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, May 26, 2010

Afternoon Sitting

Volume 18, Number 8

[ Page 5767 ]

WEDNESDAY, MAY 26, 2010

The House met at 1:34 p.m.

[Mr. Speaker in the chair.]

Routine Business

Prayers.

Introductions by Members

Hon. G. Campbell: I am pleased to say that in the precinct today we have a group of grade 11 students from West Point Grey Academy, in my constituency of Vancouver–Point Grey. They're travelling with some parents and their teacher Jenise Boland. They're here to experience the history of the House and the place and to take pictures and to understand how this all works.

I hope that they are having a very good day. I'd ask the Legislature to make them all welcome.

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V. Huntington: I was delighted to be joined earlier today by Mrs. Dale Cotter and 30 of her grade 4 students from Beach Grove Elementary, in Tsawwassen. These students were an exceptionally inquisitive group. I hope the ten parents who accompanied them were justly proud of their well-behaved children. Would the members please join me in welcoming them to the House.

Hon. R. Coleman: Joining us in the House today are 40 grade 5 students from Betty Gilbert Middle School in Aldergrove. They're accompanied by their teacher Gina Crockett and 16 parents. Would the House please make them welcome.

J. Horgan: Joining us in the gallery today are two constituents of the Minister of Labour, Pamela and Dennis Sutton. They were joining me for lunch after participating in a Women's Institute auction. We had a lovely tour. We had some great discussions about the minister and his constituency. Would the House please make them very, very welcome.

Hon. M. de Jong: A few weeks ago the Premier was in the Netherlands. Today a return visit from some folks who hail from Eindhoven in the Netherlands, where they take their football and their beer seriously: Tiny and Gerard Verhoeven and Kees and Ans Pÿnenborg. I hope the whole House will make them feel very welcome.

S. Chandra Herbert: I'd like the House to make very welcome Corbin Murdoch, an artist in his own right as well as a youth program coordinator with the Vancouver East Cultural Centre. Check out his band, Corbin Murdoch and the Nautical Miles. Please make him very welcome today.

Hon. J. Yap: I'd like the House to join me in welcoming 45 grades 6 and 7 students and two teachers, Mr. Don Allison and Mr. Kevin Dimick, as well as nine parents from one of the best elementary schools in British Columbia, Tomekichi Homma Elementary, in my community, Steveston. They're here as part of Mr. Allison and Mr. Dimick's class on parliamentary democracy.

I had a chance to meet with the students and give them a bit of a preview of what question period and the debates in the House will bring. I had some great questions from them, and I know that we will show them exactly how parliamentary democracy works during their visit. Would the House please join me in giving them a warm welcome.

R. Cantelon: I think it's fair to say that engineers built this great province. They supervised and designed the infrastructure on which the transportation systems and, in effect, the foundations of the economy of this great province are built. With us today in the House are two of the best, and their wives. Joining us today are Lee Rowley and his wife, Caroline, and Mike Herold and his wife, Sandy. Please make these guests welcome.

L. Reid: I have two sets of introductions today. The first. I have three lovely individuals in the gallery: Janice Barr, who is the executive director of the Richmond Society for Community Living; Michael McCoy, the executive director of Touchstone Family Services; and he is joined by Lawrence Portigal, a board member.

Now, we all have wonderful agencies. They are the folks that make our communities stronger. My lovely colleague from Richmond Centre and I had the opportunity to have lunch with them today. I'd ask the House to make them very welcome.

My second introduction, on behalf Mr. Speaker, is a group of individuals participating in a full-day parliamentary procedure workshop. This workshop provides a firsthand opportunity for the public service to gain a greater understand of the relationship between the work of the ministries and how that work affects this Legislature. Would the House please make them welcome.

D. Hayer: It gives me great pleasure to introduce five very special students and their principal from Kwantlen Park Secondary School, one of the best schools in Surrey. They are my guests. I took them out for lunch today, and they're touring the Legislative Assembly. As a matter of fact, they're sitting up there.

They are Rachel Wilkinson; Omar Berbar; Cherise Ervin — who couldn't be here; Sophia Mattheakis; and Eric Von Sivers. Joining them is principal Rick Breen.

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[ Page 5768 ]

These students participated in the Rotary Club of Surrey's Adventures in Citizenship speech meet. That event focused on developing greater awareness among the young people of their responsibilities, and these grades 11 and 12 students were asked to speak on why Canada is an exceptional country to live in.

They did an excellent speech on this, and for their great work I promised them that I would invite them here, take them out for lunch and introduce them to the House. Also, they see how our democracy works. Some of them are expected to go into politics. They might be our future MLAs, even our Premier. Would the House please make them very welcome.

Hon. S. Thomson: I've got a very special guest in the gallery today, and it's my first chance to introduce her officially. She's been here for throne speeches and things like that where we don't get the formal introductions, but my wife, Brenda, has joined us in the gallery today, and I am very pleased to thank her for her continued support and want the House to make her welcome.

She also has two girlfriends with her from Vancouver. Barb Elworthy and Dixie Wolfe are visiting as well. Dixie Wolfe is actually the daughter of the late hon. Evan Wolfe, who served this province under two Premiers — Premiers W.A.C. Bennett and Bill Bennett — as Minister of Finance for the province. I'd ask the House to make them all welcome.

Statements
(Standing Order 25B)

AUTOMOBILE CRIME REDUCTION

J. Les: As a society we depend on our vehicles for transportation. For many of us, buying a car or a truck is the second-largest purchase that we will make. Understandably, falling victim to auto crime can be upsetting, both financially and emotionally.

I'm happy to say that auto theft has dramatically reduced and decreased in British Columbia. Since 2003 vehicle theft has decreased by 58 percent in our province, and vehicle break-ins have dropped by 52 percent over the same period. In my constituency of Chilliwack we've seen an impressive 60 percent reduction from 2003. The bait car program that we worked hard to develop in British Columbia has paid off in spades and is now being emulated by many others across North America.

During the Olympic and Paralympic Games we had an influx of cars flooding the province, particularly the Lower Mainland, and car theft was a real concern. Once again our police forces rallied to ensure public safety and vehicle security. Bait cars were deployed with microdot DNA technology, making it easier for police to identify and recover stolen items.

These cars were placed at all 22 park-and-ride locations, VANOC parking lots and departure hubs as well as games training and preparation centres. They increased surveillance, solicited the help of police dogs and traffic helicopters and deployed undercover cars equipped with automatic licence plate recognition technology, which can scan up to 600 plates an hour, to locate stolen vehicles. These efforts paid off. We not only celebrated a very successful Olympics, but we experienced a 14-year low in vehicle thefts and incidents as well during that period.

A reduction in auto theft not only promotes the well-being and security of British Columbians; it also saves money by keeping insurance rates as low as possible. This now longstanding and reassuring trend will continue to keep British Columbians safe, thanks to the hard work of our local law enforcement agencies.

IAN CASE AND THEATRE ARTS

C. James: I rise to acknowledge an extraordinary Victorian and the contributions he has made to B.C.'s vibrant arts community. Ian Case is a UVic graduate trained in acting and English. He's the general manager of Intrepid Theatre, which produces the Victoria Fringe Festival as well as North America's only solo performance festival, which is happening right now in Victoria.

Ian has acted in, directed or produced more than 50 shows in Victoria since the 1990s. Throughout that time he's shared his talents with the Vancouver Island arts community, serving as a mentor and an adviser to his fellow artists and performers. Ian is the former president of ProArt Alliance of Greater Victoria and the former publicist for Langham Court Theatre. Ian has also played a key role in standing up for arts funding in British Columbia.

This summer Ian will be playing in William Shakespeare's Richard III, a part that's very near and dear to his heart. Ian first saw this play in Stratford, England, when he was a teenager. The performance was so powerful that it convinced him to become an actor.

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He'll be joined on the stage by his daughters in this performance, Hannah and Emily. That's going to be a very exciting production for him.

In recognition of his significant and ongoing commitment to the arts and theatre community, Ian was selected as the CFAX community award for arts leader of the year in 2010. He has also been named by Monday Magazine as the hardest-working person in local theatre.

Would the House please join me in congratulating Ian and thanking him for his outstanding contribution to the arts, not only on Vancouver Island but all of British Columbia.

lower mainland
local government association

R. Howard: I recently had the opportunity to attend the annual general meeting of the Lower Mainland
[ Page 5769 ]
Local Government Association, otherwise known as the LMLGA. As a past member of the executive of the organization, I was pleased to see a document entitled Working Together in the Lower Mainland, which is a sustainability snapshot for 2010.

The LMLGA has embarked on a very valuable journey. The report of the Fraser Basin Council represents a very unique opportunity for the LMLGA and the region its membership covers, which is from Lillooet to the Lower Mainland to Hope.

The opportunity to identify issues which transcend local and regional boundaries is a valuable one. This is a starting point for a broader discussion to identify opportunities that allow us to collectively work together to plan for the future of the Lower Mainland, to look out for the region as a whole — a transborder discussion of key issues.

Issues such as agriculture and food, consumption and waste, sewers and water, environmental health and transportation are important issues which transcend local and regional boundaries, and I think it is an opportunity for LMLGA to identify the priority issues that have strong agreement and work to push these forward so that shared action can be taken across the broader region.

The very things that bring many to the region — oceans, mountains and proximity to the border — are also things that restrict and guide our growth. With strong population growth predicted over the next 25 years, it is important that we engage in this kind of dialogue and more often think as a region when it comes to significant decisions on matters relating to the environment, consumption, waste and transportation.

Thank you to the LMLGA, to the Fraser Basin Council and, of course, their funding partners that make this important work possible.

sunshine coast trail

N. Simons: Located on the upper Sunshine Coast and Powell River regional district, the Sunshine Coast Trail stretches 180 kilometres from Saltery Bay ferry terminal to Sarah Point and Desolation Sound Marine Park. The formation of this epic trail began in 1992, led by Eagle Walz and Scott Glaspey and a handful of outdoor enthusiasts. They realized that accessible old growth was vanishing from the upper Sunshine Coast, so they formed the Powell River Parks and Wilderness Society.

The society began building trails with the aim to preserve the natural assets of the region and to provide hikers with access to view an incredible variety of wildlife, vegetation and inspirational views. By connecting existing trails and creating new ones, they formed the Sunshine Coast Trail, which is fast gaining a reputation for being as challenging and inspiring as the iconic West Coast Trail.

By March 2001 the trail was over 180 kilometres long, where only nine years earlier it was 35 kilometres long. One of the attractive things about the Sunshine Coast Trail is that while traversing some rugged and challenging terrain, there are shelters, wilderness campsites and access to supplies along the way. The trail even passes by some quality restaurants and some comfortable bed-and-breakfasts — my kind of hiking.

The whole Sunshine Coast Trail system is broken into smaller segments for shorter hikes, with some wilderness campgrounds also along the way. The segmentation of the trail into sections creates a unique opportunity for hikers of all skill levels to explore portions of the trail or the entire trail. With a bit of research and with the third edition of the Sunshine Coast Trail guide book, any casual hiker or marathon hiker will find the Sunshine Coast Trail to be inspiring.

organic agriculture
in south okanagan

J. Slater: Organic and sustainable agricultural principles have been a long history in the Similkameen Valley. In 1986 a Similkameen Okanagan Organic Producers Association began certifying farms. Since then, South Okanagan–Similkameen growers have been leaders in the advancement of organic principles.

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Cawston Cold Storage Ltd., which operates under the brand name of Nature's First Fruits, is the only 100 percent organic packing facility in British Columbia handling only certified organic fruits and vegetables. Under the leadership of president Billy Potash they grow, pack and sell a variety of organic tree fruits and vegetables. The management and growers of Cawston Cold Storage are able to provide their valued customers a lifetime of experience in the organic industry. Their label, Nature's First Fruits, can be found throughout North America from coast to coast, as well as in parts of Europe and Asia.

The Similkameen Valley has the highest concentration of organic farms in Canada, an impressive 40 percent of all organic farms across the country. Only 1 percent of farms are certified organic across Canada, and approximately 2 percent in British Columbia.

In 2004 a representative group of 34 South Okanagan and Similkameen Valley farmers gathered to discuss moving forward on a concept for a centre of excellence in organic sustainable farming and research. By utilizing the local expertise in 2005, a grass-roots society was formed — the Organic Farming Institute of British Columbia, located in Keremeos, British Columbia.

Farmers were surveyed across four of B.C.'s major farming regions, and results indicated a high degree of interest in education. In 2008, through discussions with the Fraser Valley institute, the first organic farming course was developed.
[ Page 5770 ]

AGRICULTURE IN
MAPLE RIDGE–PITT MEADOWS AREA

M. Sather: Agriculture has been a mainstay in Maple Ridge for over 130 years. Three families in particular hold a special place in the history of agriculture in my community. William and Amanda Hampton and John and Mary Laity arrived in Maple Ridge by riverboat from New Westminster in 1879. John Laity paid a dollar per acre for his land, which he asserted was an outrageous price. He only agreed to it because of the fabulous view of the Golden Ears mountains.

The two families began farming next to each other, and their descendants, some six generations later, continue to farm the same land today. Residents and visitors alike were treated to the delightful scene of Bill Laity working his horses in his fields until he passed away recently. Today Bill Laity's sons run a Jersey cow dairy, while their neighbours Paul and Matt Laity run a Holstein dairy herd. Heather and Don Laity, to the south of them, farm the famous pumpkin patch.

Just down the road from the Hamptons and the Laitys is the Davison farm. The Davisons have been farming their property since 1902. The Davisons also have a Jersey dairy herd as well as a cedar hedging business. Kerry Davison is planning to develop an artisan cheese processing plant and shop on their property.

Agriculture is thriving in Maple Ridge, but there is a cloud on the horizon. There's currently an application to convert over 200 acres of prime agricultural land adjacent to the Hampton and Laity farms to an industrial park and associated uses. If accepted, this proposal would spawn more removal applications from the area. This would jeopardize the wonderful farm families in northwest Maple Ridge and adjacent Pitt Meadows.

As a former member of this House, Val Roddick, frequently reminded us, we all have to eat to live. Let's remember that, and all of us do what we can to protect agriculture and farming families.

Oral Questions

B.C. HYDRO ADVERTISING CAMPAIGN

C. James: Just a number of weeks ago the government launched a new advertising campaign with B.C. Hydro. The ads first appeared during the Vancouver Canucks playoff run, and they've been airing every day since. My question is to the Minister of Energy, very straightforward: how much is the ad campaign costing British Columbians?

Hon. B. Lekstrom: We have some exciting times in British Columbia right now with the Clean Energy Act. It's an important new direction that we're setting for the province of British Columbia.

As the member well knows, I think it's extremely important that we communicate with British Columbians. We hear that all the time from our constituents, I'm sure, from both sides of the House. They want to hear what's going on in Victoria, what the policies are.

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We have, actually, a clean energy act that is the envy of North America. We're going to go into full discussion on it. I'm proud of that. I'm proud of the ads, and I know the British Columbians I talk to are proud of those ads too.

Interjections.

Mr. Speaker: Members.

The Leader of the Opposition has a supplemental.

C. James: I can tell this minister and this government they don't need to spend advertising dollars. The public knows what's going on with this government, and they don't very much like it in British Columbia.

These are taxpayer dollars being spent, and it's shameful that when the government can't find funding for rent supplements or nutrition supplements for people with disabilities, they can find millions of dollars for an ad campaign. While they're cutting programs, community programs, public health programs, child care for young women who are going back to school, the government can still spend taxpayer dollars on advertising.

Again my question is to the minister, very straightforward: how can the B.C. Liberals justify spending taxpayer dollars on government advertising when they're cutting vital services for British Columbians?

Hon. B. Lekstrom: As I said earlier, this is an exciting time for British Columbia. We have the opportunity to develop clean, green, renewable energy in this province that other jurisdictions around the world look to us with envy.

The cost — the other one the member should know, as she may be somewhat confused as the Leader of the Opposition. This is funded by B.C. Hydro. B.C. Hydro's ads will be published by the Financial Information Act, which is posted every year.

So to say that programs are being cut — Member, you're wrong. This is a very good ad. I think the member, should she not even be in this chamber, would have to agree. Those are great ads. They're informative, and British Columbians are proud of them.

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

C. James: I can't believe the minister would use that as an excuse. B.C. Hydro dollars are taxpayer dollars, taxpayers' money, and they deserve to know how much.
[ Page 5771 ]

Let's look at the facts. Another broken promise from this government. They promised to actually reduce advertising spending, and what's the budget? It was $6.9 million last year, $19 million this year. Again my question is to the minister: how much of taxpayer dollars is this government spending on this ad campaign?

Hon. B. Lekstrom: The Financial Information Act discloses this. B.C. Hydro does that every year, and I know the member will be looking at that. But you want to talk about the ad? It is a great ad. I've had members on your side of the House tell me what a great ad it is, so maybe you should talk to your own members.

J. Horgan: Well, we're in the midst of the largest corruption trial in B.C. history. We're in the midst of a historic initiative campaign to tear down government policy. It's little wonder that the Liberals want to change the channel.

But our question is a simple one. How much is it costing B.C. Hydro ratepayers to tell them that there are rivers in British Columbia? I know that must have been an epiphany when they turned on the hockey game and they saw water in B.C. rivers. How much did it cost to tell them the obvious?

Hon. B. Lekstrom: I'm proud to hear he was watching the hockey game, like most proud Canadians were. The issue, as I've said before, Member, is that the information will be released under the Financial Information Act by B.C. Hydro.

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But these ads…. Let's not lose sight. We're proud of our ability to communicate what is, I think, one of the most significant pieces of legislation we've seen in this province for decades, an opportunity that puts British Columbia at the forefront not just of North America but the world when it comes to clean energy development.

British Columbians and our government are extremely proud. Get on board, Member.

Interjections.

Mr. Speaker: Members.

The member has a supplemental.

J. Horgan: When I took my glasses off and squinted at the picture of W.A.C. Bennett, I could almost see the member for Vancouver–Point Grey there. I could almost see that. Then I thought to myself: "Well, that justified airlifting five planeloads of people to Hudson's Hope, because they were doing the filming of the commercials for B.C. Hydro."

The star of the show, King Lear, says to us now that it's okay to waste public money on advertising. He didn't say that in the 1990s. Why is he doing it now?

To the Minister of Energy: tell us today how much the ad buy is, and how long must we endure pictures of W.A.C. Bennett and water going over turbines?

Interjections.

Mr. Speaker: Members.

Hon. B. Lekstrom: As I said earlier, the Clean Energy Act sets out a new and important direction for British Columbians, one that I think is extremely important that we take every opportunity…

Mr. Speaker: Minister.

Hon. B. Lekstrom: …to communicate.

Interjections.

Mr. Speaker: Members.

Just to remind the minister. That bill is before the House.

Continue, Minister.

Hon. B. Lekstrom: Certainly, I think that the members on the opposite side would have heard that as well, but we'll get into the debate on the Clean Energy Act.

We have actually said that we are going to communicate with British Columbians on the opportunities that we have in this province. We have the opportunity to generate clean, green renewable electricity…

Mr. Speaker: Minister.

Hon. B. Lekstrom: …not only to meet our own demands but to meet the demands of North America, and we're going to do that.

Interjections.

Mr. Speaker: Members.

I want to remind the minister that when a bill is before the House, it shouldn't be discussed. That applies for both sides.

D. Black: The only reason the minister is withholding this information is because it's shameful. It's shameful that the B.C. Liberals spend millions of dollars on ads while telling British Columbians at the same time that there's no money in the cupboard for vital services for their families.

There's absolutely no reason, no reason at all, that the minister cannot release this information right here in this House today. Why won't he make this information public?
[ Page 5772 ]

Hon. B. Lekstrom: We have a Crown corporation in B.C. Hydro that is the envy in North America of any Crown corporation. We have amongst the lowest electricity rates in North America, and you're against that. You're against clean energy development.

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Not only are you against enshrining the public ownership of B.C. Hydro for all British Columbians. We enshrined it in legislation. You opposed it. But more importantly, when we have the ability to become electricity self-sufficient, to create jobs and economic opportunities in every region of this province, to develop the electricity not only to meet our needs but to help others meet their needs with reduced greenhouse gas emissions, we're going to do it. We're going to do it well, and British Columbians are going to be proud.

Mr. Speaker: The member has a supplemental.

D. Black: Well, perhaps I can help the minister calculate what it's costing his government for these ads, because each and every 30-second ad during the playoffs on CBC cost $7,000 — each and every 30-second ad — money that could have been spent to help B.C. families in a critical time. Instead, this money is being wasted on government advertising.

So again to the minister: what does it say about a government that can find millions of dollars for an ad campaign while at the same time cutting critical supports for B.C. families?

Hon. B. Lekstrom: The reason we're able to invest in the programs that British Columbians enjoy is because of job creation, because of opportunities we have in this province. In order to have a strong social foundation for the programs that we have to deliver, to ensure the less fortunate in this province can maintain a quality of life and be looked after, is to ensure that we have, actually, an environment where the private sector wants to invest. That's who creates the jobs. We're going to do that. We're proud. I'll put our budget against any one of your budgets from the 1990s.

R. Fleming: The question is simple, and the minister has been asked it six times. The question is: why won't the minister be transparent about his ad-buy binge in the middle of spending cuts across government? The public has a right to know. These are tax dollars. So the question is: why won't the minister tell the House today…? He authorized buying this ad campaign. The minister should tell the House today what the total cost is of this ad campaign splurge.

Hon. B. Lekstrom: I'll give the answer I gave a number of the other members. This information will be posted….

Interjections.

Hon. B. Lekstrom: Slow down. Slow down, Members, and you'll get the answer. Every year under the Financial Information Act this information is posted. The members know they'll get the information.

But if what the member is saying is that you wouldn't communicate with the people of British Columbia, we see it differently. We're going to communicate. We're going to talk about what's important to British Columbians. We're going to talk about what the Clean Energy Act means — pardon me, Mr. Speaker — about what our ability to develop clean, renewable electricity in this province means, what it means to jobs, what it means to communities, what it means to First Nations.

We're proud of what we're doing. We're going to build on it, and you'll all love it too.

SOCIAL SUPPORT PROGRAM FUNDING
AND GOVERNMENT SPENDING PRIORITIES

J. Kwan: What is clear is that this government is willing to spend millions of dollars on government ads while cutting critical programs for the people in greatest need. For 25 years adults with disabilities determined to be independent could turn to a Broadway Connections program, a community program based in East Vancouver for the last 25 years. Through that program, past and present clients have forged relationships and friendships that benefit their lives.

Social support, as the Minister of Health should know, is a key determinant of health. My question is to the Minister of Health. Why is he supporting the government's advertising campaign at a time when he is cutting funding for people who are in greatest need in our community?

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Hon. K. Falcon: Once again we have the NDP, of course, talking about cuts that don't exist in health care, when the health care budget is actually going up 15 percent over the next three years. I understand that the NDP have difficulty understanding that a $2 billion increase in a budget is actually not a cut. That's an increase.

Now, in the world of the NDP, and we've had this discussion many times, no programs apparently should ever change. It doesn't matter whether the information changes. It doesn't matter whether best practices suggest that you can do things differently and drive better results. In the NDP world, apparently, nothing should ever change.

But the fact of the matter is that Vancouver Coastal is looking at all of their programs very carefully to ensure that they are meeting the needs of the residents based on the best practices that are available. That's exactly what they're doing in the case of the Broadway program.

Mr. Speaker: The member has a supplemental.
[ Page 5773 ]

J. Kwan: It is clear that the minister doesn't know what the heck he's talking about. Denise is a 25-year program participant. She took the lead at organizing and advocating for this program at its inception. Betty Ann is a 17-year-old participant who calls this program beloved and vital. Broadway Connections promotes independence and peer-to-peer relationships and prevents isolation.

It is successful because it is unique and specifically designed for people with disabilities. It has adaptive equipment that facilitates full participation. It is one of a kind in Vancouver, and there are no others like it.

Before the minister shuts down the successful program, will he at least go down to the Mount Pleasant Neighbourhood House and meet with Betty Ann and Denise and tell them face to face why he's supporting this government's advertising campaign and cutting their programs today?

Hon. K. Falcon: The Broadway Connections program is a program that — the member is right — has been around for 25 years. It is a socialization program that provides subsidized $3 meals. It provides taking people to movies and to darts and table bowling, etc., and I'm not saying that those aren't important socialization programs. They are not health programs, however.

So what the health authority is doing, I think quite appropriately, having examined that program, is they are actually going to take the dollars, put them into enhanced rehabilitation services for those folks, and allow those folks to connect, in the broader community, to existing programs that allow them to be better integrated in the broader community.

That's actually what best practices suggest is the right thing to do. I get that in the NDP world no change should ever happen. That is actually what the best evidence says in terms of dealing with these folks.

A. Dix: The minister apparently thinks it's best practices to take people out of a program that has been extraordinarily successful for them and to spend money on people to find them other programs that might be successful. This is what he describes as best practices.

The truth is that this program is best practices. It's been long regarded as a model program by Vancouver Coastal itself, and the minister disparages everyone involved when he limits it to talking about people playing darts. It's way more than that, and the minister should know that, if he even bothered to read his briefing note.

Here's a suggestion for the minister. The net cost of the program this year is ten of the Minister of Energy's ads. Ten of those ads would pay for this program this year. Why doesn't he go down and talk to the Minister of Energy, divert that money to these clients, to these people in the community, and restore funding to Broadway Connections?

Hon. K. Falcon: This, of course, is a common theme from the NDP. We have a $2 billion increase in the health care budget. We have a….

Interjections.

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Hon. K. Falcon: I'm willing to give an answer if you're willing to listen to it.

We have a $2 billion increase in the health care budget over the next three years. That is a record level of increase in health care spending in one of the most difficult economic times we've had. We've got Vancouver Coastal actually doing appropriate work to make sure that they are focusing those dollars on direct health care. That's what the public would expect.

I get that the members opposite believe that nothing should ever change in the health care system. That has been a consistent theme. But they have never suggested what they would ever do differently, other than just keep doing exactly the same thing and keep spending more money doing exactly the same thing.

On this side of the House we are saying to our health authorities: "We want you to innovate. We want you to bring about appropriate change. We want you to focus on delivery of health care services." Socialization programs, as important as they are, can probably be better provided in the community, but we want to ensure that rehabilitative services for those with physical disabilities are being provided, which they are doing here, and streaming them into programs that are already available in the community.

FUNDING FOR COMMUNITY-BASED
HEPATITIS C AND HIV/AIDS PROGRAMS

K. Corrigan: A national research study released last week reveals that B.C. women with HIV are more than twice as likely as women in Quebec or Ontario to experience viral-load rebound — meaning their medication stops killing the virus — and they are more than twice as likely to suffer, as well, from hepatitis C. Given these alarming statistics, why has the government slashed funding for community-based HIV/hepatitis C work?

Hon. I. Chong: Our province provides more than $100 million to fight HIV each and every year. And I can tell you that, on a per capita basis, we have one of the most robust programs here in British Columbia. Our recently announced $48 million seek and treat program is yet another opportunity to help those with HIV to ensure that they get the support they need.

Mr. Speaker: The member has a supplemental.

K. Corrigan: Well, the minister well knows that I'm talking about community-based HIV programs, programs
[ Page 5774 ]
that help protect women against more complications and health decline. Millions of dollars for taxpayers' ads, but no money for programs like this. The government has eliminated all the funding of the National Congress of Black Women Foundation to run an effective AIDS program.

This foundation, which is based in my riding, provided essential support to women of African descent who are diagnosed with or affected by HIV. Will the minister please admit that slashing the budgets of effective community HIV/AIDS programs harms women's health?

Hon. I. Chong: I'd like to let all members of this House know that our Centre for Excellence for HIV is world-renowned. It is recognized internationally. We should be proud that British Columbia…. We are a pioneer in our approach to unique issues affecting women living with HIV and their families.

Let me just say this, Mr. Speaker. The $48 million seek and treat program, a four-year program, is going to provide the supports that are needed. It's going to deal with people living with HIV in three specific areas to begin with — definitely in the Downtown Eastside and Prince George and Kelowna. This program is also getting world recognition, and we should be proud of the work we continue to do on HIV prevention.

S. Hammell: Surrey South Fraser Community Services saw its budget for HIV and hep C services decrease by $133,000. Programs that focus on reaching First Nations women and women in ethnic communities are also being hit.

[1420]

For example, community-based programs such as the Asian Society for the Intervention of AIDS and the Vancouver Native Health Society positive outreach program have both, because of cuts, lost capacity to provide outreach and support services — a counterproductive decision because it further marginalizes patients who are already hard to reach.

Again, to the minister: will she revisit these cutbacks to community-based AIDS/HIV programs?

Hon. I. Chong: Once again, I want to acknowledge the excellent work done by our Centre for Excellence in HIV. The work that is being done is recognized by people such as Dr. Julio Montaner.

I also want to say to the member that I have had the opportunity to meet with a number of community-based organizations that support persons with HIV. They have also been looking at our $48 million seek and treat program, acknowledging that that, too, will deliver more outcomes to ensure that people with HIV get the supports that they need. We will continue to advance that program.

COMMUNITY GAMING GRANTS
FOR ARTS FESTIVALS

S. Chandra Herbert: My question for the minister for gaming…. Application for gaming funds have been coming in for over four months from arts groups that produce festivals, and only now are the minister's officials telling organizations that put on film, dance, theatre and music festivals that the government has changed the rules on them, telling them that they are no longer going to get funding because they are not community cultural festivals and they aren't worthy of the support.

Can the minister of gaming tell me when he became the province's arts czar, deciding dance, film, music and theatre festivals aren't supportable community cultural celebrations?

Hon. R. Coleman: We made the changes on the amalgamation of the grant programs on March 5. That information was sent out to organizations. Since then we are answering questions of individual organizations as we try and clarify our priorities as they match up with regards to the applications they may want to make to government.

Mr. Speaker: The member has a supplemental.

S. Chandra Herbert: Well, no arts and culture organization that I know of in this entire province ever received the notice that the minister mentioned, nor were they told by the minister that they weren't worthy cultural festivals in their communities. They are.

The question back to the minister is: why were his ministry officials, who I spoke with, instructed not to release the documents that told the arts organizations that they weren't worthy of support? Why were the ministry officials told they were not allowed to release documents which said things like Green Thumb Theatre was not a youth arts company worthy of support, either, because it was not run by children?

Hon. R. Coleman: Maybe I should just clarify something to the member opposite, who has got so many facts wrong in that statement, it's unbelievable. Let's talk about the Green Thumb Theatre group that the member just mentioned. This group applied prior to the amalgamation of the grant program on March 5. As the grants staff are processing these applications that were received prior to the grant change, they're contacting the applicants to advise them of the changes to the grant program to allow them the opportunity to amend their applications, because we're focusing on youth and arts and culture.

Mr. Ivan Habel, the general manager of the Green Thumb Theatre, was contacted yesterday regarding their application. Arrangements have been made to allow
[ Page 5775 ]
them to make an amendment to their application for their youth focus program. It will then be processed along with other applications, Hon. Member.

N. Simons: Well, what's obvious is that the arts community in the province is being buffeted by rule changes and changes in standards and application procedures and cuts, and they're the ones left reeling. It's impacting on the communities that benefit from assistance from government to put on good arts and culture shows. Not only can't the minister keep track of his own definitions of what a festival is, he seems not to know the definition of youth, arts and culture either.

Green Thumb is a good example. It's an internationally renowned, award-winning fixture in British Columbia that tours the province by bringing theatre to kids. They've been told that they don't qualify because they're not actually being run by youth. This is the problem facing these arts organizations.

[1425]

I've never been happier to see a red light. It gives me a little bit of an opportunity to explain to the minister, now that we're stopped here, that the arts community is reeling.

The new definitions come in, in March. The applications were called for in February. It seems to be a complete…. Nobody's told about this, and it just shows that this government is in disarray. I think that the question that the minister should answer is: how can he support, how can he rationalize, taking away arts and culture opportunities for kids throughout this province?

Hon. R. Coleman: Same application, same application period, a different change in criteria made March 5 so that people could understand it. Any organization that doesn't understand can call the branch and get an explanation. We won't make any apology that the arts and culture money in the province of British Columbia under the gaming grant thing is going to be focused on young people and youth in the province of British Columbia this year. That's where we're going to focus the money.

[End of question period.]

Tabling Documents

Hon. M. de Jong: I table the 2009 annual report for ICBC.

Petitions

L. Krog: I rise to table a petition calling on the government to stop the imposition of the HST, signed by over 100 British Columbians.

Orders of the Day

Hon. M. de Jong: I call in Committee A, Committee of Supply — for the information of members, the estimates of the Ministry of Health — and, in this chamber, committee stage debate on Bill 19.

Committee of the Whole House

BIll 19 — Finance Statutes
Amendment Act (No. 2), 2010

The House in Committee of the Whole (Section B) on Bill 19; L. Reid in the chair.

The committee met at 2:30 p.m.

Section 1 approved.

On section 2.

B. Ralston: Can the minister explain section 2 and the companion section in section 3? They appear to amend a section that has not yet been proclaimed — a budget bill, 2008. Can the minister explain the purpose for introducing this amendment?

Hon. C. Hansen: What this amendment does is that it provides for the…. This is in terms of section 2. I'll deal with section 2. I know he was also referencing section 3, so I will actually deal with both of those in terms of what the proposed amendment is.

Section 2 provides that the penalty section of the new interactive digital media tax credit will not be repealed, and in doing so it ensures that the penalty provision with respect to the new interactive digital tax credit will continue in effect after the regulation to repeal the climate action dividend is deposited.

In terms of section 3, it provides that only that part of the penalty section with respect to the climate action dividend tax credit will be repealed by regulation. This ensures that the penalty provision with respect to the new interactive digital tax credit will continue in effect, again, after the regulation to repeal the dividend is deposited.

Sections 2 and 3 approved.

On section 4.

B. Ralston: This section amends legislation that just passed in the Budget Measures Implementation Act earlier in this session. There appears to have been a drafting oversight that impacted the northern and rural benefit, depending on the level of taxation that one paid. Can the minister explain, if he might, the error that requires correction?
[ Page 5776 ]

Hon. C. Hansen: The member is correct; it was an oversight. This amendment that's before us today corrects an error in each of the two schedules that set out the amounts to which the homeowners are entitled under the new northern and rural homeowner benefit.

The error is that in the current schedules, that would result in reduced taxes, in some cases below the intended minimum amount of $350 or, in some cases, $100. These corrections ensure that these minimums continue to be applied consistently throughout the province.

Section 4 approved.

On section 5.

B. Ralston: This is a proposed amendment to the Income Tax Act of the province, and it refers to "the functional currency tax reporting provisions of the Income Tax Act" of Canada. This was something that I was not aware of and had to do some research on. Can the minister explain briefly what "the functional currency tax reporting provisions of the Income Tax Act" are, how they work, and why this amendment is necessary?

[1435]

Hon. C. Hansen: We tried to make sure that we have consistency between the provincial Income Tax Act and the federal act. The federal act has been changed to allow for corporations to file in U.S. dollars, and we are changing our act, basically, to parallel the changes made by the federal parliament.

B. Ralston: I'd understood, then, that in addition to American dollars, the income tax could be filed in other currencies: the euro, pound sterling or the Australian dollar. Is that accurate?

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

B. Ralston: Are there any implications for the tax that would be assessed and might accrue to the province by virtue of this reporting provision? One thinks of currency fluctuations. Is the tax calculated in the reporting currency and then recalculated in Canadian dollars? Does that make the corporate tax received subject to currency fluctuation?

Hon. C. Hansen: Actually, it gives more certainty, more stability. This actually avoids some of the uncertainties that come as a result of currency fluctuations.

B. Ralston: If there were a sizable group of corporations who chose to avail themselves of this provision, would the province avail itself of hedging opportunities in currency markets?

Hon. C. Hansen: In terms of corporate tax filings, those are administered by the Canada Revenue Agency. That is something that was harmonized many decades ago. The Canada Revenue Agency, of course, would be the recipient of the funds from the relative corporations. All of the transfers that the province receives from the CRA would come in the form of Canadian dollars.

Section 5 approved.

On section 6.

B. Ralston: In this section, the description is that it "provides for the advancement of an alternative argument in support of an assessment at any time after the normal reassessment period." Can the minister give an example of how this might apply?

The Chair: I recognize the member for Delta South, who seeks leave to make an introduction.

Leave granted.

Introductions by Members

V. Huntington: Joining us in the gallery today are 35 grade 5 students from Southpointe Academy in Tsawwassen. The students are accompanied by seven of their parents and by their teacher Dr. Amrit Mangat. Would members please join me in welcoming them to the House.

Debate Continued

Hon. C. Hansen: Again, this is a change to allow for consistency with the federal statutes. An example would be if the CRA is reviewing an assessment and they're proceeding under one interpretation. If, after they get a ways through that assessment, there is a differing interpretation that may come forward, it allows them to consider that alternative interpretation as well.

Sections 6 to 9 inclusive approved.

On section 10.

B. Ralston: This section replaces section 33 and makes some changes to some technicalities in the application to the federal Income Tax Act provisions. Can the minister explain the second one in the explanatory note? It says that it applies provisions to allow some Canadian-controlled private corporations to pay quarterly income tax and quarterly instalments and to increase the instalment threshold to $3,000.

[1440]

Can the minister explain the purpose of that part of the amendment? Is that, again, to have consistency with the federal act?
[ Page 5777 ]

Hon. C. Hansen: Yes, this is to provide consistency with the federal statutes and allows for the increase in the threshold from a thousand dollars to $3,000, which would allow a corporation to apply for quarterly rather than monthly instalments.

B. Ralston: Could the minister explain how the fourth in the explanatory note, the provision that "enables a corporation to reduce its…corporate income tax instalment amounts by its provincial refundable tax credits" — how would that work? I'm assuming that there may be some disparity in a corporation's ability to use refundable tax credits, that they're on an annual basis, whereas the tax might be paid monthly or quarterly. Could the minister explain that?

Hon. C. Hansen: Regardless of whether it's a quarterly filing or a monthly filing, if the corporation is entitled to those tax credits, they can deduct the proportionate share of the tax credits from that period's filing, and that would be reconciled when the corporation submits its total annual filing at year-end.

Sections 10 to 17 inclusive approved.

On section 18.

B. Ralston: This section amends the definition of "B.C. labour expenditure." Can the minister explain the significance of the change in definition?

Hon. C. Hansen: It simply provides for a provision that a company can't claim the same labour expenditure or cost as both a film tax credit and a digital interactive media tax credit.

Sections 18 to 27 inclusive approved.

On section 28.

B. Ralston: In his introductory speech at second reading, the minister offered a brief explanation of the purpose of these amendments. Apparently, that was to align the tax credit with the programs that were offered. I'm wondering if he might offer a little bit more detail as to the purpose of these amendments.

Hon. C. Hansen: What this amendment does is it provides for a training tax credit to individuals who successfully pass the industry training requirements and receive certification in a trade. So some individuals receive their trades training, for example, in the Armed Forces, but they are never registered as an apprentice with the Industry Training Authority.

It also adds the certification tax credit for individuals. The creation of the certification tax credit for individuals reflects the policy intent of the B.C. training tax credit program to provide a refundable training tax credit to all individuals who obtain certification, including individuals who obtain certification by successfully challenging the final exam for that particular trade.

The amount of the certification tax credit is the same amount that the individual would have received had that individual completed their trades training by graduating as a registered apprentice.

[1445]

B. Ralston: The minister has given the example of receiving the training in the Armed Forces and also an opportunity to receive the credit by simply challenging the exam. Are there any other instances in which that circumstance in this statute would apply?

Hon. C. Hansen: Another example might be an individual who received training in another country. We do have procedures in place whereby that credentialing can be recognized in British Columbia. But in some cases where that process cannot lead to a granting of a certification, then this allows for a process whereby those individuals could challenge the final exam for the trade and thereby get their certifications.

B. Ralston: Perhaps I just need a question of clarification. The requirements say that the individual has to be "resident in British Columbia at the end of December 31 of the taxation year." So is the minister speaking of a program where the prospective applicant to this program completes a course of training in another country, is then resident in British Columbia by the end of the year and makes the application? Is that what is intended here, or am I misunderstanding what the minister is saying?

Hon. C. Hansen: This provision for the credit would actually be…. Somebody would have to be paying income tax in Canada to apply for the tax credit. So this would be in the case of somebody coming from another country — somebody that's come to British Columbia, established their residency and then would subsequently apply pursuant to this section.

B. Ralston: In subsection (2) of the proposed amendment there's reference to level 1, level 2, level 3 and level 4 requirements. There's a different tax credit for each level, and generally, the higher the level, the greater the tax credit. Can the minister briefly explain what each of the levels was and the policy rationale for a greater credit for a higher level?

Hon. C. Hansen: First of all, a level doesn't necessarily correspond to one year of training. In some cases it can be less and in some cases more. For some trades and occupations, it could be two years towards completion of
[ Page 5778 ]
a certification. In other cases, particularly with some of the more traditional trades, it could be as much as four levels. But that doesn't necessarily translate into four years or two years, because each level can take longer in some cases and in some cases shorter.

Sections 28 to 33 inclusive approved.

On section 34.

B. Ralston: This part begins the interactive digital media tax credit. The minister, again, set out some of the basic principles in his speech at second reading. I'm wondering if he could, for this particular part, advise in broad terms what the purpose of the amendment is and what its financial implications are for those companies or individuals who might choose to avail themselves of this tax credit.

[1450]

Hon. C. Hansen: This change is really to recognize the convergence that's taking place within the film, digital and interactive media industry — that it's no longer an industry that is really all about film, all about animation, and that side of it. Interactive digital media is really becoming increasingly an integral part of what we have traditionally thought of as the film industry in British Columbia and, quite frankly, a great opportunity for British Columbia to really be on the forefront of this new convergence that's taking place.

With every indication that we've seen from the industry since making this announcement, that is exactly the case. Companies are quite excited about locating in British Columbia specifically because of these relatively minor changes that we have made. So it's really to give these companies an incentive to locate in British Columbia, to grow in British Columbia and to create the jobs in this industry, which are great jobs and, I think, a big part of the economic future of the province.

B. Ralston: In section 133, which is described as "Eligibility for tax credit," sub (1)(b) reads: "the corporation has a permanent establishment in British Columbia at any time during the taxation year." Can the minister explain what is meant by that term, "permanent establishment in British Columbia"?

Hon. C. Hansen: The term "a permanent establishment in British Columbia" is an income tax term that is used to determine the place of doing business. Yeah, it's that simple.

B. Ralston: I thank the minister for that answer. I understand and would expect it's one of the criteria that determines eligibility. I was hoping for a bit more meat on those bones, if I can put it that way, given that it describes "a permanent establishment in British Columbia at any time during the taxation year." It suggests that that may not be something that persists through the year. The same term is also used in sub (d)(ii), the provision of eligible services to a corporation who has a permanent establishment in British Columbia.

I'm just interested in the issue of eligibility. There are some sections that set out conditions that preclude a corporation from being eligible for the credit as well.

[1455]

Can the minister explain that more briefly, or more substantially and assist, perhaps, in helping me to understand that?

Hon. C. Hansen: Again, as I indicated, this is a term that's commonly used in income tax matters. I think if it was not on the corporate side but on the individual side, we would use the term "permanent resident" or "has established a residency in the province." In the case of corporations, we talk about "permanent establishment."

Basically, if an organization or a corporation has a permanent establishment in British Columbia, then they are obligated to pay taxes in British Columbia. It is only those companies that are paying taxes in British Columbia that are eligible for this credit.

B. Ralston: As the minister will likely know, I think in the Business Corporations Act some of the requirements to have a permanent establishment or a physical presence within the province were, I believe, amended, and one would be able to incorporate within the province yet not be required to have a permanent establishment or a head office in the province. I think that was canvassed to some extent in the TILMA agreement. I'm just wondering what the minimal requirement is to have a permanent establishment, given that it has….

I understand the tax implications. Are there any implications in terms of physical presence? As I recall, the definition of residence was the place where one habitually slept from sort of the evening until the following morning. I think that was one definition that I recall from years ago. I'm interested in exploring that issue in a little bit more detail.

Hon. C. Hansen: It would be a corporation that has an office. They have people that are physically working in British Columbia. They have an establishment. Those would all be factors in determining what's considered a permanent establishment.

B. Ralston: That helps me better understand it.

In subsection (3) there are a number of corporations that are ineligible. They appear to be related to different alternate forms of the provision of capital — a labour-sponsored venture capital fund, an employee share ownership plan, an employee venture capital corporation,
[ Page 5779 ]
a small business venture capital corporation, a business corporation registered under the Small Business Venture Capital Act and any corporation that's controlled directly or indirectly by any one of those corporations.

Can the minister explain the policy reason for excluding this broad category of corporation from eligibility?

Hon. C. Hansen: This is really to ensure that a company doesn't avail themselves of more than one tax credit program. If they're involved with the scientific research experimental development tax credit program, the B.C. venture capital program, the B.C. employee investment program, or a corporation….

[1500]

If they are availing themselves of those other tax credit programs, they can't, in essence, double-dip and also avail themselves of this labour tax credit.

Sections 34 and 35 approved.

On section 36.

B. Ralston: We now embark on the discussion of the International Financial Activity Act. I believe I'm on section 36. There are a number of definitions that are added to the definitions section: the international film distribution business, international patent business, and then international carbon trading, international clean technology, international digital media.

Can the minister explain the purpose for adding those business activities to this international financial activity centre, the prospective business that the province hopes to gain and the basis for that view?

Hon. C. Hansen: We have identified three additional areas of international business activity that have great potential for the future. These are really new sectors where there are individuals globally who are highly specialized in building these types of business activities. We believe that these are very desirable services to be offered from a British Columbia base and an opportunity that, given our ability to attract some of these elite specialists to the province, will mean that we can actually build these sectors and create significant employment in British Columbia in the years going forward.

These are the international carbon trading and certification, the international clean technology business and the international digital media distribution business. These are three areas we've identified where we believe British Columbia is in an ideal position to become a world leader in providing these business services to an international market.

B. Ralston: The report of the Vancouver International Financial Sector Steering Committee, Phase 1 Report, suggested that certainly carbon-trading activity without an exchange was likely not to be as successful as if there were an exchange. Let's put it that way. They did make reference to Offsetters, as they're called. An example was given of an offsetting company based out of the University of British Columbia, which I believe was the official offsetter of the 2010 Olympics.

That all seemed to have been accomplished and that business up and running without the benefit of the kind of tax relief or tax regime that appears to be being contemplated in this legislation.

I'm wondering, given the caution that the report expresses about the absence of an exchange and the fact that a fairly, as I understand it, successful business is already up and running without the benefit of this kind of tax regime, why it's felt necessary to institute this kind of a tax regime for that kind of prospective business.

[1505]

Hon. C. Hansen: We certainly recognize that there are initiatives that have already started in British Columbia. The member mentioned Offsetters, which is a great organization. There's also the Pacific Carbon Trust that we've established, of course, which is a Crown corporation of government that is also looking at the carbon-trading market. This is an area that we think has potential, a huge opportunity for growth, well beyond what is currently underway.

Clearly, some of the early players in this field are well positioned to be the leaders, but I think it's important that the province actually show its leadership in saying that this is not just about the relatively small carbon-trading operations that we have in British Columbia today. Really, there is the potential for some very significant growth in that sector, and we believe that these changes will facilitate that.

B. Ralston: Well, I don't doubt there may well be opportunities, depending particularly on what happens legislatively in the United States. But beyond a kind of, I guess, stereoscopic look at the landscape for this kind of business, what evidence is there of any real likelihood of these kinds of businesses being attracted to British Columbia?

The plan here seems to have been to suggest that they would be attracted by this kind of tax policy. Is there anything beyond what's contained in the report, which is very fragmentary and tentative, that might suggest that this might come to pass?

Hon. C. Hansen: We actually went out and sought the advice of experts that understand some of these opportunities for the growth in the financial and international business sectors from a British Columbia base. The member referenced the report of the steering committee, and I think he's familiar with those individuals who served on the steering committee. Certainly, it was their sense
[ Page 5780 ]
that there is a market for this, that British Columbia is in a good position to attract this type of international business activity.

It's not just around the carbon trading itself, but it's also around the verification and certification of offsets, which is something, again, that requires a very high level of specialization. We believe that some of the people globally that have been developing this expertise and this specialization would be attracted to move to British Columbia and to build those companies and those enterprises from a British Columbia base, given these changes to this legislation.

B. Ralston: A similar question, then, about the clean technology business. We've heard much from the government about this in recent months and, I suppose, years. Again, there is — I think many jurisdictions have recognized this — a potential upside for growth in this sector, but once again, why was it felt necessary?

I referenced in my speech at second reading the reference on page 11 of the report to the international income tax rate, which would be, if this legislation were to pass and a corporation in these areas were to avail itself of these rates…. The rate in Vancouver would be 16.2 percent; in Beijing, 25 percent; Hong Kong, 17.5 percent; Seoul, 35 percent; Singapore, 18 percent; and New York, 39.9 percent.

[1510]

Can the minister explain why, in order to…? I don't disagree that these sectors are potential growth sectors, but can the minister explain why it's felt that it's necessary to offer a corporate tax rate at that level, when one would be, I think, two-thirds of the tax rate of Beijing? Is that really the policy of the government in terms of the tax environment that the government hopes to create here in British Columbia?

It would seem to be out of sync with certainly many other North American jurisdictions, at the very least, who are our direct competitors. And given the differences between Chinese society, average incomes, tax regime, health systems and all the rest of it, one wonders why this level of taxation would be the one chosen.

Hon. C. Hansen: First of all, I think the calibre and the specialization of the individuals that we're trying to attract are unique, and there are a limited number of people globally that have this expertise that we would be seeking out.

But just to have one of these experts come and work from a base in British Columbia in turn generates considerable numbers of other jobs, whether it's jobs in the accounting professions or the legal professions or whether it's the back-end office jobs or whether it's the other jobs that come along because of the activity that is attracted to British Columbia as a result of attracting one of these key specialists.

You know, these are individuals who are, obviously, in high demand, and for us to be able to attract one of them has big economic impacts to the province in terms of job creation, economic growth and, hence, tax generation. So this is one of these things that by forgoing a bit of tax to attract these individuals, we actually can generate a lot more economic activity and more than make up for that forgone tax base that's given up.

These are individuals who are under demand, and we want to establish an environment and a tax regime that is more attractive than any of the other worldwide destinations that they may be considering.

B. Ralston: Well, the minister has framed his response in terms of tax rate for individuals, and that's really a separate provision where the individual income tax would be forgiven 100 percent in the first two years, as I understand it, stepping down to 75 percent in the third year, 50 percent in the fourth year and 25 percent in the fifth year.

But the provisions that are proposed for the corporate tax rate, as I understand it, don't step down. They are in the manner that's been described here. Certainly, the policy is that if this activity continued to qualify, they would be permanently at this very reduced rate relative to Beijing, Hong Kong, Seoul, Singapore.

So I'm looking for the minister to explain, if he will, the reason why the corporate tax rate for these activities, desirable as they may be, needs to be so much lower in the view of the minister in order to attract companies to come to British Columbia and to remain in British Columbia.

Hon. C. Hansen: I apologize to the member. I was answering that previous question in the context of the individual specialist. But he's quite right. When you start looking at the corporations that we are trying to attract, the same principles apply. You know, what we're trying to do is attract companies that otherwise would not be coming to British Columbia, and that does produce a whole range of economic activity that otherwise would not happen in this province.

[1515]

Just to make it clear, this pertains to international business activity. It is not domestic business activity. The tax concession is to those companies that are conducting international business activity from a British Columbia base. That is the type of business activity that really could be located anywhere in the world. We want it to be located in British Columbia because we want to make sure that all of those ancillary jobs come with it.

B. Ralston: I understand the principle that the minister is enunciating, and I understand the policy objective in that sense, but I'm a bit more focused on the rate. I'm wondering why, for the rate that's been selected and the
[ Page 5781 ]
comparisons that are made by the committee, it's felt that it's necessary to be a corporate tax rate — as they say in this report on page 11 — that's two-thirds of the rate of Beijing.

I think that would startle most people in British Columbia, even if it is a business that's externally focused and operating an international business where its incoming supply and its customers are internationally based. I'm interested in the policy rationale for the selection of that and in the felt necessity for that disparity in the corporate tax rate.

Hon. C. Hansen: I think this is one of those examples where, by establishing a lower tax rate, we can actually produce more economic activity and hence result in more taxes that would flow to the provincial coffers to pay for the programs and activities that we rely on.

Having a rate that is lower than other jurisdictions around the world is part of our marketing effort, using these tax rates which we have today. All we're doing is broadening the scope of it. Having these tax rates in place today for those corporations that are eligible under today's rules is a pretty powerful tool in the toolbox for the folks at the International Financial Centre to reach out and to attract these companies to come to British Columbia.

What we're doing is adding three more sectors to that. We think that that will allow us to be even more successful at attracting international companies focused on international business activity to British Columbia and to create those jobs in British Columbia.

B. Ralston: Well, there was a theory in the Reagan years called the Laffer curve, which adopted the very premises that the minister sets out. If that were the case, then, and if that were the only determining factor in a business decision to locate in a jurisdiction, then the financial activity centre focused on international banking would have been much more successful than it has been to date.

Again, I understand the language that the minister is using about competitive tax advantage, but what explains the felt necessity for this, which — I think most people would agree — is a large disparity, a big reduction from the rate in Beijing, according to the report from the experts that the minister presumably solicited the opinion of?

I'm just wondering about the policy reasons for that wide disparity between the corporate tax rate for these activities in Beijing and the corporate tax rates for British Columbia.

Hon. C. Hansen: I think the basic principle is that this is attracting international business activity that otherwise would not come to British Columbia and that we are establishing a tax rate for these companies that is very attractive. It's an important part of our international marketing efforts to attract these companies to come to British Columbia and, hence, create the jobs in this province.

[1520]

When he mentioned Laffer…. I think Laffer actually predates Ronald Reagan by quite a few years. When I was studying economics at the University of Victoria, I know, we were certainly studying the works of Laffer at that time. I hate to admit it, but that predated Ronald Reagan's time in the presidency.

D. Donaldson: I'd like to explore this section a little bit further with the minister. I agree that there's potential for growth in this sector, but I'm trying to get at some of the intention, the imagining of what that could look like that this section's based on, specifically in regards to the international carbon-trading and certification business.

From the budget, the purpose of this international financial activity program is that it "provides tax refunds for B.C. corporate income tax paid on qualifying international financial activities." Now certification of trading of carbon credits is included in this definitions section.

The definition of "international carbon trading and certification business" includes "an international carbon trading and certification business that meets the requirements of the regulations." Could the minister describe what the regulations are that have been referred to here and what they say?

Hon. C. Hansen: International carbon trading and certification are very much in their infancy today. By allowing us to shape that with regulation, it allows us to change as that industry matures and evolves.

I think what's very important…. If we want to actually develop British Columbia as a base of operations — the preferred base of operations, hopefully — for international carbon trading, we need to make sure that we are in tune and linked into the emerging definitions and the emerging standards that are being sought after by other jurisdictions around the world, which will be looking for companies to undertake carbon verification and certification for carbon offsets. This, by doing it in regulation, allows us that flexibility as this industry emerges.

D. Donaldson: The minister can correct me if I'm wrong in my interpretation of his answer, which is that the regulations referred to in 36(f) are not yet in existence in B.C. There are no regulations, but he's referring to them coming in at some point.

Hon. C. Hansen: Yes, that is correct. They are yet to be drafted.

D. Donaldson: The budget document, in reference to this, the International Financial Activity Act, discussed details of the qualifying international transactions, and
[ Page 5782 ]
"any required certification process will be provided in the coming months." Certification is also mentioned in 36(f) around international carbon-trading and certification businesses. Could the minister describe the certification process that's been referred to here?

[1525]

Hon. C. Hansen: The reference that the member makes to the budget documents is actually a broader context. It's not just…. The reference to certification in the budget document on page 82 is not simply around carbon offsets or carbon trading. It actually could be in a broader context of clean technology, for example, that…. Really, there's a whole range of certifications that may be developed, for example, by the Energy, Mines and Petroleum Resources Ministry, or it may be under the carbon trading, as we've been discussing previously.

D. Donaldson: The minister is discussing the potential growth in these sectors, and we're talking about the carbon-trading sector. He mentioned activity — bringing that activity to B.C. So I would like to ask the minister: what is the activity in B.C. around carbon trading that underlies this?

I realize this is international trading, but obviously trying to attract people who are international traders to B.C. is based on B.C. having some expertise in this area. That's according to the Vancouver International Financial Sector Steering Committee Phase 1 Report.

But what is the intention of this section and of this act? This has to be based on some visioning by the government on what carbon trading looks like in B.C. So what are some of the carbon-trading opportunities that this represents?

Hon. C. Hansen: As I mentioned, this is an industry that really is in its infancy still, so it is obviously going to change and evolve. But the kind of business activity that we envision that would be generated from these provisions might be a broker, a firm that is actually buying offsets on behalf of other companies.

It could be, for example, a company in the United States that wants to buy quality offsets that are verifiable by the highest of accounting standards, and those offsets might wind up being in the United States as well, or they might be somewhere else on the globe. They might even be elsewhere, perhaps, in Canada. But that can be done from a British Columbia base.

We recognize that this is a very unique skills set that the individuals have that are involved with this type of verification and certification process, and it is that type of business that we want to attract to British Columbia, because we think we have a great environment in which to grow that industry here.

D. Donaldson: The buying of the offsets — is this section, this act, this initiative, linked to other government policies around offsets in B.C.? Can you describe some of those offsets in B.C. that could be traded under this section?

Hon. C. Hansen: Our involvement with the establishment of the Pacific Carbon Trust has given us a bit of a window on this industry in terms of the opportunities that are and will be presenting themselves globally for the growth in this industry.

[1530]

It has achieved a certain level of maturity in Europe today, but we think there is tremendous growth that we will see in North America, particularly with some of the new directions that they're exploring in the United States. This gives us an opportunity to really build that expertise right here.

In terms of the experience that we have to date, we are still very much at the early stages with the Pacific Carbon Trust, but it certainly has given us a window on the industry to the extent that we know that we have an opportunity to build this.

D. Donaldson: I appreciate that this is new and trying to get in on the leading edge of what could be, as you describe, a potential growth sector. Along those lines, the minister might be aware that there's been some debate about the efficacy of carbon-trading systems in addressing the underlying issue. I know that this section deals with trying to capitalize on the potential growth in that area, but that potential growth is based on a carbon-trading system. Was there an analysis done on the debate around the carbon-trading system before the drafting of this section?

Hon. C. Hansen: We have certainly looked at, globally, some of the other initiatives, forays into carbon trading and verification and certification. I think that's why we recognized that whether it's the Pacific Carbon Trust that we are launching or whether it's international business activity that could flow from this particular process, we need to ensure that British Columbia builds a stellar reputation for the verification side of this. There are standards that need to be set, that need to be met so that globally, if any organization is embarking on trading or certification…. They want to know that British Columbia is synonymous with quality and is synonymous with accountability when it comes to achieving the objectives that are desired.

B. Ralston: Just to follow on the questions from the member for Stikine, one of the areas that I've heard expressed as a potential future area for carbon trading would be offsetting tree planting in British Columbia. The minister has referenced Pacific Carbon Trust. I'm not sure that that's an activity that they have yet drawn into their business plan.

But given the international focus of this legislation, would offsetting activity such as replanting of forests in
[ Page 5783 ]
British Columbia qualify as an international business in the definition section of this act, for example?

Hon. C. Hansen: While I don't have as much firsthand knowledge of the standards that are being looked at globally around carbon offsets as, I think, we mentioned in the estimates debate, I noted for the member that there is the cabinet committee on climate action. I'm not a member of that committee, and I know that members of that committee would be much more familiar with the international discussions that are going on with regard to how reforestation or afforestation fits into carbon offset schemes globally.

That is something that is certainly being worked on, but I think what we want to make sure is that as we develop the standards for this, they are standards that will be respected globally. As to how exactly reforestation and afforestation can fit into that are issues that still need to be determined.

B. Ralston: In the definition section there's a new definition which is described as an IB specialist. That's an international business specialist. It refers to section 14 of the current act, which talks of an IFA specialist, an international financial specialist.

[1535]

Can the minister tell the House how many IFA specialists there are under the present act?

Hon. C. Hansen: Currently, there are none. There have been two that have taken advantage of these provisions.

B. Ralston: I wanted to ask a question about the international digital media distribution business. I'm presuming that adding this definition to the list of the schedule of activities has some basis and is related to the earlier part of this bill, which hopes to attract digital media to British Columbia. Is that the basis on which this is potentially added as a topic or a subject of the act?

Hon. C. Hansen: Just as we had a very active and successful film production industry in British Columbia over the past decades, what we saw was, basically, the completion of those films, and then they would wind up being distributed out of some other centre globally.

The same is true for digital media. We've had a strong interactive digital media industry in B.C. for numbers of years. Typically, when those products are completed, they then go to some other centre for the distribution side of the business. We believe that that's an important area that can grow.

We don't have any significant distribution being done out of British Columbia today, so any of that business that we can attract to British Columbia would be a net gain for the province. That, in turn, has a couple of implications. It helps to encourage intellectual property to stay resident in British Columbia, and it also is a significant job generator.

Sections 36 and 37 approved.

On section 38.

B. Ralston: Section 38 amends section 2 and "adds an additional restriction to the international financial activities to exclude lending activities conducted with related parties." Has this been an issue in terms of the regulation of any businesses that are here, or is this just in the interests of a comprehensive piece of legislation?

Hon. C. Hansen: The International Financial Activity Act, now to be named the International Business Activity Act, is not aimed at domestic transactions or domestic business but at what is, in fact, truly international business.

[1540]

This amendment that we are bringing in place under 38(d) is really to ensure that there are not loopholes to that that would provide for the appearance of international business activity when, in fact, none existed.

Sections 38 to 40 inclusive approved.

On section 41.

B. Ralston: This section creates new categories of specialists, as they're called. The minister alluded to this earlier when he said it was desirable to attract certain highly skilled or uniquely skilled individuals who run these kinds of businesses and that that would have an economic benefit to the province.

This section permits the application for registration of administrative support specialists and executive specialists, specialists in designated international business. It would not seem — and I don't intend to denigrate the work that people in administrative support do — at first reading, to fit the definition that the minister spoke of earlier.

As I understand it, the successful application for registration in this area would trigger the income tax rebate of 100 percent for the first two years and 75 percent and so on. Is the purpose of this section to permit a successful applicant as an executive specialist to bring with him his or her executive support team?

Is that the purpose of this section? Otherwise, I confess that I don't understand the purpose for this proposed designation.

Hon. C. Hansen: Again, this is still targeted at specialists. It is not a provision that just says that if you've got administrative staff, they can come in under this provision. It is still very limited, and it does allow for administrative support and backup office service specialists for an international financial business. Again, this is not about
[ Page 5784 ]
somebody coming in to provide a domestic service. This is purely aimed at international business activity but having that done from a base within British Columbia.

B. Ralston: I understand the intention. I suppose the practical difficulty that may be encountered is an ability to describe the functions as unique and specialized to that degree. I gather from the response to previous questions that these definitions in their detail will be appended to the act in the form of regulation. Is that how it's intended to do it? Is this the exhaustive definition of the qualifying individuals who might make these applications?

[1545]

Hon. C. Hansen: I think, first of all, individuals who would qualify for this provision would have a minimum salary requirement of $100,000 a year. Also, the Commissioner of Income Tax has the ability to go in and request information regarding the international business activities that are being undertaken by these individuals to basically ensure that this is purely international business and not something that is really domestic business under the auspices of an international business activity.

I think there are the checks and balances in place to ensure that we are attracting these specialists in these areas and that we achieve the objective of the act and the changes, and that is to ensure that we can build these industries in British Columbia and ensure that there are job opportunities not just directly involved with the companies that we are talking about but also with regard to the service sector industries, whether it's the legal or accounting professions, etc., that would be servicing these companies.

B. Ralston: In section 13.1(3) there's a limit of four specialists to be certified under that provision, and under section 13.2, for executive specialists, two or more. Can the minister explain the thinking that's led to the drafting of those subsections?

Hon. C. Hansen: I think, going back to our earlier discussions, our intent is to make sure that we can attract the specialists or the individuals who are key players in growing an industry in British Columbia. This is not about saying that a company can come and establish in British Columbia and everybody on the payroll is going to get this specialized tax treatment. It is meant to be limited to those key individuals.

In the case of the one section, as the member noted, it is limited to two individuals for that company, and in the other case, it's four individuals. It's really meant just to put a cap on how many can take advantage of these provisions.

B. Ralston: Is it intended or is it expected that existing law firms or accounting firms, for example, might choose to carve out of their existing personnel an internationally oriented unit that would qualify for this centre and the tax reductions that would come with that?

One can imagine…. For example, there are shipping companies which locate here because there's a similar federal law that forgives a certain amount of income tax or corporate tax as well. So one can easily envisage that there might be certain highly specialized individuals and law firms or accounting firms, for example, whose activity would be solely internationally oriented and might well qualify, at least in that respect. Can the minister explain how that might work?

[1550]

Hon. C. Hansen: The individuals that would qualify for this would have to be new to Canada.

Sections 41 to 48 inclusive approved.

On section 49.

B. Ralston: I hope I was quick enough. I just wanted to…. It might have been section 48. Just let me look at my note here.

There were some changes to the definition of "international patent business" and how the income for that was calculated. I wanted to ask the minister how many qualifying businesses there are at present that meet that definition of an international patent business. That was an amendment, as the minister may recall, that was brought in, I believe, in the 2006 budget but perhaps the 2007 budget.

Hon. C. Hansen: I don't have that specific information, but we believe it's probably two or three.

Sections 49 to 52 inclusive approved.

On section 53.

B. Ralston: Can the minister explain, under the existing refunds of income tax under this section of the IFAA, the existing section, what dollar amount of personal income tax has been refunded, and is there an estimate? I appreciate that may be difficult to give, given the uncertainties of future business. But is there any modelling or anticipated number as to future refunds of personal income tax that might be accorded under this provision?

Hon. C. Hansen: As the member knows, the scope of the provisions in the act up until now has been quite limited, but in terms of the international financial specialists, the uptake was small. We believe with these changes that we're making, we will get better uptake going forward, but the total in terms of forgone revenue to
[ Page 5785 ]
date is about $100,000. When I say "forgone," the argument is that that's revenue that would not have gone anyways, because it's only because of the International Financial Activity Act that we were able to attract these individuals to British Columbia.

Going forward, we have not done projections. We will be examining this over the coming years of rollout of these new provisions to determine what uptake would be expected, and from that basis, we'd be able to do the projections.

[1555]

Again, it's not that we will lose revenue in the future. It's either a question of whether we're going to attract these individuals and this activity or not. So regardless as to whether it's ten individuals or a hundred individuals that take us up on these provisions, it would not result in a decline in revenues but only an upside.

B. Ralston: Can the minister advise where, in the future, the refunds that might be paid under this provision would be reported?

Secondly, I just wanted him to confirm…. There does seem to be a disparity between the personal tax refunds claimed and the refund of corporate income tax on page…. In the September budget update, I'm advised, the International Financial Activity Act refunds of corporate income tax totalled about $20 million in '08-09, estimated to be $5 million in '09-10, although they had assumed about $20 million in the September budget and are estimated to total $10 million in this year and the next two.

First of all, then, where would the personal refunds be reported? Secondly, can the minister confirm those figures as to refunds of corporate income tax? Given that there would appear to be corporate activity, can he explain the disparity between that and the absence of any specialists making the personal claims?

J. Brar: Madam Chair, I seek leave to make an introduction.

Leave granted.

Introductions by Members

J. Brar: Visiting us today is a group of students from Frost Road Elementary School in Surrey-Fleetwood, the best school in the city of Surrey. There are 75 grade 5 students, and they are accompanied by their teacher Ms. Kerry Schwab. There are 20 parents and other adults with them as well. They are here to watch the debate and also see how parliamentary democracy works. I will ask the members from both sides to please make them feel welcome.

[C. Trevena in the chair.]

Debate Continued

Hon. C. Hansen: As we indicated earlier, the refunds to date under the international financial specialists program have been very small. So normally, what we would do with the personal income tax side…. Sorry. As the member noted, on the corporate income tax side we actually document the refunds under the International Financial Activity Act as a reduction from our corporate income tax revenues.

On the personal side — because we're talking about billions of dollars of personal income tax and a reduction from that of $100,000 over five years is actually a fairly small amount — should the amount that we would be refunding on the personal income tax side become substantive, we would look at reporting it under that section.

B. Ralston: Just to follow up, can the minister explain the disparity between the corporate income tax rebates under this program and the absence of any personal income tax? Obviously, there were companies engaged in the business that qualified but chose not to — for reasons best known to themselves, perhaps — have a specialist apply and get the personal income tax rebate.

[1600]

Is there anything to that? Is there any explanation for that, or is it simply that the companies chose not to apply?

Hon. C. Hansen: Hopefully I've interpreted the member's question properly. There's nothing that says that if you have a company that qualifies for the tax refunds under this act, it would automatically mean that there would also be individuals with that company who would qualify for the income tax provisions. So you could have, for example, a company that qualifies for the corporate income tax benefit, but nobody in the company qualifies for the personal income tax side of it.

Sections 53 to 61 inclusive approved.

On section 62.

B. Ralston: This initiates a new series, or at least a single amendment, to the Land Tax Deferment Act. The minister touched upon this in his speech at second reading. Can the minister explain the purpose of this amendment and what its effect will be?

Hon. C. Hansen: This amendment provides that a property tax deferment agreement is not terminated where a portion of the owner's interest in the property, subject to the agreement, is transferred to the spouse of the owner subject to an agreement amending the original property tax deferment agreement.

This is really to provide for more flexibility when the title to the property is transferred between spouses. As it
[ Page 5786 ]
currently is worded, it would require that the entire tax that has been forgiven would have to be repaid and then a new application for deferment be applied. In the case of transfers between spouses, we believe that it is appropriate to provide this flexibility.

B. Ralston: Is this to cover the case where one spouse transfers the entire ownership of the property to another spouse and the agreement then continues? Or is it designed to cover the case where one spouse is on title and transfers ownership to the other spouse and they're joint owners of the property after the transfer? There are two different situations. Is it intended to apply to one, the other or both?

[1605]

Hon. C. Hansen: This is to provide for a spouse being added to the title. As long as the original owner who is a party to the tax deferment agreement continues to have at least a partial ownership of the property, then the spouse can be added to title without triggering the requirement for total repayment.

Sections 62 to 64 inclusive approved.

On section 65.

B. Ralston: These are several amendments to the Logging Tax Act, and I understood from the minister's explanation at second reading that this was to match or accord with the section with the Income Tax Act. Do I have that right, or can the minister confirm that?

Hon. C. Hansen: This is similar to the changes that we made to the Income Tax Act, but this is really to provide authority for…. It's to avoid the circumstances where we have to ask for the same information twice. If I can just read this explanation of the amendment, it's to authorize the disclosure of relevant logging tax information. Otherwise, the same information must be requested twice from the same person, once for the purposes of the Logging Tax Act and once for the purposes of the Forest Act.

Sections 65 to 68 inclusive approved.

On section 69.

B. Ralston: This amends the Social Service Tax Act in relation to the purchase price of a parking right, and there's a series of amendments that follow. Part of the purpose here is to transfer to TransLink the authority to collect the parking tax within its jurisdiction. Can the minister explain the purpose of this series of amendments and their effect?

Hon. C. Hansen: Several years ago this Legislature gave the authority to TransLink to apply a parking tax in Metro Vancouver. While this tax was determined and designated by TransLink under that delegated authority, the process of collecting the tax was provided through the Social Service Tax Act.

With our initiative to repeal the Social Service Tax Act, that mechanism will no longer exist. Therefore, these series of amendments establish the ability for TransLink to collect their own tax rather than having it collected by the province.

B. Ralston: Perhaps the minister can confirm this: as I understand it, the revenue will go to TransLink, but the provincial portion of the HST will be added on top of that and will go to the province. Can the minister confirm that?

Hon. C. Hansen: This tax is totally separate from the HST tax, but the goods and services tax as it currently exists — and, hence, the HST as it will exist as of July 1 — will be charged in addition. That portion will be collected by the Canada Revenue Agency, as it will collect all of the HST, and this portion will be collected directly by TransLink.

B. Ralston: Regardless of who collects it, will a portion of that, then, flow to the province?

Hon. C. Hansen: Yes. All of the HST that is collected in British Columbia will be collected by the Canada Revenue Agency. They, in turn, will return to the province of British Columbia the provincial government's share. The HST on parking will be a part of those dollars that flow from the CRA to the province.

[1610]

B. Ralston: I just want to confirm, then, that as of January 1, 2010, the effective tax rate on parking in Metro Vancouver increased from 12 percent to 27.05 percent — that's because TransLink's portion is being increased — and that on July 1, 2010, when the HST is implemented, unless there's a change of heart somewhere, it will increase again to 35.52 percent, which by the calculation I'm provided with here, will mean an extra 8.74 percent tax on parking, not just the 7 percent nominal amount.

Hon. C. Hansen: What was in place prior to January 1 was a tax on parking in Metro Vancouver, the 7 percent parking tax that was the TransLink's tax collected through our social service tax collection mechanisms. The 5 percent GST was applied on top of that, so that total amount was slightly over 12 percent as a result of the GST being applied on top of the 7 percent TransLink tax.

Effective January 1 TransLink chose to increase that rate from 7 percent to 21 percent, so what happens today
[ Page 5787 ]
is that the 5 percent goods and services tax, of course, still exists, and it is on top of the 21 percent TransLink tax. As of July 1 the adoption of the harmonized sales tax will mean that there will be 12 percent tax applied on top of the 21 percent TransLink tax.

Sections 69 to 83 inclusive approved.

Title approved.

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

Motion approved.

The committee rose at 4:13 p.m.

The House resumed; Mr. Speaker in the chair.

Report and
Third Reading of Bills

Bill 19 — Finance Statutes
Amendment Act (No. 2), 2010

Bill 19, Finance Statutes Amendment Act (No. 2), 2010, reported complete without amendment, read a third time and passed.

Hon. I. Chong: I call second reading of Bill 17, the Clean Energy Act.

Second Reading of Bills

Bill 17 — CLEAN ENERGY ACT

Hon. B. Lekstrom: Hon. Speaker, it is my pleasure to move second reading of Bill 17, the Clean Energy Act.

This government has set out a new vision to be a leading North American supplier of low-carbon energy and technologies and clean, reliable and competitively priced power. The Clean Energy Act is a key step in achieving this vision.

British Columbia has a proud history of producing clean, reliable electricity at rates that are among the lowest in North America. This legacy is the result of a vision of British Columbia's leaders 50 years ago and a vision that helped build and shape our province.

[1615]

The vision of W.A.C. Bennett 50 years ago led to the development of hydroelectric projects on the Peace and Columbia, the two-river system.

When it was completed in 1968, the W.A.C. Bennett dam was the largest earth-fill structure ever built. It was followed by the Mica dam, one of the Columbia River projects. Then in 1980 a second dam on the Peace system, the Peace Canyon, opened, followed by the Revelstoke dam in 1984.

More than a series of electricity projects, the two-river system was the backbone of B.C.'s industrial strategy and made possible a whole series of economic activities. Energy from the Peace and Columbia has made possible our forest industry and our mining industry, industries that have opened up our province and sustained a high quality of life for families and communities across B.C.

Over the long term, the single most important market advantage for our industries has been our incredibly competitively-priced electricity rates. Competitive power rates have allowed entrepreneurs to innovate, to grow new businesses and to thrive in domestic and export markets. That's helped our province and helped B.C. families.

B.C. is blessed with enormous untapped clean energy potential that allows us to build on the two-rivers legacy, to create new wealth and jobs in communities across British Columbia while lowering greenhouse gas emissions at home and beyond B.C. borders.

The Clean Energy Act builds on the 2007 energy plan, the 2008 climate action plan and the recommendations of the Green Energy Advisory Task Force. In November 2009 government appointed the Green Energy Advisory Task Force to recommend strategic action for turning British Columbia's clean power potential into real economic, environmental and social benefits for British Columbians.

When the task force reported to us in January, one of its main messages was: "Clean energy will be one of this century's driving economic and environmental forces. British Columbia has tremendous opportunities to leverage its clean energy resources and clean technology sector and stimulate economic development and environmental improvements throughout the province."

The Clean Energy Act responds to these opportunities and establishes a long-term vision for British Columbia to become a clean energy powerhouse. It sets out 16 specific energy objectives that will guide and align government, B.C. Hydro and the British Columbia Utilities Commission in advancing British Columbia's energy vision.

[C. Trevena in the chair]

Through this act these energy objectives are legally tied to B.C. Hydro's planning requirements, decision-making by the BCUC and regulatory authorities in the act. B.C. Hydro will be required to have regard to these objectives in developing its plans. These objectives must be used by the B.C. Utilities Commission in performing its role, and in particular, the Utilities Commission will be required to consider and be guided by these principles and these objectives.

There are various regulation-making authorities set out in the act that either must be or can be tied specifically
[ Page 5788 ]
to these objectives. Key among the objectives are ensuring that B.C. is self-sufficient in electricity once again, achieving higher levels of conservation and a greater share of energy from clean and renewable resources, ensuring B.C.'s ratepayers continue to benefit from heritage assets, meeting B.C.'s greenhouse gas–reduction targets, encouraging First Nations and rural communities to use and develop clean and renewable resources, economic development and job creation, becoming a net exporter and a leading supplier of clean and renewable energy to western North America.

B.C.'s actions to implement the clean energy powerhouse strategy will focus on three areas: meeting the long-term electricity needs of British Columbians at low rates, harnessing British Columbia's clean power potential to create jobs in every region, and strengthening environmental stewardship and reducing greenhouse gas emissions.

The Clean Energy Act strengthens self-sufficiency by placing the commitment into legislation and by requiring B.C. Hydro to acquire an additional 3,000 gigawatt hours of electricity by no later than 2020, referred to as insurance. Over the next 20 years, we expect our electricity demand to grow between 20 and 40 percent.

[1620]

Achieving self-sufficiency and meeting growing demand will require a renewed emphasis on energy efficiency and conservation and major new investments by the public sector and private sector in B.C.'s electricity system.

Conservation and minimizing electricity waste will continue to be the cornerstones of achieving long-term electricity self-sufficiency and low rates now and into the future. The 2007 energy plan set an aggressive conservation target for B.C. Hydro that required the utility to meet 50 percent of its load growth through conservation.

B.C. Hydro's Power Smart program, one of the most successful energy conservation programs in North America, has been delivering energy conservation programs at homes, businesses and industry since its launch back in 1989.

Since the 2007 energy plan, Power Smart has been kicked into overdrive and has helped consumers achieve over $150 million in bill savings, and annual energy savings have grown to approximately 1,800 gigawatt hours per year. That is the equivalent to powering almost 168,000 homes. Conservation also supports local jobs and economic growth, with Power Smart initiatives creating 6,400 jobs each year.

But we will need to be even more aggressive with energy efficiency and conservation. The Clean Energy Act includes a new commitment to meet 66 percent of B.C. Hydro's future incremental power demand from conservation and efficiency improvements by 2020, an increase from the current target of 50 percent.

The Clean Energy Act also gives consumers and utilities new tools to better manage electricity use and save on power bills. The act includes a renewed commitment to smart meters and smart grids. B.C. Hydro is automating, modernizing and upgrading its electricity grid and metering system and is required by the Clean Energy Act to replace all of its 1.8 million customer meters with solid state smart electricity meters by the end of 2012.

Smart meters include two-way communication, enable in-home displays and provide customers with much more detailed information about their electricity use, and when customers get better data about how their electricity use affects their bills, they get interested. You can see it with other purchases. People will drive past three service stations to buy gas from one that charges two cents a litre less because they can see the price.

The smart grid will also be critical to manage the charging requirements of electric vehicles as more and more of these penetrate the market. A single vehicle charging at 220 volts can double a household's peak-power usage, so it will be critical to make sure that they don't plug into the grid at 6 p.m. Smart meters make it possible for pricing that varies by time of use so that homeowners can be encouraged to charge their vehicles in off-peak hours.

Government is also playing a key role in supporting conservation and efficiency through energy codes and standards for homes, buildings, appliances and equipment and by renewing the LiveSmart energy retrofit with an additional $35 million.

But even with aggressive new conservation targets, meeting future energy needs will require new investments in the electricity system. British Columbia has benefited for decades from the investments in hydro infrastructure made in the 1950s, '60s and '70s. It's time now for new investments and an expansion of B.C.'s heritage assets to ensure that future generations of British Columbians benefit as we did.

British Columbia is planning to build major generation and transmission infrastructure on a scale not seen since the Revelstoke dam was completed in 1984. Site C and new turbines at Mica and Revelstoke will ensure a source of clean, reliable, competitively priced power for decades to come. They will also continue to provide B.C. with the long-term economic advantage of affordable electricity prices.

A major expansion of the transmission system, the northwest transmission line, will electrify the Highway 37 corridor.

On April 19 Premier Campbell and I announced that the Site C project will move forward into detailed environmental assessments and reviews. By building Site C, we will be building the next generation of power on the Peace River, taking advantage of the W.A.C. Bennett dam and the Williston reservoir behind it.

Subject to approvals, Site C will be a source of clean, renewable electricity for more than 100 years. It will
[ Page 5789 ]
produce 30 percent of the power of the Bennett dam with only 5 percent of the reservoir area. As a source of firm energy, Site C will facilitate the development of clean energy projects by providing additional capacity to back up intermittent resources such as wind and run-of-the-river hydro.

[1625]

Site C will provide lasting economic and social benefits for northern communities, aboriginal groups and the province. It will create an estimated 7,650 construction jobs — those are direct construction jobs — and up to 35,000 direct and indirect jobs through all stages of the project. Construction of Site C will be subject to regulatory approvals and to ensuring that the Crown's constitutional duties to First Nations are met.

The Revelstoke and Mica dams are key heritage assets located on B.C. Hydro's Columbia River system, and both can be expanded with no impact on the reservoirs. The Mica generating station began operating in 1977 with four of the planned six turbines. B.C. Hydro is planning to add two 500-megawatt turbines to complete the station.

The Revelstoke generating station began operating in 1984 — again, with four of the potential six units, like Mica. The fifth unit should be completed by the fall of this year, 2010. B.C. Hydro plans to add one 500-megawatt turbine to the sixth and last bay.

The expansions of Mica and Revelstoke are some of the lowest-cost capacity projects available to be built in North America. They will both be required, to meet domestic needs in future.

The northwest transmission line, or NTL, will electrify the Highway 37 corridor by extending B.C.'s high-voltage transmission grid to the region. Northwestern British Columbia has 2,000 megawatts of green energy potential, and the NTL will create new opportunities for renewable power producers to connect their clean energy to the grid.

The project will provide clean electricity to support industrial developments in the area and will reduce greenhouse gas emissions by connecting communities now relying on diesel generation. They will be connected to the grid.

These new heritage assets — Site C, the Mica and Revelstoke expansions and the northwest transmission line — are critical to self-sufficiency, economic development and our government's clean energy vision.

To ensure that these critical projects proceed and are not subject to unnecessary, lengthy and costly processes before the B.C. Utilities Commission, the Clean Energy Act exempts these projects from the B.C. Utilities Commission review.

All will still be subject to environmental assessments and to ensuring that the Crown's obligations to First Nations are met. Let me read that again. All will still be subject to environmental assessments and to ensuring that the Crown's obligations to First Nations are met.

The Clean Energy Act also protects the benefits of both new and existing heritage assets by reinforcing the existing prohibition against selling or disposing of heritage assets and strengthening it by adding new heritage assets to the list: Site C, Mica and Revelstoke dam expansions, and B.C. Hydro's purchase of one-third of the Waneta dam and generating facility.

By law, the low-rate benefits that come from B.C.'s existing and future heritage assets will flow exclusively to British Columbians and will not be used to subsidize foreign power sales.

In addition to Crown investments, new independent power projects will also be needed to achieve the self-sufficiency requirements. The clean and renewable electricity and technology sector has contributed significantly to the development of British Columbia's electricity system, and the Clean Energy Act creates new opportunities for investments, jobs and economic growth in every region of our province.

Since the late 1980s the private sector has developed 63 independent power projects in B.C. that account for approximately 14 percent of British Columbia's domestic electricity requirements. These projects have contributed more than $1 billion to the provincial gross domestic product and created more than 11,000 person-years of employment.

The Clean Energy Act will expedite B.C. Hydro's electricity purchase agreements with clean and renewable electricity producers to secure sufficient supplies of additional clean, renewable electricity that will ensure electricity self-sufficiency by 2016 and beyond.

B.C. Hydro will be required to advance its acquisition of an additional 3,000 gigawatt hours of electricity by 2020 instead of by 2026 — beyond the amount specified in its base electricity supply obligations for self-sufficiency by 2016.

[1630]

New energy projects approved under the 2008 Clean Power Call to acquire up to 5,000 gigawatt hours of electricity will move forward, along with the phase 2 bioenergy call for up to 1,000 gigawatt hours of electricity from wood waste and projects to increase power generation and efficiency at B.C. pulp mills.

These specific clean power procurement processes that provide the power to achieve self-sufficiency will not be put at risk or delayed. They will be exempt from costly and time-consuming reviews under the Utilities Commission Act, yet they will still be subject to the B.C. Utilities Commission oversight with respect to rate-setting requirements and to all existing environmental requirements and standards, as well as to the Crown's constitutional obligations to First Nations.

Following the 2007 energy plan, B.C. Hydro introduced the standing offer program to take supplies of private power as and when ready and has so far signed six electricity purchase agreements. The Clean Energy
[ Page 5790 ]
Act enables repricing to reflect the results of recent calls, includes the option to increase the maximum project size above ten megawatts and allows for technologies to be specified.

The Clean Energy Act will result in major new private and public sector investments in energy infrastructure and strengthened conservation efforts to ensure that we meet the long-term electricity needs of British Columbians at low rates.

A key purpose of the Clean Energy Act is to ensure that government, B.C. Hydro and the Utilities Commission are all aligned with the same objective: to make British Columbia a leading North American supplier of low-carbon energy and technologies and reliable, competitively priced power.

To ensure that alignment, the Clean Energy Act introduces a new regulatory framework for long-term electricity planning. The current multitude of planning processes will be replaced with a long-term integrated resource plan that allows for public input and long-term stability for the industry. B.C. Hydro will be required to submit to government a long-term integrated resource plan that considers B.C.'s electricity needs over the next 30 years.

The integrated resource plan will set out B.C. Hydro's demand forecast and supply plans to achieve self-sufficiency, B.C. Hydro's plans to implement government's energy objectives, and results of the public and First Nations consultations. The integrated resource plan must be submitted within 18 months of the Clean Energy Act coming into force and must include a description of clean and renewable electricity potential in the province and the infrastructure needs for the transmission system over the next 30 years.

This incorporates and replaces the B.C. Utilities Commission's long-term transmission inquiry that commenced in 2009. Subsequent plans must be submitted every five years, and plans may be amended to adapt to changing conditions.

The act introduces a major change in the review and approval process for B.C. Hydro plans. Cabinet will approve or reject the integrated resource plan, rather than the Utilities Commission. If it chooses, cabinet may use its power to exempt specific projects, programs, contracts or expenditures in an integrated resource plan from further Utilities Commission review.

Otherwise, the projects, programs, contracts or expenditures will be subject to the Utilities Commission review, although the Clean Energy Act will require the Utilities Commission to consider and be guided by British Columbia's energy objectives and the IRP approved by government. This process will ensure that B.C. Hydro and the Utilities Commission are aligned with government's energy policy objectives.

The Utilities Commission will continue to regulate domestic supply and rates, and I want to reiterate that point, a very important point. The Utilities Commission will continue to regulate domestic supply and rates. It will continue to approve or reject projects or programs that are not otherwise addressed by this act, and when it's carrying out those functions, it will be required to consider and be guided by the energy objectives in section 2 and any approved integrated resource plans.

The government will also strengthen B.C. Hydro to help deliver the province's clean energy objectives. The Clean Energy Act will consolidate B.C. Hydro and B.C. Transmission Corporation to strengthen public ownership and allow the combined entity to fully capitalize on its unique ability to manage generation and transmission facilities.

The act will integrate the two companies into a single organization with one board of directors and executive and will transfer all B.C. Transmission Corporation assets, liabilities and employees to B.C. Hydro. B.C. Hydro will become a single point of planning — an authority to deliver the government's clean energy vision.

[1635]

The British Columbia Transmission Corporation was originally created in 2003 in response to emerging regulatory requirements in the U.S. calling for increased independence of transmission and the development of regional transmission organizations. Regional transmission organizations did not develop in the Pacific Northwest, and the movement towards greater independence for transmission was halted.

B.C. Hydro will continue to be owned by the province, and public ownership of B.C. Hydro's assets will remain protected by legislation. British Columbians will benefit from a unified publicly owned entity that will capitalize on the proven strength and trusted service of both organizations to lead the development of clean, reliable and affordable electricity for generations to come.

The Clean Energy Act will ensure self-sufficiency at low rates, but it will also position British Columbia to become a major exporter and harness British Columbia's clean power potential to create jobs in every region of our great province.

For decades, B.C. Hydro has traded energy with Alberta and the United States. Trading clean, renewable electricity is no different than other products the province develops and sells, like our natural gas or our lumber.

British Columbia and jurisdictions such as California have different seasonal peaks that allow their systems to complement one another. British Columbia's energy use peaks in the winter, when temperatures are coldest. California's energy use peaks in the summer, when temperatures are the highest.

Madam Speaker, I note I have a member that would like to make an introduction. I will take a moment's break and allow that member to make the introduction.
[ Page 5791 ]

J. Brar: I seek leave to make an introduction.

Deputy Speaker: Proceed.

Introductions by Members

J. Brar: I know the students are just leaving. I just wanted to make sure I introduce them before they leave.

Just a few minutes ago I introduced a group of students from Frost Road Elementary School in Surrey-Fleetwood. This is the second group of students from the same school. Altogether, there are 75 students from the grade 5 class, and they are led by their teacher Ms. Kerry Schwab. There are 40 other volunteers, including parents. I would like to ask the members from both sides to please make them feel welcome.

D. Hayer: I also want to include my welcome to this school, because I know they are in the Surrey-Fleetwood riding now. Actually, some of the students from my part of the riding also attend the school. I had a chance to meet with them after the MLA for Surrey-Fleetwood met with them.

I also want to congratulate them for coming over here, thank the parents and the teachers for bringing the students here, and I also ask the House to make them very, very welcome. Some of the students are from my riding, and I met with them earlier today.

Debate Continued

Hon. B. Lekstrom: I, too, will welcome the people here into the chambers. I think it's important.

Carrying on, traditionally B.C. Hydro has engaged in short-term trade that has helped keep rates low and contributed hundreds of millions of dollars to help fund government programs such as health care and education.

Looking ahead, with many states and provinces seeking to meet renewable electricity requirements and reduce greenhouse gas emissions, British Columbia is uniquely positioned to offer clean, reliable power at competitive prices to assist those jurisdictions in meeting their targets. It is estimated that we have the potential clean energy supply in B.C. to power 11 million homes.

Accessing new markets will not be easy. We need willing buyers, access to transmission and a supply portfolio that meets customers' needs. And to deliver this, we will need a partnership between government, B.C. Hydro and B.C.'s renewable power producers.

The Clean Energy Act creates a new role for B.C. Hydro to actively market B.C.'s clean power and spearhead long-term competitively priced export contracts to neighbours in Canada and the U.S. that create new opportunities for investments and jobs across British Columbia. To secure these opportunities, B.C. Hydro will partner with renewable power producers to aggregate B.C.'s supplies, market B.C. clean energy, and leverage the hydro system's unique firming and shaping capabilities.

B.C. Hydro will minimize risk by ensuring that long-term export agreements are secured before issuing new calls for power — another quote I'm going to go back on, Madam Speaker.

[1640]

B.C. Hydro will minimize risks by ensuring that long-term export power agreements are secured before issuing new calls for power. Consistent with government's commitment to one project, one process, export contracts will be exempt from B.C. Utilities Commission review, yet will remain subject to the provincial environmental, First Nations and community consultation requirements. The benefits of electricity exports will accrue to all British Columbians, but ratepayers will not bear the cost.

The Clean Energy Act firmly establishes this principle. The act clearly separates exports and ensures that ratepayers are not subject to the risk of long-term export sales and also ensures that benefits from export revenues flow to ratepayers and taxpayers. In fact, the Utilities Commission is required to ensure that any expenditures associated with long-term exports are not included in domestic rates.

The affordable rates that are one of the benefits of B.C.'s existing and future heritage assets will by law continue to flow exclusively to British Columbians. The Clean Energy Act will create other economic opportunities as well. Resource-dependent communities will especially benefit from the pursuit of new export opportunities through new clean energy investments and job creation.

These communities hit hard by the effects of the mountain pine beetle and the economic downturn can leverage their resources to produce low-carbon electricity such as bioenergy. Other rural areas of resources such as wind, run of the river and other clean resources, which can be developed to create jobs and benefits in every region of our province….

Several First Nations have participated in B.C. Hydro's calls for clean power. The new First Nations clean energy business fund will facilitate further First Nations participation in renewable power production. The fund will initially have up to $5 million invested by the province as well as a share of incremental natural resource revenues that the province receives from new power projects.

The Clean Energy Act will attract new low-carbon investments and create jobs in B.C. by permitting B.C. Hydro to enter into long-term sales contracts for green technology investments that require stable, predictable electricity prices.

A strengthened B.C. Hydro will also open new regional economic opportunities by advancing the northwest
[ Page 5792 ]
transmission line, continuing to plan for an extension of the clean electricity grid to northeast British Columbia, and establishing a new distribution extension policy to help connect rural and remote communities to B.C. Hydro's clean electricity grid.

The act will also support our growing clean tech sector by fostering the growth and development of innovative businesses and technologies. B.C. Hydro will update terms and conditions for the standing offer program in consultation with industry and will introduce a feed-in tariff program to promote the development of emerging technologies in renewable power production.

The feed-in tariff enabled by the Clean Energy Act will focus on supporting emerging technologies that can supply power from B.C.'s diverse renewable resources and develop expertise here in B.C.

Government and B.C. Hydro will work with industry to define the program, which will be established through regulation. The program will be targeted and focused. It will not be an Ontario-style feed-in tariff.

In addition to meeting self-sufficiency and harnessing our clean resources to create jobs, the third major focus of the Clean Energy Act is on strengthening environmental stewardship and reducing greenhouse gas emissions. The act enshrines in law measures the province will take to reduce greenhouse gas emissions, help customers save money through conservation and protect the environment.

Building on the commitment for net zero emissions from electricity generation, the act increases the legislated clean or renewable electricity generation from 90 percent to at least 93 percent of total generation, one of the highest standards in the world and something we should all be proud of.

The environmental assessment process will now be strengthened to specifically provide for assessments of potential cumulative environmental effects. The Clean Energy Act will prohibit the development or proposal of energy projects in parks, protected areas and conservancies. The act rejects consideration of nuclear power in implementing B.C.'s clean energy strategy. B.C. Hydro's operation of Burrard Thermal is restricted only to emergency situations and supporting transmission reliability.

[1645]

The act enshrines B.C.'s historic two-river policy by prohibiting, with the exception of Site C, future development of large-scale hydroelectric storage projects on all river systems in British Columbia, including nine sites previously considered by B.C. Hydro.

The act enables public utilities to establish programs to encourage the use of electricity or energy directly from a clean or renewable resource and to accelerate the deployment of natural gas and electric vehicles and fuelling infrastructure.

New opportunities will be provided for rural and remote residents who are now dependent on diesel power to connect to the transmission system to access clean and renewable electricity from B.C.'s heritage assets.

In closing, this government has set out a new vision to be a leading North American supplier of low-carbon energy and technologies and clean, reliable and competitively priced power. The Clean Energy Act puts in place the framework to meet the long-term electricity needs of British Columbians at low rates and harness British Columbia's clean power potential to create jobs in every region, strengthen environmental stewardship and reduce greenhouse gases.

The Clean Energy Act builds on the 2007 energy plan, the 2008 climate action plan and the recommendations of the Green Energy Advisory Task Force that was appointed in November of 2009. This bill puts British Columbia at the forefront of clean energy development in North America.

In closing, I want to say I'm extremely proud of the work that has gone into this bill, of the men and women in the ministry, the men and women of British Columbia who contributed to the input or gave their input.

We have a significant potential before us here in British Columbia. Our ability to develop clean, renewable electricity is probably unlike any other jurisdiction in the world. We have potential not only to help ourselves but to help others.

Greenhouse gas emissions don't recognize boundaries. They don't recognize the B.C.-Alberta boundary. They don't recognize the Canada-U.S. boundary. If we have the ability to develop our resources in a sound, environmentally sustainable manner, I think we have an obligation to do that.

It will help us meet British Columbia's domestic needs when it comes to electricity, but it will also help us generate jobs across this province. It will help us benefit through the money that is returned to British Columbians, to continue to invest in infrastructure and continue to invest in health care, in transportation, in education, in our social programs. I'm proud to deliver second reading of the clean energy bill here this afternoon.

J. Horgan: For the Clerk's information, I'll be the designated speaker on Bill 17 this afternoon. I want to thank the minister for his presentation this afternoon. It's always a pleasure to hear a crafted speech that was put together by those who want to put forward the illusion of progress, and the words from the minister today certainly achieved that.

There are significant challenges that we have with this bill, significant issues that I will be raising over the next hour or so as we discuss the Clean Energy Act. I want to start with the end of the minister's speech and then go back to the beginning.

The minister spoke passionately about his desire to reduce greenhouse gas emissions, yet this very minister
[ Page 5793 ]
signed an environmental assessment permit to allow a natural gas plant north of his community, called the Cabin gas plant, that will increase our greenhouse gas emissions by 3 percent — increase by 3 percent.

You can't have it both ways. I hear that all the time from the other side. "You can't have it both ways, Member of the opposition." So a little bit of quid pro quo, as it were.

I don't dispute for a minute the minister's passion on this question, but to have signed off on a 3 percent increase one day and then to come into this House and say our clean, green energy, which has been clean and green long before the arrival of the B.C. Liberals…. It didn't just happen in 2001. It happened, as the minister said at the beginning, some 50 years ago. I'd like to go back to that point.

I welcome the member for Kamloops — wherever it is, South Thompson or North Thompson. I'm sure he'll be chirping for the next hour, and that will certainly embolden me in my comments as we proceed this afternoon.

[1650]

I also want to speak to the minister's comments about the genesis of the two-river policy and how W.A.C. Bennett in the 1950s and '60s saw quite clearly, it appears today with the benefit of hindsight, the net benefits to the people of B.C. of the development of hydroelectric facilities on the Peace River and the Columbia. And good for the minister. I don't want to date the minister, but I think she would have been in short pants at that time. I for one was not born.

If the government wants to take credit for a policy of a previous Premier, that's grand. I encourage that. The issue, however, before us is policy going forward from today. That's why we're here.

I have a master's degree in history. I like old stuff. I read autobiographies. I've read about Bennett. I've read about many other leaders in Canada. That's all to the good, and I encourage those in the gallery…. I encourage ministers to crack something other than their briefing books now and again to get a broader perspective on the world around us.

But that doesn't change the fact that the member from Point Grey did not create green energy in British Columbia — not even close. He wants to take credit for it day in and day out. The government on the other side wants to take credit for it, and if that feeds their delusions, that's just fine by me. But I think practical, thoughtful people — those who are paying the bills for B.C. Hydro, those who are paying the bills for the bloated executive council of the B.C. Liberal cabinet…. Those people would prefer to hear some practical solutions to the enormous challenges we face.

I don't dispute for a minute the minister's framing of the challenges that we have as a community, as a province and as a society and, in fact, as a civilization as we grapple with very significant issues. Our challenges as legislators — the challenges at B.C. Hydro, the challenges of the current government — are to try and find the best of many bad options, and that's not easy to do. In fact, it's quite difficult to do.

I give any government in any jurisdiction, regardless of its political stripe, the benefit of the doubt on these matters. I would like very much to give this government the benefit of the doubt, but I look back at their historic position on things like the Utilities Commission, for example. I'll be reading some quotes into the record on the view of the then Leader of the Opposition, now Premier, on the importance of the regulator in the day.

Someone has asked me again. It must be introduction day, so I'll take my seat if someone will stand up.

T. Lake: I seek leave to make an introduction.

Leave granted.

Introductions by Members

T. Lake: Thank you to the member for Juan de Fuca. I wanted to get the introduction in before you worked yourself up to full fury. Thanks for giving me that opportunity.

Today in the gallery we have a whole school from my riding of Kamloops–North Thompson. We have the Brennan Creek Elementary School here. Brennan Creek is a remote one-room school located at Brennan Creek, which is on the shore of Adams Lake about 20 kilometres north of Skwaam Bay on a road that is mainly used by logging trucks.

The school has five students now between grades 1 and 7, and they're here today with their teacher Diana Fraser and their parents. It's a very, very hard-working and interested parent group. They support this school tremendously well. The school has a four-day workweek and a longer day so that it allows the parents and the students to access services in the more urban areas on the other day.

The school board has also supported the school very well with major repairs and enhancements. New siding was recently installed. Major repairs have been made to the teacher's residence, and a new high-speed satellite Internet connection was also established.

I'm really pleased. I had an opportunity to meet with the students and parents beforehand and show them a few of the non-official parts of the tour of the building. I would have the House please help me welcome these students, parents and Miss Diana Fraser from Brennan Creek Elementary School.

Debate Continued

J. Horgan: I thank the member for Kamloops–North Thompson for keeping that down to five minutes. I, too, want to welcome…. The member is from far away.
[ Page 5794 ]
I live just in the region, so I get kids here all the time. Certainly, we all tip our caps to the kids and the teacher from Brennan Creek Elementary.

I thank the minister for allowing me to warm up to my full dudgeon. I'll certainly get there as quickly as possible.

[1655]

I was talking before the introduction about the history of hydroelectric development in British Columbia. The minister's recitation was accurate as far as it went, but there were challenges at those times. There were people that stood in the way of those developments, for good reasons. There are valleys that have been despoiled in the Kootenays. There are valleys that have been despoiled — the Kwadacha. The Tsay Keh Dene First Nation just now, 40 years later, received some compensation for the impacts of the Williston reservoir. The minister is aware of that.

These historic issues that we talk about in terms of their benign impact at the time and their great benefit to us today are just not the way it happened. I know the minister and members on that side know that, but I think it's important — when we talk about challenges, we talk about industrialization and we talk about flooding valleys — that we talk about the downsides as well. In order to make good public policy, we have to look at all issues.

One of the advantages we've had here in British Columbia since the 1980s is an independent utilities commission. I will certainly get to the importance of that body and its future under this Bill 17 as the afternoon progresses. But I think it's also very important for the minister…. I know he'll take very great care in reviewing my comments and will reflect in his own community on the impact that Site C will have absent now regulation — now only under the auspices of the Environmental Assessment Act.

Perhaps there will be a full federal panel. That's certainly what the people in his community want. That's what his constituents are asking for. If the project is legitimate, if the project is in the best interests of British Columbia, then I'm sure it will surpass any of the obstacles that regulation would put in its place.

As an opposition member — and I speak to the kids today from the Interior, north of Kamloops — the job of the opposition, what I'm doing right now, is trying to make it clear to the government that they are just a passing fancy. They will go away someday. They will be replaced by someone else. Our side wants that to happen more quickly than that side.

Governments are ephemeral. They come and they go. They are not permanent. The government of British Columbia is a permanent institution, and one of its Crown corporations, B.C. Hydro, has served us all very well. But the people in this place, the people in cabinet, will be replaced, with absolute certainty — if not next time, the time after that; if not the time after that, the time after that.

The role and function of legislators is to ensure that the government of the day does not make decisions in the interest of themselves but rather in the interest of history, in the interest of our future, which is sitting in the gallery today. As an opposition member, I take this job very seriously. All of my colleagues do.

We do periodically get some respect from the government for the difficult task of being negative every day, but it's important and it's valid. The Queen, as I've said repeatedly, pays us to do this, and I thank her every two weeks for that stipend. I do it with enthusiasm and vigour, and I will continue to do that throughout the rest of the afternoon.

I want to go back to the benign nature of viewing history and creating reservoirs as if there was no impact. During the 1990s I had the pleasure of working with a thing called the Columbia River treaty commission, which was a group of elected representatives from the Columbia Basin stretching from Valemount — not "mont" but "mount" — down to…. My colleague, my friend from Prince George, is happy that I said it correctly. It took me a while to get it, Member, but I will never forget it, and Jeannette Townsend can be credited for emblazoning that in my mind.

The discussion took place from the very top reaches of the Columbia Basin in Valemount down to Trail at the border and stayed just on one side of the Boundary country and took us to the member for Kootenay East's constituency at the Alberta border.

The objective of those local representatives was to bring to government — a government that was 30 years distant from the decisions that led to the flooding of valleys…. Thirty years later they wanted to bring to Victoria, bring to the government, elected representatives that may not have had any knowledge whatsoever….

I did not have a significant understanding of the impacts of the Columbia River treaty on the people in the Kootenays — very, very little interest in that. As a Vancouver Islander educated away from British Columbia, the Kootenays was a distant place. Electricity was there. I flicked the switch, my television went on, the lights went on, and all was good. But there was a profound impact on the people in that region — a profound impact.

[1700]

Thousands of people were displaced from their homes, homesteads flooded, forest lands alienated by reservoirs with torpedoes coming out of the ground. The minister knows. Going to Williston Lake, it was supposed to be a recreational haven for people to come and play water sports and so on — fearful all the while that a massive pine would come jettisoning up from the bottom of the reservoir and go through the bottom of their boat. It's difficult to have fun and leisure and go fishing in a reservoir when you're not sure whether or not you're going to get a torpedo coming from the bottom in the form of a Douglas fir or a pine tree.
[ Page 5795 ]

The expectation for those from away was that it was benign. We created reservoirs, which are lakes, aren't they? Well, no, they're not. Reservoirs are bathtubs. They go up, and they go down.

I had the mayor at that time…. His name escapes me now. My colleague from Columbia River–Revelstoke will certainly know him because he replaced him a couple of elections later.

Interjection.

J. Horgan: Fred Demmon was the mayor of Golden. While we were discussing the impacts of the Columbia River treaty, he told me that there were cottages that in low-water years were seven kilometres away from the water.

Now, there's a recreational property you're going to want to purchase, isn't it? Let's line up to buy some property on the reservoir just outside of Golden, because if the snowpack is high and the reservoir is high, you can walk to the end of your dock and jump into the lake. But if it's a low-water year or if the treaty somehow requires us to flow more water through as an international obligation, all of a sudden you're walking through mud to get to your boat, which is potentially seven kilometres away.

That strikes me as a government saying to the people in that region: "This is all going to be good. There are no downsides whatsoever to signing the Columbia River treaty. There are no downsides whatsoever to the two-river policy." Not true — a reality quite different from what we just heard from the minister.

The minister is aware of all of this stuff. His job today is to say: "We've got the next coming of the two-river policy right here, the Clean Energy Act. It is going to revolutionize the way we do business. It's going to allow jobs in every corner of the province. There's going to be milk and honey, gold on the streets. Nothing wrong here; everybody rejoice. All in favour — hands up."

That's the role and function of the minister of the Crown. I give the minister credit — although I'll be chastised by my colleague from Whalley for doing so — for at least putting on a brave face and saying all the positive things that were in his well-crafted speech. But the reality is the responsibility of opposition, and the reality, hon. Minister, is going to be coming upon you for the next seven or eight days as we continue to debate the merits of this bill at second reading.

Again, I'm delighted my colleague from Kamloops–North Thompson has given me an audience because I think some of the people in the audience are actually interested in what I have to say. I want to give you a sense of what happens at second reading of a piece of legislation. The minister will be interested as well. How does a bill become law?

There used to be a program on public television in the United States with a little bill that danced around on the screen, and that's how I learned about it. Of course, I didn't realize — I was living in Canada at the time — that it was about Congress, but what we do here in British Columbia is that a government will introduce a bill. It's called first reading. It's printed. All of us on this side, all of us on that side, people in the broader community have an opportunity to review the contents of that bill.

At second reading we have a general discussion about the principles of the bill — what's intended by the government, and we've just heard all goodness, nothing wrong. Everyone will be happy; no harm done to anyone anywhere. That's the vision of the government. The opposition regrettably has to bring a black cloud to that and dump a little bit of reality on the position that the minister has just outlined for us.

There are 30-odd pages in the bill. There are multiple sections. We'll get to the clause-by-clause section, perhaps, unless the government recognizes perhaps a better course of action. We'll be laying that out over the next number of days.

Our concern with the bill really goes back to 2003. The government came to power in 2001, made a host of promises about how they were going to use the Utilities Commission in a different way. They were going to take the politics out of it. That's what they were going to do.

Oppositions always talk about that. When governments get old and bloated, they need to be pushed a little bit, and oppositions are always there to make the case that what the government is doing is wrong and if only the people elected the opposition, all good things would flow.

That's the back and forth. That's what we do here, and my colleague for Kamloops–North Thompson will be able to come to Brennan Creek Elementary and explain that in more detail. I'm certain he will, and he'll do it with enthusiasm and aplomb. You can look that up when you get back to school. No worries.

[1705]

I want to just read a couple of quotes prior to 2003 that came from an unlikely source. My colleague from Whalley is very interested in this because I told him I would be doing a little bit of history for the members in this place.

The parts that I'm going to read come from a speech to the Canadian Institute of Energy in November 2000. The then Leader of the Opposition said the following: "What we support is an open, honest, public review of all these projects" — he was referring to energy projects when he said that — "and when they're successful, we will know they're right for the province of British Columbia, that what we support is a government that actually starts to tell the truth to consumers." That was the end of his quote.

Now, as the kids from Brennan Creek heard, I just said to the minister that that's what we would do if we were
[ Page 5796 ]
in government. That's the role, perhaps, of opposition: to speak the truth. "This is what the public would want. Let's take away the politics from the regulator." That's what the Leader of the Opposition — the now Premier, the member for Vancouver–Point Grey, my good friend — said in 2000.

He said a couple of other things, and I want to read those into the record as well. Again to the very same Energy Institute conference he said: "It's critical that we restore the independence of the Utilities Commission to properly do its job on behalf of utilities and consumers alike without political interference. We intend to do that."

Thunderous applause, no doubt, from the Liberals in the room — thunderous applause from those assembled to heap praise upon the Leader of the Opposition who now is in tatters as the leader of a government facing the largest corruption trial in B.C. history and an initiative campaign that's been signed by some 550,000 British Columbians.

Ten years ago that very member was going to remove politics from the Utilities Commission. I will get to the importance of making a reference to the Utilities Commission in a moment. In 2001, shortly after the speech, in front of all of the Liberals, that was met with thunderous applause, no doubt, the B.C. Liberal platform said this was the "New era of hope" campaign.

I know that 2001 was a long time ago for many of us, but this is what it said:"You shouldn't have to pay higher than necessary electricity or auto insurance rates because government wants to play politics with B.C. Hydro. You should be confident that government will protect your interests. A B.C. Liberal government will restore an independent B.C. Utilities Commission to re-regulate B.C. Hydro's electricity rates."

Very impressive words from the then Leader of the Opposition. Quite a juxtaposition, quite a contrast, quite a difference — to my elementary kids — from what we just heard from the minister who said that this bill will exempt from Utilities Commission approval and oversight seven or eight projects.

I've totalled up the costs of those projects conservatively. It comes in at about $10 billion — I'll be going through them in some detail in a moment — worth of projects that are exempt in this bill from Utilities Commission oversight. That's a lot of peanuts — isn't it? — $10 billion.

How can you go in ten short years, Member from Whalley, from making passionate appeals to the public: "Get behind me. I will restore independence to the Utilities Commission. I have a vision that depoliticizes electricity. Follow me to the promised land"? How do you get from that to: "Ah, we want a Utilities Commission, except for $10 billion worth of projects"? Ten billion dollars — absolutely staggering. Humorous to some, but staggering to most.

The kids in the gallery are thinking: "What is he talking about now?" Ten billion is a big number, though. They get that — $10 billion. For some of them that are on the cusp of Columbia River–Revelstoke, they would know about the Revelstoke dam. Maybe they've gone there. That would be a good field trip for the kids to go up and take a look at Revelstoke. They're in the neighbourhood. It's not that far away.

The Mica project unit 6 that the minister referred to — about $300 million. It would probably have been approved by the regulator had it gone through the process, had it not been exempted. There are some that argue that perhaps by not allowing it to go to regulation to get a certificate of public convenience and necessity, a CPCN, as it's called in the business….

Perhaps by exempting Revelstoke and Mica, which is another good project but a billion-dollar project, a $1.3 billion project…. By exempting those two heritage assets, it prevents First Nations from making a claim at a public hearing in front of an independent body where there's cross-examination, where they have an opportunity to put forward their case.

[1710]

If Mica and Revelstoke…. This is a theory, and perhaps when we hear from members on the government side, they'll disabuse me of that theory. People have said to me: "Well gee, those are two good projects — positive public projects — that will provide electricity now and into the future." But by removing them from regulation, First Nations will no longer have an opportunity to make their case for any potential claims as a result."

A couple of other projects, hon. Speaker, but before I get to that, why not another quote? Are you okay with that? I knew you'd be fine with that. Before the election in 2001, the Premier of today, the opposition leader of yesteryear, the champion, the crusader, the one that was going to restore independence…. He was going to depoliticize politics. He was going to do everything differently. He was rewarded with 77 members, and that turned out to be a curse. We're seeing that in a courtroom in Vancouver now, as we look at the B.C. Rail Liberal corruption trial.

But back in 2001 just before the election, in an opinion piece, an op-ed article that he wrote in the Vancouver Sun, the now Premier, then Leader of the Opposition, who was a crusader for conscience and independence and oversight, said: "We will strengthen the B.C. Utilities Commission and put B.C. Hydro back under BCUC control. This will protect consumers."

I know my friend from Whalley — he's learned in numbers — would probably support me when I say that the objective of the Premier at that time when he was Leader of the Opposition, aside from currying favour with voters, which is self-evident, I suppose…. We are creatures of votes. We have what we call the running of the reptiles every four years, and here we are. The 85 of us arrive here, and we debate back and forth the benefits and merits of pieces of legislation.
[ Page 5797 ]

Back in 2001 on the eve of an election, the Premier, not satisfied with his rousing support from the energy institute back in November, went a step further and put in writing in the Vancouver Sun, the journal of record. I say that to the editors of the journal of record, the Vancouver Sun, although they rarely print anything I send them. I do say to them that they decided this was important. This was significant public policy; let's publish it in the journal of record.

The people of British Columbia can access it whether they be in Brennan Creek, whether they be in Columbia River–Revelstoke, whether they be in Peace River South. They can get access to the Vancouver Sun and see in print for all British Columbians to understand that the then Leader of the Opposition, the current Premier, was steadfastly opposed to politicizing the Utilities Commission.

Why would you want cabinet to make those decisions? Why would you allow elected representatives from disparate walks of life…? I look at the denizens of the cabinet today. They all come with different backgrounds and understandings. I don't think there's a man jack of them over there that understands electricity or electricity policy — nor should they.

I know that the Minister of Energy comes from a natural gas background. He's probably got a steep learning curve on electricity, but he's working hard at it. But to my knowledge, after reviewing the resumes of the current occupants of cabinet chairs, I don't know of one person over there that has a background in electricity — not one.

Rather than have the independent Utilities Commission review B.C. Hydro's integrated resource plans and rather than have experts independent of government, independent of politics, championed by the Leader of the Opposition and rather than have those individuals in a situation where there can be cross-examination and evidence can be tested back and forth — rather than do that — this bill has decided that the best course of action is to allow the 25 people that the Premier has appointed to cabinet make decisions on electricity policy.

I don't know. It was a bad idea in 2000-2001. Miraculously, nine years later, with an initiative campaign at the 550,000 mark and a corruption trial going on, it's now a good idea for the cabinet to review these issues. It seems inconceivable to me.

I'm going to wait a moment before I get to that. I'm just going to inventory, instead, some of the projects that are listed in Bill 17 as exempt from Utilities Commission oversight. It shan't take me a moment, hon. Speaker.

The northwest transmission line: $404 million, estimated cost. Now, there are colleagues in my caucus who support this initiative. There are colleagues that are dubious about it.

[1715]

The intent, as the minister outlined, is to electrify Highway 37, to provide clean energy from our existing facilities — like Revelstoke, like Mica, like the Peace Canyon and the other projects that B.C. Hydro operates — to get them off diesel so that they are reducing their greenhouse gas impact. All to the good. Most people would support that. But we have to keep in mind….

When I talked to my colleague from Stikine about this, there are very few people living along Highway 37. We talked about maybe 2,500 people max — 2,500 people. We're going to spend $400 million to provide them with electricity that they are now getting from, admittedly, diesel generators. That's a lot of money. You could probably find other ways to provide electricity to those communities. So there must be another reason why you would want to expend $400 million.

One of the reasons, of course, is to encourage mining developments in the region, and there are many proposals — the Red Chris proposal near Iskut, the Galore Creek proposal, Shaft Creek. There are a half a dozen copper, gold and other metal mines that are on the verge of going forward provided they get access to clean — not necessarily clean, but electricity.

The government, trying to disguise a subsidy to the mining industry as good electricity policy, has ensured that the regulator, the B.C. Utilities Commission, never gets their hands on this piece of work.

I don't know if it's a good project or not. I'm not prepared to speculate on that. I do know that the mining sector is very, very bullish on it. They're very anxious to ensure that they have sufficient electricity. Very electricity intensive industry — the mining sector. Members on the other side will know that. That's the motivation. That's what the government wants. They want to ensure that they can proceed with a $400 million expenditure.

Who is going to pay for that? The man on the moon? The kids from Brennan Creek Elementary will be paying for it. Their parents will be paying for it. Electricity users, ratepayers, B.C. Hydro customers will be paying for that. Now, before the tabling of this bill, before we could proceed with a project of this magnitude, there would have to be a hearing, and a certificate of public convenience and necessity would be issued by the Utilities Commission so that this project could proceed.

Now we're not going to do that. That's 400 million bucks that ratepayers will have to find to pay for an electricity line, a transmission line for 2,000 people, tops, says my colleague from Stikine, and two or three mining projects. Now, I don't begrudge the development of those mines. I would probably on most days think that that was a good thing, but 400 million bucks is a lot of money.

Rather than all of the members on that side of the House that are in cabinet, that have no understanding of the impact of this on the broader system at B.C. Hydro and the broader system that's going to affect ratepayers, I would prefer that that be done by an independent commission. And that's what the Premier said ten years ago. That was his objective. He said it not once, not twice, but
[ Page 5798 ]
three times. Put it in the platform for all to see. That was then; this is now.

There's another project that's not on the list, that's been exempted, that will not receive oversight, and that's a project called the smart meter, smart grid program. Now, the minister, in his remarks today, commented on this as a positive initiative with respect to conservation. Many people have made that case to me.

I've had other people make a different argument. They've said to me that these devices are susceptible to hacking, security challenges — people hacking into your house and using your grid to reduce their costs. There are challenges in California. There are challenges in New York.

My colleague from Surrey-Whalley, well read — always sending me literature that he finds in his searches of various papers and journals — has sent me an abundance of information about the downside of smart meters. It's a billion dollars — a billion dollars to implement this project. And the minister, I'm sad, is going to have to review this in Hansard.

The minister, six months ago — not in 2000, not in 2001 — said the following to me in this place with respect to smart meters: "…there will be a full public document…. That won't be available until the public filing with the B.C. Utilities Commission. That's when all of the work will culminate in the business plan in what we would…put forward. Ultimately, as we've talked about, the BCUC will review that and make a determination: is it in the public interest or not?"

[1720]

Now, that was six months ago, six months ago from the very minister who just stood in this place at second reading on Bill 17 that says: "We're not going to do that anymore. Changed my mind." A billion dollars.

It may be a good idea. I was actually looking forward to seeing the business plan. I've been the Energy critic for four years. I said to the first minister — the now-ascended senator, the beloved Richard Neufeld — four years ago: "Where's the business plan? How are you going to implement this? How is B.C. Hydro going to save ratepayers an unnecessary additional burden?" He said: "Well, you'll just have to wait and see the business plan. It's coming. It's coming."

The next year I asked again, in 2008. In 2009 I asked the new minister, and he said: "Oh, you'll see a business plan all right. We're going to table it at the B.C. Utilities Commission. We'll have a full airing of the details. There will be cross-examination."

Organizations like the Public Interest Advocacy Centre and the B.C. Sustainable Energy Association send regular participants to the Utilities Commission. They send their lawyers to cross-examine B.C. Hydro officials so that we can burrow down deeply — experts, people steeped in this information. They can ask the appropriate questions and get the appropriate answers under oath.

Now, that's not to say that cabinet ministers won't do that when a billion-dollar item comes to cabinet or Treasury Board. I know that members on Treasury Board and cabinet are earnest. I'm going to be criticized by my colleague from Whalley for giving credit where credit might or might not be due, but they spend a lot of time on this stuff in cabinet.

But will they spend a lot of time on smart meters when they know…? "Well, the Premier wants it. I'm only here because the Premier picked me. What if I'd put up my hand and say, 'Hey, wait a minute. That's $1 billion, Member from Point Grey. Is that the best thing we can do with $1 billion? Wouldn't it be better to try and retrofit some of our aging housing stock rather than put a gadget on the wall that will tell you, guess what, that your lights are on.'"

That's what a smart meter does. It tells you what your consumption is at certain times during the day. The minister is selling this as a positive initiative for consumers because they'll be able to say: "Oh, look at that. I'm using a lot of electricity now while I cook my dinner at six o'clock." Well, lo and behold, the busiest time of day for B.C. Hydro, peak demand, is at about six o'clock every night.

The member for Columbia River–Revelstoke knows this. Most people — not us; we'll be here till seven o'clock, but most people — go home at six o'clock and eat their dinner. That involves turning on the stove. That involves some lights in the wintertime so that you see what you're doing. Maybe they'll have some music on, or they're watching reruns of MASH on the television. Who knows what they're going to be doing at that time?

Hon. P. Bell: Hansard TV?

J. Horgan: Hansard TV. Some will be watching that, or they might be watching new, fresh, clean advertisements from B.C. Hydro about how fantastic everything is going to be. That's right.

Instead — and that's the lunacy and my friends in the gallery might see the humour in this — earlier today, we've got a billion-dollar initiative here in smart meters, and we're not going to have any oversight of that. "We're just going to let cabinet decide whether or not that's a good idea. But in case the public actually thinks they're getting shafted, we're going to put ads on in the middle of the hockey game so that everyone can see how wonderful we are. No impact from anything we're doing. Forget about those flooded valleys. Forget about communities that are now gone."

The member for Columbia River–Revelstoke can articulate what communities in the Kootenays no longer exist — families, homesteads gone, kaput, under water. But it was all benign. No harm done. Everything's fine. You can see that tonight on the hockey game or whenever the next hockey game is. It's tomorrow night?

Interjection.
[ Page 5799 ]

J. Horgan: Saturday night. My goodness. Go Hawks. Saturday night, we're going to be able to turn on the TV, and B.C. Hydro is going to tell us that everything is fine. It's all good. It's only $1 billion, and it's in our interest to know that our lights are on. That's what we'll be able to see. Because our lights will be on, we'll look at the smart meter and it'll say: "You know what? Consumption on your street is very high right now."

You can look out the window and see lights on in other homes and come to that conclusion for less than $1 billion, but apparently, this is a good conservation tool. But why is it a good conservation tool? That part of the story is rarely told, and that comes back to rates. That comes back to rates.

If the utility can get into your house…. Right now, you've got the little meter that spins at the side of your home, and someone from B.C. Hydro comes once or twice every couple of months, and they read that meter. It might as well be Latin or hieroglyphics to most people. There's a whole bunch of numbers, and sometimes it's going really fast, and sometimes it's not going very fast at all, depending how much electricity you're using. But we leave it to the good people of B.C. Hydro to tell us how much we're using.

[1725]

Well, now with a smart meter — it'd be like an iPad on the wall in your kitchen — they'll be able to tell you that this is the highest cost of all the electricity you're using in a day. Six o'clock — that's when peak demand is at its highest. That's when the market for electricity…. It's a commodity. It's traded every day. That is when it's at its most expensive.

The spin from the minister and from Hydro and the good conservation policy is that if you can, do your laundry at two in the morning, or use your electricity at times that are not peak, at times when the value of that commodity is at its lowest. It makes good sense. Do you need to spend a billion dollars to get that into people's heads? I don't know.

Rather than have an iPad on their wall telling them that their lights are on, I think they'd probably rather have a retrofit. Give consumers the money to spend on upgrading their infrastructure so that they're using less electricity, so that the housing stock is improved.

When the smart meter gets slapped on that 1950s house with no insulation and with windows that are single-pane, it does not conserve energy. It just costs that consumer more.

How does that happen, hon. Speaker? Funny you should ask that. I know you were thinking it, or my colleague here was thinking it, in any event. The reason it's going to cost you more is that once we've got smart meters in all of our houses, B.C. Hydro is going to introduce what they call a time-of-use tariff.

Interjection.

J. Horgan: "What is that?" says my colleague from Burnaby–Deer Lake. What are time-of-use tariffs? Hydro will create a new category for billing. Six o'clock. You're using your power. It's going to cost you a ton.

Many people are now familiar with what's called the inclining block rate, or the two-tiered system. If you look at your hydro bill, it will say that if you use whatever it is — I think it's 1,000 or 1,100 kilowatts — the rate is a certain level. Anything above that, and the tariff goes up. That is designed to encourage conservation. It's good public policy. It's a pain in the wallet if you're a consumer.

What will add insult to injury is…. The Premier says: "Look, I've seen these gadgets. I was down seeing the governor of California, Arnold Schwarzenegger. I didn't ask him for the $300 million he owes us for electricity that we sold them in 2000." That kind of speaks to the uncertainty of having an export policy with a partner that still owes you 300 million bucks, but that's perhaps for another day.

While he was down in California, Arnie said: "Look at this, Premier. You stick it on your wall, and you know how much electricity you're using. Isn't it fantastic?" No, that's another guy that said that. I can't do the Austrian accent, but people get the message. The Premier was captured by this technology. He came back and said: "Make it so."

Hydro's been grappling with it for the past couple of years. Well, now it's in a bill. It's mandated by legislation, and there will be no oversight. The Premier said it's a good idea. It is exempt from Utilities Commission oversight.

Ten years ago he said he wouldn't do that. Six months ago the Minister of Energy said he wouldn't do that. Well, they're doing it today, and it's shameful.

I don't know if smart meters are good or bad. I've laid out my perspective for the smattering of people in the gallery, for the six or seven people watching at home and for those in the House today. There are potential upsides — no question — to smart meters, but ultimately, it comes down to whether or not that is a useful expenditure. A billion dollars — that's what the minister told me a week ago is their guess. It's their best guess at what it's going to cost to implement this program.

If we had an independent regulator that we could count on, as the former Leader of the Opposition, the current Premier, seemed to do ten years ago…. You know, this is the irony. In that ten years he's appointed the commissioners at the Utilities Commission. So it's not like he doesn't know these people. It's not like he doesn't have confidence in them. He appointed them. These are order-in-council appointments, and they do good work. They have historically done good work.

Governments that are out of control, governments that want to drive their agenda, governments that don't want people in the way do away with regulatory processes. I know this to be true.
[ Page 5800 ]

I'll leave it at that. My colleague from Prince George on the other side of my other colleague from Prince George….

Hon. P. Bell: Were you part of that, John?

J. Horgan: I have no comment at this time. I'd like to say it's before the courts, but it's not. It's your stuff that's before the courts.

A billion dollars.

I've gone through a couple of these. We talked about the northwest transmission line, Mica 5 and 6, Revelstoke 6. We've talked about the Clean Power Call. I'd like to do that for a moment, if I could.

[1730]

There has been a raging debate here in British Columbia about private power production. Many of us are opposed to dismantling the jewel that's B.C. Hydro.

It's the irony of listening to the minister talk about the glorious history of our public utility, and it has been, by and large, a glorious history. It has served us very well. Industries have developed. Ratepayers have been more or less the most benefited of these, resulting from our public utility. Rates are low, whether they be industrial rates, rates for residential consumers or commercial rates. They're among the lowest, year after year — the second- or third-lowest in North America. That's a good thing.

When the Premier came to power ten years ago with his glorious charge to restore independence to the Utilities Commission, you would have thought: "Well, you know, you've got this utility. It's got reservoirs, which makes it unique to some of our trading partners. We're able to store electricity in the form of water like a big battery, so we can hold water, buy on the market when it's advantageous to do so, buy power when it's least expensive and sell power when it's at its most expensive. That's good business."

You'd think that a free enterprise government would get that, but it's the doctrinaire socialists, so-called, on this side of the House that continue to make the case that you should let your Crown corporation — a dominant player in the marketplace — play the market when it's advantageous to do so.

It returns a dividend to the people of B.C. annually, normally about $400 million. This year the government has bumped that up to $600 million — this year and next year and the year after that. The result is a 29 percent rate increase.

For people who are watching at home, if you're wondering why your rates are going up, part of it is because the treasury needed to be filled up, and the Minister of Finance wasn't satisfied with the HST. He felt that there needed to be more, so the dividend at B.C. Hydro has been increased by a third from $400 million annually to $600 million. This year, next year and the year after that a 29 percent rate increase is projected.

We've had 18 percent rate increases over the past three years — all of this at a time when the government has been promoting private power production, a parallel generation system. They've sold this. The minister said so today, and we may well hear from other members on the government side: "This is clean and green, and it's all good."

Well, if it's good, then why do people in communities oppose it? We had an election in 2009. Independent power production, private power, was a significant issue in at least three constituencies that I'm aware of where controversial independent power projects had been promoted — four, actually, if I count my friend from Nelson-Creston. Columbia River–Revelstoke, North Island, Powell River–Sunshine Coast — those are four constituencies where private power companies have focused their energies on trying to get B.C. Hydro and the B.C. Liberal Party to allow them access to the treasury, allow them to get their hand on the golden goose which is the shaping and firming abilities that we have with our reservoirs.

Independent power producers, mostly run-of-river, are seasonal. They come in the springtime. Spring freshet is what it's called. It's what some have called junk power. It's not particularly valuable, because at the time of year when we have most energy coming from independent power producers, our reservoirs are almost overflowing. Other jurisdictions — Bonneville Power Administration just to the south of us — are awash in electricity. So the value of that power is very, very low.

The debate that raged in May of 2009 led to the return of four New Democrats in those four constituencies with increased pluralities, more votes than they got before. I know my friend from Shuswap is a fan of logic, so let me try and draw this out for him.

Interjections.

J. Horgan: Oh my goodness. Our friend from Prince George is off of it again.

The logic I'm trying to explain is that in the communities where these projects are proposed, candidates from one political party said: "We don't want to proceed that way." Candidates from another political party said: "We do want to proceed this way." Four candidates that said, "We love private power" lost. Four candidates that said, "We should think about this; this is the wrong way to go" — their vote went up.

That tells me, being a democrat, that the public policy initiative being proposed by the losers might not have been in the best interests of those communities. Had it been so, as my friend from Prince George alleges, perhaps the outcome would have been different.

[1735]

But my logic tells me that if you win on a position that says, "Proceed with caution…." Why don't we have regional planning, provincial planning? — all absent from this
[ Page 5801 ]
legislation. If you had a regional plan for energy development, as they do in the Kootenays, if you had a regional plan on the Sunshine Coast and on the north coast, perhaps you'd have buy-in.

Instead, you have promoters of private power that come to communities and say: "I've got a water licence. I've got the support of the government. I give significant donations annually to the governing party. They've told me that although they thought that independent regulation was a good idea ten years ago, they assure me that now it's not so important."

That's the state of play. That's where we are today. It's unfortunate, but the government seems hell-bent for leather to proceed. One of the issues that is exempt now under Bill 17 is the so-called clean power call. That's about a $400 million ticket that will no longer be subject to Utilities Commission oversight. If you're scoring at home, I've totalled up $10 billion worth of projects just from the exempt list. There are many others on the list that I haven't touched upon. There are future developments within the independent power sector that are now exempt. Anything that is destined for export by statute is now exempt.

The minister talked about a new plan, about not proceeding with projects until we have contracts in hand. That troubles me as well. I want to touch a little bit on the notion of our historic export policy, which has served us fairly well, as I said, save and except the $300 million that Arnold still owes us. I'm hopeful that the Premier, at his next visit, will bring a bill and see about getting some of that money returned to B.C.

Our export policy has a history of success. What the government is proposing now…. Instead of allowing B.C. Hydro to seek opportunities when they can — when reservoirs are high, in high water years — to look for opportunities to sell public power south of the border, into Alberta — displacing, in many instances, greenhouse gas emissions…. This is all to the good.

Rather than focusing on the positive aspects of our existing policy, the government has instead said that B.C. Hydro will become an aggregator of projects. So micro-hydro, wind projects, various other private power initiatives will now be assembled by B.C. Hydro, by statute, and then marketed south of the border.

Who's going to do that marketing? B.C. Hydro. The public utility is going to be assembling private power for shareholders — not for citizens, not for ratepayers but for shareholders. We're going to take our public expertise and put it at the disposal of the private power industry. We're not just taking that marketing expertise. We're not taking 20 years of experience and success that Powerex can demonstrate in the marketplace — whether it be California, Utah, Montana, Alberta, you name it. Powerex has contracts all over western North America and has successfully taken its competitive advantage and provided benefits to the public through dividends.

With Hydro now being forced to aggregate private power, instead of putting the interests of ratepayers first, we're putting the interests of shareholders first by statute — by statute. The government of the day, the member for Vancouver–Point Grey, is saying to ratepayers: "You know, Powerex, on behalf of B.C. Hydro, has done a pretty good job of playing that market, buying low and selling high. We're going to tell them now that they must buy high and try and find a market for that." That's the plan. That's the new math from the other side.

The result is going to be that that power, as I said — the spring freshet power — will have to be firmed and shaped and made useful in the marketplace. The member was agitated by this, but the reference has been made that this is junk power. I didn't make that up. Someone else made it up. They told me, and I'm just repeating it. I'm just repeating it because I believe it to be true. I believe it to be true. If you can….

Interjections.

J. Horgan: I'm not backing away. It's junk power. There you go. It's junk power — simple as that.

Interjections.

J. Horgan: Look, I'm sure I'm not going to get a Christmas card from Plutonic this year. That's a pity. No campaign donations for me from the private power sector, and that's a shame.

[L. Reid in the chair.]

That's a pity. No board appointments for me. I'm just stuck representing the people of my community.

[1740]

I'll just have to be satisfied with being able to go out in my community with a petition rather than running away from a petition. But if that's the way it is…. So 10,000 in Shuswap — my goodness.

Interjection.

J. Horgan: More votes than the minister got. Yeah, that's true.

So we've had a history of success with our export policy, but now we've decided that rather than leaving that to the traders at Powerex, rather than leaving that to the board members of B.C. Hydro or the senior managers, we're going to let cabinet figure that out. We're going to let the electricity experts at the executive council table make determinations about what's good policy and what projects we should aggregate to export to California.

Now, California has put forward some standards for what they call clean green energy, and you'll probably be
[ Page 5802 ]
surprised to learn that many of the independent power projects that have been approved in British Columbia do not qualify. So the premium that green, clean power was supposed to get, the premium that the people of California were going to pay to get rid of their gas plants, to get rid of their coal plants…. Many of the projects here don't qualify.

I've had discussions with members of environmental organizations who have visited California — Sacramento, San Francisco and other points south. I've talked to legislators there and asked: "Well, what's the likelihood of a 250-megawatt run-of-river plant?" That's not micro-hydro, as you can well imagine, hon. Speaker. That's a big plant. That's not a weir; that's a dam, in my mind. My colleague from Delta North will have something to say about that in the days ahead. These are big facilities, and the footprint, the environmental degradation of these plants do not comply with the standards in California.

We have our heritage assets, as they're called now, that had a significant impact. I've talked about that at some length. We sell into the marketplace not at a premium but at the market rates because we've amortized the debt. We've paid off the debt for those dams a long time ago.

The cost of generating electricity from our heritage assets is pennies. The cost of generating electricity from private power companies: $88 a megawatt hour, on average. So that means we're up around $100 a megawatt hour, up to $120 a megawatt hour, for some of the power that B.C. Hydro is now forced to buy.

Now, I've called that junk, and they've taken issue on the other side. But if you've got pennies on one side and $120 a megawatt hour on the other, it strikes me that it's fairly difficult in a marketplace that, according to the budget documents, has the average price for electricity at below 50 bucks. Buying at $120 and selling at $50 — how are we doing on that? I bet the kids from Brennan Creek wouldn't do that. I don't know who would do that. Who would buy power at $70 more than you can sell it for and call that good public policy — anybody?

Interjection.

J. Horgan: The member for Shuswap. You're missing the point, Member, and with your intellect, I would have thought you'd be able to follow me here. So $120, $50. That doesn't work. It doesn't work — simple as that.

You know, I'll go and stand on the steps and call it junk power if it will satisfy the member from Prince George.

Interjection.

J. Horgan: Yeah, your constituents and the independent power…. Yeah, they've been there for me all the time.

I want to read to you, hon. Speaker, some of the headlines that have resulted from the tabling of this bill. Now, the government, in their ads that are playing in the hockey games and playing across B.C., has said this is all great; this is fantastic.

Well, those that have been observing this place, those that have read the legislation, have had things like this to say. These are just headlines. I don't want to burrow down too deeply, but in the Vancouver Sun, which I referred to earlier as the journal of record, the headline on May 13 read the following: "Public Interest Not Served by Limiting Utilities Regulator." That was the headline on an editorial in the Vancouver Sun. In the Globe and Mail: "B.C. Sidelines Energy Regulator." That was on April 29, 2010.

In the Vancouver Province. I'm going to have to read some of this, because Brian Lewis rarely writes things that I agree with. He's written a whole, entire column here, and I want to read much of it into the record. In his column on the sixth of May he said: "Premier's Power Grab Is Bad News for You and Me."

Those are the headlines in the three major papers in our province with respect to this bill.

[1745]

Now, you wouldn't know that, watching the ads on television that B.C. Hydro's promoting. You'd know that W.A.C. Bennett was one-time Premier of B.C., and that's good to know. I knew that before the ads. I think many British Columbians would have known that — an illustrious 20-year run. You'd think that most people would have known that. But there it is. B.C. Hydro has decided to spend money telling people that once upon a time, back before 1972, this guy was the Premier, and that's good. As a historian, I am encouraged by that. Any time we can expand public knowledge about our history, that's a good thing.

But nowhere in the ads does it say the following, and this is the lead from Brian Lewis's column on May 6. It goes as follows, and I know my friend from Whalley is sitting in rapt attention. It says as follows.

"Silly me. If it hadn't happened right before my eyes, I'd have sworn there's no such thing as the divine right of Premiers. Sure, high school history taught us about divine right of kings — medieval doctrine that claimed the monarch is subject to no earthly authority, including the will of the people, and derived the right to rule only from God.

"However, the new Clean Energy Act tells me there has to be a divine right of Premiers, at least in B.C. How else do you explain a blatant power grab by Premier" — who is named in the article, the member for Vancouver–Point Grey — "that permeates this proposed legislation?"

That's the question posed by Brian Lewis, an observer of politics in British Columbia for some considerable period of time, and the people at the Province pay him to regularly write his thoughts on what happens here.

Unfortunately, he's not quoted in the B.C. Hydro ads. I don't know why they would miss something like that. "The divine right of Premiers" has kind of a ring to it.

I've made reference to the airlifting of supporters up to Hudson's Hope. The Infrastructure Minister had the good fortune of flying up there with many other people
[ Page 5803 ]
to announce the advancing from stage 2 to stage 3 of a five-stage process for Site C. It was a glorious day. The sun was shining. The camera angles were just right. The Premier stood on the hill like a prophet and said: "Let there be Site C." And there was Site C. Now it is exempt from regulation in this bill.

One project, one review or whatever the tag line is now on the other side. We don't need regulation. We don't need no stinkin' regulation, as they would say in the 'hood. We've got exemptions here in our bill. That's all we need.

Let me read a little bit more from Brian Lewis in his column — and I'm happy to see the minister's return — "Premier's Power Grab Is Bad News for You and Me."

"His government is gutting most of the B.C. Utilities Commission's regulatory power and transferring it to cabinet, which realistically means the power is being wheeled directly into the Premier's office." Interesting. "Once the deed is done the protective regulatory firewall that stood between B.C. Hydro and its ratepayers will have been dismantled.

"That firewall meant that before B.C. Hydro could build new projects, introduce new programs or increase rates it had to make its case to the commission."

The minister will know, as he said six months ago….

Deputy Speaker: Member, you will know that referencing the absence or presence of members of the House is not appropriate.

J. Horgan: I apologize. Rhetorical flourish. I'm often afflicted by that. If anyone was offended, I retract that. Maybe we can scratch that out. Look at Hansard. Maybe you can just take your pencil and rub that off for me. Thanks very much.

I've lost my train of thought, which is…. A slumped minister and an endorsement from Langara. Why don't I have a drink, then.

Interjections.

J. Horgan: A train to derail. We don't want to talk about trains, Minister. We don't want to talk about trains.

I've got two glasses over here. I feel like John A. Macdonald. My goodness. It's water. We're fine. Some humour, some levity. It's good to see.

I missed your song last night. Maybe you can play it for me later.

Interjections.

J. Horgan: Here until Thursday. That's great. Very good.

So we've talked about the role of the regulator. The minister will know — his quote to me — that we would see a business plan before the regulator on smart meters, guaranteed six months ago…. Not so much anymore. That's not going to happen, and that's unfortunate.

We've talked about our export policy that has served us very well for decades that now has been somehow linked into the proliferation and development of private power companies. But most of all, what troubles me about this debate is that we've gone from a position that the government held, that we required new sources of supply to meet our domestic needs…. That was the argument that the previous minister would make to me.

He would say: "We need to be self-sufficient in electrons." They're this big, hon. Speaker. You can't see them, they're so small, but we need to be self-sufficient.

[1750]

"We only can make them here. Nowhere else will we accept an electron." Uh-uh. Won't happen. Our electrons have to be B.C. We can't put a stamp on them. You can't put a little label that says: "The Gala apple was grown here." There are no stamps to put on our electrons. They're really, really small.

Hon. G. Abbott: What an insight.

J. Horgan: Yes, it's a good insight. I've given some wisdom to the member for Shuswap, and he is rejoicing in that.

Hon. G. Abbott: I'd never thought of that before.

J. Horgan: Well, there you go. I'm glad that I've brought something new to the table.

Hon. G. Abbott: I've got to tune in to this network more often.

J. Horgan: Yeah, we're here every night.

So we don't need to be self-sufficient. We've got a coastline larger than any other province in Canada. We don't need to be self-sufficient in boatbuilding. We can get our boats from Germany. We can send $800 million to a port town on the North Sea. That's okay. We don't need to be self-sufficient in that.

But our electrons, which are this big, no label — grown here, product of British Columbia…. It doesn't say that on the electrons, really small. But that, by mandate, by statute, now is required. And it's better than that. Not only do we have to be self-sufficient — only electrons born and raised here in British Columbia — we need an insurance policy.

We need to buy 3,000 gigawatt hours more than we need in high-water years to satisfy what, exactly. Peak demand? No. Because we can satisfy peak demand today, right now. We can satisfy our needs at six o'clock right across British Columbia with our domestic power supply. In addition to that, we have 1,400 megawatts that we sell in the United States each and every day, and have been doing so since 1996, called the downstream benefits from the Columbia River treaty.

Some 1,400 megawatts that we've been selling from the downstream benefits of the Columbia River treaty in
[ Page 5804 ]
the United States…. I asked the previous minister, and I haven't had the good fortune of asking the current minister, if he considered those electrons, very tiny, owned by the people of British Columbia, to be part of our domestic supply. Uh-uh. No go. Can't do that, because the downstream benefits are an asset of the province of British Columbia — not B.C. Hydro, the people of B.C.

We own that. That was our entitlement from the Columbia River treaty, that so-called benign event brought upon us by W.A.C. Bennett that had no negative impacts — only positive, only good. From that we did get something very positive, the downstream benefits.

Can we factor that 1,400 megawatts, Member for Vancouver-Kingsway, into our assessment of our self-sufficiency needs?

A. Dix: Rational people would.

J. Horgan: Rational people would. I agree. Rational people would. They'd say: "That's an asset, 1,400 megawatts. That's gold. We can sell that to B.C. Hydro. They'll have supply to meet our peak demand at six o'clock. They'll be born here. If we could stamp them, we would. We'd call them a product of B.C., and we'd all be good."

But no, not in this world, not in the King Lear world of the member for Vancouver–Point Grey. Can't have it.

What we need instead, hon. Speaker and members of this place, is to buy power from the people who give us political contributions. That's what we need to do. Private power production is good; downstream benefits, apparently, are bad. Now, that determination was made long before we even trenched power in the hands of cabinet, wrestled it away from our independent regulator, the Utilities Commission. This was a policy that was made before the current minister took up the office with the drapes that have been there forever, a long time ago.

I'm curious. Here we are at a time, at a crossroads. The minister has laid it out fairly clearly that the future is uncertain. Why don't we, instead of saying that we're going to exempt $10 billion worth of projects, from transmission lines to smart meters to new upgrades at existing facilities…?

Rather than spend that $10 billion and then go ask ratepayers to pay for it, why don't we start by bringing back those downstream benefits that we're selling in the United States today? Some 1,400 megawatts, and that's a lot of power. That's more than Site C, and you could have it tomorrow, not ten years from now — tomorrow.

[1755]

Not going to happen. Not going to do it because it doesn't fit into the little box that the member for Vancouver–Point Grey has forced the minister to get himself into, and unfortunately, ratepayers are going to be penalized as a result of that. Ten billion dollars' worth of projects someone has to pay for.

In the member for Vancouver–Point Grey's world, it's not his money. He doesn't care. He's been elected three times. Some 500,000 people have signed a petition. The chances of him putting his name on a ballot again, I would argue, are very slim. Now, I've been wrong on these things in the past. I may be wrong on this. But it's $10 billion of our money, ratepayers' money, that's now exempt from oversight. That is a power grab. That is a power grab.

I want to talk…. I think I might have exhausted my narrative on the Utilities Commission.

Interjections.

J. Horgan: Oh, I've got much more to go. I have piles of stuff over here, Member. Fear not; fear not. Your time will be well spent, an education.

I want to talk about the B.C. Transmission Corporation. Oh, I can see the minister shrugging his shoulders and going, "Oh, here it comes" — another one, another blow to the body politic here, another "this is then, this is now" scenario.

I want to say that the hon. Stan Hagen, who, sadly, is no longer with us, said the following, in introducing what was Bill 39. I'm going to refer to him as the former member for Comox, if everyone's okay with that. The former member for Comox said the following:

"I'm pleased to introduce Bill 39, the Transmission Corporation Act…. As part of our energy plan commitments, we are creating this new corporation to efficiently manage B.C. Hydro's transmission grid. The bill is a positive step forward in implementing the province's energy plan, a plan designed to deliver the lowest-possible electricity rates, a secure and reliable supply of energy and more private sector opportunities — all in an environmentally responsible way."

"The B.C. Utilities Commission will regulate B.C. Transmission Corp, keeping it free from political interference. This is a new-era promise, and a new energy plan delivers on that commitment." That was from Hansard, May 2003. That was then. This is now.

This is what the B.C. Utilities Commission and B.C. Hydro were sending to employees, talking about the reintegration of B.C. Transmission Corporation and B.C. Hydro: "As a united organization…."

We separated them, hon. Speaker. I hope I've been clear on that. We had a fully integrated utility — distribution, generation, transmission — that served us very, very well. Public service employees providing a return…. The minister applauds the good work of those people, as do I.

The previous minister decided we only needed to remove one-third of them to the private sector in a sweetheart deal for Accenture, who now is in the business of, apparently, doing wind turbines. They used to do back office stuff. Now they call themselves Finavera, and they apparently erect windmills. Although I've never done it, we're looking forward to seeing how that goes.

Four contracts, hon. Member. Four energy purchase agreements — never done it before, but that must make
[ Page 5805 ]
sense. If you're going to spend $10 billion without oversight, why not? Why not? Have at it. I'm sure they'll be really good at it. They'll probably make it as straight as they can, the wind will blow, it will spin, it will make electricity, and everyone will be happy, particularly the shareholders at Finavera.

This is before. We need to separate them in the interests of good public policy. Now, this is what we've said, B.C. Transmission Corporation and B.C. Hydro, to their employees: "As a united organization, the two Crowns will be better able to plan the activities needed to support the province's vision for the clean energy sector and to help it thrive in the years ahead. The formation of a single" — this is the best part; if only I had the dramatic flair of the member for Shuswap — "company with a single responsibility…."

Interjection.

J. Horgan: Oh now, Member. Please, this is a crescendo. You would know a crescendo. Here we go.

I'm going to start again, hon. Speaker, if you don't mind. "The formation of a single company with a single responsibility will be able to more effectively and seamlessly manage key issues and relationships currently split between the two organizations."

Wow, good idea. Seven years. We need to rip these things apart in the interest of good public policy. We can't keep them together any longer. They're like polar opposites. We've got to keep them apart. They'll fight all the time, the transmission people, the generation people. They squawk and squawk. We're better off this way. That was then; this is now.

[1800]

Hon. K. Krueger: Things change over time, except for the NDP.

J. Horgan: Things change over time.

So this costly experiment….

Interjections.

J. Horgan: Yeah, yeah. There will be blood somewhere.

So this B.C. Transmission Corporation experiment — how did that work out? How did that go?

Interjection.

J. Horgan: It's not before the courts. It's not before the courts, although it should be. A costly failure, I would argue, and I have some supports in thetyee.ca website.

Interjections.

J. Horgan: I can understand the minister's….

Interjections.

J. Horgan: Oh my goodness. We're getting giddy. Hon. Speaker, the blood sugar is definitely low.

If they don't like that, I want to talk about the Bentall Centre. There will be members from Vancouver that will know the Bentall Centre. It's a prestigious building right in the heart of downtown Vancouver. If they don't like thetyee.ca, why don't I just read what the website for the Bentall says? It gushes, in fact: "Spanning over 1.5 million square feet, the Bentall Centre offers four office towers and an expansive retail mall complete with exterior waterfalls, reflecting pools and a multitude of wide-open spaces filled with native foliage and colourful planters."

That's the Bentall Centre. That's where the B.C. Transmission Corporation currently occupies a ten-year lease. How's that going to go? I heard the minister say that we're going to transfer assets and liabilities. I guess that lease is one of those liabilities. Maybe we could move in some ministers. Maybe we could get the Minister of Housing to take that space. We've got four years left on the lease.

I'm sure we could put some of the homeless in Vancouver in the Bentall Centre. After all, there are reflective pools and a multitude of wide-open spaces. We've got three more years on the lease. The upside is the lease was only $13.4 million, but of course, we had the leasehold improvements.

What self-respecting new corporation created out of the ether by the B.C. Liberal energy policy…? You've got to put in a new boardroom, maybe some etchings to go with the reflective pools. So you've got a $13.4 million lease. Throw on $1.5 million in leasehold improvements, and you've got yourself a liability. That's what you've got, because now, in the interests of good public policy, the former member for Comox said, we have to create two entities — really got to do it. It's everyone's interest. We're all going to be able to work together. California will love us for this. Maybe they'll pay us the $300 million they owe us.

Interjection.

J. Horgan: Yeah, I should have gone down there as a staff person and wrestled it out of the hands of the governor. The Premier spent more time with Arnie than I ever have. He could have asked him at any time — maybe when he was carrying the torch, maybe at the opening ceremonies: "Hey, Arnie, that seat's going to cost you 300 million bucks." No, it was free, gratis. "Go ahead. Here's a coat. Have a coat and a tuque. Give us 300 million bucks. You can have a pair of socks to go with it." I tell you.

Interjection.
[ Page 5806 ]

J. Horgan: I am bitter, Member. I am bitter. I think it's outrageous, and so do British Columbians, by the way. I would argue that most Liberals do too.

I'm just reading from the website at the Bentall Centre, where we now have about a $3.5 million liability. Who's going to pay for that, hon. Speaker? Is it the Premier? Is he going to say: "You know what? I made a mistake"?

Interjection.

J. Horgan: They might be able to use it. The problem with that, though, is they're not going to need as many executives. You see, they're integrating the companies. I could read further from the brief to the staff. This is the now as opposed to the then.

Hon. K. Krueger: This is socialist business 101.

J. Horgan: Oh yeah, this is a socialist business. This is the guy that delivered a convention centre at $500 million over budget and took a phone call from a buddy to put a $500 million lid on a stadium so he could build a casino beside it, and it's socialist business. Socialist business. Holy cow.

Interjection.

J. Horgan: I'm not smokin' nothing. If you're advocating that, I'm shocked and appalled, Member. I'm shocked and appalled. Absolutely.

Interjections.

Deputy Speaker: Members. Members.

J. Horgan: So we've got excess office space. We've got an extraneous board. We're going to have to let those B.C. Liberals go that we've appointed to the B.C. Transmission Corporation board.

[1805]

I don't think there will be any severance for board members, but there may well be for senior executives. The minister has admitted in his remarks that we will be transferring liabilities. I'm hopeful that when we look back on the failed experiments of creating a separate transmission corporation from generation and distribution, someone will take the credit for the hit to ratepayers.

It's estimated in the range of about $65 million, and that's just….

Interjection.

J. Horgan: Oh, Member. Goodness me. Don't give me any sermons on saving money. You're just the wrong guy to do that. Unbelievable.

I want to talk a little bit about First Nations, because I know the member for Shuswap will be interested in this. Today I received a document from the Assembly of First Nations, and 47 nations had signed on — 47 and counting — to a document that calls on the government to withdraw this legislation.

This is a joint statement from the Assembly of First Nations. So 47 chiefs have signed on, 47 and counting, and it goes as follows. It's a joint statement from participating nations regarding the B.C. Clean Energy Act.

Now, I heard both ministers, the Minister of Energy and the Minister of Aboriginal Relations, today commenting on how they would welcome intervention from the First Nations. That would be a good thing. "Well, we'd love to sit down and talk with them."

Well, you had an opportunity to sit down and talk with them before you tabled the bill, and then, maybe, you would have avoided the embarrassment of seeing their reconciliation….

Hon. K. Krueger: Are you embarrassed? We're not.

J. Horgan: Well, you know, that's the tragedy. That's the tragedy — that you're not embarrassed. I thought a little bit of humility to go with the hubris…. Balance your h's, Minister.

Deputy Speaker: Member, your comments are directed to the Chair.

J. Horgan: Yes, hon. Speaker, thank you very much. I'll turn away from the extraneous noise and focus on the important substance of what I'm about to lay before the Legislature.

This is what was contained in a joint statement.

"Whereas the 2005 new relationship statement agrees to establish processes and institutions for shared decision-making about the land and resources and for revenue and benefit-sharing, it agrees to a new government-to-government relationship based on respect, recognition and accommodation of aboriginal title and rights.

"Whereas the B.C. government has recently held first reading of the Clean Energy Act, this act represents the future direction of green energy production and exports. This act was constructed without First Nations involvement, and there was no consultation prior to the introduction of the act. We are told the act was guided by the Green Energy Task Force" — what I heard from the ministers today — "however, upon review of the legislation it is clear that the majority of the First Nations recommendations were ignored."

And they were. I can read them out to you. There were six. Do you want to hear from my colleague from Powell River–Sunshine Coast? There were six recommendations from the Green Energy Task Force.

A little aside, if I might. I know time is running down, but I've got a few moments.

The minister said in his remarks that the act was guided by the work of the Green Energy Task Force. Now, this was a group of mostly friends of the government,
[ Page 5807 ]
but some thoughtful people as well, and I know many of them on the task force were very capable British Columbians, giving up their time to try and make a better policy outcome. That is what we all expect and what we all encourage from our citizens. I don't want to disparage the individuals, beyond saying that not all of them were Liberal.

Interjection.

J. Horgan: Disparagement is what I do. The Queen pays me for this. I told you that earlier on.

This group was appointed. There were four task forces, four tables appointed. I know there was a PR expert, James Hoggan, who has worked tirelessly on promoting these issues; Dave Porter, and both ministers will know Dave Porter, a very capable fellow.

There were six specific recommendations put forward by First Nations. "Expand the current revenue-sharing model" — not in the act. "Priority consideration should be given to First Nations in the issuance of all new tenures" — not in the act. That's two.

[1810]

"The province should review and strengthen the Environmental Assessment" Act. That wasn't part of the aboriginal component.

The third one. "The province and First Nations should enter into discussion on the ownership and beneficial use of carbon values with respect to green energy projects with a view to concluding an agreement on the sharing of those values" — not in the act.

"Where First Nations and local communities demonstrate the capacity and interest for inclusion in a B.C. Hydro IPP call, B.C. Hydro should initiate an IPP call that gives priority to First Nations and local communities" — not in the act.

You asked these citizens to come together, Minister and government. You asked them to come together and offer their time and toil and sweat and ideas. They committed it to paper. They presented it to government. An expectation, because of all the fanfare…. "We're going to just clean this up," the Premier said; the minister was at his side. "We're going to appoint these fine citizens to give us advice and input on our Clean Energy Act."

So you can well imagine the surprise of the Assembly of First Nations when Bill 17 was tabled. They quickly cracked the cover and started to look for their work, their view, their vision in the act — not to be found. Not to be found, Minister. That's a problem.

Interjection.

J. Horgan: Well, they don't. We've got an agreement to disagree here. This is how we go….

Again, the statement from the 47 chiefs, and counting, goes as follows:

"The Clean Energy Act exempts significant major hydro and transmission projects from oversight by the…commission; and whereas the…Crown has unilaterally implemented these sweeping changes and ignored the court-recognized legal obligations" — and I know this has piqued the interest of the Minister of Aboriginal Relations; it says "legal obligations" here — "for meaningful consultation and accommodation in the development of the Clean Energy Act.

"We, the assembled Nations from across B.C., speak with one voice to say (1) we call upon the B.C. government to amend the proposed act and incorporate all recommendations that support First Nations involvement in the Clean Energy Act."

That's what they've asked for.

You asked these people to come together, Minister. You didn't ask them: "Come together, give five ideas, and we'll take two." You didn't say that. You said: "Come together with your ideas. We'll incorporate them into our plan." A vision for all British Columbians, Mr. Speaker, not just the member for Vancouver–Point Grey — that's what we're looking for in this House. That's what members on that side should be looking for, and that's what the Assembly of First Nations is looking for.

Their second point. "We call upon the Premier and cabinet to immediately engage in discussion with First Nations leaders to work out a solution to incorporate our recommendations." That's the proposal. That's the request. I am certain that the administrative coordinators for the two ministers are working on that, setting up that meeting right now. I welcome news of that before the hour is up. That would be fantastic. I know that the assembly would be delighted to hear that.

The third and final point, perhaps the most salient one and the one that the minister should pay closest attention to. "We call upon the B.C. government to delay the bill until adequate consultation and accommodation with First Nations occurs."— that's the third point.

I believe that that's the right course of action. If the government was truly sincere and genuine about creating a vision for our energy future that included all British Columbians, you'd think they'd start with First Nations. You'd think they'd start right there.

The environmental community is not necessarily enamoured as well with Premier Green Jeans and his proposals that were supposed to revolutionize environmental thinking as we know it in B.C. Ms. Berman has gone off to Amsterdam. Maybe she's taken the advice of the member from Kamloops….

Interjection.

J. Horgan: Yeah, she gave an award to the Premier, who just approved a 3 percent increase in our greenhouse gas emissions with one stroke of the pen.

The Western Canada Wilderness Committee, Pembina Institute, Sierra Club, West Coast Environmental Law, Watershed Watch, Save Our Rivers…. The list goes on and on of environmental organizations concerned and perplexed at the direction that the government is going.
[ Page 5808 ]

The West Coast Environmental Law says the following with respect to the Clean Energy Act: "…fails to commit the province to achieving its energy objectives with the lowest possible environmental impact, fails to ensure a transparent, inclusive and comprehensive planning process, does not guarantee meaningful public consultation in that planning process, eliminates independent oversight of energy planning in many major projects, does not require regional planning to identify the best options for development…."

[1815]

This is where I think members on this side of the House — who are still comfortable going to see their constituents on weekends — differ from the government. And that's the nature of government and opposition. People are happy to see us, because they can bring their grievances and we can bring them to this place in the hope….

Interjection.

J. Horgan: Well, I don't know if that's actually fair, Minister. But fair enough; you can say that.

We have different roles, and we're approached differently, and I respect and understand how uncomfortable it must be for members of government in the current climate to go home.

Interjections.

J. Horgan: Well, I don't know. I've heard some boos. My friend from Richmond might tell us about the boos.

Interjections.

J. Horgan: So we're back to West Coast Environmental Law, hon. Speaker. If we could reduce the distractions, we may well be able to wrap this up before seven o'clock. So West Coast Environmental Law. We talked about the regional planning process to identify the best options for development, and their concern is that the act short-circuits the planning process by predetermining critical policy outcomes. Now, what does that mean — predetermining critical policy outcomes?

Well, I would suggest to the minister that it's the exemption list that's reducing the ability for the public to have input on critical policy issues. That's the rub. That's the concern. That's why people are lining up to oppose your legislation.

Now, I know you've spent a lot of money on the ads. I know you're trying to find a glimmer of good news from what has been a disastrous session in the Legislature. This bill is supposed to be it.

Interjection.

J. Horgan: I don't know if the member, when she was in her constituency visiting folks, had an opinion poll in her pocket, but the last couple that I've looked at have been fairly drastically opposed to the position of the government.

So they put forward the Clean Energy Act in the hope that it would somehow make the world right again. "Everything's going to be fine. We just have to impose our will upon the people of British Columbia. We have to make an inventory of projects that will total in the neighbourhood of $10 billion, exempt from any regulatory process that we've had in the past." And that is good news, according to the B.C. Liberal Party. It's not good news according to the Assembly of First Nations, not good news according to West Coast Environmental Law.

Now, the Pembina Institute is more on the fence here. The author of this report was a member of the task force, and he says that there are major issues that deserve further debate. The minister again, I'm sure, will be paying attention to this. "The act shifts decision-making power from the B.C. Utilities Commission to the B.C. cabinet for most decisions about how much electricity will be produced in the province. Cabinet decisions in this regard are expected to be based on the result of an integrated resource planning process conducted by B.C. Hydro."

The minister talked about that. The integrated resource plans will come forward — apparently in the next nine months, 18 months? — in the next year and a half that will look at the next 30 years of policy development and infrastructure development in British Columbia. On the surface, I think people would say that's a good idea. We should have a plan. We should look at it. We should make sure there's buy-in from everyone.

Well, B.C. Hydro did that last summer. They tabled what's called their long-term acquisition plan, or their LTAP. Acronyms abound at the Utilities Commission and in government, as members know. The long-term acquisition plan was a hybrid, a subset of the integrated resource plans. Hydro brings them forward regularly. The commission looks at them. They take into account government's positions. They take into account special directions, which have been numerous from this government since 2001, although they didn't want to interfere politically in the Utilities Commission.

The long-term acquisition plan was rejected by the regulator. Now, members will say: "Well, that was just this rogue panel of individuals that somehow didn't get it." This was a group of individuals appointed by the government, given statutory obligations and responsibilities. They discharged those responsibilities in an open session, an independent session where cross-examination could take place.

Hydro brought forward their plan, as they will in this act, but not to cabinet, not to the rubber stamp where the Premier says: "Yes, I want smart meters. They're a billion dollars. I don't care. I want everyone to have one."

[1820]
[ Page 5809 ]

I don't know if you can download songs on to these things, but they're supposed to be really cool if you like gadgets. But what I think most British Columbians want is to keep their rates down. They're staring down the barrel of a $1.9 billion tax transfer with the HST, a 29 percent rate increase before the installation of smart meters, before the purchase of the clean power call in the $400 million to $500 million range.

A 29 percent rate increase — that's harsh for people on fixed incomes. All of us in this place have families and individuals who are going to have a difficult time meeting their needs on these issues. So what does the government do to try and resolve those issues? They take regulation away from the Utilities Commission when it comes to setting rates on projects that I've just identified.

The minister will say in his wrap-up: "Well, the member for Juan de Fuca said that the commission no longer has the ability to set rates. They do. It's in the act." True enough. Also in the act is that the Utilities Commission shall approve whatever rates are required to meet the capital costs of $10 billion worth of projects. So the minister will be able to have it both ways.

He'll be able to say to me, as he wraps up this debate next week when closure is introduced or whatever mechanism the government uses to stifle this last opportunity — this last opportunity — for public discussion of $10 billion worth of projects…. He's going to stand in his….

Interjection.

J. Horgan: Done — I can't listen to that anymore.

It's $10 billion worth of projects. This is the last opportunity for the public to have any input into those projects, because from this point on, if this bill passes, cabinet will make those decisions. There will not be any public….

We may have an open cabinet meeting. That was a commitment, a new-era commitment. The Minister for Climate Action has never had the benefit of an open cabinet meeting because when he was elected they did away with them. I'm sure there's no correlation there, but we haven't had an open cabinet meeting since I've been here, and we came at the same time.

The challenge I see is that if we're not going to have an open cabinet meeting again, the chances of having some cross-examination opportunities for interested parties as we have at the Utilities Commission are gone, kaput, finis. With this bill, the public will no longer be able to burrow down into the costs of these projects — $10 billion. No oversight, save and except the 25 people in the bloated cabinet of the member for Vancouver–Point Grey.

It's the largest cabinet in history — side note; not really important. But if anyone's watching, it's nice to put that in your box of interesting facts. Never before have we had such a large cabinet, but I'm sure each and every one of them is steeped in electricity policy. They understand the give-and-take of a Crown corporation.

They'll be able to make reasoned decisions on $10 billion in expenditures, knowing with confidence that they have a background in this area, and just because B.C. Hydro says that they can do it for this much, they're going to say: "Good enough for me. Good enough for me." The best part of this is that it goes from the cabinet room to the commission, where the commission must approve the project and any rate increase that's associated with it.

Wow. I just have to stop for a moment and say: "Imagine if we did that." Imagine the noise, the raining down of invective from the Liberals on the other side if it was a New Democrat government that said: "You know what? We've decided we don't want anybody poking in…."

Interjection.

J. Horgan: A rate freeze was a darn good idea. You go talk to any British Columbian about that. Unbelievable. This is the beauty of the B.C. Liberals. They criticized a government for keeping rates down, and then they impose $10 billion worth of rate costs onto consumers and say that they're good managers. Outrageous. Playing catch-up.

The minister assumes — I guess it's from listening too long to the member for Shuswap — that no expenditures were made in the 1990s. Nothing happened in the 1990s. Patently false. Go to Stave Falls; go to Seven Mile; go to any number of hydro facilities that saw upgrades and investment in the 1990s. This mythology that comes from the minister, who was not here at the time….

He is a scholar, I know. He has looked into this. He's not just taking the word of the public affairs bureau. There was money. News flash: money was spent in the 1990s on hydro facilities. Keenleyside springs to mind. In any event, the point I'm making is that we introduce a rate freeze, and the members on this side say: "Oh, that's outrageous. What a shameful thing to do." They introduce a 29 percent rate increase, and they say: "We're good managers. We have the public interest at heart."

An Hon. Member: It's pathetic.

[1825]

J. Horgan: It is pathetic. It's beyond pathetic. It's shameful. I will continue to make that case, as will my colleagues over the next number of days. I've talked about the exempt projects. I've talked about rate increases. I just want to read. I know at second reading we're focusing on the principles of the bill, but I think it's important for members who haven't had the opportunity to read the bill….

I know all members on the government side certainly would have done so because there is potential that they
[ Page 5810 ]
may well be in cabinet one day, and then they'll get to approve $10 billion worth of projects. So I'm hopeful that they're reading the act so they have some grasp of the power they now have at their disposal. All they need is a wink and a nod from the member for Vancouver–Point Grey, and they, too, can have the big office and then set electricity policy unencumbered by cross-examination, unencumbered by the public interest as put forward by citizens at an independent commission.

They'll be able to just make those decisions in the cloaked room in the west annex with the windows closed and the spiral staircase and all the neat stuff that's over there. When you get into cabinet, you get to go up and down the spiral staircase and eat free lunches on Wednesdays. That was the highlight, I remember, in the 1990s — that free lunch on Wednesday for all those cabinet ministers.

Section 8 of the bill goes as follows. "In setting rates under the Utilities Commission Act for the authority, the commission must ensure that the rates allow the authority to collect sufficient revenue in each fiscal year to enable it to recover the costs incurred with respect to…a project, program, contract or expenditure referred to in section 7(1)."

Section 1 says that all these projects are exempt. So when the minister stands here at the end of second reading and says that the commission still has authority to set rates, he's going to conveniently ignore section 8, which says that they must set rates so that Hydro can meet its capital obligations and responsibilities — $10 billion worth and counting. Goodness knows what the aggregator role will mean as we assemble IPP power for sale in the United States market.

I'm running short of energy and vigour. You haven't had as much fun all day. Admit it.

Interjection.

J. Horgan: I'll do that. Cheers. With that encouragement from the member for Shuswap, how could I not carry on?

We talked about self-sufficiency and the notion that we can't buy an electron that doesn't have a made-in-B.C. stamp on the side of it. We've talked about environmental damage. There's the cumulative impact which has been added to the bill. This is a positive thing. But what is going to happen at the environmental assessment office? What does that mean? There's a consequential amendment in the bill that may well lead to a positive outcome. I'm going to have to wait and see. My colleague from Kingsway is reviewing the bill to give me his opinion before I conclude my remarks.

There is significant environmental damage from some of the run-of-river projects that have been proposed and contemplated. Certainly the Rutherford Creek issue we've talked about in this House. A tragedy occurred. We're still waiting. I know the Minister of Forests was going to get back to me with information on the investigation that was underway after the Rutherford Creek Bridge incident. I await that information. I know he's working on it.

We've talked about exports. What we haven't spent time on…. We've talked about the Transmission Corporation. We've talked about Highway 37. What we haven't talked about is storage, and this is something…. I touched upon it briefly. The ability to store electricity is the real value of B.C. Hydro. Not only do we have an abundance of rain here in British Columbia in the rain forest, but we're able to store it. The impacts — I've touched upon those. They were not insignificant, but the benefit today is obvious, tangible, and I think supported by all British Columbians. I genuinely believe that.

We have to be mindful of the damage in the past and work towards ensuring that we don't repeat that carnage in the future. I've given that assurance to the minister — that if he can demonstrate to me that projects will have minimal environmental impact, that they have broad community support, that they have First Nations participation where possible and where there is a definite public interest in pursuing a project, he'll have my support.

[1830]

I was criticized. The member for Kingsway will remember this. I was criticized. Just prior to the election campaign, a project near Lytton was approved, an IPP. Small — I think it was 15 megawatts, in the tradition of micro-hydro. Not 250 megawatts, not 1,000 megawatts like Bute Inlet, but 15 megawatts.

A full partnership with the Lytton band to address a longstanding issue about brownouts in the Fraser Canyon — good project; support of the community — achieved a result that Hydro was not prepared to do, by looping the transmission system through the valley. I, asked an honest question, gave an honest answer. I said: "It's a good idea; we should do that."

Well, the little spinmeisters in Liberal dirt control downstairs couldn't get the press releases out fast enough: "MLA from Juan de Fuca says something sensible." Of course, there was much surprise on my side of the House at that. Not so much from my friend from Port Moody — he knows me to be sensible in all things. But the issue at the time was: is this a good idea in this one-off situation? Is there a regional benefit? Is there a provincial benefit? There was, to both counts. I said: "Good idea."

Well, I was pilloried by the government members. "Oh, you flip-flop, and you're doing this, and you're doing that." They should know by now that public policy isn't that easy. You can't say on one day that everything is black and then discover the next day that it's white and deny it. You have to recognize that you live in a black-and-white world. That's what we do on this side of the House. Sometimes some members on that side of the
[ Page 5811 ]
House will acknowledge that life is tough. Sometimes they will acknowledge that. It's rare.

Interjection.

J. Horgan: Name names. I can't do that in the House. I've been chastised once already.

The storage issue is what makes the Crown valuable. Why the private power folks are so keen to get this bill passed is that they will then be able to access shaping and firming services from the corporation at a minimal cost.

How are we going to quantify that? It's not in the bill. How are we going to pay for the marketing, the aggregation of these IPPs? Not in the bill. We've got shaping and firming services and marketing capacity from B.C. Hydro — three very, very valuable…. In fact, without those three elements, the independent power that's produced today is of little value on the open market, little value indeed.

People want firm, uninterruptible power. The minister knows this. He's had briefings on this. He must remember this. How do you get that when you've got intermittent, interruptible power? You use the reservoirs.

I can see the IPP folks now, as they're writing their cheques to the B.C. Liberal Party. "Oh, by the way, about those reservoirs, are we going to have access to those in the bill?" "You bet. How much do you need? How many feet?" "How far do we have to be in Golden from our resort? How far will the water go from the beachfront?"

Will you have to walk seven kilometres if you live in that region? Maybe you will. That's the issue. In this legislation there's no reference to firming or shaping or to storage capacity — how that can be of value to the independent power sector.

The last point I want to make…. I know there are many members who want to participate in the debate. I'm very much looking forward to hearing from the member for Kamloops–South Thompson.

Interjection.

J. Horgan: Yeah, firming and shaping.

There's one clause in here that's odd to me. It's section 9, "Domestic long-term sales contracts." I want to draw attention to this particular section for all members of the House, particularly the member for Shuswap because I know he'll want to hear this.

The domestic long-term sales contracts. Prior to the tabling of this bill, the joint industry steering committee, which is a collection of large industrial customers — pulp mills, electrochemical companies, a whole host of large users like Catalyst, and I could list them — were opposed to independent power production because they saw their rates going up as a result. The more costs that accrue to B.C. Hydro, the more costs will flow through to them through the Utilities Commission. This was the cause of great concern.

You can well imagine my surprise when I read a press release from the joint industry people saying that this is a good bill — end of story. Not any analysis of it. Just: "We support it." That was the cost, I suppose, of this clause: "You must issue a press release."

[1835]

This is what the clause says: "The authority must establish, in accordance with the regulations, a program to develop potential offers respecting domestic long-term sales contracts for availability to prescribed classes of customers on prescribed terms, including terms respecting price, for prescribed volumes of energy over prescribed periods."

Now, what does that mean? I know that the folks on the other side will understand this. That means that prescribed customers, mostly industrial users…. I'm a prescribed customer. Everyone in this place who uses B.C. Hydro to light their home is a residential customer, and we are a class of customers. What this clause does is it allows large industrial customers to go to B.C. Hydro and cut their own deal — not at the Utilities Commission, as I read it, but at B.C. Hydro.

"Hey, I'm a big pulp mill. I can use a deal. I need a 20-year contract at $5 a megawatt hour." Done. It's right there in the bill — guaranteed low-cost, long-term contracts for some customers.

Now, I'm wondering. I'm not certain of this. I'm reluctant to step out on a limb, as you know. I'm reluctant to do that, but I'm betting that most of the customers in this prescribed class of customers have written a cheque, on occasion, to a political party represented in this Legislature. I'm betting almost 25 cents, although I don't support gaming in any form. I am in a hockey pool, and that's as far as I'm prepared to go. I don't believe that those cheques ever came to people on this side of the House, but they probably, without any doubt, went to people on the other side of the House.

We have a clause in the bill ensuring low-cost, long-term power to a class of customers that isn't my neighbourhood and isn't the neighbourhood of the member for Burnaby–Deer Lake. These are industrial users that are probably going to be pretty happy about it. And that would explain….

Interjection.

J. Horgan: "Well, they employ British Columbians, so let's give them subsidies. But we won't call them subsidies, because we just don't do that. We're B.C. Liberals. We call them something else. We hide them in bills."

That's the issue. I think this is an abomination. I think they're dressing it up to be something that it's not. I think that the Assembly of First Nations feels the same way. There are many environmental organizations, and I
[ Page 5812 ]
know with absolute certainty that there are users — citizens, ratepayers — who are going to see their rates go through the roof as a result of this bill. What the benefit to B.C. will be is uncertain to me. The rhetoric of the minister and the rhetoric we will hear from others will not satisfy my concerns about this bill. I believe it should be withdrawn.

I thank you very much for your time today.

Hon. J. Yap: It's my honour to rise to speak in support of Bill 17, the Clean Energy Act. I spent the last hour and a half or so listening intently to our colleague from the other side, the member for Juan de Fuca. Before I start into my presentation in regards to why this is such an important piece of legislation — I'm grateful that my colleague the Minister of Energy, Mines and Petroleum Resources has brought this forward — I just want to address a few points — not every point but a few points — that the member for Juan de Fuca brought up.

First of all, the member should apologize to the hard-working people — men and women, British Columbians — around the province who work in the clean energy independent power industry for when he referred to their power as junk, calling them junk. It's unbelievable that the member would cast such aspersions on these British Columbians who are working hard to help build a prosperous, low-carbon economy for British Columbia. He should apologize.

You know, the member for Juan de Fuca, towards the end, as he was starting to wrap up, talked about: "Oh yes, the NDP government in the 1990s did spend money in Hydro." I guess that list did have Hydro spend money, and I'm sure…. He was in government at the time — a ministerial assistant, I understand — so he would be quite familiar with that project that wasn't even in British Columbia, where $11 million was lost — a failed hydro project in Raiwind. Where is Raiwind?

[1840]

Hon. K. Krueger: Wherever Ali Mahmood is.

Hon. J. Yap: In Pakistan, yes. My friend from Kamloops is renowned for reminding us that this was just one of many, many missteps that that government — these members here who aspire to get back into government — made in the 1990s. So that's one.

You know, I also heard the member for Juan de Fuca, again, criticizing the tremendous investment in the natural gas assets of our province — especially up in the northeast, which is where a lot of the natural gas finds are happening, where economic development is happening. He specifically talked about the Cabin gas project, which will be a tremendous economic driver for the province of British Columbia, which will help us generate the kinds of revenues that would allow us to pay for such important services as health care and education.

On the question of natural gas, I just want to share a very interesting quote here from this member for Juan de Fuca. This is on Hansard, and he said: "The natural gas sector, as all members of the House should know, is driving our economy right now in terms of revenue…. Were it not for natural gas, we wouldn't be having the modest improvements that we have seen in our education and health sectors, and I think that that industry quite rightly is on the vanguard of moving to a low-carbon economy."

The member for Juan de Fuca is on the record as saying that natural gas is a great thing, and for the last hour or so I heard that member cast aspersions on the natural gas economic driver that is helping our economy, the northeast part of our economy. So that was one.

We all know. As the minister with responsibility for climate action…. That member should know that natural gas is a great transition fuel. It's a great transition fuel as we move long-term into the low-carbon economy of the future, as we deal with climate change. Natural gas is a good fossil fuel, and we have loads of it in British Columbia. We want to get at it. We want to support the industry to help us transition to a low-carbon economy. So that is just one.

Another point that the member for Juan de Fuca said…. I'd just like to remind some members on the opposition who were not elected in the '90s, and maybe they missed this, that in the 1990s there was no oversight of B.C. Hydro. To suggest — like that member, and I'm sure we'll hear from others with this Clean Energy Act — that suddenly there will be no oversight is simply not true. BCUC will continue to have a role in oversight over the rates that ratepayers in British Columbia will pay. That will continue.

I've got a couple more. The member for Juan de Fuca spent a bit of time early on criticizing….

Interjections.

Hon. J. Yap: Oh, I was listening. Yes, yes. The members remarked that maybe I wasn't listening. I was listening, as I'm sure all my colleagues on this side were listening, intently, to the words of the member for Juan de Fuca.

There was a point earlier on in his presentation when he talked about this opening up of…. Why are we wanting the northwest transmission line investment? Why do we want to do that? Nobody is there. Well, granted, he did say there were some prospective mine projects up there.

It's exactly the kind of investment we need to have, Madam Speaker, to encourage not just the mining industry but the clean, renewable power generation that can happen in that part of the province and that will help us achieve our goal of being a clean energy powerhouse in British Columbia.
[ Page 5813 ]

There were so many more. I just want to address one more that was covered by the member for Juan de Fuca. He talked about: "Oh, why look at this new technology — smart-grid technology, digital technology — as a way of encouraging conservation?"

[1845]

This is very important, Madam Speaker. We want to encourage conservation. He talked about retrofits, but we didn't hear him…. I didn't hear the member give any credit to this government for investing in retrofit programs through the LiveSmart program.

We had a very successful first tranche of $60 million that was taken up for retrofitting homes around the province and a fresh $35 million that's available to help British Columbians retrofit their homes, but we didn't hear that from the member. I just wanted to address that before I get into the gist of my presentation on why we need to have this landmark piece of legislation, the Clean Energy Act, Bill 17.

I see this, as was mentioned in earlier debates, as another indication of the exciting times here in British Columbia. I believe it was my colleague from Peace River South, the Minister of Energy, Mines and Petroleum Resources, who said: "These are exciting times in British Columbia." And they really are, because we are at the forefront of….

Let's step back a bit. First of all, we've just hosted the entire world at the most successful Winter Olympic Games in the history of the Olympic movement, right here in British Columbia. We've just hosted the world. We've shown what tremendous assets we have, how blessed we are here in British Columbia.

We are an open trading economy of 4½ million people living in harmony, with a pretty high standard of living and a strong economy, which is what we want to continue to build right here in British Columbia — a strong economy for our children and their children. The Clean Energy Act, as we move towards the low-carbon economy — the clean energy, the clean technology economy — will help us get there.

I view the Clean Energy Act and what it will bring for British Columbia as very much a part of our climate action plan. Being the minister responsible for the climate action plan, that is an issue that is very important to me, and I just want to set some context here, if I may, Madam Speaker.

We know that members of the opposition seem to sometimes have a position and sometimes not have a position on climate change. They campaigned against our climate action plan, and their position was totally rejected by British Columbians. It's important for the proper context of why the Clean Energy Act is such an important part of our climate action plan, of our economic plan.

Interjections.

Deputy Speaker: Members.

Hon. J. Yap: I'd just like to share some observations by commentators. Here's one from a highly respected journalist from the Times Colonist, and he had this to write about the NDP's position on climate change. Here's what Les Leyne had to say.

He said: "Her position" — referring to the Leader of the Opposition — "is a confusing mush of contradictions. When there's a choice between doing the right thing about climate change or gaining an edge over the Liberals, the NDP has taken the latter option every time." That's on climate change. There you go.

Here's another observation from another highly, highly respected journalist from the Globe and Mail. Here's what Gary Mason had to say about the Premier: "So the Premier deserves enormous credit for the bold steps he's taken on the climate change file." That's what was said; this is all part of the quote. "I say don't listen to the NDP's leaders, because what they are doing is playing politics with the planet. British Columbians should be demanding to know what the NDP's grand plan is for fighting climate change." Demanding it. Yeah, Gary Mason said that.

Interjections.

Hon. J. Yap: Gary Mason said that, yes.

I'm about to wrap up the quote here, and I do note the hour. "The NDP's plans for reducing greenhouse gas emissions are as vague and fuzzy as much of the party's rhetoric around the issue suggests."

[1850]

That's just for some context. As I said, British Columbia is blessed with natural assets. One of them, which didn't happen accidentally, is our tremendous investment in heritage hydro assets. Two generations ago the very visionary government of the day, under Premier W.A.C. Bennett, started British Columbia down the path to become the potential clean energy powerhouse — that potential that we have.

[Mr. Speaker in the chair.]

This bill, the Clean Energy Act, Bill 17, will help British Columbia, will help us here today to build on that advantage — those assets that we received and that generations of British Columbians have benefited from over these last four-plus decades.

The member says that we're selling it to the private sector. We know that the members of the NDP take their marching orders from unions. We know that. We know that the NDP have been told by their union masters that they have to oppose independent power production because that's just not on. We know where they take their marching orders from.
[ Page 5814 ]

In the time that I have left…. I do realize the hour. I will take the advice of my dear colleagues and reserve my right to speak when we return to the House.

Hon. J. Yap 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 6:53 p.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF HEALTH SERVICES

(continued)

The House in Committee of Supply (Section A); N. Letnick in the chair.

The committee met at 2:33 p.m.

On Vote 37: ministry operations, $14,612,943,000 (continued).

A. Dix: Yesterday I asked the minister…. I asked him several times, but on the final occasion he offered an answer with respect to the wait times for MRIs in Nanaimo and Victoria. He was referring to February data from what he described as the website, and he said that wait times were 179.7 days at Royal Jubilee and Victoria General Hospital and 181.7 days at Nanaimo Regional Hospital.

Now, on the website the most recent information available comes from the month of February, as the minister suggests. But it says: "Currently wait times for non-emergency MRIs are approximately 11 months in Greater Victoria and approximately 14 months in Nanaimo." That's what the health authority says, which obviously are very different numbers. So I just wanted to know whether the minister has misspoken or whether he has other numbers.

[1435]

Hon. K. Falcon: I am advised by staff that those are the most recent numbers that were provided by VIHA. They are more up to date than the ones that are posted on the February website. Those numbers have not been brought up to date. My understanding is that they bring those up to date subsequent to board approval. So it goes to the board, the board is given the latest update on where things are at, and then it gets posted on the website.

A. Dix: Just to finish off our round on MRI wait times. I had asked the minister for the wait times in Prince George yesterday, but it was a long list, and he didn't get to it. I wonder if he'd just give us Prince George.

Hon. K. Falcon: The wait for non-urgent elective MRIs at University Hospital of Northern B.C. is 5.5 months, I'm advised.

A. Dix: I'm going to move on to another topic that we briefly canvassed in question period last week. That's the issue of the Compass contract on Vancouver Island and on recent outbreaks of C. difficile.

The minister asserted in question period, I'd say with some theatrical flair, that the problems in Nanaimo Hospital in general had nothing to do with cleaning, which seems to be an extraordinary conclusion. But there it is; that's what he said. He said it adamantly, and he said it with respect to C. difficile in particular.

We know that is not the case, and we know it from documents released by the Ministry of Health to the Nanaimo paper. Officials of the Ministry of Health — and I'm quoting them, hon. Speaker — said with respect to the C. difficile outbreak in 2008 that housekeeping is the biggest problem.

It, of course, identified other problems, as there always are in these issues. The hospitals are overcrowded, and there are issues that the minister mentioned, including people's responsiveness to antibiotics.

But the minister asserted and asserted unequivocally, as I said, that it had nothing to do with housekeeping when in fact…. Let me quote the minister because sometimes the minister complains that we don't quote him accurately. So referring to C. difficile, the minister started listing off journals — the New England Journal of Medicine, the Archives of Internal Medicine. He didn't refer, of course, to anything specific in here; it was question period. Then he says: "For the member to…suggest this is about housekeeping is just dead wrong."

Presumably, he has reviewed those FOIs, because this was a pretty serious issue in health. His own staff say that it is about housecleaning. In fact, it's more about housecleaning than all those other things. How does he reconcile his unique position of saying that it's not about housecleaning with all of the mountain of evidence that says it was?

[1440]
[ Page 5815 ]

Hon. K. Falcon: The member is trying to mix up two different events. There are the FOIs the member refers to. He's referring to an outbreak of C. difficile at Nanaimo General from two years ago. The member can check my comments on record when I did a scrum. I acknowledged at the time that the performance of VIHA in the C. difficile outbreak from two years ago was less than acceptable. My recollection is that I apologized on behalf of government, said that we would do everything we could to do better, and that's exactly what took place.

A series of changes were implemented in consultation and cooperation between not only the internal reviews that were undertaken at Nanaimo General but also through the work that was done by B.C. Centre for Disease Control, which came in and made a series of recommendations. The member is correct to point out that it wasn't just housekeeping issues, though that was part of the challenge two years ago.

It was a range of issues that include overcrowding, which is one of the reasons why, of course, we're now investing $40 million — I believe is the number; I'll double-check it — to triple the emergency department at Nanaimo General. It's exactly why those investments are being made.

Now, the most recent case that the member is talking about is where in question period the critic tried to assert that the recent issue of C. difficile outbreak at Nanaimo General was a direct result of contracting out. That's what the member opposite said; that's what the Health critic said.

The Health critic is making a rather astounding assumption here. He, without any knowledge of the facts, is just making an assumption that it is not just housekeeping. It is because of contracted housekeeping. That is the position of the members opposite. I pointed out quite rightly that the member is just simply dead wrong.

In fact, the independent audits that are undertaken on cleanliness in our health care system — which, by the way, were not undertaken by the NDP at all…. They had no way of actually gauging cleanliness levels under the NDP administration, of which that member was the chief of staff, because they didn't do any audits.

The audits that came out last year by Westech, done independently, actually pointed out — and I made this clear to the member — that of the 16 facilities that failed to meet the high standards set, the 85 percent benchmark that was set, nine were actually in-house cleaners and housekeeping — apparently the very method that the member opposite and the NDP believe all the facilities should be at. Only seven of them were contracted-out service providers.

I guess if I am to follow the rationale of the member — I assume he would at least base it on evidence — then it should be that we should contract all of the housekeeping because of the results that we found in the independent audits. But of course, that would be not appropriate either.

The fact of the matter is this. Housekeeping is housekeeping. Whether it's being delivered by contracted-out service or being delivered in-house, the only concern the government has — and that the health authority should rightly have — is that the standards are meeting the benchmarks we set. If the standards are not meeting the benchmarks, then we will implement whatever changes are necessary to ensure that they meet the benchmarks.

That is the discussion we've had. I know the critic is trying to confuse the two issues and talk about a story that took place two years ago and trying to mix up the two cases and suggest that I've declared something that is not the case.

Is housekeeping important? Of course it is. Handwashing is extremely important. Handwashing amongst health professionals is extremely important. C. difficile, in the most recent outbreaks…. As we know, a number of those cases came from the community and were brought to the hospital. In a crowded emergency department, naturally, that is something that is highly and readily able to infect others. That's what happens.

A. Dix: Isn't that norovirus?

Hon. K. Falcon: And norovirus. There were both. There was norovirus and C. difficile.

Interjection.

The Chair: Order, please. Order, please.

Hon. K. Falcon: Yes, I am saying that a handful of the C. difficile cases also came from the community, and the same with the norovirus.

[1445]

It's important to know that, because if you look at the cases of norovirus or C. difficile, especially in the case of norovirus these are challenges that are faced wherever people gather — in the community, on cruise ships, in hospitals. That can be a challenge.

Nanaimo General was dealing with both of those cases, both norovirus and C. difficile. I am advised and was advised that a number of those cases of C. difficile were brought from the community into the hospital — not all of them; some of them — and that created real challenges.

Managing C. difficile is a challenge in every hospital. I'm sure the member would know this, and that's why I quoted from those journals for the member — to recognize that this is not an issue that is unique to British Columbia. This is an issue that is dealt with and is a challenge around the world. In every single health care and hospital facility the challenge of dealing with C. difficile is a big problem, and it is getting more difficult because of the increased use of antibiotics. We are now seeing strains of C. difficile that are more resistant to drugs and antibiotics, and that is making it even more challenging for hospital settings.
[ Page 5816 ]

The issue of cleaning is one part of the puzzle. There is just no question about that. But for the member to suggest, as he did, that the whole issue was about contracted-out cleaning was just, frankly, wrong.

A. Dix: The minister said what he said, and he wants to clarify the record. That's fine. I'd say two things about the 2008 outbreak. All of those facts and all of those FOIs — I'm glad to hear that the minister has read them, because we'll be asking him questions about them — I think give two strong messages: (1) housekeeping was completely inadequate, and (2) the audit process set up by the government was completely inadequate, according to officials of the Vancouver Island Health Authority.

I have a specific question, since the minister — or the government; he wasn't minister yet — after 2008 automatically renewed the Compass contract. I have a question for the minister with respect to an outbreak that occurred in December 2009. Did the health authority's infection prevention officer order the health authority to bring in non-contracted staff in December and this spring to help address these cleaning problems?

Hon. K. Falcon: I don't know for certain if that was the case, as the member declared, but it wouldn't surprise me if additional cleaning staff was brought in. One of the recommendations coming out of the events that took place two years ago, which I readily acknowledged at the time were less than acceptable, and I think that VIHA did too….

[1450]

They brought in a number of changes to address this issue so that in the future, if they have an outbreak of C. difficile…. Remember, C. difficile is present in the hospital virtually at all times. At any one time there are usually a half-dozen or five cases of C. difficile.

The issue is that if they have an outbreak where they see more than that particular number, they automatically initiate their hospital incident command infrastructure. That is a structure that was put in place as a result of the events two years ago.

What happens when they initiate the hospital incident command is that there's increased surveillance in monitoring. There's increased cleaning and changed cleaning solutions. There are contract precautions for care providers, placing patients in private and semi-private rooms, cleaning of common areas, etc. They go through a whole range of issues.

One of the things that is key is attention to detail in all aspects, including hand hygiene, which is so important, too, for the transfer, particularly amongst the health care professionals. You would think that would be a matter of course, but I think this is something that increasingly we're discovering across Canada is not necessarily done as a matter of course. It's something that really has to be emphasized and monitored across all the health authorities.

There are a number of steps that they will take when there is an increase or an outbreak of C. difficile. It's entirely appropriate that they do so. Enhanced cleaning and possibly even bringing in enhanced support to deal with that outbreak is exactly the right approach. In fact, it mirrors what's happening over at Fraser Health.

Fraser Health monitors C. difficile outbreaks in exactly the same way. If there is an outbreak, they send a special team that goes into that facility and immediately implements a whole range of advanced cleaning and precautionary measures that are put into place to control and damp down and clamp down on the outbreak itself.

A. Dix: I just want to ask this, because this was after a crisis at the hospital had taken place. This was the C. difficile outbreak that started — and this part of the information is from the paper — on November 17. The outbreak was declared on November 17 — right?

The Compass Group, whose contract had been signed — whose contract includes, as I understand it, the responsibilities for just these very contingencies; the contract that had been renewed in 2009 by the government automatically without bid — informed the health authority. They informed the health authority in December 2009 that they couldn't do the kind of cleaning that Dr. Wale, the VIHA medical director for infection prevention and control, had instructed.

They could not do the task of the top-to-bottom deep cleaning, not because their workers aren't excellent — their workers are excellent; they work very hard — but because there weren't enough resources. They didn't have enough resources under the contract to do what was required in this circumstance to save lives.

My question to the minister is very simple: has this happened? Did Compass say, "No más, we can't do this" in December? Were people coming in — regular employees from Campbell River and Port Alberni? Were they brought in, where they haven't contracted out, to help do this work? Did this occur again in March?

These are the kinds of incidents that, since the minister became minister, he says have nothing to do with housekeeping. My question is very simple. These were major actions. Surely the minister was informed. Did this happen? Why did it happen? Why was Compass not able to do the work that we paid them millions of dollars to do?

Hon. K. Falcon: I know the member fixates because he receives enormous political support from Hospital Employees Union, and because of that he fixates on this whole issue of contracting out.

[1455]

That's really the issue here. The member won't admit it, but that's exactly what it is. In the Health critic's world….

A. Dix: People die.
[ Page 5817 ]

Hon. K. Falcon: Well, the member says that people die, and here and now, he has reached the height of irresponsibility, because now the member is suggesting that the only reason people who, sadly, unfortunately, did die, Member….

Sadly, people die around the world all the time as a result of C. difficile infections, and for that Health critic to try and suggest that the only reason that's happening is because there happened to be contracted-out health services is a terrible, terrible slur on those individuals that work extremely hard…

Interjection.

The Chair: Order, please.

Hon. K. Falcon: …in that hospital to try to deliver top-quality services. I think it's actually repulsive…

Interjection.

The Chair: Order, please.

Hon. K. Falcon: …that the member would actually suggest that.

A little bit of an education for the member because, apparently, he cannot get out of his HEU blinder which compels him to argue, against whatever the facts are, that the only kind of cleanliness, apparently, in the NDP world is Hospital Employees Union cleanliness. Apparently, they're the only ones who can keep things clean.

Now, that's in spite of the fact that the independent audits demonstrated very clearly that the majority of the facilities that failed to meet the bar were actually in-house cleaning facilities, exactly the kind of people in the union that that member is entirely bound to.

Member, you're just completely wrong when you say that, and the facts don't support you when you say that.

Interjection.

Hon. K. Falcon: You can keep saying it, but — Chair through to the member — the critic is just simply wrong.

What facts should the critic be aware of? Well, the critic should be aware that infection control is important for all health services and providers. A comprehensive infection control strategy has to involve appropriate surveillance, cleaning, disinfection, sterilization, hand hygiene, contact precautions, personal protective equipment guidelines and incident investigation. All of those issues are important to dealing with outbreaks when they take place.

The other thing I might add, and one of the reasons why we have invested $460 million in over 30 emergency departments across the province — including Nanaimo General, which is getting a $46 million expansion, a tripling, in fact, of the emergency department space — is, in part, to deal with some of these things.

When we were elected in 2001 after a decade of a government of which that member was the chief of staff, sadly, there was very little capital investment that took place in emergency departments and, indeed, in health facilities around the province. Most of them that we inherited are health facilities that are over 40 years old.

I digress, though. There was one that they did build, but it sat empty for ten years until the Jimmy Pattison Pavilion was finally operated by ourselves. We got people in there and are now operating the facility. It sat empty, and the only expense that was paid on it was the heating bills they paid and the security to keep homeless people from trying to live in this heated building that the NDP kept going for ten years, which was an extraordinary waste of money. But I digress.

The issue here is that the member is confusing two issues. In 2008 they did not do a good job at Nanaimo General. I've said that on the record. I said that shortly after I became Health Minister, and as my memory recollects, I believe I apologized on behalf of the fact that I don't believe that VIHA did a good job. I think that that was supported by the recommendations that came out from the B.C. Centre for Disease Control.

Look, at the end of the day, the people that work in these facilities are human beings. They do their very best, but they are not perfect. The system can always try and improve, and the system should always try and improve.

The recommendations that came out as a result of the '08 situation have now got a situation where…. As I mentioned, they've now got an infrastructure in place that will see a hospital incident command initiated when they have an outbreak that goes beyond the normal levels of C. difficile that they are commonly seeing in hospitals, and a whole bunch of issues and criteria will kick in to deal with those outbreaks.

That strikes me as entirely the right approach: that you learn from whatever mistakes may be made, recognizing that we don't profess or pretend at any time that we have a perfect system. It should always be continuous improvement.

It is one of the reasons why we set up the Patient Safety and Quality office headed by Dr. Doug Cochrane, a noted neurosurgeon. Dr. Cochrane looks across all the health authorities to share best practices and ensure that what is working in one health authority is shared across all health authorities. That, I think, is entirely as it should be.

[1500]

The Chair: At this point I just want to remind both member and minister to talk through the Chair. Also, this room is smaller than the big House, so if we can tone down the passion a little bit, it'd probably be more
[ Page 5818 ]
beneficial for everyone here, and to continue to keep that respect — all right? Thank you.

Go ahead.

A. Dix: The point to the minister is that these are serious issues. By the way, the Compass workers are represented by the HEU as well. To suggest that this is about union matters is just ridiculous. Any Health critic under these circumstances would ask questions on C. difficile — anyone who took these situations seriously. It involves a whole bunch of issues, as the minister well knows, most important of which is that these issues of infection control can mean life and death. That's exactly what I mean, and exactly why we're asking these questions.

I asked the minister a specific question twice. He's gone off on these long tangents. The specific question as to whether the health authority was forced to order the Nanaimo hospital, because Compass…. This was a contract that was renewed under the government. They weren't able to supply adequate resources not because the staff wasn't good, but because they couldn't get enough staff to do the necessary cleaning of the hospital, the top-to-bottom deep cleaning of the hospital, within a two-week time frame that Dr. Wale had called for.

I'm asking, for the third time, a specific question to the minister, to which he knows the answer. It is beyond the scope of this to be able to go off on any tangent that you feel like. He knows the answer to this question, so I'm asking him specifically: did that happen? What were the circumstances under which that happened?

Why was it at that time that Compass — just after the government had renewed the contract with them and a year after the events to which the minister is referring, to which he says he apologized — was unable to do a basic job ordered by the health authority?

Hon. K. Falcon: As I mentioned to the member in my last answer, the fact of the matter is that what they do — I think, quite appropriately — when they have an outbreak, as they did in '09…. They brought in additional resources from Ladysmith and Chemainus to do a full-out assault on all the issues associated with trying to manage a C. difficile outbreak.

It's actually very similar to what happens in other health authorities. I mentioned Fraser Health, for example. In Fraser Health what they do when they have C. difficile outbreaks that are above the normal rates that one would expect to see in hospital facilities, Fraser Health's infection control teams…. They've put together special teams that will undertake additional actions to move into that facility and deal with the issue and the outbreak.

In the last two years Fraser Health's overall C. difficile rate has decreased by approximately 35 percent, and in the case of Burnaby Hospital, by 60 percent, as a result of this approach. I should point out to the member that Fraser Health, by the way, has contracted out services on their cleaning.

There is a very good example of some very good results being done with contracted-out cleaners. The member is right to point out that often they are still HEU workers. I acknowledge that. But the member knows what the HEU agenda is in terms of…. They believe that there shouldn't be any private involvement in cleaning in the hospitals, and the NDP reflexively supports them in that without fail. There's no question about that.

We agree to disagree on that, but I think that the approach the VIHA took…. It's not a question of ordering; it's a question of saying, "We have an outbreak. Let's bring some resources here and deal with the outbreak," just like they do in Fraser Health with their health infection control team. They bring them in, and they deal with the outbreak. By doing that, they've managed to bring down the C. difficile rates.

Where that is working and effective, I would hope and expect that other health authorities would follow those kinds of successes.

A. Dix: My question is really very simple. Did Compass in December 2009 tell the health authority, contrary to the requirements of their contract, that they would be unable to do a top-to-bottom deep cleaning of the health authority? That's a simple question, that's the question I asked, and the minister presumably has an answer for it.

Hon. K. Falcon: I don't have an answer.

A. Dix: Were staff brought in during the current outbreak, the C. difficile outbreak, in April under the same circumstances?

[1505]

Hon. K. Falcon: The answer is yes, and that's entirely appropriate. I want to commend VIHA for doing that — bringing in additional resources when they've got an outbreak, to manage that as aggressively as they can. I just want to state for the record that I want to commend them for that.

A. Dix: It wasn't Compass that brought them in. It was VIHA bringing in — shall we say, for want of a better term — facility bargaining association members from other hospitals on Vancouver Island.

Hon. K. Falcon: It's a VIHA decision to bring in additional staffing resources. That's what they did to deal with the outbreak, and I commend them for it.

A. Dix: The minister referred in 2008…. This is a discussion of the audits. The minister should know that I
[ Page 5819 ]
think that one of the lessons of this is that we need to improve that process dramatically. Essentially, what we have is a site-tested audit.

In 2008 when housekeeping was failing, according to the evidence provided by VIHA itself…. It was failing to do the work needed and was a principal contributor to the C. difficile outbreak in 2008. Throughout that period, according to the audits, the Nanaimo Regional scored above 90 percent. Doesn't that suggest to the minister that the current process of auditing isn't the appropriate one?

Maybe if he doesn't want to listen to me and he thinks I'm too partisan or something, how about Dr. David Forrest, who recommended the same — that bioluminescence techniques be employed? He promoted this as a kind of measurement to housekeeping, to no avail, in 2005 when the contract to Westech was awarded.

Or how about the repeated statements in these FOIs that "the wholehearted process needs to be revamped to include more objective measurements of performance" — again recommending bioluminescence?

I'm suggesting to the minister…. This is not to criticize what's happened but to say that this is the evidence from the people in VIHA who went through this experience going forward. Isn't there an argument to go away from this visual testing system? While housekeeping was failing and cleaning was failing in 2008, so much so that the minister apologized for it when he became minister…. If that was the case, how was that consistent with having a 90 percent success record at Nanaimo Regional General Hospital?

Doesn't that argue for all of us to say that we need to improve that process and change the processes that we use to assess the quality of cleaning?

Hon. K. Falcon: I think that it's important to, first of all, recognize that B.C. was actually the first province in Canada to implement provincewide quality and cleanliness standards to all of the hospitals and all health authority–managed residential care sites. Now, it is entirely fine for the member to suggest how that can be improved, and bioluminescence may be one way to try to improve that.

But Member, in fairness, for ten years you were also in government, and you were chief of staff of that government. You had every opportunity, if this was such a burning issue of great importance, to implement those exact kinds of things, but you never did. That's fine. We're proud of the fact that we were the first.

Can we improve on audits? Possibly. I'm always open to suggestions on how things can be done better. The fact of the matter is that these third-party audits are unscheduled. They're unannounced, they just show up, and they do inspections and look at the cleaning standards in these facilities. I think that that is a level of rigour that you don't see anywhere else in the country. I'm always open to the idea of how it can be improved, and we'll look at whatever suggestions may be put forward.

I know that the member has done enough homework to know that the challenges of outbreaks in hospitals — whether it's norovirus or C. difficile or MRSA — are not unique to Nanaimo General. They're certainly not unique to British Columbia. They are, indeed, not even unique in Canada.

[1510]

These are issues that are being dealt with around the world. It is not just a case, as the member would say, of not having contracted-out cleaning services. Any reasonable person looking at the evidence would deduce that.

One of the reasons why, when we make substantial new investments, as we are doing at Royal Jubilee, for example…. I'll use that as an example. The new $350 million tower that is being built here, just in the greater Victoria area, that has got individualized rooms for virtually 90 percent of the patients that will be in that hospital…. One of the reasons why that is the case is for infection control.

Again, you take an aging facility that has multiple ward beds, and that is a challenge when controlling issues around infection. When you have private rooms like the new hospital facility will have, that makes a big difference in your ability to control.

But they've done more than that. They've also got special hand-cleaning stations interspersed around each floor so that health professionals are easily reminded. They're a very bright colour in a little sort of area, if you can imagine sort of a fountain drinking area, with a very bright colour in the background to remind health care professionals of the importance of washing hands. That seems like such a simplistic thing, but it is hugely important for the control of the transfer and spread of infections like C. difficile, MRSA and, of course, norovirus.

So this is an area that we have to have a constant improvement underway within the health authorities. I have no hesitation in acknowledging where we fall short, because at times we will. I wish I could say to the Health critic that there will be a day where there will never be an outbreak of C. difficile, even a major one. Unfortunately, even one where some individuals who are usually immune-compromised already, may even pass away. There is no hospital that I am aware of in the free world that has no cases of C. difficile or MRSA or other outbreaks, on occasion.

So the issue is: how is it being dealt with? In 2008, quite correctly I believe, Nanaimo General was taken to task in terms of how they handled it. It turned out that…. There was a whole range of issues, and I won't belabour them, because the member would have read the reports, but the reports pointed out how improvements needed to be made.

Those improvements were made. Teams were put in place to deal with these kinds of things, to make sure that a whole range of new procedures were brought into place, including surveillance and detection, which is im-
[ Page 5820 ]
portant for identifying early on when the challenge is starting to happen so that you can come in with extra resources, if need be, from other facilities and deal with that, and deal with it aggressively.

I will say this. I expect the health authorities, and certainly under the oversight of the patient care and safety office headed by Dr. Doug Cochrane, to continually try to improve on everything they do, including infection control. It is a challenge not just at Nanaimo General but at facilities around the world.

A. Dix: Of course, we know that Westech apparently believes that there's no connection — or the president of Westech apparently believes that there's no connection between hospital cleanliness and infection control. We know that the audits came in because severe cuts were made not just in contracted-out areas but in all areas of cleaning in that period.

I think that what the evidence shows, and the evidence the FOI shows, is that the audit process is a failure. I mean, what larger failure can you have than one of the best possible grades you can get being given at a time when the minister has to apologize to the people of B.C. for the failures of housekeeping under the Compass contract?

So what this shows, what the Nanaimo situation shows, is that the audit process, which should be a protection and a source of confidence, isn't. The minister is quite right to say that you're not going to get rid of all hospital infection, in fact, because there are issues around the world and because our hospitals in B.C. are increasingly crowded. With hallway medicine becoming the standard, there are going to be issues of infection control.

The minister knows this. This is a reality, and we have to do all of it. We have to improve housekeeping. We have to initiate programs around handwashing. We have to address issues in the hospital to ensure overcrowding is addressed. We have to deal with the reality of the failure of antibiotics to deliver as much as they used to. We need a whole team of people in every hospital. That's the argument — and I know that the minister doesn't want to hear it — for having everybody in the hospital on the same team.

[1515]

In any event, I'd like to ask the minister whether he…. Now, in 2010, a year after the Compass contract was automatically reviewed, and six months after — as I understand it, and the minister doesn't know about it — they were unable to fulfil the terms of their contract during an outbreak, the government has decided to, in fact, not continue with the contract with Compass. I'd like to ask the minister if he would explain why that's the case.

Hon. K. Falcon: The member is wrong in his characterization. Actually, they had an option to extend the contract for a further five years. To VIHA's credit, they built into that contract a provision that allows them, with six-months' notice, to go out to the marketplace, to test the marketplace, to see whether they can get additional services and perhaps even better value. That's a right they have exercised. They have every right to do that, and good for them for managing their operation appropriately.

But the member is far too pessimistic and negative, unfortunately, I think, around this issue. Actually, if he travels outside of British Columbia and goes and asks about infection control and management around the other provinces, what he will find is that British Columbia is seen as a leader in this regard.

In fact, in dealing with major outbreaks like when we had the SARS incident, B.C. was recognized for its leadership in dealing with SARS. H1N1 was another example, I think, where B.C. really came to the forefront in terms of our ability to manage these kinds of things.

So why is B.C. different? Well, actually to the member's point, the member may not be aware, but there is a Provincial Infection Control Network.

In addition to the patient safety and quality office headed by Dr. Doug Cochrane, who I talked about earlier — a noted neurosurgeon and certainly well-regarded in the medical fraternity and someone that has just been very diligent in looking into a range of issues to ensure that best practices are being shared — we do also have the Provincial Infection Control Network. That was established in British Columbia in 2005 to maximize the coordination and integration of health care–associated infection prevention, surveillance and control activities for the entire province.

I believe that it's one of the reasons why British Columbia continues to be viewed as a real leader in this regard. It's got a central office and a community of practice comprised of experts involved in the prevention, surveillance and control of health care–associated infections across the continuum of care. They develop the new and the latest best practices, so they're constantly monitoring around the world to determine what are the emerging best practices and making sure that those best practices are shared amongst our health care system.

As I say, I think that the network has really done some very exceptional work. Examples are influenza, H1N1, SARS. They've done a lot of very good work on antibiotic-resistant organisms prevention and control management of health care workers in a number of areas. There is important work going on, on exactly that point.

Having said that, I do have to also be honest with the public that even with all of those experts in place and all of those experts providing advice on best evidence and sharing that best evidence, at the end of the day, we still have a system that is being operated by human beings, and human beings are not always perfect. They sometimes can make mistakes. I'm sure that the critic would acknowledge that he's probably occasionally made mistakes. I certainly don't have any….
[ Page 5821 ]

Interjection.

Hon. K. Falcon: Exactly, and I'm the same way. I make mistakes too, and I try to acknowledge when I make a mistake.

I also try to acknowledge on behalf of the health care system when I think we can do better, and the 2008 outbreak in Nanaimo General, based on the information that I received shortly after becoming minister, certainly suggested to me that we could have done a lot better. I had no problem acknowledging that.

But as I say to the member with the greatest of respect, I think his overly pessimistic viewpoint and his narrow interpretation that this is all entirely an issue around contracted cleaning is certainly not an opinion that is going to be shared by most experts in the field that recognize that infection control is a much broader effort and, frankly, a much more complex effort to deal with.

Cleaning is an important part of that — there is no question — but there are a whole bunch of other areas that I am pleased to say the Provincial Infection Control Network is looking at, as is the patient safety and quality office.

A. Dix: You see, sometimes I don't think there's what is called a conversation going on. I just finished an intervention when I talked about the various elements, and there are more than the elements that I listed going into these issues, and the minister says in response: "Well you're just talking about contracting out."

[1520]

What is more disconcerting…. I don't mind the minister deliberately mischaracterizing my views. I've come to expect it. On that performance measure, he's doing very well.

But the performance measure that is less gratifying to people is when you ask a direct question as to why the Compass contract is being terminated and what the reason is for that. That was the question that I just asked. The Chair is listening carefully, so he heard the question I just asked.

That was a direct question, and while the minister's reverie is very interesting, that's the question I asked, and I guess that's the question I'll have to repeat for a second time, which is kind of standard practice in these estimates.

Hon. K. Falcon: Well actually, Member, what you need to do is listen, because I gave the answer. Apparently, the member is not listening, and I'm sorry about that, Chair, because the answer I stated very clearly was that this was a contract that had a provision that allowed VIHA to exercise a provision in the contract that allows them to go out and test the marketplace and determine whether they can get services perhaps at a better price, perhaps better resources — whatever the case may be.

That's called the marketplace, and that's called a contractual provision, and it was exercised. I don't know why the member is apparently bothered by that. I have no concern with that at all. In fact, I commend VIHA for signing contracts that give them that provision.

They took the opportunity to extend the contract initially. They had a five-year provision that allowed them to extend it for a further five years. They did that. It also had a contract provision that allowed them after six months — as I understand — to exercise an option to go out and test the marketplace. They're doing that. Good for them.

It may be that they'll test the marketplace and decide that they can't achieve better value than what they're getting, or it may be that maybe they can find a different service provider that can provide them better services at better value. I have no idea. That's why they're testing the marketplace, presumably, and that's exactly what I said in my first answer.

A. Dix: Why did they exercise that option?

Hon. K. Falcon: I assume because it was a prudent thing to do to go out and test the marketplace and determine what they can achieve in the marketplace. I don't have any problem with that at all.

A. Dix: So the minister is saying that it has nothing to do with the failures of 2008, the failures of 2009? It has nothing to do with those things; they're just deciding to test the marketplace? That's fascinating. I guess what the minister is also saying is that it's a possibility, contrary to what VIHA seems to have suggested, that Compass will retain the contract.

I want to move on to another area of questioning, because the minister doesn't seem to want to provide an answer on that question. We'll ask him another set of questions.

So in Fraser Health, and I'm referring the Minister to an April 22, 2010 document…. Again, he was asked about this in question period, but he chose not to answer. He had other things he wanted to say at that time, so we'll spend some time on it here.

Can the minister explain why it's the case that the sterilization department, which is a key part, I think, of any safe process in hospital, in Fraser Health is being reduced, why — given the central importance of sterilization that we've seen in our very discussions in the last day on the situation in Kamloops, where the issues are, as well, very serious with respect to sterilization — the minister chose to cut, as part of a cut by 14 percent in the elective surgery budget there, the sterilization? Because it seems to me, in that case, that sterilization is one of the three critical components, really.

I mean, if you're going to schedule surgery, you need the staff who are going to do the surgery, you need the
[ Page 5822 ]
operating room time and you need sterile and safe equipment. I'm just curious, because the minister didn't respond to it in question period, whether he would just enlighten us as to why he did this, and then we'll happily move on to questions about surgeries.

[1525]

Hon. K. Falcon: First of all, I think it's important to recognize that Fraser Health is recognized by the International Organization for Standardization, which is commonly known as ISO 9000, for meeting their very high-quality management system standards in the sterile processing departments. So they meet the highest international standard that is available and is internationally recognized as the highest standard that you can possibly achieve. I want to commend Fraser Health for doing that.

So what has Fraser Health done? They have made significant investments — new capital equipment in the sterile processing department, sterilization department. They've implemented best practice standards, and they've increased staff education.

But they are making some staff changes which affect about seven positions, and to put that into context, there are 230 individuals that are working in the health authority in this area. The positions include a staffing clerk at Royal Columbian, a transport aide at Burnaby Hospital, existing vacancies at Ridge Meadows and Peace Arch, and they are reclassifying two full-time positions as part-time.

Now to the members opposite, I know that any change in the health care system apparently is the end of the world as we know it. But one of the things that we are asking the health care system to do is to manage the cost pressures because we know that even with the 15 percent increase that we're providing in budget over the next three years — an additional $2 billion — there are still pressures on costs. So they're looking right across their system to make sure they're delivering services and managing them in the most effective possible way. That's exactly what's happening there.

I think it's also important to recognize that in Surrey we've got a bit of a unique situation in that we have the new $240 million out-patient hospital that's currently under construction — ahead of schedule, I'm pleased to say. Thankfully, when that opens there will be approximately 12 FTEs, which is a government term for full-time positions. So 12 FTEs will be required in the sterile processing department to support the expanded surgical services that are going to be operating as a result of the 450,000 additional procedures that will take place at that out-patient hospital, relieving greatly some pressure on Surrey Memorial.

So is that a change? Yes, a very minor one — mostly dealing with positions that aren't being filled, a staffing clerk and a transport aide. But nevertheless, I think it's entirely appropriate that Fraser Health try and manage their resources as effectively as they can, recognizing that they meet the highest standards possible in their sterilization department.

A. Dix: Yesterday we deferred a discussion on surgeries and the number of elective surgeries that are being proposed by the health authority.

I wanted to ask the minister…. Why don't we start…? We were just there on Vancouver Island. It was a short tour of the province. Elective surgeries, according to Mr. Waldner, were reduced by 750 last year on Vancouver Island as a result of the budget crunch facing the Vancouver Island Health Authority at that time. I'm wondering what the intention is with respect to elective surgeries on Vancouver Island this year.

Hon. K. Falcon: So the data for the '09-10 surgical data — we don't have that available for the member yet. It would be incomplete at this point.

I understand from staff that what happens is hospital data is coded upon patient discharge and then sent to CIHI, the Canadian Institute for Health Information. The coding and collection process creates a bit of a time lag there, so it takes a while for us to get the final data for the fiscal year. The close-off for data submission to CIHI is July 31, following the fiscal year-end, and final data is generally available to the ministry by early September.

I do have data for the member, though, that we collect throughout the year for management purposes. We've got the data on a calendar year basis, which I can share with the member, but that's all I've got. It says here that they consider this data to be quite complete and reliable through period 10. I understand that there are 13 periods. Period 10 roughly corresponds with December; so this is essentially data for the calendar year.

If that's okay, does the member want me to go through some of this now?

Interjection.

Hon. K. Falcon: Table it. I can do that, sure.

A. Dix: Just in terms of the elective base, then, this year and what the intention is this year, I guess, without those baselines, if you could. I'd appreciate if you'd table that.

[1530]

Some of the key areas, the key periods, in some of the health authorities…. We'll get to this when we get to Fraser Health and Vancouver Coastal Health, where there were significant reductions in the number of surgeries in February and March. It was called the Olympic slowdown. The minister is familiar with it or will remember when we had a bit of a discussion on that last November.
[ Page 5823 ]

In VIHA is it the intention to do, with respect to elective surgeries, the same number of elective surgeries as last year, roughly — so a zero lift? Is that zero lift from the budgeted amount last year or for the budget minus 750?

[J. McIntyre in the chair.]

Hon. K. Falcon: A couple of things. First of all, for the calendar year, just to note and read into the record, for the different health authorities in terms of the percentage change in total surgical cases: IHA increased by 5 percent; Fraser Health by 5 percent; Vancouver Coastal up 4 percent; VIHA was down 1 percent; NHA, Northern Health, was down 2 percent; and PHSA was the same. Overall across B.C. the total surgical cases increased by 3 percent.

One thing that is a little challenging about predicting going forward now is that we are moving away, as the member would know, from the pure block funding model to a model that is increasingly going to be moving towards a patient-focused funding model. So there will be an additional $80 million this year available for patient-focused funding, and the following year it's $170 million.

Those dollars will go to those health authorities and facilities which do the best job of attracting and successfully getting that money, and that won't just be handed to them. So the way we do it today is we hand the block fund to the health authorities, and we say: "Manage within this block fund." In my view, it creates perverse incentives or even disincentives to actually treat patients, because every patient becomes an expense and therefore something that you try to avoid.

Under patient-focused funding, we will reward those health authorities and hospitals that do a good job of dealing with patients. When the patients get an elective surgical procedure undertaken with the high-quality standards built in upfront, then they receive additional revenues as a result of doing that, and they will be incentivized appropriately, I think, to actually deliver those services in as productive a way as possible. If they're not successful in doing that, they will lose that business to other facilities either in their health authority or in another health authority that may be better at delivering those kinds of services.

It's the kind of thing that we believe is going to, very importantly, not just drive some surgical volume but deal with the issue of elective surgical wait-lists in particular. So those are additional dollars, but I wouldn't be able to tell the member where those dollars will end up, because it will depend on how good a job the different health authorities are doing in competing for those dollars.

Certainly, it's going to have some positive effect. Hopefully, if VIHA is astute and does a good job in delivering those services, they will attract a goodly portion of those dollars, and that will certainly affect how many surgical procedures they do.

A. Dix: The numbers the minister just gave me — four, five, minus one, minus two — are those calendar year to calendar year or fiscal year to fiscal year?

Hon. K. Falcon: Calendar year.

A. Dix: They're calendar year. So they don't include the February slowdown, which was several thousand surgeries, which would have affected, obviously, all those numbers. It probably put most of Vancouver Coastal and Fraser Health, certainly, into the negative in that time.

[1535]

I guess I'm asking about the current budget, because as I understand the minister's proposal for patient-focused funding, which I think we'll talk about later, it's not what you'd call fully in place. He's doing a slow ramp on it. So the core funding isn't effective to the next two years, and he's providing extra funding, as the previous minister did and he did through the innovation fund, over the next couple of years.

I'm asking about the plans for this year. For example, in Vancouver Island is it the intention of the health authorities, and in Fraser Health — I guess we want to add that — to have a zero increase in elective surgeries this year, given the cut that occurred in both of those health authorities in the number of elective surgeries in the fiscal year ending March 31? I understand the minister seems not to have the data for that, but I want to get some understanding of what the base is.

Hon. K. Falcon: What we are doing in British Columbia is we want to manage the wait times, because what we want to do is make sure that people are not waiting an inordinate amount of time to receive their elective surgical procedures.

As the member would be well aware, the first ministers of every province and the federal government established targets for a number of surgical procedures, which included hips, knees, cardiac and cataract surgical procedures, where there would be a benchmark that said the goal is to have 90 percent of the people receive those treatments within a 26-week period.

That was the standard that was set across the country, and as the member would well know now, the Canadian Institute for Health Information, or CIHI, which we've referred to many times, reported out that British Columbia was number one in the country for meeting those wait times. Ontario was right up there with us. Interestingly, Alberta was down at about number seven or eight, if my memory serves me correctly, and yet Alberta spends 25 percent more per capita on health care than we do in British Columbia.
[ Page 5824 ]

I think it's an important comparison, in my mind at least, because it's proof positive that results aren't in any way tied to how much you spend, which is a common misconception. In fact, it's something I, unfortunately, hear across the way all the time from the members opposite — that we need to spend more money, as if there is a correlation between more money being spent and health outcomes.

In fact, Alberta has a younger population than British Columbia, and they've got 700,000 fewer people. In spite of that, they are spending 25 percent more per capita on health care to get worse outcomes than we have in British Columbia.

For our government, our focus is on the wait times. That was confirmed not only by CIHI but also the Wait Time Alliance, which is a federation of doctors from one end of the country to the other that also tried to hold governments accountable for wait times. Again, they gave British Columbia an A rating in every category.

[1540]

Does that mean we've reached nirvana? No, we have not. There is still, I think, an obligation on government to make sure we consistently try to strive to continue to meet those targets and to demonstrate leadership. What we will be doing on an ongoing basis with the health authorities, including VIHA and Fraser Health, is saying: "These are the targets. We expect you to meet those targets and stay within those targets." It's their responsibility to do so within the budgets we provide them, the increased budgets.

A. Dix: It was all very interesting. The question was specific. The government cut the number of surgeries last year in Fraser Health, elective surgeries, according to its own admission. We had a discussion of this at length in estimates, and because estimates in that case presumably took place later in the year, the minister had more information.

What I'm asking is: is it the plan for Fraser Health and for Vancouver Island Health this year to use the base from last year, which is obviously a lower base, in elective surgery? Are the cuts to elective surgery made last year going to become permanent cuts? The minister said in the Legislature, not months ago but weeks ago, that there was going to be a further cut this year in the number of elective surgeries.

While the answer to the question is very interesting, and we've heard it before in these estimates, the specific question was about elective surgeries on Vancouver Island and in Fraser Health, and whether they'd be doing the same number as last year, less than last year, more than last year, and whether the base includes the significant cuts in both VIHA and Fraser Health made last year.

Hon. K. Falcon: You know, I think it's worth stating for the record, because the member keeps going on about cuts to surgical procedures. I think the member has lost a little bit of the context. We've had a disagreement over this issue before, but whether the member wants to recognize it or not, when you are hosting an international event on the scale of the Olympics, as we did in February, it has been the experience of every other jurisdiction that's held those kinds of events that they have a drop-off in surgical procedures.

Why? Not surprisingly, and you saw all the enjoyment the people in British Columbia were having, indeed across Canada, as we hosted the most successful Winter Olympics that I and certainly most people can recall…. As people were having that fun — that includes health professionals: doctors and nurses and care aides — even people that wanted to get their elective surgical procedures cancelled their surgical procedures so that they could also partake in the largest event that will probably take place in their lifetime.

Now, the member can just want to believe that that doesn't happen and try to deny it and think we should have fully staffed-up OR slates when you've got cancellations taking place because of a major event like that taking place, but really, I don't think that makes a lot of sense.

There was a drop-off in the number of elective surgical procedures. That was a planned drop-off during the period in and around the Olympic event that was taking place, and that was appropriate. That was based on the advice and information that had come from other jurisdictions that had hosted Olympics.

Again, to the issue of go-forward. Well, go forward we don't know how many surgical procedures they will do. I especially don't know given that it will be partly what they do within the base budgets that they've been provided and also partly what they will do dependent upon how well they attract dollars out of the patient-focused funding dollars that have been put in place — as I say, an additional $80 million for this year alone and another $170 million for next year.

What we do know is that Fraser and VIHA, I am advised, met their surgical wait-list targets last year and that we will be expecting Fraser Health and VIHA to meet their surgical wait-time targets this year. They will do what they do best to ensure that they meet those targets.

I want to, first of all, acknowledge on the record and commend them for the fact that they met those targets and helped us, as I mentioned, become number one in the country in terms of meeting those wait-time targets in every category.

[1545]

A. Dix: You know, it's all very interesting. I know the minister is of the view that people who have been waiting a long time to get well wanted to continue to wait longer because of the Olympics — that we needed to shut down surgeries at Chilliwack Hospital during the
[ Page 5825 ]
Olympics. We disagreed on that. We had a discussion of that, but that wasn't the question. I didn't mention the Olympics in the question. I wasn't asking about the Olympics in the question.

What I was asking the minister about was…. These were his answers in the House from last November. In 2008-2009 Fraser Health did 65,716 elective surgeries. He said in the House that there was going to be a reduction in that volume of 4.6 percent. Some of that reduction in volume took place in the period before the games, of operating rooms.

The minister will acknowledge — because it happened in this sort of reality-based world — that the operating rooms were shut down far before the Olympic period and that reductions took place. If 65,716 was the base in '08-09 and that base was reduced by 3,000…. I'm quoting from the minister here in the House. He says that what we're talking about from that 65,716 base is — Minister's words — "a 4.6 percent reduction" in elective surgeries, "about 3,000 fewer," which would put us about 62,716.

I'm asking him whether that will continue to be the base. He says…. I guess what he's saying is: "Well, I don't know the answer." Even though we've asked this every year in Health estimates, people didn't bother to bring that answer, which is fine. The minister is providing us the calendar year information, which is good, and I thank him for that.

I'm just asking him whether, in Fraser Health, they're budgeting for any kind of percentage increase. Dr. Murray, presumably, should know this, and the minister should know this. Are they going to have a zero increase on the new 62,716 base of elective surgeries? Are they planning an increase? Are they planning a cut? Or are they planning a freeze? Equally, are they in the other health authorities?

The answer is: the minister doesn't know. I guess we'll have to move on again with the same result, as we've done previously.

Hon. K. Falcon: Again, I'm not in any way trying to not be as clear as I can be. I'm trying to actually be as clear as I can be and tell the member: one of the challenges is that we are not in a pure block-funded world anymore.

We know that Fraser Health's budget represents about 25 percent of all the other health authority budgets. If they receive 25 percent of the $80 million — for the sake of argument, the 80 million extra dollars that we are putting in through patient-focused funding into additional surgical procedures — then, you know, the member can do the math. That's over $20 million more that would be available to Fraser Health for elective surgical procedures.

Clearly, that is going to have some impact on the number of procedures they do, but I don't know how many that will be. They may end up actually being very successful at what they do, really outcompeting some of the other health authorities, doing more and taking more of that $80 million.

[1550]

Or they could end up doing less. We just don't know. What we do know is they will likely end up doing more surgeries as a result of not only the base budgets they have but the additional $80 million we've set aside to get the patient-focused funding underway.

A. Dix: Just a precise question that came up yesterday, and it follows from what the minister just said with respect to the patient-focused funding. I appreciate that staff will be sending over some of that information. The issue of, strangely enough, the Kamloops sterilization issue that we raised yesterday — a full exchange…. I don't want to necessarily recanvass that exchange but just to ask this.

Clearly, what the report shows — at least according to the mayor of Kamloops, who has read the report and was consulted on it yesterday — is that the prospects of the hospital will be effectively undermined. Its ability to meet even its current number of surgeries would be undermined if the present central sterilization department process remains in place.

I just want to give the minister an opportunity to respond, because it's a key issue in Kamloops. They're really concerned. Their hospital is in a bit of trouble. Their ability to respond with sufficient numbers of surgeries has been put into question.

Whether he will be responding quickly…. It's probably become more important, in light of patient-based funding, that he would respond quickly to the needs of Royal Inland Hospital, replace the sterilization department, knowing that the success of Royal Inland Hospital in achieving access to additional funds will depend on that. That's certainly the view of the mayor of Kamloops and of IHA officials — and, I suspect, reflects the reality.

If the present number of surgeries is difficult, it will be difficult for Royal Inland to compete for additional dollars under another funding model.

Hon. K. Falcon: As I said before, if the report comes back with a recommendation with respect to an investment in the Royal Inland sterilization department, I made the commitment that we would follow the recommendations of the report. We will work with all the partners, including the regional hospital district and, of course, Mayor Milobar, whom I have great respect for, to ensure that the appropriate decision is made.

But as I said to the member yesterday, the report may have a number of recommendations, and the member doesn't get the pleasure of just cherry-picking which ones he likes. I fully expect that the member will support all of the recommendations coming out in that report. I think that that would be appropriate.
[ Page 5826 ]

A. Dix: Send it over.

Hon. K. Falcon: Well, the member says: "Send it over." But the member doesn't hesitate to take one aspect that he's heard about from the report and say, "Government, you should make a commitment for that," and he's apparently urging us to do that. I've already been on the record as saying that whatever the report recommendations are, we will certainly take them into account in making our decisions — for sure.

I find it interesting that the Health critic is being selective about the recommendations, and I would hope that I would hear the Health critic say: "Actually, I will endorse all of the recommendations of the report." That would be appropriate, but of course, the member probably won't do that because he might not like all of the recommendations in the report.

I can tell you that as the minister responsible, I look at evidence, and I like to hear independent reports. If independent reports have recommendations, you can be sure that this Minister of Health will take them very seriously.

S. Chandra Herbert: A quick question. Can the minister remind me of how many years we've been spending about $800,000 every year on the Station Street lands, which are currently sitting empty?

Hon. K. Falcon: It serves us by recollection, we think, that it's probably since about 2004.

[1555]

S. Chandra Herbert: I think that's about right. I just wanted to make sure. About $800,000 every year since 2004 on the empty lot near Station Street, which was created there or purchased, I guess, to potentially move St. Paul's Hospital out of the West End down to that lot.

Now, I know that the minister has been to St. Paul's. I believe his mother was a nurse there and has fond memories of that place, and I'm glad to hear it. I understand the minister was approached by people from within Providence, from within St. Paul's, with a request that we move away from the idea of relocating to Station Street and that we move to rebuilding on site. There's a large parking lot in the back and a number of other options there on site. Instead of a billion dollars being spent on a new space down on Station Street, we could have potentially spent a lot less to revitalize St. Paul's Hospital on site.

Just a question to the minister: can he provide us information on that proposal and where the government is going on that? Certainly, I'm very excited about that option, if that is, indeed, the case.

Hon. K. Falcon: I know this is an issue that has occasionally caused some angst in the Vancouver area. The Esperanza Society acquired the property there that the member refers to. Government, I think, very appropriately agreed to make the $800,000 annual payments to keep those lands in reserve for a potential health facility, which was one of the ideas that were being floated at the time. What I can tell the member is that that remains a valuable piece of property. Whether it ever becomes a health care facility, it is certainly a valuable piece of property that could serve the interests of, I think, a government for sure in the future.

What I have done is I have been to St. Paul's Hospital on repeated occasions since I've become Health Minister. In fact, I think it's probably fair to say that I have visited that hospital more frequently than any other thus far, in part because of a historical affection that I do have for the hospital and the history but also because I happen to believe that there are just some exceptional people who work in that hospital. Every time I go there, that certainly is reinforced. Not only was my mother a nurse there for over 20 years, but the current nursing and staff there, I believe, are amongst the most innovative that we have in the health care system.

I think Providence should be recognized for that. One of the strengths that Providence brings to the table many times is that they are very open to innovation and changes in trying to do things differently and better. Certainly, that's been demonstrated every time I've gone there.

What I can tell the member is that I have been engaged in frequent conversations with St. Paul's Hospital via Providence Health Care. They've got some very interesting ideas on some capital investments that could be made going forward. We are looking at that as part of our capital plan, and we still have a fair bit more work to do. I have to say that and point that out. But what I can tell you is that the discussions have been very positive.

My commitment to the facility is very strong. It is just a belief that it forms an important part of Vancouver's history and the delivery of important services, and I do instinctively believe that that should continue to be the case. We are having discussions with Providence along those lines.

As I say, we've still got a ways to go in those discussions, but I would describe them as being really positive and fruitful. As usual, Providence is coming forward with ideas and solutions that I think can ensure that St. Paul's will continue to be an important fixture in the city of Vancouver.

[1600]

S. Chandra Herbert: I can't say strongly enough how supportive I am of revitalizing St. Paul's on site and certainly have been for many years, as have many of my constituents in the West End and across downtown.

But I completely agree with the minister about his characterization of St. Paul's as, really, an innovator. They have innovative programs, innovative staff. I guess
[ Page 5827 ]
the challenge is that there is all that innovation going on in a building which is quite old and was built at a time where the principles of how a hospital worked are very different than they are today.

I guess, as those conversations continue, I would hope the minister might be willing to include both myself as well as the MLA for Vancouver–False Creek at a minimum, given that it is our local hospital. We'd be very interested in working with the minister — at least on my side; I can't speak for the member for Vancouver–False Creek — to see that become a reality. Certainly, reinvesting on site, I believe, will save us money, and it will also keep St. Paul's as the innovative leader it is.

The question for the minister is: is the ministry considering funding the creation of a business case or a business plan, through Providence, for the St. Paul's site, to determine the costs and benefits of this proposal?

Hon. K. Falcon: As I mentioned, I was in discussions with the folks at Providence. We are in the early stages of a discussion on how we can together create a business case that will, I think, address some of the issues that the member talked about and also recognizing the investments that the member would know that we have made — almost $15 million in the new emergency department, which I had the pleasure of touring.

Clearly, just again with the innovation side of things, how they staff it and the lean processes they use to get people in and through and out of the emergency department or into an in-patient bed are truly extraordinary.

So the financial details about who is paying what on a business case are typically negotiated between the ministry and Providence, so I wouldn't go into those kinds of details except to say, again, that I have spent lots of time meeting with the doctors there, with a lot of the administrative leaders in the hospital and with the folks at Providence Health Care, both at the board level and the administrative level. I think they do have some very, very good ideas on how we can continue to keep St. Paul's as an important part of the Vancouver health care scene and strategically make some investments there.

I can tell the member that we are absolutely committed to moving forward on working with St. Paul's on the preparation of a business case that could flesh out some of the ideas and the innovation that Providence has brought forward.

S. Chandra Herbert: A quick question, because the minister is giving me what I want and what we have been calling for in the community for a long time — at least, so far, the commitment that that seems to be where we're going towards.

Just a question about timing. Obviously, this project has been on the go since at least 2001, if not earlier, in terms of the need to renovate and revitalize St. Paul's. So obviously, my constituents are getting a little impatient. They appreciate that some capital investments have been made, but we'd love to know that a revitalized St. Paul's Hospital will be opening in the next few years. Can the minister give us an idea of the timing?

Hon. K. Falcon: I was going to make a crack about the first thing that needs to get done at St. Paul's is the elevator, and anyone that goes there on a regular basis would know of what I speak. It is actually quite historic that that elevator still continues to operate in a facility as old as St. Paul's.

It is an amazing facility with incredible character. I think that one of the things that we have to do is make sure that whatever the plans are…. And there's a fair bit of fleshing out that has to be done, and it's got to be done contextually too, in terms of other proposed investments that are being made in the Vancouver area, many of some significance.

[1605]

What I can tell the member is: we are going to try and move this process along as responsibly as we can in a way that continues to build on the ideas and some of the suggestions that were brought forward by Providence. I remain, just personally, very committed to St. Paul's Hospital and the outstanding workers that operate in that facility.

A. Dix: Just to give the minister's staff a sense of what to expect in the next little while, we've got about an hour of our continuing exchange today, and then we're going to have members from the Vancouver Coastal region, from the Northern Health region asking some specific questions.

Just to say to the minister, because it's our longest individual period — and for the deputy — that if he needs to take five minutes…. I get to go in and out and be replaced, but if he needs that at any time he should just…. Would you like that now? Five minutes? No problem.

If we could recess for five minutes.

The Chair: Yes, I'm happy to recess Committee A for five minutes.

The committee recessed from 4:06 p.m. to 4:15 p.m.

[J. McIntyre in the chair.]

A. Dix: I just wanted to ask the minister a couple of questions about a specific proposal from employees of the Chilliwack General Hospital. The minister will be aware of this. There's a proposal to contract out a number of services in the region, in fact.

I think the minister will agree with me, notwithstanding his view on the proposal, that it's outstanding that workers who are very committed to their work at the hospital and the neighbouring hospitals got together
[ Page 5828 ]
and put forward a proposal to save money, essentially to compete for their jobs.

The proposal they put forward is a very interesting proposal. I want to ask the minister if he has reviewed it. The proposal saves in the neighbourhood of three-quarters of a million dollars. Of course, it saves jobs as well.

It appears, anyway, that the Fraser Health Authority doesn't think the proposal should be considered. I'd just like to ask the minister, I guess, if he has reviewed the proposal, what he thinks of the proposal and whether he would be prepared to review the proposal side by side with the contract bidders to assess its value.

Hon. K. Falcon: With respect to the Health critic, I am pretty sure the Health critic knows that the Minister of Health isn't reviewing tendering documents on health authorities that are going out to tender on services they require for food, laundry or housekeeping, nor will the minister be doing that. Anyhow, it's an interesting way of thinking how the Minister of Health should spend his time.

What the Minister of Health is most concerned about, of course, is the quality of services and making sure, as we do, that they're independently audited. The health authorities are responsible for ensuring that they go and get the best possible value and the best possible quality in whatever the services are.

In this case I understand that what they're looking at is bundling a number of services with the successful RFP proponent on issues related to laundry, food, housekeeping and waste management.

Now, I am aware of the fact that the HEU made a proposal. First of all, I want to commend that, because I actually think that is a good thing. I think that there should always be an opportunity for those who are providing the current level of services to have an opportunity to compete.

The member opposite has described in some detail the proposal. I don't have any of that detail except to say that I understand, according to the review that the health authority did on the proposal submitted by the HEU, that it did not meet the request for proposal criteria nor did it present any cost savings.

Of course, that would be a challenge because I think, as I've talked about earlier, that even in an environment where our health care budget is increasing 15 percent or $2 billion over the next three years, there is still a challenge to try and bend that cost curve down. That's one of the reasons why the health authority would be entertaining proposals like this.

I apologize to the Health critic. I don't have those details nor would I ever be reviewing documents like that. That is entirely and appropriately in the purview of the Fraser Health Authority, and it is the Fraser Health Authority that is responsible for making those decisions and accountable for the results of those decisions in terms of the quality of services being provided.

A. Dix: Of course, the Minister of Health is responsible for those decisions through this Legislature. In this case I think the workers involved…. While the minister talks about it as a union proposal, it was really the workers who are doing the work who made the proposal.

What has been suggested is that the Fraser Health Authority is insisting that it be a third party that conducts the work. Now, in spite of the fact that they've found $747,000 in savings, that doesn't matter. Indeed, what makes the proposal, I think, pretty courageous and indicates that it comes from a group of workers really committed to the hospital and to the neighbouring hospitals is the fact that the proposal would, amongst other things, from the workers themselves, cut 16 full-time positions.

[1620]

So the proposal they make cuts 16 full-time positions, and the response they get back is, "We don't want you to compete, and there are no net savings," which is just inconsistent with the document that was presented.

I guess my question to the minister is not that he review every contract but that he look at this one, because it has real significance in the area. The workers involved have put on an extraordinary effort to save money. They've asked the minister, and they've contacted the minister and the local MLAs in question. They've met with the member for Chilliwack-Hope and the member for Chilliwack on this question.

I'm simply asking the minister to review this question, given the broader policy implications, and ensure that a fair opportunity to compete is being offered here, so that whatever decision the Fraser Health Authority might make, the workers, who have put forward a really outstanding proposal that the minister has received, get a fair opportunity to compete for the work with a proposal that seems outstanding.

As I noted to the minister, while Fraser Health appears to want a third party to contract the work, and Fraser Health claims there are no net savings…. In fact, as I said, the workers have proposed plans that would save $750,000 and reduce the number of full-time positions by 16, which is a really hard thing for people to do in their workplace and, I think, is worthy of merit.

In this case, because of a very specific circumstance, I'm asking the minister to review that and particularly review the issue of whether the workers, who are trying to save their jobs here and have made really an extraordinary effort, get a fair opportunity to compete, which I think is something that is in his purview and is something that I think the workers deserve.

They're going to be working there under the provisions regardless for some further period. Whether he would intervene to make sure that happens…. I think those are the kinds of assurances that the Liberal MLAs for the area had offered, and that's really the question I have for the minister.
[ Page 5829 ]

Hon. K. Falcon: First of all, I thank the member for the question, and I thank the member for some of the additional information that the member has provided with respect to the proposal that was made. I am encouraged, to be honest, and I would agree with the member that when the HEU is making an offer like that and attempting to recognize the challenges in the health system and trying to do their part to come up with savings, that ought to be applauded and recognized.

I will have one of my assistant deputy ministers take a look at that and ensure…. As the member is suggesting that it may not have been given a fair look, I will make sure that there is a look taken at it from my assistant deputy minister to ensure, in fact, that it has been done exactly as one would expect — that it is a fair process that met the requirements laid out in the request for proposals and that it demonstrated the kind of savings that Fraser Health was looking for.

I don't think for a second that Fraser Health would have any hesitation in sharing that information — well, they won't — with my assistant deputy minister, and we will look at that for the member opposite and make sure. The reason why I do want to do that is because, actually, I do want to make sure that when a union like HEU is making a real attempt to try and be part of a solution — as it would appear, in accordance to what the member has shared with me — we do take a look to make sure that they've been given every opportunity to put forward a reasonable proposal. So I will have that looked at by my assistant deputy minister, and I thank the member for that.

A. Dix: I had just a question with respect to the decisions made to essentially transfer Riverview services to Youville residential care facility and Langara residential care facility. The minister will know…. These are extraordinarily difficult questions, I think, particularly for the seniors in question, principally seniors. I think almost all of the people who are affected who would be displaced by this move, the seniors affected…. They're just very difficult questions.

[1625]

We all know, because we know health outcomes related to these kinds of moves, that there's a real effect when you move seniors from somewhere which is their home and their room in their facility. It has real consequences for their health outcomes. Certainly it's the case here. I visited the people at Providence Health Care. They gave me a tour of the Langara site. I've been to the Youville site, as well, just as an MLA, meeting with constituents there in the past. So I'm familiar with the sites.

I think the circumstance is this. I mean, what you're talking about in some respects are the difficult questions that often face Health ministers and health authorities when they're trying to meet competing goals. There's a shortage of seniors care beds in Vancouver. There is, and that's acknowledged by everyone — including, I think, the health authority and Providence Health Care. At the same time, there is a need to move the beds.

In this case, I think it's fair to say, this is the only part of the Riverview move of beds where the receiving organization, in this case Providence, isn't getting…. They're getting money to upgrade their facility and to change their facility, but they're not getting money in this case to build a new facility or a specific facility.

There's certainly room for that. The minister will know that there's certainly an empty portion of land on the St. Vincent's Hospital site — where St. Vincent's Hospital used to be — where you could build such a facility or others in the old model that Vancouver Coastal Health put forward, the campus-of-care model. That would be something that, in fact, might be recommended.

I think that Providence were the only ones that were asked to accommodate on existing sites to make room for these Riverview beds that didn't get any new capital, which I think is unfortunate given the shortage of both seniors care beds and mental health beds.

I gather the decision by Vancouver Coastal Health was, as these things are, made without consultation with the residents, and it's going to lead to a real concern for the residents.

I will just give the minister an example of the kind of concern. It's a personal story, and I don't say it to add to it. I know that these are very difficult questions. There's a gentleman whose mom is being displaced and who also had another family member displaced at a mental health facility which was also closed. It's had real consequences in both cases for the health of both individuals — just the stress in his mother's case and the real impacts of the transfer.

I want to ask the minister (a) to what extent the difficulties that this is going to pose to seniors weighed on this decision and, secondly, whether the minister thinks that it wouldn't make more sense, rather than trying to transform these facilities…. Having toured the facilities, I don't think that the transformation is going to be easy, and I really suggest to the minister that he give a visit to Langara and take a look at some specific things that I was going to raise with him earlier.

I don't make these suggestions in an attacking sort of way, but just to raise the concerns raised by the seniors. So I think that there are some things that need to be addressed at Langara that are specific to Langara that make that a difficult decision. To what extent do the needs of the seniors weigh on this decision? Clearly, it's going to have negative health outcomes as a matter of course for them.

And (b) why was the decision taken to transform these facilities? I presume the decision was taken for cost reasons. The floors in question have single rooms, and the single rooms are easier to transform.

Why was the decision taken not to provide, say, on the St. Vincent site through Providence, a specific facility
[ Page 5830 ]
for the patients and residents coming from Riverview rather than this effort at a hodgepodge which, I think the minister would agree, is far from ideal? Why was that decision made?

It's not an issue, really, of integration, because these are going to be locked-down facilities, so there's not going to be much in the way of integration. I guess the question I have for the minister is: why was the decision made, and why not consider the St. Vincent's site rather than taking these beds out of the seniors care system and the long-term care system? Why not consider that option instead? Why was that option ultimately rejected by the government?

[1630]

Hon. K. Falcon: First of all, I know that the member likes to sort of make it seem like every single decision is made at my desk and that I control, apparently, every lever in the province for every decision that is made by every health authority, but thankfully, that is not the case.

Thankfully, we actually have a provision where we work with the health authorities — in this case, Providence — to deal with an issue that has been a longstanding issue for British Columbia, and that is the repatriation of Riverview clients, Riverview health clients, back into their communities. It is, I think, safe to say that in the past — and this member would have some familiarity with it, because this is an issue that transcends governments — there were commitments made but, unfortunately, no dollars that were provided to actually allow this to happen.

[N. Letnick in the chair.]

Since 2001 we've had 421 Riverview health clients move to community facilities across British Columbia, giving them the opportunity to come back to their community. That includes Youville and, as the member talks about, the Langara campus facility. I think they call it the east wing — is that correct? — of the Langara campus facility.

In many if not most cases, these are individuals that were from Vancouver. So the issue is: how can we ensure that as they move back into their community, they are moved back into facilities with the appropriate level of supports that one would expect — the appropriate enhanced supports?

The member is correct to point out, I suppose, that in a perfect world where you had unlimited budgets, you would just build brand-new, purpose-built facilities every time, and certainly, there have been a lot of seniors residence–building going on in the Vancouver Coastal area.

In fact, over 1,100 new units of seniors housing have been built since 2001. I think, to put that in perspective, in terms of how many beds that is, 1,100 beds is a lot. That's almost as many as were built in the entire decade of the 1990s, to just sort of give some perspective around it. That's just in Vancouver Coastal.

I think that in a perfect world I would agree with the member that if there were unlimited budgets, probably that would be an ideal way to deal with this. But we don't live in a perfect world where we have unlimited budgets.

What Providence, I think, is trying to do is ensure that as they do this, they work very closely with the families. The member will know that they've had, I am led to understand, numerous meetings with the residents that are currently in the facilities and their families to put together individualized care plans for each of those individuals and determine whether or not, given some options in terms of where they might have an opportunity to relocate, that would work for both the individual resident and the families. This is not an easy thing.

The other thing they have also done is stopped taking new in-patients into their existing facilities both at Youville and at the east coast neighbourhood. They stopped taking new residents in February.

The belief and the hope is that through the normal transitioning that sometimes takes place, many of these individual residents that wish to stay in the facility will, hopefully, be able to be accommodated as they go through the process of renovating the east wing for these individuals. In the case of Youville, I believe it's the top two floors that are being renovated to allow for the transfer of these individuals back into their communities.

What I do know, the level of detail I know, is that Vancouver Coastal has worked very hard with the families to try and ensure that this is undertaken in a manner that is as compassionate and as thoughtful and as careful as they possibly can. That is always, I think, a challenging issue.

[1635]

My hope is that as they work through the individualized care plans and that as they work with each resident and their families, they will be able to arrive at solutions that will, hopefully, meet the needs of the vast majority of the families that might be impacted by this change that's taking place to fulfil a longstanding governmental commitment.

I thank the member for the invite to tour Langara. One of my challenges as a minister is that I am invited to tour facilities, as the member could imagine, in every part of the province. I wish I was able to get to all of them. I'm often not able to. But when this issue was first raised with respect to Youville, I did look into this issue. I did have a discussion with staff about this issue. I made sure I was briefed on the issue at the time, and this was some months ago — at least a couple of months ago, if my memory serves me correctly.

The one thing that was very important to me was that the families involved would be treated with the utmost compassion and thoughtfulness. In fact, that is the
[ Page 5831 ]
Providence Health Care tradition. I believe that's exactly what they are trying to do in these circumstances.

A. Dix: Many of the seniors in question have been forced to…. They've all been informed from one day to the next that they are forced to relocate. There was a very significant series of issues involving contractors walking through facilities and so on, which we've tried to work with Providence to ensure doesn't recur. Ultimately, it's just a very hard decision for the seniors in question.

What the minister is saying — and his position is his position — is that even though there's a requirement for seniors beds and even though there's a requirement for what we might broadly call mental health beds, they've chosen the option of sacrificing these seniors beds in order to have a cheaper option for the mental health beds. I think that's the position, and there are arguments you can make to that.

Surely the minister understands that forcing people who've sometimes lived in the facility for a very long period of time and all of whom…. I've met the Langara ones. I haven't met all of the people who are being forced to move from their rooms at Youville.

The consequence of the move is real on the health of the people being forced to move, and even in the best of circumstances and using the best of approaches…. That hasn't been the case yet, although some improvements have been made over the past few months, perhaps even by the intervention of the minister or myself. Things have got better, but at the end of the day, people are being forced to move, and it's extremely upsetting.

The question I'd have a little bit is about…. Just as an example of how difficult it is, the east wing at Langara surrounds a very beautiful garden that the foundation fundraised for, and it is a very beautiful garden. Just as an example of what's required, because it's not a purpose-built facility in that case, that's why it would be useful, even if the minister couldn't visit, for ministry staff who are responsible to take a look.

Just an example of how this is a difficult fit is that we're talking about the first floor, east wing, in Langara. It surrounds a garden, and one of two options will be required. What the residents have been told and the rest of Langara has been told is that the residents of 1E, the new residents of 1E, won't be allowed in the garden that they look out through a piece of glass at. That is hugely unfair to the new residents.

On the other hand, there's enormous anxiety, and I think an understanding on the part of the administrators, that that garden which is there can't be shared under normal circumstances between the two sets of residents. So it's an example of what happens when things aren't purpose-built.

I appreciate the minister looking at this. I've met with the families. I'm not raising some of their concerns about the process with the minister, because I actually don't think that he takes responsibility for all of those. I'm raising some of those issues directly with Providence and with staff, and we've done some of that process already, which is essentially casework.

I would like to ask the minister to consider the extraordinary impact of this decision on the residents who are currently on those floors, and whether or not it would be possible, using the remarkable amount of space available next to the Youville site, the St. Vincent's site, to accommodate the new patients — who we all acknowledge need to be accommodated and we want to accommodate — in that way.

[1640]

Hon. K. Falcon: Look, I think it's important to point out that Providence is making a substantial investment in both of these facilities. Youville is 42 beds with an investment of just over $5 million, and of course, the Langara east wing that we talked about is 20 neuropsych beds at a cost of over $1.7 million.

Certainly, I'm not going to step in and start messing up what I know has been a lot of work and a lot of attempt to recognize that some folks — and, hopefully, very few at the end of the day — will be impacted to the extent that they may need to locate to a different unit either on the Langara campus or within one of the other health authority units in Vancouver Coastal. That is only going to happen after, as I say, individualized plans are put together for each one of those residents and their family members, who will be involved in great detail.

I do think, though, that if we step back and think for a minute, it's fair to address the question, particularly of those that are impacted: why is this happening? Why is government taking these folks from Riverview and moving them back into communities and, in this particular case, potentially having an impact on those who are there enjoying things as they are?

Many of these individuals — and they're not all seniors, as the member would know; some of them are as young as in their 20s — have either acquired brain injuries or are dealing with complex mental health issues. They may have severe Parkinson's disease, issues that really require a very high level of care.

Importantly, these are individuals we know that function best with appropriate enhanced supports, and the best evidence supports the fact that they function best when they are part of their community, not institutionalized at a facility like Riverview.

The east unit of the Langara campus, those 20 specialized neuropsychiatry beds that are going to be put in place with the enhanced supports, are going to be part of not only best evidence, best practices for those individuals but, again, part of the original vision that has been in place but, frankly, that governments prior to us being elected in 2001 weren't actually supporting with dollars.

It's one thing to say we need to have folks back in their communities, but what was happening was that
[ Page 5832 ]
they were being released from Riverview with no supports. We know what the end result of that has been. We are still dealing with the challenges of many of those individuals and trying to provide them the kind of supported housing with support services so that they can be looked after with dignity, the kind of thing that one would expect from the government.

I recognize that this is a challenge. I thank the member for bringing it up. But I am satisfied that Providence, as is in keeping with the Providence tradition — which is, of course, a religious-based tradition founded in the Catholic faith, very much compassionate and caring towards those that are within their care; they always have been; I believe they always will be — is working very, very carefully with each of those residents and their families to try and undertake this change.

I recognize that changes are very unsettling, but they're trying to do it in as compassionate a way as possible. I am certainly satisfied that they are really trying very, very hard to do that.

[1645]

A. Dix: I will just say this. We're talking about the displacement of 62 people. It's going to be very hard on all of them. All the evidence shows that it's going to have real health impacts, at least on some of them. I know, having met with them, that it has huge impacts on lots of them.

As I mentioned to the minister, the closing of a community mental health facility recently, in the case of one family, led to an individual having to go back to Riverview. Having spent ten years in the community and made progress, the closing of that community in the Fraser Health Authority led to very serious consequences. I think these families really feel this passionately — not really having had this issue even talked of to them.

They weren't even talked to before this was announced — that they're out. There was no suggestion that it might take place. They were simply told that places that are their homes…. Regardless of whether they're residential care beds or what they are, those are their homes that they're being forced to leave. So it's a very disconcerting situation for them and has real consequences.

I think they'd like to believe that that was weighed in the equation. Clearly, Providence Health Care would rather have had a purpose-built facility. I think that's fair to say. Those decisions weren't made by Providence either.

I had a question to the minister. It's just a very simple question. In 2007 there was an RFP for a ten-year mental health plan. The previous plan was the 1998 plan that would end in 2007 or 2008. It's a little unclear on the numbers there, but let's call it 2008 for the sake of argument. The government did an RFP that was posted on the website August 31, 2007. It closed September 14, 2007.

The results of that weren't published, but a consultation process on the plan was undertaken, and it involved Dr. Patrick Smith. The plan was in the 2008 throne speech, but the plan itself hasn't been published. In this case…. When you have a ten-year plan, you have ten years of notice that the plan is going to be up. You do an RFP in 2007, and then there's no new plan for the last three years. I just wanted to ask the minister where that might have been, where it might have gone.

Hon. K. Falcon: I thank the critic for the question. I think the critic would be disappointed if I didn't point out that the 1998 mental health plan that was introduced by the NDP government had no dollars attached to it. I know that the member would be disappointed if I didn't say that, so I thought I'd say that for the benefit of the member.

[1650]

I do think that some very good work has been going on with respect to this. The member is correct that an RFP did go out to help bring about and pull together the updated mental health plan. This, of course, isn't being done in a vacuum. It's being done at a time where we're already making very substantial investments.

We were just talking about, a couple of moments ago…. We just saw an announcement yesterday of $225 million from the province and the Streetohome Foundation for supportive housing for those, many of whom have mental health and addiction issues….

We've got the five assertive community teams, the ACT teams, in Vancouver that go out and seek out those with mental health and addiction challenges to connect them with services, to try and bring a more whole-of-government approach to this challenge. We work very closely with the Ministry of Housing to ensure that we not only house these folks but also make sure they also have the appropriate addictions and mental health supports at the same time.

What has been happening since 2007? Obviously, there's been very extensive consultation that's gone on. I personally have met with a large number of the stakeholder groups, both individually and as large groups, as we work on the updated mental health plan.

I've also had the opportunity to note how other ministries that touch on issues around mental health and addictions are part of the discussion, because one of the things that we do know for sure is: as we go forward, it has to be a whole-of-government approach. That is certainly supported by best evidence. A review of all the literature is also a key part of this, to make sure that as we go forward, we are aligning our investments that we are making both currently and in the future with best practices and best evidence.

I've also had the opportunity to meet on a number of occasions with Senator Kirby, who is heading up a federal commission. Sen. Michael Kirby is a well-regarded senator who has done some very important work in a number of areas and whom the Prime Minister has appointed to
[ Page 5833 ]
chair a national task force with respect to mental health. So I want to ensure that we are touching base with Senator Kirby.

I just met with him as recently as within the last couple of weeks to ensure that we are developing our plans not only based on the best evidence and the whole-of-government approach and ensuring all the stakeholders have a viewpoint, but also making sure that we're learning whatever might be being discovered through the work that's being undertaken and the dollars that are being invested through Senator Kirby's federal commission.

That is the state of it, Member. I can tell you that we are very close to, I think, releasing a draft report, and I am actually excited about the opportunities that lie ahead for us. I do think that what is really interesting to me in mental health and addictions is just how much we have learned and how much has changed. As Minister of Health I find I'm very much driven by evidence, even when that evidence I don't sometimes like or instinctively feel like it's something that I grapple with.

Insite would be an example of that, where you just instinctively think: how can this be, that we would allow individuals to, in a supportive environment, inject themselves with dangerous drugs? But the evidence seems to demonstrate that it is effective for helping to put these folks into contact with health services and to, hopefully, get them to a stage where they're ready to accept the kinds of interventions that can help them get off of their very challenging and difficult addictions.

I'm sorry about that, Member. I know that was a longer answer than I probably should be doing, but it is an area that I think some real progress is being made, and I'm excited about it.

A. Dix: Just briefly, on the 2007 RFP, who won the RFP to write the original draft?

[1655]

Hon. K. Falcon: I'm advised that the consulting company was called Wave Consulting. The principal is Dyan Dunsmoor-Farley. Ms. Farley's role was to support the consultation process and the framework for putting this together. I want to emphasize that she was not there to write a report. That's not her role. Her role was to ensure that the consultative process was thoughtful, expansive and inclusive as we started building the new mental health and addictions plan.

A. Dix: So we started off with Wave Consulting, and the goal at that time, as I understand it from the RFP, was to produce a mental health plan in 2008 — which would make sense. The previous plan had expired in 2008. The government engaged in a consultative process that Dr. Smith was involved with. Was Dr. Patrick Smith directed to be involved in this process?

The consultation that he was involved with, I gather, was part of a tour around an initial plan that took place between October 2008 and July 2009. What happened at that point?

As I understand it — people told us a little bit about what they saw going on — the report that was given to the government at that point used as a model the model in Victoria, Australia, which is a community-based model and uses a pretty comprehensive population health approach. That's their approach. That model has been changed, I gather, more recently in the process, which is fair enough.

I just wanted the minister maybe to take me through that period. What was the process and, really, why — again, I'm just asking for my own information, I guess — has a plan that was supposed to be ready in 2008 still not been released, even in draft form, in May 2010? That's almost two years late on a plan and a process that was initiated three years ago. That's quite late.

[D. Horne in the chair.]

Hon. K. Falcon: With respect to Dr. Patrick Smith, I'm just getting advice from my staff. The member would recognize that when this process got started, I didn't have the opportunity to be the Minister of Health at the time, so I'm getting up to speed a little bit on the historical nature of this.

[1700]

I understand that Dr. Smith was seconded from the Provincial Health Services Authority. He was seconded on the basis that he, I understand, is quite a knowledgable and specialized individual in terms of his credentials. He has a PhD in psychiatry. He apparently is a specialist with respect to addictions and mental health. Dr. Smith, I understand, was quite involved in the process.

The reason why it is taking some time — and appropriately, I think…. This is an area that I have a great deal of personal interest in, because I think mental health challenges are much more widespread than most people would believe. The impacts I've seen firsthand on individuals…. It certainly is something that we are learning an awful lot on — how to deal with the issues of mental health and addictions.

The problem is that we've got to make some pretty significant shifts in how we deal with it, because the old model that has governed the province for many years is very much a tertiary institutional model, which is sort of the classic…. You know, put them in Riverview, or deal with them when they show up at the emergency departments, etc.

One of the things we know is that all the best evidence is telling us that, actually, we have to change our approach to a much more preventative approach that gets in early, particularly to our kids, when they start to exhibit or demonstrate anxiety and the kind of behav-
[ Page 5834 ]
iours that, if not dealt with early on, can easily become much more significant mental health challenges later on, in their teenage years or early adult years or, indeed, well into their adult years.

That has meant a different approach than we took historically. Historically what would happen is that the Ministry of Health would put together a plan, typically based on the way we've always done things. Under that old scenario, we probably would have been able to move within that time frame.

We were taking a whole-of-government approach, meaning that we had to involve the Ministry of Education for sure, because there's an element of children and making sure that we have the ability to get at children early on. Because we were involving the Ministry of Children and Families and other ministries to ensure that this is indeed a whole-of-government effort, it did require us to take some more time.

My personal belief with respect to this is that it's much more important that we get it right than that we get it quickly. I do believe now that we are certainly at a point where I think those discussions and the work and the extra time that was spent are going to pay significant dividends, particularly in ensuring, as I mentioned earlier, that we align to some other research and work that has been done at the federal level through Sen. Michael Kirby and the good work that he and his commission are doing with respect to mental health.

Again, some of the early indications coming out of the work that they're doing emphasize the importance of early treatment, the importance of dealing with the unfortunate stigma that often is associated with mental health. You see that sometimes when we are, for example, transitioning folks from Riverview to communities. There often is that initial reaction of unfortunate, misinformed perspectives about what these folks are like.

Just as a final thing, I'll say that I had the opportunity to visit one of the new facilities we built. I want to emphasize this because I don't want to leave the impression for a moment that while we are undertaking this significant work and taking more time to get it right, nothing else has been happening.

We all know about the Burnaby Centre for Mental Health and Addiction, which is a state-of-the-art, 100-bed facility in Burnaby that actually has helped inform us in some of the lessons that we need to learn on a go-forward basis. One of the things we've discovered from many of the patients that are presenting at the Burnaby Centre for Mental Health and Addiction is that they have severe disorders, both on the addiction side and on the mental health side. That requires a different approach in terms of how we're going to treat them.

What we also discovered is that some of the folks that graduate, if I could use that term, from the Burnaby centre are incapable of living, even with supports, in their community. That required us to make a new investment at the Riverview facility to recognize that some of these folks will require ongoing and very much a high level of care and will not be good candidates for transitioning into the community. So those investments were made.

[1705]

We've also made additional investments. The new Cypress Lodge is one of the new lodges we've opened on the Riverview campus that I had the opportunity to visit. I would encourage the Health critic, actually, sort of all politics aside…. The Chair was also there with me, as was the Minister of Small Business and Economic Development, when we visited that facility for the official opening ceremony.

You cannot walk away from that building without being touched by, first of all, the incredible facility itself. It has got to be one of the most uninstitutional-like settings I've ever been in — lots of natural light. It's built to really feel like a home, with beautiful murals and paintings that were contributed from people within the community through a contest that was held to allow the public to have an opportunity to put some beautiful pictures into this facility. The caring, the total caring nature of the workers there, was really something to behold. It certainly touched me.

Again, I appreciate the member's…. The critic is actually being very good to allow me to go on, but I make these points because we continue to make those investments as we build the mental health plan. These investments are informed from what we learn and continue to learn as we're putting together the plan.

It would not have been possible without the groups that are involved in the mental health alliance that have been very, very good partners in this process as we have gone through creating the new mental health and addictions plan to take us forward into the next decade and beyond.

I thank the member and the critic for giving me the latitude and the opportunity to talk about some of these issues, which are near and dear to me.

A. Dix: Oh, I hesitate to say briefly; I feel like I'm just encouraging the minister. I won't say briefly. I'll just say: can the minister…. Two very precise points about this: when will we expect to see the plan? What will happen after we see the plan publicly?

Will it be in final form or draft form at that point? You see, here I'm making it more difficult, because I'm adding a third question. Is it expected to be a policy plan — in other words, guiding us towards more prevention, more community-based work, more population health work, more focus on young people, as the minister suggests — or will it be a series of initiatives, as well, that have money attached to them?

It could be either. One doesn't preclude the other, but I'm just asking what he expects the plan to do in that regard.
[ Page 5835 ]

Hon. K. Falcon: Member, we plan to have that plan released this fall. It will be a complete plan. It will not be a draft. It's in the draft process right now, so we're having the opportunity to go through it and have a look.

It will really be an overarching and very important guiding document for government. One of the things that it will do is to inform government on how we are going to have to look at doing things differently in terms of how we deal with the issues of mental health and addictions. It will be a very important document with respect to that.

[1710]

What does it mean by a guiding document? The member says: "Well, does that mean there'll be specific things with budget items attached to them?" No. What it will be is a document that will say to government…. For example, in the Ministry of Health alone we spend about $1.26 billion on mental health and addictions. That's just in Health. Now, of course we've got Housing, which again spends hundreds of millions of dollars more on housing. Then Children and Families will be spending whatever they spend, but it will certainly be in the tens of millions of dollars. You've got Education doing what Education does.

All of this across the whole of government will be informed by this document, and that document will become now the measure by which we have to look at everything we're doing to ensure that it aligns with the new mental health and addictions plan.

That involves change. It involves change, for example, to say: "You know what? It actually is not appropriate to be waiting to treat these people until they become highly acute and they present at emergency departments, where it becomes a very expensive level of care." It means that we have to treat them in the community earlier. We have to try and intervene earlier when some of these challenges present, as early as school children age. Again, that's what the evidence is telling us.

We're excited about it. We're looking forward to that release in the fall, and I think this is going to be in many ways a seminal document that will, I hope, help inform other governments, too, that also struggle and deal with these challenges across the country.

A. Dix: So what we'll have in the end is sort of a guiding document. Then what would flow from that would be initiatives that the minister would undertake from that point on in consultation with the health authorities and so on. That's what we're looking at.

Since the project was initiated in September of 2007, there hasn't been any work product released. I just want to check with the minister. There hasn't been any work product released publicly in that time, as I understand it.

What happened was that they started the process in September 2007. The process will end in, roughly, let's say, October 2010, for the sake of argument. So it's a three-year process. The consultation ended midway through 2008, external to government, in that what we've seen in the final 15 months of the process would be consultation internal to government.

Is that a fair description of the process it has taken? And is there any estimate as to the cost of that process? I know that the initial requirement was to lead a team of ten through the consultation process, but presumably, the cost is more significant than that.

Hon. K. Falcon: I'm advised that the external consultations actually finished in June of '09, so that would be 12 months ago. For the last 12 months virtually all of the discussion has been both across government and with the health authorities but also, of course, with the federal health commission. That has, essentially, consumed most of the efforts since that time.

[1715]

I want to recognize that that is being done at the same time, of course, as we've seen the health authorities increase the adult community mental health beds by 64 percent since 2001, increase the community addiction beds by 205 percent. There were 874 beds in 2003, and today there are 2,662. And of course, the opening of the Burnaby Centre for Mental Health and Addiction and the Cypress Lodge and the other lodges that have opened on the Riverview campus, etc. All of that has been going on at the same time.

The final thing I would say with respect to the cost — the member asked about the cost — is that virtually all of the costs were absorbed in-house, I'm advised by staff, except of course for the Wave Consulting contract, and the Wave Consulting contract was issued back in 2007. Staff couldn't recall what the contract amount was. It was actually another ministry that issued the contract, Healthy Living and Sport. I'm sure that it's either on the record, or we could probably find it out for the member if he's interested.

A. Dix: Just a question on another subject. And I'd appreciate if you could find that out. Just given the size of the initiative, I don't think that the contract amount will be in any way surprising, so I'm just curious as to that process.

I want to ask the minister about nurse practitioners. I want to put this problem to the minister. I think he probably — I'm hoping — will share my astonishment and frustration with this story, which I got from the minister's own website, which is always — not always — the best source of information. It has a very nice bio of the minister, and it includes the story of a Clearbrook clinic and a woman named Janet Baillies, who is a nurse practitioner on site.

Essentially, the clinic got funding to expand its size and to deal with more patients from the Fraser Health
[ Page 5836 ]
Authority — right? I think it's fair to say that I've rarely seen the kind of praise for a project that this project has received from patients. And then I read on the minister's website, chronic care page….

Here are some excerpts.

"At the Clearbrook clinic, the medical team includes Janet Baillies, the nurse practitioner on staff. She's an RN who has nursed in just about every capacity in her career. After her education upgrade, she's now qualified to order tests and diagnostics, leaving the doctors free to do what they do best.

"'I don't know how I'd run the practice without her,' Newton says of Baillies: 'When I look at what she does in a day, there's no way I could absorb that work.'

"One of the theories behind the team-based approach is that family physicians should be able to take on larger patient loads. At the same time, they should manage more easily by having a nurse practitioner on staff who can requisition prescription refills, among other tasks."

What impressed me, and I know a little about the subject from the patient perspective, is the work that Ms. Baillies did with people with diabetes, for example, which is extraordinary.

So what happens? Her funding is cut by the Fraser Health Authority. I'm not using the word "cut" in a…. Her funding was cut. She no longer received funding. That's what I mean by the term "cut," to the minister. So an extraordinarily successful program praised on the ministry's website, and the funding is cut.

Why is it cut? It is cut because of the fact that all the money saved, really, which is quite, I think, exceptional…. The quality of care is described on the minister's website as exceptional. Essentially, the money saved is saved by the government directly under MSP.

The costs of the program were born under the innovation fund by the Fraser Health Authority. So in the Fraser Health Authority's narrow interests, they're not getting any benefit from this. It's other funding of government — the provincial government is; the health care system is.

Money is being saved effectively, but because there are competing internal interests to organizations under the direction of the minister, the funding is cut, a service is lost, the quality of care diminishes and costs increase — right? They've got to go out and recruit a doctor and at a higher cost to the overall health care system through fee-for-service than was being paid before all this happened.

I guess I want to put that to the minister. We have a problem, clearly, right now in using nurse practitioners to improve health care services, in many cases to provide service where it's not available.

[1720]

I'm wondering if the minister could comment on Ms. Baillie's case and tell us what plans the government has, because as he knows, the majority of nurse practitioners trained in B.C. are not currently employed as nurse practitioners.

Hon. K. Falcon: I'm letting the Health critic know that I'm trying to get details on that specific case, and I apologize for the fact that it's taking a while. We're trying to pull that together.

A. Dix: We can do it after.

Hon. K. Falcon: Okay. But I want to say a couple things about the nurse practitioners program, first of all. The first thing is that we're proud of the fact that we in British Columbia started the nurse practitioners program. I'm just going by memory on all of this, Member, so if I'm wrong on one of the dates, I apologize. I think that it was in 2003.

For the members of the viewing public or members that are gathered here, one thing they would know, or should know, is that a nurse practitioner is like a registered nurse but with a master's degree. They're very highly trained. They're not quite doctors, but they're sort of between doctors and nurses.

I have met with the leadership of the Nurse Practitioners Association now on a couple occasions. I, first of all, have to acknowledge that I don't think that we have handled this file well at all as government. I want to accept responsibility for that, because I just don't think that we have.

Why haven't we? Because when we created the nurse practitioners, the truth is that we hadn't particularly figured out how and where they could fit into the system really well. Instead, we provided for the period from 2005 to 2009, $62.7 million to the health authorities and said: "Fit them into the system."

I think that what we should have done a lot better, to be candid with you, is to say: "Actually, here's how we believe they can fit into the system. We want to follow those dollars and make sure that's exactly where they went, to ensure that those nurse practitioners are being incorporated into the system in the best possible way."

[1725]

So I want to start by acknowledging that that is a shortcoming and one that we are working very diligently to improve upon. I say that because I think that it just needs to be said. It's something I've said to the nurse practitioners when I've met with them, and I think that it's only fair to say that here too.

Now, one of the things that we are doing in British Columbia, and why I think the nurse practitioners are going to be so important as we go forward, is that they can fulfil a very important role as we increasingly shift towards a primary care model that says we want to try and look after patients, particularly those with chronic illness and chronic disease, more effectively in the community.

We try and move away from the approach we have right now, which is that we wait until people get really sick and they show up at the acute care or tertiary care
[ Page 5837 ]
facilities — or, to use the language of most people, at their local hospital — to be treated for whatever their ailments are.

We have made some progress on that. We've worked with the B.C. Medical Association, and we've provided over the last five or six years about $800 million to specifically enhance the family practice program by having a number of services. One of them was the enhanced family practice program, which I believe may be the program that the member is referencing here with respect to the case in Abbotsford.

The enhanced family practice program was a program that provided grants to enhance the family practice. I believe, when we get the information on the case that the member is referencing, that it will probably be a case of where a doctor, operating their family practice or private practice, applied and received a grant under the enhanced family practice program, hired a nurse practitioner, and the nurse practitioner probably undertook some very good work. Then the grant came to an end.

That may have been the case. I don't know, but I'm getting that information.

What I do know is this: the efforts that we've undertaken on primary care have yielded some very, very positive results. We haven't particularly done a good job with the nurse practitioner portion of that. That's something we're working on with the Nurse Practitioners Association, with our head nurse in the ministry and with staff to figure out how we can better incorporate the nurse practitioners into our system and do a better job of taking advantage of the exceptional skills that they have and the important role they can play within the health care system.

The Healthcare Quarterly journal validated some of the work we've done with respect to primary care, and I do want to point that out. In fact, Dr. Marcus Hollander undertook a review of some of the initiatives we have made with the BCMA. He actually followed a cohort of chronic care illness patients and demonstrated that, actually, the benefits of treating in this way and the upfront investments we've been making to deal with them in their community have resulted in a cost benefit of at least 3-to-1, the benefits outweighing the additional costs that we're investing in the enhanced family practice program with the physicians. The benefits were very clear and very compelling.

[H. Bloy in the chair.]

I'll quote from Healthcare Quarterly into the record: "Family practice in B.C. was in decline in the 1990s. In order to reverse this trend, the Ministry of Health Services and the BCMA agreed to collaborate to support family physicians in the province." That, I think, has been a cooperative relationship that is really starting to yield results, and that has worked very well with family physicians. It has not worked as well with the nurse practitioners.

Hopefully, now that I've given a high-level response to the member, we might have some specific answer to the question with respect to the Abbotsford case.

J. Kwan: I thank my colleague the member for Vancouver-Kingsway for yielding the floor to me to ask some specific questions related to services in my riding.

In fact, I'd like to ask the minister about the Health Contact Centre. As the minister knows, on May 3 the Vancouver Coastal Health Authority closed down the Health Contact Centre in the Downtown Eastside. This is a facility that's right beside the Carnegie Community Centre. It is the heart of the Downtown Eastside.

You may not be aware, Mr. Chair, that this important facility was opened back in the year 2000 as part of the Vancouver agreement. It was one of the four health facilities that were established as part of the comprehensive four-pillars approach to the strategy.

The context in which this facility was opened included the issues around overdose deaths, epidemic rates of HIV/AIDS, hepatitis C, public disorder in front of the Carnegie Community Centre and so on. There was a desperate need, for members of the community, for this health service.

[1730]

The decision to suddenly close down the Health Contact Centre, of course, has tremendous impacts for people in our community, and one would argue that it is shortsighted in terms of public policy. The Health Contact Centre was particularly important for low-income residents during the evening hours, nighttime hours, when other facilities were closed.

It has resulted and demonstrated that it has resulted in less emergency room visits and less 911 calls because of this service. It helps to connect and provide a place — for women, particularly — for all members of the community to access service, to make connections to other health care provisions which they might otherwise not have access to. This is having huge impacts on the people in the Downtown Eastside.

My first question is: could the minister please advise this House how much is being funded for the Health Contact Centre? In other words, what was the budget allocated for the centre?

Hon. K. Falcon: I've got staff looking up the budget amount. I haven't got that right at my fingertips, but staff are looking that up.

I do want to comment on the Health Contact Centre, because I do think it is important to address this issue on the record. The member is right that the program started, as I understand it, in 2001, but let's not quibble. It's either 2000 or 2001. It was always started and intended to be a transitional service. What the centre provided was late-afternoon and overnight access to
[ Page 5838 ]
telephones and washrooms as well as basic foot and wound care to individuals in the Downtown Eastside.

Now, what has changed since it was opened initially, as I say, as a transitional service, which was supposed to be in place on a transitional basis until other services could be put in place permanently…. Those other services have been put in place. There are a number of them. Clients can access available services nearby, including the Downtown Community Health Centre, the Pender Community Health Centre, the Vancouver Native Health Walk-in Clinic, the Rainier Hotel for women in the Life Skills Centre.

I also understand that some of the savings from the closing of the Health Contact Centre are being reinvested. For example, an additional $200,000 is being reinvested in the Life Skills Centre, which provides many of the exact same services as the Health Contact Centre.

The other thing that I think is worth pointing out — and this was done after a review by Vancouver Coastal — is that when they were doing renovations on the Roosevelt Hotel the centre was closed for several months in 2008. What they found interesting is that during the time it was closed for several months, there was no noticeable impact on any of the clientele that was being served. I think that is, in large part, due to the fact that all of these other services are being provided within a number of blocks of that area.

It is a change that reflects the fact that this was originally established as a transitional service. It was never meant to be a permanent service. In fact, some of the news articles I had read about it at the time from community activists in the area pointed out that it was never the right size or the right facility for the services they were trying to provide. As I say, a number of those are provided in other facilities in the area.

Hopefully, now I might have the budget amount for the member. I do. Apparently, the annual cost to operate the service was $962,000.

J. Kwan: The budget for the centre was $962,000. The minister said that about $200,000 is being reallocated to another service in the community to enhance services in that facility. That really leaves an outstanding of $762,000. I'm wondering: where has that money gone to, in terms of reallocation of dollars in the community? That's one question. I'm sure the minister's staff will look for that answer for the minister.

[1735]

While they're looking, let me just respond to the minister's comments about the centre and its utility, if you will, for the members of the community. I note that it's true that there are other services in the community, and they're all doing excellent work. There's no doubt about it. We're talking about a community that faces a lot of issues and challenges, many of whom are very marginalized.

The hours of operation for these facilities actually vary. Very few, if any, provide 24-hour service, which is critically needed. The other facilities in the community that have lobbied for 24-hour service for a long, long time, for which they have not received funding from the government, include Insite, as one example.

To that end, really becoming a bridge of services in the community, especially in those vulnerable hours when people can't access service, becomes a critical issue for a marginalized community. So I want to put that back to the minister for his response in terms of access to service related to that.

Then, on the question around moneys — $762,000 in total — is the minister saying, as well, that the moneys allocated for the Health Contact Centre are all being reallocated back into the Downtown Eastside community for services in that neighbourhood?

Hon. K. Falcon: Certainly, we know that even with the substantial increases in the budget that are being provided to Vancouver Coastal Health, they still have pressures on their budget, as the member well knows.

One of the things they are doing is making sure that where they have duplicative services or services that no longer meet their original purpose — or are, frankly, having the exact same services being provided elsewhere in the community — then they are ensuring that they are not just keeping a program going.

Particularly, a transitional program that was originally supposed to be a transitional program while the other services were put into place — that's not something that would just continue to be funded forever. Those dollars will all be reinvested back into Vancouver Coastal Health system. There's no question about that.

But this, I think, is exactly one of the things that needs to happen. It is difficult, because we do have a tendency to say that once a program starts, you know, it just continues forever. What Vancouver Coastal learned, actually, was that the services being provided there were being provided in a more robust way — much more comprehensive health services than just the minor foot and wound services that were being provided, and the free use of telephone and bathrooms on an overnight basis at the Roosevelt Hotel.

Many of those same services were being duplicated — in fact, enhanced — in some of the other operations that I mentioned to the member. That became, apparently, quite evident when it was, as I pointed out, closed down for a number of months as a result of flooding that took place in the hotel. As a result of that, significant investment had to be made to deal with the flooding issue, and there was no noticeable impact whatsoever on the clients, according to Vancouver Coastal. That's primarily because there is that whole range of other alternative services now in the area.

Look, this is, I think, one of the issues that health authorities have to deal with. They have to look at the services they are providing and determine which services are
[ Page 5839 ]
meeting their original objectives. Are they meeting those objectives? If they are not, how can they make them meet those objectives?

Is the service already being provided by other service providers? If that is the case, then, do they need to duplicate the service? If so, they may continue to do so, if it makes sense. In this case, my understanding is that after the review, they did not feel that that was the best utilization of the almost $1 million that they were putting into that operation annually.

J. Kwan: I appreciate the minister's high-level answer, again, to my question. But I asked a very specific question: where did the $762,000 go? And what other service in the Downtown Eastside actually provides 24-hour service?

[1740]

Hon. K. Falcon: The Life Skills Centre, Member, as you know, is receiving an additional $200,000 investment. I'm advised that the Life Skills Centre is a much larger and better-equipped facility that's better suited to provide access to daily living needs — like showers, bathrooms, telephones — and offers a wide array of health, mental health, social service and recreational activities and operates as an emergency shelter overnight.

Vancouver Coastal's investment in this facility will pay for increased staffing and additional programming for an additional 12 hours a day, five days a week.

J. Kwan: Yeah. You know, I don't want to belabour the point, because the minister actually didn't answer my question again.

The only amount of dollars that he cited out of the $962,000 allocated for the Health Contact Centre was the $200,000 allocated for the Life Skills Centre. In other words, it's a cut in funding for the community of $762,000, which the government cannot account for, the minister could not account for.

I know that the minister would actually like to get up and say: "You know what? We've increased the health care budget." In the meantime there are programs being cut in the community that are critical to members of the community.

We heard earlier today in question period about the Broadway Connections program, impacting people with disabilities. Somehow the government thought that it's okay to cut this $100,000 program that supports people with disabilities. It's specifically designed for people with disabilities, so that they can engage in the community, make the connections, build friendships and, as the Mount Pleasant Neighbourhood House people say, be part of the Mount Pleasant community family. That's what's happened in that scenario.

People who saw the conception of this program come into play 25 years ago are now seeing that program lost. Denise is the individual who saw the program come into play. Another woman, Betty-Ann, has been using that program for 17 years and all of a sudden has had the rug just yanked out from under her. She was told by some representative from the health authority at one of their program meetings that night that the program is now lost.

Somehow this is supposed to be progress. Somehow, according to the minister, this is all good for the people. The last I checked, when a program is good for people, that evaluation actually comes from the people, who make that determination. Governments get into doing programs and determine…. Programs that are the best ones for the community are the ones that are utilized by the community. That's when programs come into play, and the people who make them work are the people in the communities who provide the staffing and the servicing of these programs.

At the end of the day — this is what I'm hearing from the minister — this is a program cut. Make no mistake about it. This is a program cut, just like the Broadway Connections program is a program cut. Somehow the government in its own wisdom decided that these are redundant programs. They're duplications, I think he called them. What they really are, are budget cuts for community programs that have been servicing the community well, and now the community is left without.

[1745]

The minister couldn't answer the question around 24-hour operations because — guess what, Mr. Chair — there aren't very many in the Downtown Eastside. This is one of them, the Health Contact Centre, and now it is going to close.

Hon. K. Falcon: The Washington Needle Depot, for example, is another 24-hour-a-day operation on East Hastings Street.

J. Kwan: It's a needle exchange. It's not a drop-in program.

Hon. K. Falcon: Look, I know that the member opposite is wedded to programs and believes that every program must just stay regardless of what the evidence tells us, regardless of the usage, regardless of whether it's meeting its original purpose. The member believes that you should just continue to fund them ad infinitum — never ask any questions, never look at what the evidence tells you.

It doesn't matter, when it shuts down for a number of months to have renovations undertaken, that there's no noticeable impact. It doesn't matter that Vancouver Coastal Health advises that not one client will lose access to core health services. In fact, they've buttressed up the services in the Life Skills Centre. But none of that seems to matter to the member opposite.

First of all, I will say that there are probably more government programs — federal, provincial and local — in
[ Page 5840 ]
the Downtown Eastside than in any other piece of real estate in the country. I think you would be hard-pressed to find more government services.

I don't equate the number of government services and programs with results. What we are focusing on are outcomes and results. We want to make sure that people get the kind of care that they deserve, that the services that are being provided are meeting not just the needs of the people that are working and employed in the facilities but the needs of the population. That is the lens through which I know Vancouver Coastal was looking at the program of the Health Contact Centre.

Remember, as I said to the member, it started out initially as a transitional service that was put in place on a transitional basis. Nine years later that transitional service, which was originally to be a transitional service, is still operating, in spite of the fact that you've got all of these other services providing very similar services in that neighbourhood. I just think that it's very appropriate, when the health authority is dealing with pressures, in spite of the significant budget increase, that they look at all the programs they're delivering.

I will also say that the member talks about a cut. Actually, every dollar is being reinvested back into Vancouver Coastal. I understand that their home support services are going to be buttressed up with some of those dollars. That is an area that is actually experiencing increased client demand year over year, and that will go towards providing very important home support services for members of Vancouver Coastal Health Authority.

So every single penny of those dollars, every single penny of the savings that are being driven by health authorities as a result of a number of initiatives they have underway — which, by the way, that member opposes, as do all the NDP just reflexively…. Even the joint procurement, for example, that they're doing — that has saved, thus far, over $115 million by doing something different, that is allowing $115 million now to be put back into front-line care — is a change, and I think that is a very positive change. As usual, the NDP opposes those kinds of things too.

The fact of the matter is that we have in British Columbia a challenge, as all governments do, where we are seeing health care expenditures rise 15 percent over the next three years. That is a very high level of increase. That's over $2 billion in additional dollars going in just for operating. It doesn't include the almost $3 billion in capital that will be invested over the next three years. In spite of that, we know that there is still virtually unlimited demand.

I don't make any apologies for the fact that all the health authorities, including Vancouver Coastal, are looking at their operations. They're looking at what are duplicative services. They're looking at how they can deliver services better. They are making sure that the services they are delivering are direct health care services, making sure that that is the priority in their health authorities, and I support them in doing that.

G. Coons: Just one comment for the minister. The Washington Needle Depot is a needle exchange and not a drop-in centre. I just wanted to make a comment on that.

I have two issues I'd like to bring up with the minister dealing with the north coast. He's heard some concerns about the nurse practitioner in Bella Coola. He's gotten some communications about that. I'm glad he was mentioning the exceptional skills and valuable role that nurse practitioners play.

[1750]

In Bella Coola they are losing their nurse practitioner that they've had for two years. It's gone a long ways to breaking down barriers, improving health care. They assist members as far as women's health, prenatal youth health, chronic disease, palliative care, home care. If it's not continued, there's going to be a huge decrease in interdisciplinary care, less consistent chronic disease follow-up and the loss of the holistic nursing focus care at the clinic.

I was there a week and a half ago. I met with the Nuxalk, and they have real concerns. Charlie Nelson talks about: "If this nurse practitioner program is discontinued, it's going to be a big step back in our health plan, and we're concerned about the services." The CCRD, the regional district, considers it a vital, essential component for health care in the whole valley. At community meetings I heard the same message. It makes no sense at all. It's incredibly valuable. It will only increase health care costs.

More important is a letter from the doctors in the region that serve this remote location. "The nurse practitioner program has been an important part of health care delivery in the area," they say. "There's a significant need, and we strongly feel that the benefits are clear-cut. The absence of this program will be felt profoundly in the community."

The minister talked about the exceptional skills and gave a high-level response about nurse practitioners earlier. It's clear that there's no duplication of services at all in the Bella Coola Valley. So I'm just wondering: with the realization that the loss of this nurse practitioner position in the Bella Coola Valley will significantly increase costs to the ministry and to the minister, will he immediately work with the Vancouver Coastal Health to ensure that there's permanent funding for a nurse practitioner in the valley?

Hon. K. Falcon: Thank you for the question, Member. I recognize the member didn't have the opportunity to be in here when we earlier had a discussion around the issue of nurse practitioners, but one of the things I acknowledged is that this is an area that I don't think government has handled well in terms of properly integrating nurse
[ Page 5841 ]
practitioners into the health care system and following up on the significant dollars we put in to ensure that that would happen. Just to reflect back on some earlier comments for the benefit of the member.

What happened was that we established a nurse practitioner program in British Columbia. We were the first to do it in the country. We're proud of that. It's essentially a master's degree program for registered nurses that can allow them to upgrade to a higher level. And then between 2005 and 2009 we provided health authorities with $62.7 million to incorporate nurse practitioners into the system. But to be honest, that's where I think we did not do a good job of making sure that we worked with health authorities to follow and figure out exactly how the nurse practitioners were going to incorporate themselves into the system in a way that met the needs of the system.

I am aware of the situation the member talks about. I believe that actually the United Church delivered services in Bella Coola, funded through the Vancouver Coastal Health Authority. One thing that I can assure the member of is…. I think the community is understandably concerned about why this is coming to an end, and the short, honest answer is because there wasn't good thought given to how we could have sustainable funding to ensure that these kinds of things could continue, as opposed to a grant, which was how these positions were funded in the past. Obviously, grant funding by a health authority is not the ideal way to ensure that there's going to be a continued service.

[1755]

What I want the member to know is that we are working very hard right now with all the health authorities to figure out how we are going to link nurse practitioners and other health professionals into helping us better deliver primary care with a funding model that will be sustainable, that will ensure that we can keep nurse practitioners practising in places like Bella Coola.

We are continuing to do the work, Member. I hope that we can have some answers for the member specific to that case in the coming weeks.

G. Coons: I just want to make a comment before I get on to my next situation. In the Bella Coola Valley over the last couple years, since the nurse practitioners were there, there's been a 20 percent reduction in ER visits; a 50 percent decrease in people with diabetes admitted to the hospital; and a significant 53 percent drop of people with A1c values, more than eight within the community — so a significant improvement.

Again, as the minister has recognized, the exceptional skills and the valuable role that we play…. A place like Bella Coola does not have the duplication of services that we find elsewhere, where perhaps services are being cut or slashed — or redefined, as the minister might say.

Thank you for that, Minister. I'll let people know that you're looking into that.

My second question is dealing with Northern Health and the medical stay units that Northern Health has provided to patients that need to visit Prince Rupert for medical services, either from the villages or from Haida Gwaii. Just recently, with two weeks' notice, it was determined that they are going to cancel the medical stay units May 31.

These units are provided to patients at $25 per night — a low cost so patients and their families can come in to Prince Rupert and stay. Now they've re-evaluated the program, due to, I believe, provincial funding, and have given an accommodation list to people with names of hotels or bed-and-breakfasts in Prince Rupert where the costs are going to be 50 percent more — instead of $25, at least $50 per night for the winter rates, or 69 percent more with the winter rates.

There's considerable concern among some of the mayors. Barry Pages and Carol Kulesha have major concerns about this — again, the lack of consultation and the enormous cost that's going to be downloaded onto patients in need of medical care.

I'm just wondering: will the minister work with Northern Health to ensure that the medical stay units remain open so at least necessary health care for patients doesn't skyrocket by 50 to 69 percent for those that need and have medical appointments in Prince Rupert?

Hon. K. Falcon: I thank the member for the question. It is true. This is a program that has operated in Prince Rupert. It's the only community, I understand, in the entire Northern Health that has a program like this.

The essence of the program, just for the benefit of those that are paying attention, is exactly like the member talked about, which is that it provided a cheap rate of $25 and provided some rooms for those that were coming down to receive medical services. Typically, most of them, probably two-thirds or more, would be mothers that are preparing for giving birth.

Some of this may just be confusion, because what I understand is that, actually, the Northern Health Authority is still in discussion with the community about this. My understanding is that they've entered into an arrangement with a number of the hotels — there's at least ten, I understand — that will provide rooms at that rate, beginning at $25 a night.

The idea, I think, is that through cooperation with the local hotels and motels in the area, they could provide the exact same service in cooperation with the private sector to deliver those. I understand a number of them have rooms available at that $25 level.

I also understand this is a discussion that is still ongoing. I don't believe — and I stand to be corrected — that a final decision has been made. They are still talking to the community and trying to make sure that they're all operating from the same fact base so that they understand what it is they're actually talking about trying to achieve.
[ Page 5842 ]

My understanding is that those discussions are still continuing. Hopefully, they can be resolved to the satisfaction of the communities.

[1800]

G. Coons: Just a follow-up question with the minister. Yes, the letter came out saying May 31, but due to some of the concerns, the administrator is going to be travelling to Haida Gwaii to do some more consultation. We'll see what develops from that.

But yes, the accommodation list…. They have worked with them, and the cheapest room is $45 plus tax, instead of the $25 per night. So with tax, it'll be doubled to over $50, as I said. It would be 50 percent increase, and a 69 percent increase in the winter months, unless they wanted to go to a dorm room at the Black Rooster, where it is $25 a night. I don't think, if you're coming in on medical, that you want to be in a dorm situation and meeting that $25.

That would be the only available accommodation out of the 15 or 20 that they have given to people. I will make this available for the minister.

Hon. K. Falcon: Certainly, I will follow up on some of the details, because I was led to understand that they've made arrangements with at least ten motels that would offer that $25 rate. If that is not the case, then I certainly would be interested in clarifying that.

I thank the member for the question, and I look forward to following up with Northern Health.

D. Donaldson: I have a question for the minister that also deals with travel and travel costs. I had a situation where a couple of residents of Smithers came into my office to provide me with an analysis around travel costs, and I'll share that analysis with the minister. They happened to be seniors, and although it's a specific case, I think the example applies quite broadly throughout the Northern Health area, especially in Stikine. It's in relation to this budget vote that we're discussing.

The analysis that they provided was around the high cost of accessing specialized medical services, around travel. I'm going to quote from the presentation they gave me.

They say: "While it is inevitable and necessary for many specialized services to be centralized in major populations centres" — that's their view — "however, it is neither reasonable nor inevitable that it should be prohibitively expensive for people who live in remote areas to access such centralized services."

They go on to say: "Our acceptance of the necessity to centralize some medical services also requires acceptance by the health care system of the necessity to provide access to those services for rural and remote citizens at a cost in time and money close to that for those in our major centres."

The interesting part is that they took time to do quite an analysis on what it costs to go from Smithers to Vancouver to see a specialist. The minister, I'm sure, is aware that Northern Health has decided on an option of providing a discounted bus service for those kinds of visits.

This couple — and I can provide this analysis to the minister and to his staff — looked at the cost of taking that bus to Vancouver from Smithers versus flying. The minister likely knows this, but many people do not perhaps know that the bus service going from Smithers to Vancouver requires overnight stays because of the scheduling in places like Prince George — two nights, in fact. Then, because of the scheduling, it also requires additional overnight stays in Vancouver.

So they looked at this. The average figure for travel expenses by flying…. This involves some overnight accommodation, but by the flights out of Smithers, you can also get a specialist appointment and fly back in the same day. Their analysis included some overnight. The average figure for travel expenses flying was $700, and the Northern Health bus was $790. This is out-of-pocket expenses, of course.

What they conclude from this is that it would seem — with the costs incurred by Northern Health to run the bus, as well, in this — that it would be less costly for Northern Health and certainly for the patient if air travel was subsidized, as is ferry travel, at least by 80 percent.

[1805]

They haven't seemed to be able to get anywhere with Northern Health on this issue, and they point out that there is a lack of ridership, in their experience, on the bus from Smithers to Prince George.

What they're looking at here is that Northern Health has spent $4 million for medical transportation, and a lot of that is on a contract to provide the bus and service that I discussed. However, in their analysis, as I say, it's less costly for a person to fly, and if Northern Health was not using that bus route, perhaps they could subsidize the flight even further. Again, I said I'll provide this analysis that this couple has done. They've put a lot of work into it.

The question is: would the minister commit to investigating this analysis, and would he address this issue with Northern Health as a potential positive travel solution for residents in places like Smithers and the Hazeltons as well?

[1810]

Hon. K. Falcon: I thank the member for the question. It took a little bit of time because there are a number of programs we're very proud of that try and address that. The member has touched on one of them, of course, which is the northern connections bus program that we launched in 2006.

For the benefit of members who may not be familiar with this, it utilizes customized, wheelchair-accessible,
[ Page 5843 ]
48-passenger coaches and 20-passenger buses that are equipped with numerous amenities — including DVD players, satellite radio and wheelchair-accessible washrooms — to try and make the trip as comfortable as possible.

Most of what I've heard back with respect to the northern connections bus program has certainly been quite positive. I think if the member…. Part of what I heard him asking or suggesting was that he thought that there could be cheaper ways to provide flight services — did I get that basically right? — instead of bus services.

I think that if the member has suggestions in that regard, he should definitely take those to Northern Health. I actually think they would be interested in hearing about that because I know they, through these kinds of programs, are certainly doing their best to try and address the unique situation that folks in rural B.C. have.

It doesn't stop there. In addition to the northern connections bus program, we've also been investing…. Now I just lost one of the other pieces of paper here that talked about the specialists program that we have. I apologize, Member. I can't find it.

It is a program where we pay the travel costs and a premium to encourage specialists to come to the north and visit rural-remote communities to be able to bring that service from the Lower Mainland up into northern B.C. It is called the northern and isolation travel assistance outreach program.

In the most recent year of which I have information available, we invested over $3½ million to provide over 2,600 visits. Again, it is bringing that specialist service up into northern British Columbia to provide the supports that those folks deserve.

It goes beyond that, even. I had the real pleasure, back in mid-April with the Premier, to announce a new B.C. family residence program. The member may not be familiar with this one because it's a new one. Essentially, this will provide subsidies for a family's travel and accommodation whenever they have a child that requires care at B.C. Children's Hospital, and B.C. Children's Hospital, as we all know, is a world-renowned facility that treats children from right across the province of British Columbia.

With this program, we have provided $13 million, just in this year's budget, to provide for these travel and accommodation programs. We're doing that in cooperation with Hope Air and the Shriners. We are really very, very excited about that program because that makes a real difference in the lives of families and can provide accommodation for up to 30-day stays.

[1815]

In addition to that, though, as the member well knows, we also are increasingly investing in the kinds of facilities, whether it's the northern cancer strategy that not only is investing $100 million in a new northern state-of-the-art cancer centre in Prince George but also outreach facilities in different communities….

We're also increasingly using video conferencing and telehealth to provide more opportunities for people to receive consults, for example, through video conferencing, which obviates the need to have them travel all the way to the Lower Mainland, in some cases, when that's required. It provides, again, another opportunity to provide more services, better services, to folks in northern British Columbia and rural B.C.

The suggestion from the member that the member may, indeed, have other ideas, that it could even be cost-effective…. I know that would certainly be, I think, welcomed and listened to with great interest by the very capable folks in Northern Health.

D. Donaldson: Thank you for that answer, to the minister, and to the staff, thank you for the work you do to provide the information that the minister uses.

I'd like to point out that…. This is from the couple that came in, and the people they talked to. The bus service has always been contentious, they've said. The buses are not set up for long-distance travel. They have insufficient legroom between rows, fairly hard seats, do not recline sufficiently, and it's impossible as is to access the washroom without stopping the bus.

Those are the kinds of concerns that I will bring up with Northern Health. But what I'm asking the minister is on the bigger picture around this analysis that they have done on air travel being actually less costly to the user than the bus service.

The question I had is: would the minister investigate this analysis and address it with Northern Health? This couple, on behalf of many, has tried to do that and has not gotten anywhere. It seems like possibly a potentially positive solution. Would the minister, in his role as being where the buck stops when it comes to health authorities, investigate it on behalf of these constituents and on behalf of rural people in B.C.?

Hon. K. Falcon: I'm sorry to hear that the services — all of which I've just listed and all of which have come about in the term of our government — have not apparently met the satisfaction of this couple. I do think it is a challenge, sometimes, to meet every member of the public's need and belief that the system must provide a level of service that, I have to respectfully say, sometimes is not entirely reasonable.

Now I am not, nor would I, to be honest, reviewing directly the idea they have. I do think that if they think they have a good idea, they should share it with Northern Health. If they don't think they've gotten a fair hearing from Northern Health, certainly the member can bring a copy of that to our office, and I can have staff take a look at it.

But I do, I think, have to say — I've said this before, and I say this to the public, but I think it bears repeating in this context — that we cannot pretend as a health system to try to be all things to all people all the time at no
[ Page 5844 ]
cost. I think we have to be at least honest with the public about that.

I have just enunciated a number of programs in which there's been an investment of literally over…. Well, just on the ones that I mentioned, investments of tens of millions of dollars to try and deal with these exact challenges. I think these are programs that by and large…. What I have heard is some pretty positive feedback.

While I always respect and understand that people would like to see government do even more, I do think we have to reflect on the fact that even with the massive double-digit increases in the health care budget over the next few years that we're providing, there is a context. The context is that we are in a world economy that is still very, very shaky.

[1820]

We are starting to see some signs of recovery, but I think that the very fact that our government has been able to announce, implement and move forward with all of these travel assistance programs and all of these programs which go directly to try to meet the needs of folks that live in rural British Columbia is a pretty substantial step forward. None of them existed a mere ten years ago, and all of the costs and all of the burden was, unfortunately, on the backs of individuals from rural British Columbia.

I do think it is progress. I don't pretend it will be perfect for every individual out there, but I would respectfully suggest that the couple the member is referencing should try and put that information together as best they can and present it to Northern Health and try and outline where they believe the benefit and the savings are involved.

As I say, if they can't feel that they get a fair hearing, then certainly, I'll have staff take a look at it to make sure that a good idea is not being overlooked.

M. Sather: I wanted to ask the minister about the out-of-province, within-Canada medical care program. Reading from material provided by government, it says: "All insured medical services obtained by MSP beneficiaries from a physician licensed to practise medicine in the province where the services are obtained will be covered at the appropriate provincial rates without prior approval by MSP unless otherwise stipulated by a reciprocal agreement with another province or territory within Canada."

My question is: with regard to Alberta, do we have one of those reciprocal agreements?

Hon. K. Falcon: Yes.

M. Sather: Does that agreement then stipulate that the aforementioned medical services would be covered at the appropriate provincial rate then? Does that reciprocal agreement negate that, or what effect does the ministry's reciprocal agreement have?

Hon. K. Falcon: The answer is yes. We do, under this reciprocal agreement, have an arrangement whereby if a service is provided in either province to a citizen from those provinces in the other provinces, that service will be provided, and the bill is then submitted to the respective province of which the citizen originally patriated from.

M. Sather: Could the minister then tell me what sort of services to somebody that was hospitalized in Alberta from British Columbia on an emergency basis…? What kinds of services are covered, then, for them?

Hon. K. Falcon: Those would be the usual medically necessary services one would expect: the hospital services, the physician services and including, of course, diagnostics that may be required as part of those physician services.

M. Sather: I bring this up because it was brought to my attention by one of my constituents. I can't give the minister the specifics of this person because we haven't been able to contact her lately. Apparently, she is back in hospital.

[1825]

Her experience was that she was hospitalized in Vancouver — she's from Maple Ridge — but the capacity wasn't there to give her the emergent cancer-related surgery that she required, so B.C. Bedline arranged a flight for her to Edmonton, apparently on a Learjet. When she arrived there, she had a fairly lengthy stay, quite a long recuperative period, and as not a woman with a lot of financial means she ended up having to pay a number of things, including her prescriptions. That was $147. Then Ensure, which is a supplement the minister may be aware of for people who require that kind of thing, was another $204.

More significantly, though, after she came out of surgery, and she had a fairly long stay in the hospital, she had to pay as an out-patient after she left intensive care, although she was still in the hospital, and that was around $625. These were out-of-pocket expenses, which surprised me in the first place. I thought it would be more like the minister was saying — that the practitioner there or the hospital would incur the costs and then bill us. But these were out-of-pocket expenses. Is that the normal, typical way that things are done, then?

Hon. K. Falcon: Prefacing my remarks by first of all emphasizing that it's difficult without having the exact details…. The member points out why that wasn't possible for him to have those details. I certainly respect that, but it is a bit of a challenge.

What I can say, though, in principle, is that if the individual or an individual received the drugs as a result of her in-patient treatment in the hospital, of course that would have been covered. But if the individual has been
[ Page 5845 ]
discharged by the hospital, then yes, the prescription drugs would be the responsibility of the patient. That is no different than what would be the case here in British Columbia too.

When you're in the hospital receiving care, the prescription drugs are part of the care that you receive. But once you're discharged from the hospital, you have a responsibility, of course, to purchase your own drugs to provide ongoing maintenance, or whatever, of your particular malady. Of course, we've got a PharmaCare system that will cover drugs, depending on income and all the rest of it.

M. Sather: Thanks to the minister for his answer there. I wanted to also focus on the accommodation, the medical accommodation that she had to pay. She had to pay as an out-patient, but she was still in the hospital — again, out-of-pocket expenses. Is that not recoverable, or how does that part work?

Hon. K. Falcon: I do think this is probably something we'll have to get the details of. You can't be an out-patient and be an in-patient at the same time, so I'm not really sure I'm understanding, nor are my staff understanding what exactly happened here.

I think that maybe the best thing to do, if I could, Member…. If you can contact the family of the individual, even if the individual is hospitalized, and try and get the specifics of the case, then it would probably be a lot easier for me to provide…. I can provide written answers, too, if the member wishes, to address the particulars of the case.

M. Sather: Well, the thing is that we have talked at length. I've spoken to her, and she's now hospitalized, so I can't. Her parents are elderly, and I mean quite elderly, so they're not a really good source of information. But these are the facts as she's relayed them to me. I did contact medical authorities to try to help her get reimbursement. This is ongoing over a month now, and she hasn't received anything that I'm aware of.

[1830]

What was even more shocking to me, though — and it's very clear from what she told me, unless she wasn't telling me the truth, but I have no reason to believe that — was that she was in the hospital and that she was charged for medical accommodations.

In addition to that, when she was discharged, there was no travel paid back to Vancouver. She had to pay for a WestJet ticket herself. She was fortunate that family members came through, or she would have been hitchhiking back to the Lower Mainland. That was $218 for WestJet and altogether some $1,330.

I don't understand how this could happen. It seems to me that if you send a patient to Alberta — she didn't ask to go there; the doctor sent her there — I would have thought that return transport would be included. I'd ask the minister, then — in a general sense, if he doesn't necessarily want to talk about this particular issue: is that the way it works? Can somebody be sent to Alberta by a government-commissioned airplane and then be left to their own devices to get themselves back home once they get out of the hospital?

Hon. K. Falcon: I guess, two things. Under the reciprocal agreement, if the individual was receiving in-patient hospital care, then that would have been covered. That should have been covered. If that is not the case, we'd certainly be interested in hearing that. But that would certainly be unusual to the extreme.

In terms of the travel question, the member pointed out correctly that the individual was flown by Learjet to Alberta to receive whatever specialized services were necessary to be received. It is true that upon discharge the return airfare is not paid for by taxpayers. This is fairly common, even in British Columbia, as the member well knows.

If you are someone from northern British Columbia and are required to be flown down on some sort of a medical emergency to receive treatment in the Lower Mainland and are able to be discharged and don't require medical transport back to your home, then you are also responsible for paying your own way or finding a way of getting back home. That has been the case in British Columbia for many, many years.

Now, the member probably wasn't here for our previous discussion that we just had around the issue of trying to recognize that there are unique circumstances to folks in rural British Columbia that we have tried to address through a number of programs — the northern connections bus program, the new children and family program that will look after the accommodation and flight costs for individuals whose children from rural or remote communities are required to receive care at B.C. Children's Hospital for up to 30 days. That's a $13 million program we just announced.

There is no program to cover off a situation like the member has mentioned, whether someone has come from northern British Columbia to the Lower Mainland or whether someone has been flown to Edmonton to receive specialized care, upon discharge.

D. Thorne: I have just one question.

Interjections.

The Chair: Please continue, Member.

D. Thorne: I wanted to ask one question, as I just said, but I'm referring to a number of different programs that have lost their funding through Fraser Health in the Tri-Cities area — one in particular. I'm sure that the minister and his staff are very aware of these programs.
[ Page 5846 ]

There were several programs last year — the adult survivors of abuse program at the Tri-City Women's Resource Centre and the SHARE Changeways program — where funding was cut. I know I have talked to people in the ministry about these cuts.

[1835]

Some of them are now being done sort of by people in another part of the health system, even though I and many others are quite alarmed at that because we don't believe the service can be as good as a singular service that's provided at an agency. I can understand how you save money, costs, when you combine a program with another program that's already working. So these two programs — I have checked into those.

Now, since those programs, we have lost what I consider to be a couple of other very important programs in the Tri-Cities. One is the Community Volunteer Services society which was an agency for seniors, an outreach program for isolated, homebound seniors. When that program funding runs out, I think it's at the end of May or the end of June, there won't be another service to take the place of that particular service. So that's kind of alarming, especially since it was a very, very cheap program run by volunteers. I just don't know how the community of isolated seniors that it served is going to adjust to that program.

Then, of course, we have the combining of the crisis lines in Mission, the Tri-Cities and Surrey, with Surrey taking over. I'm sure that Options and Surrey Community Services will do a fine job with the crisis line. However, the loss of the volunteers in Coquitlam — I just wanted to put that on the record — has been quite a blow to the crisis line program because these people are not, in very large numbers in any case, going across the bridge to Surrey so far.

I, along with others in the community, am quite concerned about how that will affect the crisis line in the end. Will we be able to continue providing the same service for the north Fraser and the south Fraser with volunteers and not end up spending money that we haven't spent on it?

Melissa Park Lodge was a mental health housing facility. People have been moved from there, and some of those moves have been more successful than others.

I just wanted to finally come to the program that of all of these programs has most alarmed the community and which has received a lot of attention in the media and in the House because several of us have brought it up. That's the Chimo Achievement Centre. I know that everybody sitting on the other side is very aware of the Chimo Achievement Centre, which is a local, therapeutic day program for adults.

We, myself and people from the centre and people from the community, have tried for six months to save that program, mainly because not only is it important to keep the clients independent, but there is no other program to replace Chimo. In fact, at the end of our attempts to save this program, the ministry…. Or I shouldn't say the ministry, because it would be Fraser Health that actually came back and said in writing that one of the main reasons that this program was closing was because it was a unique program. There was no other program like it in other parts of the Fraser Health region and, therefore, it wasn't fair to other parts of the region.

I'm at the point where I don't know if it was closed to save $160,000 a year or if it was closed because it was a unique, wonderful program and everybody else was jealous. Both of those reasons were given many times by different numbers of people and different people at Fraser Health.

The question that I want to ask — and I'm sure you're wondering if I'm ever going to get to the question — is when these decisions are made…. I should say, perhaps, after these decisions are made, is there ever any attempt mandated from the ministry to the health authority that some kind of a study is done to see if, in fact, we have saved $160,000 on the Chimo program? Let's use that one for an example because it's the one that's most fresh in my mind, if not anybody else's. Are we saving $160,000?

[1840]

I just want to give you one example with Chimo. Elizabeth is one of the clients, and some of you may even be familiar with her name. She's a client with a tracheotomy, and after she enrolled in the Chimo program, approximately three years ago, she no longer had frequent visitations to the Royal Columbian Hospital and saved, I would think, probably hundreds of thousands of dollars for the health authority by the mere fact that she was no longer being admitted to the Royal Columbian Hospital frequently — a couple of times, two or three times, a year.

The Chimo closed its doors a couple of months ago. Elizabeth has already been back into the Royal Columbian for an extended stay. I do believe, from what I have heard from other people — ex-patients or ex-clients of Chimo — that she nearly lost her life. She is now at home and may, in fact, be back in the hospital any time.

I would think, knowing the costs of people who stay in hospital — the day costs, approximately — that we've already spent far more on Elizabeth, just one of 45 clients of Chimo…. We've already spent more than $160,000 in the Fraser Health Authority.

I want to know how we track the savings on these programs that we cut. How do the people in the Tri-Cities, Maple Ridge, New Westminster, Burnaby — all people who have clients in the Chimo program…. How can we be assured that we are saving $160,000 a year overall in the Fraser Health Authority by shutting down Chimo?

I mean, perhaps that's a difficult question. It seems so simple to me. If we're not saving the $160,000, which is nothing — it's such a small, paltry amount of money —
[ Page 5847 ]
why would we close a program like Chimo? And how are we tracking the savings? That's my question.

Hon. K. Falcon: I thank the member for that question. It's always great to have a good long lengthy one just as we're getting close to wrapping up and the minister is at the end of a long series of interactions. This is testing me, isn't it? This is all about testing the minister. So thank you, Member, for the question.

First of all, a bit of context for those that are listening to our discussion and debate this afternoon. The Fraser Health Authority was one of the health authorities that received substantial budget increases over the next few years. In spite of that substantial increase, the member would well know that they still had cost pressures.

In fact, last year their cost pressure was, if my memory serves me correct, about $160 million — meaning that even with budget increases, they were still facing cost pressures that, if they continued to do things exactly the same way as they had done or didn't look at how they were delivering services and whether those services were direct health care services that should be the priority for our health authorities, then indeed, they would have been facing a very serious deficit situation.

As a result of that, they reviewed a number of their programs. I should say Chimo was one of them, and the member has mentioned Chimo.

Because they are no longer able to continue funding the program as it is does not in any way suggest that the program being delivered was not a good program. The Chimo program was a leisure day program for adults that was operated by the Kiwanis society. It did provide some important socialization activities and services to the members that were participants. I understand there were, I think, 25 participants in the program.

[1845]

What Fraser Health did was recognize that though the programs that were being provided were important — what are described as social leisure programs — they did not focus on the kind of core home health services or medical supports that Fraser Health was wanting to make sure they prioritized their dollars towards. Those are programs like bath programs, wound care, blood pressure checks, fall prevention programs, caregiver respite programs, etc.

Recognizing that their discontinuation of the $165,000 in funding was going to have an impact on people that enjoyed the leisure programs that were provided, I know that they tried to work very carefully with all of the participants in the programs and their families to have them have opportunities to relocate to other programs in the community.

My understanding is that as a result of the work that was done, three of the clients moved to residential care. Apparently, those three clients would have moved to residential care in a very short time, whether or not the Chimo program continued. Four clients were referred to the Fraser Health adult day programs at Queen's Park and Hawthorne Care Centre. Seventeen clients were referred to other community recreation programs, such as the Dogwood Pavilion and Glen Pine's recreational facility programs. They're city recreational centre programs and programs that are run by non-profits. Three clients, I understand, opted to attend the private Lakeshore day program.

Is that a perfect situation? It probably isn't. I don't for a second want to take away from the fact that the services they provided there were probably very good services. But the truth is that both in the case of Chimo and in the case of the crisis line consolidation, which makes imminent sense, by the way ….

Rather than funding multiple crisis lines in every community, what they actually said is: "Let's have an RFP that says we will have one crisis line that everyone can call, that all volunteers will be welcome at, and we will do that in a manner that respects that we don't have unlimited taxpayer dollars." And that's what they did.

The Options Society I happen to know well. It has provided, and continues to provide, a number of services in Surrey in particular that are exceptional, and I have no doubt they will do a very good job.

In conclusion — because I know, Chair, I'm getting the look — what I will say is simply this. All of these are very difficult decisions for a health authority like Fraser Health. They have a challenge to make sure that they focus on core medical services, that they recognize there are not unlimited dollars available by taxpayers to fund every conceivable service. I think they tried very hard and were successful in meeting the budget pressures they faced and are continuing to provide services in the best and most responsible method they can.

The Chair: Seeing no further questions, I'll call Vote….

Member for Vancouver-Kingsway.

A. Dix: Hon. Chair, it's kind of you to say, but actually, we're discussing this tomorrow. So I was going to suggest that we move that the House rise and report progress and ask leave to sit again.

Motion approved.

The committee rose at 6:49 p.m.

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