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)

Tuesday, May 31, 2011

Morning Sitting

Volume 24, Number 1

[ Page 7627 ]

TUESDAY, MAY 31, 2011

The House met at 10:04 a.m.

[Mr. Speaker in the chair.]

Prayers.

[1005]

Introductions by Members

H. Bains: This morning, visiting this great house of democracy are students from Cougar Creek Elementary. They are around the vicinity, I'm told. I haven't seen them yet, and I will be meeting them after. They're grades 5 and 6, accompanied by their teacher and their parents. So please help me welcome them to Victoria.

Introduction and
First Reading of Bills

Bill m209 — election finance
AMENDMENT ACT, 2011

B. Simpson presented a bill intituled Election Finance Amendment Act, 2011.

B. Simpson: I move that a bill intituled Election Finance Amendment Act, 2011, be introduced and read now for a first time.

Motion approved.

B. Simpson: The fundamental principle of democracy is one person, one vote. However, that fundamental principle is undermined by money, specifically the ability of candidates in political parties to raise money from organizations which do not have voting rights and the ability of people with financial means to enhance their vote and, therefore, their influence through cash donations.

The current freedom of organizations and individuals to donate huge sums to political parties significantly undermines the one-person, one-vote principle. This bill addresses that issue and supports the principle of one person, one vote by restricting the right to donate to candidates and political parties to registered British Columbia voters only.

The bill also levels the playing field by capping individual donations at $1,000 per year. This is a radical change from the current system that would create a fundamental shift in the relationship between candidates and political parties and the voting public.

The Election Finance Amendment Act would restore accountability to the electoral system by ensuring that the principle of one person, one vote is honoured and reflected in how election campaigns are financed.

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

Bill M209, Election Finance Amendment Act, 2011, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Hon. R. Coleman: Before I do the orders of the day, I have a motion I'd like to put to the House. It's on the order paper.

Mr. Speaker: Proceed.

Standing Order 81.1

ADOPTION OF
GOVERNMENT BUSINESS SCHEDULE

Hon. R. Coleman:

[Pursuant to Standing Order 81.1 (2), all remaining stages of Bill (No. 2) intituled Budget Measures Implementation Act, 2011, Bill (No. 8) intituled International Interests in Mobile Equipment (Aircraft Equipment Act), Bill (No. 11) intituled Yale First Nation Final Agreement Act, Bill (No. 12) intituled Police (Independent Investigations Office) Amendment Act, 2011, Bill (No. 13) intituled Miscellaneous Statutes Amendment Act (No. 2), 2011, Bill (No. 14) intituled Coastal Ferry Amendment Act, 2011, Bill (No. 15) intituled Municipalities Enabling and Validating Act, (No. 4) and all uncompleted Estimates shall be completed and disposed of on or before 5:30 p.m., Thursday, June 2nd. At 5 p.m. on the date mentioned, the Speaker and the Chair of the Committee of the Whole will forthwith put all necessary questions for the disposal of all uncompleted Estimates and remaining stages of the said Bills without amendment or debate and divisions called on sections of the said Bills shall be taken in accordance with Practice Recommendation No. 1. Any divisions called on the Estimates or second or third reading of said Bills may be taken in accordance with Standing Order 16 and all other divisions will be covered by Practice Recommendation No. 1. Proceedings under this motion shall not be subject to the provisions of Standing Order 81, or the Standing or Sessional Orders relating to times and days of the sittings of the House.]

At the same time, I'm tabling with the motion a proposed schedule for legislation and motions within the House over the next three days.

J. Horgan: I rise to speak to the motion. It was brought to my attention over the past number of days. I've been making efforts with the Government House Leader to endeavour to find an opportunity to complete the debate on the bills that are before the House, to find an opportunity to fully debate a $40 billion budget on behalf of the people of British Columbia.

The Speaker will know that prior to the beginning of this session this Legislature sat for four days over a ten-month period — four days, hon. Speaker.

[1010]

The expectation, I believe, of the people of British Columbia is when they elect legislators, they send 85
[ Page 7628 ]
representatives to Victoria to respect and protect their interests. I think there's an expectation — all members have that expectation; all their constituents have that expectation — that we will be in this place doing the people's work until we're finished.

I have a great deal of respect for my colleague the member for Fort Langley–Aldergrove. We have done our level best to work within the parameters of a fixed schedule, which we all agreed to some ten years ago in this place, but not once in the six years that I've been a member of this place have we stuck to the calendar. Every single year there's an amendment. This year we sit for four weeks to discuss $40 billion of public money.

We were told at the start of this session: "It will be a light legislative load. A couple of bills — that's all we'll have." Fifteen pieces of legislation and a motion amending tax policy in British Columbia introduced yesterday reducing the ability of the people of British Columbia to take their collective wealth and provide services in Cranbrook, Castlegar, Comox, Courtenay — right across the province. That's why we come here. That's why we have elections.

People will know we have a fixed election date in British Columbia, apparently, but it's still at the whim of the member for Vancouver–Point Grey. We are under the expectation in this place when we come here that there are rules. The Government House Leader today stood and amended the rules. The Government House Leader stood in this place and said to 84 other members: "Tough luck. So sad. So sorry. We're done Thursday at five o'clock come hell or high water." That's the position of the government. That's the position of the Government House Leader.

We have made every effort, and there will be back-and-forth. We'll be in the corridor debating whether we have had sufficient time for this or that and thus and so. But ultimately, it strikes me that this is a question of principle. It's a question of principle about why we are here. Why do we have elections? Why do we select an individual man or woman to come to Victoria to represent the interests of British Columbians if we only do it at the whim of the government?

I fully understand and respect the government's desire to advance their agenda. No question about that. No question at all. But the executive council has at their disposal 40,000 staff and now, come five o'clock on Thursday, $40 billion to spend. The role and function of the 85 members sent here by the citizens of B.C. is to scrutinize that expenditure, to hold the government accountable — good or bad, left or right, New Democrat, Liberal, whatever they want to call themselves on the other side. The "Hey, just vote for us; we're not the NDP" party is what I seem to hear from them more than anything else.

If that's how they want to characterize themselves, that's fine. If they want to be completely absent of any moral compass, any set of principles that will guide them other than "we want to cling to power as long as we can," that's fine. That's absolutely fine.

But the people of British Columbia watching today, those in the gallery who came here to watch democracy unfold, have seen the guillotine slammed down on debate in this place. They've seen the government use their majority, use their ability to contort, to bend the rules to their will. I reject that. Those on this side of the House reject that.

I sense that the Speaker is going to tell me that he's had wisdom from the Chair that a discussion about what we're doing here is out of order. Are you going to ask me to sit down? I'm standing until you do.

Mr. Speaker: Yes, Member, I'll ask you to sit down.

Members, pursuant to Standing Order 81.1(2), and I'll read it:

"A Minister of the Crown who from his or her place of the House, has stated that an agreement could not be reached under the provisions of section (1) of this Standing Order in respect of proceedings at one or more stages of a public bill, may propose without notice a motion for the purpose of allotting a specified number of days or hours for the consideration and disposal of proceedings at one or more stages of a public bill. The motion shall be decided forthwith, without debate or amendment. Any proceedings interrupted pursuant to this section of this Standing Order shall be deemed adjourned."

J. Horgan: Hon. Speaker, in your recitation you made no reference to the budget estimates. I understand that this is an extraordinary amendment, and as much as the guillotine and closure time allocation has been used on legislation in the past, in my six years here and in a brief, brief discussion with the clerk, I'm of the understanding that the budget estimates have not been truncated in this form in the past. I seek your counsel on that.

[1015]

Standing Order 81.1
(Speaker's Ruling)

Mr. Speaker: Hon. Opposition House Leader, the estimates have been, in the past, subject to this order. So with that, I will propose the motion at this point in time.

[1020]

Motion approved on the following division.

[1025]

Orders of the Day

Hon. R. Coleman: I now call Motion 11 on the HST, and in Committee A we'll be doing estimates of the Ministry of Finance.

Government Motions on Notice

MOTION 11 — GOVERNMENT CHANGES
TO HARMONIZED SALES TAX

(continued)

R. Austin: I'm very proud to take my place in the debate on Motion 11, the latest iteration of the how to fix the HST for a government that, I think it's fair to say, has broken trust with the people of this province by bringing in this tax in the very first instance. Here we are today, over a year after the 2009 election, still discussing the HST.

[D. Black in the chair.]

Why are we here? We are here, of course, because a government decided not to have this debate, not to have a fulsome discussion on tax policy prior to the last election. Oh no. That wouldn't have been quite right. No, instead what they decided to do was to pretend that while the world economy was spiralling into descent, that actually the finances of British Columbia were still okay, that we would only have a deficit of $495 million.

That was the position of the B.C. Liberal Party prior to the '09 election. Now, most people in British Columbia, indeed most people around the world, looked at that and thought: "That's not possible." But oh, no. The B.C. Liberals kept that pretence up — that the deficit would only be $495 million.

In reality, after the election the B.C. Liberals found themselves with a huge problem: a deficit that was actually 400 percent bigger than the one that they had gone to the electorate on — 400 percent bigger. So what we are discussing here at the end of the day isn't so much just an issue of tax policy.

What we're discussing here today is a matter of trust. Do people in British Columbia still trust the B.C. Liberals to be honest with them around the HST?

After all, it was brought in to solve the big problem of this massive deficit. How did that solve their problem? Well, they got an extra $1.6 billion from the federal government to bring in a tax that they had promised they would never bring in. That's why we're here today.

Now, since they have brought in that tax, they've said a whole bunch of things about the HST. They said it would be revenue-neutral. Well, we then find out that it brings in hundreds of millions of dollars more than the PST and GST. They weren't honest about that. They misled the House in regards to that. We discover later on that it's no longer revenue-neutral.

They said that if they brought it in and gave this massive tax shift from business and corporations to people, that somehow corporations would, in their wisdom, take that benefit and flow it through to communities — either through lower prices in products and services, or they would reinvest those tax savings that they have been given and create jobs.

[1030]

Well, I want to speak just for a second about what happens when you continually give corporate tax cuts to big companies. I'm going to use just one example. In my riding there was a company that had a pulp mill in Kitimat, the Eurocan pulp mill owned by West Fraser. They received a very substantial tax benefit through a thing called the black liquor tax. That was actually a federal program. What did that company do with the $18 million that they received as a benefit from their investments in Kitimat? They took the $18 million, shut down the Eurocan pulp mill and used the $18 million someplace else in the province of B.C.

That's just one example of how corporations, when they're given constant corporate tax cuts, don't necessarily put it back into the communities that they serve. You know what, hon. Speaker? It's not their responsibility to look after the communities necessarily. Their responsibility is to look after their shareholders' interests. It's the responsibility of government here in the Legislature to try
[ Page 7630 ]
and help the people of British Columbia, to make sure that we can create equal opportunities around the province for everybody. That's our responsibility, and this government is failing to do that.

They also said: "Well, you know what? Companies will give back cheaper prices in goods if they get a savings on the HST. They'll pass it down." Well, let's just look at that. You know, the government actually had a savings on liquor taxes. The PST and the GST had a higher liquor tax than the HST, a 3 percent savings on the HST if you were to go to the liquor store after the HST came in. What did the government do? They raised the prices of liquor — okay? They raised the prices of liquor. Once again, there were no savings to British Columbians from having the HST.

So on all counts we can see that the government has weaved, it's bobbed, it's done whatever it can to try and make out that the HST is a good thing for consumers, that it's a good thing for citizens in terms of job creation. Unfortunately, that's not the case.

This motion seeks to give a…. How shall I put it nicely? It's giving a financial inducement to people to vote in the upcoming referendum. It's saying to British Columbians, who've already been misled through and through for close to two years on the HST: "Trust us. Trust us just once. If you were to vote the HST in at 10 percent, we'll reduce the HST, and we will give some financial inducement to seniors and to all British Columbia families that have a child under the age of 18."

Well, first of all, I think it's hard to imagine that British Columbians, after all they have witnessed in the last two years, could actually believe the government — that in the future, two years down the road, they will eventually take the HST down to 10 percent. But that's up to British Columbians to decide. I can certainly tell you, hon. Speaker, that when I have been back in my community — and I've only spent one weekend back in my home community since this was brought in — people come up to me and say: "You know what? I really don't believe it."

Even if they did lower this, there are still so many items that are not covered by the PST-GST which would be covered by a 10 percent HST that, quite frankly, in the long run most families would be far worse off under the HST, because at the end of the day this is still a huge tax shift from corporations onto individuals.

Let's look at the record of the last ten years. What have we seen in terms of tax policy here in British Columbia? We have seen the costs for average families go up and up, while the corporate sector has seen continual benefits in terms of reduced corporate taxes.

I think the anger that we see about the HST wasn't simply the fact that British Columbians know they were misled by a government that promised not to bring it in. What really upset them was the notion that they are continually having to pay more and that corporations are continually getting to pay less. I think this was the straw that broke the camel's back, because the HST, when it was introduced, put a burden of $1.9 billion onto families. That's a whole heck of a lot of money onto families that wasn't there prior to the HST being there. So families said: "We've had enough."

[1035]

Look at some of the introductions of taxes that have come on. It's not just tax policy. It's all the extra charges that come onto families. It's the hydro rates. It's ICBC, creating such huge profits with what every British Columbian has put into ICBC that the government then drags $750 million out of ICBC. It's MSP premiums that have gone up. All of these changes are not in any way progressive. They are regressive. Why? Because if a family that makes $40,000 has to pay the same MSP premiums as a family that makes $140,000, it's not fair.

So what we have seen in the last ten years…. If you look at the total tax take in the province of British Columbia, you will see a reduction in the corporate sector, and you will see an increase to families in terms of how much they have to pay to make up for what has been given to the corporate sector. So they've had enough.

I think that where I come from in northwest B.C. people are particularly upset because we haven't seen any benefits that have flowed through from corporations. I heard the other day the Minister of Forests making the argument that this is a good tax for the forestry sector.

Well, I can't speak for the whole province as he can, but I can speak for the northwest, and there isn't a single manufacturing facility left in northwest B.C. So even if there's a benefit coming through for the corporate sector in forestry, what are they going to do — suddenly reopen mills that have been torn down? No, it's gone. It'll never come back now. It's a little bit too late, and it's too little — far too little.

For those of us who live in northwest B.C., we see this as something that has hurt ordinary families. It hasn't helped our regional economy in any way. People feel that they have been misled time and time again, and they've had enough of it. All I can say is this. I am going to vote no to this motion, as indeed are all of my colleagues. When I go out from this place next Thursday, I am going to be speaking with constituents, and I'm going to be telling them why I will be voting yes in the upcoming referendum.

I'll be voting yes to extinguish the HST, to go back to a PST-GST regime because that is what is better for families. There's been too much burden put on them, and it's time for the corporate sector to pay their fair share.

G. Gentner: I, too, will be voting no against this motion, and there are a number of reasons. I want to focus on one particular aspect of it, and that's the HST and the Stanley Cup. That's why I cannot support this motion.

Let me explain it this way. The Boston Bruins from Massachusetts have a 6.25 sales tax — period. Here it
[ Page 7631 ]
could be 12 percent, 11 percent, maybe 10 percent. I know the member from the South Peace is all happy and wonderful because he's supporting the Boston Bruins. He probably bought his jersey in Boston at a very cheap rate because there's no sales tax, or less sales tax, on that jersey than there is here.

Interjection.

G. Gentner: The northeast. But the Minister of Transportation and Infrastructure — we know he flip-flopped on the HST, and now he's supporting it, like a fish out of water. And now he's supporting the big, bad Bruins over there, knowing that in Boston they don't have an HST.

You know, in Boston you don't pay tax on the American flag. It's exempt. You don't pay on uniforms, team uniforms or sports jackets. In Boston there's no tax on sporting events. They don't pay for the hot dogs, the banners and the programs for hockey. They don't even have a parking tax when they go see the Bruins.

But here, you know, I wish our government would support minor hockey the way the Governor of the State of Massachusetts does. They're exempt on hockey tickets. There are no hockey expenses there on the hockey tickets. You watch the Bruins, and there are no taxes on hockey hats. But the big, bad, ugly Bruins don't have the HST.

[1040]

Our Premier donned a Canucks jersey, and any child in this province who wears an adult shirt — and most must, with the jersey of hockey, because they're large — has to pay the HST. I hope, of course, that the Premier paid the HST.

The Stanley Cup is coming to Vancouver. The silversmiths in Boston don't pay a tax on servicing and polishing the Stanley Cup, but in Vancouver, if we win, we will. Although Boston has to pay 6 percent on the silver polish product, here we have to pay 12 percent on the product.

Let's say we go organic and stay away from the abrasive, ammonia-filled commercial silver cleaners. Let's say, you know, with Mary Ellen's solution, we use toothpaste — non-abrasive, organic toothpaste that won't tarnish the Stanley Cup. Now, the difference between Boston and Vancouver is that there's no tax on toothpaste in Boston, but there is here now in Vancouver. Not only is it more expensive to shine the holy grail in Vancouver, but prevention against tooth decay is more expensive here in British Columbia as well. Mary Ellen's old tricks don't even work in British Columbia. If you can't polish the Stanley Cup or your teeth with tax-exempt toothpaste, how can you and your teammates smile for the team picture?

When the Vancouver Canucks hoist the 35-pound Stanley Cup, let it shine, Madam Speaker, let it shine. Hallelujah, let it shine, and let's make sure it's without the burden of the HST. I say: "Go, Canucks, go. Let's defeat the Bruins and kill the HST."

I want to talk about prevention and how important it is for children to live a healthy lifestyle. Hockey parents — obviously not the Premier — have witnessed rink rentals for ice time, because of the HST…. Now, for the North Delta minor hockey, costs are going up, way up. Registration for house team members is $600. For a rep team member, it's an additional $250. You add on extra ice time, it's $100. Skates today are $400 to $500. A helmet is a hundred bucks. Pads and equipment, another $200. Sticks now are $100 to $150. So you add it all up, and you throw on the HST. Hockey is not affordable in British Columbia.

Shame. Shame on the B.C. Liberals. I thought we were putting families first, but we're gouging families. I want to talk about hockey sticks. You know what? There are very few hockey sticks that are even made in this country anymore. They're made overseas. We're supposed to claw money from the HST, giving a break to manufacturers, thinking it's going to create more added value. But even our hockey sticks are no longer made in this province, in a province of wood.

How will the HST police deal with that new underground economy, the annual hockey used equipment sales that hockey teams put on with mom and dad? Are we going to tax the resales like we do everything else? That's what this legislation does. We have an underground economy emerging, no thanks to the B.C. Liberals. Fundraisers to help pay for all of this — you know, the expenses of hockey…. Hockey rentals are going up, and catering is going up, all because of the HST.

Renting a bus to go to a hockey tourney? HST slapped on it. Food for the trip, for the young 'uns, another HST tax. Bandages and medical supplies are now part of the HST — used to be exempt. Even the vitamins that get your little ones up for the game — HST.

[1045]

Your team accounting is now taxed. Massage therapy, if you need it, is taxed. When you launder the smelly team equipment and clothing, it's now taxed too. But you know what? In Boston most of all that is exempt. If it's not, they only pay 6 percent.

Families first from this government? I don't think so. Not even a longtime hockey sponsor, Tim Hortons, supports the HST. So when you watch the HST Stickman on TV during the hockey playoffs, don't forget that the real stickhandling by the B.C. Liberals when it comes to fairness doesn't exist. It's blatant high-sticking.

I want to briefly touch on this, and I'll surrender the chair because I know a lot of people want to speak. But briefly, the HST referendum was originally going to be conducted under the Recall and Initiative Act, which contains detailed rules for campaign finance. Now, the B.C. Liberals decided to hold the referendum under the Referendum Act instead. The Referendum Act allows
[ Page 7632 ]
rules to be adopted and amended from the Election Act, which also contains detailed rules for campaign finance. But that's not what they're doing. The HST Referendum Act does not incorporate or set any rules for campaign financing.

The B.C. Liberals chose the HST referendum rules through an order-in-council, and the regulation that they passed has no campaign finances rules like those in any other election — shame. The B.C. Liberals' rules don't require financial agents, registration of third-party advertisers, identification of an ad sponsor, disclosure of contribution expenses, limits on contribution expenses, or financial reports.

The type of election on the HST conducted by the B.C. Liberals is more than just high-sticking. It's more than just roughing. It's cheating, it's rigging, and they should not only receive a game misconduct, but they should be suspended for life.

This referendum ballot is about cheating. It's about disenfranchising voters who won't be registered, voters who will be away on holidays, voters who are transient. University students will be away with no permanent addresses, no ability to go into an election booth and talk to an election official.

It's about undelivered ballots. It's about ballots lost in the mail. It's about not knowing whether your ballot was received and counted. It's about third parties perhaps voting for others. It's about ineligible ballots from voters who have moved. It's about ballots sent to questionable and temporary addresses. It's about picking up discarded ballots in recyclable blue and yellow bags on the curbside for garbage day. It's about voter intimidation for employers and special interests.

The electioneering during a normal election is forbidden within a couple of hundred metres from the voting place. However, your fundamental protection and privacy is gone under this process, and perhaps your vote could be sold and bought. That is the situation that's at hand.

Now, the government came out against the Internet balloting process for the city of Vancouver. It was because, according to the Minister of Community, Sport and Cultural Development, the election legislation was not in place, so he nixed it. Now, the elections officer said that with physical ballots, observers do not need specialized knowledge or qualifications to ensure that votes are properly cast and counted, but the technology on on-line voting inevitably turns the process into a black box which could undermine public confidence.

I wish the B.C. conservatives could put that same concern about this process as they did with the on-line voting process that they nixed in the city of Vancouver. Hon. Speaker, with that, I will surrender the chair, but I do want to stress my outrage at the HST and how it's going to affect families, those who want to play sports in particular. And I also want to voice my outrage at the methodology that's being employed for this sham of a vote for the HST.

[1050]

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

Deputy Speaker: Please proceed.

Introductions by Members

M. Dalton: In the gallery today we have 33 students and their parents from Alexander School in Abbotsford. They're accompanied by their teacher Mrs. Grieve, who is from Mission. I had the opportunity to talk with them on the steps just prior to coming here. Would the House please make them feel welcome.

Debate Continued

C. Trevena: I am speaking on Motion 11. I think it will come as no surprise to either side of this House that I will not be supporting Motion 11. It was brought in yesterday, four days before this House is being closed down.

We have met for four weeks in ten months. We are being asked to decide a significant piece of tax policy in a debate that is being truncated. We've just heard that all proceedings are going to be shut down on Thursday evening, no matter whether they have been fully debated or not. That is wrong. It is unacceptable in a democracy that a government should act so flagrantly.

Tax policy is central to a government's role. It's how it earns the money to provide the services. But in this motion it is changing the way it wants to approach a tax which is already grossly unpopular, and it is not allowing full debate to do so.

It is absolutely outrageous that we should even be debating this motion, because what we in this House are being asked to do — and I'm not going to mince words; we don't have time, unfortunately, to mince words, to be loquacious — is to bribe the people of British Columbia so that they will support keeping the harmonized sales tax when we have a referendum this summer.

Previous colleagues have talked about the way the referendum is being held, but in Third World states, this bribery…. We would be condemning it. If some government in a different country was going to its people and saying, "We want you to keep this tax, so we will pay you to keep this tax," we would say: "That's outrageous. You can't do that. That's not the way the government works."

Government policy is supposed to be thoughtful. It's supposed to be considered. It's supposed to be in the best interest of the people who they are representing, particularly when it comes to fiscal policy. But here in B.C. it seems that it's okay. The people of B.C. are expected to accept that they're going to be patsies and that they can be bribed by their own government.

It's not okay. It's not healthy for our democracy. It's not healthy for our fiscal policy. It is simply wrong, and I think the voters of B.C. recognize that.
[ Page 7633 ]

I remember in high school history class in England learning about the evolution of the political process. I'd like members to cast their minds back to maybe 1832 when we had the Reform Act which started to clean up the political process. In 1832 the Reform Act got rid of rotten boroughs — those places where almost no one lived but a number of MPs were elected. Victorians were reform-minded. They became zealots in ensuring that democracy worked, and by 1872 they also recognized that it was wrong for politicians to bribe the electorate.

At that time what happened was that politicians and their agents would take men off for drinks — it was only men who had the vote at that stage — and take them to the open hustings to ensure they voted the right way. There is not much difference in what we are seeing today in this motion. In cutting the rate of the tax, in offering people cheques — we are not seeing much difference. That's 150 years of democratic tradition thrown to the wind.

Our present Premier clearly seems to think that bribery is good. Give people a cheque for each child and promise that an already regressive, already unfair tax bill will be less in 2014. This is a government that is unable to keep a promise for six weeks. Why would anyone consider trusting them for a three-year time span on anything? And on the HST of all things, which they promised not to bring in during the election campaign and six weeks later threw in people's faces, is stretching everyone's credulity.

I know that my colleagues on this side of the House have quoted the Premier's statements when she was running for the leadership of the B.C. Liberal Party, but those statements underline boldly and heavily the reasons people have every right to be angry about this crass piece of political manipulation.

[1055]

The Premier said: "We aren't going to be talking about trying to reduce it by a point or two" — the rate of the HST — "before the referendum. I mean, I think people will see that as buying them with their own money." Yes, Madam Premier, people will see what's being done as buying them with their own money, and people will not accept it.

None of us should underestimate the people whom we represent, but I think the Premier and her Finance Minister live in such a rarefied world that they don't understand that basic principle. You have to respect people's intelligence, and what people know is that the HST has made life more expensive over this last year, and they will not be bought off.

We have debated time and again in this House over the last year the inequities of the HST. It is not a fair tax. A flat tax is regressive. It costs more for consumers. Members from the government side can try to laugh it off, as they often do, but everything from coffee to haircuts to bikes to funeral costs cost more with a flat sales tax.

That cheque in the mail isn't going to be enough to make life more affordable for tens of thousands of people in B.C., nor is it going to make business better for the painters, the home renovators, the restaurateurs — those businesses that have seen their profits impacted time and again in the last 11 months. That 7 percent puts a lot on a quote for a job. It puts a lot on a bill for a meal. It is a direct hit to individuals and to businesses.

To function well, an economy needs some fiscal certainty. Businesses need to know that they can trust the government to act rationally. Individuals need to be able to plan around what they earn and what they have to pay for in goods and in taxes. I've got to say that I do not see how this government can continue to act as though it has any fiscal or financial credibility.

Guardians of our economy? Not only has it had deficit budgets for five of the last ten years and not only did it have the largest deficit ever in B.C. in 2002, but then we get the arrogant, rampant financial promises. From costs for the convention centre — remember this, Madam Speaker? — $495 million budgeted for, and it turns out it cost nearly double that; or the B.C. Place roof, $577 million, $208 million over the original estimate, which according to the B.C. Liberals was based on a business plan…. So much for their business plans.

Then, of course, very sadly, the very memorable line in the last election about the budget deficit — $496 million and not a penny more. Oops, as the Finance Minister likes to say.

Just after the election it happened to be $2.8 billion, only reduced by the $1.6 billion payoff from the federal government to bring in the HST — which of course is why we ended up with the HST in the first place and a government that is so arrogant it doesn't think people recognize that for what it is.

These last two years the B.C. Liberals have shown their lack of control over economic policies and, after that oops moment of an unexpected $2.4 billion deficit —$2.4 billion is a huge amount of money — and the HST, we had the on and off unilateral and unexplained income tax cut brought in by the previous Premier, which was then ruled out.

Now, the mistress of the popular airwaves, bending to what she thinks the public wants to hear, cuts the HST and cuts a cheque to the people. The Premier needs to realize that this is not a local radio show she's producing. It's about running a province, and the health and well-being of four million British Columbians need it to be done well.

It seemed for a fleeting moment in the B.C. Liberal leadership campaign that she did understand the true costs of playing with tax policy.

[1100]

If I might quote her again:

"Cutting the HST by 1 point is more than $800 million out of the budget this year and every year after that; $1.6 billion" — seems

a familiar figure — "for a 2-point cut. We need to ask ourselves where we're going to get that money, because we are 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."

I continue to quote the Premier:

"I mean, that's where the money comes from, ultimately. So yes, government could cut it, but at what cost to the citizens?"

Bingo, Madam Premier. At what cost, indeed?

This scandalous bribery of the B.C. electorate, massive tax shift to the corporate sector will without a doubt mean cuts to services, cuts to schools, cuts to health care, cuts to people with special needs. We are daily raising in this House the effects of those cuts — people being forced to leave group homes and left without any support, the impacts of poverty on women, the lack of help for our seniors.

A progressive tax system and a progressive government look after the needs of the people first and foremost. Without providing a solid, equitable start in life through child care and education, without providing security for people with public health care and a social safety net, we are a much poorer society, both morally and economically.

Let's not delude ourselves. The neoconservative approach of cutting public funding to the bone means we are less able to compete nationally and globally. Healthy, well-educated people who are not worrying about the high cost of housing and who know their children will get the same equitable start in life that they were able to get are going to be more productive. They do not have to be bribed to support a government, because the government is worthy of people's support.

This government is not. It is tired, and it is moribund. It is so desperate to hang on to power, with no agenda except being in power. It is willing to undermine our democratic processes by bribing the people on whose behalf it is supposed to be working.

Madam Speaker, I will not be party to that sort of politics, and I will not be supporting this motion.

J. Brar: I also rise to speak against the motion, and let me tell you why.

The question for me and for the people of B.C. is very simple. The question is: why should the people of B.C. trust the B.C. Liberal government on anything they say about HST? That's the question, because the B.C. Liberals have lost the trust of the people of British Columbia, and the people of British Columbia don't trust them on anything they say about the HST. That's because the B.C. Liberal position on the HST has been changing almost every minute, every day.

Before the election the B.C. Liberals told the people of B.C. that they had no plans to impose the HST on the people of B.C., and the B.C. Liberals told the people of B.C. that the HST is not on their radar. That was before the election. They gave that commitment in writing to the Canadian Restaurant and Foodservices Association. They also gave that commitment in writing to the Greater Vancouver Home Builders Association. But that was before and during the election campaign.

As soon as the elections were over, they changed their mind. Then Premier Gordon Campbell and the B.C. Liberals betrayed the people of B.C. by doing just the opposite. In less than two months the B.C. Liberals broke their major promise that they made to the people of B.C. during the election, and that was not to impose the HST on the people of B.C.

Clearly, they misled the people of British Columbia. Clearly, they deceived the people of British Columbia. Clearly, they did not tell the truth to the people of British Columbia, because they knew. They knew very well that telling the truth means losing the election.

[1105]

That was the situation, and that's why the people of British Columbia don't trust the B.C. Liberal government anymore. That's why they don't trust this government.

Madam Speaker, if you look at the story, during the election they made another promise to the people of British Columbia, and the promise was that the deficit would be $495 million, not a penny more. That was before the election, and that was during the election. That was the commitment made by the Premier and every member of the B.C. Liberal Party to the people of British Columbia. But as soon as the election was over, the people of British Columbia found that the reality was way different than that.

The deficit, in fact, was $1.8 billion, almost four times larger than originally forecasted by this government. Clearly, on this issue, as well, B.C. Liberals misled the people of British Columbia. That's why the B.C. Liberals have lost the trust of the people of British Columbia, and that's why the people of British Columbia don't trust this government on anything they say about the HST.

[L. Reid in the chair.]

The story goes on. When the B.C. Liberals went down big time in the polls, former Premier Gordon Campbell appeared on BCTV to announce 15 percent income tax cuts to buy back support from the people of British Columbia, on a prime-time TV program. People were mad to see this low level of politics, bribing people with their own money to get back their support, and his popularity went down even further. It went down even further. So the people of B.C. finally forced the former Premier to step down because of his deception around the HST.

What happened next? The B.C. Liberals flip-flopped and decided to withdraw the 15 percent tax cut announced by their own Premier. They did not get what they wanted to get from the people, bribing them to get back their support. Guess what happened. They withdrew that 15
[ Page 7635 ]
percent tax cut given to people because the people did not respond the way they wanted them to respond.

That's why the B.C. Liberals have lost the trust of the people of British Columbia, and that's why the people of British Columbia don't trust this government on anything they say about the HST. And the story goes on.

Once upon a time the B.C. Liberals promised — during the election, again — that the B.C. Liberals would provide the best education system so that no child is left behind. Soon after the elections were over, they started closing schools. They have closed 175 schools in the province of British Columbia. Clearly, they were not honest with the kids of this province and with the people of this province, and that's why they have lost the trust of the people of British Columbia. And the story goes on.

Once upon a time the B.C. Liberals made the promise to the people of British Columbia that they would not sell B.C. Rail. But as soon as the elections were over, they actually sold B.C. Rail. That's why the people of British Columbia don't trust the B.C. Liberals, and they don't trust anything the B.C. Liberals say to the people of British Columbia about the HST.

The story I just told you clearly tells us there is a clear pattern, that this government says one thing before the election and does completely the opposite after the election. The B.C. Liberals have become masters of misleading British Columbians. The B.C. Liberals have become masters of deceiving British Columbians, if you look at the last election patterns.

[1110]

They continued to say one thing before the election and continued to do completely the opposite after the election. People thought, and I also thought, the new Premier probably will be different, but the new Premier is not a change in any way, Madam Speaker.

As a radio show host, the new Premier had this to say about the HST: "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 to refuse to bother explaining why they did it. They can't even be bothered to mount a defence, and I think that is an insult. That is an insult." CKNW, July 28, 2010.

She also said that it seems impossible that the tax wasn't contemplated before the spring ballot. "I just don't think it is possible that that could be the case." CBC news, Thursday, August 13, 2009.

Just a few days ago the B.C. Liberals now decided, and they made the announcement, that they are going to reduce the HST by two points. That was the announcement made, again, to buy back support of the people of British Columbia just to win the referendum.

That's the story. The current Premier pointed out…. Before she flip-flopped on this move as well, this is what the current 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." That's what the Premier said during the leadership race. As soon as the leadership race is over, now the Premier is there to support it, basically to direct her Finance Minister to reduce the HST by two points.

That's why this government has lost the trust of the people of British Columbia, and that's why the people of British Columbia don't trust this government on anything they say about the HST. The Premier of British Columbia — I'm talking about the new Premier of British Columbia, Madam Speaker — made three specific promises to the people of British Columbia, three promises on the HST, during the leadership race. As soon as the leadership race was over, the new Premier changed her mind and completely, completely changed her position on that one.

Before the leadership race the Premier promised to the people a June 24 referendum. After the race was over, she broke her promise to have the referendum on June 24. Instead, ballots will be sent out June 13, but the vote will not end until July 22, with results not known until August — merely a month short of the original September 24 date, rendering the change almost useless.

The second promise. Before the leadership race the Premier made the promise to the people of British Columbia to "provide equal funding to both sides during the referendum period, as was done in the electoral reform referendum." After the race was over, she broke that promise to the people of British Columbia, as well, and now has decided to spend $7 million of the taxpayers' to convince the people of British Columbia to support the HST — $7 million.

Now the situation is like this. The pro-HST funding is roughly about 78 percent, the anti-HST funding is just 4 percent, and arguably, neutral funding is 17 percent. How is this referendum is going to be a fair process? This is not going to be a fair process.

[1115]

The other promise the Premier made. Before the leadership race the Premier promised: "The referendum will be conducted in the same manner as a provincial election." As soon as the race was over, she broke that promise as well and now is choosing a mail-in vote instead of her promised election-style vote.

The list of those realities, the list of those broken promises, the list of Liberals' broken promises before and after the election goes on and on. When we talk about the HST, it is very clear that the HST will hurt B.C. families and small businesses. The reality is that the HST is an unfair tax on British Columbians.

The HST transfers $1.8 billion in taxes paid by big businesses now onto the backs of B.C. families and small businesses. Big business will pay less, and the people of British Columbia will pay more, and small business
[ Page 7636 ]
people will pay more. I know I am mindful of time as well, Madam Speaker, but the bottom line is that the HST will drive up the cost of many things for B.C. families.

The cost of restaurant meals will go up. The cost of many groceries such as snack food and other prepared food like salad, sandwiches and heated food will go up. School supply costs will go up. Services such as taxi fares will go up. The cost for live theatre, movie tickets, amusement parks, campground fees, museum admission and whale-watching tours will go up.

Accounting services costs will go up. Veterinarian care costs will go up. Other professional services like architects and real estate agents will go up.

Classes like yoga, dancing and martial arts will go up. Membership fees for clubs and gyms and player fees for team sports will go up. Facility and ice rink rental will go up. Haircut costs will go up.

The list goes on and on. This is going to cost B.C. families way more than B.C. families were paying under the GST and PST system.

HST is also going to hurt small businesses and the economy of British Columbia. It's going to hurt the restaurant and food service industry, the construction and real estate industry, the tourism industry, the taxi industry and the veterinarians. Thousands of people will lose jobs because of the HST. The restaurant industry alone forecasts that the HST will cost them up to 12,000 jobs. The tourism industry predicts that it will cost them up to 10,000 jobs.

That's why lots of British Columbians are opposed to the HST, which includes the B.C. Restaurant and Foodservices Association, the Council of Tourism Associations of B.C., B.C. Care Providers Association, the Federation of Community Social Services of B.C., the Rental Owners and Managers Association of B.C., the Union of B.C. Indian Chiefs, and the list goes on.

I would like to conclude by saying this. There is no winner among the people of British Columbia or among the small business community of British Columbia. The only people who are winners in this game are the corporations and the wealthy people who are friends of B.C. Liberals. That's why the B.C. Liberals are doing almost everything possible to buy back the support of the people of British Columbia.

I would like to conclude by saying the message from the people is very clear. These 700,000 people signed a petition to stop the HST, to eliminate HST; 700,000 people came out. They came out because their message is very clear.

[1120]

The message is that B.C. Liberals cannot continue deceiving the people of British Columbia. B.C. Liberals cannot continue betraying the people of British Columbia. Enough is enough, Madam Speaker. We must stop the HST.

I will vote yes to get rid of the HST, and I will be voting against this motion in this House.

B. Routley: It is indeed a joy to rise in this House and talk about an issue that's important to the constituents in the Cowichan Valley.

You know, in talking to people throughout the Cowichan Valley…. I talked to restaurant owners who said that this is already impacting their business. A pool and spa owner said that in the past he had lots of orders, lots of work for pools and in-ground pool construction, and these are not cheap projects. We're talking about $100,000 to $150,000 pools, and he has had none — zero, nada — since the introduction of the HST.

The consumers understand that it's a huge bill on any kind of construction work. So it's affecting new-home builders, it's affecting home renovators, and it's affecting roofers.

Senior care. I was sitting next to a fellow, having my lunch, and it turned out he had five senior care facilities. I said: "You know, the HST has winners and losers. Are you one of the winners in this deal?" He said: "No, I'm not." He said: "As a matter of fact, I buy food to feed to the seniors, and guess what. I have to pay HST on the food that I hire in and those prepared meals that I bring in — pay those suppliers the HST — and I have no alternative but to hand it on to the seniors." So that's what's happening to seniors — more costs.

You know, you have to give it to these Liberals, though. I was there minding my own business, having a wonderful time watching a Canucks game. What could be more harmless than that? What could be more enjoyable? What could reduce your blood pressure and just have a wonderful time — watching a Canucks game? But there, hidden in…. As soon as there's a commercial, there it was, lo and behold.

I have to give it to them. These Liberals and their spin doctors are really, really crafty. Stick men. Go figure. But you know, they had it figured out. Any stick man looks way more honest and trustworthy than any Liberal ever could. What kind of Liberal could they put up?

So for $5 million, give or take a billion, they hatched yet another jiggery-pokery Liberal plan. Stick men. The people of B.C., I know, will see through the stick men. They know full well that these Liberals are going to be sticking it to them. That's who they're going to be sticking it to.

These guys with their commercial should be in Hollywood, or maybe in Disney. Maybe they could do a sequel: "Run for your life. Here come the stick men." I can see it now. They could even tell a story about nice politicians sending out cash to all good girls and boys under 18, but no, that would be just too unreal. Well, apparently not. Not here in British Columbia. Not with these B.C. Liberals. Anything is possible. More jiggery-pokery, trying to buy votes with people's own money.

It's a pattern. It's a pattern that, sadly, we have to hear over and over again. It's for the sake of transparency, for the sake of the people of B.C. who come down here. I'm glad there are a few folks listening. Maybe for the first time
[ Page 7637 ]
they're hearing that this is the pattern that goes on. This is what really goes on in British Columbia.

[1125]

This government said they weren't going to sell B.C. Rail, and they did. They said that they weren't going to rip up health care contracts, and they did. They said they care so much about education, and then they closed community and rural schools all over British Columbia and ripped up teachers' contracts, and it took the Supreme Court to bring some fairness back in the province of British Columbia.

They said that they had to order paramedics back to work, and I spoke in this House on behalf of paramedics that I know. They said they had to order the handful of people that weren't working back to work because there was a big pandemic coming. No pandemic.

In the 2009 election they said emphatically and on multiple occasions: "We will have a $495 million debt and no more." The post-election September budget forecast was updated to $2.8 billion. By the time the fiscal year was over, the official deficit came out as $1.8 billion, almost four times larger than originally forecast.

In the 2009 election they said the HST is not on their radar, but they even put it in writing to the homebuilders and other groups: "We're not contemplating the HST." The B.C. Liberals deceived British Columbians on the HST, promising no HST during the election and then bringing it in just days after. It was later revealed that the government was considering the HST in the months leading up to the 2009 election.

As a radio show host, the new Premier had this to say, apparently on CKNW, July 28, 2010: "It's an insult to British Columbians for the government, first of all, to have brought in this tax in what most of us regard as a very, very sneaky way" — and that they then refused to bother explaining why they didn't do it properly. "They can't even bother to mount a defence, and I think that's an insult."" There you go. There's something we can agree with that this Premier has said already.

Also, we know the Premier's Progress Board was recommending the HST back in December of 2008, and it was the Premier they were directing their recommendations to. The Premier's Progress Board are a hand-picked group of individuals, hand-picked by the Premier to give recommendations. You can still go on line and print off the 2008 December Progress Board report where they're recommending — what? — the HST.

"Oh, it's not on our radar." It was being recommended by the hand-picked people for the province of British Columbia's Premier at the time, and they say that it wasn't on their radar. Only after 700,000 people signed a petition and the people of B.C. — all over B.C. — rose up in protest…. Only then did they admit:"We could have handled it better." Oh, my my. We could have handled it better. Oh, so much better.

They're so repentant now. They get on, they stand up, and they say now: "Oh my, oh my." You know, if they could have rammed it through, they would have rammed it through and down our throats, and we would have had to just eat it up. But no, they now stand before the people of British Columbia somewhat repentant, somewhat now acknowledging: "Oh, we could have handled it better."

In fact, the whole plan that originally they were introducing and saying was the best thing they could do for British Columbia, they have crumpled up and thrown it away. And now they are bringing in a whole new plan, throwing out the baby with the bathwater, throwing out a whole new set of principles and policies that that party has long held as important — even things like corporate tax cuts. My, my — all of a sudden.

You know, when we were talking about it when we had leadership, people talking about the corporate tax…. "Oh," business said. "Oh, is that so? Oh, that's just awful. Imagine. We've got the socialists at the door. Somehow this is going to be just so awful. It's going to cramp investment in British Columbia."

[1130]

The facts are that there wasn't any investment in British Columbia as a result of this government's policies. There should have been a flood of investment with corporate tax cuts in Canada and in the province. Where's the evidence? The fact is that we were losing jobs — a steady stream of major family-supporting jobs leaving the province. Where were they investing? United States, China. Biggest corporations. Oh, but we need to help those poor corporations. They are suffering.

Did you know that, folks? They're suffering. They're having a terrible time. It's just awful. You know, we need to really think about those poor corporations. What were we thinking? We should empty out our pockets and pay everything we can to help those multinational rich corporations, because they're going to come flooding in. Oh, that's the promise. That's been the promise over and over. That's been the promise since 2001.

Over the last ten years we've been fed a steady stream of what are now known to be broken promises. I don't have sufficient time. However, just the ones I've already related are why no one can believe the promises in this motion. Yet this bunch says: "Just trust us. Just trust us one more time. We're not making it up this time. Oh, we made it up before, and we didn't really mean it, and we're really, really sorry. But this time we have a wonderful plan that goes into the future, and if you just look way out there, way out to 2014, you can trust us this time. We've got it right. Oh yes, we've got all the spin doctors working."

You know, it's interesting. During the campaign for the premiership of the Liberal Party, we heard the candidates, and one of the candidates was suggesting that maybe we should just have a vote in this House and get rid of the
[ Page 7638 ]
HST. That was a good idea. That was a fine idea, brilliant — apparently overruled. Told something about ready, fire, aim. Wasn't that what we heard — "ready, fire, aim"? Oh no.

Well, a lot can change. So now they're saying…. Somebody said something about bribing people with their own money. That would be really, really bad. Can you imagine how bad that would be?

Interjection.

B. Routley: Oh, name names. Name names.

Interjections.

B. Routley: That could be the current Premier of the province. My goodness, it's unbelievable.

Now we're going to bribe people with their own money. You know, we're going to hire a whole bunch of people. There's a real efficient plan. We're going to hire a whole bunch of people to write cheques. So if you're a millionaire mom, if you make $100,000 a year and you've got little ones at home, you can look forward now to a cheque cut by the B.C. Liberal Party. Isn't that a wonderful plan?

Now, what would that be for? Is that for lunch money for the kids? No, I don't think so. No. This is a desperate attempt to salvage the HST through a package that people will understand. This is mean-spirited right from the beginning.

People understand when you're transferring money from their pockets right to the richest people and the richest companies in B.C. Not one shred of evidence, no connectivity. We're not connecting the money. All those millions of dollars — we're not connecting those millions of dollars to anybody.

[1135]

We're not saying: "You know what? We'll give you millions and zillions of dollars if you create jobs." No — no such plan. No connection to jobs. Just a kiss and a promise. It's a cruel hoax. More snake oil salesmen scams.

This is one of the worst ones perpetrated on the people of British Columbia. They even promised to pay anyone with a child. You're going to get a cheque.

The Liberals have provided misinformation on the HST every step of the way, underestimating the cost to families, inflating the economic benefits and claiming it was revenue-neutral.

They claimed that the economic benefits were going to be wonderful. Oh, and they brought in Jack Mintz. You know, we didn't have a study. Wouldn't it have been thoughtful to think about studying? You're going to have the most major corporate tax transfer in the history of British Columbia, and you're going to do it without even consulting anyone other than the Premier's Progress Board, which just happen to be running some of the biggest, richest companies. Oh, there's no self-interest there, no self-interest at all.

All of a sudden we're going to try and wring ourselves out and turn into families first. Yeah, corporate families first. That's what it's all about. Corporate families first.

We all know. Working families all over British Columbia know. Forest workers know when they're having their pockets picked. They know that when they're laid off and they're out of work, and we've got a government….

You know, they say the forest industry is going to get $140 million. That should be good for you. Okay. Well, let's figure that out for a minute: $140 million goes to all these major corporations, and you know what? I'm the first one to say that they've had a difficult time because of global markets. But giving them $140 million and then trying to tell the people of B.C. that they're going to somehow trickle that back down to you? Come on.

When you go to buy a 2-by-4, it has nothing to do, absolutely nothing to do, with $140 million break that they're giving these corporations. That's going right into the bank, right into the coffers of those big corporations.

When you go to buy 2-by-4s, is anyone, including any B.C. Liberal, honestly going to stand up and tell the people of B.C. that when they go down to Home Depot, they're going to get a deal on 2-by-4s because they gave $140 million to the biggest forest companies in British Columbia? Not on your life.

What about the mining companies? I was sitting on the Finance Committee. Here I was listening, and I couldn't…. My jaw just about fell down to the table, because there is one of the big corporate cheeses saying his mining company…. It's only $10 billion in the last five years. I said to him: "Well, what are you going to do with this $50 million to $80 million tax break for oil and gas and for mining? What are you going to do with your cut of the tax break? When you buy and sell in world commodity markets, just exactly how do you explain the B.C. Liberals' plan?"

It's been carefully articulated by the B.C. Liberals. I've heard them, over and over. It's been carefully articulated that we're going to give them all of this money, and we're going to somehow magically, presto chango, get it back. It's going to be wonderful. We'll have pockets full of coal or copper or gold or something that's all going to come rushing back to the people of British Columbia. Absolutely false. Absolutely false, and they know it's false.

Their original HST claims have been contradicted by the latest so-called expert panel. Let's just talk about that.

[1140]

First there was this panel. We had Mintz. Oh, by the way, I forgot to mention that Jack Mintz is a highly credentialed economist.

Everybody understands it. You can hire economists. If you're a company and you want an economist to come in
[ Page 7639 ]
and tell you good things, he'll come in and tell you good things. If you want him to come in and tell you bad things, you can hire one to come in and tell you bad things.

If you want to hire economists like Jack Mintz, who just happens to work for Brookfield, one of the major companies…. Oh, there's no self-interest there. "Oh, we're crystal-clean. You can look in our pockets. There's nothing there. It's all, all purely non-self-interest. Oh no, no, we just are here serving the wonderful people. Yeah, that's what it's all about — talking about how we're going to serve people and start…."

We all know that it's not revenue-neutral now. Not revenue-neutral. They came in, and the previous Finance Minister sat in that chair over there and said it was going to cost the province $113 million. Any of you folks hear that? I heard that — $113 million.

We were going to lose money on the deal. Oh, yeah, we were going to lose…. Isn't it terrible? It's just terrible. We're going to lose $113 million. The province of B.C. is going to suffer, and we're suffering for a good cause. The cause is so wonderful.

Apparently, the Liberals woke up one morning, and they said: "You know, we need to do something desperate, something bold. Let's give all the money of the middle class of B.C. to the richest corporations. Surely that's going to work." No study.

Then they bring in a study, Jack Mintz, after the fact, and he writes a study that just happens to be totally opposite to the study that he gave in Ontario. But now we form…. "Oh well, maybe we should have another independent panel."

This is scene — what? — 23 in this movie. It's a nightmare, but it's a movie nonetheless.

[Mr. Speaker in the chair.]

Now they're offering a whole new tax policy, totally remaking a policy that they said just weeks ago was the greatest single thing that they could do for B.C. Apparently, now they admit they were wrong on that count, too, and they are — get this — even back-pedalling on corporate tax cuts that they said were so desperately needed to drive new investments, desperately needed to create jobs. All of a sudden, not so much. They were desperately needed, but now not so much, not anymore.

Now they claim they're going to get 2 percent back. We're going to get a little back from the corporations — temporarily, mind you, temporarily. They're not talking about any temporary tax for ordinary British Columbians. No, no, you're going to pay and pay and pay some more, but they want to talk about a temporary tax for the biggest corporations who have had tax break after tax break after tax break. Has it resulted in investment and jobs? Zero. Nada. Nothing. Those are the facts.

I remember when they ridiculed our NDP leader recently for suggesting the same kind of corporate tax. You know, it's so hypocritical. What do they do? They tear a page right out of the NDP playbook — eh? That's what they do. They figure: "Well, you know, they must have sat that down…."

It's interesting. All the same corporate speakers said just months ago, when our leader was suggesting such a thing: "Oh, the sky is falling. This is terrible. This is going to be destroying the economy of the province of British Columbia for sure." All of a sudden now, not so bad. "It's not so bad. It'll all be good. Oh, it'll all work out. It's just going to be wonderful."

[1145]

Now a wholesale new set of claims. If these guys were like the road crew…. Have you ever seen the road crew that are patching…? You know, they patch over the potholes; they patch over the busted-up highway — eh? Have you ever seen that? Well, that's what we've got here.

They're patching up their principles. They're patching up their philosophy. Only weeks to go, and they're rejigging their policy — desperate moves by desperate people. "Trust us," they say, after a decade of jiggery-pokery.

Now let's not forget this Premier…. Let's get this right. Just a few weeks ago this Premier said — and I don't want to get this wrong: "Cutting the HST by 1 point is more than $800 million out of the budget this year and every year after" — oh! — "$1.6 billion for a 2 point cut, and we need to ask ourselves…."

Interjections.

B. Routley: Yes, we do.

We need to ask ourselves where we're going to get that money, because we're either going to have "a $1.6 billion bigger deficit" or we're going to get "$1.6 billion fewer heart operations," $1.6 billion fewer special needs teachers. School facilities and hospital rooms are going to close. It's going to be terrible. It's going to be tragic. It's going to be awful.

In fairness, I think she was speaking to her radio audience. Some of these Liberals might call it a ready-fire-aim approach, but I think it was a rare moment of unvarnished transparency for our Premier, clearly very comfortable with flip-flops.

More than 700,000 British Columbians signed an initiative petition, which eventually triggered this referendum scheduled for September 24. The opposition and several business groups argued that the delay would cause too much uncertainty. But we had the Premier candidate come riding in on her white charger, and she announced: "Oh, we've got to do this way more quickly than that. How about June 24? That would be a really good day. Let's go with June 24."

Whoops. Oh. Yeah, then there was the announcement, a total flip-flop, that now we're going to have a mail-in vote that ends July 22, with final results not expected until mid-August — a mere month short of the original
[ Page 7640 ]
date. Whoa. What is that? What kind of plan is that, totally remaking the rules as we go along?

Now they're spending a minimum of $7 million — taxpayer dollars. This is after they shredded a leaflet. More than half a million dollars for a leaflet. You know what I believe, hon. Speaker? Somebody picked up the leaflet, and they opened the page, and there inside of the leaflet was a list — $880 million we're going to give to the construction industry, $140 million to manufacturing, $140 million to…. You know? And $80 million for oil and gas.

Somebody in the shop over there, somebody and their 2,000 employees or more that are dealing with them, finally woke up and read the document and said: "Whoops. This isn't going to work. If we actually send this leaflet out to the good people of B.C. and they open it up and look inside…."

[1150]

It is all about giving their money away — $2 billion — to the biggest companies and corporations in B.C., fleecing the people of B.C. At the end of the day, that was what they had in mind.

You know, hon. Speaker, as a candidate running for Premier, there was a video out. Do you remember the video?

I was just saying this morning that when I was crawling on my hands and knees under the veneer plant up at the Youbou sawmill, when I was climbing around under there on my hands and knees, picking up sawdust and rolled-up bits of veneer, I had no idea that I was going to end up in this Legislature and have the opportunity to speak up on behalf of working people, the people of British Columbia.

I had no idea how desperately the ordinary British Columbians — sawmill workers, forest workers, families all over British Columbia — ordinary people, people like me and my family, who started out in a little cabin for $40 bucks a month up in Youbou and started out at a wonderful….

I thought I was making out like a bandit, going from a dollar-an-hour minimum-wage job to $3.28 back at the Youbou mill in 1970. Thanks to my union, we worked on sharing the labour rates with the people of British Columbia, taking care of ordinary British Columbians.

I always thought that the people of British Columbia would have the right to elect people that would take care of their interests. I thought that there would be people in Victoria whose job it was to read all of the mail, to look at what's going on and to say, in balance: "Our job is to look after ordinary British Columbians, middle-class British Columbians, the working people." But I was shocked, amazed and really disheartened to find out it's not so, hon. Speaker.

The other party on the other side are taking care of the corporate interests of all of the multinational corporations, all of those people. They're gifting millions of dollars — millions of dollars. At the end of the day, they expect payback time, and these Liberals have delivered in spades.

Now they're reworking this desperate plan to try and ram it down the throats of ordinary British Columbians, but we all see through their stick men. We see through the stick men. At the end of the day, just like the stick men, it's transparent to all to see that you're there to stick it to ordinary British Columbians.

You know, as candidate, I remember this Premier said that few issues have caused more anger and as many problems to the B.C. Liberal Party as the HST. Well, duh. At the end of the day, people don't like it when you stick it to them. No.

"I've heard from people all over B.C.," she said. "The tax does need to go to referendum." And she says that government should provide equal funding. Get this one: we were going to have equal funding — another jiggery-pokery move by this government at the end of the day.

[1155]

So let's stop and pause there for a minute. Let's camp there for a minute or two. Has there been equal funding? Has there been equal funding? No, no. Crumbs from the table. Meanwhile, there are unfettered rights for big business to go and do their thing, to tell their employees whatever they want, to ram it to us. You know, no equal funding, no facts.

And factual information — talk about a vacancy. There's no factual information that's going out. They're not telling the whole truth and nothing but the truth. They're telling poor women, moms, that at the end of the day, they're talking about the HST. But they don't tell the transparent truth, and they don't tell them what they'd be entitled to under a PST-GST model. They don't tell them the truth, what the GST would have provided.

You know, another one we heard: "Oh well, we're going to have this referendum conducted in the same manner as a provincial election." As Premier-designate, the Premier said, repeatedly promised, even, on the June 24 referendum…. It was in her swearing in. She talked about the June 24 referendum. But on April 8, 2011, Clark — the Premier — broke her promise, and we have the referendum on June 24. Instead….

You know, revenue-neutral. They said it was going to be revenue-neutral, and it's not revenue-neutral. At the end of the day, this is now $820 million that they're gouging people in British Columbia on — $820 million.

Mr. Speaker: Hon. Member. Hon. Member, will you please take your seat.

Interjections.

Mr. Speaker: Members.

Hon. Members, based on the schedule that was put before me this morning, I will now put the question on Motion 11.

[1200]

Interjections.

Mr. Speaker: Members.

Motion approved on the following division:

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

Hon. R. Coleman: I move the House do now adjourn, Mr. Speaker, thanks to the Silver Streak from committee.

Hon. R. Coleman moved adjournment of the House.

Motion approved.

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

The House adjourned at 12:05 p.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF FINANCE

(continued)

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

The committee met at 10:30 a.m.

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

B. Ralston: I had hoped and expected to continue with questions of Mr. Bourque from the B.C. Securities Commission. I gather he's not here at present, but he will be here later — early this afternoon, I expect.

What I wanted to talk about, to begin with, is the Financial Administration Act. That's a statute administered by the Minister of Finance and the Ministry of Finance. Section 72 concerns guarantees and indemnities. I believe the minister may have a copy of that section before him. But if not, I'll read it. It's relatively brief — certainly the relevant section.

Interjection.

B. Ralston: No, it's with respect to the Financial Administration Act that relates to the giving by the government of an indemnity or guarantee of the performance of an obligation. Section 72(1) reads:

"(1) The government may, subject to this section, give an indemnity or guarantee the performance of an obligation.

"(2) The power given by subsection (1) is in addition to any power conferred by any other Act.

"(3) An indemnity, and a guarantee other than a guarantee referred to in section 74 (2), must not be given under this section or under any other Act by or on behalf of the government except in compliance with the regulations of the Lieutenant Governor in Council."

The relevant regulation under the Financial Administration Act is the guarantees and indemnities regulation, B.C. regulation 258/87. The first two sections concern indemnities. I'm sure the minister is familiar with it or will be shortly.

"An indemnity may only be given…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 by the director for the purpose of this section, has given prior written assurance that the purpose for the indemnity has been reviewed and accepted by the risk management branch."

As the minister knows, this section was something that was referred to by the Deputy Minister of Finance and the Deputy Attorney General in a release dated
[ Page 7642 ]
October 20, 2010, where, under the authority of this act and this section, they claim to have released Mr. Basi and Mr. Virk from their liability to repay an indemnity arrangement they'd entered into with the government. Can the minister explain, from the perspective of the Ministry of Finance, how that indemnity in respect of Mr. Basi and Mr. Virk was entered into?

[1035]

[P. Pimm in the chair.]

Hon. K. Falcon: To the Finance critic of the opposition, I understand the Attorney General actually was canvassed rather extensively on this issue during his estimates. The questions, though I'm pleased to provide whatever answers the member likes, obviously don't directly relate to the budget estimates for the Ministry of Finance for the '11-12 year.

As the member would know, the indemnity agreement on the Basi-Virk matter actually dates back to 2005 and was a decision…. The subsequent more controversial decision to forgive, ultimately, the legal fees owing by these two excluded employees was a decision that was made by the Deputy Minister of Finance upon recommendation by the Deputy Attorney General. Key to that was that neither the Minister of Finance nor the Attorney General were involved in that decision at all.

I understand that the Attorney General has actually ordered now a review of government's legal indemnity policy. That review is underway and is being led by the president of UBC, Stephen Toope.

B. Ralston: In the case of the indemnities of Mr. Basi and Mr. Virk, the date of 2005 has been mentioned. Can the minister advise: who gave the prior written approval? Was it the Minister of Finance, his delegate or the director of the risk management branch of the Ministry of Finance?

Hon. K. Falcon: I am advised that back in 2005, a recommendation was made from the Deputy Attorney General to the Deputy Minister of Finance to approve the indemnity, and that decision was made by the Deputy Minister of Finance at the time. The Deputy Minister of Finance at the time, I am led to understand, is empowered to make those decisions under the Interpretation Act.

B. Ralston: Where in the public accounts is this reported? I imagine that an indemnity is classified as a contingent liability. I see the minister has the assistance of the comptroller general here today, so perhaps that could be clarified.

[1040-1045]

Hon. K. Falcon: I'm advised that, in 2005 when the indemnity decision would have been made by the Deputy Minister of Finance upon recommendation of the Deputy Attorney General, they were required to table all indemnities and guarantees in that fiscal year. So it would have been recorded in that fiscal year that there was an indemnity that had been made with respect to the individuals involved.

I'm also further advised that, essentially, in a case like this there's only a contingent liability that is identified if they can estimate what the costs are, if they feel that they can adequately estimate what the costs may be. In this case that wasn't felt to be the case, I'm advised. But what does happen is that every year as payments are made towards the indemnity — towards their legal fees primarily, I would imagine — that is reflected in the insurance and risk management account, which is all the costs that are being made with respect to indemnities and guarantees each and every year.

B. Ralston: I further understand that there's no upper dollar limit on the amount of an indemnity that can be given. For example, theoretically, the deputy minister on behalf of the government could enter into an indemnity for $10 million, $15 million, $20 million, $25 million. There is, apparently, in the policy no limit. Is that correct?

Hon. K. Falcon: I'm advised that the policy does not set a limit.

B. Ralston: And further on the policy as it is now, the minister has said that the indemnities that have been given are disclosed. Are they disclosed by the name of the person who has been given the indemnity by the government, and if so, where in the public accounts is that disclosed? I hadn't noticed that previously.

Hon. K. Falcon: Member, with respect to the question, I'm advised that that information is not disclosed as part of public accounts. It is disclosed as a separate statutory report that's tabled by the Minister of Finance, and that separate statutory report provides information on the giving of guarantees and indemnities, and it also names the individuals that received the indemnities and what the amounts of the indemnities were.

B. Ralston: Can the minister advise when the report for the last fiscal year, the year just ended March 31, 2011, was filed?

[1050]

Hon. K. Falcon: We're just confirming when the last filing was made. We believe it was likely in February, I'm advised. But with respect to the two individuals the member is referring to, I'm advised that that would have actually been tabled back in '05-06. I'm not exactly sure which year, but one of those years would have actually had the tabling with respect to those two.

B. Ralston: I gather that the list that's provided in the statutory report is not a continuing list in the sense that it lists all the outstanding indemnities. It simply lists the ones that are new in the reporting period. Is that correct?

I'd like to continue. Under the present policy, what is the obligation of the delegate of the Minister of Finance? Under the act the Minister of Finance is delegating his authority and his power under the statute to make an inquiry as to what might secure this indemnity by way of personal property, loan guarantees, securities or any other form of offsetting a reduction of the government's financial exposure.

Given that the regulation does refer to the risk management branch…. I assume that the government would be taking some steps to limit government liability, given that, as the minister has agreed, this is an open-ended, without-any-limit indemnity. The financial sky is the limit, potentially, on one of these indemnities. So what offsetting steps in the policy are taken to reduce that liability?

[1055]

Hon. K. Falcon: I understand and am advised that the essence of the policy, I guess, if you sort of distilled it down, is that there is an assumption that the indemnity is provided, essentially, in good faith, in expectation that the individual has performed their duties on a good-faith basis and that they're considered innocent until proven otherwise. That's the basis on which the indemnity is provided.

I'm also led to understand that there was some security that was undertaken from the individuals. I don't have all the details. I think there may have been a charge on their mortgage or some such thing.

Ultimately, when the decision was made as a result of a plea bargain, where guilty pleas were entered into from those two individuals, a decision was made by the Deputy Attorney General and a recommendation made to the Deputy Minister of Finance to relieve them from the obligation to pay back the legal fees — well, I'll let the Attorney General and the Deputy Attorney General answer as to the rationale behind that — presumably in return for receiving the guilty verdicts and some savings that may be realized from not having what appeared to be an interminable court process continue on.

B. Ralston: The policy that the minister has referred to — was it ever reduced to writing? The minister mentions a good-faith assumption of a presumption of innocence, so I'm wondering if it was ever reduced to writing.

What was the nature of the financial disclosure required by the person making the application for an unlimited indemnity? And thirdly, was there any independent verification of the financial representations offered by the person applying for the indemnity? In other words, did you check it out? Was the story checked out at all?

Hon. K. Falcon: For the benefit of the member and, frankly, for myself, I'll read into the record what the Deputy Attorney General had to say when he provided a statement relating to this matter. If the member would just give me some forbearance, it's not that long, but it might elucidate things.

B. Ralston: I have a copy.

Hon. K. Falcon: Do you have a copy of that? Okay. Do you mind if I read it into the record? I've never read this before either. With the member's forbearance, I'll just read this into the record, because I think it might help me as we go through this discussion.

[1100]

"It is important to clarify for the record the circumstances relating to the decision to release Mr. Basi and Mr. Virk from their liability to repay their legal costs of the prosecution that concluded this week with their guilty pleas.

"On October 5, 2010, it came to the attention of the legal services branch, Ministry of Attorney General, that the special prosecutor had proposed resolution of the prosecutions through guilty pleas.

"Discussions then took place between the legal services branch and defence counsel, including with respect to their clients' liability to repay the legal costs."

Then in brackets, "The indemnities provided that they would have to do so unless acquitted on all counts" — end of brackets.

"Legal services branch referred the matter to me and to the Deputy Minister of Finance. The Deputy Minister of Finance has authority under the Financial Administration Act respecting this matter. He and I considered the issue. 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 guarantee of convictions.

"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. 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.

"A letter is being sent today to counsel for Mr. Basi and counsel for Mr. Virk releasing them and their clients from the October 14, 2010, condition that required they not discuss the above financial matters and that they refer all inquiries to the Ministry of Attorney General."

I think I can say with a high degree of certainty that when that decision came out, actually it was as much a surprise to me as I'm sure it was to every other member of executive council and, indeed, of government and the opposition, which is exactly why the policy, frankly, the framework needs to be reviewed and is being reviewed as a result of this.

The Attorney General has appointed Stephen Toope, the president of UBC, to undertake a policy review to provide real clarity on the policy going forward with respect to excluded employees.

B. Ralston: Well, back to my question, was this policy reduced to writing in 2005? And since it continues now, pending the review, is it still the same policy in writing? I'm interested in a response to that particular question.

[1105]

Hon. K. Falcon: I'll just read into the record here, and it says under the act: "The indemnification policy for certain civil" — in brackets — "non-criminal matters is set out in section 73 of the Public Service Agency's Terms and Conditions for Excluded Employees. By extension, indemnity may be extended to other civil and to criminal matters on a case-by-case basis." That is really the extent of the policy, which is part of the problem. There needs to be, frankly, more clarity around the policy for excluded employees, which is what Mr. Toope is looking into.

B. Ralston: Then just to follow on the second part of the question I asked previously: was there any consistent application of a requirement for a financial disclosure? In other words, the senior public servant accused of a serious crime is getting the benefit of an indemnity that may amount to millions and millions of dollars. What obligation to disclose their financial assets was imposed upon them in return for that indemnity being granted by the government?

Hon. K. Falcon: In terms of the obligations that were imposed on the employees specifically, the staff of the Ministry of Finance don't have that information. That's information that resides with the Attorney General, who I understand is going through questioning on this very issue as we speak, in fact. I'm advised that they're going through extensive and detailed questions respecting the indemnity that was provided for Basi and Virk and that they are better able to indicate what obligations were imposed on those employees.

My understanding is that there was some charge on their financial assets, but I only know that and our staff only know that from what we've read in the public realm.

B. Ralston: Well, as I understand what the minister has said, the Ministry of Finance is responsible for the reporting of this information and presumably for assessing the risk and the contingent liability to the province. That's one of the paramount responsibilities of the Minister of Finance.

Is the Minister of Finance saying that the ministry and his officials just didn't know how this indemnity was formed and what conditions were put on it? Is that what the minister is saying?

[1110]

Hon. K. Falcon: Again, just to sort of review. As I mentioned earlier, what happens is…. Back in 2005 — I believe it was in 2005 — when the recommendation from the Deputy Attorney General to the Deputy Minister of Finance at the time was to provide an indemnity, that indemnity was done in good faith, obviously. The amount is not known. We're not certain what that's going to be. It's very difficult, obviously, to even estimate what it would be, which is why there's not an issue of contingent liability that can be put into place.

But I'm advised by staff that then what happens is that over in the Attorney General's ministry, as the indemnity payments are being made, presumably there comes a point where they start to say that they want to ensure that they've got some security for repayment. So a decision is made over in the Attorney General's ministry — and was made, apparently, in this case — to secure a charge of some sort on the assets of the individuals in question.

It would be the Attorney General's ministry that would be able to define on what basis and at what time they make those decisions because I'm not aware of that, except that those decisions can be made. They're made independently by the Attorney General.

As I say, as far as the Ministry of Finance…. The Ministry of Finance provides the separate statutory report that indicates who we provided guarantees and indemnities to, every year the new individual guarantees or indemnities that are provided.

I think that covers it.

B. Ralston: Is the minister saying, then, that the assessment of the — if I can put it this way — creditworthiness of the applicant is assessed on a rolling basis? The indemnity might be entered into with no security and no inquiries made, and later on after a year or two or at some undisclosed milestone, then there's a request for security? This does seem very much like a cozy gentlemen's agreement without a lot of financial accountability, frankly.

[1115]

Hon. K. Falcon: Because, as I mentioned earlier, in the case of criminal matters, these decisions are made on a case-by-case basis, that's essentially what happens. That's one of the perceived weaknesses of the policy — that if it's made on a case-by-case basis, there ought to be some more thorough policy surrounding it, which is why Mr. Toope has been asked to look at the policy and answer some fundamental questions in making recommendations back to the Attorney General.

I understand that some of the questions include: what the objective of the policy is; how it works; who is indemnified and under what circumstances; whether the policy is
[ Page 7645 ]
fair in how it compares to other jurisdictions; and what, if any, changes need to be made to the policy.

That is the framework under which Mr. Toope will be looking at this. Clearly, when you deal with things on a case-by-case basis, it does open it up to questions of how it compares to other jurisdictions and all the other things that reasonable people might bring forward as concerns. So I think that having Mr. Toope look at this and make some recommendations back to the Attorney General with respect to this is important.

B. Ralston: Again, I know that the minister doesn't prefer this mode of question, but I just want to attempt to summarize, then, just to confirm — the minister can object at the proper time if he so chooses — that there is no consistent policy at the present time for requiring financial disclosure from anyone who is applying for an indemnity under this policy, and secondly — and I'm going to return to the third leg of the question that I asked some time ago — that there is no independent financial verification.

For example, if one were to make an application to a financial institution, one might be subject to a credit check. If one were to apply to the ministry for social assistance benefits, you would be consenting to independent verification of your sources of income, and indeed, the ministry employs investigators who will investigate your claims about your lack of financial assets if there's a suspicion that you're not telling the truth.

So in the case of these senior public servants, no such steps were taken, and that's the basis on which the minister says that the policy is being reviewed.

[1120]

Hon. K. Falcon: Again, I earlier had read into the record the indemnification policy for certain civil non-criminal matters set out in section 73 of the Public Service Agency's Terms and Conditions for Excluded Employees. As I said, the second sentence went on to say: "By extension, indemnity may be extended to other civil and to criminal matters on a case-by-case basis."

On a case-by-case basis, what we rely on — presumably, what the senior professional civil servants rely on — is making professional judgments. This is all interesting to me, because of course it's something that has never…. I've never been part of a discussion on any of this while in any of my capacities as minister in any previous cases. Clearly, these are things that are made utilizing the professional judgment of highly trained and experienced civil servants.

Now, the issue of professional judgment, of course, is that whenever it's going to be used, there may potentially be inconsistencies. That's one of the reasons why the Attorney General, presumably, has asked Mr. Toope to take a look at this — to determine what those inconsistencies, if they exist, may be and how we might better refine things by having a more robust policy around it.

What I do know and what I'm advised is that the legal services branch, in appropriate cases, does do extensive due diligence to determine what financial resources and/or assets the employee has or had, what could reasonably be expected to be sold, with the proceeds contributed to pay for the defence, and what may be available as security for repayment.

That, I understand, is something that the legal services branch takes responsibility for, using its professional judgment again. As I say, in the case of the individuals that you mentioned, though I am advised not to talk about individual cases, I do understand that a second mortgage was secured on one of those individuals' homes.

Again, that would have been done under the aegis of the Attorney General and the legal services branch, under the responsibility, ultimately, of the Attorney General's ministry, making a decision using their professional judgment as to what would be appropriate.

B. Ralston: Perhaps the minister can confirm, because this is a matter of public record. The Globe and Mail newspaper reported that the government struck a deal with Mr. Basi in 2005 to advance some funds and, if necessary, recoup that money by forcing the sale of his $857,000 family home. "That deal, previously unknown, contradicts the claims made by the then Attorney General" — his name is used here, but I won't mention that in the House — "that…agreed to pay $6 million in legal fees because Mr. Basi and his fellow defendant, Mr. Bobby Virk, had no ability to pay."

The following day the Globe further reported that the government "gave up recovery of assets worth $352,000." An Attorney General spokesperson states that the government "would not have reached a deal…if it had insisted on taking the assets…. 'It was determined that after the costs we had to go through for recovery…compared with the…cost of multi-millions to continue the case, the Deputy Attorney General and the Deputy Minister of Finance decided that from a cost-benefit perspective, it was better not to put impediments in the way of a plea bargain with Mr. Basi and Mr. Virk.'" And it's attributed to a Mr. Robins.

Can the minister confirm that those reports are true?

Hon. K. Falcon: No, the minister can't. Again, I am trying hard to be as forthcoming as I can on an issue that only has a tangential relationship to the Ministry of Finance. As I indicated to the member, this is something that I understand is, as we speak, being canvassed by the Attorney General, which is the appropriate minister and ministry responsible for many of the questions that the member is asking, questions that have, I find, very little relevance to our vote in the '11-12 fiscal budget.

I've tried hard to answer what I know, but I want to emphasize to the member that the member might want
[ Page 7646 ]
to pass on to another member to ask questions while he goes over to the Attorney General's ministry and estimates debates and asks these questions of the appropriate minister.

B. Ralston: Well, I'm familiar with the schedule for this morning. In the other House we're debating a motion. The Attorney General's estimates are not being canvassed at the present time, so I think the minister is mistaken on that account.

[1125]

Given that the comptroller general is here and available to provide advice to the minister, can the minister advise whether this policy and the individual indemnities given by the government were ever the subject of an internal audit by the comptroller general? If so, would the minister be prepared to table that internal audit?

Hon. K. Falcon: I'm advised that not to our knowledge has there been an independent audit done with respect to those indemnities and guarantees. To the best of our knowledge, there was not an internal audit done during the 1990s either, when a number of indemnities and guarantees were paid out to members of that party's government.

B. Ralston: Returning to the role of the Ministry of Finance and the deputy minister who was charged with carrying out this policy in the case of Mr. Basi and Mr. Virk, what due diligence was exercised by the Deputy Minister of Finance when making the assessment of the capacity of Mr. Virk and Mr. Basi to make repayment or partial repayment of the indemnity?

Was all the financial information provided? Was it available on a current basis? Or was it simply presented? All this took place over a very brief three-day period between October 5 and October 8, 2010 — in the space of three days. This very complicated decision, with broad implications for the administration of justice in the province, for the credibility of the government and indeed the credibility of all elected members — not just members of the government, not just members of the cabinet but all members of the Legislature — was taken apparently in three days.

According to the statement that we've been given, no one else knew about it. That's what the statement by the Deputy Attorney General says. These two deputies are highly capable but both relatively new to their positions.

Can the minister explain how that decision by a Deputy Minister of Finance was taken in that brief three-day period, and what information was available to the Deputy Minister of Finance to make that decision?

Hon. K. Falcon: Again, I can only advise the member what I'm advised — that two professional civil servants did, in terms of the Deputy Attorney General, make a recommendation to the Deputy Minister of Finance, based on the statement that was provided by the Deputy Attorney General, saying:

"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 of 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."

[1130]

[D. Horne in the chair.]

"No one" — and I'm adding emphasis to these words — "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."

So again, I am relying on a statement of the Deputy Attorney General providing a summary of their decision, how they made their decision completely independent of even the Attorney General or the Minister of Finance, that it was a decision made by two professionals, the Deputy Attorney General and the Deputy Minister of Finance.

I can't add anything more to that. That is my knowledge of the situation and my understanding of how they came to that decision.

The Chair: Although the member may not be fully satisfied by the minister's response, these questions have been fully responded to. It seems the debate is becoming repetitious, and I encourage the member to find a more productive line of questioning.

Interjection.

B. Ralston: I see we have some noise from the peanut gallery.

Mr. Chair, with respect to the comments that you've just made, I do have one further question which, I think, advances the topic slightly. Can the minister advise, through his deputy: since this decision came to light, what further and independent steps have the deputy minister or the minister taken to find out what took place in this decision being made?

Hon. K. Falcon: I'm advised by my deputy that he has never spoken to the former deputy with respect to this particular issue but that we, as the Ministry of Finance, will participate in whatever capacity we are requested to in the policy review that's currently underway by Mr. Toope at UBC. I understand that that report is expected to be released in late October of this year. So naturally,
[ Page 7647 ]
I and, I'm sure, the member opposite will be looking forward to the report and the recommendations, if any, that come from that report.

B. Ralston: Does the minister support the position taken by the now Minister of Education during the Liberal leadership debate that this whole decision should be the subject of an independent review?

Hon. K. Falcon: Reminding the member, of course, that we are straying about as far from the vote as we can possibly stray.

I am satisfied with the actions that the Attorney General has taken in requesting Mr. Toope to undertake a review of the policy as it exists and to make recommendations, if any, that may be necessary to improve the policy to ensure that there is public confidence in at least understanding what the policy is for government going forward. I'm satisfied with that work.

B. Ralston: My question was a different one, though. It wasn't about the policy. It was about this particular instance as perhaps illustrative of the problems with the policy. So does the minister support an independent review of the decision taken in the decision to forgo the payment of $6 million in legal fees by Mr. Basi and Mr. Virk?

[1135]

Hon. K. Falcon: Again I'll just state that the only thing I will state on the record is that I respect that this decision was made by professional civil servants utilizing their professional judgment and that, certainly, the decision caused much political angst for government and members of the public. I certainly acknowledge that, but I am satisfied that the Attorney General is making the appropriate and, frankly, informed decisions on how to proceed going forward.

I'm supportive of the decision that the Attorney General has made to have an independent review done of the policy, and I am satisfied that he has selected an eminent British Columbian, as the president of UBC certainly is, to look at that and provide that independent review. I will happily wait for the results. We will participate fully, if asked to, in that policy review.

I'm not going to make any other comments or speculation as to what any other decisions may be, could be or that the member would like to have perhaps seen. I'm satisfied that the Attorney General, who, frankly, is more fully informed than I am on this issue, has made the appropriate decision.

M. Mungall: This question I originally directed to the Minister of Advanced Education, but she actually told me that this is the appropriate ministry to direct this question. It's regarding loans. I'm just wondering about the total money loaned out for student loans last year and what the budget is for this year.

Hon. K. Falcon: In fiscal 2010-11 over $200 million in new student loans were issued. As of March 31, 2011, over 272,000 student loans have been issued to date by the province, worth $1.9 billion. Over 177,000 student borrowers hold outstanding student loans worth just over $1 billion, of which 152,000 students borrowed…. Yeah, I think that's adequate. I can get you a copy of this.

D. Donaldson: I have a question on these budget estimates. Last year when I questioned the then Minister of Finance on an aspect of this ministry's responsibilities, it was around procurement and the $4 billion that this government purchases in goods and services in order to run the government.

Other jurisdictions have another level of criteria that they place on procurement contracts. Of course, the government looks for the best cost, the ability of the supplier to provide the goods — those kinds of criteria.

[1140]

But other jurisdictions also use social impact measures. For instance, the province of Manitoba gives certain points in the procurement process, the RFPs that go out to aboriginal-owned businesses, to encourage that sector with government procurement spending.

Last year the minister said: "In terms of social procurement, that is something that the office has explored and will continue to see if there are opportunities for government to be more engaged in that approach as well." Could the minister inform as to what has occurred in the last year — this was May 18 last year — as far as the government becoming more engaged in the procurement process to support social enterprises?

Hon. K. Falcon: Essentially, the approach we've taken with respect to…. It's referred to in different terms sometimes. The member talks about social impact measures. What we've done is every ministry will come forward with some social impact outcomes that they're wanting to achieve.

For example, when I was the Minister of Transportation, we undertook a number of projects that engage First Nations at a level that had never happened in the past. On the Sea to Sky Highway, for example, both the Lil'wat First Nation and the Squamish First Nation received significant employment opportunities out of that.

[1145]

It was more than just providing a job. It was actually trying to provide a foundation that would allow them to continue after that project was over to bid and to work on other projects. So for example, the Lil'wat First Nation started a ready-mix company that provided a lot of the concrete for the Sea to Sky Highway and, by the way, did so very, very successfully.

The First Nations were involved in doing a lot of the building of the roads through to the — what's that valley called again up at Whistler where the new road went? — Callaghan Valley, and they did an outstanding job, delivering that project ahead of schedule and on budget. The Westbank First Nation is another good example, where they actually built, in essentially a P3 arrangement, the Campbell Road Interchange and are currently constructing the Westside interchange, which are both very significant projects.

But every ministry has different things too. For example, there's a Wood First policy, which is really about a social outcome we're trying to achieve to support forest-dependent communities by requiring a higher utilization of wood in construction of new projects. For example, the new $100 million cancer care centre being constructed in Prince George has a very heavy wood theme, which is entirely appropriate, especially given the area. But that Wood First policy creates employment in a secure marketplace to not only use the wood but also to demonstrate it around the world so that we can have other markets take more interest in utilizing or looking at the options of using more wood as opposed to concrete.

We've also got the clean energy funds, like the ICE fund, which are really about helping to achieve some social objectives of providing dollars that will provide the stimulus for new green, alternative energy options that can come forward that we're trying to encourage through tens of millions of dollars that government is providing through that. We've got the whole carbon neutrality. It's really all about, through the Pacific Carbon Trust, creating opportunities in encouraging the use of other greener technologies that may not be utilized without some of the encouragement that's being provided through the Pacific Carbon Trust.

All of those would, I think, fall under the ambit of social impact measures. We continue to look for new opportunities going forward, in particular with rural communities and First Nations.

D. Donaldson: Thank you for that answer. I would just simply like to point out to the minister that on the government's website, under the ICE fund, it is listed as currently not taking applications, so I hope that's not reflective of some of the other programs he mentioned in his answer.

I did note that the minister talked about the economy being more than a job, and I think what we lose sight of is that the economy is not something mysterious. It's about the well-being of the people in the province and the well-being of families, and so along these lines I'd like to ask the minister a question about how we judge that well-being.

Just last week the Organization for Economic Cooperation and Development announced that they have completed work on their Your Better Life Index as a supplement, an improvement, to using the gross domestic product, the GDP, as an index for how we're judging our well-being. In fact, this index was created for the Organization for Economic Cooperation and Development by former Nobel economics prize–winner Joseph Stiglitz, so a very well-respected and well-known economist.

The purpose behind this different way of assessing how we're doing, Your Better Life Index — and I'll quote from the OECD, the Organization for Economic Cooperation and Development, publication — is: "Nowadays more and more people, including governments and economists, are becoming frustrated with the shortfalls of the GDP as an economic indicator of the true well-being of individual people and society more widely." They go on to say: "Ever since the OECD started out in 1961, GDP has been the yardstick by which it has measured and understood economic and social progress. But it has failed to capture many of the factors that influence people's lives, such as security, leisure, income distribution and a clean environment."

[1150]

So my question to the minister under these budget estimates is: is the ministry looking at something similar to Your Better Life Index, a better way of judging the well-being of the people of the province through economic measures other than the GDP, similar as has happened in other developed countries around the world as portrayed by Your Better Life index.

Hon. K. Falcon: Thank you to the member for the question. I would agree with what the OECD has put forward, because I think that using a measurement of just GDP growth or economic growth independently as a measurement of quality of life would be far too narrow a measure, although I think that it's an important measure.

I noted The Economist had a really interesting article just recently, and if I can find it for the member, I'll get it to him. It talked about how globalization and an increase in trade has done more to relieve poverty in Third World countries than all of our sort of programs of providing aid and everything had done for literally generations. More people have been lifted out of poverty as a result of increased trade opportunities in the last number of years than we've seen ever in human history. That is one element.

I mean, if you can support your family and you've got a job, that certainly is encouraging, but it is not the only thing. Certainly, anything we can do — particularly, I think, in rural B.C., because I do think that this is particularly important — to support the continuation of maintaining rural communities and supporting them…. Frankly, it's more than just words. It means our policies, our tax policies.

I have to take this opportunity to point out that HST provides a $140 million benefit to our forestry sector, which
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allows them to be more competitive, which means they can continue to employ individuals, reopen mills, hire people. The mining sector is a good example. Huckleberry Mines is a recent example where the general manager, I believe it was, pointed out that as a result of HST, they were able to…. That's a big part of why they're able to extend the life of that mine, where you've got average salaries in the $100,000 range. Those are really important for rural communities.

So we need to recognize that every decision government makes can have an impact, both positive and negative, on quality of life.

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

Motion approved.

The committee rose at 11:55 a.m.

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