road is actually in extreme distress and has become very, very dangerous for the travelling public. That's quite scary for motorcycle riders. Motorcycle season is going to be upon us soon, and it's just a matter of time before someone will have a serious incident on this stretch of road — you know, if one of the wheels gets caught in the rutting that is taking place.

The local people, actually on both sides of the hill, have been quite patient, waiting for the repair to this highway. Understanding that the Olympics…. I know a lot of the money has gone into the Olympics and all the infrastructure in the Lower Mainland — with the concentration of the funds going there.

For the last couple of years, folks — motorcycle riders, vehicle owners, etc., whoever goes back and forth on this road — have had the understanding from ministry officials that it was going to be torn up and repaved
[ Page 4682 ]
in the spring of 2010. I've outlined already the area I'm talking about.

Recently the project actually went out for tender. A lot of the taxpayers in the area were responding in a negative way because they found out that the government has decided only to repair the section of road from Paulson Bridge to the westbound brake check, due to the lack of funds as being a rationale.

[1705]

Would the minister please comment on that, on this question that was posed by the hon. member for Kootenay West on behalf of her constituents and also, perhaps, through the legislative cameras here, let folks in the area know when they can actually expect to see some major repavement and repair work in the area?

Hon. S. Bond: I appreciate the member asking on behalf of his colleague. Certainly, we recognize the importance of Highway 3. I've had the opportunity to meet with the coalition of mayors from one end of it to the other, and we continue to invest significantly in Highways 3 and 3A, in fact. Related to the specific project…. I think what the member said was the Paulson Bridge to avalanche gate project. I think that's what the member was speaking about. I think the good news is that the contract has been awarded. Construction will start this spring, and it will be completed by the fall of 2010.

I think the issue was the scope and magnitude of the project, and as a former minister, I'm sure the member knows that we would be adjusting our budget to look at how much we can actually manage to cover in a season. In this particular case it's six kilometres of work. It starts at the east end of the bridge and goes about six kilometres to the avalanche gate at the westbound brake check, and there will be fill paving on the eastbound truck climbing lane, etc.

The contract has been awarded. Construction will start and finish by the end of the fall. When the member from Kootenay gets back, I'd be happy to have our staff sit down and work through other concerns she has about that particular stretch.

[1710]

Highway 3 is a priority. I think the total since 2001 — I don't have the number in front of me — is about $200 million in investment. I certainly want to remind the member that we have interior and rural side roads, oil and gas road improvements, mountain pine beetle strategies. The vast majority of our rehabilitation actually does take place outside the Lower Mainland. We are paying attention to rural roads.

I'm happy to pursue this further with the member when she returns, but the contract has been awarded and the initial six kilometres will be done this spring.

H. Lali: The minister has already mentioned the mayors along the highway. They have the Highway 3 mayors committee — mayors all the way from Hope, Princeton, Keremeos, all over Osoyoos, Midway, Christina Lake — all those communities — Grand Forks, Castlegar, Cranbrook and a number of communities that I missed. All the mayors formed this committee.

Obviously, the Hope-Princeton section, which is in my constituency…. Actually, Highway 3 would be from the Similkameen River, which is the dividing line between mine and the boundary of the Similkameen constituency. From there to the height of where Manning Park is, is my constituency. It's commonly known as the Hope-Princeton section there.

Obviously, the mayors are anxious. I know the member for Kootenay West has been dealing with the mayors committee on a regular basis, and I've dealt with the committee as well. There is an expectation by the mayors, as well as the MLAs from both sides of the House, that we're looking for some investment to come. I know the minister said that they will be doing some more in the future, so we'll wait for that.

For my constituency in Hope-Princeton, the highway there, I know there were a couple of bridges that were replaced when the Liberals took office in 2001. But really — aside from potholes, crack-filling, etc., and regular maintenance — no major projects for repavement or taking out some nasty corners since I was the Highways Minister in the '90s. So we're looking for some investment there.

I wonder if the minister could share some future plans.

Hon. S. Bond: I appreciate the member opposite's questions. Certainly, as someone else who lives on the other side of Hope, I understand the importance of making sure we have a great transportation system. In fact, we've had some very productive discussions with the mayors coalition, and even as recently as in the last week or two — I don't know exactly when — one of my staff travelled and met with a number of them.

I can assure the member opposite that we're meeting with a group of mayors to look at the Hope-Princeton section — looking at issues like congestion, looking at some initial engineering. I think it is an important network in our province. We do need to look at it, and I think it's not dissimilar to looking at how we deal with the Cariboo connector and the Pine Pass. Those are all important strategic investments.

We have been very pleased with the positive approach that the mayors coalition has taken. I did ask for a tally of what we've actually invested in Highways 3 and 3A. I believe it's just about, when we look at the work this year in addition, $30 million this year or something in that area. I'll get the number for you. But I think 70 projects since 2001 along 3 and 3A.

Just to reassure the member, we are looking at the Hope-Princeton section, and that would be in addition.
[ Page 4683 ]
Certainly, we have done some work along Highway 3. We've got Cambie Creek. We've got the area between Manning Park and the regional boundary near Sunday Summit, Highway 3 east of Hope.

[1715]

We have, certainly in the preservation and replacement program, invested dollars. But again, I understand the importance. I appreciate being able to work with the mayors, and we are certainly looking in particular at the Hope-Princeton area to see what we might accomplish.

H. Lali: I have a specific question on the Spences Bridge. The minister knows; we've talked about it. I've written to the minister — and the minister has written back as well — and asked for a study for some long-term solution to the Spences Bridge, if not a complete replacement, then a major rehab and some sort of estimates. The study was supposed to have been actually completed before Christmas, and it would be revealed in a public meeting in Spences Bridge.

I'm wondering if the minister might be able to give me some idea when it's going to be completed and when we can go in and actually talk to the people in Spences Bridge. As you know, right now it's only open to pedestrians and bicycles. The folks would like to actually see cars over there, because it does hurt the economic development aspects — future prospects, actually — for the community. As you know, there's no major employer there, just a few restaurants. I think there's a motel there and the fishery. So can the minister give me an idea when the study's finished?

Hon. S. Bond: I understand that the chief engineer…. The report has been completed. It's important for the member to know that. It's currently being reviewed internally. I'm told that the report provides a number of options.

I do think the member…. We've had this conversation, and we've been collegial but candid with one another. Obviously, we do have to look at this in terms of the degree of investment that would be required and what those options might represent.

I can assure the member opposite that once the review has been completed internally to look at those options, we will obviously take the opportunity to speak to the people of Spences Bridge, to walk through what we think may or may not be possible. So I commit to doing that. I think we've been fairly transparent in this process with the member opposite, and we'll continue that once the review is complete internally.

H. Lali: Last question. There are actually a number of highways in my area, so I'll go through them from top to bottom on my list and speak slowly enough so that folks can make a note of that.

One is them is Highway 99, which is basically from Cache Creek to Lillooet. There's the Fountain Slide. The Pavilion Indian band and the Fountain Indian band and, obviously, the district of Lillooet are very concerned with, basically, the side of the hill going down into the Fraser River down below. They're looking for some long-term solution before any kind of catastrophe will happen in that area.

We're asking for some comments from the minister as to its future and what kind of work can be done. Actually, that would be the same question for each one of these that I'm going to talk about.

Highway 12, from Lytton to Lillooet. Actually, aside from the minister's government and mine having done some work at the Big Slide — not a long-term solution but short term — there hasn't been any rehabilitation or repavement work done on it probably from the time of the Social Credit, really.

Highway 97, Logan Lake to Ashcroft. Some sections are in need of repavement, as rutting is taking place and there are stresses on there.

Highway 8, which is from Merritt to Spences Bridge. There are sections there as well, and folks who live along that highway and use it regularly are constantly asking me when we're going to see some repairs and repavement work there.

Highway 5, which is the old Merritt to Kamloops highway. That's in desperate need of some repavement, because the big Arrow trucks hauling the chips back and forth from Merritt to Domtar in Kamloops have been really beating up the road. There hasn't been any repavement work done on it for many, many years now.

The final one is Loon Lake Road, which is off Highway 97, just north of Cache Creek. Especially on the sections closer to Highway 97, there's some rutting and big potholes, etc. There are some corners that have some really lousy pavement on there. Folks there are also wanting an answer from the ministry as to when they can see some repavement work. That's my final question, and I lumped it all into one.

[1720]

Hon. S. Bond: I know that we have met about these slides in particular. Staff advise me that we certainly have recently added rock protection fences and that we do geotechnical evaluations on an ongoing basis.

Certainly, in the case of the Fountain Slide, we're looking at drilling an additional hole and looking at an ongoing investigation around that particular slide — so ongoing monitoring and, obviously, making sure we're concerned about the integrity there. We'll continue to work on those.

What I'd like to do for the member opposite in terms of Highway 97…. We know that the member would be aware that we use a pavement management system, and
[ Page 4684 ]
we take appropriate action. Our regional teams go out and monitor and look at those sections of highway.

What I'd like to commit to the member is that we would have one of our staff look through this list of sections of highway — we don't have all of the detailed information with us today — and report back to have a conversation about these particular areas, including Highway 5 and Loon Lake Road. We'll give this list to staff and ask them to look at their plan and what the future look at these strips of highway is. We will be in touch, and certainly, staff will look at those areas. I appreciate the question, and we'll get back to the member.

N. Simons: Thank you to the minister and staff for this opportunity. I'd like to start with just a couple of questions around B.C. Ferries and the comptroller general's report and possible action on recommendations.

In particular, the most important recommendation, I believe, was the one which suggested that for the people of the Sunshine Coast, Powell River–Sunshine Coast, for ferry-dependent communities, there needs to be some mechanism for the public to have input into how the ferry system is managed in order to protect the public interest.

[1725]

I might just point out that in the last ferry increases, the cost for car and driver for Horseshoe Bay–Langdale went up 8.3 percent. For Saltery Bay–Earles Cove, it went up over 6 percent. Powell River–Comox, almost 6 percent. What I believe is very troubling is the cost for lengths over 20 feet. It went from $2 a foot to $5.60 a foot — a 180 percent increase.

Now, understand that Powell River–Sunshine Coast is the only ferry-dependent constituency in the entire province. It has major tourism infrastructure. It has the beaches and the mountains and the trails, all of which are enjoyed by people who bring over their ATVs or their bicycles or their Sea-Doos or their tent trailers. All of them are facing an increase of 180 percent on the length of their vehicles.

I highlight that to point out the importance of the public having a say in these matters. I hear references to mayors' councils and such. I wish there was some way of emphasizing the importance of protecting the public interest in ferry-dependent communities.

Ferry advisory committees are very helpful in helping the ferry corporation in adjusting schedules and such. But when it comes to setting the fares, when the public's needs — and that's business needs, tourism needs, commuters' needs, residents' needs — are not reflected in the governance structure, you essentially have communities that are left without a voice — nothing more than an advisory committee that basically talks about adjusting a schedule five minutes one way or the other or half an hour one way or the other.

I'm wondering, if it's possible, if the minister could let the people of Powell River–Sunshine Coast know if there's any intention of addressing their need to be heard in the governance of B.C. Ferries.

Hon. S. Bond: We did canvass this fairly thoroughly earlier with one of the critics — the Transportation critic. I think what's important to recognize is that we continue to consider the comptroller general's report to us. I think she did a very thoughtful job, and it's my job to be equally thoughtful about how we move forward with that.

I have had the opportunity to meet with the B.C. Ferries organization and TransLink and others. I do commit to the member opposite that we will look at those recommendations and look at which ones, if any, should proceed. And that's been canvassed fairly thoroughly.

I am concerned about the increases that the member opposite references, because in the chart that I've been provided with, the member is absolutely correct. There is an increase for some vehicles on B.C. Ferries. I should point out that it is revenue-neutral. B.C. Ferries is making no additional money as a result of these changes. What they did adjust was that if you have an overlength vehicle, you will pay more, whereas most recreational vehicles actually pay substantially less.

When I look at the percentages, none of them, in terms of increases, reflect the percentage that the member opposite has suggested. If he has a specific case, I would be more than happy to have our staff speak to the individual just so we can clarify that. I recognize the importance of tourism. I certainly do.

In fact, if you look at, for example, a truck and camper, the old rate was $72. It's now $45. When I look at a 26-foot RV, that percentage dropped 18 percent. A full-sized tow vehicle with a travel trailer dropped by over 3 percent.

Where we do see an increase…. This is probably the category that the member referenced. The mid-sized tow vehicle and a ten-foot tent trailer — their rate went up by 80 cents. The area where it sees the most significant increase is if you have a pickup truck plus a boat trailer — because it's low and long — those costs increased. All of the others saw significant reductions.

[1730]

I know the member opposite referenced the ferry advisory committees. I'm informed that there was a discussion with the ferry advisory committees about this change and that they supported the change in terms of the realignment of how the costs were paid.

I do want to be cautious. I don't know how the person paid an increase of that much. Certainly, there was an increase for pickup trucks and boat trailers.

N. Simons: Thank you, hon. Minister. Well, I know that ferry advisory committees are not going to be saying it's a good thing to see fares increase.
[ Page 4685 ]

[H. Bloy in the chair.]

When you mentioned the tent trailer or the person carrying the boat, those are the tourists who are coming to the Sunshine Coast, and from $2 per foot over 20 feet to $5.60 per foot over 20 feet is going to have a huge impact on people who need to pull their boat or their bicycles or their tent trailer.

Now, that's just one aspect of it. I think that when you consider the overall costs — and we don't even know what the HST is going to do to the fares — I just want to point out the importance of…. This is the only highway that people from the Sunshine Coast have to Vancouver. It's the only highway they have from Powell River to the north Island. It's the only highway they have between the upper Sunshine Coast and the lower Sunshine Coast, and the only highway to Texada Island and to Keats Island and to Gambier Island and to Savary Island.

The impact on our communities has already been felt. The ferry advisory committees that the minister has cited have stated publicly their concern about tourism, about ridership numbers and about the cost of living on the Sunshine Coast. Every time there's an increase, the trucks that pull the groceries onto the ferry and off the other side onto the Sunshine Coast are going to be paying more. Our food prices will go up.

I'm just urging, if I may be so bold, the minister to seriously consider the importance of public interest in policy development in this regard.

To save time perhaps, out of respect for my colleagues and the minister, I would like to ask about the road from Powell River to Lund, which is a road that has been under construction for, I think, almost as long as I have lived — well, maybe slightly less, yeah.

There are some important elements to that road besides the road itself and the road base and the shoulders, and that is the repositioning of the telephone poles and the infrastructure that goes with that. I'm just wondering if the minister might be able to inform residents when that might be completed.

My final question, which is completed unrelated, is about…. I have a constituent who is actually speaking on behalf of many residents about the issue of light pollution. I'm not sure if the minister has heard about this. The night sky is something that has a huge impact on navigation, on wildlife, on people who are interested in looking at the stars. There is technology that's approximately the same price as current technology, which actually manages to keep light from escaping up, to preserve the night sky for those who are interested and for the birds who are migrating, etc.

I'm wondering if it's possible to perhaps at some point discuss this further. I wasn't sure if there were any policies in place at this time. Thank you for the minister's time.

[1735]

Hon. S. Bond: We'll start with the last item first, which is the night sky. It's interesting. There is some new technology, and in fact, we are looking at things like shrouds, which actually force the light down. We'd be happy to have a conversation with the member opposite about that, because we understand that is an important thing. We have some consideration of that, but it would be good to hear any of those ideas and some of the other specific concerns. In a couple of minutes, trying to keep up with all of these roads and things….

This is Highway 1, and as I look at the history, the member opposite is certainly correct. There's been an ongoing long list of investment. It's about $1.5 million. We're continuing to enhance that road, but I think there is some work that perhaps needs to be jump-started with B.C. Hydro.

In looking at where we're at in terms of the utility poles that have to be relocated, I will commit to the member that we will reconnect with B.C. Hydro and have some further discussion about that. It looks like there's been a bit of a slowdown in terms of the communication there. We will follow up with that.

I appreciate the member opposite's comments about ferry service. You know, I don't live where a ferry is necessary. I do live, obviously, in the north, and I understand the importance of transportation. We're going to work to look at the comptroller general's report to see how we can certainly protect the public interest.

I do want to try to clarify for the member. I do want to make sure we are on the same page when it comes to the rate changes, because it does sound like it doesn't reflect the information I've been given about the percentage of increase.

I'm happy to have that conversation again with you, but I'd also be very interested in the night sky discussion. We will update the member when we've had a conversation with B.C. Hydro on those utility poles.

J. Brar: I would like to ask one question regarding the Golden Ears Bridge toll. My understanding is that all vehicles crossing the Golden Ears Bridge are required to pay a toll, but a few weeks ago I got a phone call from a constituent of mine. Her name is Margaret, and she told me that vehicles with out-of-province plate numbers are not required to pay a toll at the Golden Ears Bridge.

I would like to ask the minister whether vehicles with out-of-province plate numbers are required to pay the toll or not. If not, why?

Hon. S. Bond: Frank came all the way up here to help with that answer, but it's pretty straightforward. Actually, all vehicles that use the bridge are expected to pay the toll. I'm sure he can understand that the issue is the collection of those tolls. If you can imagine, if the vehicle crosses the bridge once or twice and they live out of province, the issue is whether or not we're actually able
[ Page 4686 ]
to collect the toll from them and the costs that would be engaged in actually trying to do that.

To be clear, there is an expectation that every car that crosses the bridge does pay the toll. I should point out that it is a TransLink bridge. The policy is that any vehicle crossing would pay the toll. The question is whether or not they actually pay it if they live out of province, and chasing that toll would be probably lacking in…. The economy of doing that is questionable.

[1740]

J. Brar: Just so that I'm clear, is the minister saying…? I understand the expectation part, but do we have the system in place with which we send the tickets to the people who have vehicles with out-of-province numbers for collection? Do we do that or not? That's the question — if we do that. I can understand the expectation part.

It looks like this is the kind of policy which could be seen as discriminating against the people of British Columbia versus the people from out of province.

Hon. S. Bond: The licence plate is recorded, and if we can track them down, we bill them.

M. Sather: The rapid bus lane that the government announced to go from the Golden Ears Bridge connector to Harris Road in Pitt Meadows — can the minister tell me when construction will begin?

Hon. S. Bond: It is a stimulus project. We expect it to start, obviously, as soon as possible because it needs to be completed by March of 2011, as other stimulus projects would need to be finished. We don't have a specific start date at the moment, but because of the compressed nature of the infrastructure program, we need to get them moving as soon as possible. So sometime in the near future it will begin. I don't have a specific date. It would be completed at the absolute latest by March of 2011.

M. Sather: And the bridge will double, if you will, as an HOV lane. Is that correct?

Hon. S. Bond: The bridge has been built to accommodate a bus-priority HOV lane. It's undetermined at this moment in time. The bridge is built to accommodate it, but I don't have a specific date as to when we would implement the lane over the bridge — so built to accommodate it; not certain when it would actually be implemented.

M. Sather: My apologies to the minister. I misspoke. I didn't mean the bridge. I meant the rapid bus lane. But I think you may have answered it anyway, if I'm not mistaken. It will accommodate an HOV. Yeah. Okay.

The other thing I want to ask the minister about is…. In Pitt Meadows there's been a lot of discussion about a second connector from the Abernethy Connector, which goes onto the Golden Ears Bridge to Harris Road. Locally at least, it's called the north Lougheed connector. If it were to be built, it would connect with the provincial highway.

Can the minister tell me: what discussions has the provincial government had with Pitt Meadows municipality about that road and the connection with the Lougheed Highway?

[1745]

Hon. S. Bond: All I can say is that I am very lucky to have the team that I have, because for me to actually be able to answer you with any credibility on some of these projects without them would be impossible.

I'm told that this is not a provincial highway, so our role is a supporting role to the municipality. It's their responsibility in terms of the actual connection. Where our partnership would come is when it actually interfaces with the provincial highway.

What we've done to date…. There have been discussions, and in fact we are working in terms of doing the analysis necessary, looking at traffic counts and a number of other sorts of data pieces. Because it's not a provincial highway, it is actually a municipal responsibility.

I'm told there's a very productive partnership and that eventually our role would be that interface with the provincial highway. We're in ongoing discussions about that.

M. Sather: I wanted to ask a question also about the Pitt River Bridge, which the Premier was at last fall to announce the opening. Everything is going great, I guess. It seems to have stalled, though, and we've got big bumps on that bridge. They're actually rather dangerous for traffic going both directions — both bumps coming off the bridge, if you will, and also there's some other work that needs to be done there.

I wonder if the minister could tell me when those bumps will be corrected, when the lanes will be finalized and when that project will be complete. I know there's a spur road — I can't remember the name of it right now — heading off towards Coquitlam from the bridge. I'm not so much concerned about that but mainly the effects that it has for my constituents going back and forth on the bridge.

Hon. S. Bond: I want you to know that the member opposite is in great company. Apparently, my deputy drives over those bumps too, so he's been asking Frank why it hasn't been fixed. I can tell you why, and it will be fixed within the next couple of weeks. The issue has been that it's been too cool to pave. In fact, what Frank tells me — and he is a fountain of knowledge — is that we've only had five paving days in the last 150 when we could actually do that.
[ Page 4687 ]

The temperature is now obviously warming. We commit to getting it fixed, and I can assure you that the deputy will continue to remind me of your questions. We understand the bumps. We'll get them fixed in the next couple of weeks, and thank you for reminding us.

H. Bains: Just a question coming out of the question that was asked by the member for Surrey-Fleetwood about the out-of-province vehicles using the Golden Ears Bridge, which means also the out-of-country vehicles coming over. I think we have a number of those big trucks, as our trade is with the United States, using that bridge.

My question is this. I understand the dilemma of collections. The tickets are issued, but collection is the problem. Isn't there a provision in their contract that if the vehicle number level is below a certain level, then TransLink is responsible to make up? My question is: would that not be considered a lost revenue, where TransLink or the province is held responsible for that?

[1750]

Hon. S. Bond: I'm not certain we understood the question completely, but the answer we're prepared to give to that question is that the tolls are imposed by TransLink. The revenue goes directly to TransLink. If they don't collect the toll, they get no revenue. In essence, they have the ability to impose the toll. If they don't collect it, they lose that revenue.

B. Routley: I'd like to thank the minister and staff for this opportunity to ask a number of questions.

If I could actually serve notice of my first question, because it may take some time to get a response to this. Essentially, it comes down to this. The folks in the Cowichan Valley are convinced that, as compared to the Lower Mainland, our region — the Cowichan Valley region — is not getting the road maintenance and upkeep anywhere close to the same level that they seem to experience when they go over to the mainland and visit neighbourhoods of friends and family.

What I would like to know is: do you have a per-kilometre, for example, average cost comparison of the cost of maintenance for the Cowichan region or, if not the Cowichan region, for Vancouver Island as compared to the Lower Mainland?

That would answer a number of questions that I've had in my office from constituents who are concerned about the degradation of roads in our communities and what seems to be a continuing trend in that regard.

[1755]

Hon. S. Bond: I should start by saying to the member that, first of all, our staff would be happy at some point to sit down and walk through, more specifically, the program that is utilized. Also, if there are specific concerns about sections of road, we can have that conversation. I'm happy to do that. Our team is always really good at facilitating that.

I guess the best way to describe road maintenance is that there are provincial standards and those are consistent across the province. Mike described it best, I think, in saying that if a road has a similar set of circumstances — for example, the same volume; the same weather pattern; in other words, not a high snowfall area — if it's in Smithers or in the Cowichan Valley, it would receive the same treatment because there are provincial standards.

Having said that, there are also roads which require additional support and additional attention. For example, if you're travelling on the Trans-Canada Highway, and you look at literally hundreds of thousands of vehicles, there would be additional investment in road maintenance because of the volume. If there's a higher snowfall, then that would also require and necessitate additional resources.

Generally, there is a provincial standard. There is a very sophisticated program in place for monitoring, and whether you live in Smithers or in the Cowichan Valley, that standard would be the same, given that the other circumstances I mentioned are consistent.

B. Routley: Thank you, Minister, for the answer, although I'm not sure that people in the Cowichan Valley will be entirely comforted by that, because the feeling is that there has been a continuous decline in the level of service. People talk about the good old days when we had better road maintenance. I don't know whether that's a provincial standard today as well, but maybe that's the case. I don't know.

In any case, that fits nicely, I guess, with the list of issues that I would like to share with you. Probably it's best to just go through the list of issues, and maybe we can hear some kind of response.

Starting with the drive from Duncan to Mill Bay, there are a whole lot of potholes in various areas. Near the Payless Gas station on the north side of Duncan — at least, what used to be the Payless; I don't know if it still is — there are a whole bunch of rather large potholes developing on the road that I've noticed myself. But this isn't my list. This is a list from other constituents.

The concern is that since the winter of 2008 and 2009 they've never really been properly fixed. I think there has been some kind of rough patch jobs, but the same holes seem to show up again. Then after the winter they're right back into a situation with a huge hole.

Are you comfortable with me continuing with the list? Okay.

The Chair: Member, please direct your questions through the Chair.
[ Page 4688 ]

B. Routley: Okay. Well, through the Chair to the minister, I'd like to continue with the list, then.

The second area is north of Duncan, heading to Cowichan Bay from the Koksilah bridge towards the Cowichan tennis courts. There's a section of road that's in terrible shape. While it floods there at that corner from time to time…. Since the flood, it's in absolutely appalling condition — huge holes and sections of the road where the water has washed away. You know, the line is gone and that kind of thing. That's an area that we would like to have some attention to.

Going towards Cowichan Bay, continuing on as if you were going to Cowichan Bay from the Koksilah bridge, you would hit Hillbank Road. About a kilometre up Hillbank Road the pavement is breaking down badly in places on Hillbank Road — about a kilometre off the Cowichan Bay Road.

Continue driving to Cowichan Bay. You'll notice that the yellow lines in the centre and the white lines on the sides of the roads have deteriorated. It's dangerous driving, at nighttime in particular. Constituents who are driving that road at night have real concerns. Both the yellow and white lines are an issue.

[1800]

When you get into Cowichan Bay, if you stop by the Masthead Restaurant in Cowichan Bay — there's a restaurant and pub there that are quite busy — in the middle of the road there's a small metal cover. There's quite a hole developing around that cover. You've got people walking there, but there's also this hole that's getting worse by the day. So we wanted to mention that.

Right in that same area there are…. The Cowichan Bay area is quite busy, particularly during the tourist season, and people are flying down that hill. I've had a number of concerns from residents in the Cowichan Bay area about speed. There was a question about whether or not it would be possible to have a speed bump or some kind of traffic-calming device, before people….

Again, people park along both sides of the road, and they're crossing back and forth. People come flying around that corner, and there have been a number of close calls that I would want your ministry staff to be aware of. So that's another issue.

South of Mill Bay, if you drive up the hill by Wilmot Road, the condition of the pavement leading to this road is breaking up badly. It's essentially in a deplorable state at this point, and the residents in that area say that it speaks volumes about the lack of concern for Island roads. Again, this is the feeling by some residents that things seem to get bad and have not been redressed over a number of years.

Walk up the hill on Wilmot Road to the stop sign, about 30 metres, and you'll find a major sinkhole around the culvert there. This hole has been growing there for at least five years. Again, it's a sinkhole, and apparently every so often maintenance crews fill it in with a bit of gravel and some new blacktop. But for four years now — this is what I'm told — this hole is steadily getting bigger, so we would ask your ministry to take particular attention to that concern.

Drive up the hill, and you'll see the white lines on the right side of the road in many places disappear altogether. Without the white line, drivers are cutting corners, and people feel they're being put in danger driving to and from work in that area.

Another issue is on the Trans-Canada Highway. There are a number of reflective lights in the middle of the Trans-Canada Highway that have become worn out and are ineffective, so there's a question about whether those are going to be repaired or corrected at some point.

Just on the south side of Duncan there's the new Cowichan Commons. Again, I don't know what you do about this without having a highway bypass. I know that's millions of dollars. But I get a lot of complaints about the three new lights that have been installed and complaints from people that it used to take eight minutes to get from Allenby Road, on the south side of town, to Drinkwater Road, and now it can take half an hour.

I have had constituents explain to me all of the times that they've been hung up and stuck on the road there and how it's taking longer — certainly a lot longer than it used to take — getting to and from work.

Another issue, and this would go a long way…. I don't think that this has been addressed. This is an issue that I heard about when I first got elected, actually, and it made a lot of sense to me. I'm sure people have approached ministry staff about this one, but I would be negligent if I didn't raise it as an important issue in the Cowichan Valley, particularly for the folks who live in Mill Bay, and that is that when people come off the ferry and arrive in Mill Bay, often they're directed by the signage or just by the flow of traffic.

[1805]

You get off the ferry, and you automatically start heading into Mill Bay. They were hoping for appropriate signage to make sure that the people were directed to the highway and not just for Victoria. But if the sign said Victoria and, you know, parts south, Duncan….

Actually, the quickest way to the highway is to turn left. Unfortunately, just about every tourist in the world ends up speeding through what is a residential community. I've heard from so many people, and it just seems to me a no-brainer that this one could get fixed. There's a safety committee that has developed in Cowichan Bay, and really, they'd be forever happy to have a sign that said: "Go to the highway that way — left."

The last issue I've got is the issue of the white paint on both sides of the road. It's a twisty road from Cobble Hill to Shawnigan. By the time you get to the pub there, there's a lot of…. Again, this might be an area that's been addressed, or maybe you're waiting for the weather
[ Page 4689 ]
to change so that you can deal with it, but people who drive that road regularly are very concerned about the dangers, particularly when it's dark or on rainy nights. They have a heck of a time seeing where they're at.

Basically, those are the issues, and it would be wonderful news to hear that you would be willing to have a look at those. I guess my question is: do you have any timeline that I can tell the constituents that we can expect some action on these matters?

Hon. S. Bond: The issues of paving and painting and replacing reflectors are important things. I know what it feels like to be driving along and not being sure which lane you're supposed to be in. I know that's intimidating to people. Certainly, in the north we experience that, as well, because of weather.

They are seasonal programs. Our line-painting trucks — we have a certain number of them around the province, and they are beginning work as we speak. The same is true for looking at paving, potholes and also the replacement of reflectors. It's basically after the winter season that we have to get out and do that work.

We will commit to the member opposite that within a week we will get back to him and let him know when we can begin action on these priorities for him. Obviously, the sign — we'll have a look at that. We'll look at the sinkhole. I'm pretty concerned if we have a sinkhole that's been there for four or five years. I can't imagine that we want to be talking about that a year or two from now.

We'll take the list. Probably as we speak, our regional team is looking at how we can get out and make some action here. We will move on these as quickly as we can. I've asked the staff to get back to you within a week and let you know which ones of those would be moved on as quickly as possible — happy to do that. You'll get a report back within a week.

[1810]

G. Coons: I wanted to thank the minister and her staff. As she knows, we have been in touch with quite a few municipalities and getting letters of concern. I think that's quite appropriate, showing that the minister is doing her job, and her staff, and we're doing our job as opposition to try to get the issues and concerns out there. So I want to acknowledge the appreciation from us for the work that the minister and her staff have done.

I just have one last question. It's with the Mayne Island Residents and Ratepayers, who have the dangerous ditches and the many potholes. I'm sure the minister got the pictures. I just want to confirm that there will be follow-up with the operations manager, Bob Webb, with the ratepayers association.

Hon. S. Bond: I concur with the members opposite. I actually appreciate the way that the information comes to us, in terms of how the concerns are gathered by both of the critics, and we try to move on that.

I would have hoped that that contact had been made by now. I'm going to have that confirmed by staff, so if it hasn't been made by now, it will be in the very near future. I appreciate the reminder of that and have been assured by staff that if it hasn't occurred it will happen very quickly.

H. Bains: I think now we want to get back to some of the other key issues that we identified that we want to talk about. I think right now I'm going to move to the Evergreen line, Minister, if we may.

Looking at the service plan for this year, there are a number of entries here for 2010-11 and 2011-12, on page 30. The Canada Line rapid transit project, the Evergreen line rapid transit projects, buses and other transit priorities, and then there's a total.

My question is to the minister, quickly, on the Canada Line rapid line project. It lists $20 million for the next three years — this year and then the following two years. Can the minister explain what that is for?

Hon. S. Bond: That is the agreed-upon performance payment to the Canada Line. In fact, one would have to agree that they have not only met but exceeded their expected performance, so that's the agreement that was reached, and that is the annual performance payment.

H. Bains: Can the minister explain how the performance payments work? What are the criteria?

Hon. S. Bond: There is a series of performance expectations laid out in the concession agreement. If the Canada Line meets those expectations, then they receive their performance payment. That's what's reflected in those numbers.

H. Bains: Is a list of those criteria available?

[1815]

Hon. S. Bond: The information is public. I can share with the member opposite that the most significant criteria…. In fact, the three big ones, as we would call them, are system availability — so the cars are available and, obviously, able to be utilized — and quality and ridership volume indicators.

Those are the three major performance criteria which they are measured against, and if they are successful, then they receive their performance payment.

H. Bains: I see $20 million listed here in each of the coming three years. Is that the maximum they can get for performance? Or is it on an escalating level — that once they meet certain thresholds, then they get a certain amount of money?
[ Page 4690 ]

Hon. S. Bond: The member is correct. It is the maximum available.

H. Bains: If this is maximum, then it means that it is on an escalating basis, that if they meet all of those criteria, they get $20 million or that if they don't meet one of them, then it will be less than that. I think my question is, then…. So you're simply listing maximum, hoping that they will meet all of those criteria, so you've got to be budgeted for that. I appreciate that.

I think I'm going to move on now to the Evergreen line. It lists here $33 million for 2010-11, then $133 million for 2011-12 and $136 million the following year, for a total of $302 million. My question is…. That's $302 million, but my understanding is that the province's portion is $410 million. Is this where that money is coming from, or does this money reflect something else?

Hon. S. Bond: This would be the three-year cumulative total of the $410 million commitment. Future budget years would reflect the balance, bringing us to our total commitment.

H. Bains: So $33 million is the initial payment, then. Has there been any payment made prior to this year?

Hon. S. Bond: In the year previous to this budget document — so in '09-10 — there was $16 million additional spent. That would be for engineering, some property purchase. It would be the $302 million plus $16 million that was spent in the year previously.

H. Bains: That takes us to $318 million. Perhaps the minister could advise the House what the completion date is for that project.

[1820]

Hon. S. Bond: Our target and expectation is that the project would be completed by the end of 2014.

H. Bains: The end of 2014. What is the beginning date of having that project started?

Hon. S. Bond: Obviously, there's planning and engineering and land assembly at the beginning of the project. We expect construction to begin next year.

H. Bains: The minister, during her…. Before I get to that question, let me ask…. So $318 million is identified between last year until 2012-13. Will the remainder, as the minister is suggesting, be expended in the following year, the completion year?

Hon. S. Bond: There would be two subsequent years to finish the project in terms of budget years, so the balance would be expended over the two-year period.

H. Bains: During her last year's estimates — I think it was in October 2009 — the minister at that time suggested that there were 12 dedicated staff confirmed to work on this project. Is that still the case, or do you have additional staff? How many staff are dedicated to this project?

Hon. S. Bond: I don't want to hold up the member opposite. We're going to get an accurate number. We'll wait for it, and then I'll provide it in the next couple of minutes. I just don't want to delay your question-asking, so we're waiting for that answer, and I'll provide it the moment we have it.

H. Bains: I appreciate that, because the time is running very fast, and there are quite a few items that we still need to go through. Although we have tomorrow, there are other issues.

The minister has said publicly that the ministry is the lead on the Evergreen line. I would like to know from the minister if that is still the case.

[1825]

Hon. S. Bond: Yes, we continue to lead on this project. That is absolutely correct. We have 12 dedicated staff, which is the number, obviously, that we gave in October.

But as you can imagine, as the project ramps up and we begin to do design and all of those things, we actually have about 80 additional people that are responsible for things like designing, IT, environmental assessment, consultation process — very important. We have people that do that as well. So we have 80 full-time people if you include all of the additional tasks that I outlined.

H. Bains: The cost attached to the employees that are dedicated to this project — who do you bill that to? Is that the ministry cost? Is that in addition to the $410 million that the government has announced provincially?

Hon. S. Bond: That would be included in the $410 million — certainly, in the project cost. All of these people are incorporated into the costs that will accumulate over the next number of years to complete the project.

H. Bains: Is the total budget, as was announced before, still at $1.4 billion?

Hon. S. Bond: Yes, it is.

H. Bains: Now let's look at this. I think that we had this discussion during last year's estimates as well. So $410 million is the provincial side, and $417 million, I believe, is the federal side of the commitment. The total is $1.4 billion, and that leaves us with about a $573 million gap. Even though the minister has said that there's
[ Page 4691 ]
$400 million expected from TransLink to come to the table with, that still leaves us with a $173 million gap.

My question to the minister is: where is that money going to come from? That's my first question.

Hon. S. Bond: The member is right. We certainly have had this discussion. We are certainly committed to the Evergreen line, as you can imagine. The engineering is going forward, and we look forward to beginning the environmental assessment process very quickly.

We're looking at a number of things. First of all, I think what's important for us to contemplate is what revenue we can actually generate. When you think about development opportunities…. We are contemplating what types of revenue we could generate as we consider the line being built. We're going to look at the question of scope. We're going to look at cost savings and efficiencies. We're going to do what it takes to get the Evergreen line built.

There is also one significant component that remains critical, and that is that the Mayors Council actually honour the commitment they made to bring $400 million to the table. I know it's a priority for many mayors. Certainly, it's an enormous priority for many constituents in the Metro Vancouver area and certainly in the Coquitlam area.

We are working very hard to find agreement on how we can complete the project, but we're going to look at every avenue that's available to us. Certainly, our commitment is to move forward with this project and see it concluded in 2014.

[1830]

H. Bains: I think it's nice to hear the minister say this and to make those statements, and she has done this before publicly. But when you really look at it, does she have the capacity, or does the ministry have the capacity, as far as the financing is concerned?

There are huge gaps. So how can the people of that region or the people of this province believe the ministry or believe the minister? Nothing personal here, but I think that this is the commitment being made. I think that this is one of the commitments that was made way before the Canada Line and many of the other projects. And still, they don't see it coming in practice because of lack of funding.

I think the nice statement is good — comforting. But it does not do the job. The question again here is for the minister so the people out there can actually see it happening. How could you start the project when you don't have funding in place?

Hon. S. Bond: Well, we certainly have $817 million in place. We have the ability to begin the project, to move forward with the project. I'm confident that the people who have waited for decades to, in fact, see this project delivered will see it delivered. We have reiterated our commitment to it. We are going to look at how we can, as I've said previously, generate potential revenue when we look at development along the line. We are looking at scope. We are looking at cost-saving efficiencies.

We're also looking at the Mayors Council honouring the commitment they made over the course of numerous events, documents that have committed them to bringing their share to the table. I look forward to an ongoing positive and productive relationship with the mayors. We've had some very good discussions about how we need to move forward.

I can simply reiterate that we intend to build the Evergreen line. We have in our budget reflected the dollars necessary to carry our portion of that. The federal portion is also reflected. Now we need to bring the regional dollars to the table, and that's what we are currently working on.

H. Bains: But have the mayors come to the table yet? What is the reaction to this $400 million of their commitment? The second part of my question would be the $173 million. The minister talked about the opportunity to raise that money through development. Can the minister actually give some examples? Where is she anticipating that money is going to come from? Or is that going to be the responsibility of the mayors and TransLink again?

Hon. S. Bond: I think that, hopefully, for the first time in decades people will have confidence that, in fact, we are going to see the Evergreen line delivered. I have made reference to some initial work that we're doing. Obviously, an important corridor. We know that people obviously like to live and work and look at the possibility of development along that line.

I'm actually very energized by looking at that component of how you build rapid transit and what else you can accomplish at the same time. I think that providing opportunities for people to live close to public transit is important. So in collaboration with the regional representatives, we're going to look at how we can maximize the benefit of placing a project that's worth $1.4 billion in a corridor.

I think it's the responsible thing to do to look at how we can generate revenue to assist in closing that gap. But there's also work to be done in terms of efficiencies and scope, and our team is working very hard to find ways to close the gap. The most significant commitment that we will continue to work on is having the regional mayors bring their share of the commitment to the table.

[1835]

I should be very clear about this. It was a commitment. There was a commitment to be partners in this project. In fact, the mayors actually asked us to leverage dollars
[ Page 4692 ]
from the federal government in a number of cases. We did our work. We went, and we brought a senior level of government to the table, bringing over almost half a billion dollars.

I do want to say that it's been a constructive discussion. I'm optimistic that we'll continue to work with the mayors in a way that would see them honour the commitment that they've made, and we are committed to ensuring that this line is built.

H. Bains: I guess that when we talk about commitments, the commitment also was made that it would be built concurrently with the Canada Line, and that commitment wasn't kept by the government. We all know that. Now we're waiting to see if there's financing available for this project.

Now I will quote the chair of the Mayors Council. He said in the Globe and Mail: "The minute you stick a shovel in the ground and start to build the Evergreen line, you better have the capital dollars you need to build it. Coupled with that, you also need the operating dollars to run the system after it's built."

So I think that there are twofold challenges. Challenge number one is the capital dollars that are not there yet. It hasn't been identified, and if the mayors don't have the capacity, TransLink doesn't have the capacity to raise $400 million, then where is that money going to come from? That's the number one question.

The second question, which is more important, is the operating money. They don't have the capacity to operate this line as it sits today. Right now the $130 million of additional money that they received through the last initiative is just to keep the system going as it is today. They don't have money to operate the Evergreen line, even if you build it.

I might remind the minister that the purchase price of a bus is one-tenth of the overall cost during the life to operate that bus. I mean, the same thing goes, probably, similar in percentage, maybe a few percent here and there…. Capital cost is one thing, but operating over the life of this project is going to be a huge amount of money and a huge amount of commitment on behalf of TransLink and the mayors.

I think the challenge is giving somebody some assurance that the capital money that you expect in TransLink, $400 million, is going to be there. And the $173 million gap, which hasn't been identified — who is going to come up with that money? It hasn't been identified. So if you could give us some commitment of where that money is going to come from. Do the mayors and TransLink actually have the capacity to raise $400 million? Not only the capital needs to be raised; to service that debt, they need additional operating money and the capacity that they don't have.

I think those are the huge questions, and I think that the public who live in that region, the public who are using the system — they're eager to use that new system — are looking for those answers. Enough speeches have been made over the last ten years, and I don't think that they want to hear another speech from the minister in this House on this question, on the eve of putting the shovel in the ground to have this thing going. I think that those are some of the questions.

I know that pretty soon we will be running out of the clock here. If the minister could address those issues, hopefully, we'll have some concrete answers to the questions.

Hon. S. Bond: When we look at what is low-cost to operate, certainly SkyTrain technology is. In fact, the member opposite referenced the cost of buses, etc., and I should point out that it costs, in terms of capital investment, one-tenth of the capital costs to use SkyTrain technology. So it is cost-effective.

We should be very clear that we intend to build the Evergreen line, and what I would do is challenge the member opposite, who certainly seems passionate about building the Evergreen line. It would be an opportunity for us to join together and encourage the mayors of Metro Vancouver to honour their commitment to bring their $400 million to the table. I think that would be an incredibly important step.

I've listed the areas where I believe that we can generate additional resources to begin to close the gap. In terms of operating, I think what's important to recognize is that TransLink has actually done a study about operating, and according to their very own report, the Evergreen line will actually generate, through farebox, enough revenue to pay the operating expenses.

[1840]

Obviously, because it's SkyTrain technology, there are no drivers. There is, as I point out, a far lower cost both in capital and in operating. TransLink has provided the information that tells us that for the Evergreen line, operating is taken care of by farebox. So the most significant gap we have to close is that the Mayors Council needs to come to the table and honour the commitment they made to their $400 million. Then I am incredibly confident that we will see the Evergreen line in operation at the end of 2014.

H. Bains: I hope that when they said that the farebox will look after the operating cost, it's not only day-to-day operating but also to serve the debt — whether that money is considered to service the debt of their portion, is also part of that operating money. If the minister could confirm that, No. 1.

No. 2, I think that the issue still remains. If the mayors haven't come to the table up until now — like I said, on the eve of putting a shovel in the ground — you don't have the funding available or the total money available, but you're starting a project without having a full
[ Page 4693 ]
commitment to have the funding. I hope that we're not looking at another Vancouver Convention Centre where you started construction without having proper plans, without even having the funding in place. I hope we're not seeing that here.

If the minister could actually confirm to this House and to the people of this province that the capital, at least the capital cost of $1.4 billion, is committed and is arranged and is on the table before you put a shovel in the ground.

Hon. S. Bond: Well certainly, we have an exceptional team of people that have been gathered together. They are expert at what they do. We are fully confident in the capability that we have to deliver this project. We anticipate, as I said, breaking ground next year.

The minute the package is finalized and put together, I can assure you that the Evergreen line will continue along the path of engineering, design and environmental assessment. I'm confident that we'll put it in place, and I look forward to the member celebrating with me in 2014, when in fact, the Evergreen line begins to operate.

Thank you, and I move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 6:44 p.m.

[ Return to: Legislative Assembly Home Page ]

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

TV channel guide • Broadcast schedule

Copyright © 2010: British Columbia Hansard Services, Victoria, British Columbia, Canada

ISSN 1499-2175