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)

Monday, May 30, 2011

Afternoon Sitting

Volume 23, Number 5

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MONDAY, MAY 30, 2011

The House met at 1:34 p.m.

[Mr. Speaker in the chair.]

Routine Business

Introductions by Members

C. James: I have three guests in the gallery and in the precinct with us today: Joe Foy, who is the national campaign director for the Wilderness Committee; Chief Liz Logan, deputy Chief of Treaty 8 tribal council and also the former Chief of Fort Nelson First Nation; and Diane Culling, a member of the board of directors for the Peace Valley Environment Association.

These individuals and others are travelling the province on their Meet the Peace tour. They're in Victoria tonight, telling the story of the Peace River and talking about the concerns they have around the proposed Site C dam. Would the House please make them all welcome.

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Hon. B. Penner: It's my honour to introduce an individual who maybe doesn't need an introduction, but I would like to welcome him here to the floor of the Legislature. Former mayor of Oak Bay, former member of the Legislature and probably best known as the former Attorney General for the province of British Columbia. Would the House please make Brian Smith welcome.

Hon. M. McNeil: It gives me great pleasure to introduce some very special people in my life: my husband of many, many years, Rod McNeil; my daughter Molly O'Callaghan, along with her children Nora, Fiona and Roger O'Callaghan. In addition, I have my sister of many, many years in the audience, Anne Mathisen. Would the House please make them all feel welcome.

R. Chouhan: I would like to share very special and good news with everyone today. My wife, Inder, and I became grandparents once again, the second time. My daughter Amrita Chouhan Sanford; her husband, Jamie Sanford; our first granddaughter, Chloe; and my younger daughter Anu Chouhan are all very excited to receive our new granddaughter. Please join me to welcome her.

Hon. N. Yamamoto: Joining us today are members of the Association of Professional Engineers and Geoscientists of British Columbia. Their 26,000-member organization helps to ensure the protection of the public, and their organization supports the work of government in many ways.

Joining us in the gallery are 16 representatives, including Frank Denton, their president; Jeff Holm, their vice-president; and Derek Doyle, the CEO and registrar. Would the House please help make them welcome.

Hon. B. Lekstrom: Joining me in the gallery today are two very able-bodied individuals who work in the Legislature. I would like the House to please help me welcome Lynette Butcher, my administrative assistant, as well as Holly Unwin, who is my administrative coordinator.

M. MacDiarmid: I'm delighted to welcome from Vancouver-Fairview today students from the Collège Educacentre, along with their teachers Kathleen Kulpas and Spencer Gee. These are five adult students who are learning English. They are new to Canada in the last couple of years, and they've immigrated to Canada from Iraq, Senegal, Guinea and the DRC. So to them I say bienvenu, welcome. Would the House please make them welcome.

E. Foster: In the House today I have three very special guests. My wife, Janice, is here today, and accompanying her are two young men who have spent the last year with us. Exchange students Nobahiro Tomanaka and Jesus Romos Salazar have lived with us since last September, and they're getting ready to go home at the end of the school year, so I would like the House to make them very welcome.

M. Stilwell: I'd like to introduce Dr. Arvind Gupta today. Dr. Gupta is the CEO and scientific director of MITACS and a professor of computer science at the University of British Columbia. Through unique research and training programs, MITACS is developing the next generation of innovators with vital scientific and business skills. I also see Jason LeSange of MITACS and Brad Bennett, who is the chair of MITACS. Would the House please make them welcome.

I. Black: I have two introductions to make this afternoon. One is becoming a frequent visitor to this House. He is my father. I'm beginning to wonder whether it's the support for his son he's interested in or if he's just keeping a beadier eye on how his tax dollars are being spent. Would the House join me in welcoming my father to the House this afternoon, Stewart Black.

Sitting next to my father is a seven-year-old girl. Her name is Danielle. She is the light of my world. She's my daughter. Would the House please welcome Danielle to the House as well.

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R. Cantelon: Today I'm delighted to have join us in the House five people who work with InSight developers, an award-winning developer in Nanaimo. These are the people who are the real brains behind the organization,
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so please welcome Louise Turch, Tracy McLean, Eileen Barker, Clara Ominger and Paula Sled. Please make them welcome in this House.

P. Pimm: Today in the precinct we've had a classroom from up north, North Peace high school, 35 students with their two teachers, Jim Lovell and Darcy Hoff. Certainly, they're coming from one of the best schools in northern British Columbia. I'd like the House to make them welcome today.

L. Reid: We are joined on the floor of the chamber today by two wonderful women. We have Sheila Orr, who was our former colleague from Victoria-Hillside, and Wendy McMahon, who represented Columbia River–Revelstoke. I would ask this House to extend their warmest welcome possible to those who have served with us in the province of British Columbia.

D. Hayer: I have a very special guest on this very historical day, when our new Premier was sworn in as an MLA today. My special guest is my wife for almost 30 years, Isabelle Hayer, my best friend and volunteer. Would the House please make her very welcome.

Hon. S. Bond: It is my privilege today to introduce some exceptional volunteers who help British Columbians in their darkest hours. They are spotters in the sky searching for plane-crash survivors. They are road rescuers who pull injured travellers from their wrecked vehicles. They are emergency radio operators, search and rescue trainers and emergency social service providers. They are all volunteers with decades of dedication.

Those with us today are this year's recipients of emergency management British Columbia's Public Safety Lifeline Volunteer Awards, and I know the House will want to congratulate them.

We have Brady Conroy of Kamloops. He is the emergency management B.C. Emergency Radio Communications Volunteer of the Year. Marie Woodruff of Victoria is the provincial emergency program Air Volunteer of the Year. Bob Zimmerman of Quesnel is the Search and Rescue Volunteer of the Year for 2011. Bev Stenning of Victoria is the Emergency Social Services Volunteer of the Year, and Jim Hurtado of Vanderhoof is the Road Rescue Volunteer of the Year.

These individuals do exceptional service. We were very proud to present their awards today on the steps of the Legislature. I know that all of our colleagues in the House will want to make them welcome and congratulate them.

C. Hansen: Joining us in the House today is a former resident of Vancouver-Quilchena but someone who frequently finds the opportunity to come back to that neck of the woods. Would the House please welcome Peter Ker.

Hon. M. de Jong: Joining us from Summerland today here in the precincts are Carla Wright and Ken Ostraat. In addition to visiting us, I owe a special debt of thanks to Carla, whose daughter toils day in, day out within the Health Minister's office and performs yeoman service. She is a very talented young lady. I know the House will want to make her mom, Carla, and Ken Ostraat very welcome here in Victoria.

Statements
(Standing Order 25B)

SEASPAN MARINE CORP.
BID FOR SHIPBUILDING CONTRACT

J. McIntyre: Following this morning's successful motion put forward by my colleague from West Vancouver–Capilano, supporting Seaspan Marine's bid for the estimated $35 billion national shipbuilding contracts, I rise to ask all members of this House to join with me in wishing Seaspan every success as the July 7 deadline for proposals looms large.

They're in competition with three other bidders in central and eastern Canada to become one of the two 30-year strategic partners with the federal government to rebuild and refit the country's naval and patrol fleets. The procurement model is designed to create two centres of shipbuilding excellence in the country that will have the first right of refusal on any and all federal contracts for large combat and non-combat vessels.

If Seaspan were to be successful, this would ensure the stability of the B.C. shipbuilding industry with thousands of well-paid, skilled, family-supporting jobs, averaging $80,000 a year. A recent report estimates the creation of an additional 740 construction jobs as a result of the infrastructure required to build the ships in both Victoria and Vancouver.

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Additionally, the winning shipyard must foster a viable marine cluster around it to incorporate other shipbuilders and suppliers into its supply chain, thereby adding value beyond their business and further expanding the economic impact for, in our case, the two major shipbuilding centres.

This has the potential to significantly increase the size of our marine industry, which has for decades been subject to extreme economic cycles. Seaspan Marine Corp., headquartered in North Vancouver and with a workforce of approximately 2,000, is an association of Canadian companies involved in coastal and deep-sea transportation, bunkering, ship repair and shipbuilding services in western North America.

Congratulations to Jonathan Whitworth, CEO, and Seaspan for being on the shortlist and know that you officially have British Columbia's full support as the west coast contender.
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BIKE TO WORK WEEK

L. Popham: When you look around B.C. today, you just might think something's amiss — or a mess, to put it bluntly. It may look like something's a little off or a little flat. You might just conclude that it's bad hair day here in B.C., but actually, it's the first day of Bike to Work Week. Many of us are sporting the very coveted hair style those of us in the know call helmet head. For me it's an everyday look, and I'm proud of it.

H.G. Wells once said: "When I see an adult on a bicycle, I do not despair for the future of the human race." Well, would he ever be excited today. It's the 17th annual Bike to Work Week, and it's being held from May 30 to June 5 all across B.C. The vision of Bike to Work Week is to experience the joy of an ever-increasing number of people safely commuting by bicycle. The mission is to encourage more people in all B.C. communities to commute by bicycle through bike-to-work initiatives. Last year in Victoria alone we had 633 registered teams, a total of 5,744 cyclists, 830 new cyclists and a total of 243,798 kilometres cycled.

Albert Einstein once said, "Life is like riding a bicycle; in order to keep your balance, you must keep moving," and that's just what Bike to Work Week does. It helps introduce an opportunity to stay healthy physically and mentally while reducing our carbon footprint. We can arrive bright-eyed and bushy-tailed for work, which leads to greater productivity and a healthier workforce.

I'll leave you with a quote from John F. Kennedy: "Nothing compares to the simple pleasure of a bike ride."

CONTRIBUTIONS OF SENIORS

M. MacDiarmid: Next week, June 5 to 11, is B.C. Seniors Week. It's a great time for us all to honour and celebrate the seniors in our lives. Our older citizens are an incredibly diverse group of individuals, and I know we all want to thank them for the tremendous contributions they've made and continue to make here in British Columbia.

Who are our seniors? They're the nation-builders who've helped make this province the amazing place that it is today. Our seniors are our parents, our grandparents and our friends.

What are they doing today? Well, some seniors are entrepreneurs, and many are in the workforce, so they're at work. Right now others are swimming, cycling, hiking, doing yoga or tai chi. They are tweeting. They are on Facebook. They are inspiring, listening, mentoring and sharing their knowledge, wisdom and life experience.

Many of them are volunteering. Seniors do thousands of hours of volunteer work every year in B.C. In 2007 seniors volunteered for 44.3 million hours in this province. On average, those who volunteer spend 196 hours volunteering each year. Our seniors enrich our communities and our lives in many ways. They inspire us, and we owe them our deepest respect.

Now, here are some of the ways that you can celebrate with seniors in your community next week. There will be barbecues, dinners, bocce tournaments, picnics and garden parties. If you're a senior in Chilliwack or North Vancouver, you can compete in a talent show to be part of the Canadian Senior Star, the largest talent competition dedicated to seniors. And if you're in Victoria, you can dance at the Rockin' 50s Dance — dance the night away dressed up in '50s attire.

Regardless of where you are next week, please make sure to take some time to celebrate with the seniors in your community.

We owe them so much. Let's make sure to give them the respect and honour that they deserve. So don't forget next week to celebrate with B.C. seniors.

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MAY DAY EVENTS ON QUADRA ISLAND

C. Trevena: Mounties in their red serge, the colour guard, pipe band and then the floats — a parade that wends through the forest along Rebecca Spit. Saturday marked Quadra Island's 113th May Day. The theme this year was "Gardens of delight." In the past it's been islands, air, oceans. The one guiding rule for the theme according to Sandy Spearing, who runs the community centre, was the request by a young participant years ago: "Can I wear my angel wings?"

This year we had gnomes and bees and garden parties, underwater gardens and many sets of angel wings. There were also the traditional floats and the child care centre, the kindergarten, the May Queen and her court, and the volunteer emergency services in their dress uniforms.

The parade ends at the field on Rebecca Spit, where the May Queen is crowned. This is a comparatively new tradition. The first May Queen was the then 11-year-old member for Saanich South. This year Jane Nighswander was crowned and talked about May Day's place in her life in the community. Of course, there are maypole dances, grade 3s working hard on the intricate weaving of ribbons, year after year, taught by Barrie Calverly.

Every year a person or organization on the island is honoured for their commitment to the community. This year it was the seniors housing society. Gourmet picnics are donated by island restaurants and stores and are auctioned, and people eye the sky for the continued sun and just a touch of breeze for the annual sailing race.

The afternoon is a time for games, for volleyball and races, the building of beach houses and, of course, the grease pole. Now, many visitors to Quadra may assume that that tall pole in the field on the spit is our maypole, but every year Doug and Gretchen Peters make sure it's
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covered in grease and $50 is attached to the top. While strategies vary to reach it, it usually goes.

Quadra opens itself to the tourists. In fact, this weekend sees the studio tour which marks the start of the season. But May Day is the time for friends and neighbours on the island to celebrate Quadra Island's wonderful sense of community.

100th ANNIVERSARY OF
VAN HORNE ELEMENTARY SCHOOL

M. Stilwell: I want to wish Van Horne Elementary School a happy 100th birthday. Listen to what Principal Phil Moses says about this wonderful school: "For a century Van Horne Elementary School has created a legacy of foundational learning, pivotal experiences, special relationships and an enduring supportive community."

Last week over 600 people came together to celebrate, reconnect and remember the struggles and successes of 100 years. Besides Mr. Moses, 18 former principals were recognized for their contributions and the difference they made in the lives of students, parents and teachers.

Parents have always been integral to the school, and in the 1920s the parents established a soup kitchen and gave free milk to the needy. Today parents continue to make contributions to school life and the community. Many former principals remember efforts of past PACs — the dances, fairs and events held with the surrounding community.

Thanks to Dave Miranda, current PAC chair for his work, and kudos go to all of the centennial committee: Phil Moses, Denise Johnson, Dorothy Watkins, Sean Martin, Erica Saunders, Debbie Blaise, Vicky Rusk and Mary Shields.

Van Horne continues its success due to the hard-working students, their devoted staff and supportive parents. They all thrive following the code of conduct that instils the desire to work together as a team. It was a wonderful celebration, and congratulations to all.

RESPONSE TO FLOODING
IN CARIBOO-CHILCOTIN AREA

B. Simpson: Mother Nature has not been very kind to the Cariboo-Chilcotin this past year. Last summer's fires destroyed thousands of hectares of forests, while smoke blocked the sun for weeks and choked the air throughout the region. Then came the fall storms that washed out Highway 20, and now we have the spring floods.

Many areas of the Cariboo have already been impacted by early spring flooding from rivers and creeks that won't peak until late June. Cedar Creek in Likely now flows like a torrent through the community's ballpark, flooding half of Cedar Point Provincial Park. Just down the road a flash flood of another creek deposited gravel two-thirds of the way across the narrow point of Quesnel Lake. A few days ago Choate Creek wiped out a portion of Beaver Valley Road.

At one point the Cottonwood River rose 18 inches above its historic high at Cottonwood House historic site. Downriver it wiped out the frontage of a small subdivision on the Quesnel Hixon Road, causing government to dismantle three homes in order to prevent them from being swept into the river.

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I stood with the two families whose homes were to be destroyed and witnessed their anger and anguish as they removed the last of their belongings and complied with the government's need to destroy their private property in order to protect the public interest.

Throughout all of these natural disasters, teams of dedicated individuals manage and coordinate the government's response and assist victims to find shelter and comfort when they are evacuated from their homes. Today I want to recognize the efforts and expertise of the professional staff in the Solicitor General's office, emergency management B.C., the Cariboo regional district's emergency operations centre, emergency social services.

All of these people do their absolute best to mitigate and moderate the impacts of Mother Nature's fury. I ask the House to please join me in thanking all the emergency response personnel from all levels of government who work hard to serve the people of B.C. in the times of natural disasters.

Oral Questions

FUNDING FOR GROUPS PARTICIPATING
IN MISSING WOMEN INQUIRY

A. Dix: First, on behalf of the official opposition, I want to congratulate the Premier on her return to the Legislature. I'm sure it's a very, very proud day for her and her family.

My question is to the Premier, and I hope it's a question that we can find some agreement on. The government has chosen to deny funding to women's groups, to aboriginal groups, to community groups in the Downtown Eastside at the Missing Women's Inquiry — this in spite of the recommendation of Wally Oppal, who has recommended that these groups be heard, that their voices be heard at the inquiry. Will the Premier intervene to overturn this decision and make sure those voices are heard at the inquiry?

Hon. C. Clark: Thank you to the Leader of the Opposition for his kind remarks to start off this very first question period since I've become Premier. It is indeed nice to be back. I owe many thanks, as well, to
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the people of Vancouver–Point Grey for supporting me and getting me here and, of course, to all the folks sitting on this side of the House who've been holding down the fort while I haven't been here, including the Minister of Finance and Deputy Premier, who's done some full duties in these last couple of weeks. I'm delighted to be here.

Thank you very much to the member for the question. It is tragic what has happened in the Downtown Eastside, and it continues to be tragic — what happens down there for women and children and men who struggle every day in what is certainly one of Canada's poorest postal codes. It has been a challenge for governments for decades to try and get our hands around the issues down there, try and wrestle them down and make sure that it's a better place tomorrow than it has been in the past.

Certainly, this government called the inquiry in the first place and appointed Mr. Oppal to head it up because we want to make sure that people's voices are heard. We want to make sure that we get to the bottom of some of the problems down on the Downtown Eastside and make sure that when we get to the bottom of those problems, we have a way to move forward.

I know the inquiry is committed to making sure that we can hear from as many voices as absolutely possible, because we want to make sure that the Downtown Eastside is a better place, is a safer place and is the kind of close-knit, healthy community that many of the rest of us have the good fortune to live in.

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

A. Dix: Well, there's apparently funding for a large number of government lawyers. We've seen in previous matters, in particular in the B.C. Rail trial, that there's funding sometimes for government insiders — $6 million worth of funding in that case for them to get access to justice.

In this case we're talking about the groups…. I want to quote the former Attorney General, who says: "These groups are closer to the facts at issue. Most of these groups were front-line lobbyists for public attention to the missing and murdered women and ultimately for the establishment of a public inquiry."

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Now, the Attorney General says there's a line, and because of that line, these voices won't be heard at the inquiry; they won't be supported by the government. But I think that clearly, the government's line is in the wrong place. So what I'm asking the Premier to do is intervene and ensure that those groups that represent women on the Downtown Eastside are heard at this public inquiry.

Hon. C. Clark: Thanks to the member for the question.

The member knows that the government is funding the families to be able to be heard at the commission, and we are making sure that as many voices as possible are heard before that commission. It seems to me to be our obligation to do that, and we're certainly living up to it, although it isn't required by law for us to do that. We want to make sure those voices are heard because, as I said, the issues facing women and children and men who live in the Downtown Eastside are serious, and they are urgent.

One of the things the government has done to try and address those issues and make sure that we really understand them, to make sure we have a road map to try and address them is appoint the commission of inquiry that Wally Oppal is heading.

There are many, many other things, though, that we can do, and among them is making it a little bit easier for all families to get ahead in this province. Make it a little bit easier for all those folks, many of whom are struggling at the bottom of the income scale, many of whom find themselves at the middle of the income scale, some of whom still find themselves at risk of homelessness. Make sure that they have a chance to get ahead.

Putting families first is at the heart of what we are doing as a government. We want to make sure that families have a lighter burden across the board, that it's a little bit easier every day for families to put food on the table for their children, no matter where they find themselves across the province, whether it's in Salmon Arm, whether it's in Prince Rupert, whether it's in Atlin or whether it's in the Downtown Eastside of the city of Vancouver.

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

A. Dix: Putting families first isn't about words; it's about actions. In this case the actions are $6 million in funding for the defendants in the B.C. Rail trial — $6 million, right; that's what it is — and to deny funding to the very groups that Wally Oppal has said should be funded.

What did he say? He said that the groups he has given standing at the inquiry should not be denied participation because they have lack of funds, and this is precisely what the government is doing. The voices who protected and defended women in the Downtown Eastside are being denied access at this hearing.

Why doesn't the Premier intervene, give the same status she's giving to government organizations at this inquiry, give the same treatment that the government gave to defendants in the B.C. Rail trial and ensure that those voices are heard at this inquiry?
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Hon. C. Clark: Thanks again to the member for the question.

Now, the member knows, as I said, that the government is funding families. We, I believe, have a moral obligation to do that. Even if we don't have a legal one, we certainly are.

We've expanded the terms of reference for the commission so that it's a study commission. They can hear from many other groups as well, so it's a less formal inquiry. The idea with that is to make sure that it's easier for people to be able to access the inquiry and make their voices heard.

There are very specific issues in the Downtown Eastside that we absolutely have to be thinking about. We have to make sure, as I said, that the route going forward is a lot better than the route going backward that we've seen in the past for people in the Downtown Eastside.

But we have to support families all across the province. We have to lighten the burden. That's why the minister responsible for B.C. Hydro is reviewing B.C. Hydro. That's why, when ICBC decided that they were going to start giving people higher rates after they had one ticket, the Solicitor General stepped in. That's why the Minister of Transportation is having a look at B.C. Ferries.

That's why we are lowering the HST by 2 points. We're going to make sure that every family in this province ends up ahead when it comes to taxes. When you think about the total burden that government puts on families — I want to help families get ahead all across the province — I'd sure rather be supporting a 10 percent tax than a 12 percent tax.

L. Krog: I'm sure it wasn't the Premier's intention to trivialize this topic by comparing the discussion today with what's happened at ICBC. For years these women's groups have been arguing and fighting to seek justice. We are talking about dozens of women whose lives are gone, women who have disappeared.

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It's a very simple proposition. The former Attorney General was very clear. He's a respected jurist. He was a respected lawyer in his time. He was a respected Attorney General. He has stated very clearly that these groups should be funded.

I'm simply asking the Premier to say to me today, to tell this House, to say to this group: why is it okay to pay for $6 million in legal fees for Dave Basi and Bobby Virk but not for these women's groups?

Hon. B. Penner: As the Premier has correctly noted, we do feel an obligation to respond to the tragedy that took place in the Downtown Eastside with the murdered and missing women. That's why our government established the inquiry. That's why our government expanded the terms of the inquiry to allow for not just the formal hearing study or hearing commission but also a study commission so that all people can participate, if they want, without the need to rely on lawyers for cross-examination in a more adversarial setting. So we responded.

In addition, as the Premier noted, we have decided to fund legal representation for the families of the murdered and missing women, because we know that this is an important issue.

Mr. Speaker: The member has a supplemental.

L. Krog: If the former Attorney General, the head of this commission, had thought the funding was adequate to simply fund one lawyer to represent all of the families, he would have said so. But that's not what Mr. Oppal said. He said: "My intention was to ensure that no group with standing before the inquiry would be denied legal counsel at the evidentiary hearings due to lack of funds."

The simple fact is that no one goes into this kind of inquiry without counsel and expects to get the same hearing or have the same kind of job done. Businesses don't go into courtrooms without high-priced lawyers because they appreciate you need an advocate. The fact is that the former Attorney General recognized the need for advocates for these groups to ensure that all the voices were heard.

Again, my question to the Premier is: why is it we can fund Bobby Virk and Dave Basi, but we can't fund these groups?

Hon. B. Penner: Obviously, the public as well as the government — and, I would assume, the opposition, from the comments I've just heard — have a limited appetite for spending unending amounts of money on lawyers and their fees. That's why we've decided to prioritize. Our priority is putting families first.

Like we did for the Braidwood Inquiry looking at the tragic death of Robert Dziekanski, where we provided funding for the family of Mr. Dziekanski to be represented in that inquiry, we are providing funding for the families of the murdered and missing women that sadly lost their lives in the Downtown Eastside at the hands of Mr. Pickton.

There is not an unlimited amount of money that can be spent on taxpayers' fees. Our government recognizes that, but nevertheless, we are providing the funds necessary so that the families of the murdered and missing women have legal representation at the inquiry.

J. Kwan: Some 60 women have gone missing from the Downtown Eastside community, and 20 other women have gone missing from the Highway of Tears since 1995. Wally Oppal, the inquiry commissioner, on May 3, 2011, recommended that the government pro-
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vide funding to 13 applicants who requested financial assistance to participate in the formal hearing of the commission.

For this inquiry to deliver real answers and lessons, residents of the Downtown Eastside, women's and indigenous advocacy and service organizations must be full participants. They were close to the women who have gone missing. They knew their struggles, and they knew their lives. They are the ones who drew public attention to these cases and have been fighting for justice.

My question is to the Premier. Will she support their participation in the inquiry so that B.C. has a meaningful and full missing women's inquiry?

Hon. B. Penner: As I indicated, our government is providing funding for legal representation for the families of the murdered and missing women so that they can participate in the formal inquiry component that's taking place. But as I mentioned, our government responded to a request from the commissioner himself in March to expand the terms of reference so that it would allow for a study commission, which is less formal, less adversarial and more open for people to participate, with or without legal representation.

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That avenue is there. I know that the commissioner does intend to hold study commission hearings and to make it as successful as possible for people to participate.

Mr. Speaker: The member has a supplemental.

J. Kwan: Let me just put this quote on the record.

"This inquiry has a responsibility to highlight those systemic injustices that allowed the unimaginable deaths and disappearances of so many women from the Downtown Eastside. The membership of organizations and groups like the Downtown Eastside Women's Centre and the February 14 Women's Memorial March Committee provide the critical context necessary for this inquiry as we knew the women and their lives."

Without their participation the inquiry will be incomplete. Many fear that it will become an exercise that generates no real answers or lessons. This inquiry is not just about understanding what happened. It is also about preventing more cases of women going missing from the Downtown Eastside and other parts of British Columbia.

Will the Premier reconsider? Will the Premier do the right thing and allocate legal funding to support these organizations so that they have full voice and full participation at this inquiry?

Hon. B. Penner: In addition to what I've already stated about the informal study commission component that our government recently added to the terms of reference for the commission of inquiry, last week Commissioner Oppal was quoted on May 26 as stating that people at the study commission don't need to cross-examine witnesses. That's confirmation that in order to participate in the hearing you don't need to have a taxpayer-funded lawyer.

Now, we did see fit to provide legal representation for the families of the murdered and missing women. We felt that that was appropriate. It's similar to what government has done with other inquiries such as the Braidwood Inquiry into what happened to Mr. Dziekanski when he arrived at the YVR international arrivals lounge.

As the Premier pointed out, and she's quite correct, we have no legal obligation to do that. We felt it is important to do it for the families, and that's why we are funding representation for the families.

B. Ralston: My question, too, is for the Premier. Clearly, Mr. Justice Oppal, as he was, and the former Attorney General, did not make this recommendation lightly. It came after careful consideration and submissions by the commission. He has recommended that in order that justice be done…. I'm going to quote from what he said. "My recommendation to the provincial government was to fund all the groups that satisfied me that they would not be able to participate fully without financial support."

This is coming from a very respected jurist, a former Attorney General, who did not make this recommendation lightly. Why will the Premier not heed that advice and overrule the Attorney General?

Hon. B. Penner: I'm sure the commissioner will be pleased to know that the opposition, who used to criticize him on a daily basis, now considers him well-respected. I'm sure he'll appreciate that change of heart on the part of the NDP.

Again, as I've said, our government is putting families first. There is a limited amount of money and a limited amount of taxpayer appetite, frankly, for spending money on lawyers and their fees. We have decided to prioritize funding for legal representation for the families of the murdered and missing women.

That's similar to what government has done with previous inquiries such as the Braidwood Inquiry that I've already talked about, where we provided funding for the mother of Mr. Dziekanski but not for other groups that wanted to participate. There were other people seeking funding, but the government decided to put the funding for the families first.

Mr. Speaker: The member has a supplemental.

B. Ralston: Well, that limited appetite wasn't much in evidence when the government approved $6 million in legal fees for Bobby Virk and Dave Basi.

Once again I return to what Mr. Justice Oppal said: "My intention was to ensure that no group with standing
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before the inquiry would be denied legal counsel at the evidentiary hearings due to lack of funds" — again, for the evidentiary hearing, a considered response by the former Attorney General.

Will the Premier intervene and overrule this Attorney General and fund those groups?

Hon. B. Penner: As the Premier noted, we are all tragically touched by what happened on the Downtown Eastside and the loss of all those lives in such a senseless, tragic and, frankly, horrific way. That's why we're pleased to see a conviction entered and the sentence imposed upon Mr. Pickton, but we didn't want to stop there.

[1415]

That's why our government appointed an inquiry of commission to look into whether there were systemic issues that prevented Mr. Pickton's arrest at an earlier date and his earlier conviction. So we're funding the commission of inquiry.

We've expanded the terms of reference for the inquiry so that people can participate in the study commission without the need for taxpayer-funded lawyers, so that they can do that in a less adversarial way but still have their voices heard. In addition, because we are so touched by what happened and so distraught, we have made funds available to provide legal representation for the families of the murdered and missing women.

C. James: This is the government's own commissioner, appointed by the government to manage the very serious issue of missing women across this province. The commissioner himself has recommended to government that these groups and organizations need to be funded in order to participate in this very serious inquiry.

I heard the Attorney General say that it's about priorities, that we have to prioritize money. Well, it's very clear what the B.C. Liberals have made a priority. Their friends and insiders Basi and Virk got $6 million — and nothing for the missing women's inquiry.

My question is to the Premier. If the Premier wishes to put families first, here is an opportunity. Fund the groups and organizations today.

Hon. C. Clark: Thanks to the member for her question. I am very glad that the rumours of her imminent demise are turning out to be untrue. She's provided a great voice for women in British Columbia. We haven't always agreed on everything, but I'm delighted that she's continuing to take her seat in the Legislature.

As the Attorney General has said, our government is deeply concerned about what's happened in the Downtown Eastside, and that was why we appointed the commission of inquiry in the first place. That was why we took Justice Oppal's advice and expanded the terms of reference so that it could be a study commission and could hear from more people. That's why we are providing funding for the families to be heard in this — so that they can be represented by lawyers, just like we did in the Braidwood Inquiry.

The government is, I think, with all of these actions, demonstrating in this particular aspect that we do really…. This is an incredibly important issue. We have to make sure we get to the bottom of it. And we have to make sure that, going forward, the Downtown Eastside is a safer place in the future than it has been in the past.

Our government remains deeply concerned about this, not just with respect to the work of this inquiry but even further. We need to, as I said, look at the total burden on families overall. We need to make sure that low-income families in particular are doing better than they have been. That's why our government has provided a whole series of rebates and made it a whole lot easier to be able to support the burden of government when you're at low income now than it was about ten years ago.

Mr. Speaker: The member has a supplemental.

C. James: I remind the Premier that we're talking about the missing women's inquiry, and the missing women's inquiry would not have happened if it weren't for those 13 groups who stood up to this government to insist on having the inquiry. These are groups and organizations that put time, that put energy, that put their own resources into making sure the inquiry was going to be there, in making sure they would have a voice to try and do everything possible to ensure that these kinds of things don't happen again. Now when they're asking for funding to fully participate, this government has said no.

I ask my question again to the Premier. Why won't the Premier, why won't the B.C. Liberals support these groups and organizations, support the work they've done to get the inquiry so that they can fully participate?

Hon. C. Clark: To the former Leader of the Opposition, many thanks again for the question. Although I was on the outside at the time, I am reliably informed…. I remember this from my days in radio. The government said at the time that they would support an inquiry when the legal proceedings were complete.

[1420]

The government kept their promise and has gone further, has accepted the recommendation of Commissioner Oppal to expand the terms of reference to make it a study commission so that more people can be heard, and has followed the example that was set in the Braidwood Inquiry and made it possible for the families to be funded and be heard at the inquiry.

I think those are very important steps to have taken, and it really reflects more than anything this gov-
[ Page 7541 ]
ernment's deep concern about the conditions in the Downtown Eastside.

All of those missing and murdered women were lost to their families and to our communities in the most tragic way possible. It's incumbent on all of us in every aspect, in every corner of our society in British Columbia, to care and to show that we care by doing something about it. That's what this government has done.

M. Farnworth: My question is to the Premier. This is not about the HST. This is about missing women, women who were murdered at the Pickton farm. It's about a botched investigation. It's about mistakes that were made and should never happen again. That's what this inquiry is about. It's not about the HST.

The individual heading up that inquiry, a former Attorney General of this province — who, though we often disagreed with, we always respected — has said that these 13 groups should be funded. Those 13 groups know more about the Downtown Eastside than the Premier and her entire government will ever know.

My question is to the Premier. Why doesn't she give the former Attorney General, Wally Oppal, what he's been asking for: that funding be provided for these 13 groups so that we can get a report that really does accomplish something?

Hon. B. Penner: I'll say it again. Our government was very touched by what happened. We watched closely, and we helped fund the investigation as it took place. Prosecutions were pursued, convictions were obtained, and a sentence was imposed. I don't think Mr. Pickton will be seeing the light of day anytime soon, and that's appropriate.

However, we didn't stop there. We felt it was important to establish an inquiry to look into whether in fact there was a botched investigation. The member has reached his conclusions. I'm interested in hearing the conclusions of the commission in that regard, and that's why we established it. We are providing funding so that the families of the murdered and missing women can directly participate with legal representation in the formal inquiry and also in the study commission, which are the less formal hearings.

My understanding is that Commissioner Oppal is hoping to start those less formal hearings within weeks and will be travelling to northern British Columbia to do so.

Mr. Speaker: The member has a supplemental.

M. Farnworth: Commissioner Oppal knows what he's doing. He asked for funding for a reason. When the Premier has been asked about this funding, she has talked about wanting to make things better, and she has talked about the HST.

This is not about the HST. This is about missing and murdered women from the Downtown Eastside and a commissioner, a former Attorney General, who is recommending funding for 13 groups.

Why will the Premier not listen to the commissioner, the former Attorney General of this province, who has recommended the funding for those 13 groups? Why will the Premier not fund those groups?

Hon. B. Penner: I've heard the opposition complain day after day about how much money has been spent in the past on legal fees, and our government actually shares many of those concerns. It's why I've appointed Stephen Toope, the president of UBC and former dean of law at McGill University, to review the indemnity policy to get a better handle on legal fees through the indemnity policy in the future.

Unfortunately, we can't turn the clock back. We can't put a different date stamp on a memo and set the clock back on that issue. What we can do is get a better handle on expenses in the future, and that will give us more resources in the future to spend on things like providing representation for families in public inquiries.

In this public inquiry our government is funding the families.

[1425]

M. Mungall: Mr. Speaker, 13 organizations have put their hearts and souls into the Downtown Eastside. It is because of them that we have this inquiry. They have been strong advocates for their communities. They need to be heard at this public inquiry. They need to have the funding necessary to do so.

Will the Attorney General today commit to that funding? It's a simple question, and they need an answer.

Hon. B. Penner: The member is incorrect. The reason for the public inquiry is because of the families of the murdered and missing women. It's because our government, like everybody in British Columbia and frankly anybody in the world that heard about this case, was horrified about what happened. We want to find out if there are lessons that we can learn so that we can prevent something like this from happening in the future.

That's why we appointed the formal inquiry, that's why we've expanded the terms of reference as requested by Commissioner Oppal, and that's why we're providing legal representation for the families of the murdered and missing women. I want to get the results as soon as possible so that if there are lessons to learn, if there are policies and procedures between the police forces that need to be changed, I want that information as quickly as possible so that we can make improvements in the future and stop something like this from happening again.

[End of question period.]
[ Page 7542 ]

Petitions

N. Macdonald: I would like to present a petition signed by almost 300 residents of Golden asking for safe access to Donald and Dejorie roads. The petitioners are very concerned about the proposed intersection as it joins the Trans-Canada within the current highway upgrades as part of the Donald Bridge project.

H. Lali: I'd like to present a petition with nearly 500 signatures from residents of the Botanie Valley near Lytton.

"NorthWest Organics LP, a company with strong links to some Lower Mainland waste management businesses, is in the process of constructing what we believe to be an industrial composting facility on a local ranch.

"We the undersigned residents and friends of Botanie Valley respectfully request that the government of British Columbia immediately enforce a construction moratorium on the proposed facility pending the completion of a B.C. government environmental impact study."

B. Ralston: I'm filing a petition from Surrey residents concerned about the negative impact of inadequate school space on our education system and calling on the government to (1) allow for an exception to the current funding formula to address Surrey schools' immediate needs in this year's capital plan, and (2) review and change capital funding policies for schools to ensure that they continue meeting Surrey's ongoing growth.

D. Black: I rise to present a petition signed by a number of residents in New Westminster urging this Legislature to adopt endangered species legislation that protects species at risk by protecting their habitat, including transparency and accountability in the legislation.

R. Austin: I also have a petition from Surrey residents concerned about the negative impact of inadequate school space on their education system who are calling for the government to do two things: to allow for an exemption to the current funding formula to address Surrey schools' immediate needs in this year's capital plan and, secondly, to review and change capital funding policies for schools to ensure that they continue meeting Surrey's ongoing growth.

S. Hammell: I also rise to present a petition from Surrey residents concerned about the negative impact of inadequate school space on our education system. They are calling on the government to allow for exceptions to the current funding formula to address Surrey schools' immediate needs in this year's capital plan, and to review and change capital funding policies for schools to ensure that they continue meeting Surrey's ongoing growth.

[1430]

J. Brar: I also rise to submit a petition signed by Surrey residents concerned about the negative impact of lack of school space on our education system and calling on the government to do two things: first, allow for an exception to the current funding formula to address Surrey schools' imminent needs in this year's capital plan and, second, to review and change capital funding policies for schools to ensure that they continue meeting Surrey's ongoing growth needs.

Reports from Committees

Hon. R. Coleman: I have the honour to present the first report of the Special Committee of Selection for the third session of the 39th parliament.

I move that the report be taken as read and received.

Motion approved.

Hon. R. Coleman: I ask leave of the House to move a motion to adopt the report.

Leave granted.

Hon. R. Coleman: I move that the report be adopted.

Motion approved.

H. Bains: Presenting petitions.

Mr. Speaker: Proceed.

Petitions

H. Bains: These are petitions from Surrey residents concerned about the negative impact of inadequate school space on our education system, who are calling on government to address Surrey schools' immediate needs in this year's capital plan, and to review and change capital funding policies for schools to ensure that they continue meeting Surrey's ongoing growth.

All of them add up to 659 petitions today. These are in addition to a petition that was presented here from the member for Surrey–White Rock calling for the same.

Orders of the Day

Hon. R. Coleman: The business in this House this afternoon will be Motion 9, judicial compensation, and then Motion 10, judicial compensation. Following that will be Motion 11 to deal with the HST.

In Committee A this afternoon we will be doing the estimates of the Ministry of Health to completion, followed by the Ministry of Transportation and Infrastructure, the Ministry of Attorney General and the Ministry of Children and Family Development.
[ Page 7543 ]

Government Motions on Notice

MOTION 9 — GOVERNMENT RESPONSE
TO JUDGES COMPENSATION
COMMISSION REPORT RECOMMENDATIONS

Hon. B. Penner: I move Motion 9 standing in my name on the orders of the day.

[That pursuant to section 6(2) of the Judicial Compensation Act the Legislative Assembly reject seven of the fifteen recommendations of the Final Report of the 2010 British Columbia Judges Compensation Commission as laid before this Assembly on May 3, 2011, as unfair and unreasonable for the reasons outlined in the Government Response to the Report of the 2010 Judges Compensation Commission filed in this House today:

1. The recommended salary increase for April 1, 2013 to March 31, 2014 of an amount based on the cumulative change in the British Columbia Consumer Price Index (the “BC-CPI”) over the preceding three-year period is rejected. The salary increase for April 1, 2013 to March 31, 2014 is set at zero.

2. The recommended increase in the pension accrual rate for judges from 3% to 3.5% effective April 1, 2013 is rejected. The pension accrual rate is set at 3%.

3. The recommended increase in the pension contribution period for judges from age 71 to age 75 effective April 1, 2011 is rejected. The end of the pension contribution period is set at age 71.

4. The recommendation that the cost of long-term disability benefits be separately funded by government outside of the budget of the Office of the Chief Judge is rejected. The method for budgeting the cost of long-term disability benefits will remain within the budget of the Office of the Chief Judge.

5. The recommendation that long-term disability benefits be extended to judges to age 75, effective April 1, 2011 is rejected but in substitution the long term disability benefits to judges will be extended to age 75 commencing on April 1, 2013.

6. The recommendation that judges be enrolled in the government flexible benefits plan, effective April 1, 2011 is rejected but in substitution the judges will be enrolled in the government flexible benefits plan, commencing April 1, 2013.

7. The recommendation that, effective April 1, 2011, the Senior Judges Program be expanded by an amendment to the Judicial Compensation Act is rejected. The recommendation to increase the possible number of sitting days for senior part-time judges at the discretion of the Chief Judge, with a three-year “sunset clause” is rejected. The following recommendation is substituted:

a. the Legislative Assembly accepts in principle that part-time judges should be permitted to exceed the existing remuneration caps but recognizes this requires legislative amendment at a future sitting and is outside the scope of the Judges Compensation Commission;

b. the Legislative Assembly recommends that the remuneration caps limiting a senior part-time judge’s salary to no more than 40% of the salary of a full-time sitting judge and the combination of salary and pension benefits to no more than 100% of the salary of a full-time sitting judge be removed;

c. the Legislative Assembly recommends that a future legislative amendment should allow the Chief Judge, using discretion and if adequate budgetary resources exist, to authorize one or more part-time judges to provide coverage to meet urgent and unforeseen needs resulting from illness or injury; and

d. the Legislative Assembly also accepts that these changes should be reviewed after three years.

That the Legislative Assembly accept the remaining recommendations contained in the report.]

I'd like to take a few moments to speak to this motion respecting the compensation that is paid to the province's Provincial Court judges. The process that is followed to determine their compensation is necessarily different from collective bargaining.

The reason for this is the need to ensure that judges are, and are seen to be, independent of government. Indeed, judicial independence is a cornerstone of our justice system. It is critical to our democracy so that anyone accused of a crime or who challenges government before the courts can be sure that their case will be decided based on its merits.

This principle of judicial independence as it applies to setting judicial officers' compensation has been affirmed in numerous court judgments. Guidance has been given to governments by the Supreme Court of Canada respecting an appropriate process to follow. What is most important is that governments and judges do not engage in bargaining over judges' compensation. Instead, a process has been determined whereby government and representatives of the judiciary make representations to the independent commissions. In British Columbia there's one for judges and one for JJPs, better known as judicial justices of the peace.

These commissions in turn make recommendations to government setting out what the commissions believe would be the appropriate salaries and benefits for judges and JJPs for a three-year period. This process unfolds according to the broad constitutional direction set by the Supreme Court of Canada, as well as the more detailed provisions contained in the British Columbia Judicial Compensation Act. Governments are not bound to accept commission recommendations, but if they wish to depart from them, they must clearly articulate a rational reason for the rejection.

In B.C. we have provided in the Judicial Compensation Act that government must find a recommendation to be unfair or unreasonable in order to reject it. Government's responses, which have been appended to these motions, contain more detail respecting the criteria for government to follow in rejecting commission recommendations.

[1435]

Before I address government's response to the 2010 Judges Compensation Commission, let me first say a few words about the judges of the Provincial Court. I haven't been in my role very long as Attorney General, but it is a great privilege for me to have the opportunity to work with the Provincial Court judiciary.

I first encountered them, I think, during my first summer of articles between first- and second-year law school when working in Chilliwack for a private law firm, and over that time I've had the experience of appearing before many of them. I'm always impressed with the dedication, innovation and commitment that our bench devotes to the public.
[ Page 7544 ]

Responding to the reports of the two compensation commissions is challenging in many ways. The respect we have for the processes established for determining judicial compensation as an aspect of preserving judicial independence governs our decision-making, but so do the fiscal imperatives that government is operating within. Government has endeavoured to be fair-minded, reasonable and thoughtful about a response to these important reports.

In considering what is fair and reasonable, we have developed our recommendations in the context of the current fiscal climate and the impact that has had on salary and benefits throughout the public sector. The details of the reasoning in relation to these issues are contained in the response documents that I filed on the 25th of May, 2011, when I filed the notices of motion. I'd like to highlight some of the general principles you will see in our reasoning.

Government has determined that it must limit compensation increases paid by public funds. A compensation arrangement for judges that provides protection against inflation is not consistent with this determination, nor are substantial increases in benefits. Protection against inflation has not been offered to employees in the public service. In pursuing its approach to deficit reduction, the government has established a net-zero public sector compensation mandate. This mandate is an across-the-board measure affecting every person who is paid from the public purse.

A similar approach is fair and reasonable for Provincial Court judges. The Supreme Court of Canada recognized, in the P.E.I. reference case, that the guarantee of a minimum acceptable level of judicial remuneration is not a device to shield the courts from the effects of deficit reduction. The court recognized that "nothing would be more damaging to the reputation of the judiciary and the administration of justice than a perception that judges were not shouldering their share of the burden in difficult economic times."

Judicial compensation has increased significantly in recent years. In 2004 judges' salaries were $161,250 a year. They are now $231,138 annually. This is a cumulative increase of 43.3 percent since 2004. This substantial increase flows from the 2004 and 2007 judicial compensation commission recommendations. Although the current net-zero mandate established by government does not extend as far as the judges commission, the current economic climate dictates this response for the entire term of the commission's recommendations. If all judges commission recommendations are accepted, the three-year total cost to government would be $6.86 million.

I want to be clear that the costs I'm discussing relate to the cost of judges only. These are the only costs the government's decision is based on.

In light of the present uncertain fiscal situation for government, a recommendation of no increase in the salary of judges for the 2013-14 year, as well as the prior two years, is fair and reasonable. Of further consideration is the uncertainty regarding the financial impacts that government may face as a result of the harmonized sales tax referendum being conducted in June of this year.

We have accepted some very minor benefit adjustments that would allow the judges to benefit from some of the benefit programs available to others in the public sector, such as the flexible benefits programs and long-term disability. But we recommend those adjustments at a later date — again, to be fair to the broader public sector, which will not be seeing benefit increases until 2013 at the earliest.

I'll take my seat and await the remarks of my learned friend.

[L. Reid in the chair.]

L. Krog: I'm delighted to rise to this today. The issue of compensation for positions of importance in our society — and certainly Provincial Court judges are very high on that list — is always problematic. The Attorney General has commented to some extent on the history of Provincial Court judge salaries. Between '92 and '97 they remained constant at $118,402 a year.

[1440]

Commission recommendations were adopted in 1998. They were increased to $134,000 that year, $139,000 in 1999 and $144,000 in 2000, and then there have been increases since. Judges can currently earn $231,128 annually. Supreme Court judges are set at $271,400 per year.

Now, there's always been a teasing sort of competition between the Provincial and Supreme courts in this province. When I say teasing, it's reflected in the backroom chat of lawyers in the barristers' lounges, etc., that Supreme Court judges have it easier and Provincial Court judges do all the work, and it's even easier in the Court of Appeal.

Like most things in life, there may be a tiny bit of truth in all of that, but it's not necessarily accurate or fair.

The reality is that Provincial Court judges in the courtroom are working very hard. The numbers of cases they have to face now are substantial. The subject of the Charter in criminal cases has made, I would say to some extent, the lives of Provincial Court judges extremely difficult; 90 percent of the criminal cases in the province are dealt with in Provincial Court. Often those cases involve significant Charter arguments. Cases that many years ago might have been dealt with in a morning — an impaired case — now can take a day or two or three, with numerous experts potentially giving evidence.

Charter defences to all kinds of cases arise, and quite appropriately. The Charter protects our rights and freedoms. That's why we call it the Charter of Rights
[ Page 7545 ]
and Freedoms. However, that means that judges are dealing with very difficult issues and, of course, face the inevitable appeals to the Supreme Court or the B.C. Court of Appeal eventually, if things get really hot and heavy.

One cannot question that they are doing their job and are working hard, but many British Columbians are in the same position and in positions of importance. I am referring only to those who are in salaried positions. I'm not talking about the small business person facing a struggling economy. The small business people in my community are probably no doubt feeling the effect of a 16 percent unemployment rate in Nanaimo. I'm talking about people who are in senior positions, whether that be in the public service generally, in the judiciary, on the boards of Crown corporations, including ICBC, B.C. Hydro, etc.

At $231,000 per annum, that is, by everyone's standard, a lot of money. At a time when we are saying to the public service generally — or, more properly speaking, the government is saying to the public service generally — that this is not an appropriate time for an increase, one is stuck in a very difficult position to be able to turn and say to a group that is already amongst the highest income-earners in the province, notwithstanding the difficult job they have, that "it's okay; we're going to give you a substantial increase" — which in percentage terms looks large and in actual dollar terms looks extremely significant to the average British Columbian.

I know that some years ago in the former configuration of my constituency, Nanaimo's average family income was $49,000 per annum. It was the third-poorest constituency in the province of British Columbia. That is family income. That assumes the possibility that parents and one or two of the so-called standard family of four children are indeed working.

Moreover, I am moved by what the Attorney General had to say about what the cost of this would be.

I have complained in this chamber on many occasions, and will continue to do so, about the significant lack of Provincial Court judges in this province. We know we are down by at least 17 judges in the province, if you accept even the most minimalist figures. At $1½ million per annum to fund a Provincial Court judge, approximately — including the court, the staff, sheriffs, all those necessary to support our justice system — the increase alone would more than cover the costs of four new appointments.

That is a significant number. It is a number that you cannot ignore. Moreover, I appreciate that the judges in a perfect world would receive the raise that has been recommended and should probably get it. But currently our courts in British Columbia pay, for Provincial Court judges, the second-highest after the province of Ontario. In the province of Ontario it's set at $248,057. That's above the national average, of course, as we are here in British Columbia, the national average being $214,360.

The subject of compensation will always be difficult, but there is a time when, in the circumstances that we are, it is hard to suggest that these recommendations are appropriate.

[1445]

There is some suggestion that it would be appropriate to get Provincial Court judges, without it being mentioned directly, up to approximately 90 percent of the level of Supreme Court judges. That would be a very significant figure.

The other thing is that from a taxpayers' perspective, one has to ask the question…. The judges are defeating themselves, in a sense, when I say this. The concept of compensation is often related to the quality of talent you wish to attract. That is a presumption. The more you pay, the greater the quality of the people who will seek the position.

The reality is…. Speaking as someone called to the bar in 1980 in this province, my observation, for what it's worth, is that the quality of the judiciary in this province at every level of the courts — but I think, most obviously and most particularly, at the Provincial Court level — has increased significantly.

You do not get some of the radical decisions or the less-tempered individuals that I experienced in my younger years. They don't get appointed anymore. We have a fairly good system, in my view, of appointing judges to the Provincial Court. I don't have to talk about the other levels of court, but certainly provincially we have a fairly good system. It requires a broad consultation with respected members of the bar and other professionals in the community.

The fact is that we have a good talent pool. I do not see a lot of Provincial Court judges retiring to go back into private practice. I certainly am not aware of — and if there was, I'm sure the Attorney General would have pointed it out to me already — any significant lack of applications for the Provincial Court judiciary.

I see the Attorney General nodding sagely as I am saying this, which confirms what many of us believe. Having been consulted from time to time myself or asked if I would be prepared to recommend or vouch for applicants, there are a significant number of very able lawyers in this province who are prepared to undertake the significant responsibilities of sitting on the Provincial Court bench.

At this time I think the government is essentially taking the correct course. I know the Attorney General may fall off his chair at those remarks, of course, but that is, I think, the fairest thing I can say. That is not to say, however, that the opposition is happy with the conduct of this government with respect to appointments to the bench in general, as I mentioned earlier.
[ Page 7546 ]

The reality is that we are facing a significant problem in the Provincial Court: a high demand for court time, an unusual number of cases — probably, by most estimates, in the range of 2,000 cases in the Provincial Court criminal division that may be tossed because of the Askov line of cases. Justice delayed is not just justice denied; it is justice dismissed. That is what will happen with these cases.

The concept that one has to wait months and months to have difficult family cases heard in Provincial Court is not a compliment to our system. It is not a situation that can continue. The fact that so many people continue to have to appear and in increasing numbers appear in Provincial Court unaided by the benefit of having an advocate, a lawyer, on their behalf is nothing other than a blemish on our system.

Having said that, many of the Provincial Court judges will no doubt argue that that is what makes their job difficult, which is why they would merit the compensation increase they are seeking. It is because they are having to deal so often with unrepresented litigants in small claims or family court and unrepresented accused in Provincial Court criminal division.

All of that makes the job difficult, but it is simply not the time. Although in the best of worlds we would be in a position to simply okay the commission's recommendations, that is not the case. I think it is most important, when you set up these kinds of commissions to make recommendations about salary, that wherever possible they be followed.

In this case the process is very clear. The government has had to respond and take a position on it. The opposition, very conscious of the importance of the work done by our Provincial Court bench, nevertheless has to reluctantly in these times and these circumstances agree with the motion brought forward by the Attorney General, and the opposition will be supporting it accordingly.

[1450]

Deputy Speaker: Hon. Members, the member for Burnaby North seeks leave to make an introduction.

Leave granted.

Introductions by Members

R. Lee: Madam Speaker, joining us in the House today — actually, right now in the gallery — are 56 members of the Lee's Association of Vancouver, led by chair Maurice Lee. Lee is the most common Chinese surname and probably one of the most used in the world. The Lee's Association of Vancouver was established 81 years ago to serve the community. Would the House please join me to give our guests a very warm welcome.

Debate Continued

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

Hon. B. Penner: I appreciate the comments from the opposition Attorney General critic. At this point, I would move Motion 9.

Motion approved.

MOTION 10 — GOVERNMENT RESPONSE
TO JUDICIAL JUSTICES COMPENSATION
COMMISSION REPORT RECOMMENDATIONS

Hon. B. Penner: I move Motion 10 standing in my name on the orders of the day.

[That pursuant to section 6(2) of the Judicial Compensation Act the Legislative Assembly reject six out of the ten recommendations of the Report and Recommendations of the 2010 British Columbia Judicial Justices Compensation Commission as laid before this Assembly on May 3, 2011, as unfair and unreasonable for the reasons outlined in Government Response to the Report of the 2010 Judicial Justices Compensation Commission filed in this House today:

1. The recommended salary increase for full-time JJPs for April 1, 2013 to March 31, 2014 of 8% is rejected as unreasonable and unfair. The salary increase for April 1, 2013 to March 31, 2014 is set at zero.

2. The recommendation amending the compensation formula for per diem JJPs is rejected. The compensation formula for per diem JJPs will remain unchanged.

3. The recommendation that the compensation formula for per diem JJPs should be applied equally to ad hoc JJPs is rejected. The compensation formula for ad hoc JJPs will remain unchanged.

4. The recommended increase in the professional development allowance from $1,000 to $1,500 effective April 1, 2011 is rejected. The allowance will remain at $1,000.

5. The recommended extension of the professional development allowance to per diem and ad hoc JJPs is rejected as unfair and unreasonable. The allowance will continue to be available to full-time JJPs only.

6. The recommendation to enrol full-time JJPs in the flexible benefits program, effective April 1, 2011 is rejected but in substitution full-time JJPs will be enrolled in the flexible benefits program commencing April 1, 2013.

That the Legislative Assembly accepts the remaining recommendations contained in the report.]

Madam Speaker, much of the same reasoning applies to the government's response to the Judicial Justices Compensation Commission, as was just articulated in response to Motion 9, so many of those comments apply, particularly with respect to the fiscal environment faced by the government.

If all the Judicial Justices Commission recommendations are accepted, the three-year total cost to government would be about $448,000. Again, government has a difficult balancing act to do. The men and women who serve as judicial justices of the peace perform an invaluable role, but our response to compensation and benefit increases is shaped by
[ Page 7547 ]
the broader fiscal challenges that government is currently facing.

Further details are laid out in the documents supporting Motion 10 that I filed last week.

L. Krog: In response to this motion, I can indicate quite clearly that the opposition is, likewise, supporting it. I would be remiss, though, if I didn't make some comment about some of the changes the government has made with respect to judicial justices of the peace.

In a more complex world, it is now recognized, essentially, that you don't get to any position unless you have the formal training and qualification. And it struck me, of course, that someone like one of the most distinguished of British Columbians, the late Roderick Haig-Brown, would never be appointed a justice of peace as he was, because he lacked that formal legal training.

That aside, that is a decision that government has made in the last while, so we now are in a position where the individuals who are JPs, as they're commonly called, are in fact lawyers, legally trained, by and large, obviously; able to do their job; familiar with some of the complexities of the law — even at the less stressful level, if you will, of work that they are required to undertake, keeping in mind, of course, that their hours are not necessarily the hours that one would want to keep. It's not a nine-to-five job, as the Attorney General well knows.

Nevertheless, my comments with respect to the judiciary and the Provincial Court judges apply here as well. It is difficult in circumstances where others are being asked to receive no increase or, indeed, face a lack of employment or dismissal. It is hard to argue that others who are in a position — notwithstanding how important it is in the community — that many of us would like to be in…. It is hard to advocate for an increase for them at the present time.

That's not to say that that may not happen. We are not talking about a lot of money overall, according to the Attorney General — less than a half-million dollars. Easy for me to say; not easy for the average person of the public to hear it. But it wouldn't even be a rounding error in the Ministry of Attorney General's overall budget, in fairness.

Nevertheless, the recommended increase of 8 percent is just too substantial to face. That increase in real dollar terms is roughly, I gather, about $8,000, properly speaking, I believe, if you're looking at a JP earning roughly $91,000 or a hundred thousand dollars a year. Again, that's a significant amount of money for the average British Columbian. Notwithstanding the valuable and important work they do in our system, it is only appropriate, I think, that the government receive the support of the opposition, again, with respect to Motion 10.

[1455]

Deputy Speaker: Hon. Members, the member for Surrey-Newton seeks leave to make an introduction.

Leave granted.

Introductions by Members

H. Bains: In the vicinity we have 25 grade 10 students from Ecole Gabrielle-Roy School, along with Ms. Samantha Marshall, and there are five parents along with them. Please help me welcome them to this beautiful House.

Debate Continued

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

Hon. B. Penner: I move Motion 10.

Motion approved.

Hon. I. Chong: Now I'll call Motion 11.

MOTION 11 — GOVERNMENT CHANGES
TO HARMONIZED SALES TAX

Hon. K. Falcon: It's my pleasure to rise in the House this afternoon in support of the motion I tabled late last week, a motion that through legislative intent confirms the intention of this government to move forward with a series of improvements to the HST on a schedule that I will talk about in a little more detail in a moment.

[That the Legislative Assembly authorizes and directs that the Minister of Finance must act as follows:

(a) In relation to the Comprehensive Integrated Tax Coordination Agreement entered into between British Columbia and Canada on November 30, 2009, further amended on March 2, 2010, to authorize Canada to introduce a Harmonized Sales Tax (HST) in British Columbia effective July 1, 2010, of which the provincial portion of that rate is 7%, the Minister of Finance must:

(i) immediately advise the Minister of Finance for the Government of Canada that, in the case that the Chief Electoral Officer announces that the result of the Harmonized Sales Tax referendum held under the Referendum Act commencing June 13, 2011 is that more than 50% of the validly cast ballots vote “No” on the question, then the desire of British Columbia is to amend the provincial portion of the HST rate in British Columbia to the following:

(A) 6% effective July 1, 2012; and

(B) 5% effective July 1, 2014.

(ii) seek to conclude arrangements with the Government of Canada that reflect the conditions and rates in section (a) of this motion as soon as possible.

(b) If the Chief Electoral Officer announces that the result of the Harmonized Sales Tax referendum is that more than 50% of the validly cast ballots vote “No” on the question, the Minister of Finance must do the following:

(i) introduce by the end of the 2011 calendar year, or as soon as possible thereafter, measures in cooperation
[ Page 7548 ]
with the Government of Canada, that will result in one-time transitional assistance payments being made to British Columbians as follows:

(A) $175.00 for each child under the age of 18 years;

(B) $175.00 for each single senior person with an annual income up to $40,000.00, the benefit being gradually phased out at annual incomes over $40,000.00; and

(C) $350.00 for each senior couple with an annual family income up to $40,000.00, the benefit being gradually phased out at annual incomes over $40,000.00.

The Minister of Finance shall use existing appropriations within Budget 2011 to finance such transition payments in section (b)(i)(A),(B) and (C).

(ii) Prepare and introduce to the Legislative Assembly for approval, a bill to amend the Income Tax Act that would increase the provincial corporation income tax rate to 12%, from 10%, effective January 1, 2012.

(iii) Delay the introduction of the planned change referred to in the 2011 Budget speech to reduce the small business income tax rate from 2.5% to 0% on April 1, 2012.]

This comes about as a result of the fact that next month British Columbians will be voting on what may be the biggest public policy decision they have ever been directly involved in. Of course, I'm talking about the harmonized sales tax, which I, along with many others, continue to believe is absolutely sound fiscal and tax policy and the right direction for our province, for our future and our children's future.

A lot has changed over the last few months. We have a new Premier in British Columbia — one who recognizes that families are at the very core of our communities and, indeed, at the very core of our province.

We both agreed when we engaged in initial discussions about HST that we needed a new approach with the HST, a new approach that starts with, first of all, listening to the public, listening to families on how we can improve the HST — again, a public policy that we believe is a very sound tax policy for this province. And two, and perhaps just as importantly, is making sure that we get independent facts, real facts, out to the public so that the public can make an informed decision when they vote with respect to the HST on the referendum that will be forthcoming.

Now, this started, of course, with the appointment of an independent panel — a panel that was chaired by Jim Dinning, a former treasurer of the Alberta government. It included such luminaries as Tracy Redies, the CEO of Coast Capital, one of the largest credit unions in the country.

I had included a former Auditor General of B.C., George Morfitt, who served a couple of terms as a very highly regarded Auditor General in B.C. It included a public policy professional from Simon Fraser University and former NDP MLA, as it happens, who also provided some very important advice into this.

The report was widely applauded, even by critics, as a result of its even-handedness. It was an unbiased, plain-spoken and clearly written account of the HST. I called it sort of the good, the bad and the indifferent, with respect to the HST.

Of course, while it commented on many of the positive aspects of the HST — the international trend moving towards what are called value-added taxes or harmonized sales taxes and why countries around the world are doing that and why a majority of the provinces, representing 80 percent of the population, have done that here in Canada — it also talked about one of the key downsides, if you will, with respect to the HST. And that was that the HST was costing the average family, on average, about $350 more per year.

So one of the things that we agreed we would do moving forward, as I mentioned, is engage in, under the direction of the Premier, the largest public listening exercise that any government, I would argue, has ever engaged in, in the history of the province of British Columbia.

It included the usual sort of form of public engagement — countless meetings with stakeholder groups — and that's to be expected. And it included, of course, an on-line survey with over 5,000 British Columbians taking part. But what is really unique about this listening exercise is that for the first time in the history of our province, it engaged technology in a way it has never been used before. It engaged technology through the telephone town halls.

[1500]

I hear a little bit of piping up coming from the NDP opposition leader, apparently uncomfortable with the use of this new technology. But I can tell you as Minister of Finance and Deputy Premier, it was remarkable — the result of utilization of that technology.

We, along with my colleagues the MLA for Peace River South and the MLA for Prince George–Mackenzie, listened to over 275,000 British Columbians and answered their questions in a series of almost one dozen telephone town halls in every part of the province. But what was really interesting to me is that of all the households we contacted, it was absolutely common that we would have anywhere from two-thirds to three-quarters of the individuals who picked up their phones staying on the telephone line for up to an average of 17 minutes to listen in and participate in an issue of major tax policy, being the HST.

We heard two things coming out of that loud and clear. The first is getting information, factual information out to the public. And why was that important? Because one of the things that the on-line surveys certainly showed us is that even today there is still an enormous amount of misinformation with respect to the HST.

I'll give you some examples from the on-line survey. Some 61 percent of those surveyed, for example, think that basic groceries have gone up under the HST, when there has been absolutely no change to basic groceries. Half think that gas prices have gone up due to the HST,
[ Page 7549 ]
when in fact we're spending about $270 million a year to ensure that the tax component of HST had no impact on gasoline and on filling your car.

Forty-eight percent of people thought electronics increased after the HST. In fact, it's exactly the same as it was under the PST and GST, remembering, of course, that we had a 7 percent PST and a 5 percent GST. Thirty-four percent of people thought that prescription drug prices had increased. Not true. Exactly the same as it was under the PST and GST.

And 36 percent of people thought that the resale of homes had increased, and one in four thought that new homes less than $525,000 had increased. Not true on all counts. The resale of homes, whether family homes or condominiums, has absolutely no HST associated with them. New homes, of course, have no change up to $525,000, and there is only an additional cost beyond the $525,000 threshold.

So that was very important to us. As the Minister of Finance, I can tell you that making sure the public has the facts before they make a decision like this is important to me. It's also important to me on the rebate side, because there are 1.1 million lower-income British Columbians that are receiving HST rebates, which are rebates from the province, who were not receiving those rebates prior to the HST back in the GST plus PST days.

I use the example regularly of the single mom from Kamloops earning $24,000 a year with three kids, and that single mom got absolutely zero in terms of rebates under the old PST-GST model. But under the HST, she is entitled to a full $230 not just for herself but for every single one of her children under 18. That is $920 more per year to help deal with the harmonization and the introduction of the HST.

I believe that single mom in Kamloops or Prince George or the Downtown Eastside, or wherever she may be, needs to know that when she's making a vote, she's making an informed vote to understand and know that we won't have to have people coming to us after the fact, after the vote, and saying to me: "Minister of Finance, why didn't you tell me that I would be losing those kinds of rebates as a result of voting to get rid of the HST?"

That is an obligation that I take very seriously, and I would have hoped that the opposition, which that often pretends they're on the side of lower-income folks, would also have stood up to make sure that information is being shared with those groups. Unfortunately, that is not happening.

As a government, the other thing we did is listen to what the public told us on those telephone town halls, and we responded. Last week, on May 25, we committed to march the HST rate down to 10 percent in two stages.

[1505]

We did this in two stages because we wanted to make sure we could do it in a fiscally responsible way, in a way that allowed us to meet and continue to meet our balanced-budget targets. That is something that's required by law, a law that we introduced and we're proud of, and something that maintains the confidence of the investment community and the rating agencies.

We also wanted to mirror how the federal government marched their rate down on the GST from 7 to 5 percent. They did it over three years, and we're mirroring the same approach in our approach. So the first 1 percent cut would kick in on July 1 of next year, and that would drop the HST to 11 percent in British Columbia. The second 1 percent would come off on July 1, 2014, for a full 2 percent reduction, or a flat 10 percent HST in British Columbia.

To bridge and transition families and modest- and low-income seniors to that first rate cut that will take place on July 1 of next year, we will provide transition cheques of $175 per child for all families in the province of British Columbia. For a typical family with two children, that's $350 that will be provided to transition and bridge them to that first rate cut on July 1 of next year. The same goes for low- and modest-income seniors. Those that are earning under $40,000 a year will also receive $175 transition cheques to again bridge them to that first rate cut on July 1 next year.

That's important because, as the independent panel noted, even with a 1 percent rate cut, the majority of families are now better off under an 11 percent HST than they are under a 12 percent PST plus GST. Even more important, under a fully implemented 10 percent HST every family — regardless of income, from the lowest to the highest — comes out a net beneficiary, to the tune of about $120 a year to the good, as a result of a 10 percent HST, not the 12 percent PST plus GST that the opposition and some others are pushing.

We are also, in response to what we heard from the public, rebalancing the equation — rebalancing the equation in recognition that the HST is a significant benefit to the small business and large business communities. We've certainly heard that loud and clear from the business sector — how supportive they are.

But we wanted to make sure that we rebalanced the equation so that we could continue to meet our balanced-budget objectives and ensure that we retain the triple-A credit rating that we fought hard to rebuild after a decade of NDP government that saw it knocked down on multiple occasions and saw a decade in the 1990s where we had eight out of ten budgets running fiscal deficits. That is certainly not an era that we want to go back to.

We believe that the increase of the general corporate tax rate from 10 to 12 percent, though certainly not something we would ever be generally happy with supporting, is a modest rebalancing that enjoys the support of the business community for the reasons that I've enumerated earlier — the fact that they on balance
[ Page 7550 ]
receive a significant benefit as a result of harmonizing the HST.

Perspective here, of course, is important, because when I first got elected in 2001 along with our government and we formed government for the first time, we inherited a general corporate tax rate from the opposition NDP that was at 16½ percent. Over the years we have marched that rate down to 10 percent, with our friends opposite voting against every one of those reductions, to the point where today we do have a 10 percent general corporate tax rate — one of the lowest in the country.

Importantly, the increase that we are putting through on July 1 of next year is timed to come into effect at the same time the federal government is reducing its share of the general corporate tax rate by 1½ percent, which means that the net change for B.C. businesses will be a half-percent increase — something that the business community has widely advised me is certainly manageable from their point of view.

But the small business tax rate is important too. You know, small business, as frankly both sides of the House are fond of pointing out, is the engine of our economy. Our small business approach in British Columbia is that we want to see our small businesses become large businesses.

Again, when I got elected in 2001…. In fact, in the late '90s while the Leader of the Opposition was actually the chief of staff to the government, British Columbia had an almost 9 percent small business tax rate. That rate today in British Columbia is 2½ percent, the third-lowest in the country.

More importantly, we said that we want to make sure that the threshold for what defines a small business is changed. Again, in 2001 the threshold was that only companies that had income up to $200,000 could qualify for that lower small business tax rate. We increased that to $500,000 so that in British Columbia a company earning up to $500,000 is considered a small business and will benefit from the third-lowest rate in the country.

[1510]

Our commitment going forward is that we will make no change in the small business rate. We will not continue with the planned further reduction we were going to do on April 1 of next year to reduce that rate to zero. Again, we are going to make sure that we balance our budget in 2013-14 as we've committed to do and that we do that in a responsible way.

As I discussed earlier, the independent panel pointed out what the impact on average families was, but they also pointed out — and we've also pointed out — that every family at every income level is better off under a 10 percent HST than they are under 12 percent PST plus GST. What you'll hear from the opposition and what I hear during question period every day is that they'll sort of scour the landscape looking for examples of where someone isn't better off. So they'll talk about someone that needs to get their roof replaced.

Well, I acknowledge there are times when you're getting your roof replaced, and we should acknowledge that under HST, even at 10 percent, that will have an additional cost for families. That's something we should be very upfront about. But what they often forget to talk about is where families benefit from a 10 percent HST. All clothing is now going to be cheaper — not 12, but 10 percent. All electronics — the iPads, iPods, whatever folks are buying, big-screen TVs — will now be 10 percent, not 12 percent. Clothing — sorry, I mentioned clothing. Furniture will be 10 percent, not 12 percent.

More interestingly, buying new and used cars. If you're buying….

Interjection.

Hon. K. Falcon: I appear to have the attention of the member for Yale-Lillooet. He should listen to this, because I can tell you in rural B.C. where they're buying pickup trucks…. Under the NDP, they introduced what they called the luxury tax of 3 percent. Every vehicle being sold over $30,000 was considered a luxury in the NDP world. When we got elected, we moved that up to $55,000 because we felt it's not a luxury to be paying $30,000 for a new car. So we moved it up to $55,000.

Under 12 percent HST, the luxury tax is gone. Under a 10 percent HST, if you're paying $60,000 to $65,000 for a new vehicle, you're paying 10 percent instead of 15 percent under the PST-GST luxury tax option that the NDP want to go back to. That is a saving of over several thousand dollars for families. That is an example you can look for on the benefit side.

I acknowledge that you can give examples. I know a cup of coffee will increase by 20 cents or so. I know that a fast-food meal will go up perhaps 80 cents on a typical $8 meal even under a 10 percent HST, but there are significant benefits — $1.7 billion worth of benefits every year to families in lower prices as a result of a 10 percent HST, instead of going back to a 12 percent PST-GST.

It is important — you hear a little bit of laughing on the other side — to understand the totality now of the NDP agenda as we understand it for our small business community. One, as the Leader of the Opposition pointed out when he was running for leadership of his party, he wants to roll back all the business tax rates to 2008 levels. So let's recap what that means. That means an 80 percent increase in the small business tax rate. Two, it means an increase in the general corporate tax rate to 12 percent. I'll give him a pass on that because we're doing the same thing, as I pointed out.

Thirdly, he wants to bring back the corporate capital tax. If anyone can remember that, that was the biggest red flag to investors in the 1990s when they brought that
[ Page 7551 ]
in. It scares away capital faster than almost any other tax change you can talk about. It's such a bad tax that the federal government actually provided transition dollars to provinces like British Columbia and Ontario and others to move and get rid of that job-killer tax called the corporate capital tax.

The final piece of the HST — I called it a trifecta of economic damage. But it's actually a quadfecta, now that I think about it. It's to go back to a PST-GST at 12 percent and hammer the small business and large business sector in British Columbia. The one huge benefit of HST is that all those input tax costs, all that invisible PST that they are paying — whether it's on purchasing vehicles, repairing vehicles, their legal bills, their heating, their electricity charges or whatever it is…. All of those invisible PST costs which were passed on to their customers in the form of higher prices are now gone. They're gone.

If you accept that business probably passes on additional costs to consumers, I guess you've got to accept the argument that when they get a benefit, they're probably passing on savings to consumers too. That's really one of the significant benefits.

[1515]

As I start to come towards the end of my remarks, I want to recap some — what I call — uncomfortable NDP facts with respect to the debate over HST at 10 percent or going back to a 12 percent GST plus PST, and that is this. Employment has increased 1½ percent in the period since the HST's introduction compared to the same period prior to its introduction. That's the job creation that they keep laughing at, but it's actually important to families to know that job growth is going to happen.

Second uncomfortable NDP fact. Housing starts have grown 11.9 percent since the introduction of the HST when compared with the same period prior to the HST. This gives B.C. the second-fastest-growing housing starts out of the ten provinces. I say that because I know we're probably going to hear how apparently the housing industry has been devastated.

Table A3 in the 2011 budget. I keep recommending the members opposite look at it. They keep forgetting to. But I'll remind them that it summarizes all taxes paid in British Columbia, whether it's personal income tax, child benefits, property taxes, consumption taxes, MSP premiums. British Columbians are still ranked second-lowest overall tax rate in the country, right behind Alberta.

British Columbians are still well ahead of where they were when that Leader of the Opposition was actually chief of staff under the NDP government of Glen Clark in the 1990s. I'll give some examples. I like examples.

A senior couple earning $30,000 in 2001, in the last year of the NDP government, paid $3,391 in total taxes, under the burden that I just mentioned — the total tax burden. In 2011, under our B.C. Liberal government, that same senior couple earning $30,000 is now paying $2,417, a 29 percent reduction — almost $1,000. A family of four earning $30,000 — again, low-income family of four, earning $30,000 — paid $3,739 under the previous NDP government. Today, under a B.C. Liberal government, $2,087 — a 44 percent reduction. On and on I could go.

I do think that in a debate like this it's probably better to listen to the job creators of our province, and I want to quote from some of them. Mark Startup, the president of the largest representative of retail outlets in the province, Shelfspace B.C. Here's what he says about his members, retailers across the province: "They liked harmonization. They like the simplicity. It saves them time and money. All of those attributes of the HST we heard about actually play out for the retail community. So what happens this week is that the acceptance of the retail community of HST gets even broader as a result of bringing the rate down to 10 percent by 2014." By the way, that's 93 percent support among Shelfspace B.C. members at a 10 percent rate.

The Canadian Federation of Independent Business, the voice of small business across the province. Here's the quote from Laura Jones, who is their vice-president for western Canada. "'I think it's good news, and we can live with this,' said Laura Jones, the vice-president for western Canada. 'I think it will sell the HST, and that's good news for consumers, business and good news for the province.'" That was in the Times Colonist on May 26, 2011.

B.C. Cattlemen's Association, the ranchers of our province: "We've noticed that under the new system our accounting is easier, and we're eligible to apply for a refund on all of the items we use on the ranch. Under the former PST-GST system, agriculture businesses were exempt from PST only on tax items that were on an approved list. The old PST list didn't include everything that ranchers need to conduct business. Even some types of farm tractors weren't eligible for exemption." That's Kevin Boon, the B.C. Cattlemen's Association general manager.

On and on I could go. Forest industry, mining sector and on and on it goes. Why does the business community, large and small, say this? Because under the NDP's preferred approach of going back to a 12 percent PST plus GST, if you've ever run a business, as I have, you have to understand the joy people have to go through in doing the paperwork associated with the PST, then the paperwork associated with the GST, then dealing with tax auditors from the PST and the GST departments. To go back to the NDP's preferred approach, we're going to have to do some changes — not just go back to a higher rate, but we're going to have to spend about $25 million hiring back and equipping a new PST office.

[1520]

We're going to have to rehire 300 tax auditors in the province at a cost of $35 million a year so that we can
[ Page 7552 ]
then reimpose all that great joy that small business enjoys when they're having to deal with the paperwork and auditors from a PST and a GST system, and again we're going to have to do it at a higher 12 percent rate.

Madam Chair, I can tell you that everything I heard from families across British Columbia in the telephone town halls that I participated in and the meetings that we have held was very clear. They want government to lighten the tax burden on British Columbians.

It's why we have marched down the personal income tax rate by 37 percent — a 37 percent reduction since 2001. Those members opposite voted against each and every one of those reductions.

It's why we took the general corporate tax rate from 16½ to 10. It's why we took the small business tax rate from 4½ to 2½. It's why we have constantly tried to reduce the regulatory burden by over 40 percent for small business in the province of British Columbia — to ensure that we have an economy that is saying to small business: "We want you to invest; we want you to grow; we want you to hire; we want you to have every best possible opportunity when competing with the other 80 percent of Canadians that are operating under an HST but also, more importantly, with the 140 countries around the world that are competing with a value-added tax which is identical to the harmonized sales tax."

There's a reason why there are 140 jurisdictions around the world that utilize an HST or a value-added tax. It's because it is more sensible. There's a reason why 140 jurisdictions…. Not one of them has gone back to the NDP's preferred approach and reintroduced or introduced a retail sales tax like the PST in the last 35 years.

There's a reason: because they make no sense. The last jurisdiction that did it in 1975, Barbados, got rid of it a year later because it made no sense for Barbados. It makes no sense for modern jurisdictions, for modern taxation policy, for economies that want to see their economies grow.

Finally, I will say this. I will talk for a moment about the restaurant sector. I have been inundated in the last number of days with calls from members of the restaurant sector that are huge supporters of the HST. I know that the NDP opposite will talk about the lobbyist organization for the restaurant association.

Interjections.

Deputy Speaker: Minister.

Members, I need to be able to hear the speaker.

Hon. K. Falcon: I know that they will bring forward the voice, as they should. I have no problem with the lobbyist association for the restaurant industry.

But Madam Chair, I want you to know this. Whether it's small family businesses; whether it's chains like Cactus Club, the Keg; whether it's high-end restaurants like Gotham or Shore Club or others, I have heard from restaurant owners across the province that have talked about how it is a benefit when they have a growing economy and growing jobs that are going to be able to give people the opportunity to go and take part and shop in the restaurants and buy food.

I can tell you this. They get how important it is. When you put $1.7 billion in purchasing power back in the pockets of British Columbians every single year with a 10 percent HST, that is $1.7 billion that finds its way back into the restaurant sector, into the retail industry, into small business, big business in every part of the province.

I will say this too. When you invest $200 million in transition cheques to families with children, to low- and modest-income seniors earning under $40,000, that $200 million finds a way back into the restaurant sector, back into the fast-food restaurants, back into the casual-dining restaurants, back into the high-end restaurants. That is good for the restaurant sector, and that is good for the economy of British Columbia.

Let me conclude by saying this. We have listened to the public. We have responded to what we heard from the public. The public asked us to improve the HST, and that is exactly what we've done. In about two weeks….

Interjections.

Hon. K. Falcon: Apparently, the NDP opposite is concerned about the fact that we've listened to the public and have responded to what we heard from the public. I can understand the discomfort of going out there and saying: "We must go back to a more inefficient, higher 12 percent GST plus PST." I can certainly understand that discomfort.

[1525]

But I can tell you this. I'm sorry that they are uncomfortable with that, but that's what we heard from the public, and that's what we're responding with — a sensible, responsible, fiscally prudent plan that marches HST down to 10 percent and ensures that in British Columbia we are going to have a growing, confident, small business and large business economy that generates jobs and incomes for families in this province and ensures that as we go forward, British Columbians will have a modern, efficient taxation policy.

That's what we are putting forward to the public of British Columbia. That's what we are comfortable having the public of British Columbia choose between — a 10 percent improved HST with transition cheques to families with kids, with transition cheques to low- and moderate-income seniors, or we can go backwards to an NDP plan of a 12 percent PST plus GST, one of most inefficient tax regimes possible.

I will allow and I will be confident that the public, fully informed, will make the right decision for the future of the province of British Columbia.
[ Page 7553 ]

A. Dix: Well, the bluster there indicates the desperation of the government. The Minister of Finance — who for eight years was part of a government that opposed the HST, that days before the election told people in British Columbia in writing that they weren't going to introduce the HST — just says: "Trust me. Believe me now."

Interjection.

A. Dix: Of course he does.

He says it's the worst thing that ever happened. It was their policy for eight years. It was the previous Premier's policy for 15 years. They misled people, and everybody knows it.

Then, completely contrary to what they're saying now, in the fall of 2009, the spring of 2010 they said it brings in the same amount of money as the PST.

It's a transfer of $1.9 billion. Well, there they were. They sent out correspondence to people. Even the former Minister of Labour, the parliamentary secretary for something…. Even he was part of a government that sent letters out to people saying: "Oh, this is revenue-neutral. Don't worry about this. This is revenue-neutral." Then it wasn't.

Relevant to this motion, in the spring of 2010 they brought in a budget in this House that said every penny of the HST was required to pay for health care. It's the law of the province. They passed it. They said every penny was going to health care.

No more. That was a dead letter virtually the minute they put it out. Now, if you assume that every penny goes to health care, $1.7 billion less to health care as a result of this motion.

Interjections.

A. Dix: Here they go again. I hear the Minister of Finance yelling out, who said that his controlled telephone town halls were the biggest consultation in history, where he gets to select the questions and the answer.

He calls people up in British Columbia, and he says: "Oh, you're going to pay for this." You pay for the call. The Minister of Finance calls you up; you've got to pay for the call.

He says that this is the biggest consultation in history. Of course it's not. One other consultation was bigger — the 700,000 people in British Columbia who signed petitions against the HST.

Then we had the new Premier. The new Premier said…. Well, what did she say? She said that playing around with this process, promising a rate cut…. And let's face it: nothing the government says on the HST can be believed. Nothing that they say can be believed. But she said in March that playing around with this process by promising, before a referendum, a rate cut would be equivalent to buying votes. She wasn't going to do it.

Then we have this spectacle in the House this week, where the government, desperate to win a referendum, desperate to bring forward a policy that the people of British Columbia oppose, is playing these games again.

[1530]

Well, actually, the people of B.C. are not buying it. They will vote that way in the referendum.

Interjections.

A. Dix: Oh, the minister talks about the polls. Well, I'm looking forward to it. I'm looking forward to the debate on the HST. I'm looking forward to this debate.

On every occasion, the government has misled British Columbians. In the spring of 2009, in the fall…. And nobody believes them now.

It's a motion to deny British Columbians something they worked hard to get: the opportunity to decide themselves on the fate of the HST.

The HST hurts services that didn't pay PST previously. It hurts those industries. It removes from the economy hundreds of millions of dollars that families would be spending on everything from clothes to dinners out to home renovations. According to the government's own report — their own report — it's $1.3 billion from families in the current fiscal year, $1.3 billion from families in the next fiscal year. It's $2.6 billion they've taken out of the pockets of families.

We have to hear the Minister of Finance talk about how people will have more money to spend in restaurants. They've taken money out of people's pockets. It leaves a massive hole in the budget which they are pretending to fill, using every dime from contingency reserves and forecast allowances.

If the B.C. Liberals are re-elected — and let's face it; this is not a likely prospect — you can imagine what they'll do to fill the budget hole. It's what they've been doing for years: increasing MSP premiums — that's what they've been doing — increasing hydro rates, increasing ICBC rates. That's their approach to public policy, and they will be driven to do it over the next few years by the decision we are making today.

From the beginning of this mess we were told things that weren't so. Now the chickens have come home to roost, and we get this last act of desperation from the government. The bottom line is this. We can't trust a word the B.C. Liberals say on this issue.

A month ago we talked about what the Premier said two months ago — that she would never do what we're debating in the House today. She wouldn't do that because it would be like buying votes. What did she say at the same time? She said that the referendum campaign would be conducted like a provincial election.

Well, in a provincial election the government can't use public funds to mislead the voters with their own
[ Page 7554 ]
money, as the government is doing with TV ads. In a provincial election people have to declare their contribution to the process. In a provincial election there are limits on both sides to ensure fairness. Broken promise No. 2 from the Premier. She hasn't been there on this issue very, very long.

What else? She didn't stop there. She said: "When it comes to the HST, the public wants straight answers from the government, not a position that shifts without warning. This is the kind of doubletalk that led to the breakdown in public trust…government must have to be successful." It's more than ironic that the most devastating arguments against this motion and against this HST are provided by the Premier herself.

We know and the government members know why the HST plan could not have been revealed before the 2009 election. People already had enough of the regressive tax-shift program of the B.C. Liberals. Even the Premier has called the B.C. Liberal assault on the truth in that election campaign sneaky — sneaky but also very unfair to the families who are now faced with the burden of the HST.

Every opportunity to avoid, to delay, to obscure, to mislead the real issues has been brought forward in this campaign on the HST, in this government effort on the HST. The massive tax shift, the reduction in purchasing power that hurts local business and the cuts to vital services that will follow the next big budget hole — on all of these counts, the families claimed by the new Premier as her chief concern will in fact be her chief targets. What the HST is about is making families pay more and get less.

[1535]

Here's what the government has told us about the HST. It saves business, big business, $1.9 billion a year. That's what it's all about — another tax shift on the part of the government.

Surely the government, the ministers in this House have the obligation when they're talking to the public to tell the truth about what's going on. Even the $650 million in "proposed temporary corporate tax increases…." This is just too much fun for words, what they said about these things before, when I proposed them. They called them 18th century socialism. But now that risk is the biggest tax shift in history — a tax shift onto families and away from big business. They're doing everything they can to save it, and now even this is in play.

What else did they do? What else are they doing? They're increasing taxes on small businesses. That's what they're doing. They're not going ahead with increases on small businesses the minister talked about earlier. The minister talked earlier about proposals that he suggests we have. Of course, he wasn't accurately reflecting those proposals outside the House. I could say directly what he was doing, but I will say this. We — myself and the member for Vancouver–Mount Pleasant — met with a group of small businesses yesterday, and small businesses again are getting the short end of the stick.

If you are a restaurant and you have been punished by the HST, and they have…. According to the Restaurant Association, if you lost 15 percent of your business because of the HST — and they have — now as a small business, in addition to that, as a restaurant you are effectively getting a small business tax hike from the government. This is a double whammy that's bad for the economy.

What do we have, in short? The continuation of a common thread under the B.C. Liberal government — a tax shift onto families that continues every day. On January 1 of this year there was an increase in MSP fees and an increase in long-term care fees. MSP premiums, long-term care fees — 18 percent over three years in MSP increases after a 50 percent increase before.

On that same day the same businesses that have benefited, according to the government, to the tune of $1.9 billion as a result of the HST and the same families who have paid the price for $1.3 billion as a result of the HST…. What happened on January 1? The government did it again. They cut taxes for business. They cut taxes for big business, and they increased MSP premiums for families.

This is a common thread that has gone through ten years. The minister says: "Trust us." That's what he says. He says: "Trust us." I heard him on CKNW this weekend. He was phoned by someone, and someone said: "Why would I possibly trust anything you have to say about the HST?" You know what the minister responded? He said: "Well, take a look at our fiscal record." The fiscal record is the cause of where we are now.

So $495 million — that's what the Minister of Finance said that the budget deficit was, and not a penny more. That's what the Premier said. That's what all the Liberal MLAs said the deficit was prior to the last provincial election. It was the most massive mistake in the history of budget-making in British Columbia. That's why they brought in the HST — to cover up that mistake. So when we hear this from a government that has failed us so utterly on these issues and then we find out that in the bargain, families will have to pay more again but get less….

That's why we've raised the issues we have in this session. That's why we've raised the issue of the suffering of patients because of Liberal orthotics policies. That's why too many rural communities have lost their schools. That's why the working families of the Tri-Cities are still waiting for the Evergreen line.

[1540]

They pay more, but they get less. This motion drives that Liberal policy further and inflicts more financial pain on B.C. families, and again, the truth will not be redressed by the Premier of British Columbia or the Minister of Finance or any other Liberal. This has been a
[ Page 7555 ]
ten-year project. The rich have got richer, the poor have got poorer, and the middle class has been squeezed, as has small business.

This is fundamentally what the HST is all about. It moves $2 billion annually from household budgets, from individual pocketbooks, from their earnings to the business sector. This is after ten years of the action we've been talking about, when British Columbia has suffered the lowest rate of economic growth under any government in my lifetime, a lower rate of job creation than the 1990s, a government that inherited a balanced budget and that has run a deficit over ten years — over ten years, hon. Speaker.

This is their sad record, and we are getting more now. The people of British Columbia want change. That's why they signed petitions against the HST, and that's why they're going to oppose the HST in the coming referendum. Regardless of what the government pretends, this motion does not alter that fundamental reality. Rather, it was written to further mislead us about that reality.

The expanded tax base that is at the core of the HST remains. A middle-class family replacing the roof on their house will pay thousands more, and the Minister of Finance, of course, dismisses their concerns. After the referendum the choice on many items will be a choice between not 10 and 12 percent but zero and 7 percent on a variety of items — on restaurant meals, on coffee, on vitamins, on health products.

The added cost burden on families has been significant, and over the last couple of years…. You take a family, $50,000 a year each, and we are talking about thousands of dollars of additional taxes that they've paid to subsidize a tax shift put forward by the government. This tax shift will continue. And now we have this making it up as they go along, this spending of contingency funds, this spending of forecast allowance that we've seen over the last few years to try and make the Minister of Finance's numbers seem right.

The fact of the matter is that since the last provincial election, the government has done nothing but the HST. They've done nothing but the HST, and here we are back again, with them bailing water, trying to find some possible fix so that they can deliver on this commitment to their friends, paid for by the families of British Columbia. The cost to citizens has been significant.

This, at its core, is a government that's out of ideas and out of gas. It's a government that has no credible answers to its own self-inflicted deficit, except to make the problem worse, to make promises about the future that nobody believes. This is the fact: another exercise in damage control. That's all this motion is. It's why we oppose it here, because we believe that the coming referendum is a choice between the PST and the HST; a choice between a tax regime where families pay more, the HST, and a tax regime where big business pays its share under the PST. Hon. Speaker, that is the choice.

That is the choice in front of us. That's why 700,000 British Columbians spoke so thoroughly, so convincingly, forcing the government into a referendum they didn't want. Now we're at the stage of this referendum where we have the government making one last, desperate plea. Nobody believes them. This motion is the culmination of a failed policy. It is not a fix; it is not a solution. It creates new and significant problems, as pointed out by the new Premier herself when she talked about $1.6 billion in cuts to health care as a result.

There will not be the promised jobs from the Liberals' HST. There will not be the promised price reductions from the Liberals' HST. There will not be the boost in small business from the Liberals' huge shift in who pays in taxes. Instead, we are seeing new pressures on small business, new pressures on families.

I will vote no to this motion for three key reasons, as I've said. The government is not to be believed. This is a major tax shift onto families, and it reflects a government whose fiscal incompetence has left our economy at sea.

[1545]

These are three key reasons to vote against this motion. To give people confidence.… Those are the things….

Interjections.

A. Dix: Oh, the ministers across there and the parliamentary secretaries across there…. I know that the government needed more parliamentary secretaries. That's clear after this debate. That's why we increased the number of parliamentary secretaries. It's clear that we needed more of them.

But let me tell you, hon. Speaker, what we in this House will commit to. We are opposed to this HST. We're committed to a government that says there'll be no more snow jobs and smokescreens and doubletalk. We are committed to a greater measure of fairness with a PST system that will be better for families and for small business.

We are committed to a health care system and an education system that's improved. We haven't given up on public health care. We haven't given up on public education. We believe that if we have a government that believes in those institutions, we can make improvements and that the best days of health care and education in B.C. are ahead of us, not behind us.

We believe that the growth in inequality under this government is caused by the very measures such as the HST. The inequality that has grown under this government — the highest child poverty rate for seven consecutive years now in this province, the highest child poverty rate in the country….

Interjections.

A. Dix: Oh, the government doesn't believe Statistics Canada now, hon. Speaker.
[ Page 7556 ]

The highest level of absolute inequality in the country — the top 20 percent against the bottom 20 percent. This is the reality, and we don't think growing inequality is inevitable. We will fight that as a government if we are elected in British Columbia.

We are for a tax system that serves as a foundation for economic and social progress, that serves both business investment and the needs of working people and families. That's why we plan and will vote to defeat this motion. That's why we will campaign to defeat the HST in the coming referendum. That's why.

It is time to end the deception. It is time for a new government that believes in British Columbia again, that doesn't mislead them again and again. It is time to stop a government, to end a government that has every day increased costs onto families, every day favoured big business over small business, every day changed its story on this tax to suit circumstances and now is desperately trying one last play.

The people of British Columbia have this debate in their hands. As much as the Minister of Finance would like to take it away from them, they have this in their hands. We are going to fight to ensure that the HST is scrapped. We are going to fight to ensure that this motion, which continues the deception of voters in British Columbia, is defeated.

We are going to fight on behalf of the people of British Columbia, who have been let down by this government, let down by a government that misled them on this fundamental issue of taxation, with the HST — fight against the government and bring change to British Columbia for progress, for fair taxes, for an economy that works for everyone, for a government that speaks for rural B.C. as well as urban B.C., for a government that believes that public services are worth defending and worth improving.

That's what we stand for, and we're going to lead that fight in this coming referendum, and we're going to lead that fight whenever the government decides to call a general election.

Deputy Speaker: Recognizing the Minister of Transportation and Infrastructure. [Applause.]

Hon. B. Lekstrom: Thank you to my colleagues across the way for that standing ovation. I didn't know that….

[1550]

It's interesting. What we're talking about here is a motion that's before us, a motion that is talking about if the people of British Columbia, under the right they've earned to have a vote on the HST, determine that they want to keep the HST. That may very well be the case. It may very well be the case more so today than it was a week ago, a month ago or six months ago.

The issue is that it appears to me that the speeches I've heard thus far from the opposition are concerned that the public, getting the information about the HST, may very well determine that they would like to keep it. The discussion we have to have today is not about the issue of were people upset or not when the HST was presented. I think every British Columbian would agree they were. The ones I've talked to — and I've talked to not only my constituents in Peace River South but around the province — were extremely concerned about how a major tax policy shift like this could be brought forward without any dialogue with the people of British Columbia.

I think it's fair to say the government has accepted that and taken full responsibility. It was a mistake. It isn't often in my study — and it's only been probably 25 years where I've paid attention and studied politics — that I see governments stand up and say: "You know, a mistake was made." In fact, a mistake was made in how this was presented to the people of British Columbia.

I've had numerous people who were upset about that, but what they've talked about is: what is this tax about? They had many questions. They asked me. I'm sure they asked members of the opposition and my colleagues here, and that information began to get out there. I don't think anybody on either side of this House goes out and tries to misinform anybody. I think they are honestly — and I believe this — talking about what they believe in their hearts are the true facts.

The reality of what's going on right now, both on the pro side and the anti side of this tax, is that we have to ensure that the factual information goes out there. I'm okay with that. What we weren't okay with, and what many of the people I spoke to who were adamantly opposed originally were upset with, because some of the information they heard was so far out there, nobody….

It was virtually unbelievable, but human nature is that if somebody tells you something that the government has done and then the government — regardless whether it was a New Democrat government in the 1990s, Social Credit before that or the B.C. Liberals today…. If somebody hears something, it seems that if government comes to correct that and says, "Actually, no, those aren't the numbers, and those aren't the facts," human nature is to disbelieve government.

It's a sad situation in society today not just in British Columbia, not just in Canada, but really around the globe. If there's one thing we can do together from both sides of the House, it would be to build that trust back, and we can do that together.

The member opposite spoke about the telephone town halls — the Leader of the Opposition. I can tell the member that going into these…. I was part of those along with my colleagues. I didn't know what to expect going into those. I had never participated in one before.

So the first one we did looked after the northeast part of the province. We had 5,900 people participate in that
[ Page 7557 ]
telephone town hall. On an average, they stayed on the line about 21 minutes. It was without question one of the most effective ways to communicate and talk to people in British Columbia that I've ever been part of. Not only was it a great system that we had to discuss this issue, but I would expect that in the future, we can use that same system again to discuss other major issues that this province deals with.

You know, a lot of this has been about misinformation. There are 1.1 million low-income British Columbians — about 20 percent of those are seniors — who receive their credit cheques today — the HST. I'm not talking about the GST credit cheque, but the HST. That's helping. Without question, it's helping these families.

The motion today is about moving from the 12 percent…. We're talking really only about the PST portion, the provincial sales tax portion, taking it from 7 percent down to 6 percent on July 1, 2012, and then taking it again another percentage point from 6 percent down to 5 percent on July 1, 2014.

I can tell you that in a region I represent, being the South Peace up in northeastern British Columbia, we're a border community. We have always been challenged with being a border community, because we have people who can go across the border and purchase goods without paying the provincial sales tax. They can bring those back into the province and think they've saved money.

The reality is nobody saves when that happens. Whether you're in the Kootenays or whether you're in the Peace, our taxes are what pay for the services we all want and enjoy in this province. It's very rare…. I won't say "never," because I have had in the last ten years probably two or three people, out of the thousands I've spoken with, come in and tell me that we provide too many services. It's been just the opposite. Most people come and tell me about if we could spend more money doing this, it would be a better service. If we could spend more money on my roadway, I'd have a better road. If I could spend more money on health care, I'd have better health care.

[1555]

The reality is, whether you're a New Democrat in opposition, whether you're a B.C. Liberal in government or, more importantly, a British Columbian, it costs money to deliver the programs we all want and enjoy. The reality of saying that I want more services, but I want to pay less taxes…. I don't think this is going to come as a shock to anybody. That's an unrealistic expectation. It just won't work.

We have actually, I think, along with the government…. I'm going to give kudos to the employees. Every government employee goes to work not on behalf of the government side or the opposition side. They go to work each and every day on behalf of British Columbians. They provide every service that we provide in this province on behalf of government, and they do a great job. But they're squeezed, whether it be the wages…. We've seen a zero mandate over the time. They've been part of trying to resolve the economic concerns and crisis that not only British Columbia has faced, somewhat, but the globe. So I want to say thank you to them.

What I do want to make sure, as we entertain discussion on this motion, is that what we're talking about is not whether we're keeping the HST or whether we're not. That's a decision that the public of British Columbia earned their right to have a say in. They made history not only in British Columbia but in this country, and they should be very proud of that. I would think that if there's been a lesson to be learned not only by our government but by governments across this country, it would be the one very important fact that the reason governments are there is the people that they represent, and this is a great example of that.

The telephone town halls, I think, are very good. I talked about 7 percent down to 6 percent down to 5 percent. I want to make sure people understand that. I'm talking about the provincial sales tax portion of the HST. For the better part of 20 years — I've been elected probably close to, I guess, 18 years now going back to local government and then having the honour to serve in this House for ten years — we have talked about: how do we lower the PST? How do we compete with Alberta?

Well, this actually does that. It makes us have the ability to compete with our border communities, whether it be business or whether they can write down the input tax credits and get that back. It levels it. So whether you're a B.C. contractor or an Alberta contractor, you now are competing on the same playing field with each other, something we've worked at for a very long time — wasn't achievable. The HST actually does that as good tax policy.

The other thing I heard loud and clear, and I've heard the opposition members speak to this, and rightfully so…. They said: "You know, there's an imbalance here. There's a major shift. The HST is on the consumer, and big business is getting the break." The one thing before I go into my reasoning on this explanation…. I want to point out that governments don't create jobs. Government creates an investment climate where the private sector invests their capital. That's who creates the jobs for ourselves and our families and our children growing up.

Now, you have to find the proper balance so that we can maintain the quality of life, look after our environment, look after what I consider without question not only the most beautiful province in Canada but the best place in the world, and we're going to do that. But not only are we saying that should the people of British Columbia decide to keep the HST, and if that happens, then this motion kicks in, but we will go from 12 percent to 10 percent by 2014, something that makes every family in this province whole under the HST, something very important because we hear different sometimes.
[ Page 7558 ]

There's also a 2 percent increase in the corporate tax rate, something that, without question… I think people said: "How can a government that is there to cut taxes want to raise taxes?" I think what this shows is a true rebalancing. It shows that what we heard, not only on the telephone town halls but I'm sure each and every member here has heard, is that it seems to be inequitable.

Right now, should this tax proceed and be maintained in British Columbia, the shift is from the consumer, as I said, and the large corporations are getting the break. I think you have to go back to what I said originally. I want corporations to be able to make money so they can turn around and reinvest, which creates additional jobs, but I also am extremely cognizant of the fact that we have to have that balance. So the 2 percent increase in the corporate tax rate I think is a very, very good move in trying to achieve a full rebalancing of what takes place.

The other one I want to speak about is that as we move forward on this, we can never lose sight during this debate that this is not about whether we keep the HST or we don't keep it. As I said earlier, the people of British Columbia will make that decision, and they will make that decision based on factual information from both sides. They will weigh out what the pros and the cons are, and they will make their decision.

[1600]

If their decision is to keep the HST, then that's what this motion addresses.

I do understand that the opposition is adamantly opposed to the HST. I accept that. They're out there. They're campaigning saying: "Look, we're on the anti side of that." We're on pro side. But I am somewhat confused that we're debating a motion that really is about after the people make their decision. We're saying: "If they decide to keep it." The opposition, you know…. I'm looking forward to listening to more debate.

If the decision is made that British Columbians say, "We're going to keep the HST," I think this is a great move. I think moving the rate from 12 percent down to 10 percent is an appropriate move. I think putting the transition payments for children under 18 years old, for families, as well as low-income or moderate-income seniors who earn up to $40,000, putting $175 in each of their pockets as a transition until the first 1 percent rate reduction takes place on July 1, 2012, is important. We heard that there's a hardship. The Premier has said, "We're going to make sure that we mitigate the impact on families," and that's very positive as well.

[D. Black in the chair.]

I won't take up a great deal of time, other than to say that the motion we're debating is a positive motion. I hope we don't get caught up in: "Is the HST going to stay? Is it not?" As I said, that's not government's decision; that's not the opposition's decision. The people of British Columbia will make that choice, and I'm looking forward to whichever choice they make, because without question, you know, there are impacts either way. But we will do this.

What I am going to do and ensure — hopefully I share this with every member in this chamber regardless of the side that you're on — is that as we move forward, I want people to have an informed decision.

An emotional decision is an expensive decision. Without question, this was an emotionally charged issue and still is to some degree. I do think that emotion has now shifted, I think, to a great thirst for knowledge: "What does this tax mean? What does it mean to my business? What does it mean to me as an individual? What does it mean to my family? Also, what does it mean if I decide to keep this tax with the changes that are proposed in this motion?"

So, hon. Chair, with that, what I'm going to ask is not only of the opposition but of all British Columbians. As we move forward, through this discussion and the debate in the coming weeks and before you cast your ballot, ask the questions. Ask tough questions. Get answers from your MLAs through their offices. Go to the website.

You will get a mailout that's going to take place. It will have both sides of this debate. All I ask is that before you cast your ballot, make sure you don't cast your vote based on emotion but on factual information. Then, we will all be a better and a stronger province.

B. Ralston: The previous speaker would have us believe that we are entering a rational Socratic dialogue here in the Legislature and in the public, but that's not the way that the Minister of Finance has characterized the debate. That's not the way the ads that are being paid at great public expense characterize the debate. Not at all.

In fact, really the gist of this debate, when it comes down to it, is from the government and from the Minister of Finance and from the Premier…. The Minister of Finance was asked a very pointed question on radio just yesterday. What assurance does the public have that these positions that are taken on behalf of the government…?

And this is just the latest in a series of evolving positions. I'll go through a few of the positions that they've taken as to why this is supposedly a good thing. When those positions fail or are rejected or the facts just don't support them, they move to other positions.

Really when it gets down to it, the Minister of Finance says: "Well, look at us. Trust our record. That's your assurance that you can accept what we say and therefore support our position."

[1605]

In fact, there's just no basis, looking back on the debate since July 2009, on which one can accept what
[ Page 7559 ]
any spokesperson of the government says. I think that's really the reason that no one in the public trusts what's being said in this debate by the government. Not at all.

Of course, if we begin with the election, as everyone knows and is well documented, the B.C. Liberals were asked directly in the campaign whether they would implement an HST. A couple of organizations did that, notably the Restaurant Association. They responded in writing and said, no, they would not. So there was a direct misrepresentation in the course of the election. They said they wouldn't do it.

They have used other justifications. The previous Premier — and this is all about saving his legacy — said that this was the single best thing that could be done for the economy. He pointed to the number of jobs that would be created. But when you listened to the Minister of Finance this afternoon, the idea that the HST will bring more jobs to the province has completely fallen away.

They don't rely on it as an argument. They don't believe it any more, and of course, the reason they don't is because there's no support for it. There never was, but they strongly and fervently insisted upon it in the early days. Yet now they realize the reality, and that's fallen away.

If someone was to go back to the debate in August, September, October, November 2009, this was a very fervent argument that was put forward by the B.C. Liberals. Now it's not one that they rely upon at all.

In fact, they insisted upon this. The then Minister of Finance, now the member for Vancouver-Quilchena, commissioned a report from Mr. Mintz, an economist at the University of Calgary, who said — in a ten-page report he was paid $12,000 to do — that in his analysis, the HST in British Columbia would create 113,000 jobs over the coming ten years.

Now, you have to put that into context. In the British Columbia economy right now, there are approximately 1.8 million full-time jobs and 500,000 part-time jobs, for a total, obviously, of about 2.3 million. There are about 200,000 people in the labour force who are unemployed. The issue becomes to look at that and assess the reality of that claim.

Later on, in the fall of 2010, the previous Premier, Premier Campbell, at the Union of B.C. Municipalities, said in his speech to that group — and that's a group from across the province of councillors and mayors: "Well, let's suppose it's not 113,000. Let's suppose it's just 50,000." Let's just suppose.

Obviously, knowing the previous Premier and his tendencies towards policy analysis, he knew that the 113,000 number could not be sustained. So the number dropped from 113,000 to 50,000 at that point.

What we hear from the Dinning panel is that after their assessment, they now project — on a different analysis, although it's not clear how they come to this conclusion — 24,000 jobs over ten years. So 24,000 jobs in an economy of 2.3 million. Any economist will tell you, and I've spoken to one or two about this, that you would not be able to assess the cause and effect of that relationship.

In other words, the numbers that are being hypothetically spoken of are so few that you could not reliably attribute that to the HST or just a statistical variation or even just a random occurrence.

Really, that's why, when the Minister of Finance stands up here today, he doesn't mention that at all. The jobs argument — the jobs, jobs, jobs argument that we heard in 2009 and 2010 — is gone. The reason it's gone is because there was never any basis to it. It was misleading. That's why they've dumped that argument.

[1610]

That's a reason not to accept what's being said now, because what was being said, with great emotion and great fervour, has not been supported by reality at all.

What else did they say about the HST? Well, the claim was that it would…. This is what the Minister of Finance said in March 2010. He persisted in this position for a year and a half, which was that the HST would raise about the same amount of money as the PST. Now, he wouldn't always call it revenue-neutral, but if one tax is going to raise the same as the other tax, that's pretty close to a definition of revenue-neutral.

But back in August 2009, I didn't accept that. I issued a news release based on a C.D. Howe study which said that an HST would mean an additional $4 billion in revenue from taxes over three years. The C.D. Howe Institute had stated in their report: "B.C. would raise more revenue if they applied an HST with the same basis as the GST at the province's current rate of 7 percent."

I got an immediate response from the C.D. Howe Institute economists that I didn't know what I was talking about, that I was wrong and it would be likely revenue-neutral. The study that they'd done was Ontario. B.C. was different, and there was very little likelihood that it would be anything other than revenue-neutral.

There's an article by Ben Dachis and Alexandre Laurin who said, and I quote: "Looking at the details of the B.C. plan shows that harmonization may be very close to revenue-neutral." The government likes to look to the C.D. Howe Institute from time to time and, indeed, Mr. Richards, who was on the Dinning panel, has done studies for the C.D. Howe Institute from time to time.

That argument that I put forward was very rapidly dismissed. The Minister of Finance for a year and a half repeatedly said: "Oh, no, no. The HST and the PST will raise the same amount of money. NDP Finance critic, you're wrong." Of course, now we hear from the current Minister of Finance: "Well, it's all different. We just didn't read the small print in the budget, and we just didn't understand what the other Minister of Finance was saying."
[ Page 7560 ]

He said persistently, for a year and a half, consistently: "I always said the HST would raise the same amount as the PST." But no. Can't rely on that, apparently. Just one more reason why one should not trust what's being said now because that position, from the previous Minister of Finance, from Liberal government members in their communications, in their public speeches…. They all said that it would just raise the same amount. It wasn't a tax grab. Raise the same amount. You don't know what you're talking about.

Now that's all reversed. We have a different position. Does that breed confidence in what's being said now? I would suggest not. No one, given that claim about jobs and that claim about revenue neutrality, will believe that.

What else did they say? Well, they even said it would lower prices. They even said it would lower prices, that price…. It would be better for business, and those price reductions would be passed on. But what did they cite in support of this? They want to have a rational, dispassionate debate, evidence-based, but they don't provide any evidence. They just provide assertions, rhetoric, ideology, assumptions, but no facts.

In the September 2009 budget update they did cite a single paper, a paper written by a Mr. Michael Smart, who is an economist at the University of Toronto, and he looked at the…. It's called Lessons in Harmony, a C.D. Howe Institute paper.

He looked at the experience in the Maritimes. What did he say about prices? This is in his conclusion, and you have to look at the context in the Maritimes when it was introduced, because when the Maritime provinces switched to the HST, the provinces knocked 5 points off their PST in Newfoundland and 4 points in New Brunswick and Nova Scotia. So there was a major reduction in the tax itself when it came in as well as an expansion of the tax base.

[1615]

A study done for the Manitoba government confirms that analysis, that that is a unique factor that has to be considered when making any assessment of this allegation that prices went down.

But Mr. Smart said: "Overall, consumer prices in the harmonizing provinces fell with reform, although prices rose somewhat for shelter and clothing and footwear, and that fact tended to make the reform slightly regressive." In other words, it wasn't favourable to low-income people. They paid more. So the policy was slightly regressive — not that price increases were passed on but that it was slightly regressive. That's the only study that they cited and they repeatedly cite and misquote.

They say, "Well, we weren't going to bring it in," but they did; "It's going to create jobs," but it didn't; "It's revenue-neutral," but it wasn't; "Prices are going to come down, and reductions are going to be passed along," and they aren't. What other claims were made in this debate that aren't supported by the evidence?

Again Mr. Smart said in the same paper, the one that they cited in the budget in September 2009, the Lessons in Harmony:

"It's important to emphasize that the increase in investment caused by the HST reform is a short-run phenomenon, as firms have acted to adjust to the new, higher-capital stock that is desired when taxes are lower. Whereas the investment effect is transitory, the effect on capital, stock and labour productivity is presumably long-run and permanent. However, my empirical methodology, discussed below, does not allow these long-run effects to be estimated directly."

So what he says is that there's a temporary, short-term increase in investment. He calls it transitory. One can well imagine that firms, knowing that a new tax regime is coming, might delay investments and make them, and that would cause a temporary bump. That's all he says, but this study is referred to repeatedly by people like the minister in some of his public appearances as proving that what happened in the Maritimes — price reductions were passed on to consumers and investment increased…. That's not what Mr. Smart said at all.

I probably have taken advantage of the situation by actually reading the paper rather than relying on summaries of it, but that's what it says.

When you look at those kinds of multiple arguments that have been made over the term of this debate, we see how they're made with great fanfare and fervour, and when they aren't supported, they fall away. The jobs argument we don't hear about anymore. The revenue neutrality has completely been reversed. That argument was dismissed at one point. Now when it's more convenient to accept it, the reverse is argued — a 180-degree turn on that issue.

When the issue of prices is convenient, the paper of Mr. Smart is referred to, but it doesn't support that position at all. With the issue of investment in the Maritimes, again, the argument is not supported by the paper.

So why would and why should anyone who's been following the debate trust the arguments that are being put forward now? Really, we hear from the Minister of Finance and the Premier: "Just trust us. Just trust us. I mean, look at our record." That record of those statements made in order to convince families and small businesses that the HST is good for them are not supported at all — not one bit.

[1620]

Let's look to some of the other aspects of the fiscal record of the B.C. Liberals. The minister likes to speak about deficits. The B.C. Liberals had the biggest deficit in the history of the province in 2003: $2.62 billion. In 2009 we heard endlessly before the election — it was part of the election platform — $495 million, maximum. Of course, the ultimate reckoning by the Auditor General and the public accounts of the province was a $1.78 billion deficit. According to the argument that's made and we're supposed to accept, and no one does, "That was not known, and it couldn't
[ Page 7561 ]
have been predicted," and therefore they should be forgiven that.

But people remember that, so when the government says, "We stand on our record," it's worth examining that record. That's another reason why no one should accept what's being said about what's being advanced by the government now.

Let me turn now to some of the arguments that are being made based on the Dinning report. The Dinning report posits or claims that the average family will pay $350 more in HST currently. The method by which this was calculated was not released in the study. The sources given were Statistics Canada, B.C. Ministry of Finance and panel estimates, yet Statistics Canada produced a study, a more reliable estimate, using its highly regarded statistical database and economic model.

That study was commissioned by the Times Colonist newspaper and published on June 22, 2010. It claimed the following results: $521 for the average B.C. family; $735 for the average married couple with at least one child; $688 for the average household where income was between $80,000 and $90,000 — this includes many two-income households and single people; $801 for the average married couple with no children, the oldest member between 45 and 64; $173 for the average unattached individual under 25. They don't include major investments, costs associated with housing and major renovations because they are out of scope of the model.

So Statistics Canada — I think, without exception, until some of the recent changes, widely regarded internationally as one of the most authoritative statistical-gathering agencies in the world — says something very different from the Dinning panel. Yet we aren't privileged enough to receive their methodology and the method by which they calculated that. Yet this is the linchpin of what the Minister of Finance says about some of these rebates that are going to be sent out to people, should he succeed in persuading the public to his point of view. So there is, again, a real disparity. It's not supported by the evidence.

The minister who just spoke claimed that he wanted to have this rational debate which is fact-based. Well, there are a number of facts on jobs, on revenue neutrality, on prices, on investment, on the average cost to a family — all of which are fact-based, based in research. Yet none of it appears in any arguments that are being made at the present time, because those are inconvenient arguments. Those are arguments that have been tried with the public. The public has seen through them. They have rejected them, so they've moved on.

What has the government moved on to? The irony, as the Leader of the Opposition said, is that the strongest and best argument — the arguments that are put forward by the Premier herself — is the argument that she said two months ago. She rejected the idea that the HST should be reduced by a point or two, running up to the referendum. People would see that as buying their votes, buying people with their own money.

[1625]

She rejected that. Yet that's exactly what's being done. So once again a position that's taken by the leader of the government, the B.C. Liberal leader just months ago — exactly what she said she scorned, said she wouldn't do — would be attacked, would be repudiated, would be seen through. And that's exactly what the government is doing. So why would anyone believe what the B.C. Liberals are saying now?

I think that one of the strongest arguments made by those who are going to be voting yes in the referendum — yes to extinguish the HST — is that they don't accept what the government is attempting to do, which in the words of the Premier is buy their votes. They're suspicious. They've heard the other arguments. They've all been rejected and fallen away. Now they're resorting to one last round of arguments, throwing all their cards on the table. I just don't see a groundswell of support for what the government is saying.

The other concern that people have is the long-term fiscal implications of this kind of a rate cut that the government now claims to be in favour of. The Premier herself, again, in the same interview, said:

"Cutting the HST by one point is more than $800 million out of the budget this year and every year after that, $1.6 billion for a two-point cut, and we're going to need to ask ourselves where we're going to get that money, because we're going to have to have a $1.6 billion bigger deficit, or we're going to get $1.6 billion fewer heart operations, special needs teachers, school facilities, hospital emergency rooms. I mean, that's where the money comes from, ultimately. So yes, government could cut it, but at what cost to the citizens?"

So two very powerful arguments by the B.C. Liberal leader, by the Premier, against the position that her own government is now taking: (1) that by cutting the rate, people would reject this as buying votes, and (2) the long-term fiscal implications for the services that government delivers, the important services that governments deliver.

Why would anyone trust the B.C. Liberals in this debate, given what they've said about this tax shift onto families and small business from big business, when people examine what they've said about jobs, what they said about revenue neutrality and about it not being a tax grab? They even said that prices would be reduced — what they said about investment. None of it is supported by the sources that they claim support them.

On top of that, you have this position taken in this resolution. The Minister of Finance has said publicly: "Well, this signals legislative intent at this point. That's why I'm bringing this motion forward." But as everyone recognizes — and it certainly has been the history on the other side of the House — should the position change, another motion saying exactly the opposite could be put forward at some future time on two days' notice, debated in a day and a half and the position reversed.
[ Page 7562 ]

There's no permanence to this whatsoever. It's just a trust-me approach, and people do not and will not, I predict, trust the representations that the government is making in this debate based on the record that's been put forward and based on the arguments that have been advanced throughout this debate, which one by one have fallen away or been completely reversed as they no longer were convenient to illustrate the point that the B.C. Liberals wanted to illustrate.

With those comments, Madam Speaker, I will move to a conclusion in this brief opportunity to address the House on this issue. It's clear that the HST is a massive tax shift from large corporations onto the backs of average families and small businesses. The approach that the Liberals have taken with the bribes, the attempt to buy votes, can't conceal the fact that many more things are now taxed under the HST, which is why it's going to cost B.C. families more.

[1630]

That's why B.C. New Democrats will actively be encouraging you to vote yes to scrap the HST in the upcoming referendum.

I. Black: I rise to take my place in the debate on this motion. Let me start with a little walk down memory lane. One of the many benefits of this job is that you get a wonderful series of assignments. One of the assignments that I've had for the last number of years has involved travelling the province and speaking with, quite literally, several hundred small business owners directly through the British Columbia Small Business Roundtable and speaking with literally hundreds of people in a room at a time at chambers of commerce meetings around the province — engaging the individual men and women who comprise our small business community and talking to them directly about a large variety of issues.

I think it's clear to say that the issue that has been most topical in the last number of years has been the harmonized sales tax. The initial reaction that I encountered as I travelled across this great province was one that went something like this: "We think we get it, but we really don't understand why you surprised us."

In the ensuing several months as we've seen the awareness grow in our private citizens and as we've seen awareness grow in our small business community, particularly in our resource-dependent communities, the tone has changed. The tone has become one of: "Look, we're looking past how you surprised us. We're looking past the way that you brought this in. Now we really get it. Now we really, really understand why this is right for the people of British Columbia."

Now, is this perfect? I don't think any tax model is actually perfect. There's never going to be a taxation model that keeps absolutely everybody happy, and if you turn to our small business owners and say, "Is this model perfect?" they would also say: "You know what? No taxation model is perfect." Would they or we say that there is any that is? No, we would not.

Much as we all absolutely count on the sacrosanct services of health care and education and the other things that government provides for its citizens, few really relish the idea of paying for them through this thing called tax. The key question that we're debating today is: is it better than the 12 percent GST-PST combination? To that question, there really is not much debate. Overwhelmingly, the answer to that is yes.

If you want some proof on that, you actually don't have to look very far, because there's no country that has adopted a PST type of model, the one that we've now got rid of, for 30 to 40 years. If anything, we could be criticized for being late in abandoning the PST-GST type of combination.

Meanwhile, while that was happening, an HST style of tax has been adopted in over 140 jurisdictions around the world — by those very areas who want our jobs, who want our enviable economic performance and those who want the standard of living that we enjoy in B.C. — for a very, very good reason. It's the best taxation alternative out there for employment, for ease of administration and for ensuring a healthy small business and industrial sector — things crucial for ensuring the standard of living that we have come to take for granted in British Columbia.

To coin a phrase, we have it so good here, and we have to protect it. Now, we have had several off-ramps that we could have taken in our bumpy journey with the HST. I want to spend the balance of my short remarks on focusing why we did not. We've had plenty of chances to give in to the voices of understandable anger and frustration over how it was brought in. No one would have blamed us for abandoning the current course.

Let's speak of our new Premier. Given the context into which she arrived, dumping the HST would have been an unchallenged move by a new leader. Without any history or baggage of introducing the new HST, our new Premier earned the support of our B.C. Liberal family in a spirited contest. Then, making history, she won her seat in Vancouver–Point Grey.

Here's a leader who has already clearly put her own stamp on government in the short time that she's been our leader. She's put a stamp on our direction and the government approach that she believes is important in British Columbia and the government tone that she believes is important in British Columbia for the coming decade.

[1635]

Yet with the hottest potato of them all, the one issue that would have brought enormous political relief to the brand, if you will, of the B.C. Liberals, she did not back down. She did not take the easy, the populist or the politically expedient route.

Why not? Nobody would have blamed her. When there's clearly an opportunity to bail, to quit, to declare
[ Page 7563 ]
that that dog just won't hunt, why did the new Premier of B.C. say, "No, I will engage the people of British Columbia on the HST. I will make the HST work for the families of this great province. I will fill in the vacuum of communication, fill in the vacuum of consultation and, in doing so, reset the debate on the HST on a new frequency" and in doing so, strip away the noise and lay the facts bare?

Why did she choose this tougher path? Because it's the right thing to do. In every political debate, at the root of every emotional discussion at the end of a dramatic, theatrical and boisterous exchange full of opposing rhetoric and conflicting facts…. And let me tell you, there's been a lot of very eloquent but factually bankrupt rhetoric from our opposition leader today.

There is a time for reason and reasonableness that seems to cut across partisan lines and political noise. That time is now. The people have been consulted — almost 300,000 of them. Thorough analysis has been done, and adjustments have been made to the HST to continue to do what this government has done deliberately and methodically over the past ten years — protect those most in need while maximizing opportunity for investment and prosperity for the families right across B.C.

Today we debate changes to the HST — a lower rate, 12 percent down to 10 percent — a move that means the average B.C. family is ahead under the HST by $120 each and every year versus the old PST-GST combination and ahead by $170 every year if that family is at the lower-income levels.

We're also voting today on transition payments, putting in place transition payments to ease the transition down to the 10 percent level from 12 percent. Those transition payments are $175 per child in every family in British Columbia, as well as $175 transition payment for every low- or modest-income senior in this province.

A third key element of what we're voting on today is the balancing of the tax burden. We're taking our corporate income tax rate from 10 percent to 12 percent to pay for the reduction in the HST and balance the tax burden within British Columbia.

There's been much said about today's vote and today's debate, but today's vote is not a gesture of some kind. There's no hollow gesture associated with what we're doing today. This is not a political cheer or philosophical cheer of some kind. What we're dealing with today is establishing a very important principle in our democracy. It's called legislative intent. It is what actually triggers the federal government to formally pass at their end an order-in-council — an OIC as we call it — confirming the fact that our HST rate will go down from 12 to 10. This is very much a very significant vote we're about to have.

I should point out, because the opportunity is just too much to pass up, that there are some very recent precedents in this, just like earlier this year when the NDP government in Nova Scotia did the exact same thing, providing similar legislative intent to increase their HST to 15 percent compared to the 10 that we are proposing here for British Columbia. There is a key difference in the way that the parties govern, clearly.

But secondly, there are also some very real implications that come from the vote here because going back to a 12 percent PST-GST combination involves a $3 billion hit to the treasury of British Columbia — $3 billion. I should point out that for all the debate we're hearing from the members opposite, I'm hearing complete silence — not even crickets. I'm hearing complete silence on how to address a $3 billion shortfall in money.

[1640]

We can debate philosophy. We can debate what tax model is right — an ancient PST-GST combination, which is what the NDP would like, or the HST at 10 percent, which is what we're proposing. But within that debate, not once have I heard about the very real financial implication of trying to convince the people of British Columbia, which is what the NDP is doing, that a 12 percent PST-GST combination will put a $3 billion hole in the treasury. Of course, $1.6 billion of that is the federal transfer payments; $25 million to rebuild the PST bureaucracy and then $35 million a year thereafter to actually run the PST bureaucracy with the 300 individuals that we would have to rehire.

At the end of the day the NDP, in my view, is running out of reasons to vote against this, but history is not on their side. For all the very strong words that we hear about looking out for the little guy, they've had plenty of opportunity to illustrate that over the last ten years.

They did not vote in favour of eliminating MSP premiums for some of our lowest-income citizens of this province. They voted against it. They did not vote in favour of eliminating income tax for our lowest-income earners in this province, which we did. They voted against it. And they also voted against the other, almost a hundred, tax measures to reduce taxes and give our families a chance to prosper in B.C.

Now, at the end of the day we have repeatedly conceded and acknowledged the manner in which the HST was introduced. No one is debating or arguing that. What remains now is a decision to go forward in a reasoned way with impacts to families fully mitigated, with a 10 percent tax that allows us to compete with those around the world who want our jobs, our prosperity and our standard of living, or to go back to a PST system abandoned decades ago by 140 of our international competitors.

The choice is a 10 percent HST or a 12 percent PST-GST combination. Let today be a little different. Let balance and reason and reasonableness prevail, and let us vote to move to a 10 percent HST.

D. Donaldson: Hon. Chair, thank you for this opportunity. I look forward to speaking to this motion put forth by the Minister of Finance.
[ Page 7564 ]

I'd like to start off by speaking to the issue of credibility. I don't know if people in this Legislature remember a saying from the former Premier around the HST — that it wasn't on the radar, not on the radar. Does anybody recall that one?

So there was no HST in the plans of this government before the election in 2009. Then lo and behold, weeks after the election the HST was brought in, one of the biggest tax changes this province has ever seen. The former Finance Minister talked about meeting over the water cooler or the coffee pot in Ottawa, and that was the first time he had discussed the HST. At that point we called it NABOB tax policy — just coming up with these willy-nilly proclamations on the HST, not on the radar. The fact is it's not believable.

I'd like to quote the current Premier, in a radio show that she used to host, around the HST. She said: "It's an insult to British Columbians for the government to, first of all, have brought in this tax in what most of us regard as a very, very sneaky way, and then to refuse to bother explaining why they did it properly. They can't even be bothered to mount a defence. And I think that's an insult."

Well, hon. Speaker, she's talking about her colleagues now in government — sneaky, an insult. We know that every member on that side of the Legislature actually voted for the HST. So it speaks to this motion; it speaks to the issue of credibility.

As well, the Premier said in interviews before she became Premier: "I just don't think it's possible that it could be the case." This was in regard to the fact that the tax was not contemplated before the spring ballot.

So again, we've got the current Premier contradicting her colleagues in government and, you know, actually making some statements that aren't exactly inspiring, around her colleagues being sneaky and an insult.

Again with credibility, we look at the referendum. The current Premier proposed on the first day of her leadership bid to cancel the HST referendum in favour of a free vote in the House, a free vote here in the Legislature. "Cancel the referendum; we're going to have a free vote in the Legislature." That was her position.

[1645]

Well, that position was roundly ridiculed by her now colleagues, and soon she changed her mind on that. She changed her mind to have a referendum. Here again, a quote on a local radio show, and this was from the Premier: "The tax does need to go to a referendum. It needs to go sooner rather than later. As a practical matter, it needs to go to a referendum on June 24."

Well, June 24. Most people would think a referendum on June 24 means that you would actually vote on a referendum June 24. In her policy book Families First, the Premier has said: "The referendum will be conducted in the same manner as a provincial election." "We're going to have a referendum on June 24," she said in the Vancouver Sun.

Well, what do we have? At the bipartisan Finance Committee, which members on the other side and on this side sit together on, we heard from a number of businesses, numerous businesses around the province, that for certainty — you know, this situation around the HST is causing a lot of uncertainty — the referendum should be moved up from the September 24 deadline.

Well, that would assume that June 24 meant June 24. Instead, what we have is a referendum, not conducted in the same manner as a provincial election but in a mail-in ballot. The results won't be known until August, mere weeks before the actual September 24 date. So we really haven't moved the referendum up. Again, it speaks to the credibility of the Premier and of this government on the matter of a referendum.

The next credibility factor lies with the actual campaign funding for a referendum. The current Premier said the government should provide "equal funding to both sides of the question." Again, it's the same as a referendum happening June 24, that most people would expect a vote on that date. Most people would expect that "equal funding to both sides of the question" would mean the same amount of money to each side of the referendum.

Well, there's about $7 million being spent by this government — $5 million and another $2 million on top of that. For the campaign to oppose the implementation of the HST, it's $250,000. I don't think most people, most right-minded people in the province, would think that is equal funding. Again, it speaks to credibility. They're just not believable on this topic — this government or the Premier.

My colleague the Finance critic spoke earlier around the issue of neutrality — the cost neutrality, the revenue-neutral HST. Well, we're finding out: again, just not believable on that aspect. The amount of money being brought in by the HST is going to be millions more than the GST-PST — by some estimates, up to $820 million more.

No wonder it's going to cost more. You look at the list of items that were previously exempt under the PST that will now have an extra 7 percent charge because of the HST. Taxis, parking, dry cleaning, vitamins, camping sites — it's coming up to summer — landscaping, veterinarian visits and funeral costs are all going to cost more. No wonder it's not revenue-neutral. These are new items. It's again a credibility factor, saying one thing and we find out something else. It's totally different.

I want to give another example in that list, and that's gifting — the gifting of a vehicle from Alberta, for instance, to a person residing in B.C. I had an example from a constituent recently whose parents gifted him a car. Under the previous system that was exempt from PST. So this fellow brought the car back into B.C. and went to insure it this year, in January, at his ICBC location. That insurer phoned down to make sure it's the
[ Page 7565 ]
same arrangements as before, because the insurance agent knew that the HST had been brought in and was assured by ICBC that that's no problem.

Well, here it is two months later, in March, and this constituent all of a sudden gets a bill from the consumer taxation bureau saying that he owed the 7 percent portion of that because of the HST.

[1650]

Again, he got conflicting information. This just speaks to the unbelievability, the incompetence. The HST had been in place for almost six months, and this government still wasn't able to communicate to its front-line resources, whether it's in the Ministry of Finance or ICBC, the actual policies that relate to the HST.

I want to continue a bit on that item in relation to this motion around incompetence and chaos, the chaos of this government around taxation. The good people of Stikine sent me here in 2009. They voted me to come to Victoria to represent their interests, to hold this government accountable for its decisions. I had had business experience before I came here in my previous line of work. I worked with many small businesses and entrepreneurs.

I also know from the families in Stikine how difficult it is, and they try to balance their budgets on a daily basis in order to survive under this government. Well, that is why I found it so shocking, and I was taken aback by the inability of this government not only to make projections about budgets but also to manage budgets.

An example that struck me right away when I came to Victoria was the $495 million deficit that this government predicted in 2009 — not a penny more, $495 million. When we actually saw the budget figures come in, the budget deficit was four times larger. Now, that's not just a little bit. That's not even in the ballpark. If a family managed their budget that way, they wouldn't have food on the table. They wouldn't be able to pay rent. They wouldn't be able to afford transit or an automobile to get to work. Four times larger than what was predicted.

What we see is that by the end of 2013 the public debt under the B.C. Liberals is going to be $26 billion more while they've been in power in the last ten years. That's a 43 percent increase. It's an 8.6 percent annual average increase to our debt load, and that's just bankrupting future generations. Again, it makes me think about the incompetence when it comes to financial management that this government has demonstrated.

Seven of the 13 budgets they've presented over the last ten years have been deficit budgets. Five of the last ten years have been deficit budgets. Of course, the proud record is that in 2002 they had the biggest deficit ever — $2.6 billion. Again, I think of the people I represent in Stikine, and if they can't predict what their income will be for the following year, then they're in big trouble. This government doesn't seem to be able to predict, not even in the ballpark.

As far as budget management goes — and this goes to the question of competence around chaotic tax policy that this motion speaks to — we have a number of examples. The Vancouver Convention Centre — $400 million over budget. Can you imagine if you were a homeowner trying to do renovations on your house and you all of a sudden had a budget that was that much over? I mean, $400 million on an $800 million project.

The B.C. Utilities Commission is an organization that's supposed to provide oversight and protect the consumer when it comes to electricity rates. They look at business cases that need to be made by B.C. Hydro on infrastructure projects. This government introduced a bill and passed it without fulsome debate. They invoked a form of closure, and it prevented B.C. Utilities Commission from oversight on $10 billion worth of infrastructure projects. Again, how is that good financial management? That just leads to a chaotic atmosphere in government.

B.C. Place — originally $365 million for the roof, now $577 million. Again, not very sound financial management, not being able to make predictions.

Of course, I'll finish off this section of my remarks about the motion on the floor around the former Premier's 15 percent tax cut. That wasn't that long ago. It was just eight months ago, back in the fall. It was on the table one week; it was off the table the following week. This is a pattern around chaos and incompetence around fiscal management.

[1655]

Now I will talk to some of the specific announcements that were made around this motion, specific announcements that were made last week in a desperate attempt to save the HST, Again, I'll quote the Premier in an interview. She said publicly: "We aren't going to be talking about trying to reduce it" — the HST — "by a point or two before the referendum. I mean, I think people will see that as buying them with their own money." Well, I think the Premier got it bang on. With these announcements we see introduced by the Minister of Finance today, it is seen by the public as trying to buy them with their own money.

The Premier went on to say: "Cutting the HST by one point is more than $800 million out of the budget this year and every year after, $1.6 billion for a 2-point cut." In fact, I think the most recent figures are a little higher than that. The Premier goes on to say: "Either we're going to have a $1.6 billion bigger deficit or we're going to have $1.6 billion fewer heart operations, special needs teachers, school facilities, hospital emergency rooms."

So yes, the government could cut it. But at what cost to citizens? The Premier hit the nail right on the head. At what cost to citizens? She's pointing out the terrible, terrible costs these announcements in this motion are going to have on bankrupting our children's future. And
[ Page 7566 ]
the government's response to that is: "Oh well, we're going to be able to balance the budget in three years after all." What do they predict that on? Four percent growth in revenues per year — 4 percent growth.

Well, just last week, the day of the announcement on these goodies, these gimmicks that were put out there to try to buy people to vote for the HST, the Conference Board of Canada had a forecast of growth for B.C. of 2 percent. They said that B.C.'s economy is an exception to an otherwise strong economy in the western provinces.

We've got the Conference Board of Canada, a nationally recognized authority on these things, forecasting a growth of 2 percent for the year, and this government basing its predictions on 4 percent. All that leads to is bankrupting our children's future, no money for the future needs of this province, and it's just a really terrible way of running the economy.

Today another example. Statistics Canada came out with some numbers on restaurants. Restaurant sales are up in every province except B.C. — every province except B.C. They're down 0.6 percent over this past month in B.C., and restaurant sales are down 2.2 percent over the past year, the first full year of the HST being implemented.

The CEO of the Restaurant and Foodservices Association, Ian Tostenson, said in regards to the announcements that are included in this motion: "If this was American Idol, this is not the government's best performance. This isn't going to be great." That's a knowledgable CEO of the Restaurant and Foodservices Association. The elements of this motion are not going to make a shred of difference to the Restaurant and Foodservices Association and restaurants in this province.

The handpicked panel that this government picked to analyze the HST, based on their analysis and based on further analysis of statistics through B.C., has come up with the fact that middle-income earners — for instance, a teacher and a mechanic, those two together — would pay an additional anywhere from $2,400 to $2,700 a year under the HST. What is this motion offering them? A one-time — one-time — transitional assistance payment of $175. It's unclear whether that would even apply to these middle-income earners. Again, the HST is costing people. It's costing people in the pocketbook. It's costing consumers.

The handpicked panel that this government commissioned to look at jobs around the HST…. Well, previously the government said there would be about 113,000 jobs that they see could be attributed to bringing in the HST. That, of course, is just theory, because it's based on the fact that there might be some trickle-down from large corporations reinvesting money into their businesses that might create more jobs, but no certainty around that, no rules or regulations around that.

[1700]

In fact, we've had experiences in Stikine where companies have taken the money and run and not reinvested. It's led to a decrease in the forest industry, for instance.

Well, the handpicked panel came up with a number vastly less than the 113,000; they said 24,400 jobs over the next ten years. Now, you know, a job is a job, and in my area jobs are important, but what this government has done is again shown its complete incompetence in the ability to predict what some of these economic indicators are — 113,000 down to 24,000. It's a litany, hon. Speaker.

I wanted to quote the current Finance Minister's words during the leadership debate to finish off my response to this motion. In regards to his leader, he called the Premier's leadership style and management approach "Ready, fire, aim." That's not a flattering image painted by the current Finance Minister about his leader, but it's exactly the approach to the HST issue that this government is taking under the Premier and under this Finance Minister. They've bungled the entire issue.

What I say to the members on that side and to the Finance Minister specifically is: "Stop the charade." The consumers of this province know better. Stop treating them with disrespect and such arrogance. They're treating the consumers as if they're always wrong; they're just misinformed. If they'd only get it, everything would be better. That's arrogance.

I say: "Withdraw this motion, admit that you're wrong and listen to the people of the province." They know what's going on. It's a transfer of costs from big corporations to consumers of $1.9 billion. They know the elements of this motion are an attempt to buy them with their own money. The people of this province aren't going to take it from this government anymore. They will deliver that message on this referendum, and they're going to deliver that message in the next provincial election.

R. Sultan: Well, I don't know if I have enough band-aids to patch up all the wounds. The member for Stikine has aimed his barbs at me with abandon, but I will, I think, refute a good deal of what he says. I'll try. Not that there isn't some element, some small element of truth in some pieces of what he says.

Again, the previous member on this side talked about a stroll down memory lane, and I guess it is perhaps useful. I'll give you my impressions of how we got into this situation we're in, by the rather sudden and not necessarily well-communicated introduction of the HST to British Columbians.

One of the most immediate problems, of course, that we as private members encountered was a difficulty in getting answers to some pretty basic questions, such as: "Are taxes going to go up on this, or are they going to go down on that?" "What's the impact, sort of, product and service by service?" Very little information was forthcoming.
[ Page 7567 ]

My faithful assistant Terry set out to design her own analysis of what was going to go up, because lots of flak started to come our way. She had on one knee the PST handbook and on the other side the GST handbook and spent several weeks trying to sort out what is what — for example, finding that miners' safety helmets did not pay the PST tax, but miners' safety lamps were taxed.

Under this new regime, of course, everything would be subject to a tax. Similarly — she'd worked in a deli — she pointed out that sandwiches to go were not subject to the PST if they were given to the customer without a plastic knife or fork, but if they included the plastic knife or fork, they were subject to the PST.

[1705]

The whole PST regime had become so Byzantine through the collective and accumulated decisions of virtually generations of politicians always anxious for a free hit and to make something new tax-exempt that the administration of the PST had become an impossibility.

As has already been pointed out, in the Small Business Roundtable in which I participated as well, many small business men and women said: "Please relieve us from this complexity. It is taking too much time, and we are asking our retail sales clerks almost to be chartered accountants." And the government responded.

Again, I don't think any of us can particularly defend how it was done. It was done badly, and even the ministers have conceded that point. The analysis — and we heard more of it today — of the specifics of who misled whom reminds me of the rehash of the Watergate scandal or something. Who knew what and when, and on and on the dialogue goes. It's all ancient history now.

I have my own impressions of the truth, but it's all somewhat irrelevant. What is important for British Columbia today is: what tax policy are we going to have going forward, and what suits the competitive circumstances of the times? The question that maybe somebody…. I'm not sure if I can use, Chair, with reference to a historical circumstance, the word "lie." Am I allowed to do that?

Deputy Speaker: I believe you can, as long as you're not putting that onto another…. If you're using a direct quote about someone else.

R. Sultan: Well, the suggestion that people had lied in the past was bandied about frequently. Thank you for that guidance, Madam Chair. The "l" word.

Then amidst this rushed introduction with a rather nonexistent communication plan, the unknown happened. One Mr. Vander Zalm decided to come out of retirement. My impression at the time was he cut through the B.C. Liberal Party like the German panzer divisions going through Poland in the fall of 1939, leaving all of us wounded if not lying on the ground expired.

It was quite a performance — one of the great demagogues, one of the great charmers of political life in our history — and it was a spectacle to behold. You might, incidentally, go to YouTube's "A letter to Bill Vander Zalm." Many of you, I'm sure, have watched it. It's somewhat ribald, not for children under 14. It was quite incredible, the stories he made up. We all looked at it and shook our heads and wondered when someone would call him to account.

This was the man, just to remind us, who invented the property transfer tax — if we're going to talk about taxes — who planned to take away women's right to choose, whose solution to the welfare program was to give everybody a shovel and put them out maybe on the chain gang — who knows — and the capstone, saw nothing particularly wrong with taking a brown paper bag full of small bills from some Asian millionaire down at the Bayshore Inn in the middle of the night in front of witnesses, saying he was just going to hold the money in trust.

Well, this person, this personality, this man with a mission, I think many of us found quite appalling, and I suspect many on the opposition bench too. But he was obviously inflicting such great wounds upon us that they decided to join the party and hitch their cause to his wagon as well. I would chastise my good friends on the opposite bench for having accepted the leadership of Bill Vander Zalm on this issue, because I think it's a despicable situation that occurred and not one that all British Columbians can be proud of by any means.

[1710]

Collateral damage — very heavy. Our Premier was one of the casualties, the first to go.

Credibility — poor, as has been reminded to us frequently in this debate.

A shift of tax policy decision-making in the populist direction despite the example of California, where populist-driven tax decision-making has virtually bankrupted the state and has resulted in a regime where they're spending more on prisons than on universities. My heavens, do we really want to go for a regime where we submit taxation to referendum? We are being pushed increasingly in that direction. I call it all part of the collateral damage that, unfortunately, we inherit in the situation.

So that's history. That's the past. We're talking about the future, as I said, so let's fast-forward to the present day and discuss the bill before us to bring in a new HST. Put simply, we're going to cut the HST from 12 to 10 percent, and we're going to raise corporate taxes from 10 to 12. A certain symmetry — 12 to 10, 10 to 12. That should be easy enough to explain — and a few interim payments made to make the medicine go down in the short term. That's the bill in a nutshell, as I interpret it.

Wonder of wonders, despite the collateral damage, despite Mr. Vander Zalm's skilful forays through the
[ Page 7568 ]
ranks, despite the hitching of the wagon to his cause on the opposite benches, the most recent pollings suggest that maybe, maybe it's beginning to work. I believe it was Ipsos-Reid that said the people in favour of the new HST is now greater than those opposed. Early days, of course, and there's much yet to be communicated and debated, but I think, for the first time, we can begin to see the glimmer of light at the end of the tunnel that we may, in fact, have a reasonable chance of winning this referendum despite the massive problems that we had to deal with.

Our opponents — learning these startling facts, thinking they had beaten us into the ground completely and that we would never recover — it seems to me, have resorted to name-calling. That's their rejoinder. They remind me of the janitor in the church who's cleaning up the pulpit and he sees the preacher's Bible open and in the margin he's written a little note to himself: "Weak point. Pound pulpit; shout loudly."

The weaker the argument, the more the volume of exclamation rises in this House, it seems to me, and the more the name-calling occurs. I find out this afternoon that I'm sneaky, for example. Well, maybe, maybe. The peculiar argument is advanced, as I interpret it: "The argument will be made that the new HST is so good, they will never actually do it. So they're misleading people by presenting this new plan. Because it's so good, they'll never do it. They'll stick with the old plan."

Much of the attack, and the member for Stikine repeated this several times…. He attacks the old HST, but the purpose of this bill is to introduce a new HST. We're not here to talk about the sins of the past. We should really be trying to have a thoughtful debate about the merits or demerits of the future. The past is past. Let's forget about hitching the wagon, Bill Vander Zalm, all that stuff, the "l" word, and let's talk about tax policy for the future. Isn't that what we're here to decide, not to recriminate one another about our failings of the past?

[1715]

I wrote in my own margin, as I attempted to thump and raise my voice…. In the playground when I grew up, you know, almost a century ago — not quite — one of our ultimate insults to somebody we didn't like very much was, "Your mother wears gumboots" — not a very sophisticated rejoinder. But I'm always expecting members of the opposite bench to stand up and say: "And furthermore, your mother wears gumboots." That's the level of discourse that sometimes seems to characterize what should be thoughtful tax policy debate.

Back to the basics. I said at the time the HST came in that it's good public policy; terrible politics. Boy, that was an understatement. I think it's superb public policy, in fact, but I think the political aspects were even worse than I realized. They were absolutely dreadful, and I've tried to describe some of the carnage that we've experienced as a result.

Why is it good? It avoids the pyramiding of the sales tax as it goes through the value chain. I think most of you are familiar with that arithmetic. It only taxes products once. It broadens the tax base to include services. This is partly what all the screaming is about.

This is partly why Brian Mulroney's party ended up with two members in the parliament after the GST. All those services that were sold and escaped taxation were all of a sudden taxable. It was the goods and services tax, a brand-new idea. Services should be taxed. Why should they be taxed? Well, we have to pay taxes. We want a good education system. We want health care that's there when we need it, and it should be paid for by everybody. It should be a broadly based tax system.

The services, whether we're talking restaurant meals or the dry-cleaning bill, have been escaping. They have not been paying their fair share of taxation. That's why we tax services. Everybody, all types of products and services, should be included.

Finally, it's simple. It's none of this stupidity about the sandwich with or without the plastic knives and forks included. So that's why it's good public policy, and I believe that. It's good public policy to support these ventures, even as amended, so we have a new HST in a treacherous financial world.

We think we're rather hard done by in British Columbia because we're taxed so heavily. The reality is that we're one of the low-tax havens of the world. Not too many people believe that when I say it, but that's what the numbers tell us.

Perhaps one good thing in this debate…. We have the remarkable phenomenon of members on the benches opposite, including the member for Stikine, complaining that we might be raising taxes on business or that we might be going into debt. It's an arch conservative philosophy that he is espousing. Well, that's not a bad outcome. If people on the opposite bench think that raising taxes on business isn't necessarily such a great idea and should be criticized, if they suggest that government debt isn't necessarily a very good thing, you know, it's not all bad. I would say that those are maxims that I've always held true.

The reality, though, is that this government has, in the ten years it's been at the helm, reduced taxes seriously and has restrained debt as measured by the debt-to-GDP ratio. Any university or hospital which has tried to get a new capital project going knows how tightly administered the iron law of that debt-to-GDP ratio is.

Is this sensible public policy? It certainly is. The rating agencies love it. We had three successive increases in our debt rating, the ultimate report card on the probity of how this government has run its financial affairs. The government which preceded us, unfortunately, had a string of debt downgrades.

[1720]
[ Page 7569 ]

Now, if I could believe the member for Stikine…. They had booming employment, balanced books. Everything was wonderful. It's so contrary to the evidence. We should get together after this debate, and maybe he can show me where he gets those marvellous numbers, because it's quite contradictory to everything I've ever seen in the Finance Ministry's own reports.

So we have an active choice facing us, British Columbians. How are we going to pay for the government services that we all value and which members opposite value perhaps even more than we do? We have to pay taxes somehow. I think the value-added tax is good tax policy. As was mentioned earlier, 140 countries around the world have reached that conclusion. Nobody who has abandoned the sales tax, where you have the compounding of tax on tax on tax, has gone back to it — once it's been abandoned — for any length of time.

We should protect the basic integrity of the value-added tax, which is what this bill does, and it is the basic question we're putting to British Columbians in the referendum. It is going to be a close thing; I'm sure of that. The demagoguery and the damage and the insults have done their job, and it will be a close thing. But I think that if we care about the fiscal health of this province, and we should, we do not want to be faced with massive layoffs in the public services as many countries around the world are now engaged in.

Read what's happening to them in the United Kingdom. At the extreme, see what Greece is up to — wholesale liquidation of Crown assets, probably at 50 cents on the dollar under distressed circumstances. This is what happens to countries that let their finances get way out of whack, and we don't want to go there.

We are an oasis of financial rectitude, and I think the world is watching us very closely to see whether — driven by populist tax decision-making; driven by severe criticism, some of it justified; driven by demoralization and the sort of insults that we've had a taste of today — we say: "Gee, we tried, but we could not maintain the centre." "The centre could not hold," to quote a famous poem. Perhaps we retreat from all of the fiscal rectitude that has brought a high degree of confidence and prosperity, I think by any standard, to our province.

Finally, I have to comment on the Leader of the Opposition, the member for Vancouver-Kingsway — back to the "Your mother wears gumboots" rejoinder. He winds up his attack on this reform, shall we say, of our approach to the HST not with some philosophical discussion of tax policy, not on the impingement of the various tax burdens on one element of society or another. But he shouts out that phrase that — I checked in Hansard — has been repeated 100 times in this House at least, namely: "...and furthermore, that we have the highest childhood poverty rate in Canada...."

I would ask: what has that got to do with how we design our HST tax policy? Furthermore, I've sent my 99-page report on the subject to what I thought were the leading members of the opposition, suggesting that not only that assertion but the sub-assertion that my own riding of West Vancouver–Capilano has one of the highest childhood poverty rates in all of B.C., not to mention some economists' calculation that Canada was one of the worst in the world, leading me to conclude that I represented the worst of the worst of the worst in my riding…. After a year of massaging the data, I said: "This is a lot of nonsense."

[1725]

I'm disappointed that a member with the experience, the intelligence and the grasp of this government of the member for Vancouver-Kingsway would resort to "Your mother wears gumboots," particularly when what he declared, frankly, is not true.

So with that, I will wind up. I think that this bill deserves strong support. It gives us the hope of salvaging a very sound tax policy system. If I could quote Professor Kesselman, if economists have any remaining credibility in this day and age, he says: "Any larger cut in the HST rate" — he's a professor of public finance at Simon Fraser, by the way — "can only be justified by the need to secure public support to retain the tax and avoid a return to an economically damaging sales tax." Direct quotation from the source of all wisdom, Tyee magazine. I happen to agree with Professor Kesselman, and I hope you will too.

M. Karagianis: I'm happy to take my place in this debate on the ever-changing HST policy. I have never in my life seen such a chaotic rollout of tax policy, ever in the history of this province, than I've seen in the last couple of years with the HST.

It seems to me that with each new iteration of the HST and its great values to us and its ever-changing face and impact, we get this instantaneous slogan from the B.C. Liberals that "That was then; this is now." And who knows what will come tomorrow? I think that it gives the entire province a real sense of uncertainty about what the future holds, and that concerns me greatly.

In my community the impacts of the HST are being felt every single day by working families. The impacts on those families — I hear about that. I see that in my community every day. The fact that there is a sense of chaos and confusion and uncertainty about the future, I think, has continued to harm my community and will continue to harm British Columbians and our economy until we get a sense of certainty.

This ever-changing tax policy of the HST, from the day of its inception here in British Columbia through to today…. I don't think it gives us any sense of confidence in what the government is doing.

If you look back to pre–the 2009 election, we knew then that there were all kinds of economic issues that were beginning to unfold worldwide — certainly south
[ Page 7570 ]
of the border — and anticipated that some of those would have an impact on British Columbians. We were constantly reassured by the B.C. Liberal government that no such thing would happen here, that we would minimize it.

[L. Reid in the chair.]

We have seen, in fact, that that was itself a huge untruth. There were huge impacts coming. Their agreement in writing with the restaurant industry that there would be no HST was, of course, a complete flip-flop in the days after the 2009 election. That, accompanied with a growing awareness that we had a debt and deficit in this province that was escalating out of control by billions of dollars, have gone hand in hand to begin to create two years of paralysis in this province while the government has done very little except focus themselves on the HST in one form or another.

Whether it was rolling it out initially and trying to justify to British Columbians why they were suddenly being given a new tax, a new and regressive tax, that was going to cost families more, at the same time giving huge benefits to big business…. The government began then to try and justify, from that day forward, this harmonized sales tax.

I, with many others in this province, listened with great interest to the then–talk show host and now the Premier of this province talk about her views on talk-show radio, listening to British Columbians. Her feeling that the government that she had once been a part of, in fact….

[1730]

She says of them: "It's an insult to British Columbians for the government to, first of all, have brought in this tax in what most of us would regard as a very, very sneaky way, and then refuse to bother to explain why they did it properly. They can't even be bothered to mount a defence. And I think that's an insult."

It seems to me that we have begun to see an interesting culmination of public opinion led by the now Premier of this province in tandem with the ever-shifting efforts by this government to try and convince British Columbians that this regressive tax is good for them and that there is actually a solid policy in place, despite the fact that it continues to change almost monthly here in the province and has continued to create uncertainty for the business community.

We saw a huge uprising by British Columbians, with 700,000 people signing, in an unprecedented and historical moment, the initiative petition to get rid of the HST, and I think that that should have been a very clear message to the B.C. Liberal government that they were on the wrong track. British Columbians were not happy with the tax that they had delivered and were not buying into any of the rationale that they had given us for why this tax should be good for us.

The reality is that since the day of its inception the harmonized sales tax has been about rewarding big business at the expense of families. Every family is feeling it every single day in their pocketbook.

Interestingly enough, I had a very recent experience which showed me how it is impacting business in a number of different ways. My washing machine went on the fritz after 15 years, and I found myself having to go and purchase a new energy-efficient, state-of-the-art washing machine. While I was in the course of that sales transaction, the sales clerk said to me: "You're the local MLA. What do you think is going to happen with the HST?" And I said: "I don't know. How do you feel about it?" And she said: "I hate the HST. My customers hate the HST."

Of course, all of those highly energy-efficient appliances that she was selling had at one point been exempt in an effort to do the environmentally responsible thing here in British Columbia. Under a negotiated provincial sales tax, there had been exemptions for purchases of energy-responsible merchandise. All of that was removed under the HST, and that particular sales department was really feeling the impact and had heard from all of their customers about how much they disliked the HST.

That in itself gave me confidence that British Columbians are not buying the spin that they've been hearing for the last two years on the HST. In fact, many of them are simply just holding tight until they have a chance to vote in this ballot and do what I believe British Columbians will do in large numbers, as they did with the initiative, which is to vote down the HST.

It's interesting, also, when I think about the fact that the latest iteration of the HST — because we've gone through revenue neutrality and found out that that wasn't true; we've gone through many of the other arguments that the government has put forward and found that each and every single one of them was, in fact, not true — changed within a very short time when there was pushback. We hear consistently and constantly from the tourism industry, the restaurant industry and other parts of the business sector that it is a hurtful tax for them and has cost business and jobs.

So we continue to see this HST get tweaked and moved to what we are currently seeing from the government and from the B.C. Liberals: their declaration that that was then, and this is now. The HST of a couple of weeks ago was a certain percentage point. Now it's going to be new in the future — next year, several years from now. And when I look back again to what the now Premier had to say about this just even a few weeks ago, where the Premier had said to the public: "We aren't going to be talking about trying to reduce by a point or two before the referendum. I mean, I think people will see that as buying them with their own money."

Well, in fact, that's exactly what we're seeing. We are seeing that there has been this shift away — a promise
[ Page 7571 ]
that the HST will be reduced once and then again by 2014. This very thing that the Premier said would not happen is happening. This whole impression that people may be being bought with their own money has, in fact, come to pass.

[1735]

Once again this gives more substance to this feeling of uncertainty and chaos in an ever-changing world around the HST. You have to ask yourself how common household purchases could possibly not be put on hold for sometime in the future, knowing that the HST has lost a point now, a point in 2014. Before we're done, if there's enough pushback from British Columbians on this, I wouldn't be surprised to see the B.C. Liberal government try once more to sweeten the pot.

If you're purchasing anything major, if you have to, in my case, purchase a washing machine…. Mine went on the fritz. I had no choice. I couldn't wait a couple of years, but if I thought that I could have gotten away with not purchasing something for a couple of years and not had to pay the fairly significant HST that I had to on my energy-efficient appliances, boy, I would have certainly waited, like many British Columbians who may be waiting to buy a house or build a house or renovate their house or purchase anything new in the way of new appliances or other significant purchases, waiting to think maybe the HST is going to have yet another iteration.

This whole idea of revenue neutrality. I think British Columbians do get this, and I think it is one of the things that angers them the most. I hear about it every day in my community from constituents — that they are deeply angry and offended that the government would in any way try and fool them into thinking that this tax shift from big business onto families could in any way be considered neutral, because in fact it's not neutral to families. It's more expensive every single day.

In addition to that, now of course we've seen that the whole idea of neutrality, which was one of the big selling points on the HST, has gone out the window. Now we're talking about the fact that the HST has become such a significant part of the revenue stream here that it will affect health care spending and education spending.

And yet, when this came in, the first attempt to sell this to British Columbians told us that this was going to be a neutral shift of money away from big business onto families. It wasn't going to hurt a lot, wasn't going to be a big deal and certainly was not going to have an adverse effect on the essential services in this province like health care and education. Now we have seen, in fact, that that is what's at stake here, and we've heard that threat, not so veiled, over and over again, from government members and even hinted at by the Premier herself.

While we are going through this chaotic state of trying to come to grips with what the HST looks like today and what it might look like tomorrow, the government has gone about spending our money to try and tell us that even this new iteration is good for us. We're seeing hundreds of thousands of dollars spent on advertising, spent on attempts to promote and convince us and brainwash us with our money that this is a good idea. Not only do we have this huge shift of our money being taken out of our pockets to the benefit of big business, but now we're seeing a lot of it squandered away on all kinds of advertising and attempts to convince us that this is good.

Again, it seems that the message shifts every other day. The first group of ads that came out didn't talk at all about this kind of new attempt to tell us that a tax reduction in 2014 should be something that motivates us right now to get out there and vote in favour of the HST.

What this has done is the HST has caused big winners and big losers. The big losers, unfortunately, are constituents like mine and other members of this Legislature who are trying to get through their day, trying to get through their week, trying to get through their month, raise their families and make ends meet. What we have seen is this attempt to convince us that it's only a small impact on our household on a yearly basis, only $350 per household.

I again would like to take great exception with that, because I think it's going to prove to be yet one more of the absolute falsehoods that have come out of this HST, one of its many iterations that will fall by the wayside as we take a closer look and families begin to calculate at the end of the year what it has cost them.

[1740]

I mean, everything from clothing to school supplies to things like sports camps and summer camps, the kinds of things that families are going to be now engaged in, as well as all the other costs that they have had to bear for the HST — things like the new washing machine that I had to purchase and other families have had to purchase as well, all along with all those other costs.

There will be the continued drip, drip, drip of these costs into families' pockets which I would be wildly surprised would ever contain themselves within a $350 cap. In fact, I think that families are probably seeing much more than that, even middle-class families. In the last ten years in British Columbia we now have middle-class families considered the working poor.

Everyone who is making an effort to get from payday to payday in the best possible way will see all of these costs begin to add up. What will happen is that families will begin to give up these kinds of opportunities, things like summer camps. They'll begin to give them up as if they were luxuries. They'll have to fall by the wayside because they'll be unaffordable.

Is that what we wanted in British Columbia? Trying to provide simple opportunities for your kids and trying to make sure that you do the right thing by your kids suddenly becomes a luxury item that even hard-working, two-income families are no longer able to afford.
[ Page 7572 ]

I'd like to talk a little bit here in the last few minutes that I have in this debate about the nature of the referendum itself. Now, we were promised very distinctly by the new Premier of this province that there would be an electoral-style referendum. It was certainly going to be moved up from September to June. Everyone anticipated that, and we thought that there would be a very finite process around this referendum, that it would be an election-style referendum.

Instead now it turns out to be yet another — and I'm going to use the Premier's words here — kind of sneaky activity here or action by the government around how this referendum is coming, because of several things. It will come in a ballot, and I would be willing to bet dollars to doughnuts that thing will look a lot more like junk mail than it does an official election tool. We have several weeks to try and fill this out and then find a way to either mail it in or drop it at a depot.

I think most confusing of all is that it's counterintuitive because, in fact, people will have to vote yes if they want to get rid of the HST and no if they want to keep it. So for anyone who is the least bit uncertain or not confident about this process and gets this ballot, it could be very easy for them to confusingly tick the wrong box.

It seems to me that every single aspect of this HST, from the day we were told that we weren't getting it to the day we were told that we were, and all of the various forms and iterations it's taken, all the excuses we've had for why we had to have it — save the economy; revenue neutrality; oh, now it's for health care; oh, wait, we're going to reduce it — all of these things have continued to give us an air of uncertainty.

So while people in my constituency wait to see exactly what is going to happen with the HST, they are not only cynical now about government and its intentions…. They have been disappointed repeatedly and have found that most of the things they thought to be true about this, change at the whim of government. Each and every time they run into unanticipated opposition to this that they feel is insurmountable, they simply move the goalposts, shift the game.

Most people now have determined that for big purchases, they're simply going to wait it out. You hear from the homebuilders that that is a huge problem facing them. You hear it from all kinds of sectors that people are simply waiting it out to see: what will the next iteration be, and will it be better or worse for me?

I think the only iteration that will work for British Columbians is to say: "Yes, yes, I vote to extinguish the HST." Certainly, the intention for me is yes, I will vote no to this motion. Yes, I will vote yes to extinguish the HST.

B. Simpson: I've got a few words to say here, and then I'll concede the floor. I have to say, as a sitting independent member on this one, I've had to do a lot of thinking and a lot of soul-searching as to what really is going on here and what I wanted to say in response to the government's motion. I guess what I want to say on the record now is more a reflection of my own stream of consciousness and kind of how I see this. Then I will indicate how I intend to vote as a result.

[1745]

I think we can all agree that HST is probably the worst form of politicizing tax policy that any jurisdiction has ever encountered. I think it's fair to say that both sides would concede to that. Ministers and members of the government have indicated the process was abhorrent. It was an awful way to do things. As the opposition members are indicating, the word "sneaky" is now being used relative to that.

On the flip side, to be fair, the opposition is using this for maximum leverage in advance of both the referendum and, potentially, a fall election.

It really causes us to pause — I would hope it causes us to pause — about how we work in here and what kinds of things we need to do to somehow take that over-the-top partisanship, that over-the-top politicization of a very difficult, very complex public policy and start to get back to governance and to public policy.

The other thing I think HST does, as I reflect on it, is it really calls into question the role of the MLAs. I think certainly as I sat as an opposition member and watched the government members as they dealt with the HST as it unfolded…. I think, to be fair, it caught them by surprise, just like it caught us by surprise, when it was announced. I know that they were getting phone calls. They were getting people questioning them on the street, just as we did.

Again, it calls into question how we are informed — not just as opposition members but also government members — about public policy, about how things are unfolding.

We've got the Yale treaty coming up in this House. I wonder how many of even the government members have had input into that, and there are contentious aspects of that that none of us in this House should take lightly.

The whole HST and the history of the HST, I think, would be interesting for some master of poli-sci or economics to take a look at as to: what does this tell us about how dysfunctional our decision-making has become because of this perpetual electioneering, this 365 days of doing battle with each other and positioning for the next election or fighting the last election?

Certainly, from 2009 on, I don't think anybody can underestimate what occurred with respect to the initiative and leading up to the first successful initiative in British Columbia. People want to split hairs on the numbers, but fully over half a million British Columbians indicated that they wanted this HST to go to a referendum, and we're leading up to that now.
[ Page 7573 ]

Now, I joked with some of the government members that I think probably the most honest way to couch the motion before us would be to simply say, "Yes, we're trying to buy a positive outcome," because that's exactly what is happening.

I would argue that if the opposition was in government and they were facing the same circumstances and they had an opportunity to try to influence the outcome of a referendum, they'd do the exact same thing. They would signal in advance something that they felt met the test of the public's desire for change, and they would do the exact same thing.

I think it's disingenuous to be crying foul that somehow this is an inappropriate thing to do. In fact, if I look at question period, there were some questions asked in question period about whether the minister would actually stipulate if the exemptions on PST would be restored if the referendum failed, and the minister was in trouble for not signalling that and so on. Now that the government is signalling what they're going to do with HST if it passes, somehow that's not appropriate.

With respect to the tele–town halls, I've listened as opposition members put forward that those things have been engineered. It's not the response I get from my constituents. The constituents of mine that have participated in those found that they were awkward. There were lots of people involved. There was a kind of awkwardness to the thing, but they felt that there was a genuine attempt to provide information to people and to engage people in a different kind of technology.

I don't join with the conspiracy theorists to think that that was all engineered for a specific outcome, and certainly, I'm not being given that back.

[1750]

What's really at stake here, I think…. With respect to the HST itself as a tax policy, I don't think that harmonizing sales tax or value-added sales tax is bad tax policy. I was on the Finance Committee for two years, heard loud and clear — and it had been going on for a long, long time — people from all sectors of the economy asking for the harmonization of provincial sales tax.

There are good reasons to harmonize your sales tax, and there are good reasons not to. I think that debate of: do you lose your ability to manage your sales tax through a PST by going to a harmonized sales tax…? What's the plus and minus of that? That's a fair argument, and Finance Committees had indicated that the province should take a reasoned look at that. Both the opposition members and the government members both indicated that harmonizing the sales tax needed to be taken a look at.

I also think that it's unreasonable for us all to stand in here and represent as a unified voice the constituents that we represent, because I know I can go back into my constituency and there are people who love the HST. I can go back into my constituency and I find people who hate the HST. To simply stand here and pretend, in order to make a political point, that my constituency is wholly on one side or the other is simply, categorically, not true and not fair to the process.

In fact, I was threatened with recall by the initiative group in my riding and, again, lots of signatures, one of the highest signatures. When I sat with them, they indicated that I was supposed to go to Victoria and make sure that the HST was repealed, go and tell the Premier that's what needed to be done. I invited them to join me to go talk to the CEOs and the managers of our sawmills, to join me in talking to the chamber of commerce, to join me in talking to the Quesnel Cattlemen's Association, the Cariboo Cattlemen's Association and other interested parties who actually felt that the HST reconciled a lot of things about their business that did make them more competitive and did address a bunch of issues that they had with sales tax.

I also went and met with all of our restaurateurs and pub owners. The HST, in conjunction with .05, in conjunction with the issues that they're confronted with in terms of minimum wage, etc. — they see it all rolling up into a perfect storm for them. So there are small business owners and entrepreneurs that struggle with this.

So for us to stand in this House and for members to stand and say, "I have a unified voice that I can represent," is simply not credible. It's not true. We have a broader obligation to actually say: "It's more complicated than that." What's really at stake here, and I think it's the critical factor for us, is that this was bad process writ large.

Does the Premier going out and seeking advice and talking to people, address one of the issues that was part of that process — and that's the transfer of tax to consumers, to people on fixed income? On balance and at face value, that's what the motion attempts to do. Whether it's politically motivated or not, I as a legislator am standing here saying: "Okay, if the HST does pass, what would I like to see happen to it?" That's what this motion is saying. If the HST passes, the government understands from its dialogue that there are people who want it rebalanced, that want it to come down on the HST and to go up on corporate taxation and rebalance.

That's an argument that was made at length in this House, a $1.6 billion transfer to consumers off the backs of corporations. This motion offers a rebalance. As a consequence, I feel obligated to say: "Yes, if the HST referendum passes, I would like to see the government take this step and, therefore, at face value, will be saying yes to this motion."

It has nothing to do with coming over to either side or getting involved in the partisan debate all again. However, I would ask the government and the Premier to consider that this is the beginning of a bigger conversation. A reading of the budget and the documentation that's provided to us around the HST is: we're in serious trouble. We're in serious trouble about meeting the balanced budget legal requirements in 2013-14 and 2014-15.

[1755]
[ Page 7574 ]

We are in a situation where we cannot guarantee an economic rebound and, as my small brain can read the budget documents, the budget document is explicit that we are going to have a hard time balancing the books as long as public expectations are as high as they are for delivery of public service.

So I would ask the government to consider what others have called for, and that is for us to look at the taxation regime more holistically. Are we pricing natural resources correctly? Is that an area where we can get more revenue in a natural resource–constrained world? Are we doing our progressive taxing properly? Do we have our income tax pegged properly, corporate tax pegged properly? Let's go and look at the whole situation once we get this HST debacle behind us at the referendum.

But on balance, I feel compelled as a member of this Legislative Assembly to give the government face value on the motion, and if referendum is passed, if HST remains, then I would like to see this rebalancing occur that's proposed by government.

Hon. P. Bell: I know I just have a few moments. I understand there will be a vote at six o'clock on the motion this morning, but I just wanted to take the few moments that I have to really reaffirm my support for the HST but also in perhaps sharing some of the understanding that I have come to in the last six or eight weeks as a result of the role that I had in listening to people across British Columbia and the telephone town hall meetings specifically.

What I have come to understand through that period of time is the massive misunderstanding that exists around the HST. I'm sure that came from a lot of reasons. I'm sure there is lots of blame to go around with everyone.

About 5,000 people took the exam on www.hst.ca that asked people questions about what HST was applied to and what it wasn't applied to. What we found through that process was that 60 percent of British Columbians believed that basic groceries from the grocery store went up in price as a result of HST — clearly not correct. We all understand that. Fully half of the people that took the test on www.hstinbc.ca believed that gasoline for their automobile went up in price — clearly not correct.

The massive misunderstanding that has resulted from admittedly a poor implementation of the HST I think really makes it necessary for us to ensure that the public is fully informed on what is undoubtedly the most important vote that the average British Columbian will make in most of their lives.

The HST comes down to some core set of principles in terms of trying to build an economy. As someone who has worked in the forest sector, as someone who lives in a forest-dependent community, as someone that represents arguably the most forest-dependent community in British Columbia, I know that there is a huge and positive impact to the forest industry specifically but generally to the economy as a whole as a result of the harmonization of the sales tax system.

Whether that is at 12 percent, which is where we're at today, or with reference to this specific votable motion in bringing it down over a period of three years from 12 percent to 10 percent, the model of taxation is the right one.

The member for Cariboo North pointed out that this motion specifically addresses the concerns that we heard from the public with regards to the HST, to the mechanics of it — not to the information or lack of information that is out in the public realm with regards to the HST but the notion that it rebalances taxation.

Clearly, we heard from the public that they were uncomfortable with the notion that the HST model, as it was proposed, has today moved taxation from corporations to individuals. The public, in the work that we did listening to the public, showed that there was real concern over that. We accepted that. The new model that we are proposing through this votable motion reallocates that back in a way, I think, that is responsible, that meets the tests that are necessary of us balancing our budget over time, albeit very challenging, as the member for Cariboo North pointed out. It will be very challenging. We will have to work very, very hard to make sure that we achieve that.

[1800]

Madam Speaker, noting that we are now at six o'clock, and I believe that there is an opportunity for a vote, I will retain my place and continue speaking to this motion after the vote and after the recess that I will be proposing momentarily.

[Mr. Speaker in the chair.]

Mr. Speaker: Hon. Members, we will now be doing the division on Motion 12.

Will members please take their seats.

[1805]

Hon. Members, the question is: "Be it resolved that this House support the efforts of our federally-qualified marine contractors in acquiring contracts for building large vessels for the Canadian Navy and Coast Guard, recognizing that capitalizing on the $33 billion National Ship Procurement Strategy will expand British Columbia’s economy and shipbuilding expertise."

Motion 12 approved unanimously on a division. [See Votes and Proceedings.]

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

Hon. R. Coleman: I move that the House recess for 30 minutes. After the recess, in Committee A we will do the continued estimates of the Attorney General,
[ Page 7575 ]
and in this House we will continue with the discussions on Motion 11.

We will recess for half an hour, until 6:40.

Motion approved.

Mr. Speaker: This House stands recessed until 20 minutes to seven.

The House recessed from 6:09 p.m. to 6:45 p.m.

[Mr. Speaker in the chair.]

Introductions by Members

Hon. P. Bell: Just before I get started, I'd like to introduce to the House my daughter Donna Hobbs and her husband, Matt Hobbs. I'd ask that all members please make them welcome.

Debate Continued

Hon. P. Bell: Before I conclude my remarks on this very important votable motion, I want to highlight four specific things that I think we need to turn our attention to and our minds to as we contemplate the vote in the upcoming HST referendum on June 22.

[D. Black in the chair.]

The first one of those four items is the importance of the support of a value-added-type tax to the economy of British Columbia. It clearly creates advantages for many of our natural resource sectors and our export businesses, and roughly one out of every $7 in our provincial economy comes from export-type businesses. Those businesses were previously hampered by a 7 percent provincial sales tax.

While at times that may be less relevant in a mining industry boom cycle like we have right now, in the forest industry, where we've had very, very challenging times, where companies have been operating at the margins, where they've had to close their operations, it is clearly an element of support for the industry that is within the constraints of the softwood lumber agreement and allows us to ensure that we have one of the most competitive forest industries in the world.

So $7 a 1,000 board feet is a significant amount at the margins of the business, and that is what the contribution of the HST is to this particular model. But that expands beyond simply forestry and mining to industries like tourism, industries like film, other export-based industries and first-dollar industries that have a significant benefit to our province.

The second key element I wanted to mention is the ease of administering this particular form of tax. It eliminates the duplication that was necessary previously with the provincial sales tax system. It also eliminates the tax-on-tax issue that comes to play with the provincial sales tax model, where taxes are collected at various points of a product preparation moving through to the end consumer, and that that tax has to be passed on. In reality, it often ended up as much more than 7 percent. It might have ended up as 8 or 9 or even 10 percent of the total price of a specific item, maybe, related to the provincial sales tax.

The administration of the HST eliminates the need for about 300 staff at a provincial level because there is simply one tax being collected and a very easy form of tax to collect. We continue to be in business in Prince George, and I know that the simplification for us in our own business has allowed us to streamline the work that needs to be done at an administrative level.

The third point that I wanted to mention that I think is absolutely critical is with the changes that we are suggesting here as part of this debatable motion, this truly does become very fair to families and individuals across British Columbia. As the member for Cariboo North mentioned earlier, it is a rebalancing of the tax, an increase in the corporate tax rate of 2 percent — not something that this government has been known for.

We've been known as a government that has reduced taxes, not increased them. Admittedly, that is a difficult decision, not one that I think any of us particularly cherish. But it is important to have a balanced budget and to make sure that we don't continue to run up deficits in this province, and we have to, if we are going to reduce the HST down to 10 percent over a three-year period, find other sources of revenue.

I think industry has accepted this quite well. They understand the benefits of staying with an HST system. The headline, I think, in the Vancouver Sun editorial that I saw the other day really highlighted that. It said that we maintained all the benefits of an HST system to business, and we removed the challenges for families and for individuals in British Columbia.

The new model that we're suggesting — going down to 10 percent over three years, an increase in the corporate tax rate of 2 percent, an increase or a levelling of the small business tax at 2½ percent — I think does bring balance.

Even though there has been some criticism from various chartered accountants identifying that this particular issue of the corporate tax rate going up by 2 percent has engendered some real hostility at times, I might say, I do think that on balance it makes sense and works for us.

[1850]

Finally, Madam Speaker, and to close my comments, I'd really like to say this: this builds a better taxation system for the future. Regardless of who governs this province, whether it's the B.C. Liberal Party, if an opposition gets elected at some point in time, it is ab-
[ Page 7576 ]
solutely critical that we have an administration system and a taxation system that sustains the business opportunities in this province and generates sufficient revenue to provide the services that everyone expects, and that's exactly what this does.

That's why I was so pleased just a few minutes ago to hear the previous opposition member, now independent member for Cariboo North identify that he is going to support this motion because he does, I think, accept that we've responded to the public. We understand the challenges that the public has identified. We've provided a balanced outcome, and for that reason, along with many others, I will be wholeheartedly endorsing today's motion.

N. Macdonald: Just to take my turn and to speak again on an issue that really has dominated this Legislature since 2009, one of my colleagues from Cowichan Valley, just newly-elected in 2009, asked over dinner what we did before the HST in this House, because it seems one issue after another has led us to talk about the HST here in the House. So we continue.

This is a motion that was put forward by the government, and essentially what it does is it takes the announcement of last Tuesday, and it puts it in front of this Legislature and gives us an opportunity to speak to it. I think there's very little that can be said that's new on the HST, but I'll certainly try to make the points that I fairly consistently made with regards to the HST.

I think that very early on, when it was announced in the summer following the last election in 2009, it became immediately clear that for many of the things that we did not pay PST for we would now pay, in addition, the HST. What that meant was that there were savings for major corporate and industrial parts of the tax base and that there would be a significant shift.

I think what this motion recognizes is that that shift is significant. The government has given up trying to suggest in some way that as it stood, the HST would be a break-even for consumers. It simply wouldn't. They are recognizing that there is a $1.6 billion to $1.9 billion shift, and it comes after a decade of similar shifts.

There has been a significant change in how we raise funds for government, and the implications of that we see anecdotally and we can measure. When you shift taxation from major corporations and you put it on the backs of families and individuals, there is a consequence that is predictable, and with this government, that tax policy is very deliberate. It has benefited corporations, and it has hurt individuals to a significant degree.

What we see with this tax is that, again, we are going to inevitably have services cut, and we will have taxes and fees increase for most ordinary citizens and taxes lifted from corporate interests and privileged interests. What we see on the ground is a deliberate policy where, as I said, the results are predictable.

Whether you argue about child poverty being the highest in Canada or not, we know that child poverty has increased. We know that the divide between those that are wealthy and those that are in poverty has increased. We have created a province very deliberately with these policies that is less fair than it was, and this is one more step in that process.

The feedback that I get from my area has been very, very consistent, and it really, up to this point, could not be clearer to me. People found the HST very unfair. Tax policy in British Columbia is always exacerbated in my area from our proximity to Alberta.

[1855]

The types of businesses we have very often are businesses that will be intended to draw people in from Alberta. For instance, with the tourist industry, the impacts would be profound because everything that goes on in tourism is something that will be compared to what's happening in neighbouring jurisdictions, in particular Alberta.

Just to give it as an example, Panorama ski resort. About 70 percent of the people that are coming there will come from jurisdictions to the east and, therefore, they have decisions they make when they come into the area.

So it could not have been clearer to me that on the tax shift and what people thought in my area, people did not like it. I think for most MLAs, they would have been able pretty clearly to see that people didn't like what was going on. There was the petition. In my area 30 percent of the people found a way to sign the petition and to indicate to government that they wanted the HST gone.

Now, to be fair, it's not as easy to say how people have reacted to these changes. Since this was introduced on Tuesday, I've been back in the riding for the three days. A few people talked to me, but I can't honestly say how all people feel about the changes.

But pretty clearly, they took the time in an unprecedented way beforehand to talk about the HST. I'll just take one issue, just one issue. It illustrates some of the complications that were caused by the HST. It deals with the sale of second homes.

Golf courses, ski resorts depend tremendously on the sales of real estate. When the HST was introduced, the second-home buyer would be paying an additional 12 percent, and that's money they could not recover. So on a $300,000 condominium, for instance, they would be paying $36,000.

Well, if you have a second-home buyer that can choose between British Columbia or Montana or the Alberta Rockies, that is a significant barrier to them choosing to come to Kimberley or choosing to come to Kicking Horse Mountain Resort and buy property and buy those condominiums. That's just one of a whole host of issues that people took the time to write to me about as their MLA, and I know that all of the MLAs
[ Page 7577 ]
that are here received many of the same concerns. Now, clearly, with this motion there's recognition that there are severe implications for people. That's why there's an attempt to change it.

The next part that I want to talk about here is perhaps a more difficult part for this government. I always thought — and I've listened to other members — that the merit of tax policies is one that people understand and will have a variety of opinions on, including on the HST. You will have a variety of opinions, and I understand that. But with this issue you cannot remove the issue of trust. I think this is really where you cannot, knowing what we know since 2005, really support a motion like this, because it has to be seen in the context of the experience that we've had not only in recent years but since 2005.

Even beginning with this motion, and I think many members have pointed it out, the Premier herself characterized it as a bribe. What's the problem with, as the Premier has said, "bribing" with our own money? There are significant problems. So the Premier herself recognizes that this motion is problematic from that point of view.

[1900]

Secondly, it asks us to trust the government to follow through on commitments. None of the things that are talked about here are things that are going to happen immediately. They are all going to happen after the referendum and possibly after a provincial election.

I cannot, after being here since 2005, trust that the government is going to follow through on those commitments. Even in the text of this motion the government is breaking commitments that they made not that long ago. They are making commitments into the future, and in making them, they are breaking commitments they've made in the past. But it goes deeper than that. This is a government that, time and time again, has chosen to act in a way that undermines the public trust in what they are going to do.

In a general sense there are so many examples of explicit commitments that have been routinely broken by this government, and I think we are all familiar with them. People should be familiar and haven't forgotten them. It goes back to when they first stepped into power with the breaking of the health employees union contract. It was an explicit commitment not to do that that the government then moved quickly to break.

The B.C. Rail scandal — we still do not fully understand what took place there, but a few things we know. We know there was an explicit promise not to sell B.C. Rail, and then we know that there was a move immediately to sell it. A clear commitment was made and very quickly broken.

In this motion we talk about things that are going to happen or things that are supposed to happen. Yet as soon as they're given the opportunity after an election or when it's convenient, then what's going to happen changes dramatically.

It's on health care — where you want it, when you want it — even on the convention centre, which was mentioned before. It's a quote from one of the members here, the clear promise that it's going to be $495 million and not a nickel more. I mean, you could not be more clear on the commitment from the government when the minister responsible says that, yet if you took the nickels that were spent beyond that $495 million and lined them up, it would be a line, if they were touching, all the way to Halifax and halfway back. So clear commitments made here in this motion are naturally something that most British Columbians simply are not going to find as trustworthy.

More recently the deficit promise of "$495 million guaranteed" simply was not a guarantee that turned out to be in any way accurate. All of these commitments were made unequivocally when the clear intention very often was for the government to do something that contravened that promise.

On the HST specifically, again, there really is absolutely no reason to trust. A written commitment in 2009 that there would be no HST — very clearly the opposite happened. When the HST was introduced, the way it was characterized turned out to be something that was characterized in a different way, when it became convenient to do so, and on and on. Like I say, we have been through so many debates like this as the government changes the information, changes the things they put out as facts.

The bill was saying that the money raised by the HST was going to be entirely for health care. I mean, we passed a bill on that issue, and it turned out to be one more laughable part of this whole boondoggle.

Then we get reports paid for by the government. It's the Mintz report. It's Dinning. It's the Fraser Institute doing their own — numbers all over the place. The ones that are convenient for the government they throw out there and play with. But the reality is that most British Columbians would agree that the government simply has no credibility.

[1905]

When you look at the motion and the government lays out the things that they are going to do, then basically what you have is something the Premier describes as a bribe, and most British Columbians would say: "Well, you cannot constantly make promises that you break and expect to be taken seriously." For that reason alone, the motion needs to be defeated.

The third point is something that, again, is troubling. The government seems to believe that simply by telling itself they're good managers, in fact they are, when the evidence points again and again to the fact that on many, many issues there is bungling. There is no more obvious example of that than what's happened with the HST. It has been bungled completely.
[ Page 7578 ]

When the Minister of Finance stands up and tries to defend the HST, basically one of the defences is: "This is such a huge mess that if we have to go back to what we promised to do during the last election, it would create a fiscal catastrophe." Well, if your argument is that you've made such a mess that you're afraid to try to get out of it, that speaks to the bungling that's gone on. So with this motion we have, again, a case of fiscal mismanagement.

There's a likelihood that this creates a pretty chaotic situation. I don't think any British Columbian thinks that a tremendous amount of thought went into the fiscal implications of what's suggested here. This is a political fix. The implications, if the government is actually to follow through on them, are pretty profound. The Finance Minister once condemned a type of fiscal policy-making that he now embraces — that ready-fire-aim method of financial planning.

But there are implications to tax policy being made in such a slipshod manner, implications that will mean either that this government will not follow through on its commitments or that it will and will create a chaos solved by only deficit or cuts to services or raising fees and taxes somewhere else. That is the predictable result of following through on some of these proposals here.

It has a real feel of back-of-the-napkin tax policy. It's hard to see what the consistent philosophy is, and like I say, the myth of B.C. Liberal managerial skill is just really put to the test with what has gone on with the HST. I think many would see this as an irresponsible and a pretty cynical gamble that compromises our long-term fiscal health.

Basically, then, the HST is part of making B.C. a less fair province. That's one reason not to support anything that promotes the HST going forward. Secondly, with this motion in particular, it asks us to trust the government when any sensible person would by now know that they can in no way trust them. They simply have not earned the trust. Third, it is another example of where the province's finances are being mismanaged in an irresponsible way.

This is tax policy that is made on the fly with no regard for our long-term fiscal health, so I won't be supporting the motion. I don't think it's a motion that deserves support. With that, I turn the opportunity to speak to it over to those that would follow.

M. Stilwell: It's a pleasure and a privilege to stand in this House today in support of this motion, although I have to agree with the great parliamentarian Winston Churchill, who said there's no such thing as a good tax. In some ways Mr. Churchill was right. There may not be any good taxes, but there are definitely some that are necessary. That is the big difference in this debate.

[1910]

We all know that there are as many jokes about taxes as there are jokes about politicians, but Franklin Roosevelt got it right when he said that taxes are the dues we pay for the privileges of membership in an organized society. They're the necessary evil that fund our schools and hospitals, and taxes are the reason we can build the roads and bridges and rapid transit we all want. The reality is that taxes will disappear the day we all stop making demands on government, and not before.

Don't get me wrong, Madam Speaker. Like everyone in the House, I get it. I know that people who complain about taxes can be divided into two classes: men and women.

We all know that the HST could have been introduced better, and some British Columbians remain angry about that and perhaps rightly so. Everyone on this side of the House has the scars to prove it. We could have and should have done a better job at introducing this major change in tax policy.

But today, as we head towards the HST referendum, I think we've got to suck it up, as my kids say, and start thinking and acting like adults, and that means putting B.C. first and our personal concerns second. The fact is that when everything is said and done, the HST has been dissected in every possible way, and it is the right tax at the right time.

The HST is the kind of tax we need to grow our economy and make our province more competitive. It's the kind of tax that reduces paperwork on our small businesses. It's the kind of tax that makes our forestry, mining, oil, gas, agriculture and manufacturing businesses more competitive and able to provide the jobs we all need right now to continue the recovery as we come out from under the international recession.

It's the kind of competitive tax that made sure B.C. film studios recently won the production of the upcoming Superman movie that will create 800 jobs. When it comes to taxes, the old PST is like kryptonite to job creation, and without the HST, that film would be made elsewhere.

This government understands that taxes are necessary, but we also understand that a strong economy is the foundation of everything we want to do for B.C. families. That means a tax policy that works, a tax policy that keeps B.C. businesses competitive, and a tax policy that recognizes we cannot and should not spend more than we make.

We're all familiar with McDonald's new NDP value meal. You simply order anything you like, and the person behind you has to pay. That approach is the way the NDP passes off today's costs to the next generation.

As a mother, it's not the legacy I want to leave for my children or for any family in this province. Our generation, the generation that is spending today, needs to make sure we can afford the things we're buying today, as a society. This government refuses to leave today's bills on the table and have our kids pick up the tab down the road. In my own community there's a Jewish proverb that says: "Taxes grow without rain."
[ Page 7579 ]

But if we have to have taxes, and we all agree we do, then we have to make sure those taxes work for families. The HST, with the changes introduced by the Premier and the Minister of Finance last week, does just that. The HST builds a better economy, and that's something all of us need if our families are going to prosper.

Ronald Reagan used to joke that government's view of the economy could be summed up in a few short phrases: "If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it." Many a truth is said in jest, and tax jokes are a dime a dozen — or 11 cents, with the HST.

It's pretty clear that taxes and tax policy are probably never going to capture the public imagination. But together, we have a big decision to make next month. Do we put B.C. first and do the right thing when it comes to the HST, or do we vote against the HST just because we're angry at how it was brought in?

None of us here can rewrite history. We can't go back and change the past. We can only move forward and do the right thing, the right thing for our families, for our job-creating businesses and for the long-term future of British Columbia.

That's the choice we have, and like my colleagues on this side of the House, I believe British Columbians will make the right choice next month, because like us, they want to put B.C. first.

M. Sather: Well, my, oh my. We're witness to the ongoing saga, the ongoing debacle of the HST that this government has brought upon itself and brought upon, unfortunately, the citizens of British Columbia. We have a new Premier now who has had a number of things to say about the HST.

[1915]

She's been in a rush, it seems, to deal with the HST. She's tried a few things. I'm not exactly sure why she's in such a rush, but it seems to be tied in with the necessity that she feels to call an election soon. Now, I don't know. Even her good friend Bill Good is saying: "You know what? Maybe you ought to try governing for a while" — you know, that arcane concept — "and we'll see how we like you then or not."

No, she's bound and determined to have an election soon, apparently, but she had that little HST problem to deal with. When she was running for the leadership, she said: "Well, what? That's no problem. We'll get rid of it. We'll just get all those MLAs that are waiting for me to be crowned to go in the House and vote against it."

Well, you know what? That didn't go over so good. Some of those MLAs said: "Just wait a minute. You know, we actually have done that already, and we voted for it." She kind of had to retract that one. That didn't go over very well.

Then it was going to be a vote on the 24th of June, I think. That didn't happen. Now it's dragged out to a mail-in ballot and just a tremendous amount of toing and froing.

I'm sure the members opposite probably said to their esteemed new leader: "Look, just show us what the plan is." They want to see a map, I'm sure, of what they're in for, but I'm not sure that our erstwhile Premier actually has a map. I think they're beginning to wonder as well.

Certainly, the Liberals see the train coming down the track, and they are doing anything they can, which they think, they hope desperately, will somehow get them over this HST obstacle.

Well, there are more promises being thrown out. We've seen promises and broken promises and re-promises around the HST. This is another one. "Oh no, don't worry, we're going to reduce it in the future, next year.

"We'll drop it a percent," they say, "and then maybe later on, 2014, we'll drop it another percent. Just trust us."

"Now, you know you can trust us around the HST. We have an immaculate record on that account, so never worry. We may be saying one thing, but it's not that we're going to do another. Just trust us." That's what they're asking British Columbians to do: to trust them on a file where they absolutely have no credibility whatsoever.

As far as the corporate tax rate that they, in a Stalinistic fashion, are now raising, they say, 2 percent, they're telling business, "Don't worry. Don't worry. It's only temporary, and as soon as we have a balanced budget" — which they still claim they're going to do in the spring of 2013 — "don't worry, we'll get rid of it, and we'll drop that small business tax and all those goodies." That's, of course, before this phantom second 1 percent is supposed to happen.

It is the most unbelievable math you can imagine. I think that as we go through this once again twisted — and, hopefully, the last — process around resolving the HST, British Columbians certainly are seeing through the government's machinations.

We all know the famous, now infamous, statements that the Premier has made about buying people with their own money. I mean, I couldn't have said it better myself. Thank you very much, Madam Premier. I've got to admit, she can be helpful at times when it comes to looking for quotes from the other side.

Then the government commissioned a report, the Dinning report, saying that the HST is going to cost the average family 350 extra dollars a year, notwithstanding a few big-ticket items like a house and renovating a home — those kinds of minor deals.

Of course, another study, Stats Canada–based, said it would be $520 a year — or it is that — that it's costing the taxpayer. That one also didn't take in housing and home-related investments.

[1920]

If you look at what some of those costs are, an $800,000 home, which certainly isn't unusual in the Lower Mainland, knocks you back 19,250 bucks in HST.
[ Page 7580 ]
A $700,000 home, it's 12,250 bucks. You spread that kind of an expenditure over quite a few years, and you still get an average that gets jacked up quite a bit, I would suggest, above even the $520 figure. The member for Peace River North figures it is costing him between $600 and $800 a year, and he's probably right. That's probably around what it is.

The former Finance Minister, the member for Vancouver-Quilchena, said: "Don't you worry. Business is going to pass on their savings to the consumer." Now, I haven't heard too much about that claim lately, like some of the other ones. The revenue neutrality of the tax — that's another one that went out the window. But if you just look at the big exporting industries — like oil and gas, like mining — they sell their product on the open market, the international market. It doesn't make a whit of difference whether there's HST in little old B.C. or not in terms of what they get for their product. So what incentive is there for them to reduce the cost of their product? None whatsoever, and they don't. They don't.

J. Les: The NDP really doesn't get it.

M. Sather: The member opposite doesn't get it. We realize you don't get it, Member. The whole province realizes you don't get it, and no matter how much you try to spin, no matter how much you try to weave on the HST, the facts of the matter are that it's a scam. It really is, and it's a shame.

Deputy Speaker: Member, may I remind you to address your remarks through the Chair, please.

M. Sather: Thank you, Madam Speaker, I'll do that.

It actually is a shame, and you know, rather than trying to manipulate again the people of British Columbia, you hear them saying: "Well, okay, we screwed up big time." Yeah, okay. And there's that $1.6 billion; they haven't taken all of it yet. There's another $500 million that they're going to collect, I assume, on July 1 before they get to the referendum vote.

"But never mind all that," they say. In fact, you hear the members opposite telling British Columbians this kind of chiding thing. "Well, you have to support the HST, because look at the ramifications. Look at the results if you don't, like the $1.6 billion."

Well, excuse me. That's their fault that there's $1.6 billion on the hook. It's not the fault of the people of British Columbia, and it's appalling to hear them stand up here and say that British Columbians now have to accept it — "suck it up," as the member for Vancouver-Langara just said. We just should suck it up now.

I don't think so. There's no reason why the people of British Columbia have to suck it up when a government has been so disingenuous, as this government has been around this issue, and continues to be so. Over 700,000 people in this province signed a petition to get rid of the HST. You know, we haven't seen a voice like that before in this province come forward and say how strongly they feel about it.

What effect does it have on the street? I was talking to somebody the other day. I don't know if their figures are way out of whack. You look at contractors, for example. A friend of mine was telling me they had some landscaping done, and they had to get a contractor in. She was talking to the contractor about the HST: "How does that affect you?" He said: "Well, my problem is that I can't find anybody that will pay the HST, even when I offer, even when I want to pay the HST. It's hard for me to find anybody that will do it."

Obviously, he's got tax forms to fill out next year, so he needs to show something for that. The fact of the matter is that it's a total underground economy, which there is no accounting for. How much is the HST costing us that way? A lot — you know, the people who now aren't waiting to see about the renovations, to see if the HST is gone so that they can save a whole bunch. All too many, unfortunately, are not paying any HST. They're going under the table.

[1925]

There's the roughly revenue neutrality myth that we certainly know was not true, and on it goes.

Let's talk a little bit, in the few minutes I have, on what is affected by the HST. A lot. Live theatre, movie tickets, amusement parks. These are costs that weren't there before, which are now there with the HST. Veterinary care; accounting; architecture; wedding planners; caterers; acupuncture and alternative medicine; yoga; dance; cooking and martial arts programs; haircuts; team sport fees; private facility or community centre rentals; ice rink rentals; taxis and commercial bus fares; car washes; auto towing; emergency roadside services; bicycles; school supplies; basic telephone and cable; magazines and newspapers; part of the cost of non-prescription drugs; vitamins and certain other health care products; appliances; new housing.

Sometimes we hear that if you buy a new house, it's only if it costs more than $525,000, but that's not the case. You're still paying 2 percent on up to $525,000, a total of $10,500, a lot of money that doesn't count because it's one of those big-ticket items. The hurt goes on and on.

They're offering some reductions to some folks through this, a one-time-only reduction of $175 a year. But it's going to cost you, by the way, before this is fully implemented, this phantom reduction in the HST, if it ever is introduced. By the time it is fully introduced, you will have paid another $800 in HST, and that $175 a year is going to take you until after 2020 to even break even. That's the kind of pig in a poke that this government is offering to the people of British Columbia and expecting them to swallow.
[ Page 7581 ]

I don't think so, Madam Speaker. I think the people of British Columbia are too wise to do that, and I think we are going to see that in the vote to come.

I wanted to talk a little bit about some of the comments by the very nice gentleman — and he is a nice gentleman — the member for West Vancouver–Capilano. I won't even say what he referred to, but I just want to go over some of the economic record of this government.

This government has run up…. This supposed anti-deficit government has run up a deficit of $47.3 billion in this province, on top of which they have another $53 billion in so-called contractual obligations. It's another word for debt that this government has run up. They've run up seven deficit budgets since they've been in, including the biggest deficit in the history of the province. They've been a have-not province six times, and the B.C. Progress Board report in 2009 found that B.C. was sixth out of ten provinces for business investment. They have the second-lowest rate of productivity growth in the country.

The member called it "an oasis of financial rectitude." Madam Speaker, if that's an oasis of financial rectitude, I would hate to see what the other side of the coin is, because it would be a very scary thing indeed. I think what we're looking at is a desperate attempt — you know, a Hail Mary pass. "Let's throw this one more time. Let's go. What else can we do to convince British Columbians to believe us now? We're going to do this; we're going to do that. If you were to vote in favour of the HST, then we're going to follow up on our promises" — of course, in like manner that they have done so far.

[1930]

There's a whole range of other things — maintenance costs for condos and rental properties going up due to the HST, even the parking tax in Vancouver. Restaurant sales in B.C. are trailing the rest of Canada since the HST was implemented, notwithstanding what the Finance Minister says about restaurants and how disparagingly he speaks of the restaurant association: "They're lobbyists." My goodness, this government lives on lobbyists. I can't imagine them speaking ill of a lobbyist, but there you have it. There's a lot of amazing things that have happened in the way that this government has presented themselves around this issue.

I think the government should not just apologize for the first round of missteps, shall we politely put them, but they should apologize for the whole thing, including the way they said they were going to equally fund the two sides of the referendum. Instead, they've come out with $7 million. All but 4 percent of it is roughly designated towards supporting the HST: their friendly HST website, the $700,000 that they wasted last fall with a flyer that got thrown in the trash.

There should be apologies for all of that, not more manipulation. With that, all I can say is that I definitely will be voting against this motion. It's a sorry tale, but there you have it.

J. Les: I am pleased to respond briefly to the motion that's before us this evening. This is actually a pretty important debate that's happening, but even more important is going to be the decision that British Columbians are going to be making in about a month in the province of British Columbia. I don't think it's possible to overestimate the impact of that decision.

Aside, possibly, from provincial elections themselves, this will be the most important collective decision that British Columbians will be called upon to make so far in the history of the province. We are talking about a decision that involves the collection in one way or another of billions of dollars of tax revenue, and it matters a lot in terms of how those taxes are levied, how they're collected, who pays them and when they are paid in an economic chain of events.

Rather than have this debate degenerate into political one-liners and gotcha types of political events, I think it is very important for British Columbians to have a sound and reasoned economic discussion about which is the best way forward. For me there is absolutely no question. The HST is a sound tax. It is better by far than the antiquated provincial sales tax that we used to have — 1949 vintage.

I think it's fair to say that there is a very large international economic consensus that value-added taxes are the best for the modern economy. The HST, of course, is what we call it here, but it is a value-added tax. I don't think there's any question around that fact. Governments of all persuasions around the world, socialists as well as capitalists, have brought in the value-added tax and use it happily.

We have a socialist government in the province of Nova Scotia. I have been able to find no evidence that they disapprove of the HST in the province of Nova Scotia — no evidence whatsoever. As a matter of fact, they are so enthusiastically in favour of the tax that they recently raised it to 15 percent, the highest in the country, which kind of leads me….

Interjections.

J. Les: I detect some unhappiness on the opposition benches. I suspect secretly that their disapproval has to do with the fact that the tax we are proposing is too low, because we know that the new opposition leader is on the record as generally being in favour of higher taxes and more spending, which is the New Democratic Party as we've known it in British Columbia for all these years. That's what they've consistently been in favour of, more taxes and more spending.

[1935]

We certainly hear the opposition in the House every day calling for more spending. If you're going to have more spending, then I guess you're going to have to raise more taxes or jack up the accumulated debt of the province.
[ Page 7582 ]

Let's just get off this notion for a moment, from the opposition perspective, that this is an ideological debate. Ideologically the members of the opposition are not opposed to a value-added tax. I would suggest that flat out, because I find no evidence anywhere of any other socialist party that is opposed to a value-added tax, not one anywhere. If members opposite can show me one of those, I'd be happy to consider the material.

We have this very important motion in front of us and, as I said, an even more important event happening in about a month. We have others around the province who are suggesting that they'd like to provide some input. Mr. Vander Zalm has already been mentioned. He suggests, for example, that somehow in British Columbia we have given up our economic sovereignty by entering into the harmonized sales tax. I guess that wasn't an issue in the province of Ontario or Quebec, or the maritime provinces.

I think the very fact that we are considering this motion in the House instructing the federal government as to what to do with respect to tax policy in the province of British Columbia is a pretty good bit of evidence that, in fact, we definitely control tax policy in British Columbia, as we always have, and we have ceded none of that economic territory in British Columbia with the advent of the HST — absolutely not the case.

The fact that we've got this resolution in the House, that we're debating it and that pursuant to the agreement we have with the federal government, this resolution will cause the federal government to do certain things pursuant to it I think is certainly very good evidence.

Members opposite have also suggested strongly, in some cases very strongly, that they want to go back to the PST. Not only do they want to go back to the PST, but they want us to go back to the PST in exactly the same form as it was previously. The opposition Finance critic has repeatedly asked the government Finance Minister over and over again to commit to bringing back the exact same PST as was in place before.

Now, of course, if that were the case, if the referendum were to go the wrong way and we would be obliged then to go back to the PST, and if we were to go back to the PST as it was before, I'm sure even the opposition Finance critic knows that we would have about a $3 billion hole in the budget.

You know, we actually need to stop and think about that a minute. Is it responsible for anyone in this House to be advocating for a position of that nature? I don't think it is.

Interjection.

J. Les: The member for Maple Ridge–Pitt Meadows, who's trying to interject in the debate here…. You know, he talked earlier about who are the better financial managers, the government that was previously in place here in the 1990s or the government since 2001. Well, we can debate that for hours and hours in this House here, but let's look at what happened to British Columbia's credit rating in the 1990s. It went south. It went south in a serious way.

After 2001 we slowly worked our way back up to a triple-A credit rating, the best credit rating there is. That verdict, Madam Speaker, has not been rendered by members of this House. That verdict has been rendered by the credit-rating agencies that do that work all the time on an international basis. They have said quite clearly that a B.C. Liberal government is better to manage the economy than an NDP government. The evidence is there, and it's clear.

At the end of the day, as I said, a very important decision for the people of British Columbia to make, and it's not going to be a decision they should base on the political wit or lack thereof that's expressed in this House. They need to carefully consider the evidence and think about what the impact of their decision will be on future generations.

[1940]

Many of us in this House have grandchildren. As members will know, I have quite a few grandchildren. I actually think it's very important to think about what our decisions will mean for them. I don't think that there's any debate whatsoever that from that perspective the HST is the best thing we could do in British Columbia. It doesn't matter for me personally. It really doesn't matter for me personally. Life will go on if we have to go back to the PST. But I know this: for my grandchildren we are much better off with the HST instead of the PST.

On that basis there is absolutely no debate in my mind whatsoever. I'm voting for this motion, and I am voting in favour of the HST on June 24.

S. Simpson: I am pleased to join the debate here around Motion 11, which is the motion that will enable the latest scheme of the government as they desperately try to work their way out of this HST mess that they put themselves in.

When we talk about this, I think it's important that we take a moment to realize how we got here. How did we end up in this situation that we're in today?

Well, the first thing you have to understand is that this is a government, the B.C. Liberals, that for years and years opposed the HST. Carole Taylor, one of the predecessors of the current Finance Minister, was absolutely clear in her opposition to the HST — where it cost us economic sovereignty, where it just didn't make sense for British Columbia. The government maintained this position right through the 2009 election. They maintained this position to the point of responding to questions from the restaurant industry in writing where they essentially said that they would not introduce the HST.
[ Page 7583 ]

That was the position they took. They took that position right up to the election. Of course, the other position they took heading up to the election was a $495 million deficit, maximum. British Columbia was going to do better than everybody else in tough economic times. That was going to be the deficit. Of course, what we saw immediately after the election was that this government had to acknowledge that we were looking at a debt that was billions higher than that.

The government, all of a sudden, had made this big mistake — the biggest mistake in the history of not just this province but maybe the biggest mistake in the history of financial reporting anywhere in this country. It could very well be. It certainly was a huge, huge error, but they quickly wanted to dismiss that.

What did the Premier of the day do? The Premier said: "I'm embarrassed because I look like a fool, and my government looks like fools. We either look like fools, or we look like people that misled folks. Let's figure out how to drive that number down, and we will do anything to drive that number down."

What did they do? The federal government, who quite rightly wants the HST adopted across this country so that they can have greater control of tax policy in the country, said, "We've got a billion six for you" — $1.6 billion. "You take the HST; we give you the money."

Well, there was no thought. It was: "We get a billion six; we're taking the billion six." That made the number a little bit more palatable for the Premier. Didn't matter what this policy meant for the province. It didn't matter that this was a shift of almost $2 billion, a $1.9 billion tax shift onto consumers, onto working families, onto small business from the corporate sector. But this government was prepared to fold up and do that immediately.

Hon. Speaker, again to remind you: before the election, no HST. Within almost minutes after the election, we're negotiating the deal on the HST. British Columbians across this province were outraged. They were outraged not just for the tax, but as the government side has acknowledged, they were outraged that they had been so dramatically misled by the B.C. Liberals.

[1945]

We saw a level of public outrage that we have simply never seen, probably in the history of this province. It was outrage at the process. It was outrage at the tax shift. That was reflected in more than 700,000 people signing that initiative — a remarkable accomplishment. Whatever you think of it, 700,000-plus people signed that initiative because they were outraged with the conduct of the B.C. Liberal government.

What have we seen since then? Well, we've seen the story from the government change on almost a daily basis. The numbers change on almost a daily basis from the government. One day it's going to be revenue-neutral. The next day it's making major money for the province. One day it's going to create 113,000 jobs. The next day it's going to create jobs that are within the margin of error, 2,400 jobs a year — within, probably, the margin of error of job creation in the province — over ten years. So it's within the margin of error.

Maybe the Finance Minister might want to learn a little about economics now that he's got this file, because he hasn't demonstrated any capacity in economics, any capacity at all.

Interjection.

S. Simpson: Yeah, well, we've seen the performance so far.

Economic growth, they talk about. There is no evidence of economic growth other than the bought-and-paid-for studies. The reality is this: this is a massive tax shift. It's a massive tax shift onto working families and small business.

The member for Chilliwack talked about this government's ability to manage. He didn't talk about the debt in this province, the debt that's reached record levels under the B.C. Liberals, $47-plus billion.

Next year, in the year coming up, a 13 percent increase in that debt. We'll go over $53 billion to almost $53½ billion, and for the next couple of years an over 21 percent increase in debt. That's the reality of where this government is going. What it is, is the reality that it's a government that's desperate to get out of this HST mess and will sacrifice anything to do it. It really doesn't matter.

Now what do we have? We have the government bringing forward this motion. They moved the referendum to June. Fair enough. But what do they do? They move it to the Referendum Act. What's the reality of moving it to the Referendum Act?

Well, the reality is we now have the most remarkable attempt on the part of this government to buy this vote. First of all, we have this motion that's going to attempt to buy this vote, and what is this motion all about? What did the Premier say about this?

In March the Premier said: "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." Nothing could be more truthful than the Premier's comments in March. Of course, her view has now changed, but that was the view.

What else do we know? Not only have they attempted to buy it, but we have this unbelievable expenditure of $7 million to purchase it. How does that work? Well, we have almost $5½ million of straight-up government money to promote the HST. So $5 million from the government — we've seen the stick man ads as they've moved from the first ad on to become a crass promotion of the HST — plus $250,000 to the no side and the $200,000 for the telephone town halls.
[ Page 7584 ]

Now, to be fair, there is other money being spent, so that's almost $5½ million. And $1.2 million was spent, a half a million on public dialogues by the universities and $700,000 on a voters guide. That might have made sense to spend that money. Then, of course, there's $250,000 for the yes side. So almost $5½ million on the no side and a quarter million dollars, $250,000, on the yes side. That's the reality of the spending to try to buy this referendum.

[1950]

The reality of this particular motion, as well, that we just have no clarity on, no clarity at all, is what the effect will be on government services. We're going to face a cut that, depending on how you look at it, is somewhere between $1.6 billion to $1.9 billion of government revenue cut out of this by cutting the 2 percent. We're going to see that cut.

We've seen that the government has said they're going to balance the budget at the same time. We've seen no explanation by the government of which programs they expect to cut in government in order to try to make that happen. There's no explanation of what they're going to do. They've talked about, obviously, this position around the corporate tax increase, but they're very clear that's a temporary matter, and it will be temporary in nature.

The reality of this is that we have a government here that has brought in this particular scheme to try to buy this HST vote in June. It can't be seen as anything else. That's what it is.

The reality, though, is this. We're hearing this day in and day out in the media. We're reading it in the newspapers. Even after the government introduced this scheme the other day, we are hearing that this government is not believable.

People don't buy it. They don't believe the government will carry through. They don't believe that it's anything but a crass attempt to buy their vote. These are people who are very angry at this government for the way they introduced this initiative in the first place, the way they misled the people of British Columbia in the first place.

Now they're being asked to buy it again, to believe the government again, and the reality is that they're not prepared to do that. We have a government that is not believable. We have a government that simply does not have a coherent policy around taxes here but is careening from position to position when it comes to this HST in a desperate attempt to get this tax through. And it really is a desperate effort to make this tax work.

We have a situation where we need to engage British Columbians, I believe, in a much more thoughtful discussion about tax policy, and we need to move that discussion forward over the next period of time. But that's not going to occur, because we're going to have to deal with this matter.

The reality is that the people of British Columbia have not accepted this position of this government. They don't believe this government. They haven't bought this latest sales job. I believe they are going to oppose this tax in significant numbers, and when they oppose the tax, we will then get back to a discussion of how the tax policy works in this province, and we will move forward, back to that discussion.

I will be voting against this, as will the members of the opposition. The people of British Columbia, I believe, will vote against this initiative when they get the chance, come later in June.

We will move forward. We will move forward in a progressive way in this province. We will move forward in a way that's fair for working families and for small businesses. We will move forward in a way that's fair for consumers, we will move forward in a way that ensures the key government services that people expect from government are funded, and we will move forward in a way that ensures we have an economy that speaks to the interests of everyday British Columbians.

I look forward to the rest of this debate and to the vote, come June, when we get to defeat the HST once and for all.

K. Corrigan: I am rising to vote on Motion 11 as well. The member for Cariboo North a little bit earlier said in this debate that the government had conceded that they'd handled this terribly. Well, they have. They are concerned about that, I think, but I don't believe it's because the government feels bad in any way about deceiving the people of the province. I think it's because they got caught at it, and the people rightly responded with a great deal of anger.

[1955]

I want to say that I am really proud of the exercise that brought us to this point of considering Motion 11. I'm proud of the British Columbians who worked, who believed in their democratic rights and acted on those rights by coming together — 700,000 British Columbians coming together — to become the very first successful initiative drive in B.C.'s history.

People were enthused. They were empowered by that opportunity to say that what the B.C. Liberal government did was not right.

British Columbians are well aware of what it was that got people angry and got them motivated to work on the campaign, to make sure that they got all those little tables set up in parking lots, in community centres, in malls, on street corners. The thing that got them there was the deception of the B.C. Liberals and the HST, promising first, before the election, that there would be no HST and then bringing it in just a few short weeks afterwards.

Well, we have a new Premier. What did our Premier say about it at the time? Here's what she said at the time. "It's an insult to British Columbians for the government to, first of all, have brought in this tax in what most of
[ Page 7585 ]
us regard as a very, very sneaky way and then refuse to bother explaining why they did it properly. They can't even be bothered to mount a defence. I think," said the Premier then, our now Premier, "that's an insult."

Now the B.C. Liberals have a leader who apparently thinks her colleagues are sneaky and insulting.

She also knew what almost every other British Columbian knew, even when the Liberals were denying it — that the Liberals planned to bring in the HST, despite claiming the opposite during the election.

When she was talking about whether or not this was planned in advance and the suggestion that it wasn't planned in advance, she said: "I just don't think it's possible that that could be the case." Such strong criticism from the person who is now the Liberal Premier, essentially saying the Liberals were misleading, saying one thing and doing the opposite, insulting British Columbians. Yet this is the party that she decided she wanted to lead.

So here we are with Motion 11. This is the activity…. This is what has brought us to where we are today.

What else did our esteemed Premier say during the process that has gotten us here, debating this motion? Well, on the first day of her leadership bid, the then candidate proposed cancelling the HST referendum in favour of a free vote in the House. This position was then reversed on February 2, and she called for an early referendum instead, committing to the date of June 24, which had been proposed by another Liberal leadership candidate who is sitting across from us in the House at this very moment.

That candidate said at the time…. He called it a flip-flop. He, of course, was correct that this now Premier flip-flopped on this issue yet again.

What else did the candidate, now the Premier, say and do? As I said, after first calling for a vote in the House, she flip-flopped to say that there should be a referendum on June 24. "Move it up," she said, as did the other Liberal candidates for Premier. Her policy book said that the date for a referendum should be June 24.

[L. Reid in the chair.]

She also said: "We're going to have a referendum on June 24, and we want to make sure that British Columbians are going to have their say." Over and over again our now Premier said the referendum would be on June 24, presumably to curtail the economic uncertainty that is hurting British Columbia.

It is hurting British Columbia, this economic uncertainty. I met with some real estate agents and developers a few days ago, and they said people are not building houses. They are not buying houses. They are not making large purchasing decisions because they simply don't know what is happening with this tax.

So it is important to have that uncertainty taken away, to have a decision as quickly as possible. It would have been financially beneficial to the people of this province if we had had a decision on June 24, as the leader promised.

[2000]

Did that happen? Well, the candidate became the leader on the promise that we would have a referendum on June 24, and she also promised in her platform that the referendum would be conducted in the same manner as a provincial election; i.e., people would go to the polls, and they'd vote on June 24 under the strict, stringent controls of an open, accountable, transparent process that an election is.

But what happened after the leadership was decided? Well, two more promises were broken. The vote that was supposed to be on June 24, that the Premier said would be on June 24 — not starting, not commencing, but would be on June 24 — now doesn't end until July 22, with the results of the ballot not known until August, just a month short of the original September date.

The promised referendum, to be conducted in the same manner as a provincial election, now is a mail-in ballot, or you can drop ballots off at collection stations. This is so far from the strict controls that an election process calls for that I think there is real potential here for, at the least, mistakes being made and, at the worst, the potential for voter fraud.

Now I get on to what we are voting on today and the final broken promise from our new Premier, at least until the next one. On May 25 the government announced that there would be a two-point reduction, a reduction that won't be fully implemented until 2014 after another election. What did Premier Clark have to say about lowering the HST previously?

Deputy Speaker: Member, you do know that the use of names is not appropriate.

K. Corrigan: Oh, absolutely. I apologize. Thank you, Madam Speaker.

What did the Premier have to say about lowering the HST previously? The Premier said: "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."

Now the B.C. Liberals are doing exactly what the Premier of the province has said it would be — buying people with their own money. And who can say it better than the Premier herself that that is what is happening with this latest move to reduce the HST by two points and to provide some money to the people of this province? We didn't even have to accuse the government of buying people's votes with their own money. The Premier said it for us.

This last move and the whole history of the Liberal HST debacle would be laughable if the implications for British Columbians weren't so serious. This is the biggest
[ Page 7586 ]
tax shift in B.C. history. Depending on the numbers that you believe, it's a minimum of $350 for a family. But that can even be a one-person family. StatsCan says it's more like $521 a year for the average family. It's a $1.9 billion shift from corporate taxes to consumers — paying $1.9 billion more.

You know, you get the feeling in this House that people who oppose the HST, people who plan to vote yes in this referendum to get rid of the HST, don't know what's good for them. But what I'm hearing in my community is from families and from businesses that do believe they know what's good for them.

[2005]

There is a sense in this House that somehow supporting the HST is now the principled and responsible thing to do. Well, the only principle that this tax represents is that families are getting hammered while the corporate sector is doing just fine, thank you very much, and getting rid of billions of dollars worth of taxes.

This has been a long history in this province. It's been a long history for the last decade, as we move more and more to taxes that hurt families, hurt the middle income, the middle class. We have increased MSP premiums. We have increased ferry fares. Now we have the HST. These are family-hurting measures, as more and more money is taken away and the responsibility for taxes is taken away from the corporate sector, and it is heaped on the backs of families and small businesses.

With this HST, so many businesses in my community are affected. The consumers, the families and the businesses that provide the services are now going to be taxed at 12 percent or 11 percent or 10 percent. In my community it's wedding planners, caterers, funerals, tutoring. Restaurant food — that's a huge one in my community.

I have Metrotown mall in my community, and I know. I have gone talking to the owners of those restaurants at Metrotown and certainly in Crystal Mall, and it's hurting them. It's hurting them a lot, and it's hurting the people who are coming to buy the services, eat the food, get the haircuts, go to the gym. It's certainly hurting families. I think families know that, but I don't know what's going to happen.

Now we have a situation where we have $7 million of our money, of taxpayers' money, being spent to convince people that a tax that is not good for them…. They should vote in favour of it. A tax that is not good for them — they should support it. I don't know. It's a pretty one-sided fight. It's a pretty unfair fight, because not only do we have $7 million of our own money to try to convince us to support this tax, but we also have no limit on the amount of money that third parties can spend.

Do you not think that the largest corporations in this province, who stand to make millions and millions of dollars from the HST, are going to think that it's a good investment to put a few million dollars or several million dollars more into an advertising campaign that supports the HST?

It may be successful, but it's an unfair fight. I hope that the people of this province do not vote in favour of the HST. With all the millions of dollars that are going into that campaign to try to convince them, it is an unfair fight — $250,000 to fight it and millions and millions of dollars to support the HST.

I'll be disappointed if it is supported. I think it's going to put a further burden on the backs of families and consumers and the small businesses in my community and throughout the province.

I'm going to be voting against this motion, and I'm going to be voting in favour of the motion to end the HST on June 24, or whenever it is I get my ballot. I hope that British Columbians also vote to get rid of the HST.

S. Fraser: I take my place in the debate on Motion 11. It seems surreal to some extent. We're here in the last week of the shortest sitting of any Legislature in the history of the Commonwealth, considering we haven't been here for most of the year, and we're still dealing with yet another new story, another change in tax policy, in a desperate attempt for the B.C. Liberals to try to sell a bad policy, a bad tax to the people of British Columbia.

[2010]

It would be laughable…. It's somewhat Keystone Kops–like how this tax policy has been developed. It's the shifting sands of truth and consequence that change every day. I almost think it's designed to obfuscate, to confuse the people of this province, and I don't think it will work.

Just so the people of British Columbia know on the record, when it comes to the referendum that was brought about by an initiative, with 700,000 British Columbians signing, opposing the HST — rightly so…. When it comes to that referendum, which we see coming forward starting June 24, it's a yes vote that you want. A yes vote means a no to the HST.

In case there's confusion there, I would urge everyone to vote as I'm going to vote. That's yes on the referendum, as opposed to Motion 11, which is another attempt to obfuscate and confuse things today. I will be voting no when it comes to Motion 11. If there's any confusion, I hope that helps clear that up for the people of British Columbia — those viewers who may be tuned in today, since there's no hockey game on.

The member for Chilliwack, earlier today in the debate, just a few speakers ago, said that this was a very important vote, a democratic vote in the process. Well, I agree with him in part. It is a very important vote, but there's nothing democratic about this process. The Referendum Act, as it was brought in….

This is not a level playing field of a vote. This is stacked by the B.C. Liberals against the people of British
[ Page 7587 ]
Columbia. Make no mistake. This vote is using taxpayers' money to convince them in a very one-sided fight. It's $7 million of taxpayers' money being allotted, the lion's share, to convince the public, to inundate the public with a spin that somehow shifting nearly $2 billion a year onto the backs of British Columbians to benefit several corporate sectors is a good thing.

What's worse is that in any election in any democratic country in the world you have to have controls in place to make sure that it's a fair election. So not only what the government is doing with taxpayers' money to convince them, on one side, that the HST is good…. They're allowing unlimited resources to be spent by the very entities that will be the recipient of close to $2 billion a year.

So what will they spend? Anything it takes. This is anything but a democratic process in a democratic jurisdiction. It is the furthest thing from an objective election process.

This is about the continuation of changing tax policy to benefit a few at the expense of British Columbians. It has been the cornerstone of the B.C. Liberal policy for ten years. Shifting the burden of taxation onto the people of British Columbia to benefit several corporate sectors is sort of the icing on the cake when it comes to the HST.

By my calculations…. I'll take one corporate sector that I have some experience with over the last few years in this place in dealing with forestry issues. The corporate sector, the forestry sector has had…. I've lost track. It's ten or 11 major and some smaller corporate tax breaks under the B.C. Liberals.

There has always been the assurance from the Liberals, as they're saying with the HST, that the tax breaks for those at the very top, the corporate sector, will benefit all of us, will trickle down, will lead to investment and jobs.

[2015]

However, just taking that one sector, which are major recipients of the HST at the expense of the taxpayers of British Columbia, with those 11 major tax breaks — probably 12 now, with the HST — we have seen record closures of mills, tens of thousands of forestry jobs lost — the opposite of benefit.

Indeed, what we've seen in the corporate forestry sector is investment, yes. Taxpayers' dollars shifted to benefit them, and they've invested in other jurisdictions. They're moving our natural resources, our raw logs in this case, engineered by this Liberal government, allowing them to do so by changes in forest policy. So yes, jobs created and probably investment and innovation — in other jurisdictions.

There was no quid pro quo. There has never been a quid pro quo for the people of British Columbia. The B.C. Liberals sell the farm. So when it comes to the HST, it's just another step in a massive tax shift to benefit corporate friends who are then allowed to spend endless amounts of money that they will be receiving from the people of British Columbia to convince the people of British Columbia, without any accountability, that the HST will be good for them.

That certainly is a flawed process. It wouldn't cover it. I would say the process has been corrupted because it does not allow a level playing field when it comes to the vote on the HST.

Now, the HST. Here we are in the meagre session that we have this spring, 4½ weeks after ten months of not sitting in this place.

Since the 2009 election we aren't dealing with people with disabilities that need help. We're not dealing with environmental disasters in this province that need to be addressed. We're not dealing with the plight of seniors or children in care. What we're dealing with is a bad tax policy that the B.C. Liberals got caught on right after the 2009 election.

The HST wasn't supposed to happen. If the B.C. Liberals had been straight with the people of British Columbia before the 2009 election, they would not have formed government. So they decided to do something else, to tell the people of British Columbia that the HST wasn't even on their radar screen. "Don't worry about that one. Vote for us."

Unfortunately, the people of British Columbia believed the B.C. Liberals, and the HST was foisted on the people of British Columbia, much to everyone's surprise, I suppose. But it shouldn't really be. There was a sudden realization in many cases. Other promises came to mind from previous elections.

Every election that this government has won has had at least a few promises that were designed to be broken. "We will not sell B.C. Rail." "We will honour negotiated contracts." "We'll run a deficit of no more than $495 million, not a penny more." All of these wild fantasies were not based in truth, and they've allowed a government to continue, election after election.

This time I think it will be different. Shifting the burden of between $1½ billion and $2 billion of taxation onto the people of British Columbia, who are already faced with huge increases in MSP payments; hydro bills; ferry rates, if you live on the islands, the coast; user-pay — these types of things…. The same thing with these consumption taxes like we're talking about today.

They inordinately benefit the wealthy, the corporate sector, absolutely, but they hurt the middle class, small businesses, people who need social services, who need the help that governments are supposed to provide. None of us are far from needing help. Those safeguards are being taken away by this government. They've been stripped, or they've had fees built into them that make them out of reach of many British Columbians, those that need it the most.

[2020]

So when we have a change to the HST being discussed and debated in this House, the big question for the people of British Columbia is: what does it mean?
[ Page 7588 ]

The speculation is we're going to come into an election again. We're being told, after the firm question for the referendum has been set, after the date has been set…. We've been led to believe that there's probably going to be another election. We're being told there'll be changes made some time down the road with the HST. "Only if you vote to keep the HST will we give you these changes. We'll pay you $175, if you have a child, if you vote to keep the HST."

Now, I've heard of politicians going into bars and buying rounds of beer for people, saying: "Vote for me." This rings true of this type of a tactic: using taxpayers' own money to buy a vote after the question was set, changing the terms of the tax after the question was set. But the changes, except for the potential payoff, the $175 per child, are happening sometime in the distant future.

Another promise — like “We will honour contracts,” like “We will not sell B.C. Rail,” like “We will run a deficit of only $495 million and not a penny more.” So while we're debating Motion 11, the question is really about: does anyone in this province buy what they're being told? History shows that promises such as these by the B.C. Liberals may just be promises before an election but become a different reality after an election.

Now, the only reason that we have the HST in place now is because the public voted for no HST in the last election. I do not believe the people of British Columbia are going to buy what this government is selling them with their own money, spending their own money to sell them this time — one time too many. Time for a change.

These types of tax shifts, like the HST, are incredibly regressive. We also lose so much autonomy in our tax policy in the province.

Interjection.

S. Fraser: I heard a member opposite saying:"Rubbish." But when you combine a tax and give the authority to the federal government — it's a joint tax, no longer controlled directly by the province — you lose your ability to effect positive changes in the province.

Now, we know that the government isn't interested in positive changes. We know that they will implement a tax here, HST, which actually makes it a disincentive to buy a hockey helmet for your kid, makes it less economically viable for a family to put their child into hockey. It makes it more expensive to buy a bicycle helmet or a bicycle.

We just had a debate on a cruelty-to-animals bill last week — rightly so. Good debate. Well, part of cruelty to animals in the bill was not providing the needs for survival. Well, let's tax vet bills, too, if that's not enough. The HST taxes a whole bunch of things that this government doesn't talk about.

[2025]

It shifts between $1½ billion and $2 billion of tax burden onto the people of British Columbia so that several corporate sectors that donate largely to the B.C. Liberals can benefit. Those sectors are allowed to use endless resources and funds which they now have — up to $2 billion a year because of the HST — to convince and sell and do a job on the people of British Columbia to sell them that this is a good thing.

The tax savings for big business were originally, initially, estimated at $880 million for the construction industry, $140 million for manufacturing, $210 million for the transportation industry, $140 million for the forestry sector, $80 million for the mining and gas and oil.

Now, none of these sectors are required to produce one job, to invest one dime in the province.

Interjection.

S. Fraser: I would note that the member for Chilliwack had an opportunity to speak to this issue already, and he was given a certain amount of, I think, leeway by members on this side as he spun his interpretation of this to the people of British Columbia. But I would suggest that he's going to have a rude awakening when we do go to a British Columbia provincial election and he sees that the government fades away just about as quickly as this tax will with the referendum.

You know, when the B.C. Liberals brought in this tax that they said they weren't going to bring in to the people of British Columbia, they did a scramble to try to justify it, to give some semblance that: "Oh, we did maybe a study on it that it would be good somehow for the people of British Columbia." It was going to be a benefit for the people of British Columbia.

After the fact, as it became clear from the previous Finance Minister that they did no such study, they paid $12,000 for a 12-page study that made some pretty outrageous predictions about how wonderful this HST would be — 113,000 jobs. Remember that one? As we know now, a more independent study has brought that down to 24,000 jobs over ten years. So as the member from Vancouver-Hastings rightly said just a couple of speakers earlier, within the margin of error in job creation in the province….

Tens of thousands of forestry jobs have already been lost with major corporate tax breaks in this province. That's a fact. The mythical 2,500 jobs a year, maybe, is not a basis to hang your hat on, especially when the story not many months ago was that this tax could not be changed because it was the best thing, single best thing, you could do for the economy of British Columbia, and now it's: "All those changes can be made."

They can cut one or two points sometime in the future to take $1.6 billion out of the revenues for the province. So what they're not being straight on with the people of British Columbia — the B.C. Liberals, that is — is where they're going to get that money. What vital public services are they going to be cutting to the people that more and
[ Page 7589 ]
more cannot afford them because of this government's tax policies and punitive fees to try to cover for a few corporate entities that happened to donate to them?

Well, Madam Speaker, the people of British Columbia are pretty smart, and the people of British Columbia will support the official opposition in voting against Motion 11, seeing it for what it is. A misrepresentation wouldn't come close to describing it. They're also going to support, I would suggest, the same position that the official opposition has with the referendum, and they're going to vote yes. "Yes" means getting rid of the HST. Yes to pre-HST.

J. Les: Just means higher taxes.

S. Fraser: Well, again, this is a member of a government that has raised our debt levels beyond belief, that has run the single largest deficits in the province of British Columbia, and he's trying to lecture me on tax policy. That would be laughable except that as they sit in government, after promising not to bring in an HST, they still control tax policy in this province. So rather than being humorous, it is scary.

[2030]

The people of British Columbia will speak loud and clear with the referendum, and they will not be sold a bill of goods, no matter how much money the corporate sector that benefits from this is allowed to spend.

With that, I'll take my seat.

D. Routley: Before I start, I'd like to ask the members in the House to help me welcome my partner, Leanne Finlayson, who's just arrived.

I'm rising to oppose this motion and express my opposition to the HST — not just the fact that the HST is bad for British Columbia and bad for the people that I represent, but the absolutely despicable way in which the province was misled by their own government. That is something that can't pass.

That is something that feeds into a cynicism that is growing in this province, and people believe there is no hope for truth in politics because of the examples that this government has set. This motion itself asks us again: "Trust us — 1 percent after we're elected, 1 percent more a year later. Trust us."

Well, that's a rightfully held cynicism, just as it was a rightfully held anger that drove 700,000 British Columbians to sign a petition for a referendum on this betrayal, the latest B.C. Liberal betrayal.

They look back, as we consider this motion, at other betrayals — B.C. Rail. They promised not to sell B.C. Rail. Well, they did. They did and caused the greatest political scandal in the history of our province. This is breaking the confidence and the faith of the people.

The HEU contracts that former Premier Gordon Campbell promised not to tear up. He tore them up, and it led to the largest mass firing of women in Canadian history. That was proven in the Supreme Court to have been unlawful. So now we must pay at least $70 million in reparation and countless legal costs in order to put that broken promise, that betrayal, right — not that we can ever make whole those families that suffered because of that B.C. Liberal broken promise.

Now we have the HST. We have the HST that this government told us, the people of B.C., they weren't considering before the election.

We're here because of two more misleading broken promises and betrayals by this B.C. Liberal government. Before the May 2009 election we were repeatedly told by the Finance Minister…. I don't know how we could count the number of times he used the phrase "$495 million, not a penny more." That would be the deficit, and he knew it was false. He knew it was false. In fact, the official deficit came in four times greater at $1.8 billion.

They needed….

Deputy Speaker: Hon. Member, your reference to an individual in this House — you need to withdraw that remark.

D. Routley: I withdraw that remark.

Deputy Speaker: Thank you.

D. Routley: The Finance Minister misled the people. The Finance Minister misled the people about the size of the deficit, and he knew what the true numbers were.

We now, after the election, find out through freedom of information that not only did this government know the revenue of the province was in such peril and such decline, but they also were busy negotiating with Ottawa the terms of an HST agreement, even though they put in writing to the restaurant industry that they wouldn't do this.

I just introduced my partner, Leanne. She works in a realty company. Those realtors know the cost of the HST. They know it in their business. I know it by the number of them who have stopped being realtors in the recent past because of the decline in their markets.

We can often be dismayed by the cynicism that this government has created in the population of British Columbia, but we should only, in order to feel better about that, look to the inspirational response to this latest betrayal — those 700,000 British Columbians who worked together to sign enough petition papers to bring this government to account. They didn't tell the population of this province the truth, and now they'll pay for it.

[2035]

This government…. It's like playing monopoly with my seven-year-old stepdaughter, you know. She just makes up the rules as she needs them. If she's going to land on the jail square, she says: "You can count twice." Now to go from my seven-year-old stepdaughter to
[ Page 7590 ]
Shakespeare, well, Shakespeare said: "Lawless are those who make their will their law." That's what this government does.

They made a law that they wouldn't post deficits and repeatedly had to break their own law. We all have to trot in here and have the government vote to amend its own law to allow it to run the largest deficits in the history of the province.

These are the fiscal wizards that the B.C. Liberals have become, running this province off the seat of their pants, covering up the true size of a deficit and then having to take payola from the federal government in order to transition to the HST to cover up that broken promise and that misleading set of facts that they offered to the people before the election.

This is fiscal policy made on the back of a napkin. As they need it, they change the rules. Desperate moves, decisions taken in haste to cover up broken promises and terrible mistakes — that's what we've come to expect from our government, and it's terrible.

Well, it comes down to an issue of truthfulness, of believability, of credibility. There are really two streams to deciding whether we can take someone's word as credible or believable. One stream is whether or not they are being truthful, whether they are misleading us. The other stream is whether they are competent or whether they are incompetent. Well, in the first stream we have the HEU contract as evidence, we have the B.C. Rail sale as evidence, and we have the HST as evidence that we were misled. We were misled.

On the other stream of incompetence we have the deficit projections, the biggest fiscal mistake in the history of the province. That's what they offered to the people as grounds and reason to vote for them before the election, and now we find out the truth. It's a sad state of affairs when the government must spend $7 million of taxpayers' money to promote this insult to the people, and I use the word "insult" because the new Premier used it.

On July 28 on CKNW on her show she said that it's "an insult to British Columbians for the government to, first of all, have brought in this tax in what most of us regard is a very, very sneaky way and then to refuse to bother explaining properly why they did it. They can't even be bothered to mount a defence. And I think that's an insult."

Now that same person is the Premier and leader of the party that insulted British Columbians. Apparently it's okay with the Premier that her party has insulted British Columbians, and it's also okay by this Premier to spend $7 million of taxpayers' money in tilting the balance in an unfair referendum.

The Premier also said it seemed impossible that the tax wasn't contemplated before the spring ballot. She said: "I just don't think that's possible that that could be the case." That's what she said on CBC news on August 13, 2009. I agree with her. I absolutely agree with her, and I think that can be borne out by the documents that have been released through freedom of information. In fact, this government knew what they were about to do.

Then finally, the quote that really steals the show — doesn't it? "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."

Well, British Columbians aren't prepared to be bought with their own money. They know, despite this government saying, "Oh, we're going to offer you 10, and they're going to offer you 12," that that 10 applies to so many things that they didn't have to pay taxes on before — fix your roof, all sorts of services, haircuts, bicycles. There's $8 million to $10 million more for bicycles alone that will come out of pockets of British Columbians.

[2040]

British Columbians aren't stupid. This government is taking them for stupid, but they know every day when they go the tills and buy their daily purchases — let alone the major purchases they have to make and major services they have to pay for — that their HST hurts British Columbians.

Madam Speaker, it's about trust, and once a government has lost trust and once it decides that it's lost any notion of a vision for the province, it begins to operate as a hurdler. It gets over one hurdle and then another hurdle and then another hurdle. First hurdle: "Oh, this massive deficit that we can't share with the people, because we know how close the election is. We'll likely be defeated. So we'll tell them it's $495 million, not a penny more. We'll say it a whole bunch of times, and then after the election we'll just deal with it."

Well, they found a way to deal with it. That was the next hurdle.

The next hurdle was: "How do we deal with this massive four-times-greater-than-expected deficit? Well, we'll take payola from the federal government, and we'll break another promise we made before the election." That's the way this government operates, and it's a sad state of affairs for a proud province, a province that was built on much more honest behaviour than what we've seen from this government.

People know when they're being sold a bill of goods, and that's what's happening.

The major companies that benefit from this tax now have a free field to play on because of another broken promise. This new Premier of ours promised repeatedly to run a fair referendum. She said it would be on June 24. Well, it's not on June 24. It takes place over a month, and it's mail-in ballots. Drop them off at your local government office; have a friend pick them up; drop them in the mail, even if there's a postal strike.

That is not a provincial election. That wouldn't pass muster in a Third World country, yet that's what this Premier calls running a referendum fairly and like an
[ Page 7591 ]
election. And $7 million of taxpayers' money to buy their votes; it's a disgrace. It's an absolute disgrace.

The referendum was supposed to be run fairly. It was supposed to be on June 24. Now the results won't come until August, barely a month before the previous referendum would have taken place, which would have had much more strict controls over spending — another broken promise, another breaking of the faith of the people of British Columbia by a government that has lost its credibility.

It is fun playing Monopoly with Brookelyn Baird, the seven-year-old who makes up her own rules occasionally. It's fun because there's not too much at stake. But this is different. This government breaks rules for itself when it wants benefit, and there's a lot at stake. We've got major companies now who will make tens of millions of dollars from a shift of $1.9 billion onto average, everyday British Columbians. That is what's at stake.

Now when this government breaks the rules of their Monopoly game, what's at stake are the livelihoods of British Columbians — in the restaurant industry, realtors, construction, bicycle dealers. So many British Columbians stand to lose because of this government's failure to keep its promises.

We deserve better. This House deserves better. This province deserves much better, and we plan to deliver better to them. We plan to deliver government that cares about them, is honest with them, confronts real problems with real solutions and doesn't need to mislead the people to be elected.

Let's inspire them. Let's inflate the people of British Columbia, not deflate them with broken promises and failed policy, failed projections, huge deficits, huge debts. It's time for a government that cares about British Columbians again — one that would have the courage and the strength to clean up the terrible mess that this government has left us, the terrible mess that this government has created and the terrible loss of faith that they have created amongst British Columbians.

[2045]

For those reasons I'll be standing with all those constituents I've talked to who feel so betrayed, who feel so misled. I'll be standing with them and voting yes to squash this tax. I'll be voting no on this motion because it asks us to have faith again in them. The B.C. Liberals have no credibility, and we can have no faith in them.

V. Huntington: Well, this is where the government's failure to tell the truth, to consult with the people and to show them the respect to which they're definitely entitled finally leads us. We're at a place where the people feel there are no good outcomes, just less bad ones.

I suspect that my attitude towards this motion is, if truth be known, shared by many members of this House: we are darned if we do and darned if we don't. We're basically in a no-win situation. For you see, my riding is reflecting the recent poll. It's almost split down the middle, not only on the supposed fix but also on the ballot question itself. But everyone shares one thing: the anger they continue to heap upon a government that deceived them. And it goes further. They are angry because they don't trust the fix either.

Neither can we trust the alternative, which is something that caught me completely off guard. A few weeks ago a lady and her husband came into my office and asked: "Does the HST question…? Does the question on the ballot mean that the PST will go back to the way it was?" And I said, "I'm sure it does. Of course it does. Nobody would try and deceive us at this point," only to find out a couple of weeks later that she was absolutely correct. She looked me in the eye, and she said: "I'll betcha a hundred bucks that it doesn't mean that and that we'll have a different PST when this is finished." And she's right. We can't trust the fix or the alternative.

Some people in my riding have said: "We're all over 21, we lost the fight, and we may as well get on with the HST." It's what we used to call lying back and enjoying it. A lot of people have said that they aren't happy with the fix. Not even the 10 percent is enough, because they are still angry that the exemptions have not been extended. Yet many others tell me they can't trust the government to stick to its commitment to get to 10 percent. They are simply fed up with any promises.

These are the people I sympathize with, but for a different reason. I believe that it may be impossible for the government to reach 10 percent. I believe that the financial situation in the province may preclude a reduction in the HST. So are we looking at an impossible promise?

I want to assure the people of Delta South that this is not a vote for or against the HST. It is a motion that attempts to win the favour of the people. It is a motion that attempts to fix the HST in the eyes of the government. But if the people of this province do vote for the HST on June 24, I will at least have participated in making it more palatable. I can assure my constituents that I will continue to support a return to PST exemptions, especially those on labour for renovations, on services and on large appliances, for these are the areas where the HST is having a devastating impact on the middle class.

The entire HST fiasco has overshadowed its value to the economy. Its introduction was chaotic, and its fix, unfortunately, remains chaotic. All I can say is: better the devil you know than the devil you don't.

H. Bains: It is my pleasure to stand here to speak on this very, very important issue that we are discussing in this House today before us, Motion 11. I will be standing here to speak against this motion, and I will tell you why I speak against this. I have the same reasons as thou-
[ Page 7592 ]
sands of British Columbians have, the same reasons why they are saying no to HST — first, how it was brought in and how they were misled.

[2050]

If B.C. Liberals were upfront with British Columbians before the 2009 election, we wouldn't be discussing this issue here today. Had they gone to the public that they are bringing in the HST, we would have campaigned, both sides, for or against it. I can almost guarantee you that they would not be sitting on that side of the House had they been upfront and truthful about their position on the HST.

They, in fact, in writing said to the public that they had no intention of bringing in the HST. But merely days had gone by after the 2009 election, and guess what. They did exactly the opposite that they said they would not do. Talk about people not trusting governments and politicians. Then, we found out that the discussions were even taking place before the election about a possibility of bringing in the HST here in British Columbia.

In comparison, let's talk about Ontario. They went to the public, around the same time, and they told the people of their province that they were bringing in the HST. And this government even used that as an excuse: "Ontario went through it; we have to go through it." But they were upfront with their public, and this government chose not to. That's why we are discussing this issue today.

I agree with many of my colleagues that stood before me here. It's about trust. It's about trust and lack of trust in our government here. They were told one thing before the election, so people gave them a mandate based on the information they provided to the public. But right after the election, they went against their promise, and they brought in the HST.

Then they said it was the single best and most important thing they could do to turn the economy around. If that was the case, let's talk about their competency as money managers and as somehow good to deal with our economy. If this was the single most important thing to turn the economy around, do you make those decisions just overnight? You don't do that. You have a plan for that.

If this was so important, as they said it was after the election, then, they would have had a long discussion, and they would have done analysis. They knew that they were going to bring it in, and they chose not to tell the public before the election.

When they try to do a sell job, why they allegedly were forced to bring HST in to turn the economy around by saying that this was the single most important thing to do to turn the economy around, could you believe that? Who would believe this government?

Over 700,000 British Columbians resoundingly said no, that they do not trust this government. That's the message from British Columbians, the message to this government that they do not like this bad tax. They know that this tax is a tax shift from corporations on to individuals and families. As a result, it should be scrapped.

They went through the referendum initiative, and they were successful. Then the promise was made during their leadership campaign that the referendum would be moved to June 24 because the business community and the opposition and other people told government that you need to remove the uncertainty. Because of that uncertainty, people are not spending money, and it is hurting the economy.

The current Premier promised to move that referendum date to June 24. Well, you know, maybe people thought we could trust this Premier. Not a day gone by, the Premier then said: "Well, yes, now we are choosing a mail-in referendum, and the ballot will be mailed out starting June 13." The people will have the ballots in their hands by June 24, but the results will not be tabulated until August — merely a month before the original date. Again, another broken promise. How do you trust this Premier?

[2055]

Like I said, this is all about trust. How do you trust this Premier better than the previous Premier, who had to resign over this issue and who tried, really, by spending a quarter of a million taxpayers' dollars to go on TV to tell us how good this tax was for them? He knew that the people weren't buying it. He had to resign.

People thought: "The new Premier is coming, and perhaps things will change." How wrong they were.

[Mr. Speaker in the chair.]

When the Premier was a radio talk-show host, she talked about this issue on her shows. This is what she said on July 28, 2010: "It is an insult to British Columbians for the government to, first of all, have brought in this tax in what most of us regard as a very, very sneaky way and then refuse to bother explaining why they did it properly. They can't even be bothered to mount a defence, and I think that is an insult." That is not what the Premier is saying now.

Then the Premier went on to say — this is March 21: "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."

What do we see here today? Exactly that. This is exactly what is happening today.

The issue here is of trust. Before the election this government said the maximum deficit was $495 million. The Premier said that, the Finance Minister — not a penny more. After the election what was the real number? It's $1.8 billion — four times more than what they said not a penny more than. That, again, is a trust issue.

It is all about trust, and if we cannot trust our leaders, if we cannot trust our government, then no wonder people are not paying attention to politics. That's why it is important that we must defeat this bill.
[ Page 7593 ]

When the referendum is conducted, I will be voting yes to get rid of that HST so that people will have some fairness, and this government will hopefully learn their lessons — that they need to be upfront with the public, the very public that actually send us down here. Those are the reasons that I will be voting against this bill, and I will be standing with my constituents to say yes to extinguish this bad tax when those referendum ballots are mailed and received by us.

I am advised, Mr. Speaker, that the time is running out.

Interjections.

H. Bains: I could go on another hour, another two hours, another three hours, because there's so much story to tell about the deceit of the last eight years, about the misleading of this government and how they have shifted the tax, billions of dollars of tax, from corporations onto the individuals and families. This is another attempt to shift more tax onto the individual and consumers and families.

Noting the hour, Mr. Speaker, I reserve my right to continue tomorrow, and I move adjournment of the debate.

H. Bains moved adjournment of debate.

Motion approved.

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

Hon. P. Bell moved adjournment of the House.

Motion approved.

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

The House adjourned at 9 p.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF HEALTH

(continued)

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

The committee met at 2:40 p.m.

On Vote 32: ministry operations, $15,566,169,000 (continued).

B. Simpson: Just a couple of quick questions — or one, depending on the Minister's answer. I've been in correspondence with the Ministry of Health with regard to the use of antipsychotic drugs to treat dementia patients. One case in particular that I've raised with the ministry, the case of Hilda Penner, illustrates some of the issues associated with this.

So it's basically three issues. First is the use of antipsychotic drugs for the treatment of dementia. Health Canada and the federal drug administration have both circled that as a use, that isn't appropriate, and I've asked for the government to take a look at that.

The second is the issue of families that have representation agreements, and they have health authorities that supersede those representation agreements by certifying their loved one and then getting the freedom to manage the care of that loved one under certification.

Then the third is the relationship between the use of antipsychotics and staffing levels and whether or not the form of chemical restraint that antipsychotics give is a way to offset a potential misalignment of staffing resources in some of these care facilities.

In response to my question to the minister's office by letter — it was actually to the minister's predecessor — I just recently received a notice that a review has been initiated and a steering committee established. My question to the minister is whether or not the terms of reference for that review, the membership of that review and the time frame for that review could be tabled in the House, with full public disclosure.

Hon. M. de Jong: Thanks to the member for the question and his earlier correspondence and interest. In fact, I'm assured that since the initial work was undertaken at the end of January or in February, a committee has been set and is operational. There are terms of reference. I don't have them at my fingertips, but I can make them available to the member.

B. Simpson: I do appreciate the minister's staff getting in touch with us. Part of the reason for this is that, as the minister knows, there are many families who have been in this circumstance. The letter that I got back indicated that there's a desire to meet with Hilda Penner's daughters, in particular, to go through this with them. But the request from them and other families involved is that if they don't know the terms with which the inquiry or the review is operating, they're not sure whether they can engage them in a fulsome way.

They would like to know what those terms are so that then they can make sure that they give them adequate information. So I would appreciate it if the minister could either table those or direct them to my office. I'll forward them on to the families involved.

[1445]
[ Page 7594 ]

Hon. M. de Jong: Can I also say this, having been given the opportunity? One of the fundamental tenets of the delivery of care that we and care providers try to operate around is the notion that patients — first of all, patients, and if not patients because of some disability, then their families — understand the risks and benefits of any medication so that there is an informed consent to the use of that.

There are all sorts of intervening circumstances that may complicate that, and the member is acutely aware of what some of those are, but it's ensuring that there are procedures and processes in place that ensure that to the greatest extent possible, the patient is provided an informed consent to the use of medication — and if not the patient, then the patient's family.

The other issue that the member raised relating to staff and the use of drugs…. The antipsychotic drugs are not a substitute for care — nor should they be used, nor are they intended to be used…. They are sometimes a requirement to protect the patient from themselves, sometimes a requirement to protect the caregivers from the patient, but they are not a substitute, nor are they intended to act as a substitute, for the provision of care by human beings. I'll endeavour to get the material to the member that he has requested.

B. Routley: To the minister and his staff, thank you for the opportunity to enter into this debate.

I have in the Cowichan Valley a senior. His name is George Morgan. I've been dealing with George's family over the issue. He's a 79-year-old senior who in his younger days was a surveyor in the interior of British Columbia when he had a car accident, and since that car accident he's had a leg wound that required ongoing care. Currently this senior and his family feel that they're being gouged and their finances are being bled away. George and his family feel that way.

This is happening at the for-profit senior care facility in the Cowichan Valley called Sunridge Place, which has an in-house pharmacy — one of the new models that have the in-house pharmacy. It's a requirement, apparently, that the family has to use the in-house pharmacy. The family has checked out cheaper alternatives. They could buy the bandages and the ointment that he requires much cheaper. He's forced, under the rules, to purchase through the Sunridge Place in-house pharmacy, and he's essentially a captive there, one of many seniors that are captive of the in-house pharmacy rules.

George Morgan has now been faced with paying thousands of dollars for wound care that was once fully covered when he was at Cowichan Lodge. George spent at least two years — two winters, I'm told by the family — in Cowichan Lodge. His wounds were tended, and he actually returned to health enough that he was able to go back to the farm the first summer.

Then he went back to Cowichan Lodge because his leg deteriorated. He had recovered again the following spring and went back to the farm, only to deteriorate. At that point Cowichan Lodge had been closed, and the hospital sent him…. He went into the pod and then was sent to Sunridge Place. There was no option to…. He lost the lottery. That's the way I would put it.

Did you know, Minister, that there's a health care lottery for seniors, certainly in the Cowichan Valley? If you win the day, you get sent to a place like Cerwydden, where I am told that…. If George was at Cerwydden, his care would be fully provided for, and that's the case in many other public facilities.

[1450]

Unfortunately, he didn't win the lottery. He ended up in Sunridge Place, and he's being gouged for…. It's now well over $10,000 that that has happened in the last year and a half or more that this has been going on. I find it completely unacceptable — not only the drugs but the food.

I'm told that families…. One of the ways that these for-profit facilities are gouging our seniors in British Columbia is that there are three ways for them to make money once they sign the deal. There are three ways: food — they can cut back on food; the pharmacy, where they can gouge you; and then they can cut back on staff. It's my understanding that all three have happened there at Sunridge Place.

There've been cutbacks. I've had staff in my office in tears, Minister, about what's been happening to the staffing levels. I've seen what's happened. Right on your website there's a report about Sunridge Place, and it's publicly made available about the problems with food. I would request that the minister have a look at that.

When people are starting to chisel away at the kind of quality food that seniors should rely on, in my opinion, it bears a full investigation into this kind of gouging and the practices that are going on that I'm sure most of us would not want our family members to be forced to go through.

Obviously, the issue that I see, the question that I have for the minister is: does the minister think it's acceptable to allow vulnerable seniors to be taken advantage of as they are at these P3 facilities?

Hon. M. de Jong: I'm at somewhat of a disadvantage, not having all of the facts of the individual case at my fingertips. I'm wondering if the member can advise the committee whether his constituent has registered these concerns with the patient care quality review board.

B. Routley: I'm not aware of whether they have or have not contacted other authorities. I know they have been contacting my office about a variety of issues, not the least of which is the social care worker that's hired by the lodge. You would think that with a name like "social care worker," they would be there to look after the interest of the seniors there at the lodge.
[ Page 7595 ]

Apparently, instead what's been happening…. What I'm told is that…. And I'm going to provide for the minister a full chronology of events that has been put in front of me by the family. If you insist that we follow the other procedure, we'll happily do that as well.

This is alarming when you hear that a social worker would go to his neighbour. George sometimes has to go to the hospital in Victoria to have his leg looked at. It weeps in a major way. We're talking, like, cups full of fluid sometime comes out of this leg. George was being, in my opinion, gouged $350 for a trip to Victoria and back that the lodge was charging.

Well, George's neighbour was providing that service for him for free. Why? Because part of the deal he had with George is: you get to hay my field or have at the small modest family farm that they have, and in return, George's friend would give him rides to the hospital in Victoria.

Can you imagine, Minister, the frustration of the family? They learn that George is being told by the social worker, first of all, that he should sell his farm to pay for bandages; and second of all, that he's telling the neighbour: "You should be charging some money. You shouldn't be doing this trip for free. You should be charging some money."

[1455]

I mean, I just shudder when I see these details that I'm sure I will share with you and I hope that you'll look into. But I'm alarmed at what's going on at this facility. The family felt powerless to deal with a situation where they're being gouged for thousands of dollars, dealing with the bills on an ongoing basis.

Because they live over on the Mainland, the family would like to move him out of the facility. And the social worker has the audacity to tell his sister, has the audacity to tell her over the phone…. This is what this lady tells me. She said to her: "I can get George to do whatever I want."

Wait a minute. Put on the brakes. In the province of British Columbia we've got seniors being abused, right there in the Cowichan Valley? If half of this stuff is true, there ought to be a full investigation. In my opinion, they're very serious issues indeed, and I do intend to make sure that the minister is fully apprised of all of these matters. They've recently been forwarded on to me to have a full review of the material that they've laid out.

My question to the minister at the end of the day is: is this the outcome of the B.C. Liberal privatization model — that we have B.C. seniors being gouged and their life savings being bled away to pay for what are basic medical care services in other facilities?

By the way, I phoned health care workers that tell me that on Vancouver Island, VIHA seems to have this policy, and it's hit-and-miss. They discriminate against seniors in some of these P3 models, because they get gouged for their bandages. Other facilities don't get gouged. The family tells me that they looked into it over on the Mainland, and there are no charges whatsoever. If they were in a facility over on the Mainland, they wouldn't pay. If this is true, it's totally unacceptable.

Hon. M. de Jong: I am saddened to learn of the challenges that Mr. Morgan, his constituent, has encountered, particularly since the accident that has wrought such pain and discomfort upon him, particularly his leg.

I am, however, obliged to remind the member that, in what I'm sure is his genuine desire to assist his constituent and the family in addressing what are apparently some very unsatisfactory circumstances, it is perhaps less than useful to wrap the argument in ideology. Private organizations have been involved in the delivery of seniors care in this province for decades.

The hon. member has asked, essentially, for my reaction to what is taking place. In part, it is to suggest to the member that it is precisely to provide patients, residents and their families with an outlet to address these matters that the patient care quality review board was established.

Whilst I appreciate that the member has come to this forum and raised the issue, I am surprised that in the course of his interaction with the constituent — which appears to have been extensive — and with the constituent's family, he has apparently not provided them with what I thought would be the very first bit of advice an MLA would provide to people encountering these circumstances. That is advice around the very body that has been established to examine and investigate precisely the kind of allegations that he has brought here.

[1500]

[N. Letnick in the chair.]

Now, if the member decides to forward information to me in my office, I can assure him that that is the course of action that I will take. There is actually a body whose mandate it is, and which is charged on a full-time basis, to ensure that patients, residents, seniors receive the kind of dignified care to which they are entitled.

Unless I have mistakenly interpreted what the member has provided to me today, it seems that to this point he, at least, has not provided the family with information around the patient care quality review board. If that is so, then I am happy to do so on the strength of the material that the member will provide to me.

B. Routley: I find it interesting that the minister would try to play politics and try to turn this around and somehow make this about the MLA. I think that's absolutely just shameful. You should be ashamed of yourself for trying to attack…

The Chair: Member.
[ Page 7596 ]

B. Routley: …a fellow MLA.

Well, I was attacked — come on — with nonsense that is…. Clearly, this minister knows that this kind of serious stuff that has been brought to my attention…. I'm going to bring to the minister directly something as serious as this, as these allegations. Something that's pressing right on my desk today, right now, is going to be something that I'm definitely going to bring to the minister.

If you want to put it off for another rainy day, that doesn't surprise me. That's the approach of this government — to put it off and find some body to tinker while the place is really on fire with problems.

The issue about the ideology — I want to touch on that. There is a difference. I actually had a senior that was under my care. I had power of attorney for someone that chose to go into one of the expensive care facilities, and I am totally aware that seniors can do that. That's one of the many choices available to seniors — to choose. If they have the wherewithal, if they have the finances, if they want to go into a privately funded facility, they can do that.

That isn't what George did. What happened in the Cowichan Valley that's a tragedy is that we had a wonderful facility called Cowichan Lodge that was fully supported, as this minister well knows, by the community in the Cowichan Valley. There were all kinds of protests about the action of the government in closing that, and we think it was done to fill the beds at the private care facility. That's why it was done.

We were originally told: "Oh no, we need more care for seniors in the Cowichan Valley, so the Cowichan Lodge won't be threatened in any way." Then they come in and close the Cowichan Lodge, and essentially, a lot of those folks that were in Cowichan Lodge ended up filling the beds at Sunridge Place.

This is about a senior that spent two years at Cowichan Lodge, and he'd be back, happily, at Cowichan Lodge if it weren't for the decisions of this government. My point is that George is just the tip of the iceberg.

There are all kinds of seniors that are finding themselves being gouged and their food cut back on — you've seen the reports — and their in-house pharmacy picking their pockets. When the cart goes by for a chocolate bar or a pop, it's, like, ten bucks, the family tells me. Ten bucks for a couple of items. They say: "Don't worry about it, George. We'll just put it on the bill." Meanwhile, the bills are mounting up to the point where they want to take his farm away.

It's totally unacceptable what's happening, so I want to know whether you think they…. What action has the patient care quality review board done? Now, you referenced them. You tell me what they've done to fix…

The Chair: Through the Chair, please.

B. Routley: …things in the province of British Columbia — through the Chair.

Hon. M. de Jong: I'm sorry that the hon. member took such umbrage with my comments, which were not in any way meant to impugn him.

He'll also note, I hope, when he has time to review the exchange that has taken place here, that at no point did I try to diminish the seriousness of the information or the circumstances that he has related to the committee. Far from it.

[1505]

But it is to ensure that there are avenues available for those others who, as the member suggests, may find themselves or have families who believe their loved ones are in circumstances that are not satisfactory, that we established a mechanism by which those complaints and those issues could be addressed.

I'll say this, as well, to the member. I think that we are in the fourth day now of these estimates. Perhaps when the member's participation is complete — it may be now, or it may be later — he will consult with his colleagues and ask them whether or not during the course of these estimates I have tried to be as forthcoming as possible in addressing the issues that have been raised, tried to provide as much information as I possibly could and taken seriously all of the information that members bring to this committee.

That's something he should probably take up with his colleagues, and if at the end of the day he wishes to come to the same conclusion that he did a few moments ago, then that is for him to decide.

M. Sather: I have a question for the minister. A family of seniors — a senior family, I guess — have come to my office asking a rather particular question. The husband is in a care home in Maple Ridge and, of course, there's the 80 percent income requirement to be paid.

So they've undergone — his wife, who is still at home — income-splitting with their…. I don't know if she did it on her own or with assistance from professional help. She did that, and she wasn't able to get, didn't receive, the information she needed to do that until about March, as I understand it. So by the time she then reapplied to the facility for a new rate, she was granted the new rate but only effective as of April 1.

This only applies until the end of the year, she tells me, at which time she will have to go through the process again. Essentially, she's losing the three months; that's what she's concerned about. So January, February and March she's not getting the benefit of the reduced rate.

Apparently, they will probably do this financial exercise again — splitting their income — next year, as I understand it. So she's concerned that she's not getting the full 12 months' benefit, only nine of the 12 months,
[ Page 7597 ]
and she's concerned that this is going to happen again because of the delay and the natural time it takes to get your T4s or whatever the case may be.

I guess my question to the minister would be: is it permissible for facilities to hold back, in that sense, those three months of the reduced rate such that she doesn't, on an ongoing basis, get the full 12 months' benefit?

[1510]

Hon. M. de Jong: To the hon. member. He will know, I think, that we had a pretty extensive discussion with his colleague from Kootenay West about some of the challenges that people are facing. I'm obliged to him for highlighting another circumstance.

The provision for income-splitting is designed, of course, to ensure that we are in a position where the entitlement or the subsidy is being calculated in a way that is fair and not prejudicing a spouse or a partner who remains behind in a home. There is a requirement, I am reminded, that people reapply on an annual basis. That is certainly the case. There is no intention to penalize people who apply or file in a timely way so that they would lose, in the circumstance that the member has described, that three months associated with the income-splitting.

I am also told this. I don't profess to be an expert, necessarily, and I'm not sure this is even applicable in the specific example the member has highlighted. But there is a bit of a tension, we have discovered, between the desire to income split for one purpose — that is, the calculation of applicable care rates — and not income split for other reasons, perhaps income tax–related reasons, or vice versa.

The member may recall from the conversation we had with his colleague, the member for Kootenay West, that it is precisely those questions that we are pursuing in the review that is being undertaken now around this whole question of income-splitting for the purpose of rate calculation.

C. Trevena: I have a couple of questions for the minister. It may just be one.

When I was talking to him the other day…. It was about the new hospitals for Campbell River and Comox. One of the issues that we have in Campbell River — and, I think, for the whole north Island but particularly in Campbell River — is the lack of space for seniors care. We have at the moment in our present hospital…. It's very sad. Often seniors are in the maternity wing. I think the minister can see the inappropriateness of that.

It's estimated that we're 30 percent short in the city on seniors care, and we're going to be waiting about five years, at least, until the hospital is complete. So I wonder if the minister can give any advice or any hope to the community about what we're going to do in that intervening time until we get the new hospital?

[1515]

Hon. M. de Jong: I apologize to the member. What I'm trying to do is get the numbers for residential care — a comparator over the last five years for where the growth is and some indication of what the availability will be, going out. I haven't been able to find it on the spur of the moment here, but I will endeavour to get that information for the member.

I will say this. I will not quarrel with her proposition that between now and the opening of two new acute care hospital facilities, there aren't going to continue to be pressures. There is no question that there are going to continue to be pressures. I would also agree with the proposition that managing that pressure is, in part, tied to the range of options that are available for seniors — being in a hospital versus other care options that might be available.

I am hesitant, knowing the time, to fill that time with dead air. If I can get some of that information for the member, I'll be happy to pass it along.

C. Trevena: Thank you. I appreciate that, Minister. Looking historically over the last five years we have had facilities built in Campbell River. We do have two new facilities. We’ve had another one close. Sunshine Lodge closed. We've got New Horizons and Ironwood Place. Both are new ones. The assisted-living one is long-term care.

So we have facilities in place, but they're full. They're full; the hospital is full. We're getting back to the stage we were in about five years ago, with seniors having to leave the community. That's the issue that people are really facing.

Hon. M. de Jong: The other bit of information that has already come to my attention is that between 40 and 50 transitional beds are in the process of being planned and ultimately constructed, out of recognition of the very fact that the member has alerted the committee to.

S. Fraser: Hello to the minister and staff, and thanks for this session. I have many issues to deal with, but I have to narrow it down to one because we have such limited time this session with estimates.

So the issue is called Returning the Favour Care Home. It's an intermediate care home, an assisted-living complex in Port Alberni. I make a point of trying to visit as many of the facilities as possible in my constituency. I'm sure the minister does the same.

I'm very, very impressed with the level of improvement. The new owner had taken over about two years ago, and a 100 percent improvement. You can tell when you walk in. It's a small facility. It's seven rooms. You can feel from the people, the residents in there, that it's a family atmosphere. I've talked to, certainly, the residents and their families, and they just rave about the outcomes for their loved ones when they're in there. The
[ Page 7598 ]
people that are in there say the same thing. You can see it and feel it when you go in there.

What's happening, I believe, is an injustice here. I've met with VIHA already on this. They've made assurances, but nothing has happened. So I'm asking the minister if he could look into it. I have a lot of details, which I have no time for, but I have so many letters from past residents, families and such, and current residents and families, supporting the work that's done there. It appears that referrals have stopped coming from VIHA — all referrals. We're talking about lineups for up to a year to find such a facility. VIHA is no longer recommending or even mentioning, citing, that this place exists.

[1520]

Returning the Care is one of the best, if not the best, such facility I've ever seen, as far as the quality of care that is delivered and the obvious outcomes of those residents that are there and their families that are there too.

In the West Coast General we have so many people that are taking up space there. I checked just a couple of weeks ago. There were three hospital beds taken up by seniors waiting for placement in a care facility. At any time there have been up to one-third of the medical surgical beds filled with seniors awaiting placement. I've been told by the professionals at West Coast General that that's not going to change.

Yet we have this fine facility that the owner has invested in, in good faith. VIHA admitted that the contract is flawed. There's no other contract of any care facility like it, I don't believe — certainly not in my constituency but, I don't believe, in the province. They're not filling the beds. They're not recommending the beds. I'm hearing that from a number of people that have written to me, independent of the…. Certainly, this is not just the operator talking here.

So I guess what I'm looking for is some assistance from the minister, if he can assist me in looking into this a little bit further. We need this facility and such facilities in the Alberni Valley. It's a disservice not just to the owner and operator — how this is being handled through VIHA and through home and community care. It's also a disservice to those people that are waiting for such a facility and are not getting access — not even a mention that this place exists. So please help.

Hon. M. de Jong: I'm going to make some inquiries right now and will, in a moment perhaps, have some additional information — or not. But I'm going to ask the member a fairly direct question. Is he aware of any additional information about why the situation has developed? It may just be theories, but if he's got a suspicion about what has given rise to, obviously, some changed circumstances, I'm also interested to hear that now.

S. Fraser: Yes, certainly, I've heard from residents and their families that they believe the reason that this is happening is that the operator is a strong advocate on behalf of their residents. If they feel that…. Certainly, there've been instances where there have been medication problems, as delivered by home and community care. When the resident has not been up to the task of advocating for themselves, they've got a strong verbal support from their residence.

The supposition is that this is punitive. Do you know what? I would have doubted that initially, but after hearing from so many residents, the same sort of stories over and over again, I'm believing it's true.

Hon. M. de Jong: To the member: he has performed an admirable service by drawing the matter to my attention. I'm not in a position…. At the moment, I'm advised, there is no contractual relationship between the care facility and the authority. I don't know if that means that there was and there no longer is. Those are all questions that we'll have to ascertain, and I know that the member will make himself available if we require further information from him.

[1525]

I will say this. I'm gratified to learn that the member has, in his constituency, a care facility that falls into the category of private, that he is prepared to stand and speak on behalf of in such glowing terms. I say that not to be mischievous or meddlesome, but we had an exchange a few moments ago with one of the member's colleagues which suggested that that was never possible, whatever the case.

I think the lesson is that private or public, the success and the quality of care that people receive are ultimately dependent on the individuals who deliver that care and the level of commitment that exists on the part of either the ownership or the management. I'm grateful to the member for bringing this matter to my attention. We'll endeavour to find out what the circumstances are and to relay that information to him as best we can, as quickly as we can.

S. Fraser: Thanks to the minister for that. This is a private facility, and the owner has done a great job of improving this facility and providing the care that you don't always see. Certainly, this is not a large-scale corporate model. It's not warehousing seniors. This is a homelike setting. I applaud that model, whether it's private or whether it's a non-profit. That being said, I thank the minister for this.

I ask him…. I have lots of information that I can provide for him, should his staff require it, and I'll have an open door policy on this one. Currently there are beds that are available there. As long as they're not being filled, it actually hamstrings the quality of service, I think, because there are field trips and such provided that are certainly the desire of the owner and operator to do and that they have in the past done.
[ Page 7599 ]

The contract that does not exist…. I mean, there is a contract outstanding, but it is a flawed contract, and VIHA has already said that it is. It's month to month at best. There is no way to make any permanent decisions. It's very, very difficult to run an operation like that, as the minister can, I'm sure, well appreciate.

On that, I will thank the minister and thank his staff.

M. Farnworth: My question — or my comment and question — is to the minister. We spend about $15½ billion on health care in B.C. How much of that figure comes from transfers from the federal government?

[1530]

Hon. M. de Jong: To keep the member informed, I'm reliably informed that the funding is transferred from the federal government to the consolidated revenue fund here, but it is earmarked as transfers pursuant to the health accord. I'm just endeavouring to get the actual figure that is transferred into the consolidated revenue fund.

In the fiscal plan for '11-12 the appropriate line item is found on page 88, "Contributions from the federal government," and it lists health and social transfers as $5.398 billion. I believe the health component of that is in the neighbourhood of $3.2 billion, and we're just trying to verify that figure.

M. Farnworth: We were right.

I asked the question factually but also rhetorically, in the sense that it's a lot of money that we get from the federal government to go to our health care system, and it's been increasing at the rate of 6 percent a year under the health accord. On $5 billion, 6 percent is $300 million, with the bulk of that coming to fund health care in the province of British Columbia.

When the agreement expires, if that was either capped at the present level or the agreement was eliminated and the transfer payments were cut back or eliminated, that would have a significant impact on health care funding in the province of British Columbia. Is that not correct?

Hon. M. de Jong: If I understand what I think is the basic proposition that the member is advancing, which is any move to alter, reduce, the growth of the federal transfer payments as provided by the existing accord, then yeah, that will create pressure.

M. Farnworth: I thank the minister for clarifying the obvious. I don't mean that in a smart-alecky kind of way, because we've seen it happen before in this province and other provinces during the '90s, when the federal government did cut back on transfer payments for health and social services to the provinces. It had a significant impact on the provincial ability to deliver health care.

The agreement is up in 2014. We've been through a series of minority parliaments whereby the ability to cancel or not to renew the agreement, I think, has been constrained. That has changed.

My question to the minister is: what steps has the ministry been taking, has the government been taking, in terms of ensuring that the renewal of the agreement is very much on the front burner of the government's agenda and ensuring that we can have a health transfer or health accord that continues into the future with terms that are favourable to the provinces when this one expires in 2014?

[1535]

Hon. M. de Jong: It is very much on the front burner, as the member might expect, not just for the Ministry of Health but for the Finance Ministry as well. I have the advantage of being able to rely for advice on the services of a deputy who is uniquely placed to speak of the Finance Ministry's former preoccupation with this issue and can advise the member that a lot of work has been done preparing for the discussions and the negotiations that will follow within the Council of the Federation.

Much of that, I think, is going to focus on alerting the federal government to where the cost pressures are. This is a theme that has come up, I think, repeatedly during the course of these discussions: how as a nation we should try to coordinate ourselves better to address some of those cost pressures insofar as they confront us.

Here is an aspect to this that I, actually, in my capacity as the minister, presently intend to raise, beginning with the initial meetings that I hope and believe will begin in a few weeks with federal counterparts, and that is that we take pride, in British Columbia, in some of the health outcomes. Our rate of smoking is at 15 percent. If we could take it to 12 or 10, think of all the savings that would accrue.

But insofar as there is a national component to this, it is, I think, appropriate for British Columbia to not just tout our successes but challenge other provinces, because when they lag behind, the very issue that the member has raised is impacted. The costs associated with treating cancer patients in a province where the smoking rate is 20 percent impacts on the discussion that the member is referring to, and I think it is appropriate for us as a leader within the country to say to our colleagues elsewhere, "You've got to do better," because we are not intent upon financing, as it were, the costs of lagging behind.

That's an aspect to the discussion that I actually intend to try to bring to the table when we engage, and as I mentioned a moment ago…. I should say this: that engagement has not yet occurred at the ministerial level with the new majority government in Ottawa, but I am hoping to change that in a matter of weeks.
[ Page 7600 ]

M. Farnworth: I take that these discussions have not yet been engaged at the ministerial level, but in terms of the bureaucratic and the deputy level, at what stage are they? Are they well enough along that we are starting to see what a post-2014 agreement would look like, what its priority is to be, or…? Where are we?

[1540]

Hon. M. de Jong: I can inform him and the committee that at the deputy level, discussions have been taking place for the better part of a year. I don't want to overstate, though, at what stage we're at and suggest that there is a draft agreement that is being reviewed at the senior and political levels. We're not there yet.

As a heads-up to the member and the committee, I have received enough information about this to know that there is interest being paid to the formula by which transfers are calculated. Generally, when we are talking about changes to formulas, that involves winners and losers. So a lot of attention is being paid, on the part of British Columbia, to proposals that may arise, and we will develop and be advancing some of our own around how those formulas should operate in calculating what the transfers will be.

It's still premature to say it is a contest between formula A and formula B, but my guess is that there are going to be some specific and pointed conversations at the senior level about the formula by which transfers are calculated.

M. Farnworth: Just a couple of quick questions on this topic, then move on to the next one. The minister is right. Changes in formulas or speculation about changes in formulas always involve winners and losers, and they need to be paid close attention to.

My question is: this speculation or change — is it being driven at the provincial level, or is it being driven from the federal level?

The second question I have is…. Whenever an agreement is up for renewal, there's always an opportunity to seek potential improvements or changes that British Columbia would like to see. Are we pursuing any particular changes, and if so, what are they?

Then the third point. I take the minister's point, and I think it's a very valid one, in terms of: if we are making investments that are improving health outcomes but affecting the long-term ability to control some health care costs by lifestyle changes — and smoking is, I think, one of the key ones around that — are we getting…? What kind of leadership role is the province prepared to take vis-à-vis other provinces with regards to that?

[1545]

Hon. M. de Jong: Thanks to the member for raising the issue. I think it's an important one.

I'll try to deal with this a little bit in reverse order. How strongly are we prepared to advocate on this question? I think the short answer is: we feel pretty strongly about this. We feel strongly about the fact that as our health outcomes continue to lead the rest of the country, what we don't want to see, in the way that the member has described, is a discussion emerge, a formula changed in a way that penalizes British Columbia for doing better.

Creating some benchmarks, creating some incentive to change is the route we'd prefer to go. That's all very general language. But what are driving cost increases? We pick on the one that we most readily identify with: smoking. Well, what are you doing to reduce the incidence of smoking in your province? And don't penalize the jurisdiction whose people are actually taking the largest steps to address that.

That's going to factor into the discussions that will take place. Who is prompting the discussion around changes in formulas? Well, this much, I'm sure, has not changed through the years: federal governments will always look for a more simplified calculation, and they will always look for whatever mechanism can be developed that limits their exposure to cost increases. I guess we do that as provincial governments as well.

Having seen that door open up, then, each province will advocate for changes that they see as either protecting their entitlement or growing their entitlement. We will want to be very vigilant about ensuring that a formula is arrived at that is fair, that is equitable and, as I said a moment ago, does not penalize British Columbia for taking steps to invest, for example, in preventative health care, because over the longer term the prevention of chronic disease is going to be the only way I think we actually get a handle on controlling some of these costs.

M. Farnworth: I appreciate the minister's remarks. One of the things I always find — and I know just from my own experience, my time as minister previously — is that there's often a significant debate around the issue of benchmarks, around the issue of priorities and a sense of: "Okay, Ottawa, just give us the money, and we'll make our own determination as to how we spend it."

That's great from one aspect of the provincial perspective, but one of the challenges of that is that it doesn't necessarily meet what the minister is talking about, which is: "You know what? There are long-term chronic health issues which really need to be addressed, not just by an individual provincial strategy but by a coordinated national strategy that says this is going to be a focus because the results over the long term will pay dividends right across the country, and that is a desirable outcome."

I think one of the things that I would like to see this province do is to sort of advance that there is a national role in areas of health care that we should not be too quick to surrender. We have seen that in the past and from various provinces. I think that's one of the
[ Page 7601 ]
areas around changing in a transfer fund or around a new health accord that I would be particularly concerned about.

One of the areas…. I know that we're starting to run short in terms of our time available for us in this estimates process. When it comes right down to it, it is about money — about the money to provide services, the money to deliver services and where that money comes from. Health transfers, health care premiums, general taxes, general revenue are all sources of funding for health care. Once we get that revenue, the question is: how is it managed within the system?

[1550]

I asked the minister a question in the House the other day around CareCards and fraud, and I'd like to just explore that in a little more detail at this time. What I would like to know is…. The minister has made an announcement of $10 million and then $28 million over a five-year period for the implementation of the new CareCard system. That's $150 million.

My question is much the same as what I asked him in the House and that is: what studies have been done by the ministry in terms of trying to quantify the amount of fraud that exists within our health care system and the way in which it is apportioned, whether it's billing fraud or whether it's people using fraudulent CareCards? What work has been done in that area, and what information has the ministry been able to gather?

Hon. M. de Jong: I'll take a few moments to try and set the stage for the other conversation that will follow and begin by acknowledging what may be the obvious, and that is quantifying in absolute terms the amount of fraud that is taking place is difficult, given the nature of the activity that we're trying to analyze.

What we can do, and what has occurred in the past, is a breakdown of the types of fraud that occur. I think it's fair to say that, insofar as a portion of what has motivated the change with the CareCards is fraud-related, it is fraud that is perpetrated by those, for example, non-residents that might try to access the system or residents who are not entitled to the service because they have not gained entry into the country or the jurisdiction lawfully.

There are other kinds of fraud. There are frauds perpetrated by practitioners who bill for services that they have not necessarily provided. Whilst that is an element of fraud, it's not something that we necessarily always capture. Have there been studies? There have. Admittedly, they have revealed amounts that are measured in the two and three millions of dollars, as opposed to the 200 and 300 millions of dollars.

One of the investigation units in '10-11 looked at 326 cases and identified potential recoveries of about $2 million. To extrapolate from that, as other agencies have done…. The Canadian Health Care Anti-fraud Association comes up with a fairly significant figure, which I'm not in a position to validate or suggest to the member is accurate, of $300 million for all types of fraud.

I think the point that I'd also like to make in answering this initial question — and I accept responsibility for this, for whatever reason, and I suspect I have added to this in terms of how I have answered some of the questions — the rationale for the change of the CareCard and the expenditure of what are, admittedly, significant sums of money over the next five years is motivated by more than just the desire to address fraud.

[1555]

We are convinced we have an opportunity here to create an instrument, a tool that actually will provide for better health care services and not just a reduction in the amount of fraud, although that is an important component of it.

So a smart card with a photograph, as most provinces now have. Added to that a chip that would allow an emergency room physician, at the time an accident victim is brought into the emergency room, to take that card and reliably access health care records for that individual has a distinct therapeutic patient-centred benefit that we think represents a huge benefit for the people and the families we're trying to serve.

To the extent that the focus in the public discussion of this has been on fraud, it's because, in part, that's one of the components to this that I have spoken about and the member has asked questions about. I hope that during the course of the discussion we have around this today the member will accept, and I will have an opportunity to discuss in further detail, some of the additional benefits and additional considerations that have gone into the ministry, the government and me making the decision to proceed with this.

The member will get no quarrel from me. To implement this, in addition to the $10 million in capital funding that I spoke of, there is an implementation cost that stretches in excess of, over five years, over $125 million.

M. Farnworth: I appreciate the minister's answer, and I look forward to hearing the other aspects of the CareCard that the minister is talking about.

I want to ask a couple more questions on this particular area before he addresses that area, and that is that the minister has made this announcement. The previous Health Minister, back in 2004, said they were looking at a new type of card dealing with the issue of fraud. My question is that you're going back…. Over the last seven years there has been some work. The minister has mentioned that there have been some studies, and they differ. We're talking $2 million or $3 million this year. Last year I think the figure was about $936,000 based on 399 cases that were investigated, 370 or a 94 percent rate where there was something amiss that was, I think, recovered by the ministry.
[ Page 7602 ]

There have been studies, or there's been work done. Would the minister make those studies available to the opposition?

[1600]

Hon. M. de Jong: Maybe the first thing I should do…. Again, I will not do this in any sort of an argumentative way.

I have seen material, as the member might expect, given the conversation that's taken place over the last week or two. The discussion around this actually dates back to the member's predecessor, I think, in '94 or '95 where the decisions were made to make some changes.

I read, as again the member might expect, some Hansard exchanges in, I suppose, this forum for '94-95. It may have been Minister Ramsey or Charbonneau — I can't recall which — who spoke of taking this next step and the development of a new card that better protected the identity of citizens and patients and better facilitated the flow of information between the state and individuals. That work, which the member correctly refers to, has been going on for some time.

There is a business case that has been developed over the years and upon which the government has relied in moving forward. Oh yes, there's the Hansard from days on…. I don't know that I need to regale…. I think the member accepts that these conversations took place in the past.

There is the business case. I think it has already been FOI'd by either the official opposition or others. My only hesitation in saying to the member, as I have to many of his colleagues, "I'll get you that document," is that I can't recall for certain which portions, if any, were prepared for cabinet or Treasury Board and, therefore, what limitations I may be confronted with. I will endeavour to ascertain that.

[D. Horne in the chair.]

Some things have happened that were clearly influential in terms of the government's decision to move forward. Now, I'm told that the technology around the notion of the chip or the smart card within the information technology industry has evolved to a point where there's some greater certainty around the type of technology that is available.

The calculation, by the way, of the cost, which by any measure seems…. When you think about a plastic card and start talking about a hundred million dollars plus, you ask yourself, as I did: why so much? It's actually done on a per-card basis. The fact that the supports, the processing and the development of the information could be $25 or $30 a card adds up when you're talking about the potential for four million cards.

The technology has evolved to a point where utilizing the same approach that, for example, banks and financial institutions do with their bank cards, there is a belief that not only can you employ that technology in a way that provides better health care services. The day is not far off when this can provide the means by which a citizen communicates with the state around a broad range of services that extend beyond health care.

One of the great discussions we had around this initiative is what to call it. If someone gets a card that combines the driver's licence…. If they choose to do that, as I will, to get one more piece of plastic out of my wallet…. If they choose to get a driver's licence that is combined with the CareCard, what to call that? In fact, what we may be looking at is a services card…

Interjection.

Hon. M. de Jong: That's right.

…that extends beyond just health care. Having said that, the statutory framework that would allow for that to happen is not in place, and the statute that is before the House does not address all of those factors as well.

[1605]

The member will appreciate that in working with the Privacy Commissioner…. On the one hand, I think, as I have read some of this material, privacy commissioners across the provinces understand the advantages to be gained by facilitating the flow of information between the citizen and the state. On the other hand, they are understandably cautious when the state starts talking about sharing information internally. They will want to ensure that there are safeguards in place that ensure that information is being shared between departments of government for legitimate reasons, as opposed to illegitimate reasons. Much of that is in the future.

The card, though, represents an investment in creating a tool or a vehicle by which the work can be done in the future. The first order of business will, of course, be the health care services and the possibility of combining the driver's licence with what we now know as the CareCard.

I apologize. That's a very long-winded answer, but I wanted to cover a lot of the turf that the member raised.

M. Farnworth: There's no need to apologize for long-winded answers. It would not be the first time that either he or I have been long-winded in our time here.

I appreciate the minister's comments. He's right. These discussions have been going on back into the '90s and again in 2004, but each time it was just discussions, and nothing happened. Now it's at a point where: "Yes, okay, we are going to make this investment." That's why it's like: "Okay, how much is it in…?" The unveiling of this was very much centred on this as an anti-fraud method.

What the minister is saying is that you've got $2 million or $3 million or a million dollars, and you're sort of going: "Okay, well, we're investing or spending this
[ Page 7603 ]
much money to be dealing with X amount of fraud. That's a lot of money that we're going to be spending out. If you just took, let's say, 2 million bucks a year, that's 75 years to get payback. We only financed SkyTrain over 40 years. So there are, I think, a lot of questions and concern around that.

If the minister is saying that one of the other primary aspects of this new card is the better management — correct me if I'm wrong here — of health records or the ability of physicians to access patient records faster and easier, the question, then, that comes to mind is: what have we been spending in terms of health management over the last several years? A significant amount of money. How is this different from the money that we've spent on health records management? Is this, in essence, then, an additional cost to the money that has already been spent, and what are we going to get for it?

Hon. M. de Jong: I think it's a fair question. We talk about the paperless society and e-health, all which is designed to facilitate the flow of information more quickly. The days of transferring bulky files from one department to another…. X-rays, for heaven's sake, move around electronically now, and other diagnostic tools and measurements.

[1610]

What that has done, I have been reminded — and was reminded when the time came to discuss whether or not to move ahead with this proposal — that it has created an imperative to know with certainty, quickly, that you've got the right person, that the person who is presenting himself with that piece of plastic is actually Mike de Jong and not Mike de Jong's brother.

It's an appropriate question to ask: how does this stuff work together in terms of e-health and facilitating the flow of information? What we are trying to ensure through the advent of an enhanced CareCard is that those individuals, those professionals, who practice in the field of medicine can know quickly and with as close to absolute certainty as possible that the person they are dealing with is who they say they are or who they believe them to be and that the records that they are receiving are accurate and pertain to that individual. That's also a very important component to what we're trying to achieve here.

M. Farnworth: I thank the minister for that explanation.

When is it anticipated that the new cards will, in fact, come on line? Who's going to be responsible for them? What firm is involved, actually, in the development of the card?

Another question is…. Okay, so I show up at a hospital all bloodied and battered one night, and I don't have my wallet and my card. How do you know that it's Mike de Jong and not Mike de Jong's brother?

Hon. M. de Jong: I hope to cover the points that the member raised. The objective is to start issuing cards in the second half of next year as part of the driver's licence renewal process. That's roughly the timeline that we're operating under. It's a coordinated effort with ICBC. We'll want to take advantage to reduce the cost to the greatest extent possible with service providers that have experience in the area and examine what is in place within the insurance corporation on that front.

Interesting, the scenario that the hon. member has highlighted at the emergency room at 2 a.m. on a Friday night. I think that the short answer is that when you develop a strategy that seeks to create advantages associated with having a card and a smart card, if someone shows up not having the card, many of those advantages are lost. If I can, there are a couple things I want to say about that, since we're talking about that kind of a scenario.

[1615]

First of all, the hope is that in the case of a motor vehicle accident, most people still choose to take their driver's licence with them when they're operating a motor vehicle. So the combination….

I don't carry my CareCard around. I've generally got my driver's licence around, so hopefully there are some advantages there.

It's still possible that someone will arrive and they don't have the combined card or the separate card, if that's what they choose to have. They get emergency medical service. That's the important point.

In that situation, is it possible that services are being provided to someone who is not covered under MSP? Yes, that is the case now. Is it possible in that scenario that someone will receive service and then subsequently be billed because they're not covered or haven't registered or are not entitled by residency? Yes, that exists also. The advantage of knowing, with certainty, who the patient is at the time they present themselves via the matching of the card with the individual would be lost.

The other point, and the member today hasn't asked about this yet, is I think an important point that I'd like to at least get on the record. The card itself, when it is fully operational, will not contain medical records. The member has, I think, accurately and fairly presented his questions by talking about having access to medical records, and he is right. The card provides access to records that are held elsewhere. It is not a card that is designed to hold an individual's detailed health records. So in the case of loss or theft, people don't have to fear that some nefarious character has acquired access to all of their health records.

Hopefully that answers some of what the member has raised.

M. Farnworth: I thank the minister for that last point, because that was actually my next question. We get a
[ Page 7604 ]
new credit card with a new chip, and already organized crime is working on the next generation of ability to crack that and render the card useless. So I think one of the key issues around the ability to access health records is something that from a privacy perspective, I think people will have a lot of questions around.

One of the first questions that did come up in the minds of the public when it heard it's linked with the driver's licence is: is ICBC going to have access to your health records? I don't think that question has been yet answered.

Hon. M. de Jong: Two points in response to a good question. ICBC won't access health records, but perhaps more importantly, they can't. It will be designed and established in that way.

The second point, which, quite frankly, I….

M. Farnworth: ICBC is the only contractor?

Hon. M. de Jong: No. There was something else I was going to point out, which I'm sure will come back to me in a moment.

M. Farnworth: I have a final question before I move on to my colleague from Vancouver–Mount Pleasant. In terms of the contract and the development of the card itself, is it solely ICBC, or are there outside contractors involved? If so, who are they?

[1620]

Hon. M. de Jong: There are actually two components to the card development, I'm reminded. One is the identification — the photograph, the facial features and that dimension — which ICBC, admittedly, has some expertise around with respect to the driver's licence. They have drawn on, and continue to draw on, some external partners, I'm told, for that purpose.

Then there is the technology — the enhanced technology or chip component — of the card. In both cases it will require accessing external expertise. Whether or not in both cases that is the same third party as ICBC operates with, I can't say at this point. In no instance would any of those third parties have access to health records.

The last thing that slipped my mind that I wanted to say is this. For citizens who have concerns, I can stand here and try to allay those concerns as best I can, and the state can as well, but for citizens who are adamant that they do not wish to have a card relating to their driving privileges tied to a card that is responsible for the management of health care services, they ultimately have the choice to obtain two separate cards. That choice will be preserved.

J. Kwan: My question to the minister actually relates to the issue around orthopedic shoes and orthotics for individuals who require them. As the minister knows, back in March of last year the Liberal government made a change for individuals who require a range of health supports. Without consultation, the government made this change. It's now been a year since this policy has been brought into place. We now know that there have been significant impacts for some individuals in our community.

I've been contacted by Dr. Tammy Gracen, who actually tried at length going through government sources, first to the Ministry of Housing and Social Development at that time. Then the doctor actually, also, went and tried to contact your predecessor, the now Minister of Finance. She, in fact, talked to the Minister of Finance, who then referred her to a staff person at the ministry with a phone number. Dr. Gracen phoned a number of times, and nobody returned her call.

As a result, she's had patients that have come in…. One particular patient had to undergo three surgeries, three amputations, because she was not able to obtain the orthopedic shoes that were required. She currently has children in her practice at the moment who cannot access orthopedic shoes because they've outgrown them. The policy is such that if it's not a limb loss, they would not qualify to get the support.

So I raise this because this is a policy that's clearly faulty and that, I think, puts the cost to the health care system in a number of ways, whether it be surgery, surgical requirements, additional medical appointments. It has caused long-term health problems that those individuals would require down the road if they're not able to access this preventative measure at this time.

I'd like to ask the minister to please advise: what does he intend to do about this, and when can we see the policy changed?

[1625]

Hon. M. de Jong: I think it was on Friday that the member and her colleague and I became aware of the individual case that I believe the member is referring to today. She correctly points out that in March of last year the Ministry of Social Services and Housing, as it then was, undertook some changes at the policy level. My recollection of those changes and what they were designed to accomplish was to eliminate circumstances in which there was duplication of coverage. They were not designed or intended to eliminate access by children or adults to services or medical products for which there was a clear medical necessity.

The member, I think, has probably heard my public commentary on this over the last 48 hours, which is that the government intends to quickly — and by the government I mean the Ministry of Social Development and the Ministry of Health — ensure that in circumstances where a low-income or individual on social assistance is in need of a product that is a medical necessity, that product is available.
[ Page 7605 ]

Now, I don't want in any way, shape or form to compare the circumstances that confronted me with the situation and the patient that the member profiled, but I can tell the member this if it's any comfort. As we stand here, I've got a pair of custom-made orthotics on, and I understand the difference that it can make in a person's life.

I was a bit surprised to hear the assertion that the member relayed and the doctor relayed about children because my recollection and my quick review suggests that this should not be an issue at all for children. If it is, we will want to address that quickly insofar as it has become an issue for low-income or income assistance adults. We are in the process now of examining it, and I am hopeful that in the short days ahead we'll have a more detailed answer for the member.

J. Kwan: Well, Dr. Gracen in her letter actually spells out very clearly…. In fact, those were exactly the examples, and that was actually the last straw, if you will, that drove her to my office.

She actually is not my constituent but obviously serves many people in the community. She came to me asking for help because she was at the end of her rope, and she could not believe that children who needed these medical supports were not able to access them. She herself is a mother, and she simply couldn't look the child in the eye and the parent of those children in the eye and say: "Sorry. I know you're in pain. I can stop that pain, but I don't have the ability to do so because the government won't fund the shoes for you."

It is just absolutely heartbreaking, and that is the reality. We have seniors in the system who are in that situation as well, and so it's really the young and the old and all those in between.

When the minister says that they are in the process of reviewing this and hopefully there will be something announced shortly, can we be assured that this is actually going to be across-the-board change in terms of a policy change, as opposed to being a one-off, case-by-case assessment?

What Dr. Tammy Gracen said was that the assessment should not be based on people's risk of losing a limb but rather people actually in pain. That is to say that if, in situations like that, you actually have a doctor who can verify that that medical need is there for either orthopedic shoes or orthotics or whatever the case may be, then that would be provided.

[1630]

Is that what I'm understanding the minister to say, that it would be a policy change and not a case-by-case sort of assessment that somehow has to hit the media, somehow has to generate public outcry, before the government takes action?

Hon. M. de Jong: I think the most forthright thing I can say is to communicate to the member now what my expectations are in asking, along with the Minister of Social Development, for the review to take place.

My expectation is that whether or not an individual, an adult or the child of an adult, who is on social assistance…. If there is a medical necessity associated with the need for orthotics, that product would be made available. To the extent that that may require reviewing the general criteria that is being applied in making those decisions, then that is what we will need to do.

I think I understand the member's suspicion, which is that it's fine, when a patient is profiled in the media, to address that. But I think the point the member and the doctor whose correspondence she is referring to would make is that there are other cases and other examples. The review we're undertaking will consider that fact.

I'm not certain even today that I actually have the correspondence that the member is referring to. If I do, I apologize. I'm not sure I do, and I know that the member won't hesitate to provide it to me.

J. Kwan: I'll just close with this because I know the next set of estimates is about to start. The letters that I've been copied on were actually sent back in August of 2010 to the ministry, etc. I'm not sure if it's made its way through to this current minister. Perhaps not. I'll be happy to provide copies to this current minister.

Let me just put this on the public record, and then I'll wrap up my comments on this. Just to quote directly from Dr. Tammy Gracen, she says:

"As for my adult patients, basic mobility, not limb loss, should be the criteria for foot orthotics. Pain does matter, and people do need to be able to walk. Regarding shoes, if orthopedic shoes are required to prevent limb loss, they should be covered. Even in the U.S. they have a Therapeutic Shoe Bill which provides two pairs of orthopedic shoes per year for diabetics."

She also goes on to say:

"I also feel that they should be covered if they are needed to try biomechanical problems and as an adjunct to a foot orthotic. Do you provide lenses for glasses without the frame?"

I think, actually, she puts it very succinctly in terms of the issues before us.

Lastly, I'll ask the minister…. I don't need an answer because it might require some time. I wonder if the minister actually tracks the cost that has occurred as a result of this policy that was implemented a year ago — that is to say, as a result of this policy, the additional health care costs that British Columbians have had to carry because of surgeries that weren't required, antibiotics that were required, follow-up visits and so on, so forth; a litany of health care costs related to this bad policy.

Now, in this instance, I'll just say this. I'm highlighting that in that set of cuts — the issues around orthopedic shoes and orthotics as well — there are other cuts, as well, in that set of cuts that have impacted, I think, people's health negatively. I urge the minister to follow up on those aspects, as well, with the minister. I look forward to the policy change. If the minister can
[ Page 7606 ]
provide an affirmative in my seeking of the cost issues, I would appreciate that.

Lastly, when he says the policy review is underway and perhaps an announcement will be forthcoming, does he have any time frame that he's looking at?

Hon. M. de Jong: Thanks to the member for bringing the matter before the committee. I could probably offer some trite answer about trying to ascertain what the costs are.

[1635]

I'm not sure we'll ever know, except to accept the proposition that there are times when short-term savings can result in longer-term costs. That is applicable in health care and many other areas of public policy.

We will complete the review. I'm obliged to the member for forwarding the correspondence and for alerting me to the fact that it arrived in the ministry last year during the summer. Hopefully, those people for whom there are real, tangible benefits — lifestyle benefits, health benefits — associated with something as simple as an orthotic device will receive those benefits.

To the member for Port Coquitlam and his many colleagues that participated in these estimates, I thank them for their contribution and the opportunity to discuss these important matters of public policy.

Vote 32: ministry operations, $15,566,169,000 — approved.

The Chair: This committee will take a short recess. We will resume with the debate of the budget estimates of the Ministry of Transportation and Infrastructure.

The committee recessed from 4:36 p.m. to 4:40 p.m.

[D. Horne in the chair.]

ESTIMATES: MINISTRY OF
TRANSPORTATION AND INFRASTRUCTURE

(continued)

On Vote 41: ministry operations, $806,922,000 (continued).

The Chair: Do you want to introduce the staff with you?

Hon. B. Lekstrom: Well, thank you very much, hon. Chair, for making sure I looked after things. Joining me today is my deputy minister, Grant Main. As well, on my right is Nancy Bain, who is our Assistant Deputy Minister of Finance; Dave Byng, my chief operating officer; as well as Dave Duncan, who is the ADM for highways. I also have Kirk Handrahan, who is the executive director of the marine branch, joining us.

G. Coons: Thank you, Minister, again. We were doing the ferries estimates last Tuesday, May 24.

I just want to clarify something. I gave the information to the minister. The minister stated that back between '91 and '99, under that model, ferry fares went up about 70 percent.

[J. Thornthwaite in the chair.]

I was trying to do the numbers, and I found the press release put out, the backgrounder dated December 9, 2002, where his own government stated that the historic rates between 1991 and 2001 — during those ten years — averaged about 4.5 percent, which would be about 45 percent, so a significant difference between that. I just wanted to make sure that that was clarified, and then we can get our numbers together, because quite often we end up sometimes at the high end or lower end, depending on the debate.

I wanted a clarification so the minister has the correct information of that to prevent any perception that, you know, somebody may be purposely misleading the public. Just on that note, I just wanted to clarify that with the minister, and we can continue that discussion, if need be, some other time.

Hon. B. Lekstrom: I want to thank the member. We will certainly look at our numbers, and you're right. We've had the opportunity to meet numerous times. This is not about picking a number out of the air. We certainly thought we had the numbers. I know what you've reflected and showed me. I will go to work on that and get back to you as quickly as I can.

H. Bains: This is a continuation of our estimates debate that we did last week. We touched on the Evergreen line project. As we were advised on that particular day, the time was limited for us, but now that we have more time available to us, there are a few questions that we'd like to get some answers on from the minister.

The minister stated during that estimate debate here in this House that they're waiting on the Mayors Council to determine how their funding will be raised. When does the…? The question is that the minister…. Not the minister's own words, but the minister did state here that the project now is not completing on the time that it was originally scheduled to complete — as a result of the statement that the minister made.

The reason given was because the mayors and TransLink couldn't come up with their portion of the funding, which is $400 million. So my question to the minister is: is there any timeline as far as the completion date is concerned now that they're still in negotiations, and no one knows when that will complete?

[1645]
[ Page 7607 ]

Can the minister give a ballpark date how long this delay is, when the new completion date is, so that the people in that region can actually start to see if this project (1) is going to start, (2) will be completed, and (3) that it will be completed on a certain date?

Hon. B. Lekstrom: As we spoke last time, it has been delayed. We're looking, probably, if all things go well here in the next short time frame — and I'm thinking short….

There are two issues. The Mayors Council and TransLink are trying to resolve the issue, I think, on the short-term funding as to how they will raise the funds necessary to meet their $400 million commitment to this project. As I said, the province's $410 million is there. The federal government's $417 million is there.

You said that they couldn't raise the money. They can, through property taxation. What they don't want to do is use property taxation. That may be one of a bundle of things they use to raise that money.

We made a commitment to work with them. We are now awaiting…. The Mayors Council, I know, is working diligently to put forward something that is going to say: "Here's the bucket of options where we would like to raise that money from. We're going to have a dialogue."

My goal is to have, first, the Evergreen dealt with, and then the longer-range plan, obviously, is to find a solution so that we're not back dealing with one-offs, whether it be the UBC line or any of the others.

It would be nice to find a funding solution, but I do want to be clear. The provincial money is there. The federal money is there. There was a commitment from the Mayors Council for $400 million that's not there yet. I'm very optimistic that they will find a way to raise the revenue. So the ball is really in their court. I believe I said that last time.

Being the optimist I am, I'm hopeful that we'll get a resolve and a solution to it very quickly in the coming weeks, I'd like to say, and if not weeks, a very few months. We'll move forward, and the people will see this project in the ground and completed. Certainly, it's about a four-year build, so if things work very quickly, in late 2015, I would like to think that this line would be fully operational and operating for the public. That's what this line is about.

H. Bains: The minister is saying that now, with the negotiations that are continuing on and with the delay as a result of a lack of agreement on $400 million that the mayors and TransLink have to come up with…. I just want to confirm. The minister is suggesting that the completion date now will be late 2015?

Hon. B. Lekstrom: I do want to be very clear. This is really out of our hands as a province. It's out of the federal government's hands, who have the money at the table. It's out of the provincial government's hands, who have their money at the table.

There's no lack of agreement between TransLink and the Mayors Council and the government. There was a formal commitment made that they would fund $400 million of this project. The discussion now amongst the Mayors Council is how they're going to raise their portion. So it is a waiting game right now.

I'm optimistic that they can find solutions to that. Property tax is one avenue they have. They're not excited about that. Nobody likes to see property taxes increase, but if we want transit — and the Evergreen line is a commitment that I think everybody is looking forward to — it has to be paid for.

The good part of this is that there are three funding partners at the table. There's the provincial government, as I said, with $410 million. There's the federal government with $417 million committed. That money is there.

There was a commitment from the Mayors Council of $400 million. The challenge is that they haven't found their $400 million or a method to raise that $400 million yet. Being the eternal optimist I am, I think they're going to come up with that very shortly.

[1650]

H. Bains: As the minister has suggested, they have perhaps one option where they can raise that money from — that is the property taxes — right now, under what is allowed under the legislation.

But the mayors unanimously — Minister, you know this, and the previous ministers knew this — have said that property taxes are not an option. They said that some time ago, and a unanimous decision was made that that's not on the table. And the minister at that time said that the carbon tax was not on the table. So I think that just shows that they are in quite a disagreement about how and what sources can be used to raise that money.

If the property taxes are not an option, then I would ask the minister…. The government is the lead on this project, and they have committed $400 million. There's $410 million from the provincial government and $417 million from the federal government. But there is the other portion — $400 million. That's not there.

If you are the lead, as government, are you going to start the project and continue to wait and see if the third partner is bringing that money to the table or not? What would happen? If the ministry is taking the lead, then how often are you meeting with the mayors and TransLink in order to come up with their portion of $400 million? Are we even meeting?

Hon. B. Lekstrom: I guess you asked: will this proceed if they don't come to the table? I think the simple answer is no. I don't know how it could. This is really about a partnership.
[ Page 7608 ]

This is a partnership where the federal government has come to the table with money and the provincial government has come to the table with money. We had a commitment from the Mayors Council and TransLink that they would raise their $400 million and come to the table. We are now….

Although we're the lead, I've met with the Mayors Council. I'll be meeting again with them in June. In the interim I am meeting with the chair of the Mayors Council shortly. They have gone out and held five regional meetings to talk about what it will look like, what we need to do to raise this money and what you would entertain. They had those discussions with the public.

But to think that there will be another $400 million magically appear from the provincial or federal governments…. I'm going to be realistic with you, Member. That won't happen.

H. Bains: So I guess the question that the people of that region, and I guess everyone else around the Lower Mainland, who have been promised, who have been waiting to have this line proceed….

[1655]

The question is: how actively and how aggressively are the minister and the ministry pushing this file so that we could find solutions to provide TransLink and the mayors the funding sources that they need in order to come up with their part of the commitment?

I think — the minister can correct me — that it will require legislative changes, just judging from what the mayors have already said: that the property tax is not an option. They may put that back on the table. I don't know that. I can't speak on their behalf. But it may not be the entire area of a funding source to pay $400 million.

Other sources are needed, and I understand they will probably require — the minister will correct me or give this House some information — legislative authorization to TransLink and the mayors to go beyond what they currently have as far as the funding sources.

Has the minister been contemplating any legislation? Are we even close to coming up with those sources that have been discussed? Is there a deadline from the ministry, at least, to the mayors and to TransLink by which they must come up with this funding?

I understand that the stable and long-term sustainable funding for other projects probably requires longer discussion, but this one is the one that we need to make a decision on, like, today in order for us to complete even the new deadline that we are talking about. So how realistic is the minister?

First of all, when will this agreement be reached by the mayors and with the minister so that the funding is available so that it can proceed? Then at least the new completion date, which is delayed by almost a year now, can be achieved.

Hon. B. Lekstrom: I guess we'll just start with the completion date that is delayed by a year. I want to be very clear. That's not delayed by the federal government; it is not delayed by the provincial government. It is delayed as the Mayors Council works through their options.

As I think the member is aware, we signed a memorandum of understanding with them to talk about the longer term as well — what funding sources are available. The ball today is in the Mayors Council's court. We have said and I have said, and I made it very clear: "I'm open for discussion."

If there are issues…. You've talked about taxation as one that they could actually use. They have told us: "We're not crazy about using taxation here." It may or may not be part of the suite of measures that they use to raise their $400 million, but what we're waiting for is really the work that's ongoing, and I know they're doing it every day right now.

They held their regional meetings. They're in discussions. I'm looking forward to my next discussion not only with the chair, Richard Walton, but with the entire Mayors Council. But they have to work through that.

I can't stress enough to the member that we always work to allow our local governments to have autonomy, to make decisions. So I'm quite certain the member isn't saying that the heavy hand of government should step in and overrule local governments and tell them how they should raise their money. I know that the member will correct me if I'm wrong.

These people, these men and women who sit on the Mayors Council, are working right now to come up with options. On those options, we will enter into discussions with them. I need them to put those down, to get it together so we can begin the work — not only for the short term, which is the Evergreen line that we're talking about today. There is a far broader issue here. It's the full funding model that's used as we move forward, whether it be with the UBC line or any of the other extensions or, I guess, expansions of the system that exists today.

[1700]

H. Bains: Let me put it this way, then, Minister. In order to achieve this new completion deadline, the later part of 2015, when will this issue have to be resolved by? For example, do they have to have this issue resolved — coming up with the $400 million — by a certain date in order to meet this 2015 deadline or the completion date?

Hon. B. Lekstrom: There is no drop-dead date, Member, in the sense that it will or will not proceed. We went to a request for qualifications for this project about ten months ago now. We had three qualified proponents. For most RFQs, once they're completed, the request goes forward within about three months for the project. We're ten months into this. So am I concerned that we may lose some of these qualified people? Yes.
[ Page 7609 ]

They haven't come to me and said: "Gosh, we're dropping out." But if traditionally in an RFQ, someone that qualifies is expecting to see the project proceed and go to tender within three months, ten months in is a long time for these people to hang on. The ball is in the mayors' court. If they determine they want to move on this, as I said, I'm an optimist.

If we're going to meet the 2015 deadline, and it's about a four-year buildout, the math is pretty simple. We've got to get going on this very quickly, and the Mayors Council will have to make a determination. Again, I'm confident they will. I've had discussions with them. I can't see why they wouldn't. I mean, I don't think there's an intent here, and they never told me they don't want to live up to their $400 million commitment.

What they've said is: "You know, property tax concerns us. We want to look at what options are available to us." If that's the only one, as the member said…. If you look at what's going on out there, whether it be fuel tax they've maxed out…. There are a number of things that have gone on. If there are new ones that they need to discuss, that's what we put forward through the memorandum of understanding.

We want to look at that. We want to work with the Mayors Council to find a solution to this. But I do not want to leave a grey area to think that if they don't come up with their $400 million, there's another $400 million from the federal or provincial government. There just isn't. There are communities and projects around the province that work towards partnerships, whether it be federal, provincial, municipal. And in this case it's no different.

Again, I want to be very clear. I have not spoken to any member of the Mayors Council that has said: "We don't want to live up to our $400 million commitment." They have all said: "We made a commitment. We will live up to it." The issue is how they're going to raise their funds — not our funds, but their funds — to do this.

Again, is it time-sensitive? I would think it is somewhat. I don't have a definitive date that I can say that as of this day this project will proceed or it won't. But if it's a four-year buildout and we're not in the ground soon, that 2015 date would probably be in jeopardy as well.

H. Bains: As the minister said, there's a four-year buildout time, which means that by the end of this year, in order to achieve the 2015 completion date, they must come up with their portion of $400 million. If it goes beyond that, and I read this from the minister's statement, then that date will be further delayed if you use what the minister has said — a four-year buildout time.

[1705]

My question to the minister is this, then: have you let that concern be brought to the mayors' attention — that this issue must be dealt with before the end of this year or it could be a further delay? And also…. Yeah, let me leave that question there, and then I'll ask the next one.

Hon. B. Lekstrom: Have I had discussions with the Mayors Council? Yes, I have. Did I say that I think we need to move on this fairly quickly if we are going to get this going? Yes, I did. But these are very intelligent men and women that serve on there. They know that if it's a four-year buildout and we're not in the ground in 2011, 2015 would be a tough time to meet. So they know that. They know, and I believe that they're committed to trying to find a solution to this.

But what I do want…. I know the member understands this. This is not a solution that, single-handedly, the federal government or the provincial government will solve by putting more money in. I think it's fair to say that economically there are challenges out there. We're very fortunate that we've got this commitment from both levels of government.

The other thing I will say on this, Member, is that having discussed this with the Mayors Council, I know they're as committed as you and I to seeing this project go ahead. That is what the population wants, and that's what we want. We think it is a good project, it is the right time, and it's the right project.

What we have to do is have the ability — and I say we, the Mayors Council and TransLink — to raise their $400 million. They're working on that right now. I'm looking forward to what they're going to bring forward to discuss with me as far as the options they think may work to go into this.

I don't think there's any one silver bullet that says that's the funding where we're going to get it all. I think — and, again, I'm kind of crystal-ball gazing here — it will probably be a grouping of areas where that money is raised from, not only for the Evergreen but probably the long-term solution for the broader range of transit in the Lower Mainland as well.

H. Bains: So has the minister left it entirely up to the mayors and TransLink to come up with options of sources of funding, or has the minister, the ministry, suggested where those potential sources of funding now could come from in addition to the property tax?

Hon. B. Lekstrom: We have actually provided through the MOU…. I'm not sure if the member has seen a copy of that. It's pretty broad. It is wide-ranging. We are open for discussion: "What can we do?"

We have made it clear, though, that the Evergreen has to be a regional funding source, without question. I think the $410 million is the broader provincial funding that's brought to the table. What we're looking for is the regional funding, which would be raised regionally, and that's very important. Yeah, it is very wide-ranging.

Have we said: "Here are the one, two or three things that you can raise money from"? No. What we've said is: "Here's an MOU. We want to sit down and discuss all opportunities and try and reach agreement." I'm quite
[ Page 7610 ]
confident that we may not agree on everything that's put forward by either side, but I am very confident that we can find the solution not only to the Evergreen but the longer-range issues as well.

H. Bains: Perhaps the minister could clarify for this House…. The $400 million — the TransLink portion and the mayors' portion that we're talking about — is their portion of the capital cost of this project.

[1710]

There is a discussion about the operating side of the cost as well. Is it not, as is my understanding, that they have the capability of borrowing $400 million to pay for the capital cost? Then I'm sure that they need to look at options for paying the cost of that debt on a yearly basis, because it'll come from the operating side of the budget, which, to me, is the area of the MOU that we are looking at. I understand that they are both somewhat related.

If they have capacity to raise money on a yearly basis, on a sustainable basis, they have a better ability or a better capacity to raise capital from borrowing. Is that not the option that the minister has suggested — that this is a borrowing part and that, then, we can still talk about the operating part?

Hon. B. Lekstrom: You know, TransLink will make the determination. I know they have some reserves, but they will not have $400 million that they just pay down and there's their share. So they're going to borrow the money, and what they're looking for is the revenue source to ensure that they can make those payments. When you and I borrow money to buy a car or a home, we want to make sure that we have a job that will earn us enough to make those payments so that in the long run we pay that off.

That is what this discussion is about. The MOU will cover that. For SkyTrain — this is something that TransLink is a leader in North America on — actually, the farebox covers the operational cost, which is unique in North America and something that TransLink is very proud of, and rightfully so. The operating cost is one part of it; the capital cost is another. We're talking about the $400 million — I want to be very clear — that we're looking at right now and that the Mayors Council is looking at coming up with, which is the capital contribution to this project.

H. Bains: So which is the…? What TransLink needs to borrow is $400 million, and I understand that to service that debt there needs to be ongoing funding available to them.

[1715]

Perhaps the minister could say: is it that portion of servicing the debt of $400 million that is of concern? Is that the stumbling block right now — that they are not in a position to find operating money to service this potential debt that will be incurred if they go out and borrow $400 million? Is that the real issue now?

Hon. B. Lekstrom: I guess in a nutshell, yes. I mean, this is about going and getting the…. Now, again, if they had X dollars in reserve, whatever they had there, they would borrow that much less. So for the sake of it, if it was $50 million in a reserve and they needed $400 million, they would borrow $350 million, put it in and make the payment. What they need to do is ensure that they have a revenue source coming in to them that will meet those payment requirements.

For the sake of it, I want to keep it easy. We're talking $400 million. I want to leave any reserves out of it, if they have any. They are going to go to the bank. They are going to say, "We have worked, and we have a revenue source" — whatever that revenue source may be. That's really the topic that they're working on right now. "We have the ability. I would like to borrow this much money." An evaluation is done, no different than for you and I when we go to the bank to borrow, whether it be for a home…. That would be looked at. Can they make the payments? Does their revenue stream meet their payment schedule? If it does, they would have the money.

TransLink is doing very well that way. The issue here is very clear, though. They don't have $400 million at this point. They're looking for a revenue source to generate the income that will pay for that $400 million, and again, I'm optimistic we will be there very shortly.

H. Bains: So through these ongoing discussions that the minister had with the Mayors Council and TransLink, have they advised the mayor how much, actually, they are looking at borrowing? Are they looking at borrowing the entire $400 million, or are they suggesting that they need less because they may have some reserve?

The second question would be, while the minister is at it: how much have they advised you that they need to service that debt, whatever the debt that they need to incur?

Hon. B. Lekstrom: No, I haven't told them how much their payments would be. That is TransLink's job. That is the Mayors Council. These are very, very brilliant men and women, both elected officials and the staff over there. They know they made a commitment for $400 million to bring to the table as their portion of this project. They made that commitment. They want to honour that commitment. So when they go to revenue sources to raise that, that's the discussion. They have property tax now, of which they said: "We don't want to use property tax. We want to talk to you about other revenue sources."

We said okay. They've entertained discussions, not only amongst themselves but others. They will be the ones…. I don't know what they have for capital reserves, but for the sake of this discussion, let's just put that aside
[ Page 7611 ]
and say they have none. They would need to borrow $400 million.

What they're going to do is they will look at their payment schedule, whether they borrowed over ten years, 20 years, whatever that is. We don't dictate that as a government. That is between the Mayors Council and TransLink. They go to work on that. They borrow the funding. They will set their payment schedule based on what that term is, and they are going to have to be able to meet that payment schedule based on a revenue source that we're trying to work together to have them access.

[1720]

H. Bains: I'm sorry if I made that statement, but what I asked was if TransLink had advised, in those meetings with the minister or the Mayors Council, what their position is as far as their reserve is concerned. What is their position, that they may have advised the minister about, on how much, actually, they're looking at borrowing towards this total commitment? And what are they looking at as far as the amount that they need to service that debt?

Hon. B. Lekstrom: To the member, again, I apologize if I give you a different answer. I interpreted the question maybe somewhat differently. In my meetings with the Mayors Council they did not indicate what they have for a capital reserve, they did not indicate how much they would be borrowing, and they did not indicate how much revenue source they were looking for to make those payments.

H. Bains: I think that it is a bit puzzling for the public who is watching this. The minister, on one hand, is saying that we are taking the lead on this project, and yet, there's one partner with a significant commitment — which is almost one-third, $400 million — that's not on the table yet. It was supposed to be there at the end of last year; it wasn't there at the end of last year. It was supposed to be there by the end of March this year. Not there at the end of March this year and still not there today.

Is it not irresponsible for the minister not to ask those questions? With all due respect — I'm not blaming this on this minister; he's fairly new in taking over this file. But somebody from the government must show some leadership, must go and talk to the Mayors Council and TransLink and ask those questions — what is the holdup, how much do you actually need to borrow, are you talking about borrowing the entire $400 million, and what is the issue about servicing that debt? — so that the minister is aware what the scope of this problem is as far as borrowing and servicing that debt.

I think that's where the public is losing their patience. They're saying: where is the leadership? You know, everyone is blaming everyone else. In the meantime, people are stuck in their cars, who were promised that this line will be in operation, which continues to be delayed now. And we have greenhouse gases; that commitment was made. The commitment was made to double the ridership on public transit by 2020.

You know, all those promises were made, and yet people are pointing fingers at each other. I think, Minister, they are saying that the buck stops at your door. You are the lead on this project and many other projects that you're responsible for. But on this particular one, which was promised — promise after promise was made — still there's no sight in the near future as to the completion date.

Has the minister asked those pointed questions? If they are having difficulty, what is the scope of those difficulties? How much do they need to borrow? Yes, their commitment is $400 million, but how much do they actually have to borrow? Is it basically assumed that they have to borrow $400 million even though they may only need to borrow less than $400 million? And how would the minister know what is the scope of their issue of servicing that debt? I think those are the questions that the public is asking from this minister. Can you answer some of those questions?

[1725]

Hon. B. Lekstrom: We seem to be going somewhat in circles here, Member, but is it not irresponsible to not ask those questions? Absolutely not. I formerly served as a mayor. I can tell you that if the government is coming to dictate…. The question has never been $200 million, $300 million, $400 million. The Mayors Council came to us with a commitment of $400 million. They're going to raise the funds how they see fit. That is the question.

So it's interesting. We're taking the lead. We are going to deliver this. We are going to do the building. We are going to do it, but taking the lead does not mean we're going to pay the whole shot. I don't think British Columbians would expect that. I don't think somebody in Prince Rupert would expect that.

I think a $410 million commitment is a pretty significant commitment by this government. I think a $417 million commitment is a significant commitment by the federal government. Those dollars are there. That commitment has been lived up to. We have a commitment from a third funding partner, being TransLink, the Mayors Council, who says: "We're at the table with $400 million." These two commitments are there. The money is in the bank. This commitment isn't.

They're working hard to find their $400 million. They could raise it tomorrow if they wanted to raise some property taxes. Tomorrow they could, but let's be clear. They don't want to use that pot of money, or at least not exclusively. They've made that clear. I have heard that.
[ Page 7612 ]

So the issue is not: "If we only had to borrow $200 million, we could do this project." That has never been on the floor for discussion. We are the lead. The only thing right now….

Many of the questions would be better directed to the TransLink members and the Mayors Council. I can't answer for them. What I can tell you is that the discussion I've had with them leaves me with the feeling that they're committed to finding a way in working with us so that they can find ways to raise their $400 million.

Let's be clear, though, to the public. They can raise it today if they wanted. Their hands are not tied. What they have said is they don't want to use property taxes, and that's their choice.

But I'm not going to leave any, I guess, people thinking that there's something the provincial government or the federal government has done to stall this. We are there with our dollars; the federal government is there. The Mayors Council is not there with their dollars yet, but I'm optimistic. They're going to work with us to find the way to raise their dollars that are needed.

H. Bains: Perhaps I will move on, especially….

Interjections.

H. Bains: We're not going to get the answer, as the minister continued to duck the question, in my view.

But some of the initiatives have been, I think, ongoing. For example, the RFQs, Minister, were asked for, and then they closed September 7. That's my understanding. The short list of respondents was supposed to be announced in the fall of 2010, and yet nothing has been announced. Can the minister advise as to the status of the RFQs?

[1730]

[P. Pimm in the chair.]

Hon. B. Lekstrom: Let's go back to your first comments about ducking the question. I don't duck any question, and I'm not going to here. I want to be very clear for the millions of people that are watching this, I'm sure, riveted to their televisions.

We have said we are committed to the Evergreen line. We have $410 million committed to that project. The federal government has $417 million committed to that. The Mayors Council, TransLink, said they would put $400 million towards this project — a very good project, the Evergreen line.

The issue is that the federal government and provincial government have their funding in place; the Mayors Council and TransLink do not. They are presently looking at ways and avenues that they would like to secure that funding. They can do it through property tax. They don't want to.

They are talking about, under an MOU that we signed with them, all of the options available. Some may or may not require legislative change. We don't know. They're working on that.

I don't know how much clearer I can be on an answer. I hope the member…. If he goes back to "duck the question," we'll focus the next two hours on that. I'm happy to do that.

The RFQ went out and was closed in September of 2010. There were seven proponents. Four were removed from that. Three met the qualifications. They were notified. They are on the list.

But as I said, right now we are about ten months into this process. After an RFQ the average time is about three months before those projects would go to tender. We're very fortunate that those three have hung on. I don't know how long they will hang on.

Is this time-sensitive? I would have to think…. Anybody in the business world knows what we're talking about here and would probably be quite amazed that somebody has hung on ten months waiting for this tender to come out.

The ball is in the Mayors Council's court right now. That's as straightforward as it can be, and I can't give a straighter answer than that.

H. Bains: Perhaps the right thing to suggest here is that the government, I think — the minister is a part of that — is ducking the responsibility. It is the responsibility of the government, which announced all of these projects in 2007. They put timelines on when those projects would be completed.

Yes, there were partners at the table. Yes, there were responsibilities, and people took the commitment to come to the table. I understand that. But the minister, at the end of the day, is responsible, and the government, at the end of the day, is responsible for delivering those projects. So it is clearly the government that is ducking its responsibility in not having those partners at the table, not having that issue resolved as far as the funding is concerned.

On the RFQ question that I asked the minister. Three, as I understand, would be identified, qualified, through the RFQ process. Three bidders would qualify, and they would be announced, as was suggested, by fall of 2010. But no announcement has been made of who those qualified bidders are.

Can the minister announce who they are today, and if not today, when would you announce those successful bidders?

[1735]

Hon. B. Lekstrom: I'm not sure what the member has against ducks, but let's go back to ducking the responsibility question. Nobody is ducking the responsibility, Member. You and I always have good dialogues, and I
[ Page 7613 ]
appreciate that this in the manner in which we're discussing it. But our partners made a commitment, and as we're the lead, we're one of the partners. We're one of three. We have $410 million there.

I'm pretty certain members of the watching public are going to know these numbers off by heart as well. So $410 million from the partner, being the provincial government; $417 million from the partner, being the federal government; and the third partner, being TransLink, the Mayors Council, had a $400 million commitment. Those are the three funding partners.

We have a funding commitment by the feds. Their money is there. We have a funding commitment by the province. Their money is there. We have a funding commitment by TransLink and the Mayors Council. Their money isn't there, so there is a challenge.

If it's live up to the commitments, I'm optimistic that TransLink will. As I said, we're entertaining discussions right now. No announcement has been made.

Member, I'll go back to the question that you asked. I don't know, Member. I don't have an answer for you today on that. I will go to work. I will find out why those three proponents have not been named, as you said they were in that release. Or if you could share that with me, I'd very much appreciate that. I will go to work and endeavour to get the member an answer as quickly as I can.

H. Bains: It was my understanding that it was the Evergreen line rapid transit project brief, July 5, 2010, on page 12. It was announced that the short-listed responders were supposed to be announced in the fall of 2010. Now, as the minister said, almost ten months have gone by since the time that the process started, and this September 7 was the closing date.

So that's the question. Perhaps the minister could…. I'm surprised that the ministry staff do not have the answer to that, as far as when those successful bidders' names would be published. I thought that they would have that information, but if not, perhaps the minister can announce that later.

Based on that, can the minister explain now when the RFP stage will begin? If that is anticipated in the near future, is there a timeline on that as well?

Hon. B. Lekstrom: You asked: when will the RFP proceed? The RFP will proceed when the funding partners have their funding secured.

[1740]

Right now we have funding secured from the federal government, and I won't reiterate the number because I know that the member knows. We have funding secured from the provincial government. We are waiting for TransLink and the Mayors Council, working together, to secure their funding. When that is concluded, the RFP will proceed.

H. Bains: I have a few questions on B.C. Transit. Perhaps I could read a statement here — a statement of facts, I believe. According to the 2011 service plan, Minister, in 2010-11, B.C. Transit will be operating on a $283.78 million budget, $71.2 million of which will come from the municipal governments. By 2013-14 the budget will be $383.4 million, with the municipal governments being responsible for $124.9 million — an increase of 75 percent.

Municipal governments have raised concerns over this increase. We talked about the other issues, and the municipal governments also were having some issues with this. Is the ministry exploring other ways that B.C. Transit could be funded?

Hon. B. Lekstrom: B.C. Transit is always looking at opportunities and alternative funding sources. Obviously, one is very fundamental. It's increasing ridership, which obviously generates more revenue. A very good plug for B.C. Transit: last year ridership went up 5 percent, a very significant number. The year before that it was 2½ percent, so to see a 5 percent increase helps everybody.

B.C. Transit has also entered into a pilot project with Mission and Abbotsford on alternative funding options. They're very proactive on that, understanding that as communities have their portion to put in, they have a tax base that they have to go to for that, similar to the discussions we've just gone through on the Evergreen line.

I think they're very proactive. They're always open to discussions and always looking for alternative sources in working in collaboration with the communities that they provide this service to.

H. Bains: Minister, on March 8, 2011, the Victoria regional transit commission voted to cut transit service by 7,000 annualized service hours. Kelowna is proposing cutting some bus routes in order to participate in the new rapid bus system, pending public consultation. Can the minister advise how these cuts fit into the provincial transit plan goal of doubling ridership by 2020?

[1745]

Hon. B. Lekstrom: A couple of things to this answer. In Kelowna they projected ridership to go up by 3 percent. The actual is 9.6 percent.

[D. Horne in the chair.]

The other one is that our provincial transit plan calls for a 5-percent-per-year increase in ridership, so we've achieved that as well, as I stated last time. The issue here is that when you talk about the 7,000 hours — I'm quoting from the member; I may have that number a little bit off — that they have cut back the service, actually that's a result of route rationalization.
[ Page 7614 ]

I think it's fair to say that when you cut hours back, you want to make sure that you have the proper route, that you're stopping at the proper times, that you're picking up the most people. Route rationalization is a fundamental basis of how you can actually — I think, in the words of the member — say, cut hours of service but at the same time enhance the service provided to the travelling public. That's what's going on here.

H. Bains: Let's move on to Kamloops. Since 2008-2009 the province was working with Kamloops to add an additional 10,000 service hours, but then B.C. Transit admitted in 2009 that only 4,000 had been added, instead of the 10,000 that were agreed to or promised. The city approved, since that time, an additional 2,500 hours of service earlier this year, but it still falls short of the 10,000 hours that originally were planned and anticipated. Can the minister advise if there are any plans to live up to that promise?

The time, I am advised, is not what I was led to believe earlier on. It is a different timing. The time now is cut back for my estimates, I am told again.

There's another question here. Four additional buses were promised to Kamloops in 2008. Can the minister also advise if there are any plans to live up to that promise?

[1750]

Hon. B. Lekstrom: I have been going on at some length here on B.C. Transit. I'm going to take a moment to introduce a couple of staff that have joined us from B.C. Transit. Joining me is Manuel Achadinha, who is the CEO of B.C. Transit, as well as Michael Kohl, who is the chief financial officer.

Kamloops. There were, as you said, 10,000 hours committed to that, additional. As you said, there were 4,000 originally, 2,500 added as well, so well below the 10,000. Part of that is that we are building a new maintenance facility, a new maintenance garage, there in order to meet the requirements. That new maintenance facility is a federal-provincial-municipal project joined together, which is very exciting.

Part of this growth that we're putting in place, whether it be 10,000 hours or greater, is based on the transit future master plan for the region. Part of that master plan — and probably, without question, the most important — is going out and engaging the public, finding out what routes are working, what routes may need to be added, what the times are, what's working and what isn't, and making sure that we have the best plan for the region.

Having served in local government previously and in this position, I've already heard from local government that they don't want to have things imposed on them. They would rather have it dealt with in a collaborative manner. That's what's taking place here.

H. Bains: I would like to move on, because of the time again. There are so many questions about B.C. Transit. We will not be able to ask those questions today as part of the time constraint.

The South Fraser perimeter road — we have a few more questions on that. I want to read, for the record, this motion that the Delta council considered on May 16:

"(a) that the B.C. environmental assessment office be advised that the corporation of Delta does not support the proposed amendment to the South Fraser perimeter road table of commitments that would allow culverts instead of bridges for two of the North Delta creek crossings,

"(b) that the B.C. environmental assessment office be advised that the corporation of Delta expects Gateway to be held to the design and operating standards described in the original table of commitments,

"(c) that specific details of the vegetation and wildlife compensation for fill site No. 5 and the Highway 99 interchange be requested to ensure that the compensation for these additional project impacts is explicitly accounted for and addressed,

"(d) that a copy of this report be sent to" a number of the ministers here — I will not name them — and a number of MLAs."

My question to the minister is: are the minister and the ministry willing to comply with the request from Delta council?

Because of the time, I believe then the member for Delta North will have a few questions on the same issue.

[1755]

Hon. B. Lekstrom: I will start, Member, by introducing Geoff Freer, who has joined us. He is the executive director of the gateway program here in British Columbia.

What's happened. You talked about the culverts versus the bridges. Obviously, as the project began and has been worked on, it became clear that they could use these culverts versus a full bridge, which is less of an environmental footprint, for example, than the bridges.

As we move forward, we will always meet the environmental standards in this province, which everybody should be proud of. These changes are before the EA right now and awaiting a decision on that. But I would expect, as we move forward, that anytime you can lessen the footprint of a project — and there's been a great deal of consultation on this one — that's in the best interests of everybody in British Columbia.

H. Bains: What I'm hearing from the minister is that there's no intention on the minister's part to comply with the request that the Delta council has asked of the different organizations here and the minister — to comply with their request.

[1800]

[The bells were rung.]

Hon. B. Lekstrom: We will come back, and I will give you an answer to that question, Member.

At this time I would move that the committee rise, report resolution and completion of the Ministry of
[ Page 7615 ]
Health and progress on the Ministry of Transportation and Infrastructure and ask leave to sit again.

Motion approved.

The committee rose at 6:01 p.m.

Committee of Supply

ESTIMATES: MINISTRY OF
ATTORNEY GENERAL

(continued)

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

The committee met at 6:46 p.m.

On Vote 16: ministry operations, $351,678,000 (continued).

L. Krog: The last time we met, I was asking a question: what steps did the ministry take specifically to determine that it was not worth pursuing Mr. Basi on his pledge of assets to the province respecting the legal fees arising out of the B.C. Rail corruption trial? I'd asked a number of examples. Was an appraisal done? Was the mortgage a first mortgage, a second mortgage, a third mortgage?

Hon. B. Penner: I think I indicated that, yes, we did get an appraisal. The province's interests were secured by way of a second mortgage on the property, and that property, I believe, was co-owned with Mr. Basi's wife.

L. Krog: Can the minister confirm: what was the amount of the first mortgage outstanding in principal? I assume that was part of the investigation, obviously, and if so, what was that versus the appraised value of the property?

Hon. B. Penner: I am advised that we don't have that number here with us today.

L. Krog: Well, given that we last met on May 12, I would have thought it wouldn't have been impossible to obtain that information. It's a fairly obvious question. If the province was going to write off an estimated $6 million in legal fees, presumably half of which, arguably, could be attributable to Mr. Basi, and he had actual equity in his home, I would have presumed that information would be available.

Can the minister advise of any information respecting what the estimated value of the equity was — that equity belonging to Mr. Basi as opposed to Mrs., assuming the property was jointly owned?

[1850]

Hon. B. Penner: I'm not sure I can give a specific breakdown as between Mr. Virk and Mr. Basi, but in total it looks like there was about $350,000. However, some of that, as the member was suggesting or asking, would have been jointly owned by the respective spouses, particularly in the case of Mr. Basi.

L. Krog: I would have thought, given that I filed questions on notice with the minister…. I refer specifically to question 7: "The Attorney General claimed that the defendants had no money to cover these costs despite evidence of property holdings that appears to contradict this claim — can the Attorney General produce documents showing that the government conducted a full review of the defendants’ ability to pay in arriving at this conclusion?" I'm going to assume the minister has with him tonight at least somewhat more useful information than he's provided.

Was the equity in the property in real estate only, or is the $350,000 figure attributable to RRSPs or other holdings, including vehicles and other tangible assets, that would have been in Mr. Basi's name?

Hon. B. Penner: I'm advised that both personal property searches as well as land title searches were conducted.

L. Krog: There was security taken over Mr. Basi's assets. Can the Attorney General describe what particular security that was? Was it a mortgage? Was it a general indemnification? Were there any lists of assets provided by Mr. Basi when he entered into that arrangement with the government?

[1855]

Hon. B. Penner: As I indicated already, the province had a mortgage registered against the property of Mr. Basi which ranked second in priority. The legal services branch ascertained the amount outstanding on the first mortgage, but I'm advised that it would infringe not only privilege but also Mr. Basi's privacy to provide further details.

L. Krog: Given that most mortgages state a specific amount in the principal, which is public knowledge, and obviously, the amount is presumably less than that, can the Attorney General advise: what was the amount shown in the mortgage — which is, after all, a public document?

Hon. B. Penner: We'll endeavour to track down what the face value of the first mortgage was.

The Chair: Member, I would encourage you to show the relevance explicitly to the vote.

L. Krog: The relevance to the vote, obviously, relates to the conduct of the Ministry of Attorney General in the
[ Page 7616 ]
expenditure of public funds, including $6 million in fees that were paid. I don't wish to enter into any argument, but we have spent some time on this matter previously, and I want to ask the question which the Attorney General hasn't answered. Was there any other security taken, apart from the mortgage?

Hon. B. Penner: Yes, I'm advised that the ministry did have some additional security, in particular over an RRSP, I believe. But to the Chair's point, the Chair is correct that the member is asking questions about last fiscal, and these estimates are about fiscal 2011-2012.

L. Krog: I appreciate that, but then, the minister has answered a number of very specific questions related to this matter previously or has been unable to provide information and has endeavoured to provide information. Can the minister tell me how much was in the RRSP that was secured?

[1900]

Hon. B. Penner: I will consider the member's question and whether or not we're able to disclose that information. We'll go back and see what it is. If that information is appropriate to disclose without violating anyone's privilege or confidentiality, then we would be happy to disclose that.

The member is correct. We have spent a number of hours now canvassing questions related to last year's budget estimates, as opposed to this year's.

L. Krog: I appreciate the minister's comments, but the questions that are on the order paper are fairly straightforward. I would have expected the Attorney General to have with him and available for his estimates information related to a matter which caused a great deal of public concern. It was the writing off of $6 million, estimated, in legal fees paid by the government of British Columbia for two individuals who pled guilty to fairly serious offences.

That would be the first time, according to what I heard from the minister on the last occasion that we met, that British Columbia has ever paid the legal fees of two individuals who have either been found guilty or pled guilty to criminal matters that occurred while they were working for government.

If I'm going to not get any forthcoming answers on the specifics, I've asked the Attorney General to advise me specifically, if he can: was there a mortgage on the house, was there a general security agreement, was there a pledge, or was there an assignment? What was the nature of the legal instruments — which I assume his ministry, in their wisdom and being careful, would have obtained before they entered into this arrangement to pay potentially substantial legal fees on behalf of two individuals working for the Liberal government?

Hon. B. Penner: As I've noted in my previous answers, the government did have a form of security in terms of a second mortgage over the Basi property. In addition, as I indicated, I think, in my last answer, we did have security in terms of personal property relating to an RRSP.

I have told the committee that we are prepared to release the details of the value of that RRSP if we can confirm if that's appropriate, without violating solicitor-client privilege or other issues related to personal privacy. So we want to make sure that that's checked off before we disclose that, but we're certainly prepared to do it if it's determined to be appropriate.

[1905]

The member and I actually agree on more here than perhaps he understands. Like him and many others, I was also very concerned about the cost involved here and whether or not government had obtained adequate security before advancing funds. My understanding is that this matter went on for many years, and contrary to the impression that some people may have, it didn't conclude with a one-time payment. So the payments were made over, I believe, a period of time.

Given all that, I thought it was appropriate to ask Mr. Toope, who is the president of UBC and a former dean of law from McGill University, to consider a number of things: namely, what the purpose is of the indemnity policy, and how has it expanded over time? I think we can all agree here that it appears to have expanded to criminal matters for the first time in the 1990s and then onward without necessarily being clearly codified in a written policy that's transparent to everyone.

Mr. Toope has agreed to look into this matter — without remuneration, I might add, which I think is appropriate. A lot of money has already been spent, as the member has noted, and it would be in my interest in trying to better control costs in the future. So I think it's appropriate that this review starts with Mr. Toope not charging taxpayers additional money to find out how we can save taxpayers money in the future.

With respect to the criminal context…. That's how this policy clearly changed at some point; I think it was in the 1990s. I've specifically asked Mr. Toope, in the terms of reference, in point 2, and I'll quote this into the record:

"In the criminal context, the review should consider whether there are circumstances in which it is appropriate for government, rather than the public servant, to bear the legal costs involved and, if so, provide policy guidance regarding both the circumstances and the approach — for example, whether there should be an indemnity or reimbursement, and if indemnity, whether upon a guilty plea or conviction repayment should be required."

That's an explicit consideration for Mr. Toope in his review that he's accepted responsibility for undertaking.

In point 6, I've specifically asked Mr. Toope to turn his mind to the following, and I'll read the second sentence in point 6: "The review should also provide guidance regarding any conditions or requirements that should
[ Page 7617 ]
apply, such as repayment, appropriate security and termination of coverage."

That goes, I think, to some of the questions and the unease that the member is feeling about whether or not appropriate security has been obtained in the past for indemnity matters and what we can do better in the future to control costs and make sure that the interests of taxpayers are better protected.

L. Krog: The minister indicated earlier in his answers this evening that there was approximately $350,000 worth of equity. There's an RRSP of an undisclosed amount that's covered.

Was there security over such things as vintage automobiles or any automobiles? Was there a general security agreement? Was there a security agreement over any bank accounts? In other words, what other security did the province actually have to secure what turned out to be, for all most practical purposes, a limitless legal bill?

[1910]

Hon. B. Penner: Some of this is ground that I think we canvassed when last we met as a committee to talk about the estimates, from last year as opposed to this year, for the Ministry of Attorney General. But as I said on that last occasion, there were rigorous independent accounts review arrangements, which are typically entered into by the Ministry of Attorney General if and when indemnities are agreed to. That's been the practice of the ministry to date.

The premise for having an independent reviewer assess the legal fees, or the bills that are submitted, is that it would be inappropriate for the Crown, as the indemnitor, to control or be seen to control the amount of money spent in defence of criminal proceedings brought by the Crown as a prosecutor even where, in this case, there is an independent prosecutor.

You may legitimately ask if that is a sufficiently robust method to protect the interests of taxpayers. I think that's, again, what is at the heart of the matter here.

That relates to why I've asked Mr. Toope to look into this matter to see if there aren't some better ways to protect the interests of taxpayers and build a greater clarity into the policy and also, by the way, to consider whether, from a perspective of public administration, there are benefits to providing indemnity to government employees or whether in fact there aren't considerable benefits from the public administration perspective.

The other thing that I think has been overlooked to date in this discussion we've been having is that any time we're faced, in a criminal law context…. One of the things we have to assess is whether parties facing a criminal matter might be successful in asserting a Charter right to a fair trial that includes state funding for their defence.

[1915]

In the lawyers' parlance, this is known as a Rowbotham application — or a Rowbotham order, if you're successful. Typically, the ministry would have to assess, in criminal matters, whether granting and administering an indemnity was an appropriate course of action, weighed against the possibility of a Rowbotham order, which is something that is effectively imposed on the Crown as an obligation and a burden to pay in return for being permitted to advance a particular prosecution. It's in that context that these difficult decisions sometimes are made.

Specifically, in the terms of reference that Mr. Toope will be guided by for his review of the indemnity policy, I have asked in point 3, and I'll read this into the record, for him to consider the following: "Where alternate means of legal expense coverage exist, they should be considered, as well as the possibility in criminal proceedings where a court may order public funding of defence costs — e.g., Rowbotham orders."

That is sometimes a moving goalpost because different courts, when they apply the Rowbotham test, may come to new conclusions based on how the law evolves over time. I know that the Ministry of Attorney General is confronted by Rowbotham applications fairly regularly. Particularly in the context of major trials, that can be expensive.

It is something that we respond to on behalf of taxpayers. We want to try to protect their interests while also making sure, of course, that the administration of justice is protected and that if it's deemed appropriate, the Crown is able to move forward with the prosecution.

L. Krog: The guts of the issue is that there appears to be an RRSP. The Attorney General has still not answered about other security that may exist over other assets. There's $350,000 equity, potentially, in a family home that could have been easily foreclosed. I appreciate the comments made at the time that it would be costly, but the last time I checked, foreclosures in this province don't cost $350,000. Presumably, there would have been equity to recover, even if it was only half of that equity, which would be $175,000.

The real question is: in circumstances where there is evidence of substantial equity in real estate and an RRSP — which is readily exigible, arguably, if it's been assigned properly — why would this government write off any rights to those legal fees?

[1920]

Hon. B. Penner: Just to address the member's question about why government would choose to do this and to reiterate what we talked about at considerable length last time when we last visited the estimates from last year, no elected official was involved in this decision. It was made at the unelected-officials level, dealing with the policy such as it was.
[ Page 7618 ]

We've already noted that it looks like there could be some improvements in terms of enhancing the clarity of the policy, particularly as it applies to criminal law matters involving government employees. That is something that Mr. Toope is now engaged in, the president of UBC and former dean of law at McGill law school.

I want to also note that the member will be aware that sometimes individuals, when faced with a daunting debt and efforts to collect on that debt, may elect to declare bankruptcy. The member will know that when that happens, that makes collection more difficult.

To go back to another document that we made mention of during our last debate on this topic — the statement of, I believe, October 20, 2010, by the then Deputy of Finance and current Deputy Attorney General. One of the paragraphs says as follows: "A major consideration was the relatively small amounts that might be recovered from Mr. Basi and Mr. Virk compared to the millions of additional dollars it would cost the government to continue to fund defence, prosecution and court-related costs through to the completion of the trial and to fund any appeals with no guarantees of convictions."

The member has just referred to the amount of $350,000. I think he said that was the main value or equity in the home. I'm not sure that's necessarily correct. I mentioned already that that's, I think, a number inclusive of an RRSP and may be inclusive of Mr. Virk's equity as well, as opposed to just one home. So just to caution the member about that number.

L. Krog: Is the minister then saying, when he mentioned bankruptcy, that in fact the Crown wasn't secured by a mortgage and wasn't secured by a proper security agreement that would have taken priority over ordinary creditors — that the only creditors who therefore could have taken priority over the provincial government, arguably speaking, would be Canada Customs and Revenue and statutory agencies such as that? Is that what the minister is telling us?

Hon. B. Penner: As noted in that joint statement from October 20, the two deputies were mindful of the relatively small amount available for possible recovery versus the certainty of large additional costs if the matter were to proceed.

[1925]

The member is asking whether certain types of debts can take priority to a second mortgage. I think the member alluded to a number of examples, and my understanding is that some of those debts that he described do, in certain circumstances. But I'm advised that I'm not at liberty to disclose the particulars of the financial circumstances of these individuals due to privacy regulations or laws.

L. Krog: Well, I don't think I heard the Attorney General say that my statement of the law was inaccurate, and I'm very flattered by that, of course. But presumably, a second mortgage is a second mortgage is a second mortgage. It is security and clearly would have provided security.

If I can just clarify how this arrangement was arrived at, the Attorney General has stated that this agreement, if you will, or decision — I won't call it an agreement — to not seek to recover any of the legal fees, which were the subject of this security, which were the subject of the second mortgage…. This decision was made entirely by the Deputy Minister of Finance and the Deputy Attorney General, and that was made solely on the basis of the cost of recovering that.

Or is the Attorney General telling us that this decision was made as part of a plea bargain whereby Messrs. Basi and Virk said: "We'll plead guilty. We'll bring an end to this costly trial and plead guilty if you won't come after us for our legal fees"?

Hon. B. Penner: As we canvassed last time at considerable length — I think that we spent more than a couple of hours on this overall topic debating issues that arose in last year's budget estimates time period — there are solicitor-client issues at play here which restrict my ability to answer some of the questions.

I can indicate on the record what's already been publicly disclosed in that statement from October 20, 2010, signed by both the Deputy Attorney General and the then Deputy of Finance. I'll read a paragraph here that applies: "For clarity, neither the special prosecutor nor I communicated that decision to the Attorney General on October 8, 2010. No one outside the legal services branch, myself and the Deputy Minister of Finance had any knowledge of this or involvement. For clarity, neither the special prosecutor nor the Attorney General had any knowledge of the matter or involvement in this."

L. Krog: We can confirm for the record that the Attorney General's position and the position of his ministry is this. The guilty plea was already in place. The agreement for the guilty plea was already in place with the special prosecutor. The decision to write off security against the assets of the accused, including a presumably valid registered second mortgage which created the government as a secured creditor, was made entirely independently.

Hon. B. Penner: I'm advised that for reasons I've already stated, I can't say anything more than I already have on the record numerous times.

[1930]

L. Krog: I would have thought the question was fairly simple. I'll repeat it. Perhaps the Attorney General has
[ Page 7619 ]
misunderstood me. He has stated that the decision to write off the government's claim to recover legal fees, which was dealt with by way of security on the properties, was made entirely independently of anything involving a guilty plea, which was an arrangement entered into between the special prosecutor, the accused and their counsel.

I just need to hear it from the Attorney General. Am I, in fact, correct that the decision to write off the legal fees was entirely separate and had nothing to do with the guilty plea?

Hon. B. Penner: I can go back and reread the statement from October 20, 2010, if that would assist the member. I suspect he will say no, because he's been asking this and we've been discussing this and I've been answering now for several hours on this topic.

The Chair: Member. I'd caution the member. I've been providing significant latitude.

L. Krog: Thank you, hon. Chair. I have full respect, and I appreciate it and will try to stay within the limits.

My question to the Attorney General is this. If we accept that there was security — and the Attorney General has made that statement — and if we accept that the trial was finished and therefore the most expensive part of this whole ugly proposition, from the government's perspective, was finished — the ongoing costs of the trial, the judge's salary and pension, the sheriffs, all those people involved — and all of those incredible public-dollar-funded expenses were gone, then why in heaven's name…?

If the province was secure and there were, at a minimum, tens of thousands of dollars — and I am minimizing — of secured assets available and the trial was done, why in heaven's name would the taxpayer, through the Attorney General's ministry, through the Ministry of Finance, write off those legal fees?

I would love to hear a salient, logical, cogent explanation for that. If I were the Royal Bank of Canada and I were in second position on a mortgage and there was $100,000 or even $50,000 in equity, you sure wouldn't find me writing off that mortgage on behalf of the shareholders. So the simple question is: if it's good enough for the Royal Bank of Canada, why isn't it good enough for the taxpayers of British Columbia?

[1935]

Hon. B. Penner: The public statement that was issued on October 20, 2010, makes it clear that the decision respecting the legal fees was made independently of the special prosecutor. So it was not a decision made by the special prosecutor. I think that's important to note.

I've already highlighted some of the constraints that I'm faced with in terms of dealing with some of the specifics of this matter owing to issues around solicitor-client privilege and privacy matters. But I do, again, appreciate the member's unease about the whole issue around the cost of the matter, the indemnity provisions generally and whether or not there was adequate security for the province in terms of recovering costs in this matter.

That, again, goes to the reasons why I felt it appropriate to ask Mr. Toope, Stephen Toope, the president of UBC and past dean of law at McGill law school, to review this matter. In particular, he has been asked to consider the rationale for the policy, the history of the development of the policy and how it has been applied in the past, and the need for indemnity agreements from a public administration perspective.

The review should recommend the circumstances in which indemnity agreements should be applied in respect of civil matters and should separately consider an appropriate policy for criminal matters. So I look forward to the work that Mr. Toope will do and to receiving his report in due course.

L. Krog: I assure the Attorney General that everyone in the British Columbia public and the taxpayers of the province look forward to Mr. Toope's work on this very important and very troubling issue. But at this juncture, if there were assets available and the trial is over, what's the reason for not pursuing the security? Was the Attorney General's ministry or the staff advised it was going to cost $50,000 and there was only $50,000 in equity? Were they advised it was going to cost $100,000? I throw out those figures because they're exaggerated figures. They're not realistic in terms of the costs of recovery.

So the costs of recovery versus the evidence I have before me. The Attorney General's earlier responses to my question around the equity that might have been available would indicate that there was money to go after, and there was no good reason not to.

This is a government that will happily pursue social assistance recipients at no small cost to the taxpayer, people who have absolutely no prospect of paying a nickel to the government before the inevitable h-e-l-l freezes over, and yet at the same time will write off what appears to be substantial legal fees in a case like this where they actually have security.

It's not even a question of having a judgment or being able to levy a judgment, as it is with social assistance recipients, that is enforceable. This is actual security, the same kind of commercial security that the most successful banks in the world, our good old Canadian chartered banks, secure over the vast majority of British Columbians and Canadians in general.

So my question is: what was the reason? Was it going to be too expensive, and if so, why was it too expensive?

[1940]
[ Page 7620 ]

Hon. B. Penner: I have answered as best I can, given the confines of solicitor-client privilege as well as confidentiality and privacy considerations. Then again, I want to stress that according to the statement released publicly on October 20, 2010:

"A major consideration was the relatively small amounts that might be recovered from Mr. Basi and Mr. Virk, compared to the millions of additional dollars it would cost the government to continue to fund defence, prosecution and court-related costs through to the completion of the trial, and to fund any appeals, with no guarantees of convictions."

Further, the next paragraph:

"Based on the above, in our respective capacities, the Deputy Minister of Finance and I decided to release Mr. Basi and Mr. Virk from their liability to repay. I communicated that decision to the Attorney General on October 8, 2010.

"No one outside the legal services branch, myself and the Deputy Minister of Finance had any knowledge of this or involvement. For clarity, neither the special prosecutor nor I communicated that decision to the Attorney General on October 8, 2010.

"No one outside the legal services branch, myself and the Deputy Minister of Finance had any knowledge of this or involvement. For clarity, neither the special prosecutor nor the Attorney General had any knowledge of the matter or involvement in this."

The Chair: It has been common practice of Committee of Supply for many years that pursuing questions related to the current fiscal year discussions typically take place regarding the previous fiscal year. By providing a forum for detailed examination of fiscal plans for a ministry, Committee of Supply debate is often informed by including comparative information from the previous fiscal year.

Questions relating to the ministry expenditures in the 2010-2011 fiscal year are not necessarily out of order. However, I urge the member to ensure that his questions are also clearly relevant to the vote presently under consideration — namely, Vote 16.

L. Krog: The Attorney General has raised the issue of solicitor-client privilege. I have a passing understanding of that concept. I'm a lawyer. My client tells me something. Not a court in the land can compel me to disclose what my client's told me. That's the general proposition.

I guess the simple question here is: who's the client and who's the solicitor in this circumstance that prevents the Attorney General from answering my questions?

[1945]

Hon. B. Penner: As the member, I'm sure, will know, the concept of solicitor-client privilege has been with us for a long time, particularly in common-law societies. I'm reminded this afternoon that the common-law principle of legal professional privilege was first recorded, at least that we're aware of, in an English case dating from 1577, known as Berd v. Lovelace. It's interesting to note that the full report — the full report; not the head note, not the summary, but the full report — is as follows:

"Thomas Hawtry, gentleman, was served with a subpoena to testify his knowledge touching the cause and variance, and made oath that he hath been and yet is a solicitor in this suit and hath received several fees of the defendant; which being informed to the Master of the Rolls, it is ordered that the said Thomas Hawtry shall not be compelled to be deposed touching the same and that he shall be in no danger of any contempt, touching the not executing of the same process."

That is the full report of that case. If but other court judgments more recently were of such brevity.

The principle originated as protection for individuals when accessing the knowledge and legal resources available to a lawyer and was said to stem from the oath and honour of the lawyer — a sort of special contractual relationship, so I've been advised.

In situations where indemnity agreements are in place between the province and others, the province is funding the lawyer involved in the matter and therefore becomes aware of certain things that we would not become aware of if not for that contractual relationship or the funding relationship that exists. Various information flows from that, but I'm advised that it is protected by solicitor-client privilege.

L. Krog: I don't think I've heard Lovelace referred to since I started law school in 1976. It's been an amazing journey down memory lane for us this evening, and I do appreciate the Attorney General's attempt at it.

Interjections.

L. Krog: My friend for Powell River–Sunshine Coast suggests I was there to hear the decision, but he's probably inaccurate by at least a couple of centuries.

I appreciate the Attorney General's remarks, and that's very helpful. But just so I'm entirely clear in understanding the concept, who's the client and who's the solicitor? Is the relationship the Attorney General that is covered by a solicitor-client privilege — that between the government of British Columbia and the lawyer who is paid for by the province to look after the interests of the province with respect to Mr. Basi and Virk? Or is the solicitor-client privilege what flows between the lawyer hired by the province, by Messrs. Basi and Virk directly, their clients?

Where does the solicitor-client privilege apply? The public money gets paid out, and we can't ask any questions about it because it's covered by solicitor-client privilege. Now, where's the sense in that? I'm just asking as an ordinary layperson, not as a lawyer, not wishing to complicate this matter or refer to fine cases decided by the Master of the Rolls hundreds of years ago.

I'm just asking a very simple question. How is it that we're in an arrangement where the Attorney General can stand up and say it's covered by solicitor-client privilege? I want to know: who's the client, who's the lawyer involved, and if the government's the lawyer, then why were we acting? If not, why not?
[ Page 7621 ]

It's a very straightforward proposition. Just explain to me in nice, simplistic terms that even a small, weak mind like mine can understand. How is it that this is covered by solicitor-client privilege and that we can't get answers about the most significant corruption case in British Columbia's recent history and the government that has made a decision to write off legal fees? Why is solicitor-client privilege here preventing the Attorney General from answering questions?

[1950]

Hon. B. Penner: As I indicated in my last answer, there are times when the government does enter into indemnity arrangements to fund the legal fees for government employees for different matters. On the scope of that policy or the state of that policy, I've asked Mr. Toope to review and make recommendations for the future to see whether and how it can be improved, both for civil and for criminal matters. I think that's important to look at.

As noted, when we're into an indemnity arrangement, the government is the funder. I talked about a third-party arrangement in my last answer. I'm advised, as I've explained to the member, that solicitor-client privilege attaches in such circumstances to the particulars that become known to the funder. That is the advice that I've been given from lawyers in the Ministry of Attorney General.

It's my view that estimates debate is not the appropriate place to debate legal advice. If the member wishes to pursue this debate, I guess, with me in the hallway, that'd be fine, but I don't think it's really the proper place in estimates debate.

L. Krog: I'm sure the Attorney General wasn't suggesting we step outside and settle this argument.

The province is the funder. The province puts up all of this money and, through that process, becomes privy to certain pieces of information that may fall within solicitor-client privilege. That is the Attorney General's received advice from his staff.

The effect of that, the Attorney General would acknowledge…. Assuming the legal advice is correct — and I wouldn't dispute the fine people who work in the Attorney General's ministry as I'm sure they considered this question very, very carefully — if that is the advice, does the Attorney General agree that perhaps it might not be the most appropriate policy?

When two Liberal aides are charged with crimes of corruption, who aren't just ordinary public servants but who actually work for ministers, who are Liberal appointees — insiders, if I can use the language of the trade…. Would he not agree that entering into a fee security arrangement for them — about which the Attorney General then, when it comes to the question of estimates, cannot answer any questions — perhaps might raise suspicion in the public mind about this whole affair?

[1955]

Hon. B. Penner: To the member's question: I am confident that the legal services branch lawyers, whose advice I rely on in this matter, have thoroughly considered and canvassed the extent of disclosure that can be made appropriately. I do not intend to extend that disclosure beyond which I understand to be the legal extent permitted.

The member, I think, is essentially asking at the end of his question: "Do you see how this might not look good optically?" Yes, of course. Does it look good politically? No, it does not. If anything, it proves the point that I've been making for more than three hours during this debate — that elected people were not part of the decision-making process when it came to this indemnity or, frankly, for the granting of indemnities to other government employees.

As we discussed the last time we met, it's my view that it's inappropriate for elected members to insert themselves into the specifics of a particular prosecution — and probably a civil matter, but we're talking here about a criminal matter. When there's somebody's liberty at stake, I think that extra cautions have to be taken.

But I do get the member's point that this does raise questions, and those are the kinds of questions that I want Mr. Toope to answer as part of his review of the indemnity policy in British Columbia and how it has expanded over time, through practice in the 1990s for the first time, as I understand it, for criminal matters, and apparently other matters as well. I've heard anecdotally that it may have been extended to professional associations reviewing somebody's conduct for possible discipline. When you read the original written policy, that kind of application may seem surprising.

So for those reasons, both myself and the Premier have felt it appropriate that the policy be reviewed by Mr. Toope. If you read the terms of reference — I've quoted from a few sections of it tonight — you'll see that it's a pretty comprehensive review. We want to know: what is the policy? To whom does it apply? Where did it originate? How did it develop over time, and what can be done for the future to make sure that it's fair? I'm also going to be interested to know how it compares to what's done in other jurisdictions.

I don't know what other provinces or other forms of government have done, either here in Canada or elsewhere in the Commonwealth, but I am interested to know. At this point I don't know, but I'm looking forward to getting those answers from Mr. Toope.

L. Krog: Well, I appreciate that the Attorney General agrees it doesn't look that good. It doesn't look very good, particularly when you refer to the "Guarantees and Indemnities Regulation," which indicates, on my reading of it: "to an amount that exceeds $100,000 but does not exceed $1 million, if prior written approval of Treasury Board has been obtained, and (iii) to an amount
[ Page 7622 ]
that exceeds $1 million, or is unlimited, if prior written approval of the Lieutenant-Governor-in-Council, after consultation with Treasury Board, is obtained."

So can the minister assure the chair that, in fact, the appropriate authorization was obtained from either Treasury Board or the Lieutenant-Governor-in-Council with respect to this indemnity, which clearly has exceeded a million dollars?

[2000]

Hon. B. Penner: I'm just referring to a copy of the regulation here. Can the member clarify which section of the regulation he's referring to?

L. Krog: The regulation provides, in regulation 1: "An indemnity may only be given by or on behalf of the government if (a) prior written approval has been given by the Minister of Finance, or (b) the director of the Risk Management Branch of the Ministry of Finance, or a person specified…."

It then goes off to talk about "Approval for indemnities on behalf of government corporations." It then talks about "Approval for guarantees" and says: "A guarantee may only be given by or on behalf of the government…." It goes through a long list and, in particular, 2(2)(ii) and 2(2)(iii).

If that's referring only to corporate guarantees, then we come back to the same proposition with respect to the approval of the Minister of Finance. So the basic question is: who approved it?

Hon. B. Penner: It's my advice that section 2 of the regulation does not apply here, as that pertains to guarantees. What we're talking about here is indemnities.

L. Krog: Assuming that the Attorney General is correct, and I'm sure he is, having the benefit of his ministry's advice, then was there the prior written approval given by the Minister of Finance as required by section 1?

[2005]

Hon. B. Penner: As part of our continuing legal education program here tonight, I'll just refer to section 23(1). If only all continuing legal education seminars were as interesting as tonight's discussion. But I digress. Section 23(1) of the Interpretation Act is a very important bit of legislation. I think, indeed, some of my colleagues will benefit from hearing this as well, because from time to time I do get asked questions about the exact powers and roles of deputy ministers.

Section 23(1) of the Interpretation Act. I'll attempt to retrieve from memory, sort of, and I'll quote as best I can. "Words in an enactment directing or empowering a minister of the government to do something, or otherwise applying to the minister by his or her name of office, include a minister designated to act in the office and" — here's the relevant part — "the deputy or associate deputy of the minister." That's 23(1) of the Interpretation Act.

You need to have that in mind when you read section 1(a) of the regulation that the member is referring to. Regulation 1(a) says: "An indemnity may only be given by or on behalf of the government if (a) prior written approval has been given by the Minister of Finance."

If you weren't aware of the application of section 23(1) of the Interpretation Act, you might literally think that means only the Minister of Finance can enter into the nitty-gritty of an indemnity agreement, but by virtue of section 23(1) that means also the Deputy Minister of Finance, when you read it in conjunction with this section in the regulation.

It's my understanding that that's what took place — that on the advice of the Deputy Attorney General of the day, the Deputy Minister of Finance of the day entered into the indemnity agreement.

L. Krog: I want to extend my gratitude to the Attorney General for this interesting legal dissertation tonight. It's always helpful and useful to learn such things.

Hon. B. Penner: Will it be recognized by the Law Society as credits?

L. Krog: It's a very interesting question whether it would be recognized by the Law Society as credits towards maintaining the 12 hours required annually, but I'm not sure that it would, although I appreciate it's come from a very reliable and valuable source.

Having said that, then, correct me if I'm wrong in my understanding of how government works, but I would presume that the Deputy Attorney General and the Deputy Minister of Finance report to the ministers involved. So one would presume that in this circumstance, when this indemnity was entered into, they in fact did report to the ministers of the day on this rather important indemnification arrangement.

[2010]

Hon. B. Penner: The member is asking a question that doesn't pertain to not only this year's estimates or even last year's estimates but the estimates for quite a number of years ago. This matter that we're discussing — the Virk-Basi matter — originated, if memory serves, in 2003 or 2004, I believe. That's when I remember hearing about it first. That's a long time ago. So I can't speak with any specificity to exactly who talked to who or what happened.

I can say that it is the practice of the ministry that when deciding whether or not to grant an indemnity, particularly in criminal matters, political direction is not sought. This is a subject that we've canvassed fairly extensively in these estimates debates today and about two weeks ago now, I think. My expectation would be that no political direction was sought, because that's not
[ Page 7623 ]
the practice of the ministry before entering into an indemnity agreement.

L. Krog: I appreciate the Attorney General's remarks, and this is a perfectly relevant question, then. It applies to current times. Given that we've drifted back to Lovelace and the Master of the Rolls and several hundred years, I'll try and bring us back to the present moment.

If the policy is that the political input isn't sought to these decisions, presumably, however, the policy also requires that, once the decision is made, it would be reported to the minister who is responsible for the ministry. Correct?

[2015]

Hon. B. Penner: Again, the challenge here is that the member is talking about a number of years ago. I do have the benefit of section 73 of the terms and conditions of employment for excluded employees, which lays out the written policy for the granting of indemnity. For anyone following this debate, the term "excluded employees" generally refers to members outside the bargaining unit or non-union members or employees of government.

I don't see anything in the written policy that dictates or directs that the deputies advise their ministers when they have granted an indemnity to an employee. I'm advised that there is no such formal policy.

Perhaps that is something that Mr. Toope can consider in his review. The terms of reference for that review are quite broad and ask him to make a number of recommendations about, first of all, whether we should even be in the business of granting indemnity to government employees for criminal matters, but if we are, then what changes or extra protections could or should be considered to better protect the interests of taxpayers while also recognizing that we want to be fair to employees.

L. Krog: If I understand the minister's answer correctly, what he's saying is that the present state of the law in British Columbia dictates that if the Deputy Minister of Finance, on the advice of the Deputy Attorney General, enters into an indemnity agreement, that indemnity agreement can be unlimited, and they don't have to report to the minister that they've entered into that arrangement.

Hon. B. Penner: I note that what the member is asking me is what policies might apply within the Ministry of Finance, because we're talking about what decisions the Deputy Minister of Finance may or may not make pursuant to the Financial Administration Act, which rests with the Ministry of Finance.

L. Krog: I rather thought I might get that response from the Attorney General, notwithstanding that he did indicate earlier that the advice with respect to the original indemnity in this matter, the B.C. Rail corruption trial and Basi and Virk, was entered into with the advice of the Deputy Attorney General.

I'm going to assume, however, that it falls within the Attorney General's ministry to provide legal advice to the Crown in all matters, which it does. That is its statutory and historic obligation and the Attorney General's obligation. So again my question to the Attorney General is: is it the policy of the Attorney General's ministry to advise and respond to questions about the extent of the legal obligations that may be contained in indemnity agreements?

[2020]

Hon. B. Penner: As the member will be aware, the Attorney General's ministry in essence acts as the in-house counsel for government. Government itself is very broad.

The longer I'm here as an MLA — and it's been 15 years already and counting…. And how many years…?

Interjection.

Hon. B. Penner: Just about predates Lovelace. Some days it feels like it. Anyway, threw me off topic, because it's very pertinent.

We do provide advice on a whole range of activities. The role of government is extremely broad in our society, and I'm constantly reminded of that. Even today at dinner I just heard of a matter that our ministry has been called upon to give legal advice on which wouldn't have been something I would guess about.

The short answer to the member. It's probably too late for a short answer, but an answer to the member's question is: no, the minister is not informed every time the ministry provides advice to another branch of government.

One division alone has almost 200 lawyers, the legal services branch, whose job is to advise government agencies on what they should do in terms of their legal position. Some quick examples include child protection, proposed legislation, treaty negotiations, medical treatment issues like the Insite facility in downtown Vancouver. It's a very live issue, and we've just recently been in the Supreme Court of Canada arguing a constitutional division-of-powers issue there — and a Charter of Rights issue, too, if I'm not mistaken.

That all falls under the Ministry of Attorney General. Then, of course, we have hundreds of additional lawyers toiling away every day in the criminal justice branch. From time to time they will come up with advice and recommendations for criminal law reform, possible changes to the Criminal Code. I've benefited from their advice in my short tenure as Attorney General.

I know that's a lengthy answer, but I'm trying to set the context here, that in reality, the minister is not advised every time the ministry provides advice to another
[ Page 7624 ]
branch of government, because I suspect that happens multiple times every day.

L. Krog: Perhaps we can come at this from a somewhat different angle. The minister, during the last day we had occasion to deal with his estimates, talked about the written policy relating to indemnity. He said that it relates to civil litigation and non-criminal matters only and then went on to state: "Over the last couple of decades it appears the policy has been expanded on a case-by-case basis."

I'm just wondering if the minister can indicate: are there any other cases where it has been expanded to involve people who plead guilty to criminal offences?

[2025]

Hon. B. Penner: The member asks a very pertinent question, and the very short answer is: I don't know. It is something, though, that I'm hoping to find out, and it's one of the things, I suspect, that Mr. Toope will be considering. In the terms-of-reference document, again, just to quote from that:

"This review is to consider the rationale for the policy, the history of the development of the policy, how it has been applied in the past and the need for indemnity agreements from a public administration perspective."

Under "Specific Considerations," item 2:

"In the criminal context the review should consider whether there are circumstances in which it is appropriate for government rather than the public servant to bear the legal costs involved and, if so, provide policy guidance regarding both the circumstances and the approach — for example, whether there should be an indemnity or reimbursement and, if indemnity, whether, upon a guilty plea or conviction, repayment should be required."

That's germane to the member's question.

In addition, specific consideration 7 indicates:

"The reviewer is at liberty to consult with any part of government, including the legal services branch, the Public Service Agency and the risk management branch, to understand the evolution and application of the policy, as well as the circumstances in which the policy has been previously applied."

I think this is one of the areas where we may stand to gain some additional information from the review that Mr. Toope has undertaken.

L. Krog: I very much appreciate the Attorney General's response. I take it from his answer that he can't tell me tonight. It's not that he won't. He can't tell me tonight of any other cases where a person who was covered by the indemnity policy, loose as it is, and who pled guilty or was found guilty, has ever had their legal fees waived. I take it that's the Attorney General's answer.

I am very interested, however, in the further part of his response, where he talks about Mr. Toope having the authority to review both the history of the policy and specific examples. I presume that would include the B.C. Rail case and Messrs. Basi and Virk.

Am I correct in my interpretation that Mr. Toope, based on what the Attorney General has said here tonight and what is contained in the specific considerations of the direction, that in fact Mr. Toope will be able to suss out answers relating to the case of Messrs. Basi and Virk?

[2030]

Hon. B. Penner: I believe that Mr. Toope will have the discretion to do what the member is suggesting, at least based on my interpretation of specific consideration 7. I just quoted that in its entirety in my last answer, but I'll just quote a portion of it here for emphasis: "…to understand the evolution and application of the policy, as well as the circumstances in which the policy has been previously applied."

L. Krog: I sense an interest in the Attorney General tonight, from his remarks and his remarks the other day, to get to the bottom of this case, which has been, I can assure him — and I state the obvious — an embarrassment for this government and certainly what is viewed as scandalous by the people of British Columbia — that two Liberal insiders would have their legal fees waived and the taxpayers stuck with the bill.

But just to remove any possibility of doubt in the public mind, is the Attorney General, given that these are his directions and he has set up this process with Mr. Toope, prepared to specifically direct Mr. Toope in writing to investigate quite specifically the indemnity arrangements involving Messrs. Basi and Virk?

Hon. B. Penner: Mr. Toope has accepted this review, this assignment without remuneration. As I think both the member and I agree, there is significant latitude in the terms of reference for Mr. Toope to consider. I'm not sure it would be appropriate for me to fetter his discretion as he conducts an independent review.

L. Krog: I must say, that answer was worth sitting here tonight to listen to it. I'm not asking the Attorney General to fetter Mr. Toope's discretion. I'm, in fact, asking him to give Mr. Toope some direction that may assist him in focusing in on what is the most important aspect of all of this that has led to the Attorney General appointing Mr. Toope, and that is the B.C. Rail corruption trial and what flows from it.

So, again, my question is quite simply this: will the Attorney General give some specific direction? By giving that specific direction to Mr. Toope to investigate this particular matter, he will not only relieve the government of a cloud of scandal that hangs over its head to this day; he will relieve the cloud of scandal that surrounds the decisions that were made surrounding this whole arrangement, which would surely be beneficial to public confidence in the justice system, public confidence in the Attorney General himself and public confidence in the government.
[ Page 7625 ]

Again, my question is quite simply this: why would the Attorney General not want to give direction to Mr. Toope so that Mr. Toope could investigate this matter quite specifically, as opposed to setting him out there like a sheep in the field and letting him graze wherever he wanted and come back with his belly full of whatever he wished, as opposed to coming back with something that might actually be useful to the taxpayers?

[2035]

Hon. B. Penner: I'm sure the member wasn't intending to compare Mr. Toope to a sheep with his comments. I'm sure he wasn't intending to be disrespectful, particularly to a gentleman who is doing this work, in effect, pro bono for the people of the province.

I just want to read this into the record again: "The review is to consider the rationale for the policy, the history of the development of the policy, how it has been applied in the past and the need for indemnity arrangements from a public administration perspective." As already noted, specific consideration 7 gives latitude to Mr. Toope, in this case the reviewer, "to understand the evolution and application of the policy, as well as the circumstances in which the policy has been previously applied."

It is entirely within Mr. Toope's discretion how he wants to pursue this indemnity review that I am looking forward to receiving the benefits of. My understanding is that the review is now underway. It has been launched, and I look forward to the report coming forward in due course.

If the member is worried that Mr. Toope may not understand the sentiments of either himself or myself or, I guess, as we represent the public, the public's perspective, I will endeavour to send him a copy of this discussion, a transcript of this debate tonight, so he can take into consideration the views of the member and myself as we've debated this matter at length.

L. Krog: The last thing I'd do is compare the president and vice-chancellor of the University of British Columbia, who is in a pay grade far above everybody in this room, to a sheep.

Having said that, I can't imagine why the Attorney General would find it difficult to simply send a letter of direction. The practice is with the appointment of special prosecutors…. I notice the presence of Mr. Gillen here tonight, who fulfils that role admirably for the province of British Columbia — appointing special prosecutors. The only time the Attorney General interferes with that, it is a direction that has to be published and is publicly available.

Again, my question to the Attorney General: rather than send him a transcript — certainly, speaking from my half of the evening's events, a boring transcript — why would he not wish to give him…? Speaking from my half, I didn't….

Hon. B. Penner: You're selling yourself short.

L. Krog: I thank you. The Attorney General is too kind, too kind. Perhaps it's the hour.

Why would he not simply wish to send a specific direction that was publicly available, which would provide the assurance to the public that this matter is going to be appropriately investigated? I mean, the Attorney General found it appropriate, after due consideration, to appoint Mr. Toope. And although I appreciate that he is working without remuneration, he nevertheless can add this as a significant feather in his cap, if you will. It would represent a fine act of public service to undertake it, and I'm sure those are the conditions under which he undertook it.

I expect and trust Mr. Toope to perform admirably in this job, but what is the problem with giving him a specific direction to investigate the indemnity arrangements with Messrs. Basi and Virk and report back to the Attorney General? That report is to be made public under the terms of the referral. What is the problem with that, and why would the Attorney General simply not commit tonight to doing that?

[2040]

Hon. B. Penner: As I have noted already, Mr. Toope has already agreed to undertake this review based on the terms of reference as written. That review is now underway, as I understand it, without remuneration for Mr. Toope for his efforts.

However, as the member has noted…. It's the member's view, as I take it, that as he reads the terms the reference, it is broad enough for Mr. Toope to look into this or other matters that attract his interest as he determines how this policy "has been applied in the past," to quote from the document itself.

I think the terms of reference do give the latitude that the member is suggesting, but it also gives Mr. Toope some discretion. I hope that the member is not expressing, in an implied way, a lack of confidence or trust in the judgment of Mr. Toope.

L. Krog: I appreciate the Attorney General may wiggle around this as much as he wants, but broad terms and general direction often do not result in specific answers. As John Maynard Keynes once said about money: "Everyone's in favour of general economy and specific expenditure." I want to get to the specifics, if I can.

The fact is that Mr. Toope could hand back a ten-page report, admirably wonderful in its content, and not deal in any particular way with Messrs. Basi and Virk, and that report would, based on its general terms, probably meet the direction of the Attorney General as it exists now.

He'd be quite fair and honest and would have performed his duty in doing that, but that does not satisfy the issue that is in the minds of British Columbians, which is the case involving Messrs. Basi and Virk. So again, as part of this, why not allay public concern and
[ Page 7626 ]
simply give a specific direction to consider that specific case as part of the mandate?

It may be implied, it may be suggested, and it may be possible for him under these broad terms to come to that conclusion. But there is no guarantee, and there is no requirement, and there is no language in this document that specifically requires him to do so. So why not simply give that direction? What possible harm will result from the Attorney General giving that direction to Mr. Toope?

Hon. B. Penner: To be clear with the member, this is not specifically a Basi-Virk inquiry. This is a review of the government's indemnity policy. It started originally, in writing, as a policy related to civil proceedings. Over time it morphed. To use a somewhat unscientific term, it morphed. From what I've read publicly, it appears that it was applied in criminal matters for the first time in the 1990s without the foundation of a clear written policy.

[2045]

My concerns extend well beyond the Virk-Basi matter when it comes to indemnity policy, because it's been applied in a variety of forms, some of which I've already discussed over the last three or four hours. It's been extended to employment situations, it's been extended in lawsuits, and it's been extended, obviously, in criminal matters. It's been extended in situations where legal fees may not have been paid at the end.

My concern about the state of the policy is pretty broad. That's why I asked for this review. It's about the state of the indemnity policy generally. What can be done? Should it even exist in criminal matters? I mean, it's not in writing, but it's been applied in criminal matters. How should it operate in the future? We can't turn back the clock and undo the decision upon which a case was concluded, but I think we can learn lessons about how to better apply the policy in the future.

That's why the terms of reference are crafted the way that they are: to give Mr. Toope the latitude required to take a look at how this policy evolved — or morphed, to use a more casual phrase — and to try and apply some lessons here about how we could better protect taxpayers while still, and I want to stress this, being reasonably fair to government employees.

L. Krog: I am aware of two specific cases where this policy has been applied. One is former Premier Glen Clark, who was found not guilty, and the case of Mr. Basi and Mr. Virk. Is the Attorney General aware of any other situations involving criminal charges and public servants where the policy has been applied?

The Chair: Attorney General, and noting the hour.

Hon. B. Penner: I am aware that there is at least one other instance where indemnity has been extended in criminal matters. There may be others that I don't know about. We have indicated in the terms of reference for Mr. Toope's review of the policy that he can have access to, in essence, our files and see what he can find going back in time to see how the policy has been applied. I look forward to that work coming forward from Mr. Toope to tell us more about how this policy may have been applied in the past, particularly in relation to criminal matters.

Again, I want to say this. I'm also very curious to know whether such an approach is taken by other provinces, the federal government or other countries. I say that very sincerely, because I honestly do not know the answer to that and it's something that I'm anxious to learn about.

Mr. Chair, you have indicated it's that time to note the hour. Therefore, I move that the committee rise, report progress on the Ministry of Attorney General and seek leave to sit again.

Motion approved.

The committee rose at 8:49 p.m.

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