2011 Legislative Session: Third Session, 39th Parliament
HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

official report of

Debates of the Legislative Assembly

(hansard)

Thursday, May 26, 2011

Afternoon Sitting

Volume 23, Number 3

[ Page 7465 ]

THURSDAY, MAY 26, 2011

The House met at 1:34 p.m.

[Mr. Speaker in the chair.]

Routine Business

Introductions by Members

S. Chandra Herbert: I'd like to acknowledge Marie Little, the president of Trans Alliance Society, today. She's here to watch the introduction of a private member's bill. I thank her for her ongoing advocacy for trans folks all across B.C. Please make her welcome.

Hon. N. Yamamoto: In the House today I'd like to make four introductions. I'd like to introduce Gabe Garfinkel. He's my EA. With Gabe is Larry Garfinkel, Gabe's father. He lives in Vancouver. He's a former social worker and has operated a small business for over 25 years.

[1335]

Daniel Garfinkel is Gabe's brother. He works for his father's publishing company, has spent time volunteering for his community in Vancouver and will soon be attending chef school next year. Finally, Sara Fralin, Gabe's cousin. She's an environmental studies student at the University of Victoria, an environmental and community activist and leader. Would the House please make them welcome.

Hon. H. Bloy: I'd like to introduce a friend of mine and an advocate in Burnaby. Gordon Harris is president and CEO of the UniverCity trust on Burnaby Mountain. I worked with him and a member of the opposition very closely, on getting the new school up on Burnaby Mountain. I want to welcome him to the House today.

Tributes

GERTIE PIERRE

N. Simons: I'd just like to take this opportunity to acknowledge a constituent of mine named Gertie Pierre, who yesterday was a successful candidate in achieving her bachelor of social work degree from the University of British Columbia.

Gertie Pierre has seven children and eight grandchildren. She has overcome significant obstacles in her path. She has been an inspiration in her commitment to making better her community and other First Nations communities throughout this province. Would the House please join me in acknowledging her success yesterday at UBC.

Introduction and
First Reading of Bills

Bill M207 — Gender Identity and
Expression Human Rights
Recognition Act

S. Chandra Herbert presented a bill intituled Gender Identity and Expression Human Rights Recognition Act.

S. Chandra Herbert: I move a bill intituled Gender Identity and Expression Human Rights Recognition Act be read for a first time now.

Motion approved.

S. Chandra Herbert: The Gender Identity and Expression Human Rights Recognition Act is about explicitly acknowledging full human rights protection in British Columbia for transgender and transsexual people.

This bill affirms what judges have been reading into the law and acknowledges the rights of all people to be free from discrimination based on gender identity and expression. It acknowledges the ongoing and extreme discrimination faced by people in our communities because of who they are.

Trans people face incredible difficulties and are regularly discriminated against, whether it be in the workforce, housing, health care or obtaining services most British Columbians take for granted. They also face significantly higher rates of violence.

Trans people have always been part of our human society but have received little recognition or attention to their unique challenges. Some in this House, indeed, may not even be aware of who trans people are or what they face in their very lives.

This bill is about celebrating the great diversity of people in our province and ensuring that everyone has the right to live free from hate and, indeed, to be loved for who they are, because when one suffers, everyone suffers.

Hon. Speaker, I move that this bill be placed on the orders of the day for second reading at the next sitting of the House after today.

Bill M207, Gender Identity and Expression Human Rights Recognition Act, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Bill 15 — Municipalities Enabling
and Validating Act (No. 4)

Hon. I. Chong presented a message from His Honour the Administrator: a bill intituled Municipalities Enabling and Validating Act (No. 4).
[ Page 7466 ]

Hon. I. Chong: I move the bill be introduced and read a first time now.

Motion approved.

Hon. I. Chong: I'm pleased to present the Municipalities Enabling and Validating Act (No. 4). This legislation responds to a direct request from the city of Richmond to address a very unusual local circumstance in that municipality.

The proposed legislation would provide specific authority to enable the city of Richmond to provide municipal tax exemptions on a transitional basis to eligible commercial properties in a particular area of Richmond, an area where such properties have experienced extraordinary increases in their property values and concurrent taxes since 2005. It would also enable the province to provide partial relief from provincial school taxes in circumstances where the city has provided a municipal tax exemption.

Hon. Speaker, I move that the Municipalities Enabling and Validating Act (No. 4) be placed on orders of the day for second reading at the next sitting of the House after today.

Bill 15, Municipalities Enabling and Validating Act (No. 4), introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

[1340]

Bill M208 — The Fair Chase Act

M. Sather presented a bill intituled The Fair Chase Act.

M. Sather: I rise today to introduce The Fair Chase Act. Fair chase is a concept that is embedded in the hunting fraternity. The concept is also acknowledged by government, though it has not been defined in legislation. Last year the former Minister of Environment said that B.C. is home to fair chase.

The Wildlife Act prohibits harassment of wildlife by use of motorized vehicles wherever the definition of "harass" is such that it is unclear whether or not such behaviour is illegal in the process of hunting that is otherwise legal. The Fair Chase Act will serve to eliminate that ambiguity.

Baiting of wildlife has long been considered reprehensible behaviour. This view is represented by the prohibition of bear baiting in the Wildlife Act. The Fair Chase Act extends this prohibition to wolves.

I move that The Fair Chase Act be introduced, read a first time and placed on the orders of the day for second reading at the next sitting of the House after today.

Mr. Speaker: Just before we get to that motion, hon. Member, you have a motion before that first.

M. Sather: I move first reading of the bill.

Motion approved.

Mr. Speaker: Now, Member, you can move the second portion.

M. Sather: Thank you, Mr. Speaker. I move that the bill be placed on the orders of the day for second reading at the first sitting the House after today.

Bill M208, The Fair Chase Act, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Statements
(Standing Order 25B)

HONORARY DOCTORATE RECIPIENTS

J. Kwan: This afternoon UBC will confer honorary doctor of law degrees on two people that I have the privilege of knowing. They are two people with very different histories and different personal stories. Both have notable achievements and are successful entrepreneurs.

Thomas Fung came to Canada in 1967, graduating from Magee high school. He then went to Japan, learned the art of baking, returned to Vancouver in 1984 and founded the Saint Germain Bakery. He's also the founder and chair of the Fairchild Group. He built North America's first multicultural retail centre, Aberdeen Centre, in 1989 and operates two TV stations, five multicultural radio stations, B.C.'s biggest Chinese-language magazine and an e-commerce company. Thomas was named one of the most influential people in Canada by Time magazine.

Ken Lyotier is a longtime resident of Vancouver–Mount Pleasant. He is a recovering alcohol and drug addict and a dumpster diver. Ken deeply believes that everyone should be valued and have a sense of belonging in their own community. He was the driving force behind Save Our Living Environment, an organization dedicated to improving Vancouver's urban conditions by pursuing sustainable practices.

Thanks to his skills and dedication, Ken founded United We Can bottle depot, a non-profit social enterprise that is a significant source of low-barrier employment for residents of the Downtown Eastside. In 1995, with a $25,000 loan from Vancity, United We Can opened its doors. The United We Can community has collected and recycled well over 25 million bever-
[ Page 7467 ]
age containers over the years, and each day some 700 people earn cash with recyclables to supplement their income.

United We Can is a financially and environmentally sound social enterprise that has been recognized nationally. Ken, as the founder, received the Meritorious Service Medal in 2005, and in 2010 he received the leadership award from his own industry.

I ask the House to please join me in congratulating Thomas Fung and Ken Lyotier.

CHILD CARE MONTH

L. Reid: I'm pleased to rise today and recognize Child Care Month and Child Care Provider Appreciation Day.

Just this morning I attended the Child Care Awards of Excellence in Vancouver with the Minister of Children and Family Development. The event honoured not just child care professionals from across British Columbia, but also organizations and local governments — including the district of West Vancouver and, I'm very proud to say, the city of Richmond — for outstanding service to children and families.

It's wonderful to see communities be recognized, because I firmly believe that strong, supportive and engaged communities are a key to creating a quality child care system that meets the needs of local families. If we want a stronger economy in British Columbia, it will be only because we have strengthened family.

We have a range of child care options in British Columbia which are often tailored to meet the unique needs of the children and families they serve — young parents still in school, aboriginal children and families and children with special needs, to name a couple of examples.

[1345]

I'm proud that this government has supported early learning and child care for many years, knowing the incredible difference it makes in the lives of children. I ask that the House join with me in recognizing and celebrating Child Care Month. To the thousands of amazing child care professionals, I say thank you for the work that you do each and every day to help the little ones learn and grow and have curiosity in abundance, and for the peace of mind you bring to thousands of parents across our province. We are indeed grateful.

FESTIVALS IN NEW WESTMINSTER

D. Black: The 40th annual Hyack Festival is being celebrated in New Westminster this week. An important part of the festivities is the annual Victoria Day salute to Queen Victoria and the current monarch. The city's first such event was held in 1859 at the Royal Engineers camp and was highlighted by the booming of a salute from a naval ship's cannon.

However, as noted historian Archie Miller has chronicled, in the late 1880s authorities in Victoria refused permission for residents to use New Westminster's cannon to fire the annual salute. This insult, coming on the heels of our city losing its capital city designation to Victoria, caused indignant New Westminster residents to pursue other options to ensure that the salute went ahead.

Their ingenuity won out as members of the Hyack fire brigade got possession of an anvil and proceeded to use this unusual prop to fire off the 21 rounds. The tradition of firing an anvil salute on Victoria Day continues to this day, and I was happy to participate again this year.

Yesterday I attended another traditional event as New Westminster's 141st annual May Day festivities took place. Hundreds of children gathered around the maypoles to dance and to watch the crowning of this year's May Queen, Lauren Vanags, and the Royal Knight, Markus Mattila.

May Day in New Westminster is the longest-running celebration of its kind in the Commonwealth and one that is remembered fondly by anyone who attended elementary school in our city. My oldest granddaughter, Meagan, will now have those memories, as she was one of the dancers performing yesterday.

Hyack Festival week will come to a close this Saturday with the popular international parade, one of the largest parades in our province.

CONTRIBUTIONS OF SENIORS
IN SURREY-TYNEHEAD AREA

D. Hayer: In June we will celebrate B.C. Seniors Week. Our seniors are very special in every part of B.C. They are the parents, our mentors, often our leaders, and they are the reason we enjoy such a bountiful lifestyle in this province. Without them, we would not have the economy, the freedoms, the development and the stability we all enjoy.

In Surrey we have some very special seniors who trace their roots back to the first pioneers to come to B.C. and who were very significant in our growth. Keeping the pioneering spirit alive in my constituency are the Tynehead Women's Auxiliary and the Tynehead Historical Society, who raise funds to maintain our historical Tynehead Hall, host many seniors functions and raise funds for many charitable causes.

Many of these volunteers from these organizations are from pioneer families, including Dave Stevens, a grandson of pioneer Joseph Stevens, who arrived in Tynehead in 1918; Zina York, granddaughter of pioneer Rory McCaskill, who arrived in Tynehead in 1890; Judy de Vries, granddaughter of pioneer William Frost, who arrived in Tynehead in 1907.

Other volunteers include Liz Milligan, Nancy Kalinovich, Jackie Woods, Doris Hoffman, Andrea Terris, Maxine Wilson, Joan Parolin, Margaret Smith,
[ Page 7468 ]
Bel Carter, Kim Adamson-Sharpe, Monica Matsi, Kathy Poole, Leonora Bradley, Graham Sharpe, Brenda Holt, Alexius Matsi, Baird and Bram Terris, and Barry Shiles.

My constituency's seniors population includes many others, including the Fleetwood Seniors Planning Committee chair Mildred Davies, vice-chair Wayne Armstrong, treasurer Irene Wazny and many, many more volunteers.

I ask the House to thank the seniors across the province for all they have done and continue to do for everyone and request all MLAs to make sure they attend seniors functions the first and second week of June when it is Seniors Week.

[1350]

DAY OF THE HONEYBEE

L. Popham: May 29 marks the Day of the Honeybee here in B.C., and it is my pleasure to celebrate bees in the House this afternoon. Bees are little creatures with a big job. They pollinate flowers, allowing a steady supply of food for everything else that shares this space.

I recently found a book in the Legislative Library called Honeybee Democracy and was entertained by the idea of bees making decisions collectively and democratically. The author, Thomas Seeley, brings the reader close to the hive in the annual cycle of these remarkable insects. He notes that in the late spring and early summer as a bee colony becomes overcrowded, a third of the hive stays behind and rears a new queen while a swarm of thousands depart with the old queen to produce a daughter colony. These bees evaluate potential sites, advertise their discoveries to one another, engage in open deliberation, choose a final site and navigate together as a swirling crowd of bees into their new home.

Evolution has honed the decision-making methods of honeybees over millions of years. He concludes that what works well for bees can work well for people. Any decision-making group should consist of individuals with shared interests and mutual respect. Debate should be relied upon. Diverse solutions should be sought.

Let's celebrate the Day of the Honeybee and today, if only today, practise honeybee democracy.

LORD KITCHENER ELEMENTARY SCHOOL
SEISMIC UPGRADES

C. Hansen: There is a group of students visiting the Legislature today from a school in my riding, Lord Kitchener Elementary. I know this will come as a surprise to many, but when I visited the school a few months ago, I caught many of them writing on the gymnasium wall with felt pens. I must confess that they caught me doing exactly the same thing. We were all writing farewell notes to a part of the old gym that has since been torn down as the first stage of the seismic renewal for the school.

The fact that the main part of the school is being replaced with a brand-new school is not remarkable in itself. Since the seismic program was launched five years ago, almost $600 million has been spent, and 134 schools have had seismic work done.

What is interesting about this school is that the very oldest part of the school that was built in 1914 will remain. The newer part of the school — one wing built as recently as 1962 — is where the seismic problem is. When the new school is finished, that part will be demolished. The difference is that the newer part of the school is brick-clad concrete, and the part built in 1914 was built from wood. It's a great example of how B.C. wood is the preferred building material for buildings in any seismic zone around the world. You will be pleased to know that the new school will be built from wood.

I want to thank three tireless parents, whose children attend the school, for their efforts over the last number of years to make this project a reality. They are Peggy Alca, Kosta ChatziSpiros and Doug Campbell. Thanks to their efforts, the students of Lord Kitchener Elementary will be able to enjoy the heritage of the 97-year-old wooden schoolhouse complemented by the modern features of their new wooden school that will be there to serve the community for the next 97 years.

Oral Questions

IMPACT OF HARMONIZED SALES TAX
ON RESTAURANT INDUSTRY

B. Ralston: The restaurant industry employs over 161,000 people here in British Columbia. Before the last election the B.C. Liberals said to the restaurant industry, in writing: "We have no plans to implement an HST." After the election was over, of course they went back on their word. They made families pay more, they hurt communities, and they hurt small businesses.

The restaurant industry has said that the HST will cost them $750 million a year in lost sales, or $50,000 per year for the average restaurant. Yesterday Ian Tostenson, president of the Restaurant and Foodservices Association, said: "I can't see how these changes help."

To the Finance Minister: will he admit that the B.C. Liberal HST bribe does nothing to help a struggling restaurant industry here in British Columbia?

Hon. K. Falcon: Well, I do have to say that I can't take credit for the incredible boom time happening right now in the restaurant industry, with the Canucks moving their way through to a Stanley Cup.

[1355]
[ Page 7469 ]

I have to admit that I certainly can't take credit for that. But what I can say, which I know is extraordinarily good news for the restaurant sector, is that when we send out $200 million worth of transition payments to families with kids and to low-income seniors, that gets recycled back into the economy pretty fast. I am certain that some of that is going to go back into the restaurant sector.

I'll also say this, because I know how hostile the NDP always is to reducing any taxes. I can tell you that when you drop the HST by 2 points and you put $1.7 billion back in the pockets of British Columbians, it gets spent back in the economy. Restaurants, movies, retail — it gets spent. That's exactly what will happen with a 10 percent HST.

Mr. Speaker: The member has a supplemental.

B. Ralston: Well, the restaurant industry is looking for long-term solutions. They warned that the HST could cost at least 12,000 jobs. In fact, since the legislation was introduced, restaurants have been reporting declines in sales. This latest attempt by the B.C. Liberals to buy votes won't do anything to help, according to the restaurant industry.

Let's revisit what the Premier said just back in March. "We aren't going to be talking about trying to reduce it by a point or two before the referendum. I mean, I think people will see that as buying them with their own money."

Even his own Premier recognizes that this gimmick is just a desperate B.C. Liberal attempt to save their seats and does nothing to help a struggling restaurant industry. Why doesn't the minister just own up and admit it?

Hon. K. Falcon: I guess I should be used to it by now, but the NDP hostility to reducing the tax burden on families remains. It never, never changes. When we introduced a series of tax cuts to income tax, 37 percent reductions since 2001, they voted against every single one of those — every single one.

When we marched that general corporate tax rate from one of the highest in Canada under the NDP down to one of the lowest, most competitive in B.C., they voted against every one of those reductions.

Why can't you just allow families to have some tax relief with a 10 percent HST instead of fighting to go back to a 12 percent sales tax? That's the question I have for the NDP Finance critic.

Mr. Speaker: The member has a further supplemental.

B. Ralston: I know it makes the Finance Minister uncomfortable, but let's go back to that quote from the Premier again. "We aren't going to be talking about trying to reduce it by a point or two before the referendum. I mean, I think people will see that as buying them with their own money." That wasn't two years ago; that was two months ago. True to form, a B.C. Liberal Premier did exactly what she said she wouldn't do.

This gimmick does nothing to help the restaurant industry and creates confusion as we head into the HST referendum vote. Will the minister admit that this is a sign of desperation and that once again the B.C. Liberals have left the restaurant industry to fend for themselves?

Hon. K. Falcon: The Finance critic for the NDP is wrong again, actually. What the Premier said….

Interjections.

Mr. Speaker: Members.

Continue, Minister.

Hon. K. Falcon: What the Premier was very clear about was making sure that we go out and listen to British Columbians. That's why we engaged in the largest listening exercise in the history of the province — 275,000 British Columbians participating in our telephone town halls.

[1400]

We have responded to what we heard. We've responded by saying that we're going to go forward with a plan that reduces the HST to 10 percent and that provides transition payments for families with kids and for low- and modest-income seniors.

I, for the life of me, can't understand why the NDP wants to argue to go back to a 12 percent sales tax that's inefficient and that duplicates a provincial sales tax administrative system with a federal sales tax administrative system. It's tough on business, tough on small business, bad for jobs. We're going the other direction.

S. Chandra Herbert: Well, the Finance Minister talks about listening, but for a guy who talks about listening, he sure does a lot of shouting.

Here are just a few of the things that Ian Tostenson, the president of the B.C. Restaurant and Foodservices Association, has said about yesterday's B.C. Liberal vote....

Interjections.

Mr. Speaker: Members.

Just take your seat.

Interjections.

Mr. Speaker: Your time, Members.

Continue, Member.
[ Page 7470 ]

S. Chandra Herbert: Well, I'll say it again so that maybe the minister can listen to it. Here are just a few things that Ian Tostenson, president of the B.C. Restaurant and Foodservices Association, has said about yesterday's B.C. Liberal HST vote-buy: "I think that they're mad at us. They see the restaurant industry, roll their eyes and say, 'We just don't want to hear from them.'"

To the Finance Minister: during your listening exercise how could you possibly have missed the voice of the restaurant industry that says the B.C. Liberals' HST vote grab is devastating their businesses?

Hon. K. Falcon: I think the NDP member of the opposition should know that he should be careful to distinguish between the lobby group for the restaurant association and individual restaurateurs.

I'd like to quote from what restaurateur Peter Oates from Carmelo's restaurant in West Vancouver said when he was on The Bill Good Show. He said that since last July Carmelo's has never done better. Sales have improved each month, year after year. He's got all 12 percent back on $3,000 worth of kitchen renos, through the HST input tax credit, as well as on his hydro and his gas bills.

He saves an hour a month on paperwork. I know how much the NDP loves paperwork. There's got to be lots of paperwork in an NDP world.

You know, that's just one. I've got others that I'm happy to read in. Vikram Vij, the owner of Vij's Restaurant, on CKNW: "Business is good. You know, the HST has been a little bit of an issue, but not a big one."

Rod Butters from RauDZ Regional Table restaurant in Kelowna, on CKNW, on Bill Good: "We've tried to be very proactive in our approach to our pricing and are supplying phenomenal value. So we actually haven't seen a dip. Knock on wood. Our business actually continues to grow." Imagine.

Mr. Speaker: The member has a supplemental.

S. Chandra Herbert: So the minister decides to listen to his friends. He doesn't listen to the restaurant service association. He doesn't listen to the Canadian restaurant service association. No, these are associations made up of restaurateurs and food service industry all across B.C. They actually pay to be a member of this association so that that association can bring their voice to a minister who isn't listening.

This latest B.C. Liberal HST gimmick is clearly an obvious and desperate attempt to buy votes. B.C. families know it. I know that the Finance Minister knows it, though he won't admit it. Even the Premier knows it, and she has acknowledged it through quotes: "I think people will see that as buying them with their own money."

What is particularly devastating to the industry is that this latest gimmick makes things worse, according to Mr. Tostenson, hitting them now from both sides. He says: "First the HST increase, and now another 2 percent business tax increase."

To the Finance Minister: why is this B.C. Liberal government punishing small, B.C. family–owned restaurant businesses?

[1405]

Hon. K. Falcon: Well, I'll keep going, then. How about Andrew Latchford from Cactus Club Restaurants? A pretty sizeable chain of restaurants, lots of employees there. What does he say? He's come to the conclusion that the HST is a good thing because it will improve B.C.'s economic outlook, and as the economy grows, so does the restaurant business.

I've said it before. I know that the NDP believe that, even though there are 140 countries around the world that use value-added taxes that are identical to the harmonized sales tax and that in those countries, whether it's Paris or Rome or London.... They all have thriving restaurant industries, just as we do here in British Columbia.

I can tell you this. A lowered HST puts $1.7 billion back into the pockets of consumers. That gets back into the restaurant sector. That gets back into the retail sector. That gets back into the economy. It will continue to grow the economy in British Columbia with a sales tax process — actually, an HST — that makes sense economically.

J. Kwan: It's a bit rich — isn't it? — coming from the Minister of Finance, who takes policy direction from a Premier that he has criticized, that uses a ready-fire-aim approach to policy-making. This is the Minister of Finance, and a government, that takes this approach: "I see no evil, and I hear no evil."

The restaurant associations and the industry are telling this government that the HST is bad for them and bad for their business. Don't take my word for it. They did their own survey with their own membership. Their membership said that since the HST has been implemented, in the first seven months business went down 15 percent.

My question to the Minister of Finance is this: why is he failing the small business sector by adding injury to the wound, by first misrepresenting their position on the HST and then, later on, also increasing the small businesses tax for the restaurant business association?

Hon. K. Falcon: Perhaps the member for Vancouver–Mount Pleasant should just lift her eyes from the lobbyist report she's been reading and listen to what the Canadian Federation of Independent Business wrote about our plan to reduce the HST to 10 percent.

Interjections.

Hon. K. Falcon: Wait for it. It gets better. It gets better.

What did they say? That 83 percent of the CFIB members support an HST rate going to 10 percent. That is
[ Page 7471 ]
the voice of small business from one end of this province to the other, from one end of the country to the other. I can tell you that putting $1.7 billion back into the pockets of consumers is a benefit to consumers. It's a benefit to the restaurant industry. It'll be a benefit to the broader economy.

I know that in an NDP world there can never be any good news, but I can tell you that on this side of the table we know that a growing economy raises all boats, and that's better for everyone in British Columbia.

Mr. Speaker: The member has a supplemental.

J. Kwan: Who are these lobbyists? Ian Tostenson just about ran for the B.C. Liberal leadership, and he's the one that's criticizing this Minister of Finance and their government.

The B.C. Liberals' motto is: "We'll mislead you before the election, and we'll mislead you again after the election." Around the time the restaurant industry said that tinkering with the HST won't help their struggling industry, the Premier herself said: "People will see that as buying them with their own money."

[1410]

Premier Clark knows the gimmick that she announced yesterday with this Minister of Finance is transparent and is just about buying votes. The restaurant business associations and the restaurant industry are not buying it. Will the Minister of Finance just admit that the B.C. Liberal government's ready-fire-aim policy is a failed policy?

Hon. K. Falcon: Well, the member for Vancouver–Mount Pleasant was part of one of the worst governments in the history of the province of British Columbia.

I'll tell you this. I don't mind pointing out what a great environment the restaurant industry enjoyed in the 1990s, with the highest personal income tax rates in North America, the highest marginal income tax rate in North America, the highest general corporate tax rate — 16½ percent — in the country, one of the highest small business tax rates.

In fact, the Leader of the Opposition was the chief of staff of a government that had a small business tax rate of almost 9 percent. We've marched that down to 2½ percent. We've got a thriving small business sector in British Columbia.

I'll conclude with this. I know it is just impossible for the NDP to get their heads around providing any kind of tax relief for British Columbians. They voted against every tax reduction we've put in place, and now they're going to campaign to have a 12 percent sales tax instead of a 10 percent HST. That is classic NDP.

IMPACT OF HARMONIZED SALES TAX
ON HOUSING SECTOR

S. Simpson: The voters and the citizens of British Columbia will find the tax relief they want when they kill the B.C. Liberal HST this summer.

This desperate attempt by the B.C. Liberals to buy votes in this upcoming referendum offers little or no support for the housing sector or for potential new home buyers. The HST is driving up the underground economy in the renovation sector, and this vote-buying scheme does nothing to change that. The industry is also worried about how many new home sales or renovations are now going to get put off till 2014.

The HST scheme guts government revenues. It hurts small business and continues to hurt the housing sector. Why should anybody in this sector feel anything but disappointment and concern about this Liberal government and its vote-buying scam?

Hon. K. Falcon: I know that the NDP can work themselves up into a real froth trying to fight a tax reduction, and here we go again. God forbid there should be any benefit to consumers out there.

I've got a couple of uncomfortable NDP facts. I like reading these into the record because I know how uncomfortable it makes the NDP. First uncomfortable NDP fact: employment has increased 1½ percent in the period since the HST's introduction — just to put that to rest.

The member just mentioned how, apparently, the housing industry has been devastated under the HST. Apparently, there are no houses being built anywhere in the province. Uncomfortable NDP fact No. 2: housing starts have grown 11.9 percent since the introduction of the HST. That's up.

Interjections.

Hon. K. Falcon: Since they're calling for more, one final uncomfortable NDP fact. In 2001, the last year of the NDP reign of terror in the 1990s…. In 2000 a family of four earning only $30,000 a year was paying taxes, fees — everything all included — of $3,739 under the NDP. Under the B.C. Liberals today, it's $2,087, a 44 percent reduction under this government.

[1415]

Mr. Speaker: The member has a supplemental.

S. Simpson: In February the Premier said: "This is the kind of politics that led to the breakdown in public trust in the first place…. This type of doubletalk on the HST is damaging to the public trust that government must have to be successful." Clearly, she's not
[ Page 7472 ]
paying attention to her own words, and neither is this Finance Minister.

The B.C. Liberal story on the HST changes every day. The numbers change every day. This government is not believable. They're not believable for consumers in this province. They're not believable for people in the housing sector. When is the government going to stop misleading British Columbians on this tax and tell people the truth about what you're doing and correct it and get on with getting a proper tax in this province — back to a PST, back to a GST?

Interjections.

Mr. Speaker: Wait. Just wait.

Members. Members.

Hon. K. Falcon: In his exuberance, he got so excited that he said he can't wait to get back to imposing another tax, a higher tax on British Columbians. It's incredible. It's in their genetic structure. "We must have higher taxes. We must have higher taxes." That's the NDP approach. It is incredible.

I'll tell you this. What we will never be apologetic about is listening to 275,000 British Columbians. I am proud to have a Premier that listens to British Columbians and, more importantly, responds to what she hears from British Columbians and acts in a manner that will reduce the tax burden on British Columbians to the tune of $1.7 billion, provide transitional cheques to families with kids under 18, transitional cheques of $175 each to low-income seniors so that we can get to a lower HST. That is good public policy.

C. James: I'd like to tell this minister that real relief for families will come when they defeat the HST this summer and then defeat the B.C. Liberals right after that.

The Finance Minister talks about home-building. Well, the B.C. Liberal HST adds yet another burden to families who are trying to make ends meet. We know that the cost of housing is unattainable to most families in British Columbia.

Using Vancouver as an example, it's the third most expensive city in the world in terms of housing. It's difficult for any young family to get into the market. What many of those families will do is buy an older home and try and fix it up. Well, the B.C. Liberal HST has just made it more difficult, adding costs to buying homes and adding costs to fixing them up.

Will the minister finally acknowledge that the HST hurts families trying to make ends meet?

Hon. K. Falcon: It's interesting that in that question — the example she gives of buying a used home — there's no HST that applies to any used homes in British Columbia.

Interjections.

Mr. Speaker: Continue, Minister.

Hon. K. Falcon: As usual, the NDP spend all their time outside of question period just scouring to try and find some bad example they can possibly find. So I'll give them another interesting example.

In rural B.C., Member, people buy pickup trucks. They like pickup trucks. Pickup trucks aren't cheap — in fact, about $65,000 if you want to buy a Ford F-450, for example. Under the NDP, of course, they consider that a luxury automobile, so they put a 3 percent luxury tax on that, you may recall.

[1420]

In fact, they put a luxury tax on every vehicle over $30,000. Apparently, that's a luxury for families in the NDP world. But I can tell you that under HST, we get rid of the 3 percent luxury tax, and at a 10 percent rate, the savings....

Interjections.

Hon. K. Falcon: Over $3,000 in savings under a 10 percent HST. Why don't we ever hear about those examples from the member opposite?

Mr. Speaker: The member has a supplemental.

C. James: British Columbians aren't fooled. Homeowners aren't fooled. The construction industry isn't fooled. Families aren't fooled. They know. They aren't fooled by the B.C. Liberals, because they see the results of the HST every single day. They know it's making their lives more difficult. They know the HST is a bad tax, and they're getting hammered by it.

The public doesn't trust the B.C. Liberals, and they certainly don't trust them on the HST. Will the minister admit today that B.C. Liberals have failed B.C. families?

Hon. K. Falcon: Well, I can tell you: the job creators of this province aren't fooled either. The mining sector isn't fooled by what the NDP want to do in going back to a higher 12 percent, inefficient PST-plus-GST system. The forestry industry sure isn't fooled by what the NDP want to do in terms of going back to an inefficient tax system.

I can tell you that the small business sector isn't fooled by what the NDP want to do, and that's why the Canadian Federation of Independent Business, representing small business, supports what we're doing. That's why the B.C. Chamber of Commerce president has come out strongly in support of what we're doing with our lowered HST.

They're not fooled, because they understand what an NDP government means to business. That means less jobs, a shrinking economy and higher taxes for British Columbians in every single income category.
[ Page 7473 ]

Interjections.

Mr. Speaker: Members.

IMPACT OF HARMONIZED SALES TAX
ON CYCLISTS

L. Popham: Next week is Bike to Work Week. It's the first Bike to Work Week under which bikes are subject to the HST.

Encouraging people to use their bike as part of their daily commute is good for the environment, and it's good for people's health. It's more difficult to encourage people to bike when bikes, bike repairs and protective equipment like helmets now cost more because of the B.C. Liberal HST. Why is the Minister of Finance punishing cyclists?

Hon. K. Falcon: I would ask the member for Saanich South why the NDP wants to punish purchasers, who can now pay a lower rate on furniture, on clothing, on electronics — on everything that had a 12 percent PST plus GST that will now be 10 percent under the HST. That's what I'd like to know.

Why are they so opposed to a tax change that puts the average family in British Columbia $120 to the good? Why are they so opposed to having average British Columbians come out ahead with a 10 percent HST rate? It is incredible to me, although I shouldn't be surprised, given that they have continually voted against every single tax reduction that we have put in place on this side of the House.

[End of question period.]

Hon. B. Lekstrom: I seek leave to make an introduction.

Mr. Speaker: Proceed.

Introductions by Members

Hon. B. Lekstrom: I would like to introduce in the gallery today Mr. Kulwant Sihota, Ms. Caroline Bauer and Mr. Dave Janda, joining us from Yellow Cab in Vancouver. Will the House please make them feel welcome.

J. Horgan: I seek leave to table a petition.

Mr. Speaker: Proceed.

[1425]

Petitions

J. Horgan: I have a petition signed by 736 British Columbians due to concerns of health effects resulting from the usage of wireless technology. The petition is calling on the government to repeal those sections of the Clean Energy Act currently mandating smart meters for B.C. residents until the B.C. Utilities Commission has agreed that their deployment can be done with wired technology to protect citizens concerned by radiation.

G. Hogg: I rise to submit a petition on behalf of the parent advisory council of Earl Marriott Secondary School, signed by approximately 900 residents of Surrey concerned with respect to the overcrowding of the schools in Surrey.

Hon. D. McRae: I'd like to rise and present a proclamation.

Interjections.

Mr. Speaker: Members.

Proceed.

Proclamation

DAY OF THE HONEYBEE

Hon. D. McRae:

"Whereas the honeybee, through its role as a pollinator, has been an important part of our agriculture efforts since ancient times; and whereas the honeybee plays an essential role in the success of agricultural enterprise in British Columbia; and whereas the honeybee has been under serious threat due to diseases and environmental conditions that ultimately threaten the future of agriculture in our province; and whereas the government of British Columbia has worked with the agriculture industry to improve production and stabilize that industry; and whereas it is in the interests of furthering that goal to raise awareness of the role of the honeybee and the plight it faces; and whereas our Lieutenant-Governor, by and with the advice and consent of the executive council, has been pleased to enact Order-in-Council 903 on October 11, 2002; now know ye that we do by these presents proclaim and declare that May 29, 2011, shall be known as the Day of the Honeybee in the province of British Columbia."

If I may, as people walk by the Empress Hotel, they may look down into the grotto area, and they will notice some honey hives or beehives down there. Today at two o'clock, just half an hour ago, they officially welcomed the new beehives to the Empress. Further, if I may, I had the opportunity of presenting this proclamation to Barry Denluck last week as I visited his home and his hives in Victoria, British Columbia.

Orders of the Day

Hon. R. Coleman: I call second reading of Bill 12 to continue in this House, followed by committee stage of Bill 10, Bill 9 and Bill 8. In committee A, I call the Ministry of Finance estimates.
[ Page 7474 ]

Second Reading of Bills

Bill 12 — Police (Independent
Investigations Office)
Amendment Act, 2011

(continued)

J. Kwan: I rise to continue debate on Bill 12, the Police (Independent Investigations Office) Amendment Act, 2011. Prior to the break I was just talking about the Davies Commission.

Mr. Speaker: Members, would you move off to your other duties so the member can speak.

J. Kwan: I spoke about the history around the Frank Paul case.

[L. Reid in the chair.]

I was at the point where I was going to raise, as well, that there's an aspect of the Frank Paul inquiry that has not yet been completed. In fact, the Davies Commission could not finish its work because the Ministry of Attorney General, the criminal justice branch, challenged the commission's jurisdiction to inquire into its response to Mr. Frank Paul's death. That was its decision: not to approve criminal charges against any police officer.

At the time, the Davies Commission ruled that he had the jurisdiction to inquire into the matters otherwise considered an aspect of Crown's privilege. An application for judicial review of the ruling was dismissed by the B.C. Supreme Court on July 24, 2008, and the matter is now currently before the B.C. Court of Appeal. To that end, the matter is not yet complete, as it is still outstanding as to that aspect of the Frank Paul inquiry.

[1430]

The interim report, this report that I'm speaking about, "reports on all aspects of the inquiry's mandate, except as it relates to the response of the criminal justice branch" — which is now outstanding. "Depending on the outcome of the litigation, the inquiry may hear evidence and then publish a final report into the branch's response."

I actually think that this is critical to the issue at hand as it relates to Bill 12. The matter is that we require independent investigations into these things, and where an inquiry is in place, there should be no barriers for the commissioner to finish his work. In this instance the Ministry of Attorney General stood in his way, and as a result, we only have partial findings coming out of the tragedy of the death of Frank Paul.

I want to touch on another case as well. Before I do that, I do want to say, though, for the government to realize the importance of Bill 12, I think there were accompanying recommendations that should have been adopted by the government, by policy, in this Legislature coming out of the Davies Commission.

The Davies Commission actually recommended that, aside from an independent process, Vancouver city, the Vancouver Coastal Health Authority and the provincial Ministry of Housing and Social Development at that time — that's what the ministry was called — and the aboriginal community "jointly develop a comprehensive response to the needs of homeless chronic alcoholics within the city of Vancouver."

That would include the following components: a civilian-operated program for attending to chronic alcoholics who are incapacitated in a public place; a civilian-operated sobering centre; an enhanced civilian-based detox program; the provision of permanent low-barrier housing designated for the specific needs of chronic alcoholics which would offer palatable alcohol substitutions and managed alcohol programs; and finally, the provision of community-based, multidisciplinary assertive community treatment services.

That's part of the recommendations that come with the request for an independent investigative process. So far a lot of these recommendations have just been left sitting on the shelf with the commission's work, and I think that's a shame. So the work is not yet done. If we're to honour the death of Frank Paul, then we'd better get on with it with respect to the implementation of the other recommendations.

I want to touch on another situation that I think received some media attention, but still the case, I think, is very significant. I think as of yet nobody in this chamber has mentioned this case and put this on the public record. This is the case regarding a man, Mr. Yao Wei Wu, who was beaten up by the Vancouver police in his own home.

The situation was such that the police had shown up at this man's house at around two o'clock in the morning and knocked on his door. The man woke up and sort of went to the door. Then, according to reports, Mr. Wu was beaten up by the police, and he sustained severe injuries to his eye, to his body and so on.

It wasn't until later that the police realized that they had the wrong man. In fact, they went to the wrong door. There was a domestic dispute call that came in, in the area there, and the police came to this house. When Mr. Wu opened the door, the police thought that that was the man and then began to assault the man, resulting in him suffering, as I understand, severe injuries.

Later on the ambulance then called Cantonese-speaking officers, because Mr. Wu didn't speak English fluently. It wasn't until later that they realized that they got the wrong man.

Now, I have to say the Vancouver police did apologize for this incident fairly quickly, because it hit the media fairly quickly, particularly in the Asian media outlets. It hit the media fairly quickly, and the police did apologize for that incident. But at the same time the police also
[ Page 7475 ]
issued a statement alleging that Mr. Wu had resisted arrest, and that's the reason why he was beaten up.

[1435]

The Vancouver police had to retract that statement subsequently as well. The matter is now actually before the courts, of course, as we know. The further situation to this, which I find extremely disturbing, is that the matter was referred to a police investigation. In the system, the way in which it was, the investigation was done not independently, shall I say. In other words, it was actually investigated by other police officers in another jurisdiction. The result of that investigation said that the allegations made by Mr. Wu about the assault were not substantiated.

This matter then went further than that to the point where Mr. Wu retained legal counsel. It was also brought before the Police Complaint Commissioner, and the Police Complaint Commissioner had actually referred this matter to an inquiry.

So there's an inquiry underway, but little did we know, though, that the Vancouver police officers who were involved in this case are now challenging the inquiry itself and have gone to the court to ask for the inquiry to be dismissed. At the time of this case the police chief had said that there was no need for an independent investigative process to be in place and that what was happening was just fine.

I would argue that it wasn't fine. I can't help but wonder. Had there been an independent investigative process into this case that Mr. Wu now finds himself having to fight against the police officers for this inquiry, would the findings be somewhat different than what was reported and suggest that the allegations made by Mr. Wu for the assault from the police are not substantiated?

I think these are the kinds of cases that illustrate the point very, very clearly that we need a fully independent investigative process that is completely at arm's length. It raises the critical question in Bill 12, and that is to say: should those investigative processes only go to an independent investigative procedure if it's a matter involving death or serious injuries?

How does one define serious injuries? In the case of Mr. Wu, would you call that a serious injury sustained by Mr. Wu, so therefore it warrants an independent investigative process? To be frank, I think what is required is that these kinds of cases and the notion of not just death or serious injuries should warrant independent investigative processes. Rather where there are allegations of misconduct, where there are issues on the breach of trust from the police system is at issue, these matters should automatically go to an independent investigative process.

I think if we did that, then you would, in fact, go a long way to restoring confidence in our police system. We should all have confidence in our police system. We rely on the police system in our communities, each and every one of us, for the job that they do.

At no point am I suggesting that the work of the police officers is easy at all. In fact, they put their lives at risk every single day when they go to work, and I fully recognize that. That does not mean to say, though, that there are not situations of misconduct. For that reason, accountability of the system and the procedures within the system are paramount, and that's how we can maintain the kind of trust that is required in our broader community with respect to the police force.

The Braidwood inquiry has brought forward, I think, really the issues at hand in a very high-profile way, in a very tragic way, in a way that made all of us stop to think about this situation and about the investigative processes of the police, and so on. That said, there were many cases before that. Those cases I think all attributed to bringing forward Bill 12.

[1440]

The Braidwood inquiry recommended:

"'Police-related incidents' include but are not necessarily limited to incidents in which a person dies or suffers serious harm…which involves possible contravention by a municipal police officer or RCMP officer of any provision of the Criminal Code or any other federal or provincial statute that, if the incident were investigated by a police officer, might in the minds of reasonable, informed members of the public undermine confidence in the police."

That is a recommendation that came out of the Braidwood Inquiry, and that is, I think, what I'm speaking to.

Aside from just allowing for independent investigative process into issues of death and serious injuries, I think that at a time, or any time, where the police force's conduct could have an effect of undermining the confidence of the public for the police force, we need to ensure accountability is there, openness is there and, most important of all, independence of investigative processes are in place.

So I say that Bill 12 is indeed a baby step. We have much to do in addressing this issue. I hope that the government will allow for the Davies Commission to finish its work so that we can actually see a final report coming out of the Frank Paul inquiry into this series of incidents that have occurred in our community.

Last but not least, as a preventative measure, I think that we need to bring in policies that address some of these issues that have been touched on by the Davies Commission, which talks about the need for a sobering centre. I've written to Solicitors General over the years — actually, I think three or four at least — in that period where there've been ongoing changes with the government around who is the Solicitor General, and I've written to the former ministers about this.

I ask this minister to take up this cause so that the implementation of these preventative measures can be put in place so that the death of Frank Paul is not in vain, that we actually learn those lessons, that we put in place — yes, as a first step — investigative processes but will let the inquiry and the work of the Davies Commission
[ Page 7476 ]
complete its final stages and have the Attorney General's office not actually challenge the courts on the matter of the issue around potential charges related to the police in the Frank Paul case.

Finally, last but not least, to implement the rest of the recommendations in the Davies Commission. I think we owe it to the Paul family. I think we owe it to the public, who want to see safety in our communities, who want to provide the kinds of services that are so necessary for those who are in need, who are vulnerable in our communities so that they, too, can be at the threshold of success at one day in their lives so that hope and dream of success can be realized.

Until we do that work, I am afraid that many people's voices would be in vain, and I think that's not the purpose of this Legislature. It's certainly not the purpose of why I run for office. I want to effect change. I want to see the kinds of changes for the people, particularly for those communities who have little or no voice in our society. They, too, are deserving — for the very reason that they're part of the human race.

N. Simons: It's my privilege to be able to take my place in this debate to talk about the Bill 12 before the House, Police (Independent Investigations Office) Amendment Act, 2011. I would like to say, obviously, that I will be speaking in support of this bill but to point out, as is my responsibility as a member of Her Majesty's Loyal Opposition, how I might find ways of improving such legislation in order to better meet the needs of the people of this province.

I think I'll start by saying that it's a good thing that we're having an independent oversight of police activity and police-involved deaths. I think that's been a long time in coming, and I think nobody needs to be more pleased about that than police themselves.

I worked very closely with many police officers in my previous employment as a crime prevention coordinator of the Northwest Territories. I've worked closely with police officers in my responsibilities as the director of child and family services — a lot of interaction with police officers. I see the difficulty of their job on a day-to-day basis.

[1445]

I might also acknowledge that they see the complexities of the job of a social worker, and more than one have told me on occasions that they would not want my job, as it also entails a number of difficult decisions and is fraught with its own series of challenges.

I acknowledge and I respect the work that police officers do. I used to be a teaching assistant at Simon Fraser, where I often taught the course 369, which was ethics and interpersonal skills in the criminal justice system. So I'd have plenty of opportunity to talk about the importance of following good procedure and discipline within an important and powerful agency in our communities, and that is the police. I think nothing is more important for our communities when it comes to the criminal justice system than to have trust in that first door to the criminal justice system, which is the police, and I respect the work that police do.

I've spoken to many police officers who also agree that when they see something their colleague does that brings the entire police brother- and sisterhood into disrepute, I think it hurts them as much as it hurts our communities, just as when we hear something that maybe a forester does — cuts a tree too close to a stream. Other foresters who obey the law and who practise ethically and in an environmentally sound way don't like to hear about those stories.

Police officers need to know that they're supported by the public. They need to know that the public supports them and that they are, in fact, part of the public.

When I was teaching an introduction course on criminology, I often talked about the principles of Sir Robert Peel, who was considered the founder of modern-day policing. He lived between 1788 and 1850. He wrote down…. Some of you may remember when he originally published his report. The nine principles of policing, I think, are as apt today as they were back then.

We can learn a lot from the principles that Sir Robert Peel put forward. Let me put them on the record so that in future the members from the government side will have an opportunity to research without having to go far from their desks, which might be helpful. The first of those principles is that the basic mission for which police exist is to prevent crime and disorder. Indeed, this is something that we all agree with. I think this is something that, clearly, we see on many of the logos on the doors of police: to serve and protect.

Second is that to be able to perform their duties, they need to be dependent on public approval. I think that, obviously, public approval in the work of the police officers is necessary for them to have confidence.

The third is cooperation with the police. In order to build cooperation with the community, there needs to be a good relationship, and that relationship is dependent on a number of factors, none more important than mutual trust.

Fourth, the degree of cooperation of the public that can be secured diminishes proportionately to the necessity of the use of physical force. Now, if members on the government side who nod blankly would consider that more closely, they'll realize perhaps that in fact our communities are protected not by the visible presence of guns and of armoured vehicles but of a police force that is an extension of the public.

The fifth principle is that the police seek and preserve public favour not by catering to public opinion but by constantly demonstrating absolute impartial service to the law. Once again, it's self-evident that the primary role of police is to ensure that law is adhered to and that it is applied impassionately.
[ Page 7477 ]

Number 6 is that police use physical force, to the extent necessary to secure observance of the law or to restore order, only when the exercise of persuasion, advice and warning is found to be insufficient. Once again it's talking about the gradual escalation of necessary force in dealing with the public when there are problems.

Number 7 is that police at all times should maintain a relationship with the public that gives reality to the tradition that the police are the public and the public are the police, the police being only members of the public who are paid to give their full-time attention to the duties of upholding the law.

Number 8: police should always direct their action strictly toward their functions and never appear to usurp the power of the judiciary. That is, they perform their duties independently of the court system.

Finally, the ninth principle of Robert Peel's principles of policing is that the test of police efficiency is the absence of crime and disorder and not the visible evidence of police action in dealing with it. In other words, it's sort of the Theodore Roosevelt "speak softly and carry a big stick."

[1450]

I think when you deal with policing that in effect reflects the concerns of the public, you find a police force that is able to accept criticism, work from constructive criticism and improve the service that it provides to our communities.

Now, I heard one member of the government side say that this was great work in a timely manner. The great work being referred to is the introduction of Bill 12, which is a baby step in the right direction. When it's a step in the right direction, it's difficult to criticize. However, it does not go as far as the recommendations of public inquiries, of respected judges in this province who have looked at serious problems in our communities.

We've seen custody deaths. We've seen examples of egregious overuse of authority and power. We've seen less on public events as well — the incident of the pepper spraying in Sechelt with the First Nations returning from a successful soccer tournament and engaging in a parade around their community, when the front vehicle was stopped and the confrontation resulted in pepper spray.

I read the police investigation into themselves. I was greatly dissatisfied with the lack of objectivity of that report. I was not interested in criticizing individual officers. I was interested in ensuring that what we can learn from an incident like that is learned.

What happens is there's a defensiveness, an understandable defensiveness, when the agency doesn't have a structure that can be shown to be impartial so that the people who are concerned about the actions of police do not have to simply whisper or complain or criticize even the process that existed at the time for review.

What we do need is independent, impartial oversight. This government showed an abhorrence of that idea when it came to problems within the child welfare system. This government was dragged into the new reality that there needed to be some impartial oversight of the child welfare system.

That did not come easily, and that did not come quickly. Years and years of fighting, in fact, years of pointing out the failures of the current system resulted in government finally taking action. In fact, a judge, once again, made recommendations on how to make sure that the child welfare system was overseen in an independent and objective way. This was not something that government wanted to do.

In this particular case this may be a small step in the right direction, but it's a very, very slow in coming step. We've had deaths that have resulted in the call for independent investigation since 1998. In 2004 an apology was issued on the Frank Paul death, and recommendations were made.

It's not as if this government doesn't have the capacity to generate new legislation when it's politically expedient to do that. What I'm suggesting, to the very rapt attention of members opposite, is that when the will is there to maybe make some political points, it seems that government is prepared to act.

In January of 2011 we saw a report issued by the Representative for Children and Youth saying that 21 deaths of infant children in this province could have been prevented. Absolutely. I think what one sees from that is the speed at which legislation or action from government can be taken.

In the same month we saw the tragic and unconscionable slaughter of animals, which not only resulted in a task force within three weeks but legislation within two months and debate in this House about the neglectful or horrific treatment of animals.

We have the capacity in this House. It is our responsibility in this House to address issues of public concern in a timely way. This legislation is very late in coming, but it's welcome. It is equally welcome as it is late, and I'm proud to support it.

I think that it could certainly use some improvements. This House is the place, is the chamber, in which such improvements should be proposed. I hope that they will be. I hope they'll be heard.

We talk about debate. Often we do have two soliloquies following one another instead of actual debate and reconsideration. That, to me, would be a wonderful thing to see. If we could in fact address the concerns raised by the community that this legislation only is used when there is a death or a serious injury…. I think the definition's not quite exactly right.

[1455]

I believe that in the interest of the public, incidents that bring police officers or police forces into disrepute must, in all occasions, be reviewed by independent oversight.
[ Page 7478 ]

We need to preserve our confidence in the police of our communities. They are the thin blue line, often referred to as the thin blue line. We need to ensure they have the support necessary to conduct their business adequately, but we also have to make sure that they reflect the best interests of our communities. The best interests of our communities means that they're transparent and accountable to the people of this province. I believe that this legislation brings us closer to that goal, and for that, I believe, we should be pleased.

All of this reflects the importance of good consultation and good inclusion of people in oversight of public affairs. I believe it's important to ensure that all the necessary voices are heard.

The necessary voices were heard in the Frank Paul inquiry. Important voices were heard in the Dziekanski inquiry. Whenever there's an opportunity to learn…. The Missing Women Task Force, unfortunately, has excluded a number of important voices from being heard. I think that's something that the government should reconsider, when $6 million was available for the defence costs of the B.C. Rail accused and yet funding in equal amounts is not available to important aboriginal and women's groups in the Missing Women's Task Force. I think we see an inequity. I think we see a bit of…. It's bordering on some hypocrisy.

While I am pleased that this legislation is before the House and I'm looking forward to supporting it in second reading, I do believe that there's an opportunity to make it better. What an opportunity. If we make it better, let's do our best to do so.

With that, I will cede my place to the next speaker.

Deputy Speaker: I recognize the member for Port Coquitlam. [Applause.]

M. Farnworth: I notice applause from across the way. How touched I am.

Interjection.

M. Farnworth: No, no, no. That's okay. Nothing could distract me, and certainly not the minister. That would be too much of a challenge even for him.

Interjections.

M. Farnworth: No, no, no. I was thinking on how I follow my colleague from Powell River–Sunshine Coast and the words that he spoke. Quoting Sir Robert Peel — I mean, that's pretty impressive.

My colleague says, "Quickly," and I guess, yeah, given the time and the number of speakers, I probably should get to the point, which is Bill 12, the Police (Independent Investigations Office) Amendment Act. It is an important piece of legislation, and I'm glad to speak on it because this is something that this side of the House has been talking about and pushing the government on for quite some time.

As critic for Public Safety for the last few years, this has been an issue that I think has been an important one. I think all of us have recognized this needed to be dealt with. It has arisen out of some very tragic cases in British Columbia over the last number of years in all parts of the province. A couple of them — the Ian Bush case is one; the Frank Paul case is another — really shook, and had an impact on, public confidence in policing in British Columbia.

Particularly in the Dziekanski case, it really generated a significant discussion right across British Columbia about how oversight of the police takes place in our province. It was timely in the sense that the RCMP contract was up for renewal. This was an opportune moment to be able to say: "We want change in British Columbia in terms of how complaints against the police are dealt with, particularly when it comes to serious injury and to in-custody deaths and deaths in general."

So the opportunity to make legislative change…. I think the time is now, and I'm glad to see this piece of legislation here. The recommendations out of the Braidwood Inquiry into the Robert Dziekanski case, I think, are crucial in terms of understanding this particular piece of legislation. The recommendations, I think, by and large, have been followed. I think it's important to recognize that.

[1500]

Just to back up for a minute, we are in this province in a unique situation where we have municipal police forces and the RCMP. We've had one standard set of rules for dealing with municipal police forces and another set of rules for dealing with RCMP detachments around the province. There's something not right in having separate processes, separate outcomes, separate ways of dealing with in-custody deaths and deaths and serious cases of injury.

There is a principle that one standard should apply to everybody, and I think that that's something that the vast majority of people in this province would expect. It's one standard of justice for everybody, and that's what this legislation does. I also think that instinctively, people understand that there's something not right about the police investigating themselves.

To me, one of the most important aspects of this legislation is that not only will it help to restore confidence in the police when these types of issues are dealt with, but it's good for the police as well. That is one of the key aspects of this legislation, because I think it's important that the police know themselves (1) that there's one standard for everybody and (2) that the changes we are making will in fact restore and increase public confidence, which is crucial for them to be able to do their job in the way that we expect them to be able to do their job.
[ Page 7479 ]

I think all of us in this House recognize the important job that our police forces do in this province, the tremendous sacrifices they make, but also that in order to do that, there needs to be public support. That's crucial, and this bill goes a long way to doing that.

It's important to recognize some of the comments from Justice Braidwood, who says: "This reform will go a long way towards strengthening public confidence in our law enforcement agencies. Public reaction was swift and vocal that the police should not investigate themselves, and I encourage the people of British Columbia to support this legislation. It certainly conforms to my recommendations."

To me, that's important, because Justice Braidwood was the author of that report. Justice Braidwood is the one who reviewed the legislation that has been tabled by the government. The comments of Justice Braidwood are a measure of the support that's there from the individual who authored the recommendations but sends a strong message to the public that the changes he wanted to see happen, the changes we have called for in this House over the last number of years, will in fact come into legislation. So I'm pleased that that's taking place.

I do think that it is also, though, an opportune time to recognize that.... It is important that the public understands that these changes are taking place.

The idea and the recognition of civilian oversight are crucial. There is a model in Ontario. British Columbia's model will be somewhat different, but it will allow for — over the next number of years initial investigators can be police — a transition to fully civilian oversight. I think that's a strong step forward and will place this province at a leading edge in terms of how investigations take place. That is good for the long-term confidence in policing in British Columbia.

But I also think that it is appropriate for the opposition to be able to raise questions, particularly in committee stage, as to where, on recommendations that Justice Braidwood had in place, it does veer from his report. I look forward to hearing the minister's explanations around that, particularly around the issue of the Ombudsman on the oversight and the rationale and the reasons for the changes that were made.

By and large, I am very pleased and supportive of this particular piece of legislation. I think it's one that is an indication that we as legislators have heard the public loud and clear and have learnt lessons from some of the tragedies that have taken place over the last number of years in this province.

When you look at some of the statistics in British Columbia, it has been pretty concerning. We as a province led this nation in the number of in-custody deaths in this country. That is a very disturbing statistic, and it's not one that we should be proud of.

[1505]

If this legislation helps to bring that down, if this legislation helps — along with other changes government can be making — to deal with those types of issues, then I think this legislation will serve the public well.

I'm not going to speak for too long, other than to say that a lot of the questions in here have been asked in estimates debate over the last number of years. I can tell you that I am pleased to see this before the House with us debating it and discussing it. I look forward to the opportunity — along with the critic from our side for Public Safety, the member for Burnaby–Deer Lake — of asking questions at committee stage and getting further clarification on some of the changes that have been taking place.

I just want to say that I'm very pleased to see this important step forward taking place. I look forward to voting in favour on second reading and on the final reading of the bill.

M. Sather: I am pleased today to stand up and speak in favour of Bill 12, the Police (Independent Investigations Office) Amendment Act, 2011. This has been a long time coming, but I think there had to be a process of evolution, if you will, to get us to this place where this valuable legislation could be introduced. Certainly, there have been widespread, or at least strong in some cases, public statements and public complaints about the concept of police investigating themselves. Of course, that centres around particular, very unfortunate incidents that happened.

I think, perhaps, there was a time when the police — both municipal police and the RCMP, which this bill applies to — may have had some difficulty with a challenge to their authority to investigate themselves. But I'm really pleased to see that the municipal police and the RCMP are supporting this legislation. I think it's very important that they see the value in it, not only for society but for their organizations as well.

It must be very challenging, indeed, when your members are challenged by the public in the conduct of their duties. This takes it out of the hands of the police and, I hope, makes it easier for them, as well as assuring the public that all due diligence is being done to deal with this kind of information.

I have a close family member who's a police officer. Although I haven't spoken to him specifically about this issue, I'm sure that he, too, would be very pleased to not have to be involved in any way in any kind of direct intervention such as we had before this legislation was introduced. I think it's going to be helpful.

There are questions that arise around the issue of the definition, I guess, or the limitation to alleged misconduct by a police constable that caused severe harm or death. Obviously, those are situations that we want to have investigated. But members of families whose loved ones have been involved in these unfortunate inci-
[ Page 7480 ]
dents have said that they would have liked to have seen a wider net, if you will, as to who might be included under this legislation.

Now, the government is saying that they will bring in regulations that will encompass not only incidents involving death or serious harm and an allegation of police misconduct but also other offences and offences that undermine public confidence in policing.

[1510]

I'll look forward at some point to seeing whether that does take place. I think it may be necessary because the net may not be wide enough.

One of the speakers earlier on referred to the horrific incident that happened in Mission, a neighbouring municipality to where I live, where two individuals were shot in their home. One was found dead. The other did not succumb to her injuries immediately. Lisa Dudley remained living for four days until she was discovered, and she died shortly thereafter.

The issue is around the due diligence of the police officer in the case. Shots were heard by neighbours and were phoned in. The officer apparently drove to the neighbourhood but did not go to the house and did not discover this very tragic event that I'm sure has traumatized her family to a very great extent.

It's interesting, though, to know whether or not a case like that would be encompassed by this legislation as it now stands without regulation. I don't think that it would be, because the investigation can forward to the criminal justice branch misconduct that results in the two prescribed conditions or where there's a commitment of an offence under an enactment of Canada.

In this case I don't think that that would be the case. Certainly, I don't think the officer could have been charged with an offence, and wasn't. His punishment, if you will, was small, certainly — one day's docked pay, I think. Yet the case was so horrific that one wonders if there shouldn't have been more consequence.

On the other hand, I would say it has resulted in a change of protocol for the police, certainly the RCMP, whereby they must now either make contact with the complainant on site or must ensure that there is actual follow-up of a nature that could…. You never can be positive that it's going to result in knowing what took place but could make it more likely.

I made a complaint to the police in the middle of the night, the RCMP in Ridge Meadows — who are doing a great job, I want to say — about shots that I heard in my neighbourhood. I was surprised when I subsequently got a call from the officer. He discussed the specifics of it, and that was that. I was very pleasantly pleased that there was that kind of follow-up. That's what the RCMP is doing now as a result of that very unfortunate incident, and that's a very good thing.

I think that this bill will be supported by all members of the House, and it should be. There may be some specifics, I'm sure, that the members leading our side of the discussions on this bill will have to say at third reading.

I just wanted to read into the record some of the comments by Mr. Jim Chu, chief of the Vancouver city police. He said: "It's a historic day for policing in our province. This new legislation will increase the transparency of police actions."

[1515]

That kind of cooperative atmosphere is going to serve us well. If the government decides to make further changes through regulation, then I think the groundwork is there for the kind of cooperation between the judicial branch, the government ministers and the police agencies to make that possible.

With that, I look forward to third reading at committee stage, and I'll take my seat.

Deputy Speaker: Seeing no further speakers, the minister closes debate.

Hon. S. Bond: I am very appreciative of the comments that have been made by members on both sides of the House. I think this is one of those all too rare occasions where we actually recognize that this is an important piece of public policy, that all of us recognize its time has come. I am going to resist the urge to work through the questions that have been provided in terms of things like scope, because in fact, as you read the bill, there will be a very broad scope.

When we go back and look at how it will compare to Ontario's, I think the members will be quite surprised that in fact there is a very broad list. There will be a very long list and opportunities to look beyond simply those things that might be described by serious harm or death.

[Mr. Speaker in the chair.]

I very much appreciate the comments by the member for Port Coquitlam when he said that this needs to be good for police as well. As I've listened to the description of the bill, it's been described anywhere from it's a baby step to it's a beginning step and it's a good first step.

This is a very powerful piece of legislation, and it's made more powerful by the fact that when we introduced the bill, it wasn't the government standing alone. In fact, I want to remind the members, and many have commented on this already, that we stood surrounded by police leaders from across British Columbia — from across the RCMP and from municipal forces as well.

I want to close with a few of those comments as a reminder of why the bill is timely and why it's taken time. We're actually at a place where we stand together with the police to suggest that it's time we move away from police investigating police.
[ Page 7481 ]

In fact, if you look at what Supt. Tonia Enger said…. She represents the B.C. Association of Chiefs of Police, and she said:

"The police are the guardian for the public, the people. There is nothing more important to us than public confidence and public trust. The B.C. Association of Chiefs of Police applaud the government in this step of introducing legislation. We look forward to working with government. The chiefs of police recognize it's in their best interest."

Chief Jim Chu said:

"I'm representing the B.C. municipal chiefs of police. This is very important, public support of police actions, because for the last while there's been a lot of criticism of police investigations, especially in the cases of serious harm or death. These criticisms undermine public confidence. This new legislation will increase transparency of police actions.

"Again, I want to close by thanking the government for introducing this important legislation."

Commanding Officer Peter Hourihan of the RCMP:

"'As others have said before,' he said, 'the confidence the public has in police is paramount. We need it desperately, and the public needs it desperately. The police need confidence in themselves. This type of legislation will enable that. It will provide further benefit to all.

"'As police officers,' the commanding officer said, 'when we join any police organization, we give up the right to be mediocre. That's a huge responsibility, but it's one we carry proudly. This kind of legislation will help the people in British Columbia do a better job in British Columbia.'"

I can assure you that as we go through committee stage, we will walk through the discussions that we had with Commissioner Braidwood. We didn't move away from the recommendations that he made without consultation and a true belief that this legislation reflects exactly what Commissioner Braidwood asked the government of British Columbia to do.

With that, I close with these comments made by Justice Braidwood. He said, on May 17:

[1520]

"By tabling this legislation today, the promise has been kept. I commend the government for its commitment to this much-needed reform. I salute, too, British Columbia's municipal police forces and the RCMP, who have embraced the need for a civilian-based agency to investigate serious public-related cases. This reform will go a long way towards strengthening public confidence in our law-enforcement agencies. I encourage the people of British Columbia to support this legislation. It certainly conforms to my recommendations."

I hope that as we move forward and discuss this legislation, we'll all take time to remember those graphic and very tragic circumstances. It's appropriate to stop and remember Robert Dziekanski, Ian Bush and Frank Paul.

I was so appreciative that Premier Clark took the time before the legislation was introduced on that morning to call the mothers of Robert Dziekanski and Ian Bush to tell them that we honoured the commitment we made to bring this legislation to the House. But I want us also to stop and remember that every single day in British Columbia, men and women who serve in police organizations put their lives on the line for every single one of us in British Columbia.

They do it with honour. They do it with integrity. And as we bring this legislation forward, we need to remember that the vast majority of men and women who serve in police forces across this province do so with integrity and with a purpose, and that is to make sure that all of us live in a safe, healthy and prosperous province.

With that, Mr. Speaker, I move second reading.

Motion approved.

Hon. S. Bond: Now I move that the bill be referred to a Committee of the Whole House to be placed on the orders of the day at the next sitting of the House after today.

Bill 12, Police (Independent Investigations Office) Amendment Act, 2011, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. G. Abbott: I call committee stage debate on Bill 10, Wills, Estates and Succession Amendment Act, 2011.

Committee of the Whole House

BIll 10 — Wills, Estates and
Succession Amendment Act, 2011

The House in Committee of the Whole (Section B) on Bill 10; L. Reid in the chair.

The committee met at 3:24 p.m.

On section 1.

L. Krog: My question to the minister is very simple. I'm just wondering why we need to add these sections. Were they not included originally for some reason, and if so, why?

[1525]

Hon. B. Penner: Just before I start, for those who may be watching this soon to be scintillating debate, I'm sure, seated to my left but to the viewers' right, I think, is Nancy Carter, executive director of the civil policy and legislative division within the Ministry of Attorney General. Seated to my right but to the viewers' left is Tyler Nyvall, legal counsel, civil policy and legislation division, Ministry of Attorney General.

Some of these provisions are not changing. Some are merely changing location but not content. There are a number of definitions that previously were housed in section 12 of the Wills, Estates and Succession Act. We had advice from legislative counsel. One of the drafters felt these definitions would be better located in the general definition section in section 1.
[ Page 7482 ]

So that's a bit of housekeeping, I guess, in terms of legislative practice. Then there are some new definitions or additional divisions for "Nisga'a Lands," "Nisga'a Village Government" and the "taxing treaty first nation" concepts, which are being added. I believe this has been done following consultation with the Nisga'a.

L. Krog: I'm happy to have that section passed.

Section 1 approved.

On section 2.

L. Krog: What's the impact of changing the definition of "nominee," and what's the purpose of it?

[1530]

Hon. B. Penner: To the member's question, this section would amend "nominee" to recognize that a committee appointed under the Patients Property Act might only be granted powers in relation to the person's medical decisions and care. It is only intended that committees granted powers over a person's financial affairs will be recognized as a nominee for the purposes of the act — so just to clarify the authorities that they have.

There is also a change, if you look at subsection (d) to the amendment. That's apparently a transitional provision, because over time as the treaty is implemented, the provisions of the Indian Act that pertain in this area will gradually fade away. So I think the overall intention of the Nisga'a treaty is to gradually wean themselves from the implementation of the Indian Act.

Sections 2 to 4 inclusive approved.

On section 5.

L. Krog: I'm just wondering why the change in the definition of "spousal home," and what impact will it have on the law?

Hon. B. Penner: I believe there are a couple of things happening here with this amendment. First of all, it's been flagged for me that we're changing previous language that talked about "joint ownership" to use the phrase "owned in common." There was some concern expressed on the part of the Nisga'a that it could be interpreted as joint tenancy, and so the use of the phrase "owned in common" is meant to address that and make it clear it's not a joint tenancy situation that we're talking about.

Then secondly, the definition of "spousal home" is being amended to ensure that the Wills, Estates and Succession Act provisions relating to a spouse acquiring a spousal home will generally apply to Nisga'a or other treaty First Nation land. So that would be the default provision — that the Wills, Estates and Succession Act does apply to First Nations treaty lands unless the Nisga'a or other treaty First Nation land laws overrule the application of the spousal home provisions by restricting the transfer of the land.

L. Krog: Relying on the able advice the minister is receiving from his excellent staff, I'm just curious to know…. The term used here is "owned in common," as opposed to jointly owned. I'm wondering: contrasted with the understanding of a tenancy in common, is there any difference?

[1535]

Hon. B. Penner: The term "owned in common" is broader and can include and does include the concept of tenancy in common, but it's not restricted to a tenancy in common.

Sections 5 to 10 inclusive approved.

On section 11.

L. Krog: I just wonder if the minister could explain the effect of section 11. It's fairly lengthy and includes a number of provisions. My reading of it is that it essentially preserves the right of the Nisga'a peoples to restrict ownership of land to members of the Nisga'a Nation. But, as I say, it's a fairly long series of sections and includes a number of provisions, and I'd just appreciate hearing from the minister.

Hon. B. Penner: I'm told that the member's summation is essentially correct. What we're doing here is indicating that if a person is not entitled under Nisga'a or treaty First Nation law to hold an interest in Nisga'a or treaty First Nation land, then the Wills, Estates and Succession Act does not enable that person to acquire an interest in that land. The amendment aims to avoid a mistaken belief that provisions relating to estates can be a vehicle to acquire a right of ownership or an interest in land that would otherwise be contrary to Nisga'a or treaty First Nation law.

The amendment itself does not change the law, as a court most likely would find treaty legislation paramount regardless. This is just for the sake of added clarity.

L. Krog: Given my limited understanding of the Nisga'a treaty, it strikes me.... I thought that's what the minister might say. Is this a case of having to, you know, gild the lily or protesteth too much? I mean, why would there be any suggestion that the fundamental law could be changed by the mere fact of the death of an owner? That's the concept I'm having some difficulty with.

Have there been cases in other jurisdictions or something that has led to this? I won't call it an overreaction
[ Page 7483 ]
— that's not the language I'm looking for — but it just strikes me that this shouldn't require legislative confirmation to state the obvious.

[1540]

Hon. B. Penner: As indicated in my first answer, the intention here is really just to clarify and make it as obvious as possible to anyone picking up the statute and reading it that you have to keep in mind whatever the Nisga'a or treaty First Nations law has to say in this regard.

Section 11 approved.

On section 12.

L. Krog: What's the effect of this change in terms of its clarification? What exactly does it mean? If the minister can describe, having regard to the fact that this is a difficult act, in simplistic language, what's the effect of this change in terms of clarification?

Hon. B. Penner: I'm advised that the attempt here is to draw a clearer distinction between sets of relatives along parental family lines in the distribution of shares of an intestate estate.

We're also addressing a potentially unequal distribution of shares among great-grandparents and descendents of great-grandparents. I'm told that this is a situation that is unlikely to arise frequently, but apparently it was, initially at least, a theoretical concern raised by the Canadian Bar Association and then again by a speaker at, I'm sure, a very interesting conference.

Maybe the member had the opportunity to attend. It was last November, 2010, at a Wills, Estates and Succession Act overview offered by the Continuing Legal Education Society, where one of the speakers at that session also asked some questions about this provision. We're responding to that.

Sections 12 and 13 approved.

On section 14.

L. Krog: With respect to section 14, it simply provides, I gather, that notice has to be given to the surviving spouse in addition to the notice under subsection (1). This applies only to Nisga'a lands, I take it. It has no effect on any other notice requirements?

Hon. B. Penner: In fact, what we're doing by virtue of section 14 is adding subsection (2.1) to section 27 of the act so it indicates that it's either on Nisga'a lands or treaty lands where the rule applies.

Section 14 approved.

On section 15.

L. Krog: Just to confirm, with respect to section 15, I take it this would obviously apply in a situation where a minor is entitled to an interest in a home of the deceased, and that's a spousal home, obviously. It's restricted only to spousal homes. I just want the minister to confirm that.

[1545]

It has the effect of ensuring that the interests of the minor are, in fact, protected if no one is in a position to act as guardian. And/or does it include and cover the situation where an infant has a guardian actually appointed?

Hon. B. Penner: Yes, this applies where a minor or a child has a guardian.

Section 15 approved.

On section 16.

L. Krog: My reading of this section is that, again, we have a situation where there's an interest that would flow through to a minor child in the spousal home. I think a good example would probably be a common-law couple, I presume — potentially, as an example — where you have a child of the deceased who is not a child of the common-law couple themselves but simply a child of the deceased.

I take it this is in order to protect the administrator or executor from fixing a value on it that would in fact have the effect of depriving the child of a right that it would otherwise be entitled to. Is that more or less what we're doing?

Hon. B. Penner: The member is correct.

Sections 16 and 17 approved.

On section 18.

L. Krog: This one was so much fun. I just have to hear the minister on the record explain to me the importance of the comma, which he pointed out to me in second reading debate.

Hon. B. Penner: Yes, we are debating a comma in this particular section, section 18. The member, in second reading, did ask.... He couldn't see what the difference was here. At first, I couldn't either during the briefings on this legislation, until we were finally able to find that there was a comma being added.

I was told that this is the preference in style by the legislative counsel. They believe this will provide greater certainty for whoever is asked to interpret it, perhaps judicially.
[ Page 7484 ]

L. Krog: For the record, I just want to confirm: does the minister suggest that style is more important than substance?

Hon. B. Penner: At some point drafting style can become substance.

Section 18 approved.

On section 19.

L. Krog: If the minister could just explain the effect of this section.

[1550]

Hon. B. Penner: This is, perhaps, somewhat more substantive than the comma debate, but what we're doing is making the term consistent with what's already in the definitions section, which uses the phrase "the will-maker's signature." This is apparently an issue that was also flagged at that most interesting CLE conference last November.

Sections 19 to 21 inclusive approved.

On section 22.

L. Krog: This suggests that.... It talks about proceeds — that the proceeds are gross proceeds, as opposed to net proceeds. What would constitute the difference between net and gross?

Hon. B. Penner: This is another issue that was flagged, I think, at the same conference, or at least it was certainly flagged by the Vancouver wills and trust section of the Canadian Bar Association.

The idea is to make sure that the beneficiary receives the gross proceeds of whatever the item is. An example would be if there was a vehicle that was sold on consignment. This would make sure that's the gross amount that the person is entitled to, as opposed to the amount less the commission. So if the vehicle were worth $10,000 and if the commission were $2,000, the ultimate recipient might not be happy about just getting $8,000. Rather, this makes it clear that they would be entitled to the $10,000 amount.

[1555]

L. Krog: So just to be clear. The commission, then, would be a cost chargeable to the whole of the estate, as opposed to that specific item.

Hon. B. Penner: I'm advised that, generally speaking, the member is correct.

Sections 22 and 23 approved.

On section 24.

L. Krog: The section, as it exists, has some very specific things in it. This seems to open it up a great deal more broadly. I'm just wondering what…. I assume this may have arisen out of, again, comments from the bar. If the minister could explain and perhaps provide some examples of what this section is contemplating, because I'm sure examples must have been used in order to lead to this.

Hon. B. Penner: Our intent here was to allow a court looking at a set of actions to determine whether or not those actions indicated an intention to revoke a will. We were concerned that the previous subsection (d) in section 55(1) was perhaps somewhat too restrictive to potential scenarios that are difficult to contemplate in advance.

We wanted to just provide that flexibility or leeway of a trier of fact to make that determination. This is, again, a change that was recommended by the Vancouver wills and trusts section of the Canadian Bar Association.

L. Krog: Appreciating that a great deal of work went into the initial act, the Wills, Estates and Succession Act, I'm just curious: does this section bring us into line with other provinces, or are we on the cutting edge? Where do we fit in the grand scheme of other legislatures across the country?

Hon. B. Penner: We don't have that information with us here at the House, but one of our staff is prepared to see if we can find that from other provinces.

Sections 24 and 25 approved.

On section 26.

L. Krog: If the minister could just explain this. You're changing the section to say if an order has been made under section 60, which I would have thought included periodic or lump sum payment…. Then it's been changed to: "...If the court has ordered periodic payments, or that a lump sum be invested…." What's the effect of this?

[1600]

[D. Black in the chair.]

Hon. B. Penner: What we're doing here, on sober second thought, is resorting back to language that was contained originally in the Wills Variation Act. After receiving some advice and reflecting on this further, we felt the wording in the Wills Variation Act was preferable to what had been initially contemplated for the new act.
[ Page 7485 ]

Sections 26 to 29 inclusive approved.

On section 30.

L. Krog: I'm just wondering: what's the effect of this change in terms of the people who may make a new designation?

Hon. B. Penner: This is a rather technical amendment, but in essence, what's happening is we're narrowing the scope of representatives who can make a new designation of a designated beneficiary in a benefit plan. The change is required to reflect the limitations on authority that arise under the Representation Agreement Act from the Revised Statutes of British Columbia 1996.

The current provision in the Wills, Estates and Succession Act says that a nominee may make this designation. In this specific instance the definition of "nominee" is inconsistent with adult guardianship provisions that also address this area and which do not permit the making of a new designation under a benefit plan.

Rather than amend the definition of nominee in the Wills, Estates and Succession Act, this provision will be amended to remove the defined term and refer instead to the specific categories of representatives who are permitted to make a new designation under a benefit plan. The desire for this amendment or the need for this amendment was identified by ministry staff.

Sections 30 to 36 inclusive approved.

On section 37.

[1605]

L. Krog: Again, this section. The explanatory note suggested: "...adds circumstances when the registrar may grant probate or administration." I'm just wondering: what's the substantive effect of this? It seems pretty straightforward, and I'm just curious to know why we even need this section.

Hon. B. Penner: The new provision being added to section 129, the new subsection (3), makes it clear that the registrar can do this work in addition to a Supreme Court judge.

Sections 37 to 39 inclusive approved.

On section 40.

L. Krog: Just for the sake of clarity, and I suspect this is a fairly obvious answer. Section 40 certainly wouldn't have any effect on the rights of a person in a personal injury claim who dies, with respect to damages for the personal injury itself, as opposed to economic loss — in other words, for the pain and suffering. This isn't going to have any effect on that kind of claim — is it?

Hon. B. Penner: Just to preface my answer by noting, this amendment was identified or suggested by the British Columbia Law Institute. What we're doing here is, in effect, broadening the application of the section by deleting the term "party." So "party" can have a specific meaning, often, in legal proceedings, and that's not our intention in this section.

Section 40 approved.

G. Gentner: I request leave in order to make an introduction.

Leave granted.

Introductions by Members

G. Gentner: It's a great deal of pleasure to introduce into the House today grade 4s, 5s and 6s from one of the best, outstanding schools we have in North Delta, Gray Elementary School. The adults are also accompanying them, and the teacher, Grace Yan. Would the House please make them welcome.

[1610]

Debate Continued

Sections 41 and 42 approved.

On section 43.

L. Krog: With respect to this, this substitutes: "legal expenses incurred in the administration of the deceased person's estate." How would legal expenses be defined in a circumstance like that?

Hon. B. Penner: The amendment here is an attempt to try and narrow somewhat what's included in the legal expenses related to dealing and disposing with the matter. Ultimately, I suppose a court could be called upon to determine whether any expenses were actually within the meaning of the phrase "legal expenses" in this section. I guess a court would apply the dictionary definition or the usual definition within the context of the facts at hand.

Sections 43 to 59 inclusive approved.

Preamble approved.

Title approved.
[ Page 7486 ]

Hon. B. Penner: I move that the committee rise and report the bill complete without amendment.

Motion approved.

The committee rose at 4:14 p.m.

The House resumed; Mr. Speaker in the chair.

Report and
Third Reading of Bills

Bill 10 — Wills, Estates and
Succession Amendment Act, 2011

Bill 10, Wills, Estates and Succession Amendment Act, 2011, reported complete without amendment, read a third time and passed.

[1615]

Hon. P. Bell: I call committee stage, Bill 9, intituled Prevention of Cruelty to Animals Amendment Act, 2011.

Committee of the Whole House

BIll 9 — PREVENTION OF CRUELTY TO
ANIMALS AMENDMENT ACT, 2011

The House in Committee of the Whole (Section B) on Bill 9; D. Black in the chair.

The committee met at 4:16 p.m.

The Chair: We'll take a two-minute recess while staff arrives.

The committee recessed from 4:17 p.m. to 4:19 p.m.

[D. Black in the chair.]

On section 1.

L. Popham: I guess my first question is around the definition of "person responsible for an animal" or "person responsible for the animal." There are three definitions given.

[1620]

I just wonder if the minister could give me an example of the type of person that would be responsible for an animal, such as maybe somebody who owns a business or just an example of that.

Hon. D. McRae: I'll give you three examples.

For "owns an animal," I will use myself as an example there. I own three animals. I have two cats and a dog. They are things that we have acquired over time. In case you're curious, it will be Scuby, the Jack Russell; Stumpy, the cat with no tail; and Fat Rizzo, who is a cat who has a glandular problem.

The "custody or control" by an employee would be, for example, a dog-walker. They don't own the animals, but they are actually employed by an individual to take an animal for a walk.

And "operator" pertains to regulated activities. For example, when the sled dog industry regulations come in, the operators would fall under that definition.

L. Popham: Well, for the record, I have Jake, Jane, Jigsaw Puzzle, April and Chico. I won't go into what exactly they are, but they're my family pets.

So anybody who owns an animal or anybody who's pet-sitting an animal?

Hon. D. McRae: Pet-sitting would fall under custody of an animal.

L. Popham: Moving on to "service animal," could I have an expanded definition of what a service animal would be?

[1625]

Hon. D. McRae: So "service animal" refers to law enforcement animals. For example, a police dog or a police horse, as well, could also fall under that. In the future we will prescribe other animals through regulation rather than through legislation. But what we will do at this time is we wish to work in parallel with the Guide Animal Act.

L. Popham: Would this definition include carriage horses?

Hon. D. McRae: No, it would not. The reason is, of course, that I don't think carriage horses would fall under the Guide Animal Act. So what happens under this will be purely following the Guide Animal Act as it pertains to animals.

Section 1 approved.

On section 2.

Hon. D. McRae: Hon. Chair, I move the amendment to section 2 standing in my name in the orders of the day.

[SECTION 2, by deleting the text shown as struck out and adding the text shown as underlined:

Duties of persons responsible for animals

9.1 (1) A person responsible for an animal must care for the animal, including protecting the animal from circumstances that are likely to cause the animal to be in distress.

(a) must take reasonable steps to prevent the animal from being in distress, and

(b2) A person responsible for an animal must not cause or permit the animal to be, or to continue to be, in distress.]
[ Page 7487 ]

Amendment approved.

On section 2 as amended.

L. Popham: The intent of the proposed legislation before us is to prevent cruelty to animals. Given the circumstance that happened in Whistler and other circumstances that are similar, my concern right from the start was around businesses that use animals as inventory. I actually tried to submit an amendment, but it didn't fit in this section. But I still think it's a good place for me to ask a question and to make a point around the planning for animals in businesses.

If a business were to fail, I believe there needs to be a plan in place to deal with the animals at that point. I think that in the case of the sled dog disaster, we saw a business that was failing, and I assume that the solution to some of their problems was to slaughter the dogs involved in the business. This would also pertain to something like a pet shop or anything that uses animals as their inventory, as you would a regular business.

[1630]

My amendment actually was shaped around having to submit a plan for the animals in the case of a business failing. I guess I'd like some comment back from the minister around that. I still think that that's legislation that needs to be in place. I don't know where it would fit, or maybe it's for future legislation, but I do think it's quite important, and I think it would allow us to control the finality in that case.

Hon. D. McRae: The member opposite basically — to make sure I paraphrase it right — is concerned about, for example, if a pet store were to fail, what would become of those animals. A couple of things just to read into the record, if I may.

"9.1(1) A person responsible for an animal must care for the animal, including protecting the animal from circumstances that are likely to cause the animal to be in distress." Distress is a very broad-based definition pertaining to many aspects of an animal's life, including the end of life.

Under that, there is the responsibility of the owner, whether they are a personal owner, like myself — I mentioned earlier I was the owner of animals — but also as basically an owner of a store. If you have animals under your care, you must make sure that they are not under distress.

The things that can be done. The critic may wish to pursue with UBCM the municipal government role in allowing the sale of pets in retail stores. That may have some element. The ministry does continue to work with the BCSPCA and other partners to promote the network of rehoming organizations. However, if a person were to dispose of animals in a way that was causing distress, the BCSPCA would have the ability to investigate and make recommendations as it so pertains to the end of life of that animal.

[1635]

L. Popham: I think the minister understands the intent of what I was saying. I guess the definition of "distress" is questionable because in some cases you can't tell when an animal is in distress. I'll give you an example of a pet that my family had. It was a newt. I have no idea how to tell if a newt is in distress, because newts don't do a lot. So maybe you could expand the definition of "distress" for me.

Hon. D. McRae: For the purposes of this act, an animal is in distress if it is deprived of adequate food, water, shelter, ventilation, light, space, exercise, and care or veterinary treatment. It could also be kept in conditions that are unsanitary. It could be not protected from excessive heat or cold and, also, if it is injured, sick, in pain or suffering, or abused or neglected.

As for the newt. I would trust that if it was a member of the BCSPCA or a veterinarian, a vet, they would be able to determine if there was distress caused. Obviously, we can't go down a path and try to determine and make a regulation pertaining to every single animal that may exist out there. We have to trust that the people who have expertise in this area would recognize distress.

L. Popham: Thank you very much for clearing that up.

In the case of a situation like the sled dogs, where there's possibly a report of animals in distress, can the minister tell me if the BCSPCA is required to help the animals, regardless of the numbers of animals reported? If there were, say, a hundred sled dogs, is the BCSPCA required to take those dogs into their ownership to relieve the distress, regardless of the number of animals?

[1640]

Hon. D. McRae: Under the existing act, not the amendments.... I'll just read into the record: "...the authorized agent" — in this case the BCSPCA — "may, in accordance with sections 13 and 14, take any action that the authorized agent considers necessary to relieve the animal's distress, including, without limitation, taking custody of the animal and arranging for food, water, shelter, care and veterinary treatment for it."

Now, in some cases, obviously the BCSPCA will take the animal into its care, but it also has the ability, through its network, to — and this is the term in the industry —rehome the animal if necessary.

L. Popham: Is the minister saying that the SPCA is required to take those animals in distress?
[ Page 7488 ]

Hon. D. McRae: They may. That's at the discretion of the BCSPCA to make that call at the time.

L. Popham: Do you know of an instance where the BCSPCA has not had the capacity to take the animals in distress?

Hon. D. McRae: I'm here today to deal with the legislation. I don't understand or I don't have access to the day-to-day operations of the BCSPCA, obviously. I do know that they continually do work with rehoming organizations and have those cooperative agreements in existence. As for the day-to-day operations, that is their expertise. We're here to talk about the legislation and such.

Also, I'd like to remind the member — if possible, in a polite manner, at least — that that's in the existing legislation. We're talking about the amendments today.

L. Popham: Thank you for the reminder, Minister. But we are here to discuss the legislation and the amendments that are being brought in. I guess I am trying to ensure that they are preventing animal cruelty in the intent of this bill.

For me, knowing that, I guess, the BCSPCA or the body that's regulated to make sure the animals are prevented from being in distress…. I'm here to make sure that this legislation is going to prevent that, regardless of the amount of animals that are found in distress.

I guess my question is: does this require all animals to be brought into custody, regardless of number of animals? The reason I'm asking is because…. If there is a large number of animals, is there a chance, with this legislation, that animals could be left in a place of distress because of a capacity problem?

[1645]

Hon. D. McRae: Again, the key word here is "may." But like the member opposite, I share the member's concern. This act gives the BCSPCA the discretion or ability to act; it does not require them to. However, I think all of us on this side and that side of the House have a common interest in ensuring that animals in distress are treated in a very ethical manner and such. I have faith that the BCSPCA has acted well in the past and will continue to do so well into the future.

L. Popham: Would the BCSPCA be the only body required to take the animals into custody, in that case?

Hon. D. McRae: Under this act, the BCSPCA is the only authorized agent. They can work, however, with other partner organizations to accommodate or rehome animals at their discretion.

L. Popham: This might be an odd question, but is just a regular citizen allowed to take an animal that they feel is in distress into their own custody?

Hon. D. McRae: No. If an individual were to feel that there was an animal that was in distress, the best thing they should do is report that issue to the BCSPCA as quickly as possible, and the BCSPCA would act.

L. Popham: I'm going to move on to 9.2(1): "An operator engaging in a regulated activity...." I'd like an expanded definition of "a regulated activity."

[1650]

G. Gentner: I seek leave to make an introduction.

The Chair: Please proceed.

Introductions by Members

G. Gentner: It's also a great deal of pleasure…. Earlier I introduced a class from Delta North. But I have a new class up in the gallery. I also want to correct the record. I've made a major faux pas. I introduced them as Gray School. I'd like to introduce you to one of the best schools in all of North Delta, Gibson Elementary. Could the House please make them welcome.

Debate Continued

Hon. D. McRae: Just to read into the record: "'regulated activity' means a prescribed activity in relation to the breeding, care, keeping, training, use, transportation, disposition, assembly or killing of animals."

If I may, I'll use an example. Right now there are a number of individuals representing organizations, basically making recommendations from the Sled Dog Task Force. So for example, if I may, I'll just read some of the organizations involved.

Right now we have the Ministry of Agriculture, the College of Veterinarians of British Columbia, the British Columbia Society for the Prevention of Cruelty to Animals. We have several industry reps in the sled dog industry. We have the University of British Columbia, the Professional Mushers Association of British Columbia, the International Sled Dog Veterinary Medical Association. The University of Guelph is involved.

The Canadian Veterinary Medical Association right now is making recommendations, just like I mentioned earlier, pertaining to the breeding, care, keeping, training, use, transportation, disposition, assembly or killing of animals, which then would be coming to the ministry and the minister's office, and, if signed, becoming a regulation that would cover all those elements of care for the animal from basically birth through the end of life.
[ Page 7489 ]

L. Popham: Thank you for the explanation and the example. This is where I actually thought about putting in an amendment to the bill, and I guess I'm going to read it to you, so it's on record, although I'm not going to actually submit it.

"An operator or authorized agent using animals as inventory must submit a plan to the governing authority for the proper welfare of the animals in the event that the operator ceases to exist." I think that if I would have put the amendment in here, it would have only pertained to regulated activities. Does the minister have the same understanding, or does he see this possible amendment fitting into this section?

[1655]

Hon. D. McRae: In regards to regulated activities — and the example I gave earlier was the sled dog situation — we can make specific reference there to dealing with the disposition or end-of-life plan for animals in that particular circumstance.

However, if it's not a regulated activity, we fall back under section 9.1, which is the definition of "distress." Again, it's applied on an animal case-by-case basis. You mentioned a newt earlier. Obviously, the requirements for a newt in regards to food or light would be different than for a cat or a dog.

L. Popham: Section 9.2(2) is: "An operator who is an employer must ensure that employees are adequately trained and sufficiently equipped to comply with any requirement or duty set out in a regulation respecting the regulated activity in which the operator is engaged." My question on this point is: who's ensuring that the operator that is an employer is ensuring that the employee is fulfilling this requirement?

[1700]

Hon. D. McRae: Section 9.2(2) refers to regulated activities, obviously. Fairly soon, I would imagine, under section 15.2, which we'll get to in a little bit, the BCSPCA will have the ability to inspect and determine that sufficient training was given to conduct the regulated activity.

L. Popham: But at this time that's not in practice — am I understanding this right? — because we don't actually have the regulated activities going on.

Hon. D. McRae: After much deliberation, yes.

L. Popham: Okay. At this point in time, if the activity is happening, the sled dog industry is happening, they're not a regulated activity. Was there a requirement at any point for them to be inspected by the BCSPCA?

Hon. D. McRae: If it is a non-regulated activity, if a person raises a concern — and the person could be anybody, whether it's an employee, ex-employee, regular citizen — they can make a complaint to the BCSPCA, and the BCSPCA would then make the determination whether they were going to follow up with that investigation.

L. Popham: So I understand that it was a complaint-driven process for an inspection to happen. Coming up with this point — is that something that was done with consultation with the SPCA?

[1705]

Hon. D. McRae: In regards to investigations, this is complaint-driven. It already exists and has existed for some time, obviously.

Inspections — this comes under regulated activities. BCSPCA was definitely a key player in the Sled Dog Task Force. Craig Daniell was part of it, and Barb Steele from the UBCM. The now Minister of Environment was also part of it, who was, in his prior life, a vet. So it was determined at that stage. BCSPCA was part of that process, and we're aware of the inspection issue.

L. Popham: Thanks for that answer. I think this amendment is very strong, and it's very good. I commend you for getting to this point.

I do have a question around the capacity that the BCSPCA would have undertaking this new responsibility, and I guess that comes down to the requirement for more funding. I know this isn't estimates, but is the minister confident that this responsibility would be able to be undertaken by the SPCA under the current funding?

Hon. D. McRae: I'm sure the member opposite saw some of the news releases that came out after the act was introduced, and the BCSPCA was supportive of the act. The ministry also does…. I'd like to give members opposite confidence that the ministry remains in regular contact with the BCSPCA.

We're committed to working with the BCSPCA to work through various challenges they will come across in their operations, including funding, as they arise. We're very pleased at the dialogue that exists presently and has in the past between the BCSPCA and the Ministry of Environment. For myself, I've talked to the head of the BCSPCA several times, and I know that the other ministry officials have done so as well.

L. Popham: One last question on this point. I guess I need to know: is there a business plan that would be made in partnership between the business and the BCSPCA as far as when inspections would happen? Is that more detailed than has been given at this point? I guess I would need to know how many times it would be inspected or what the intent of that is.

[1710]
[ Page 7490 ]

Hon. D. McRae: This act gives the ministry the ability to make regulations. As for the specifics, we haven't yet got to that stage. For example, we have a working group out, existing right now. We'll have to see how it shakes down and see what the processes go through. But at this stage I think it's premature to assume what the inspection abilities will be.

L. Popham: Thank you, Minister.

The next section, 9.3, "Transportation of animals":

"A person responsible for an animal must not transport the animal by vehicle unless the animal is (a) inside the passenger compartment, or (b) confined or secured in a manner that will prevent the animal from" — and then it lists — "(i) falling from the vehicle, (ii) being injured during transport, or (iii) causing a hazard to the safe operation of other vehicles."

I guess my question is regarding a family pet. Say a family pet was inside the passenger compartment during a vehicle accident, and the movement of that animal, unsecured, killed one of the passengers. Is there any way that the owner of that animal could be charged under cruelty to animals without it being secured inside that passenger compartment?

Hon. D. McRae: The answer is no. It says, basically, "inside the passenger compartment." There are no specifics as to how you must secure an animal once it's inside the passenger compartment.

L. Popham: This is concerning to me, because I think that there are injuries and deaths caused by animal movement inside passenger vehicles. I'm just wondering if the minister thinks that there could be some tightening up of this part of the legislation.

[1715]

Hon. D. McRae: This act in this particular section is designed basically for preventing the animal from being hurt, not directed to individuals and how they may be hurt by the animal. An example would be if the animal was held with a leash in the vehicle, but the leash was far too long and the animal was able to jump out of the vehicle and be dragged because of the length of the leash. It's not designed at this stage to protect the human occupants inside the vehicle.

L. Popham: I actually was implying the injury to the animal, not the passenger. An example is a real-life example of my friend's dog — the dog going through the vehicle after a really rapid stop and breaking its leg. That's the sort of incident that I'm concerned about. But we can move on from there.

Section 2 as amended approved.

Section 3 approved.

On section 4.

Hon. D. McRae: Hon. Chair, I move the amendment to section 4 standing in my name in the orders of the day.

[SECTION 4, by adding the text shown as underlined:

Duty to report distress

22.1 A registered veterinarian who believes on reasonable grounds that a person responsible for an animal is, or is likely, causing or permitting the animal to be in distress in contravention of this Act must promptly report, to the best of the registered veterinarian's knowledge and belief, all of the following information to an authorized agent:

(a) the reason for believing that an animal is in distress;

(b) sufficient information to contact the person responsible for the animal, including the person's name and address;

(c) sufficient information to identify the animal.]

Amendment approved.

Section 4 as amended approved.

On section 5.

Hon. D. McRae: Hon. Chair, I move the amendment to section 5 standing in my name in the orders of the day.

[SECTION 5, by deleting the text shown as struck out and adding the text shown as underlined:

Harm to animals by animals

23.3 (1) A person responsible for an animal must take reasonable steps to prevent the animal from attacking or otherwise harming another animal.

(2) A person must not use an animal for, or breed, raise, train or dispose of an animal for the purpose of having the animal used to attack or otherwise harmfor,

(a) baiting or fighting another animal, or

(b) another prescribed activity that involves an animal attacking or harming another animal.

(3) A person must not possess equipment ordinarily used for the breeding, raising or training of animals for a purpose described in subsection (2).]

Amendment approved.

On section 5 as amended.

L. Popham: Again, I wanted to propose an amendment to this section. I didn't officially present it or submit it, but it's an issue that I'd like to discuss. I wanted a line in this section to read: "A person must not abandon an animal." The reason why I think this is missing from this legislation is that the word "abandon" is very symbolic about a situation that causes animals an incredible amount of suffering.

Being from a rural constituency, I see endless animals abandoned onto farmland and into gravel pits. Many, many cats and dogs are dropped off. It's unfortunate that that's not something that can have a charge for.

The incidents at UVic with the rabbits were caused by continual abandonment of pet rabbits. The people that
[ Page 7491 ]
were abandoning them were not caught, but it would be reassuring to know that if somebody like that was caught, there would be a way of charging them under this new legislation, because the intense cruelty it causes, the suffering, the disease and the risk to other animals is enormous.

Can the minister comment on that?

[1720]

Hon. D. McRae: Section 9.1(1) requires a person to care for his or her animal, including protecting the animal from distress; 9.1(2) requires that a person responsible must not cause or permit an animal to be in distress. "Distress" includes neglecting an animal, and clearly, if an animal is neglected, it is abandoned.

The BCSPCA has the ability to basically investigate and if necessary or they feel it necessary, they can recommend charges at that stage. But under the definition of "distress" that we have, our BCSPCA has that ability now.

L. Popham: I guess I'm referring to the act of abandoning or getting caught in the act of abandoning. If the minister says that the words "distress" and "abandon" mean the same thing, then I think what's implied by this legislation is that if you're caught dropping off an animal — a rabbit at UVic or a kitten out in Saanich — the potential is that you could be charged and could go to jail for that. Is that correct?

Hon. D. McRae: Abandonment and neglect could be the same. If it were to happen, it is possible that a person could be charged or fined because they have caused distress for their animal.

L. Popham: With the wording as it is now, without using the word "abandoned," how likely is it that a person could be charged under this new legislation for abandoning an animal on a public space?

Hon. D. McRae: Just to quote 9.1(1): "A person responsible for an animal must care for the animal, including protecting the animal from circumstances that are likely to cause the animal to be in distress." It is a positive duty on the part of the owner that they have to be responsible for that animal. If they were to act in accordance, that was an action that was to cause distress — for example, abandonment.... Again, the BCSPCA has the ability to investigate, and if it felt it so needed, it could talk about laying charges.

L. Popham: For me, this is a very important point, mostly because in my previous life as a farmer I would also try and control the animal population around my farm. You know, three kittens dropped off one year ended up being a colony of feral cats, a population around 75, living beside my farm, which I had to deal with myself. If I could have been able to catch the person doing it and if a message were sent out that this could lead to a very large fine or jail time, I think that that would be a deterrent.

I think the intent of all of this legislation is really to deter people from being cruel to animals, because the consequences have increased substantially. I guess I'm wondering if messaging could be sent out, very strong messaging, implying what the outcome could be. I think that would be really helpful.

[1725]

Hon. D. McRae: One of the benefits of this act is that it has given greater awareness to individuals in our society in British Columbia of how we expect the animals to be treated. I agree with the member opposite that given the opportunity, I would very much like to do more interviews, press releases and such, to make sure that people are aware of the consequences of their actions. I welcome those opportunities. If you have suggestions on where I can get the information out there, please, by all means, don't hesitate to share.

L. Popham: After we pass this legislation today — because we are fully intent on supporting this legislation — is the minister comfortable with me making the statement, as the critic for Agriculture and with UVic in my constituency, or bordering my constituency, that someone dropping a rabbit off at UVic could potentially go to jail?

Hon. D. McRae: I'd be very much open to the idea of having some joint messaging go out between yourself as critic and myself as minister just to make sure that people are aware that their actions that could cause distress to animals are not acceptable in this province and that they're aware of the consequences if they were to do so.

Section 5 as amended approved.

Section 6 approved.

On section 7.

Hon. D. McRae: I move the amendment to section 7 standing in my name in the orders of the day.

[SECTION 7, by deleting the text shown as struck out and adding the text shown as underlined:

Defence

24.02 A person must not be convicted of an offence under this Act in relation to an animal in distress if

(a) the person is

(i) a registered veterinarian, or acting under the supervision of a registered veterinarian, and

(ii) an employee of a registered veterinarian who is acting under the supervision of the registered veterinarian, or
[ Page 7492 ]

(iii) an enrolled student of veterinary medicine who is an employee of a registered veterinarian and is acting as authorized by the registered veterinarian, and

(ii) the person is practising veterinary medicine in accordance with the standards of the profession,

(b) if the person is an operator, the distress results from an activity that is carried out in accordance with the prescribed standards of care that apply to the regulated activity in which the operator is engaged, or

(c) the distress results from an activity that is carried out in accordance with reasonable and generally accepted practices of animal management that apply to the activity in which the person is engaged, unless the person is an operator and those practices are inconsistent with prescribed standards.]

On the amendment.

L. Popham: Could the minister explain the intent of the amendment?

Hon. D. McRae: This section has been modified to provide a more narrow focus so that a defence is provided only to those individuals who are treating an animal in accordance with the standards of the profession and are either registrants of the College of Veterinarians of British Columbia or individuals trained in veterinary medicine and procedures who are acting under the supervision of a registrant of the college. This language has been taken from the Veterinarians Act, section 46(3)(d).

Amendment approved.

[1730]

On section 7 as amended.

D. Thorne: I have a few comments and questions about section 7. I think the intent of this section is to talk about who can be charged and convicted of an offence and the defence of certain categories of people.

I am wondering: if an individual is charged, what kind of defence does the individual have? In other words, what kind of oversight is there on a charge? What recourse does an individual have to defend himself or herself under this section?

[L. Reid in the chair.]

Hon. D. McRae: Under section 24.02, "A person must not be convicted of an offence under this Act in relation to an animal in distress if...." Then under subsection (a), (i) through (ii), it spells out that.

However, if a person is charged, I would highly recommend the person to hire a lawyer and defend themselves in the most appropriate manner. You are before the court at this stage.

D. Thorne: In other words, a person does have to get a lawyer, so it's a costly procedure.

I take myself as an example. If my animal or my animals were seized because of a complaint, I would then be informed, I suppose, by the policing agency, which in this case is the SPCA, why they have taken my animals — my farm animals or whatever. I'm assuming, from the answer from the minister, that at that point I would be told that my only recourse would be to get a lawyer and to appeal to the court system.

There is no transparency in the act or in the amendment that I'm aware of. Even the government is unable to get any information on such a charge. I guess I'm wondering if this is true.

I understand that the policing agency does not come under the FOI, not even where the government itself is concerned. So if I was the person whose animals were taken, I would have to go to the courts, (a) be able to afford that and (b) be told, and not be given enough information.

Is this in fact the only recourse that I would have?

[1735]

Hon. D. McRae: Once a person is charged and it's before the courts, they do not have to hire a lawyer. That is something the individual can make a determination on, if they choose to go forward at that stage or not.

Personally, if a charge is laid, I think a person should defend themselves with all means possible. Whether they were to choose to hire a lawyer or not — that would not be a decision.... I guess it would be a case-by-case choice that the individual could make.

But it's before the courts at this stage, and I think if that was the level it had risen to, you'd have to take the charge very seriously.

D. Thorne: Thank you, Mr. Minister. So there is no hearing by the policing agency, in this case the SPCA, in between the seizure of my animals and it going to the court. I understood, I guess wrongly, that I had to appeal to the court system myself, that there was a hearing with the policing agency and that there is the fear of disposal of the animal before it's heard at the Supreme Court.

There wouldn't be much point in my going through with a costly case through the Supreme Court if in fact my animals were destroyed before a decision had been made by the courts. Again, the lack of transparency before it gets to the courts is of concern.

Hon. D. McRae: I'm sure, as all members know, seizure and charges before the courts are two very different issues. In regards to seizure, there are no new provisions under this act. The person must apply, as it was intimated, for judicial review. However, Member opposite, we understand there are concerns in regards to seizure of animals, and we are prepared as a ministry to look into this.
[ Page 7493 ]

D. Thorne: I'm sorry. I couldn't understand. You read it so fast.

Hon. D. McRae: My apologies. I'll slow down. In regards to seizure and charges before the courts, these are two very different issues, and I think you helped highlight that. In regards to seizure, there are no new provisions under this act. The person must apply for judicial review. However, as raised, we understand there are concerns in regards to seizure of animals, and we are prepared to look into this.

D. Thorne: I would like to propose an amendment to this section. It's listed in the orders of the day this afternoon. I would like to propose that we add subsection 24.02(d) to 24.02.

[SECTION 24.02, by adding subsection 24.02(d) as follows:

(d) The government will examine the current animal cruelty investigation system in British Columbia and consider the creation of a provincial Animal Care Review Board similar to the review board which currently exists in the Province of Ontario.]

The Chair: I thank the member for her submission. That, in fact, is outside the scope of this section and is thus out of order.

Amendment ruled out of order.

Section 7 as amended approved.

[1740]

On section 8.

L. Popham: Section 8 pertains to penalties, and my question is: how were the penalties decided on?

Hon. D. McRae: In regards to this issue, we committed to making sure we had the toughest animal cruelty penalties in Canada, so we did a cross-Canada review. A two-year jail time is the maximum allowed, so we chose the two-year maximum. Under our investigations, Ontario has a $60,000 fine. Because we committed to having the toughest penalties in the country, we chose $75,000.

L. Popham: For the jail time up to two years, is that comparable to other provinces?

Hon. D. McRae: Just reading from my sheet here, Ontario has the equivalent — 24 months. Yukon also has 24 months. But I will note there are a couple of provinces that have no mandatory or opportunity for jail time.

L. Popham: So does the minister feel that these are as strong penalties as we can see here in B.C.? Maybe I'll reword that to make it more clear. Is there any reason to make them even stronger?

Hon. D. McRae: We are very pleased that we'll have the toughest penalties for animal cruelty in the nation. However, let's give it time for, basically, the new amendments to work through the system, to see how they are treated by the courts, and if opportunity needs to bring new amendments in down the road, I'm sure we'd be more than willing to look at it. We're going to keep an eye on what the other provinces are doing, of course.

Sections 8 and 9 approved.

On section 10.

Hon. D. McRae: I move the amendment to section 10 standing in my name in the orders of the day.

[SECTION 10, by deleting the text shown as struck out and adding the text shown as underlined:

(c) in subsection (2) by adding the following paragraphs:

(h) respecting practices and procedures to be used in the killing of animals, including prohibiting certain practices and procedures;

(h.1) prescribing activities for the purposes of section 23.3 (2);

(i) exempting

(i) operators engaging in regulated activities from one or more provisions of a regulation made under this section, or

(ii) persons from section 23.2 (2), or 23.3, or from one or more provisions of a regulation made under paragraph (h) of this section;

(j) imposing requirements or conditions on operators or other persons exempted under paragraph (i);

(k) respecting generally accepted practices of animal management that apply to a regulated activity;

(l) establishing classes of persons, animals or regulated activities and making different regulations for different classes. , and

(d) by adding the following subsections:

(3) A regulation made under this Act may adopt by reference, in whole or in part and with any changes the Lieutenant Governor in Council considers appropriate, a regulation, code, standard or rule

(a) enacted as or under a law of another jurisdiction, including a foreign jurisdiction,

(b) set by a provincial, national or international body or any other body that may make codes, standards or rules, or

(c) set by or in consultation with

(i) the society, or

(ii) an organization, one purpose of which is to set standards in relation to a regulated activity.

(4) Unless otherwise stated, a code, standard or rule referred to in subsection (3) (a) or (b) is adopted as amended from time to time.]

Amendment approved.

Section 10 as amended approved.

Section 11 approved.

Title approved.
[ Page 7494 ]

Hon. D. McRae: I rise and report the bill completed as amended.

Motion approved.

The committee rose at 5:45 p.m.

The House resumed; Mr. Speaker in the chair.

Reporting of Bills

Bill 9 — Prevention of Cruelty to
Animals Amendment Act, 2011

Bill 9, Prevention of Cruelty to Animals Amendment Act, 2011, reported complete with amendments.

Mr. Speaker: When shall the bill be considered as read?

Hon. B. Penner: With leave, now.

Leave granted.

Third Reading of Bills

Bill 9 — Prevention of Cruelty to
Animals Amendment Act, 2011

Bill 9, Prevention of Cruelty to Animals Amendment Act, 2011, read a third time and passed.

Hon. B. Penner: I call committee stage debate on Bill 8, the International Interests in Mobile Equipment (Aircraft Equipment) Act.

Committee of the Whole House

Bill 8 — International Interests in
Mobile Equipment
(Aircraft Equipment) Act

The House in Committee of the Whole (Section B) on Bill 8; L. Reid in the chair.

The committee met at 5:47 p.m.

On section 1.

J. Horgan: I understand this is an international protocol that has been or will be signed by Canada, and British Columbia, by this act, is becoming part of that convention. Can the minister advise the committee what the benefit to British Columbia is with respect to this legislation?

Hon. B. Penner: Both the critic and myself are essentially taking a flyer on this aviation bill, since we don't have lead responsibility for this particular piece of legislation. It is important for British Columbia to participate in the modern aviation financing framework, because it will help support the competitiveness and economic growth for British Columbia and our aviation and aerospace industry.

For example, we believe this legislation will enable B.C. aviation companies to benefit from lower interest rates offered by lenders to countries that are members of the convention and protocol. The federal government has signed on to this, and they're encouraging provinces to do the same.

Some British Columbians may not be aware of it, but B.C. does have a fairly healthy aviation industry. We supply components to companies such as Boeing down in Washington State. I look forward to continued investment and growth in this sector. It does tend to provide high wages, and that's something I think both sides of the House are interested in.

J. Horgan: I thank the minister for that answer.

Members on this side of the House have expressed some concern that by signing on to this convention, it may provide an opportunity for employers in the sector to go to lower-wage jurisdictions to meet their requirements for domestic and international travel. Is that a concern of the government, and have they looked at any reports or studies that would confirm or deny that position?

Hon. B. Penner: We're not aware of any concerns in the 43 countries that have signed this agreement that it in any way encourages lower-wage activity.

In fact, as I indicated in my first answer, we think that by British Columbia becoming a signatory and Canada as a country becoming a signatory to this international agreement, it actually places us in a better position to attract investment. Investors will have greater security and greater confidence that they're able to collect on any financing arrangements or investments that they make by having a greater certainty that they can collect on that security.

[1750]

The "aircraft equipment" is defined as including airframes with eight or more seats. Aircraft engines and helicopters have five or more seats. That aircraft equipment can now be used as security for payment, in the same way that a car is used to secure a car loan.

Again, I really do believe there are some targeted opportunities in British Columbia's aerospace sector for growth. We're not going to eclipse Boeing anytime soon, or Washington State, in terms of the size of our aerospace industry, but I think we can play an important role in supporting the growth of Boeing and other aerospace companies, including the helicopter sector.
[ Page 7495 ]

It's something that is a personal interest of mine, notwithstanding my current portfolio. I do believe we have an opportunity to expand on the aerospace industry here in British Columbia, and I think this bill is just one part of that puzzle.

J. Horgan: I know my colleague from Saanich North and the Islands…. Viking Air in his constituency has been growing and expanding over the past number of years. The opportunities in the aerospace sector are enormous for us, perched on the Pacific Rim as we are. But we have material here that demonstrates that there are those in the sector who are concerned we may be losing jobs over time as a result of opportunities in lower-wage jurisdictions.

Just a specific question again to the minister: has the government undertaken any studies? Or are there any studies available that the minister could provide to this committee that would demonstrate there is some certainty that the job prospects are brighter rather than dimmer as a result of this convention?

Hon. B. Penner: If this legislation will lower anything, it won't be wages. It will be modestly lowering the cost of obtaining capital. Lenders will see that there's somewhat less risk in terms of providing that financing for companies operating in British Columbia, because they'll have a better ability to collect their security that is offered up in exchange for them obtaining financing. So I actually think this will help B.C.'s competitive position.

But the member is right. Every day of the week, in a trading economy like British Columbia, we're competing against other countries, and we have to always sharpen our pencil and remain competitive, lower tax rates. Things like the HST with input tax credits is one part of that puzzle to help us become more internationally competitive. Many of our competitors don't have an antiquated provincial sales tax system, which adds 7 percent to the cost of inputs, like the old system in British Columbia did.

That's one reason why I strongly support the HST, as do other members of the government side. This bill is another step in that puzzle in continuing to make British Columbia an attractive place for investment so that we can have high-quality, high-paying jobs such as Cascade Aerospace in the Fraser Valley, which employs literally hundreds of people.

J. Horgan: Noting the time, I move the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 5:53 p.m.

The House resumed; Mr. Speaker in the chair.

Committee of the Whole (Section B), having reported progress, was granted leave to sit again.

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

Hon. B. Penner moved adjournment of the House.

Motion approved.

Mr. Speaker: This House stands adjourned until Monday morning at 10 a.m.

The House adjourned at 5:54 p.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF FINANCE

The House in Committee of Supply (Section A); D. Horne in the chair.

The committee met at 2:36 p.m.

On Vote 27: ministry operations, $103,516,000.

The Chair: Minister, do you have an opening statement?

Hon. K. Falcon: Just a brief opening statement.

First of all, comments to the NDP Finance critic. You may perhaps want to give us some sense of where you want to go, and then we'll try and organize the staff to accommodate the direction you want to go. So whatever you can give us in terms of an idea of who we'll need and kind of when and how you want to pace things along would be extraordinarily helpful and might accommodate us getting through this in a manner that works for the critic.

Just with respect to opening comments, I'll keep them very, very short because I want to get to the opportunity to answer questions on behalf of the critic and others.

Let me just say that British Columbia finds itself in a very enviable position compared to most jurisdictions around the world. We've come through an international economic meltdown that buffeted not only countries and state governments and provincial governments right across and around the world but also, of course, had significant impacts on the corporate sector and the business community around the world.

Yet here in British Columbia through the great work of staff in the Ministry of Finance and others we find British
[ Page 7496 ]
Columbia has not only rebuilt our triple-A credit rating, but we've maintained it through some very difficult times. I do think that is a great credit to this staff and the leadership that has been demonstrated by prior Finance Ministers other than myself, I must hasten to add.

That is very important, because as we go forward, there will always be uncertainty in the world and in the economy, and we want to make sure that British Columbia is well-positioned to take advantage of opportunities and, also, to manage downsides.

As I look at our situation today, where British Columbia has a very competitive business tax regime, where we've got the lowest personal income tax rate in the country if you're earning up to $119,000 in income, that is the kind of platform, I believe, that will serve us very well as we think about British Columbia going forward and serving and meeting the needs of families.

Of course, the recent announcement that we made with respect to the results of the listening exercise that we engaged in with the public on how to improve the HST, I think, will even go further towards ensuring that British Columbia not only has the ability to maintain a very efficient harmonized sales tax system but also has a harmonized sales tax that will be responsibly marched down to 10 percent to provide not only relief for consumers but a benefit broadly right across the business sector as British Columbians take advantage of reduced costs and go out and do what we know they typically always do — and that is spend and recycle those dollars back into the economy.

So that is going to be the sum total of my comments. Just the sense that although there are going to be challenges ahead, as there always will be, I feel very confident and comfortable that we have put in place a fiscal framework and a platform for us to go forward responsibly, prudently and within the context of meeting our commitment to balance the budget within this current fiscal plan.

B. Ralston: I thank the minister for his opening comments. I just wanted to clarify that we're going to deal with Votes 27 through 29 and 42 to 47. The practice here, as I've come to understand it, is that we will deal with all of those votes at the same time and be able to move from one vote to the other during questions over the course of this brief period that's allotted for estimates. I just wanted to confirm that with the minister and with the Chair.

[1440]

Secondly, I'd received some note from the minister's office that it was more convenient to deal with the Financial Institutions Commission issues and the Partnerships B.C. issues today. So what I'm proposing is….

I have a couple questions in the area of insurance, then pensions, then an issue relating to financial institutions themselves, the Securities Commission and then Partnerships B.C. So those are the questions that I propose to deal with today.

I'll leave any more general questions about staffing, the budget, the fiscal framework and, of course, tax policy, which seems to be on people's minds these days…. We'll leave those until either the end of the questions that I have in this area or till Monday, when we have some more time.

I'll just maybe give the minister a chance to acknowledge that or respond.

The Chair: I will say, Member, that that's the normal practice. I understand that that's the agreement — that we will deal with all of the votes before the committee under that one vote.

B. Ralston: If I could begin, I want to talk about an insurance issue. A constituent of mine went to renew his home insurance last year and was told that he could get a discount on his insurance. He'd previously had no claims. He'd been a customer of the insurance company since 2002. He's retired, and his income is obviously less than when he was working, so he was concerned about this. But he was told that he could get a $200 discount if the company was permitted to access his credit score.

He felt that this was an unnecessary intrusion. He'd had no claims. Nothing in his personal situation had changed, yet he felt that he was being forced to consent to giving access to his credit score for home insurance.

Now, this is an issue that has been given some publicity from national news programs. More recently the Office of the Information and Privacy Commissioner — just by way of background, it's Order P11-02, Economical Mutual Insurance Co. — did a ruling on a complaint under the privacy act because, similarly, a person had complained, but somewhat differently in the sense that this company had obtained his credit score without his consent when he renewed his homeowner's insurance.

Ultimately, the ruling "ordered Economical to stop collecting and using personal information it had collected in contravention of PIPA, to review the consents it has provided to insurance applicants and to provide adequate notice to its applicants. Once it has provided adequate notice and obtained consent, Economical may resume collecting and using credit scores."

I'm wondering, first of all, if the minister is familiar with this issue, based on advice from staff. What is the position of the government and the regulator in terms of this?

His position, I think, is one that is widely endorsed in some of the more consumer-oriented surveys and programs that have followed up on this issue nationally. This does seem to be a trend among insurance companies. He felt coerced, given his financial situation, to give
[ Page 7497 ]
a consent that he would not otherwise have given, just because he wanted to save the money.

[1445]

Hon. K. Falcon: The short answer is yes. I am aware of this issue, at least at a high level. I'm advised that as the regulator, FICOM is participating in the Canadian Council of Insurance Regulators, which is engaged in a consultative process over a whole number of issues, and this is one of the issues that are part of that consultative discussion.

I don't want to preclude the discussion and the listening exercise they're engaged in, but I can say to the member that as someone who actually had a few years' experience working in the general insurance industry — and I know it's a good industry, does many good things and provides important coverage — I would be uncomfortable personally with something that could result in the declining or denial of insurance coverage for individuals that may have poor credit histories.

That strikes me as something that we would have to be very, very cautious about indicating support for, because primarily there is going to be a strong correlation between lower-income folks — often, not exclusively — that may have credit scores that have absolutely nothing to do with their integrity with respect to looking after their home and other insurable items.

I can say that at a high level, Member, I will wait for the result of that consultative process to complete. I will look forward to hearing what comes back to me, but I must say that I start from the position of being entirely or somewhat — perhaps even strongly — skeptical about the idea of the possibility of people being priced out of the market as a result of credit scores or denied insurance as a result of credit scores.

B. Ralston: I thank the minister for that response. Well, perhaps I can fuel the minister's skepticism a bit further.

On CBC's Marketplace Wendy Mesley gave an example of a person in Ontario who went to renew his home insurance. The new premium was almost double. He set out to discover why that was the case. He had lost his job in the recession and recently had to declare bankruptcy but managed to hold onto his house. He said he's never missed an insurance payment, but when he asked his insurance company why his rate was now so high, they said they now factor in your credit score when determining your premium.

I think the minister may be familiar with the experience in the United States not so long ago where entire neighbourhoods were red-circled by insurers. They would simply not provide insurance in certain geographic areas of major American cities.

While one can appreciate the commercial reality that actuarial science relies upon in order to set premiums, the concern would be that through no fault of one's own and despite an excellent credit rating, one is going to be possibly paying much more expensive premiums, somewhat like my own constituent who was obliged to pay more if he did not give access to that score.

[1450]

The minister does mention the Canadian Council of Insurance Regulators. I've been provided with a report on the credit-based insurance scoring questionnaire that says that it was conducted by the Financial Services Commission of Ontario on behalf of all Canadian Council of Insurance Regulators members, and this one says: "Except Quebec and British Columbia, sought information, through a questionnaire, to better understand how credit scoring is used in the insurance industry."

The minister mentioned the Canadian Council of Insurance Regulators. Is the ministry now participating in that council's deliberations and efforts to develop a common policy on this issue — or not?

Hon. K. Falcon: Member, forgive me for not introducing.... I've got Carolyn Rogers, who's the superintendent and CEO of FICOM, joining me here today as we canvass issues around the regulators' responsibility — in this case, having to do with the potential denial of insurance around credit scores.

I can confirm and I have been advised by Carolyn Rogers that we are participating in the Canadian Council of Insurance Regulators, or the CCIR, as it's affectionately known in the regulator community. In fact, Ms. Rogers is actually leading the initiative with respect to this particular issue. So British Columbia....

That, of course, is a body that is a consultative body. It is the independent regulators in each province that make the ultimate decisions. But as I'm advised that we are leading on this particular issue, I think that gives me some greater comfort in knowing that it is being stickhandled with British Columbia's direct involvement.

B. Ralston: Can the minister then report as to how British Columbia insurers, or those extraprovincial companies that are registered in British Columbia and selling home insurance in British Columbia, are using credit scoring in the personal property insurance market right now?

Hon. K. Falcon: I'm advised that this issue started.... You know, it wasn't announced by anyone. We started hearing, just as the member heard, anecdotal stories about people being asked to provide credit scores in return for discounted rates, and these started popping up across the country.

This appears to be something that the insurance industry has cottoned on to in the recent past here. So it's one of the reasons why the CCIR together said: "Well, look. This is something that is happening right across the country. We had better try to get a handle on it. On
[ Page 7498 ]
what basis are they doing it? How is it being used today? Under what authority are they asking for that information and receiving that information? What privacy issues are related to it, etc.?"

They're trying to gather up that information so that we can understand where the industry is heading on this. As I say, it was certainly done without any sort of public announcement that they were going to start moving into this area that evidently had not been anticipated. So CCIR is looking into that, gathering the information and then will be reporting back to the respective regulators, including FICOM and the minister, with respect to how to move forward.

B. Ralston: I appreciate what the minister says about information-gathering. But just for my benefit and perhaps for those members of the public who might be interested, what is the status of the conduct of companies in British Columbia right now? What are they permitted to do, and what are they not permitted to do? Perhaps I'll ask some further questions after I get that response about the jurisdiction.

[1455]

Hon. K. Falcon: I'm advised that as a result of a ruling by the Office of the Privacy Commissioner, the OIPC, it is a requirement, because there was some apparent vagueness around whether they had the right to do that under existing general provisions within most general insurance contracts — whether they required informed consent or prior consent before accessing this information.

The ruling of the Privacy Commissioner is clear — that they will require specific permission before accessing that, which sounds like the case of your constituent in the sense that they asked him for his agreement to access the credit scores to provide a further discount.

What I'm also advised is that FICOM is in the process right now of canvassing insurers that do business in the province of British Columbia as to what their practices are with relation to this to determine which, if any or all, are undertaking this practice or planning to undertake this practice, etc., so that we can have a sense of what's happening on the ground, which will, again, help inform us.

You know, I think the key issue that the member raises is an important one. The concern is a legitimate one. We want to make sure through the work that's being done in the CCIR that we recognize what may be happening in the industry and that we ensure there is a regulatory response, if necessary, to deal with any gaps that may appear as a result of what appears to be taking place.

B. Ralston: I believe the minister and I are talking about the same order that I referenced earlier, the one called Economical Mutual Insurance Company. In the case of that particular insurance company, the order required Economical to "provide all home insurance policyholders who have not been provided with adequate notice and all present and future applicants for home insurance with notice that a credit score based on their credit information may be obtained for the purpose of assessing future risk of loss in connection with underwriting their policies. It must provide this information before collecting any credit score based on their credit information for this purpose."

So there was a remedial provision in the order. They also required them to look at the consents that they had obtained from home insurance policyholders since PIPA came into force on January 1, 2004. They must submit the notice that they intend to provide to home insurance policyholders who have not been provided with adequate notice to the adjudicator for review.

[1500]

I'm wondering, beyond the order that was made for this particular insurance company in this particular adjudication, is that something that the superintendent has now taken and confirmed as an order for all insurance companies operating lawfully in British Columbia?

Hon. K. Falcon: I'm advised that yes, indeed, the superintendent alerted all of the insurers, sent the bulletin along and advised them to take heed of the decision that came out of the Office of the Privacy Commissioner.

[J. McIntyre in the chair.]

B. Ralston: What the regulator is, then, asking for is voluntary compliance in conformity with this order. Or is there something that has a bit more teeth to it?

Hon. K. Falcon: I'm advised that obviously, once they've been made aware of the provisions in the ruling of the Privacy Commissioner's office, they cannot breach the privacy act. If they do so, the superintendent can and would send a cease-and-desist order to that specific company that was in breach of the prior order.

B. Ralston: Can the minister advise whether FICOM has received complaints about this policy of some insurance companies, and if so, how many?

Hon. K. Falcon: I'm advised that they've received none to date.

B. Ralston: The Insurance Bureau of Canada has what they call a code of conduct for insurers' use of credit information. In that code — which, they stress, is voluntary — they describe what they call informed consent. They say:

"Customers must not feel obliged to give consent. Customers must understand the nature and scope of the request. The question must be reasonably clear, to ensure that customers know what they are consenting to and how the consent will be used.
[ Page 7499 ]

"Consent must be specific, and the insurer must not presume consent will be given. Consent will be given verbally, in writing or via an e-medium. E-medium consent should be a field that a policyholder can click on directly in order to give consent. Prior to an agent or broker collecting credit information, the customer consent field — the agent's or broker's screen — must be clear and explicit for the user. This field must not default to yes."

First of all, given that this is something that's developed by the Insurance Bureau of Canada, is the superintendent aware of this? Do they agree that this is an adequate way of describing the requirements for insurance companies operating in British Columbia?

[1505]

Hon. K. Falcon: Yes, I am advised that they are aware of the IBC voluntary code of conduct. But again, I think that even with a voluntary code of conduct, as the member has indicated with his example, this appears to be, I understand, a recent phenomenon that has started popping up across the country, which is why the CCIR, on behalf of regulators across the country, have been working together to sort of get their arms around how widespread this is, how much of a common practice this is, and what the implications are of regulators not doing anything with respect to what appears to be a recent phenomenon.

I'm pleased that that work is underway, and I look forward to hearing back from the discussions that take place and some recommendations from FICOM.

B. Ralston: Further passage from this voluntary policy: "The insurer shall not refuse to provide an insurance quote to the customer, nor refuse to insure a customer, nor terminate or refuse to renew a policy because the customer refuses to give consent to use his or her credit information." In this situation the insurer may not be able to offer its best quote. "An insurer shall not refuse to provide an insurance quote to a customer, nor terminate or refuse to renew a policy solely because of unfavourable credit information."

So obviously, the example that I gave of my constituent would conform with this policy in the sense that if my constituent refused to provide his consent to provide the credit information, then he was obliged to pay more. But what about…? My interest is more on the second passage. Does this conform with the current regulatory practice in that an insurance company in British Columbia would not be permitted to refuse an insurance quote to a customer, nor terminate or refuse to renew a policy solely because of unfavourable credit information?

Hon. K. Falcon: Because this is a rather new issue that is popping up, FICOM, I'm advised, is not aware of anyone being declined coverage as a result of the issue that the member has raised.

However, what seems to be happening is what the member is suggesting, at least anecdotally, and I don't want to infer that this is the case with all insurers in the province. It may be limited to just one, for all I know.

I think that they're taking what appears to be, based on the evidence that the member opposite is providing, a different approach of saying: "Well, we will provide you a discount should you provide approval to allow us to access your credit score and thus be able to provide you a better rate."

[1510]

It's a different approach that is a concern, if that is the case, because it may achieve effectively the same thing. That's why CCIR is looking at this and taking a cross-country view and, as I say, why British Columbia also happens to be in the good position of being lead on this specific issue, one of a number of issues I understand that CCIR is looking at.

But I do think that we have to also recognize that.... The member read from a voluntary code of conduct, and it did make a reference to not declining policies. But as the member opposite would probably agree, you don't necessarily have to decline a policy. You can just make a policy really expensive and achieve de facto, perhaps, the same thing — not, again, suggesting that that would happen, but it is something that I'm sure is being looked at by the regulators as they investigate this issue.

B. Ralston: Another, broader concern about this policy is that it may well be perceived and actually be discriminatory towards low-income younger and older clients or, in the case of new Canadians or landed immigrants without a credit profile, they may find themselves in a position where they're not in a position to get home insurance.

What is the approach that the minister thinks is appropriate to ensure that this kind of potentially...? I stress "potentially" because I don't think there's any strong evidence of it yet, but the way in which these scores are being used certainly does raise that concern. What steps will the minister be taking through the superintendent of insurance to ensure that that doesn't happen?

Hon. K. Falcon: Look, I think I can say to the member that I share the concern. Certainly, as I try to do on every subject that I start to hear things about, I think the first thing to do is get the facts to make sure that we are operating under not anecdotal sort of stories — though those stories are important; that's how you learn about an issue — but making sure that we understand exactly what is or is not happening in the industry. If this is a new trend that appears to be being embraced by the insurance industry, we certainly want to be aware of that and understand what the implications of that may be.

I think the member very correctly points out that if a policy like that was allowed to move forward unchecked, then there could very well be a disproportionate impact, as I mentioned earlier, on low-income families or individuals, recent immigrants, those that have not yet
[ Page 7500 ]
established a credit score, and on and on and on. We could all come up with examples. So I think that the member is absolutely right to raise this as a concern. He's heard it from his constituent.

I'm pleased that FICOM is part of a national regulatory body, the CCIR, that is looking into this issue. I will commit to the member that upon the conclusion of that investigatory and discussionary process that is currently underway, I will certainly be watching very carefully to see what recommendations come back with respect to this.

I start from the position, too — I think a position that won't be unaligned from the member opposite — that I would have to be convinced that this is not going to have a disproportionate impact on low-income folks or recent immigrants before I would be willing to sign off on a change. But as I say, it's very early days now. I appreciate the member pointing out that we don't yet know all the facts. So we'll get those. We'll allow that process to work, and then I'll look forward to providing more information to the member in the future on this.

B. Ralston: Well, I take some issue — and I suppose it's a minor point — with the minister in saying that it's a recent issue. The Canadian Council of Insurance Regulators, I understand from reading the Canadian Underwriter magazine — which I don't often read, I'll confess.... But here we are. They said: "The Canadian Council of Insurance Regulators released the results of their survey on the use of credit-based insurance scoring, CBIS, in November 2009." So that's a while ago — I suppose not that long ago, but it's not in the last month or two.

[1515]

"Among its findings the survey confirmed the use of CBIS is not only widespread, but the majority of carriers using this information are not disclosing its impact to policyholders." They said that in Ontario — this was an Ontario survey, and I gather that B.C. declined at that stage to participate — "19, representing 55 percent of the property insurance markets in Ontario, currently use credit scoring in the qualification rating or underwriting practices for personal property insurance."

So this person, who is writing in this magazine, says that there's a range of discussions, including the widening use of credit, defining a fair use and an outright ban. So are those alternatives being considered?

Obviously, the minister says that there's some effort to get an assessment of how widespread the practice is. This report's about what's taking place in Ontario. I wouldn't imagine that British Columbia was very much different. Given the recent decision in the Economical Mutual Insurance Company, which refers directly to this use of credit scoring, what are the policy alternatives without…? I appreciate the minister has given a sense of direction, but what are the policy alternatives that the minister is prepared to consider to deal with this issue?

Hon. K. Falcon: I thank the member for quoting from the underwriters insurance article. What I understand is that this issue initially heated up earlier in the provinces of Ontario and Alberta. They've got a more vigorous sort of private sector insurance market there, particularly on the auto side. My understanding is that that's where it first started to rear the issue. So it's maybe not altogether surprising that their regulators were the first to identify this as a potential challenge and start the discussion.

I must confess that it was a recent issue to me in terms of my understanding of it. I think I first got briefed on this less than a week ago. I recall the first time I heard about this, as I'm working my way through all the different areas of responsibility.

What I can tell the member, confirm to the member, is the policy alternatives are essentially only two. There's an outright ban on the practice, or some form of limited or restricted use of the practice. That will be informed, I imagine, by the discussions and the work that's being done right now.

The superintendent is part of the CCIR and is engaged in a process of getting and gathering information from the insurers that operate in the province of British Columbia, understanding what it is they are doing or planning on doing so that we can determine what regulatory approaches or, perhaps, even legislative approach may be required, if anything at all.

You know, at this point all I would say is that I will get all the facts and the information and certainly share with the member where I intend on going on this.

[1520]

B. Ralston: Just, then, to close on this issue. And I appreciate that this kind of process may well be protracted. Obviously, my constituent is interested in what can be done right now. From the sound of it, it doesn't sound like he has really much choice other than to shop around for another insurance company that might give him a lower rate or submit his credit information and receive the discount.

Can the minister give some sense — I understand the legislative agenda is crowded, ministers are busy, and the government is busy — of where this might be in terms of the priorities of the government? And if there is an effort to resolve this issue, without binding himself, can the minister give some indication of when this might be dealt with?

Hon. K. Falcon: What I can commit to the member is that when the superintendent of FICOM here in British Columbia receives back information from insurers in British Columbia as to what their practice currently is or what they are, in fact, contemplating with respect to this
[ Page 7501 ]
issue, I've asked that they bring back some recommendations to myself so that we can make a decision as to what, if anything, is required to deal with this issue.

The member opposite is correct to point out that, you know, busy legislative calendars require that if there is a required legislative response, we have to get moving on it early enough to ensure that it happens within our lifetimes.

What I can tell the member for sure is that I will not allow the fact that we're participating with the CCIR — sort of this national effort looking into this and investigating this information across the country — to be the arbiter of determining how quickly we move forward. As you probably well know, and as I know from experience as a minister, sometimes when you get into these sorts of national efforts to provide some form of national approach to something, that can slog on for a long period of time. I wouldn't even want to risk predicting how long that may take.

What I can commit to the member is that when the superintendent receives back sufficient information from P&C insurers doing business in the province of British Columbia, I will look at the recommendations and suggestions that are made to me and move, if necessary, at a different pace than the national CCIR effort — not to impugn any of the good work that may be happening there.

I do think that if it is determined to be an issue that is growing in use and may have the kind of pernicious effects that the member opposite is suggesting could be possible with respect to low-income folks and immigrants, that's certainly something I want to be aware of as the Minister of Finance earlier, not later, and so I will commit to the member that when I get that information, I will not hesitate to make some quick recommendations in terms of how B.C. should deal with it.

B. Ralston: I'd like to move on to another topic now, on the issue of pensions. First, I have a series of more general questions about the policy of the government.

The minister may recall or has been briefed on some of the positions taken relatively recently by the previous Minister of Finance in terms of developing a separate level of retirement security, the so-called A-BC plan, the Alberta and British Columbia plan.

That was said in the context that for many British Columbians and indeed for many Canadians, their retirement security is a real issue. The number of private pension plans is declining, and sometimes benefits under the Canada Pension Plan or old age security are not adequate for most people's or many people's contemporary needs. So there's been an effort at the Finance Minister level across the country to begin to discuss this and propose some solutions.

I gather, and I'm probably interested in…. This minister is picking up from where the previous minister left off, obviously. What's the current state of the Alberta-B.C. proposal? My sense was that that had taken a back seat and was not being advanced. And perhaps the minister could just confirm what the broad intent of the government is at this point with regard to pension reform.

[1525-1530]

Hon. K. Falcon: I thank the member opposite for his patience while I get up to speed. I certainly was aware of this effort peripherally as the Minister of Health previously but not as in tune with it in terms of all the details of what's taken place.

My understanding is that the current state of the A-BC plan, as the member opposite referred to it, is that it was presented nationally at a Ministers of Finance national meeting. There were several options, I understand: sort of the A-BC plan, if you will; the CPP-plus plan, I guess, which would be taking the current Canada Pension Plan and sort of seeing if you could do some kind of add-on; and then there was a third option, which was sort of a pooled registered pension plan arrangement.

My understanding is that what seemed to be the preferred choice was to move forward with doing some additional work on the pooled registered pension plan arrangement. I understand the federal government is leading in this regard, and there are policy teams and regulators in every province that are participating in this effort to look at what a pooled registered pension plan arrangement might be and how it could include the self-employed, for example, under such a plan.

There's also a plan I've been made aware of that the Canadian Labour Congress and the B.C. Federation of Labour are also pushing which goes back to the CPP again. I know I had a briefing from the head of the B.C. Fed with respect to that. There does, I understand, appear to be some opposition in some of the eastern provinces with respect to that approach, so I don't think it's receiving the same level of attention as the pooled registered pension plan arrangement is at this point.

That's basically what I know today.

B. Ralston: I understand that your predecessor had at least expressed some interest in what you referred to as option 4, the expanded Canada Pension Plan. There are many things to recommend it, in the sense that its cost of administration is very low. It's generally national, other than Quebec, so it's portable.

I think Denis Desautels, who was previously associated with the plan, the previous plan administrator, has expressed the view that the plan — in the sense that it would raise contributions gradually over an extended period of time, leading in the long term to a higher CPP pension benefit for most contributors — is something that he says is financially possible.

Given all those benefits…. I might just say parenthetically that one of the concerns in the broader productivity
[ Page 7502 ]
debate that economists sometimes engage in, I suppose when they're not talking about the HST, is that labour mobility is an important component of productivity in Canada. So if you have a national plan such as the CPP and you enhance it rather than discrete provincial plans, you encourage the ability of people to move where work is across the country. That, in general, is considered to be an enhancement to Canada's overall productivity rather than a barrier to it.

Given all those advantages, can the…? The minister mentioned that some provinces in the east…. In my view, sometimes the east starts at Alberta. Could the minister, without revealing confidences, give a sense of the position of British Columbia on that plan, rather than chronicling the objections or lack of interest of other provinces?

[1535]

Hon. K. Falcon: I understand the concern about what I guess we would call the CPP-plus option that has been expressed by some provinces. Without betraying confidences, essentially the concern would go like this.

On increasing the rates for employers and employees, I guess there are two levels of concern. One is the impact that the increase in rates would have on employers, particularly during a sensitive time right now where most employers have in many cases barely hung on after going through a very difficult past couple of years with the international economic environment and the market meltdown, etc.

On the employee side, I understand that there's a concern expressed around how low-income employees in particular would be hurt by having to pay increased rates for a benefit that they will see many, many years later. There's some concern amongst some provinces that the hurt you provide in the early years doesn't pay off in terms of the benefits in the latter years, particularly when you've got the old age pension, GIC, etc.

I don't necessarily subscribe to that. I wasn't part of the discussion. I'm just relaying what I understand were some of the concerns. My position, I think, would probably very much mirror what the previous Finance Minister expressed, which is that as long as I can be shown that a modest expansion of the CPP is not going to provide the harms and the concerns that have been indicated, or at least that they are manageable, I would not be opposed to that. But I certainly think that the work that is underway.... I'm interested in hearing about what that means and looking at those issues.

With respect to the pooled registered pension plan arrangement that was talked about, that I referenced earlier, my understanding of the idea is that they would provide a low-cost retirement saving option and may, in some ways, be more attractive to those that are lacking a pension plan than retirement products that are currently available. I guess under this option it would be portable, national in scope, with greater portability for pension plans between employers, etc.

Whether that bears the deeper scrutiny that is going to be provided in the analysis that's currently underway, I don't know. But I imagine that at the next meeting of the Ministers of Finance nationally, I will probably get an update on where it's at and what they're discovering through the research.

B. Ralston: One of the, I suppose, concerns that's been expressed about the pooled registered plan is just the cost. I mean, there may be a desire on the part of the federal government to have the plan operated privately rather than use the resources of the Canada Pension Plan, and once again they stressed that the cost of administration for what is managing a very large pool of capital is a very low one relative to many private plans. So there is a savings there.

[1540]

As I'm sure the minister is aware, certainly, people experience this in their own RRSPs. If you pay a 2 or 3 and sometimes as high as 2.5 percent per year management fee, that, multiplied over your lifetime, really diminishes the impact of your savings. Taking that principle and applying it to a private pool, the cost for the average citizen then becomes much greater. Would the minister be prepared to acknowledge that?

Secondly, can the minister, then, explain how the pooled registered plan which is under discussion would be different from a conventional RRSP, of which there's an abundance in the financial market these days?

Hon. K. Falcon: On the first point that the member is raising, the issue of administrative cost, that certainly is an issue that is a subject of much of the discussion work that's being done. I understand that there are some industry papers out there trying to address what that would look like and what benefits, if any, would accrue from operating a pooled pension plan, even with national scope, in terms of those kinds of issues that the member raised. So they're very legitimate, and I understand that that is something that is being looked at.

With respect to the second point the member raised — the pooled versus sort of the group RRSP approach. I understand that the difference between the two is that under the group RRSP approach you're essentially bundling together individual RRSP accounts, whereas in the pooled pension plan approach you get the benefit of pooled investment risk; you get the benefit of pooled longevity risk, in terms of being able to balance out between the different life span longevities of all the people in the pool; and I understand that there's better tax treatment, too, that accrues as a result of a pooled pension plan.

That's my understanding of the three primary benefits of the pooled pension plan over a group RRSP approach.
[ Page 7503 ]

B. Ralston: I don't want to appear to be bargaining with the minister or forcing him to reveal policy choices that haven't yet been made, but the minister did say that he agreed with the approach taken by his predecessor that some — what he described as, I believe — modest expansion of the CPP might be a good thing.

[1545]

Can he put a little bit more meat on the bones in terms of a modest expansion? And secondly, what is the position of the government of British Columbia in relation to the pooled registered plan proposal? Has the government taken a position, or is it still exploratory?

Hon. K. Falcon: I think on this issue.... Like so many other issues that I'm confronted with as a minister of the Crown, whether in this ministry or others, I always operate with the same principle, which is: "Let's make sure we get all the facts and information," so that I can hopefully make a determination and support what is ultimately the best option for British Columbians and Canadians.

Member, I think what I understand is that to make any change to the CPP, like a CPP-plus, or to follow along the lines of some of the suggestions that have been made by CLC and others, requires a two-thirds majority support of the provinces representing two-thirds of the population of the country. As the member knows, it only takes one or two provinces to decide, especially large ones — if that was the case; I'm not saying it is — but if they decided that they didn't like that approach, that does make it very challenging to move forward with that option.

I'm advised that what is happening is that both those options are being looked at and work is being done. Really, the position, frankly, that I am taking at this point, because I know less about this issue than I do on other issues….

In fact, I would bet that the member opposite probably knows more about this issue than I do because it's something that I've only recently been briefed on. But my position will be to allow that work that is underway at a national level to continue and be informed by some of the results coming out of that work and then to make a determination and recommendations back here in British Columbia as to what I believe, based on what I've heard and what I understand as a result of the work being done, is the best approach for us to support going forward.

I think it is really safe to say that this is one issue where I very much have an open mind and am certainly looking forward to getting more information.

B. Ralston: If I might, then, turn to a more narrow topic within the pension area. Again, this is a broader question that arises out of a question posed to me by a constituent, and this was some time ago. The House hasn't met very frequently, so I haven't had a chance to pose this.

Particularly during the downturn, people who became unemployed were sometimes looking to their locked-in RRSP as a potential source of money that they could use to live on or launch themselves again in education or perhaps even self-employment.

The constituent that I'm thinking of here had a locked-in RRSP and wasn't able to access it. He worked long term for an employer and was then laid off. I think he said he had $40,000 in one and $45,000 in another from another employer. He wanted to access those, and he was told he couldn't.

The Financial Institutions Commission. On the website there's some material on the superintendent's locked-in RRSP list. There's a great deal of detail, and there's a series of exceptions to the locking-in requirement. I appreciate that this is a complicated policy area.

[1550]

In some provinces relatively recently, according to the financial newspapers…. Other provinces have different rules about permitting access to the locked-in RRSP. I appreciate there's a policy consideration.

Part of this is that you don't want to encourage people to save briefly and then access it, and then it becomes a charge on a public plan at some later date. You want to encourage people to save for the long term. On the other hand, sometimes life events require…. They're unanticipated, they're unplanned, and people want to have access to that cash.

So in this case he wasn't permitted to. I think what he was told when he was contacting some government officials was that there was some ongoing discussion between British Columbia and Alberta. I think that might relate to TILMA. I'm not sure if that's accurate.

Can the minister briefly set out what the current thinking is about locked-in RRSPs, and how that might be contrasted with policy in other provinces? And is there any intention to move on this or not?

[1555]

Hon. K. Falcon: I apologize to the member for the time it has taken. I guess the short answer is that we are sympathetic to the concerns that have been raised by individuals, including the example that the member gave of his constituent, and that there is work being done right now to determine where and which regulatory change would be required to allow a narrow hardship provision that could speak to some of these situations that are similar to that which the member has raised.

I think you certainly don't want to get into providing a general sort of "you can unlock your locked-in pension dollars whenever you feel like it" kind of scenario, and I know that that's not what the member opposite is suggesting. But certainly, the idea that when you have legitimate financial hardships, there ought to be some flexibility allowed to allow those individuals to have access….
[ Page 7504 ]

What I can tell the member is that work is being done on that, and I understand that there are going to be recommendations coming to me from the policy branch on that shortly.

B. Ralston: I appreciate that that's a relatively general answer. Some of the provinces set a minimum age that you have to attain before you can get access to a locked-in — sometimes 50 or 55. Sometimes there are provisions for…. In the case of marital breakdown or in the case of a divorce, there's some attempt to apportion pension savings. For some, also — I think it's in Ontario — if you leave the jurisdiction entirely, then you're entitled to access it.

Again, I appreciate that the minister says there's a policy coming. Can he give some more detailed indication of some of the concerns that will be taken into account in shaping this policy?

[1600]

[J. van Dongen in the chair.]

Hon. K. Falcon: Again, Member, thank you for your forbearance. I understand that as we're working on a rewrite of the Pension Benefits Standards Act, we're also working with Alberta. There may be opportunities there — not in this particular area but in other areas — for harmonization. So I know that a lot of work is being done in that regard.

What I am advised is that with this specific area, what we will be looking at is what is going to work for British Columbians. The financial hardship provision is something that I'm advised is very much on the radar, and there is work being done in that regard. I look forward to receiving that work once it is completed by staff.

B. Ralston: The minister has reminded me that there was a very extensive Alberta-B.C. joint task force report on pension reform.

Can the minister advise, then, in thinking about financial hardship, beyond simply stating the term: are there provinces where there is a fairly tight definition of financial hardship? I'm just thinking, for people who might ask me or people who are interested: how would that be defined, and what would be the mechanism for verifying that there was indeed genuine financial hardship? Sometimes that wouldn't be too difficult to define, but sometimes in these kinds of cases the devil is in the detail in describing a person's financial condition.

Hon. K. Falcon: I understand that it can vary widely across provinces. Everything from an income test, which is probably the most straightforward way of determining eligibility under the hardship provision.... That's what the federal government and Quebec do, I understand. But other provinces also have different things they look at: medical expense; marital breakdown, as the member opposite mentioned at one point; loss of a job; inability or difficulty paying rent or mortgage payments — sort of a whole range of things.

Now, I'm advised that the challenge, I understand, is that once you get into sort of adding a whole bunch of potential categories, you need to have somebody at the administrative or bureaucratic level that's making determinations and looking at that and determining whether it applies, etc.

I understand there is some attraction to the Quebec and federal government approach of just having a straightforward income test that says: "You know what? If you're below a threshold, that qualifies you for access to hardship provisions." But those are the kinds of things that I understand are being looked at right now.

[1605]

B. Ralston: The minister mentioned the Pension Benefits Standards Act and potential revisions. I know, strictly speaking, that future legislation is not within the bounds of this committee, but will some of those suggestions be incorporated into that legislation? If so, when might they arrive on the legislative calendar?

Hon. K. Falcon: Yes, indeed, the Pension Benefits Standards Act rewrite is a significant effort. I understand it's a large effort that is underway. I understand that progress is being made and that yes, this would be considered as, and is being looked at as, part of that larger exercise that is underway.

In terms of the timeline, this would really be.... You know how the legislative process works, Member. As we get closer to presenting the legislative rewrite of the Pension Benefits Standards Act, I would work with the House Leader to determine priority and contest with some of my other colleagues on their other legislative pieces.

I don't have control over that agenda entirely, but I understand that there has been some good progress made on the legislative piece. Of course on the regulatory side, once you get the enabling legislation in place, then there's a significant amount of work that's required on the regulatory side too.

B. Ralston: I want to revert back briefly to an insurance topic that I omitted to deal with. There was a bulletin just issued by the commission, and it's entitled Frequency of Stress Testing and Dynamic Capital Adequacy Requirements for Insurance Companies.

Can the minister briefly explain what considerations went into forming that policy? I gather that the frequency of preparation would be no more than three-year intervals.

Given the most recent events in financial services across Canada and the United States and, indeed, around the world, stress tests and capital adequacy are
[ Page 7505 ]
on people's minds. Can the minister explain how this particular change, if it is one, will better serve the citizens of British Columbia?

[1610]

Hon. K. Falcon: The bulletin that the member refers to would have been a bulletin that would have been aligning ourselves with the Office of the Superintendent of Financial Institutions, the federal regulator. The federal regulator has stress test requirements that are imposed on the insurance industry at a federal level.

What we do at the provincial level through FICOM is align ourselves with the federal initiative so they're not required to have two different standards. When they are required to provide that financial information to the federal regulator, they're required to share it, at the same time, with the provincial regulator.

To answer the second part of the member's question as to why we would do that or why we participate in something like that, that's essentially to ensure that insurers that are doing business in the province of British Columbia are capable of meeting the potential realization of claims that may accrue as a result of doing business in the province. We want to make sure the public has the confidence of knowing that their financial situation is such that they can fulfil the obligations that they're making in participating in the insurance market in British Columbia.

D. Donaldson: My line of questioning is going to involve the proposed merger of the Toronto and London stock exchanges where the B.C. Securities Commission has a role. I just want to be sure with the minister that he's got the right people in place to advise him on that.

The Chair: Five-minute break. We'll reconvene at 20 after four.

The committee recessed from 4:13 p.m. to 4:21 p.m.

[J. van Dongen in the chair.]

Hon. K. Falcon: For the benefit of the member for Stikine, I just wanted to let him know that I am joined now by Paul Bourque, who is the executive director of the B.C. Securities Commission.

D. Donaldson: The proposed TMX Group and LSE Group merger, which is the Toronto Stock Exchange and the London Stock Exchange. Potential merger plans were announced in early 2011. Just to give an idea of the scope of this merger, if it goes ahead, it'll be the number one listings venue in the world by total listings — 6,700 listings. It'll have an aggregate market capitalization in excess of $5.8 billion, and it'll result in the 20 exchanges and trading venues operated by the LSE and TSX being controlled by the merged entity. Significantly, the LSE Group would own 55 percent of the merged enterprise.

The merger transaction requires approval from Canada but also four provincial securities regulators in Ontario, Quebec, Alberta and B.C. In B.C. that's the B.C. Securities Commission, which has joint responsibility with the Alberta Securities Commission for the TSX Venture Exchange. The B.C. Securities Commission and the other three securities commissions I mentioned have all been instructed to analyze the proposed merger.

In Ontario the Ontario government, in addition to the mandatory overview by the Ontario Securities Commission, established an all-party, nine-member select committee to review the proposed transaction and how it'll affect the Ontario economy. Significantly, it was not just charged to investigate the impact of the proposal on Toronto's financial services sector but also on the mining industry in northern Ontario.

This all-party, nine-member committee released their final report on April 20, and some risks were identified by this all-party panel — some of these risks possibly relevant to B.C.

I quote from the report: "Potential risks for the mining sector identified during the hearings included uncertainties regarding how the merged entity would evolve and its impact on access to listings and capital." They also pointed out that "the majority of TSX-listed companies have market capitalizations of less than $250 million, below the radar screen of most global investors."

Even the Ontario Finance Minister, Dwight Duncan, pointed out that concerns are being raised from a range of executives on Bay Street that a shrinking number of stock exchanges will make it more difficult for small and medium-sized Canadian companies to list their shares. Many junior mining companies in B.C. rely on the TSX for investment and venture capital.

My initial question would be: could the minister inform us of what the government's opinion is of how the proposed merger of the LSE and TMX groups — in other words, the Toronto and London stock exchanges — will impact British Columbia?

[1625]

Hon. K. Falcon: The member is correct. There is a process underway right now where there has been a proposal made to merge the London Stock Exchange with the Toronto exchange, and the member pointed out some of the perceived benefits.

The member is probably also aware that there is a hostile takeover that has been launched by a consortium of Canadian banks and five pension funds. That is also in the mix here. It is obviously a very interesting time with respect to the TSX merger discussions.

[1630]

Of course, you've got significant federal government involvement here, in terms of the whole issue of
[ Page 7506 ]
Industry Canada making the determination around what it means in terms of the competitiveness situation in the country of Canada.

I can tell the member that I met with the Toronto Stock Exchange earlier in April, along with the B.C. Securities Commission. They were in the midst of what I would call a dog-and-pony show as they went around to the different governments to talk about the benefits, as they viewed them, of the merger. I have asked the B.C. securities exchange to keep me apprised as they continue to engage in discussions, particularly with the venture capital community and the mining sector and other industry players in B.C.

As the member would well know, B.C. and Alberta have a significant interest in the TSX Venture Exchange. That is the portion of the exchange that we have, obviously, the greatest degree of interest in.

The argument, of course — at least, the argument they presented to myself — was that B.C. companies that are listed on the TSX or the TSX Venture Exchange would potentially have greater access to capital as a result of exposure on the London exchange.

I know the BCSC is engaged in wide-ranging discussions to canvass some of the issues that the member has pointed out that have been heard in Ontario. I understand that some of that has been heard here in B.C. too.

So that work continues, and they are going to keep me apprised of their discussions.

D. Donaldson: Yes, the minister's right. There's a competitive bid now, so the potential merger is looming with the London and Toronto exchanges.

As the minister knows, we have the Mining Association of B.C. and the Association for Mineral Exploration B.C. They are both globally recognized as leaders. B.C. is recognized as a leader in the mining industry, not just in Canada but worldwide. It takes financing to increase that profile and become globally recognized in B.C. as a financing area, too, for mining.

Other than the mandatory B.C. Securities Commission review, which the minister has discussed, could he inform us of what research his government's done and conducted to determine the impact this merger will have on companies working in B.C.'s mining sector?

[1635]

Hon. K. Falcon: I'm advised that the B.C. Securities Commission, as part of their review process and in their discussions, has apparently only heard largely positive feedback with respect to the potential merger thus far, at least the proposed merger of the LSE and the TSX.

I can say to the member for Stikine that, at least from my position thus far as Minister of Finance, I have yet to have a single individual contact me or ask for a meeting — at least that I am aware of; I should qualify that — that has concerns. That doesn't mean that there may not be some. I just haven't yet personally heard of anyone from the mining sector or from the financial community that's approached me with any concerns on this, and so I must say that we certainly are allowing the review to continue and, as I say, haven't yet heard anything of concern.

I can confirm for the member that we have not undertaken any independent economic research on implications, but what I would say to the member is it's important to recognize that we're not talking about the merger of the exchanges themselves. We're talking about the merger of holding companies that have ownership interest in the respective exchanges.

Obviously — at least, I'm advised — most of the feedback from the financial community, at least in British Columbia, and the investment community appears to be largely positive in terms of what they believe it will mean in terms of their situation. But again, with a hostile takeover now added to the mix, this is something that is fluid, and we are going to continue to see how this unfolds.

D. Donaldson: Yes, given the fluidity of the situation and the importance of the mining sector to B.C. and the importance of the venture capital market, I just wanted to ask the minister.... In Ontario, same as here, the Ontario Securities Commission took up its mandatory role in assessing the impacts of the merger, and as you pointed out correctly, the B.C. Securities Commission is doing the same. In fact, I understand they have asked for comments by the deadline on June 20 on what they're looking at from their mandate.

The province of Ontario, in addition to that, commissioned this independent, all-party select committee to review the transaction and determine the implications of the LSE-TSX merger on Ontario industries and specifically mining. So just a simple question: why are we not doing the same?

Hon. K. Falcon: In Ontario, of course, it's a slight, perhaps a major, difference from British Columbia in that the OSC, the Ontario Securities Commission, is responsible for regulating the TSE holding company, which is the company at play here. We don't have that responsibility in British Columbia.

[1640]

They also, in Ontario, have a role to play with respect to the percentage of ownership. So any ownership interest that exceeds 10 percent, the Ontario Securities Commission is required to play a regulatory role in any decisions around that, whereas we don't have that responsibility or obligation in British Columbia.

Our interest is more narrowly defined, as is Alberta's. Our regulatory interest is in the VSE, the TSX Venture Exchange portion of the Toronto Stock Exchange, and that's where our interests really lie.
[ Page 7507 ]

As I reflected earlier, the only feedback thus far I'm advised that the BCSC has received from our mining community sector with respect to the proposed merger has been largely positive, I understand. So that's not to say if I don't start…. You know, if I start hearing from many of the folks from the finance community or the mining community that they have major concerns, I would certainly very quickly start to be very concerned. Many of them I happen to know personally, and some of them I would even consider friends.

I haven't yet heard that, and so I'm allowing the BCSC to continue with the discussions and the outreach that they're having to get the feedback that is necessary so that they can continue to determine whether or not the interests of British Columbia and Alberta, who are both working together on this, are in fact being advanced by the proposed merger of the holding companies.

D. Donaldson: Thanks to the minister for that answer. Then from what I hear — that the minister has not heard negative comments and he has also been informed by the B.C. Securities Commission that they have not received negative comments from the mining sector — would he then say that the government supports the merger of the Toronto Stock Exchange and the London Stock Exchange?

Hon. K. Falcon: I think the short answer is: it's too early to say. It's too premature to make a position. I want to be informed by the extensive outreach that's underway right now, where I understand we will receive that feedback over the next 30 days. That will provide me better information to determine whether or not the government of British Columbia should be taking a position in support or non-support of the proposed merger.

B. Ralston: I want to have another question on the B.C. Securities Commission area. Page 45 of the annual report, the '09-10 report — that appears to be the latest one on the website. That sets out — it's a compensation disclosure — what the compensation is of the executive commissioners: the chair; Mr. Hyndman, who is no longer there; and the vice-chair. Now I understand Mr. Bourque has joined the organization relatively recently. According to the report, I think it's May 2010. Can the minister advise what his annual compensation will be?

Interjection.

B. Ralston: Do you want me to just clarify it?

A Voice: Yeah.

B. Ralston: Perhaps I could just clarify that. On page 45, if the staff have access to that, you'll see disclosed Mr. Hyndman's salary. In 2009 it was $549,092; 2010 is a partial year, obviously, because Mr. Bourque began to work there.

I'm interested in what his annual compensation will be. This is for the financial year ended March 31, 2010. Presumably, we're past March 31, 2011, so that figure ought to be available.

The report has not yet perhaps been released or finally prepared. I'm interested in that, and then I'll ask a few questions about other members of the executive and senior management.

[1645]

Hon. K. Falcon: I do have that information for the benefit of the member. This may be even more up to date.

First of all, I should point out that the former chair, Doug Hyndman, has been seconded to the Canadian securities transition office. So he's working on the whole idea of a national securities regulator. The current chair, Brenda Leong, in 2011 had total earnings…. It looks like this is an all-in figure of $499,251. The 2010 earnings were exactly the same.

The executive director, Mr. Paul Bourque, had total earnings of $343,496 in 2011, and as the member knows, these salaries are funded by industry. I asked the question. I was curious myself.

I understand that the Securities Commission board has a human resources committee which sets the salaries, and of course, the payment of salaries is recaptured through fees that are paid by industry.

Interjection.

Hon. K. Falcon: I just got a note that those numbers are not finalized. They're preliminary, but I think it's safe to say that those are likely the numbers.

[1650]

B. Ralston: Just so I'm clear, then, about Mr. Bourque's salary, is that the equivalent of a full year, then, given that he started, I think, March 2010? Was that the full-year salary, or is that a partial-year salary? It seems to me that measured against Mr. Hyndman, he may be not being paid as much.

Hon. K. Falcon: I'm advised that that is based on 11 months, so slightly more than a 12-month period.

B. Ralston: Given that Mr. Hyndman has been seconded, is he continuing to be paid at the same rate? His full-year salary in 2009 was $549,092. Is the commission, in seconding him, still paying that amount, or is that being offset by other sources?

Hon. K. Falcon: Yes, while seconded, he still receives the pay that he received before.
[ Page 7508 ]

B. Ralston: Is it identical to the year before? Has the zero mandate been observed in relation to his compensation, or is he earning slightly more?

Hon. K. Falcon: Because Mr. Hyndman is on secondment, I actually don't have his compensation information in here for either this year or the previous year, but I am advised that he is earning the same as he was last year. But I don't actually have that information in front of me. So that is what I'm advised.

B. Ralston: Note 9 says, referring to Mr. Aitken: "He was acting chair July 13, 2009, to October 12. He did not participate in our incentive program in fiscal 2008." Can the minister explain what the incentive program is?

Hon. K. Falcon: My understanding is that the incentive program is a combination of performance incentives that are aligned around personal performance and corporate performance.

B. Ralston: Does the sum of the $349,000 that's been paid to Mr. Bourque for the 11 months include any participation in the incentive program and any extra salary as a result of that?

Hon. K. Falcon: The answer is yes. It's all included in the amount that I read into the record.

[1655]

B. Ralston: I'm curious as to why Mr. Bourque is being paid less than Mr. Hyndman. It seems a substantial disparity. Yet from what I understand, Mr. Bourque is doing the same job as Mr. Hyndman. Is there any reason for that?

Hon. K. Falcon: Primarily because they have two different jobs. Doug Hyndman was the chair of the B.C. Securities Commission, and Mr. Bourque is the executive director.

B. Ralston: So Miss Leong is occupying the equivalent post, then, to Mr. Hyndman. I'm just confused, because on page 45, in 2009 Miss Leong was paid…. I think there's a footnote there. She was executive director until appointed chair on October 13, 2009. She appears to have been paid, I suppose, partly as chair and partly as executive director. Then Mr. Hyndman was paid solely as chair in 2009, and that's where the $549,000 figure comes. Is that the reason, because there was some overlap between the different job duties?

Hon. K. Falcon: The member is correct. It's because of the timing and the mix of who took over at what different time in the year.

B. Ralston: I'm looking at the director of enforcement, listed as a person named Langley Evans, who in 2010 earned $277,998. Can the minister provide the salary of that person for the fiscal year ending March 31, 2011?

Hon. K. Falcon: The 2011 salary for the director of enforcement is $273,959. That's in 2011. For 2010 it shows here $277,998.

B. Ralston: Just to continue, the director of corporate finance and the general counsel. The director of corporate finance is listed as a person named Martin Eady, and general counsel is David M. Thompson. For Mr. Eady, $263,980 in 2010, so I'm interested in the equivalent figure for the next fiscal year ended March 31, 2011, and similarly with Mr. Thompson. He's reported to have earned $238,960 in the fiscal year ended March 31, 2010, so the equivalent salary for the following year.

Hon. K. Falcon: My understanding is that he didn't make the top five. I guess they're required to, at least on the schedule I have here, list the top five salaries or total compensation. So I'm sorry; I don't have it for Mr. Thompson. I do have it for the director of corporate finance, Mr. Eady. What I have here is in 2011, total compensation of $262,023; and in 2010, $263,980.

B. Ralston: I'm looking on the same page in the annual report '09-10, page 45, the compensation for independent commissioners. There are six listed there. The pay appears to range according to the meetings attended.

[1700]

Bradley Doney attended 17 meetings and received, in 2010, $67,204. Ken Hanna, for some reason, attended the same number of meetings and earned slightly less, $61,450. Don Rowlatt, 18 meetings, $67,259; David J. Smith, 19 meetings, $75,650; Shelley Williams, for 19 meetings, $67,515; and Suzanne Wiltshire, $66,682 for 18 meetings.

It appears to be that the compensation is calculated on the basis of meetings attended. Or is there a base salary and then an additional compensation for attending meetings?

[J. Thornthwaite in the chair.]

Hon. K. Falcon: My understanding…. I'm advised that compensation is based on the meetings attended. I have got some updated numbers for the member here, in 2011. The member was providing information based on 2010. So 2011, and I'll just go through it in the same order the member did.

Commissioner Doney attended 14 meetings for a total compensation of $54,298. Commissioner Hanna attended 13 meetings for a total compensation of $58,643. Commissioner Rowlatt, 12 meetings for a total compen-
[ Page 7509 ]
sation of $49,413; Commissioner Smith, 14 meetings for a total compensation of $56,598; Commissioner Williams, 14 meetings for a total compensation of $58,461; and Commissioner Wiltshire, 13 meetings for a total compensation of $57,687.

D. Donaldson: I would like to go back. There's one final question I wanted to ask on the proposed merger of the Toronto Stock Exchange and the London Stock Exchange and the potential impacts it could have on B.C. companies.

One of the reasons that the minister gave for B.C. not establishing an all-party committee to review the proposed merger, similar to Ontario, was his information that the scope of the Ontario Securities Commission responsibilities is much larger than the B.C. Securities Commission.

Yet given the importance and the potential impacts, which we don't know one way or the other, it appears, or the ramifications of the impacts on B.C. junior mining companies, who rely heavily on the TSX for investment and venture capital, will the government commit to establishing an independent all-party committee to review the merger and its impacts on B.C.?

Hon. K. Falcon: The short answer is no. Not that I don't think that there may be some merit in that, but I think that we have a timing issue that we have to be sensitive to. As I indicated to the member, at this stage it's too early for me to come forward with a position as to whether or not the proposed TSE-LSE merger is the right thing or not, prior to hearing back from the B.C. Securities Commission in terms of the feedback they receive in written form from industry stakeholders.

As the member pointed out, they have received notice they need to, if they have an opinion — good, bad or indifferent — with respect to the merger, get that information back to the BCSC. We are expecting that back within 30 days, and I will certainly be looking forward to receiving that.

That, I think, will better inform me as to what position, if any, the government of British Columbia needs to take with respect to the proposed merger of the holding companies for the LSE and the TSE.

B. Ralston: Now I want to turn to some questions about what's called the exempt market for securities in British Columbia. As the minister will be aware, ordinarily it's not possible to sell stock without registering a prospectus. It has to be sold through a registered representative, one who's licensed and subject to audit.

[1705]

The rules are different for the exempt market. Indeed, some of the most notorious frauds that have taken place in British Columbia in recent years have resulted through the exempt market. There used to be a minimum of $25,000. There's no requirement to issue an offering of memorandum that's to be filed, and in fact, most other provinces have taken the path that recognizes that the exempt market needs some further regulation.

I'm basing this on the very knowledgable Mr. Baines, who writes for the Vancouver Sun, who says:

"Last year the Canadian Securities Administrators, the umbrella organization for provincial regulators, devised a national policy that would require people who would sell these sorts of exempt products to be registered as exempt market dealers. This would require them to know the investment, know their client and adhere to suitability requirements, and their firms would also be subject to auditing and compliance."

He says:

"But a strange thing happened on the way to the forum. B.C. and the three other western provinces decided to opt out of this, the national policy. Why? B.C. regulators argue that the exempt market is too large, and the amount of misconduct too small, to warrant this extra layer of regulation."

Can the minister confirm, first of all, broadly — I want to make sure — that I've accurately described, in summary at least, some of the requirements of the exempt market, or the lack of requirements, and offer an explanation as to why British Columbia chose to opt out of the Canadian Securities Administrators' national policy requiring people selling exempt products to register as exempt market dealers?

[1710]

Hon. K. Falcon: I thank the member for the question. I'm advised with respect to the Canadian Securities Administrators and the requirement for registration that British Columbia was part of what apparently is commonly referred to as the northwest exemption, where all of the western provinces opted out of this requirement for requiring registration in the exempt market.

My understanding is that the primary rationale behind that was that the western provinces relied, disproportionately perhaps, and still rely heavily on the billions of dollars that are raised each year just here in British Columbia alone through the exempt markets. So it's an important part of the venture capital financing, and I guess at the time the western provinces all agreed unanimously that they wanted to have an exemption from that requirement.

I am advised, though, that there continue to be reporting requirements in the western provinces, in British Columbia, that there's a continued requirement for risk disclosure to purchasers, and that there continues to be a commitment to…. Or they cannot provide suitability advice to prospective purchasers too.

B. Ralston: I thank the minister for that answer. Perhaps we can explore some of the suggestions that
[ Page 7510 ]
have been made as to what the regulatory regime, then, is.

As the minister will know — or if he doesn't, he can be advised — a number of very unscrupulous and fraudulent promoters have used the exempt market to basically fleece a number of British Columbia citizens. There's very little recourse, whether it's through the courts or through the regulatory process. There's really nothing to assist people to get their money back.

Obviously, this may come down to a philosophical difference about the necessity for regulation. But given the repeated instances of abuse of the exempt market, it would appear that the requirements that the minister speaks of are very different from what would take place in an ordinary context of a broker as a registered representative with "know your customer requirement" training in order to match the client with suitable investments. Very little of that, if any of that, is required in the exempt market.

Many of the people who fall victim to these schemes are people who are late-middle-aged and, somewhat like the discussion we had earlier, concerned about their retirement and anxious to, rightly or wrongly, try and catch up through making some investments that look attractive.

Will the minister agree that the minimal requirements that he's set out, a reporting requirement — and perhaps he can give some detail as to what that is — and risk disclosure, are completely inadequate to regulate this market?

[1715]

Hon. K. Falcon: First of all, I do want to state for the record that I, like, I'm sure, any responsible legislator, would be very concerned when there's any fraudulent activity that takes place in the exempt market or otherwise. I can tell the member that, of course, one of the challenges for western provinces is that the exempt market…. It's not so much a challenge. It's an opportunity and at the same time a challenge.

The opportunity is that the exempt market is a really important market for the raising of venture capital in British Columbia and the other western provinces. As I said earlier, in British Columbia alone there are billions of dollars that are raised through the exempt market. Venture financing by its very nature, of course, is a much-higher risk than investment-grade investment vehicles.

The member well knows that in offering memorandums, in spite of the fact that there are large, large letters in a very large font saying, "This is very risky; you could lose your money; be very careful to do independent research and everything else," there will still be individuals that make investments that turn out not to have worked out well at all. That is why the reporting requirement is important.

[1720]

What I can tell the member, I'm advised, is that the electronic filing system that they utilize at the B.C. Securities Commission has been improved and updated. This is interesting to me, because I know that it was certainly different at least ten years ago, back when I was in the business world. My understanding is that they have improved the electronic filing system considerably, such that they are able to review every single exempt offering memorandum coming in much quicker now.

I'm also advised that they've also issued many more cease-trade orders this year. Over 100 have been issued this year alone, and that's increased. They've also increased dramatically the number of enforcement actions.

I think that is certainly encouraging, but you know, there are always going to be scoundrels around. It is an unfortunate part of the financial world, particularly on the venture capital side, and it requires continuous and rigorous oversight by respective security commissions. My understanding is that these improvements are helping to, as I say, ensure that where there are problems, they are being dealt with much quicker now than historically, unfortunately, has sometimes been the case.

B. Ralston: Well, let's take an example of one regulatory failure, if I can put it that way, of the B.C. Securities Commission and, also, the Alberta Securities Commission.

There's a Calgary promoter, Ross Stanfield, who just died last year at the age of 83. He raised over $229 million over 30 years from nearly 4,000 sophisticated investors in Alberta and B.C. for an exploration project near Cranbrook. He repeatedly told investors the property was rich in gold, platinum, feldspar, and it never produced anything. That's over a period of 30 years, and that's in the exempt market.

In fact, a group of shareholders went to court, just showing the difficulty of achieving legal remedies in an oppression action, which was dismissed. One can appreciate that in order to mount a legal challenge like that, a substantial cash outlay would be required in order to retain the lawyers to do that kind of serious legal work.

That was the exempt market. It's a notorious case, I think a shameful case, where one could certainly argue that requirements of registration, a prospectus, and all of that sort of stuff could have at least checked this kind of ongoing fraud at a much earlier stage.

I'd invite the minister's comments on that example as a counter-example to what he's just said.

[1725]

Hon. K. Falcon: I'm advised by the BCSC staff that a temporary order was issued last fall to the company
[ Page 7511 ]
of the former Mr. Stanfield that will require them to produce a technical report on the resources and the reserves that exist or don't exist, whatever the case may be, with respect to the properties in question here in British Columbia. That report is required to be delivered to the BCSC by July this year.

B. Ralston: Mr. Stanfield died last year after working this property, if I can put it that way, and raising over $233 million. That does appear to be rather late in the game to be making this request.

According to the report that I'm provided with, the report will be prepared by July 15, 2011, but certainly the horse has left the barn in terms of the nearly 4,000 investors who have invested in what they were told was a great prospect and was going to be a producing mine at a very high level.

If one reviews the history of this file, there's certainly been a number of red flags along the way and a complete failure by the Securities Commission to deal with it —partly limited by the fact that it was an exempt offering, and the regulatory power there is relatively little.

Does the minister not think that in an example like that, the public deserves some more protection? I gather that the rationale for not joining with, I take it, Ontario — at least in further regulation of the exempt market — is that raising what he described as billions of dollars in venture capital is economically important, and that that outweighs the possibility that investors might be subject to fraud.

Surely there has to be, after an example like that — and there are lots of others — some kind of reappraisal of the regulatory quality and intensity in this market. Most investors that invest in these kinds of things are not trained, not skilled. They're approached by unregistered and rapacious salespersons who are paid on commission and will say and do just about anything to get them to invest.

I don't think that it's a question where the individual investors should be simply blamed for their misfortune. It seems to me that there is a rule for fair regulation in this market. So is the minister not prepared to acknowledge that?

[1730]

[D. Horne in the chair.]

Hon. K. Falcon: I do think, as we discuss this topic, it is important to recognize that these are, of course, high-risk markets. The exempt market, by its very nature, can be high risk. I'm sure the member wasn't suggesting, but you certainly want to be careful not to suggest that that does not mean we're concerned when you do have these occasional circumstances where is there is fraud or alleged fraud that is taking place. That is certainly a major concern.

I think it is worth pointing out that the rest of Canada does treat the exempt markets the same as we do with respect to the registration and the prospectus requirements that are imposed.

I can tell the member opposite that B.C. has the best surveillance of the exempt market in the country, and we have the best surveillance of exempt markets in the country because of the electronic filing system I referred to earlier that allows the staff to monitor very quickly and very carefully all of the filings as they are made.

We are also the only jurisdiction in the country that has a dedicated compliance unit that focuses strictly on the exempt market — the only jurisdiction in the country that has that dedicated compliance unit focusing on the exempt market.

I think it's also worth pointing out that the B.C. Securities Commission has not hesitated to also use the Criminal Code to go after some of these people that are engaged in fraudulent activities with respect to the exempt market. In the past year alone six people have been charged with 72 charges — in 2011 alone.

The Securities Commission is well aware that in an exempt market that is raising billions of dollars, you have to be, of course, very vigilant. As I say, I'm advised that they are operating the best enforcement unit for the exempt market, or one of the most effective, in the country.

[1735]

B. Ralston: I just want to go back to the Gallowai Metal and Bul River property. The minister mentioned that an order was issued requiring the company to get a proper technical report prepared, even though Mr. Stanfield died last year.

I guess the question would be if that technical report shows that the property was never commercially viable, exposing the claims — those made about the property over those many years — as simply of no value, there would be no possibility of the commission holding him or his company to any kind of account. The $233 million that was invested by almost 4,000 investors — there'll be little or no opportunity to recoup their investment and no one to answer for what I think would count or figure as one of the larger mining stock promotion frauds in Canadian history.

I think the minister should reflect upon this as a major regulatory failure by the B.C. Securities Commission and its partner commission, the Alberta Securities Commission, and illustrative of the problems of the exempt market.

The minister does make reference to police action. The integrated market enforcement team put together by the RCMP I think is well known. I'm not sure that they've actually successfully prosecuted anyone. There may have been one conviction so far.
[ Page 7512 ]

There is a certain myth of enforcement and regulation in this sector, but in terms of police action, that's relatively rare and very rarely ever successful. Resort to the courts is difficult, in the way that this Gallowai–Bul River property illustrates. They went to the courts and got no remedy.

I'm asking the minister to reflect upon this and to consider that the exempt market needs further regulation for those who choose to invest in it. They're not all rich people. There are people who are ordinary citizens and who are trying to, usually, make an investment for their retirement and are being regularly taken and fleeced out of their money.

Will the minister acknowledge that there's a problem with the exempt market that requires further measures that the government and the Securities Commission haven't undertaken until now?

[1740]

Hon. K. Falcon: Well, I don't want to speculate on individual cases, so I don't want to speak directly to the Gallowai case that the member talks about. I'm advised that that would not be a responsible thing to do. But what I can tell the member generally is that if there is evidence of fraud in the exempt market — anywhere, frankly, but in the exempt market in particular — they will prosecute.

I think that it is important to point out to the member that the six people that I mentioned who were charged in 2011, the member should know, were convicted. One of them received a 2½-year term as a result of that.

It is worth pointing out that the B.C. Securities Commission has a criminal investigation team that's made up of five individuals. All of them are peace officers. They are full-time criminal investigators who monitor exactly this kind of fraudulent activity and present cases and lay charges working with a local Crown. My understanding is they have been working well.

I can't comment on the federal RCMP team, the IMET team the member referred to. I will have to leave that up to the federal government to defend the efficacy, or not, of that particular team.

B. Ralston: I'm looking for a more general statement about the intent of the government in terms of the exempt market and the way in which it's regulated. What I hear the minister saying — and perhaps I'm paraphrasing him incorrectly — is that he is entirely satisfied with the regulatory environment and the enforcement measures that are presently in place and that he has no intention of directing, if that's within his power, or encouraging the Securities Commission to do anything other than what it's doing right now.

Hon. K. Falcon: The member is incorrect about that. You know, I always don't like when we get to a place where people are attempting to ascribe comments or commentary from myself that are not accurate. It's not done on purpose, I'm sure.

I want the member to know that it's my position that the B.C. Securities Commission — like any department or agency or Crown of government — can always improve whatever it is they do. We have to be informed by lessons in cases, even if they're isolated cases or rare cases. The BCSC makes sure they're informed by that and tries to improve and continually improve how they're going to deal with cases of fraudulent activity.

I expect and, in fact, would require that they would continue to do that. If I sense that that is not taking place, I certainly don't have any hesitation in sitting down and having a discussion about how they can try and do their job better or perhaps convince me that they're already doing everything that any reasonable person could expect a regulator to do in these kinds of circumstances.

I do think, and I've had it confirmed, that the position of the BCSC is they can do better, that they will always try to do better and that they will always try to ensure they're acting in the best interest of unsophisticated investors in particular.

Member, just on an unrelated issue we discussed earlier, I do want to make a correction for the record. When the member was questioning me about Doug Hyndman's salary.... I just want to state for the record that Doug Hyndman's salary apparently is being paid for by the federal government. When he was being seconded to the federal government, I implied that it continued to be paid for by the B.C. Securities Commission. I now understand that he's being paid by the federal government.

[1745]

B. Ralston: Mr. Chair, I note that we're about at the adjournment point.

Given what the minister has said, can he advise the House, then, of what specific steps he thinks, based on what briefing he's received and the advice he has available to him, the B.C. Securities Commission and the ministry should take to improve the exempt market and its protection of those who choose to invest in it?

Hon. K. Falcon: I'll make this my final answer for this portion of it.

I want to assure the member that we'll continue to work, and I will continue to work with the B.C. Securities Commission to ensure that as they are informed of issues that may come up, particularly with respect to the exempt market, they will continue to improve their regulatory enforcement.
[ Page 7513 ]

One thing I can tell the member. I'm advised that they're working on a new computerized risk model to ID the kind of high-risk participants in the exempt market. It would be computer analytics that would allow them to have red flags issued immediately. If they receive an offering memorandum that comes in through the exempt market that has characteristics that would cause a reasonable person to have red flags go off, it automatically gets identified.

They believe that utilizing that kind of a risk model could further improve the enforcement levels and activity within the exempt markets. So they're going to be moving forward on that, and we will probably have the opportunity to discuss that, perhaps even in more detail.

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

Motion approved.

The committee rose at 5:48 p.m.

[ Return to: Legislative Assembly Home Page ]

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

TV channel guide • Broadcast schedule

Copyright © 2011: British Columbia Hansard Services, Victoria, British Columbia, Canada

ISSN 1499-2175