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

Afternoon Sitting

Volume 24, Number 2

[ Page 7651 ]

TUESDAY, MAY 31, 2011

The House met at 1:34 p.m.

[Mr. Speaker in the chair.]

Routine Business

Introductions by Members

Hon. S. Cadieux: Today in the gallery we have a delegation from the B.C. Federation of Labour. The occupational health and safety standing committee is here this afternoon. I am looking forward to meeting with the group after question period, along with some of my colleagues.

Joining us today are Dusty Kelly, Larry Stoffman, Paul Pelletreau, Jim Laliberte, Dave Clarabut, Rachel Barbour, Steve Milne, Dan Burroughs, Rob Ashton, Ron Corbeil, Nina Hansen, Jim Sayre and Beverly McKean. Mr. Speaker, I hope I haven't slaughtered anyone's name this afternoon.

Would everyone please make them welcome.

M. Karagianis: Today we have with us a number of guests on behalf of myself and the member for Juan de Fuca. An extraordinary group of students have joined us today. They became so disenchanted with the way the adults were handling the replacement of Belmont Secondary that they've taken up action on their own.

I'd like to introduce Ravi Parmar, who has led the charge, and Mack Edwards, Logan Howes, Cassandra Herbert, Laken Teele and Katie Rowluk. I hope we'll all make them very welcome here in the House today.

[1335]

J. Les: Today in the members' gallery I'd like to acknowledge a very special guest from Seattle. That is Mr. Matt Morrison. He's the executive director of the Pacific NorthWest Economic Region, sometimes known as PNWER. PNWER was created in 1991. Its members include British Columbia, Alberta, Saskatchewan, the Yukon and the Northwest Territories as well as the American states of Alaska, Idaho, Montana, Oregon and Washington State.

PNWER remains an instrumental organization to promote collaboration, competitiveness and economic growth and brings concrete benefits to all citizens of the region. We're very pleased to acknowledge the hard work of Mr. Morrison and his staff in advancing the objectives of our region. Would the House please join me in making Matt feel very welcome.

Tributes

Gord Piper

R. Chouhan: I also would like to extend my welcome to all the members of the B.C. Federation of Labour occupational health and safety committee here. To the names read by the Minister of Labour I want to add the name of one more who was supposed to be here today with us, Gord Piper.

Gord Piper passed away on Friday, April 22, at his home in Victoria. He was to be here on this lobby tour with us, championing the rights of injured workers. He has been a passionate occupational health and safety activist since 1989, both for prevention and compensation. His work representing injured workers and their rights is notable and touched many people, both union and non-union. He was awarded the Bud Jimmerfield Award in 2008, the most prestigious award of occupational health and safety for CAW.

Introductions by Members

V. Huntington: Today in the House I am very pleased to have Bernadette Kudzin and Yvonne Parenteau, my incredibly hard-working constituency assistants who, I might add, had to learn the job without a caucus support system and who conquered it brilliantly. I'm also delighted to introduce Shawn Courtney and Brad Densmore, who is the newest member of my staff. They are my research officers, and I hope the House makes them welcome.

K. Corrigan: I see that we have in the House today my friend Mike Hurley, who is the president of the B.C. Professional Fire Fighters Association. On behalf of the House, I want to thank Mike for his great leadership and for the work that all firefighters do in this province keeping us safe, as well as the wonderful community work that they all do. So I hope the House will make him feel welcome.

Hon. D. McRae: I have two introductions. First of all, I'd like to introduce Julia McCoid, a teacher from Ecole Robb Road, who has come down to Victoria today with 55 grade 5 students and ten adults and toured the precincts and had a great time. They're sitting there behind me. So I'd like the Legislature to please make them welcome.

Amongst that group are three very special friends. We have Alyssa, Maya and Michelle Erickson, who have been longtime family friends. Their dad couldn't be here today. He is out coaching rugby, I think, at the B.C. high school championships. I'd like the House to please make my family friends welcome.

Mr. Speaker: The member for Nanaimo.

Interjection.

Mr. Speaker: Nanaimo. The member for Nanaimo.

L. Krog: Thank you, hon. Speaker. I may have had, how shall I say, a little posting ahead of time as to who might be running against me in the next election. I
[ Page 7652 ]
appreciate the words of the member who lives in my constituency as well. But all that aside….

I don't know if they've made it into the House yet, but there is a group of students here from my constituency, Ecole Océane school. Would the House please make them welcome.

R. Cantelon: I appreciate the kind words from the member opposite, my MLA opposite.

We have several supporters in the gallery today of the childhood development centre in Nanaimo. Please welcome Janet Delgatty, Jeff Hawker, Mary Evans and Ben Hawker. Please make them feel welcome here.

[1340]

H. Bains: In the House today is a second group of students from Cougar Creek Elementary, 35 grade 5 students along with a few of their parents and teacher Jessie Sandhu. Please help me welcome them to Victoria.

Also in the House with Mike Hurley, my good friend, is Larry Thomas, my good old friend, who was the president of the Surrey Fire Fighters Association, along with that delegation. So please help me welcome Larry here as well.

Hon. S. Thomson: I have four very special guests in the gallery today. Joining us is my wife, Brenda, and I want to thank her for all her support. Along with my wife is my daughter, Alex, and two of my favourite grandchildren, Astrid and Simone, who are visiting us from Creston — their first visit to the Legislature. They're studying government in their classes. I'd like the House to make them very welcome.

D. Routley: I have three very important guests in the gallery with us today. Our CAs are so important to what we do. They serve our communities, and they make our presence known when we're not there. Joining us are my CAs, Patty McNamara and Betty Smits, and also Karlene Bara, who sometimes fills in when either Patty or Betty is on holiday.

I planned to have one other guest, a very important person to all of us — all the people I just mentioned and myself — and that's Rose Henry. She couldn't make it today, but I'd like everyone in the House to help me and Patty and Betty wish Rose a very happy 75th birthday.

N. Letnick: When we dial 911, we usually expect help. Lots of times we get the help when police, paramedics, ambulance, firefighters would show up to take care of our needs.

With that introduction, I'd like to introduce some guests that have already been introduced but are here today to witness something very important in their lives and in my life as well. That's the introduction of a private member's bill.

In the House we have Bronwyn Barter, president of Ambulance Paramedics of British Columbia. We have Michael Hurley, president of the B.C. Professional Fire Fighters Association. We have Larry Thomas, secretary, British Columbia Professional Fire Fighters Association; Larry Hollier, president of the Kelowna Professional Firefighters Association; Mike Hill, treasurer, Kelowna Professional Firefighters Association; Sherman Hillier, provincial recording secretary, Ambulance Paramedics of British Columbia; and also my LA, Ryan Pineo, who was a great help in bringing this forward.

Would you please help them be welcomed.

M. MacDiarmid: With us in the House today is one of my constituents from beautiful Vancouver-Fairview. He's an exceptional volunteer. The diagnosis is not completely certain, but we believe he is a lifelong political junkie. I ask the House to make Tim Crowhurst warmly welcome.

Hon. B. Penner: I'm advised that my 14-week-old daughter, Fintry, so enjoyed question period yesterday and seeing her dad on TV that she was able to convince my wife, Daris, to bring her to Victoria today. Accordingly, I have the privilege of making my first official introduction with them being present here in the precincts of our daughter, Fintry Katherine Penner, and my wife, Daris.

I notice they just had to step out for a moment. You may have heard Fintry. She's not bashful about speaking up when she feels it's appropriate. I ask the House to please make them welcome.

D. Hayer: We have eight very special guests here today, our community leaders. The first one is Joginder "Joe" Singh Wahlla and his son Tony Tajinder Singh Wahlla; and Charanjeet C.J. Sidhu and Col. Karam Singh Virk from India; Darshan Singh Shetta; and Kirpal Singh Mangat. Larry Thomas is the past president of the Surrey Fire Fighters Association and currently secretary of the B.C. Professional Fire Fighters Association.

Also, I have another special guest, who was here yesterday. My wife, Isabelle Martinez Hayer, is here. Would the House please make them all welcome.

Hon. P. Bell: Joining us in the precincts today is Dr. Mark Smith. Mark originally hailed from Port McNeill. He has recently returned to British Columbia after spending four years getting his doctorate of chiropractic from Life University in Atlanta, Georgia.

[1345]

I'm pleased to be able to tell the House that he's chosen Gordon Head as the area of Victoria to set up his practice. If people have a pain in the back sometime after July this year, they can go and see him at Progressive Chiropractic. Would the House please make Dr. Mark Smith very welcome in the Legislature.
[ Page 7653 ]

Mr. Speaker: It's one of those days. If you haven't been welcomed, welcome.

Introduction and
First Reading of Bills

Bill M210 — EMERGENCY INTERVENTION
DISCLOSURE ACT, 2011

N. Letnick presented a bill intituled Emergency Intervention Disclosure Act, 2011.

N. Letnick: I move that the bill be now read for a first time.

Motion approved.

N. Letnick: The bill allows individuals under certain specified circumstances to apply for a testing order if they suspect that they have been exposed to a communicable disease and a sample has not been obtained voluntarily from a source individual.

Currently emergency workers and victims of crime who suspect they have been exposed to serious illness cannot determine their exposure until many months later, often past the window of preventative treatments. Because of this doubt, suspected exposed people usually ingest a concoction of prophylactic drugs, and they, with their families, carry the mental burden of uncertainty.

This bill allows those individuals to ask the authorities to compel source individuals to get a blood test in a timely manner and, if a communicable disease is determined, to have the source individual's doctor communicate the results in confidence to the applicant's doctor.

The bill was drafted after reviewing similar acts in Nova Scotia, Saskatchewan, Ontario and Alberta. The bill is predominantly modelled after a law in Manitoba and respects models developed by the Uniform Law Conference of Canada on mandatory testing and disclosing legislation that addresses Charter rights and concerns.

Respecting personal privacy is important, and the provisions of this bill do that by ensuring all testing information is communicated through physicians only. Results are never made public and may not be used outside of the scope of the intended bill.

Over the summer months I plan to visit ridings across British Columbia, meeting with MLAs on both sides of the House and their communities, explaining the bill's intent, documenting stories and all concerns relative to the bill. I will also contact representatives from other provinces who have similar legislation to compile evidence of the effectiveness of their bills in achieving the desired outcomes. Following this consultation process a final report will be presented to the Legislature in the fall, along with any proposed amendments to this draft bill.

Mr. Speaker, it's my privilege to be sponsoring this bill and by so doing enjoy a small role in improving the lives of men and women and their families who go about day in and day out bravely serving the people of British Columbia.

The use of the provisions of this bill may not occur frequently, but just having them will provide families with the knowledge that British Columbians care and the peace of mind that comes with knowing if they or someone they love has been exposed to a communicable disease.

On behalf of all paramedics, police officers, victims of crime and Good Samaritans, I wish to thank the B.C. firefighters for their leadership on this matter. It's my hope that all members of this House will see fit to support the bill when it comes before them.

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 M210, Emergency Intervention Disclosure 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.

Statements
(Standing Order 25B)

MORDEN COAL MINE HISTORY

D. Routley: I rise today to speak of the Morden mine. The Morden mine is a former coal-mining site south of Nanaimo. In 1852 coal began the founding of our communities — Nanaimo, Ladysmith, South Wellington — in fact, all the communities of eastern Vancouver Island.

It was dangerous work infamous for its child labour. Hundreds of people died; hundreds were injured. Chinese workers weren't remembered by name but by number, and still the people of our communities gather every year to remember those workers who fell and died, directly but also indirectly as a result of their exposure to the dangers of coal mining.

In 1913-14 there was a strike, a very bitter strike, where our communities were divided. It was an effort by the workers to have the freedom to be represented by unions. During that time the Morden mine, owned by the Pacific Coast Coal Mines company, decided rather than working underground, which they couldn't do anymore, they would work above ground. They embarked on a project to create the first concrete mine head.

[1350]

It doesn't sound like much in today's terms, but in those days reinforced concrete technology was a very new thing, and this was a very revolutionary project. It's all that remains as a physical reminder of that great heritage that our communities enjoy.
[ Page 7654 ]

Now the Friends of the Morden Mine are working to preserve that. The society is preserving this site with historical walks. They're the volunteer caretakers and the park builders. They maintain the trails, and they remind us of the economic value of diversifying our community, the importance of remembering our history.

We don't have the Parthenon, but we have things like the Kinsol Trestle. We have the reminders of how industry affected the beginning of our communities. I ask all the members to visit the Morden mine site and to invest in the history of B.C.

VISIT TO LOWER MAINLAND BY STUDENTS
FROM SASKATCHEWAN FIRST NATION

J. Yap: Like all members, I always enjoy welcoming visitors to my home community. On May 23 my constituent Katarina Petakovic-Dekic introduced me to 16 grade 7 students visiting from the Opawikoscikan School in Pelican Narrows. They are members of the Peter Ballantyne Cree Nation, one of the largest First Nation bands in northern Saskatchewan.

They have occupied their traditional lands of 20,000 acres since time immemorial. Over 60 percent of their population is 18 years old or younger. Before this trip, none of these students had ever been outside of Saskatchewan, and only one had ever been on an airplane. They've experienced poverty and difficult challenges over the years. Under the guidance of their teacher, Cheryl Morin, students selected the Lower Mainland as the destination for their graduation trip and fundraised diligently to this end.

When I met with the students, they were heading off to go whale watching. Their plans also included touring the International Buddhist Temple in Richmond and lunch at a Chinese restaurant, where they looked forward to learning how to use chopsticks. Five of these students were able to attend game 5 of the Canucks-Sharks playoff series, something I'm sure they will never forget.

Ms. Morin related to me how important home and family are to these students and to their people. This is a good thing. It is also a good thing these students were able to experience the Lower Mainland's cultural mosaic and see that home and family are important to all cultures.

It's a big world, and it's an honour that these students chose to come here to see more of it. My thanks to Katarina Petakovic-Dekic and Cheryl Morin for taking the initiative in helping these youngsters see a slice of the big world in Steveston and this place we know and love called British Columbia.

CITY OF BURNABY PLACEMENT AS
FINALIST FOR ENVIRONMENTAL AWARD

K. Corrigan: Well, I'm very pleased to take this opportunity to congratulate Burnaby's mayor, Derek Corrigan, for being a finalist for a prestigious national environmental award. Now, we don't know who won it yet, but he has been encouraged to go to Halifax this Sunday to attend the Federation of Canadian Municipalities Awards of Excellence. It will be for the 2011 Green Champion Award, which was developed to promote and reward municipal champions, inspire municipal governments, and showcase and encourage the exchange of best practices among Canadian municipalities. So I am very hopeful.

He's in the running because of a long list of environmental achievements and, of course, would be the first to say that if he does win this award, it is because of a highly dedicated staff and council colleagues who would have made that possible, if it happens.

The mayor and Burnaby have championed, supported, developed and led dozens of exemplary, innovative projects that demonstrate Burnaby's ongoing commitment to sustainable development. Key achievements include: 25 percent of the city's land is preserved for park and green space; $20.5 million Burnaby Lake rejuvenation project to protect the lake and its plants, birds and fishes; LEED-standard or green-building standards for all civic buildings; first community to declare World Rivers Day; Canada's first Blue Community; the food scraps program; rain garden project. I could go on and on, but I won't.

I want to wish the mayor the very best of luck and keep my fingers crossed and hope to be able to soon congratulate the city of Burnaby and Derek Corrigan for being green champions.

COLUMBIA RIVER TREATY

B. Bennett: The Columbia River Treaty is an agreement between Canada and the U.S. signed in 1964 to manage flooding and to optimize the generation of electricity. As a result of the dams and the reservoirs that were created after the treaty, much beautiful and valuable bottom land, farms, multigenerational homes and even communities were lost forever, submerged under the rising levels of one of Canada's greatest rivers, the Columbia.

[1355]

The province receives $150 million to $300 million each year from the generation of power in the U.S. and hundreds of millions in benefits from energy generated right in the Columbia Basin in B.C. In fact, 40 percent of our electricity that we generate is generated every year in the Columbia Basin. The Columbia Basin Trust was formed to receive some of those benefits and to distribute and invest them in the Columbia Basin.

Now, an important milestone is coming up soon. The year 2024 is the earliest date either Canada or the U.S. could terminate the Columbia River treaty, but only if one of the parties gives advance notice by 2014 — not
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far off. The U.S. is working hard to determine their best interests in terms of flood control, power generation and the management of endangered fish species. B.C. is starting to do the same.

The three Kootenay opposition members and I have embarked upon a non-partisan effort to ensure that the Columbia River treaty continues to benefit the people of our region and continues to benefit all of the people of B.C.

The work that government will do over the next year in preparation for 2014 will impact all British Columbians. There's no question about that. There are billions of dollars at stake. But it will also have a profound impact on the people that we four MLAs represent, and it is therefore our duty to set aside politics and help B.C. to be fully informed and fully prepared for the decisions that lie ahead.

VICTORIA INTERNATIONAL
CYCLING FESTIVAL

R. Fleming: Bike to Work Week is well underway in communities across British Columbia and most notably here in greater Victoria, which, as everybody knows, is the cycling capital of Canada.

So with cycling on the minds of many this week, I'd like to bring the attention of the House to the upcoming Victoria International Cycling Festival, which is a multi-event festival. It's the largest cycling venture on the province's calendar in all of British Columbia. Last weekend the festival kicked off with a Tour de Victoria, with over 1,500 riders including Tour de France hero Ryder Hesjedal.

It was an inaugural event that is sure to become an annual feature in my community, and more big events are happening. This Sunday, June 5, a massive all-day family bike festival, sponsored by Thrifty Foods, kicks off. Two weeks later, on Sunday, June 19, the district of Saanich and community partners, including the University of Victoria, will present the Saanich Cycling Festival.

Victorians have always embraced cycling enthusiastically. It is now part of our regional identity, and indeed, it is part of our regional economic development pitch to investors and to new employers. We have very well-utilized regional trailways and municipal cycling networks.

But the point of this festival is that even more people can be drawn to cycling. By showcasing it as a fun and accessible thing, the festival aims to show that cycling is in fact for everyone, for fun, for health, as an easy way to get to work, school and shopping. The point the festival society is trying to make is that you don't have to dress from head to toe in spandex to get involved in cycling. In fact, they actively discourage that at the festival.

I think I would just like to say this. The festival has already started as a tremendous success. It will continue throughout the summer, and it's thanks to tireless creative volunteers who are showcasing our region as a cycling leader, promoting healthy lifestyles and commuting and recreation and racing patterns. I want the House to make them all welcome and, indeed, to join them at this festival.

JU-JITSU PROJECT FOR YOUTH

R. Cantelon: As a young person emerges from their late teens into adulthood, it can be a very challenging time as they try to wrestle with the decision: what am I going to be when I grow up? They see some of their friends going to university and technical colleges. They see some embark on careers and other jobs. Sometimes their youthful exuberance can express itself in ways that aren't viewed as positive by the rest of society. Sometimes, even so, they could end up on the streets, for example, in some difficulties.

City councillor Al Greir took the initiative to reach out to these people to try to help them find direction in their lives, to try to help them build confidence. He partnered with his friend Joe Friede, and together they established the Vancouver Island German Jujutsu Foundation. The role here is to use that discipline to help build mental and physical discipline with them and to help them develop confidence and self-respect.

They've run two program initiatives. One is Life Without Fear, which helps people to stand up and be confident about themselves in any circumstances, and the youth ambassador, which helps to develop these young people into role models for other young people facing the same challenges.

[1400]

It's a pilot program sponsored by the Solicitor General, and it's been very, very successful. They hope to continue. There have been 19 enrolments, and I'd like to congratulate Rory Van Vliet as the first graduate of the program. He's an outstanding young man who aspires and in fact is already being very effective as a leader among his peers. He's taken work with the fire department, with the search and rescue. He's taken first-aid courses and now has secured permanent employment. He's an outstanding example and becoming an outstanding citizen.

I'd like the House to join me and congratulate Al Greir and his friend Joe Friede and others, especially Rory Van Vliet, for their accomplishments in helping the youth come out the right way in our society.

Oral Questions

COST OF GOVERNMENT INFORMATION
ON HARMONIZED SALES TAX

A. Dix: Everyone in B.C. knows that the B.C. Liberals misled people in the last election about the HST. In fact, according to the Premier herself…
[ Page 7656 ]

Interjections.

Mr. Speaker: Members.

A. Dix: …about all her colleagues, they were sneaky — well, perhaps with the exception of the member for Burnaby-Lougheed. But what's the Premier's record? She said two months ago that she wouldn't change the rate of the HST or even talk about it before the election because that would be "buying votes," and then she did the opposite. In her own words, she went out and bought votes. She promised: "I'm not going to be out there cheerleading and trying to give people some kind of snow job." Now she's spending $5 million in taxpayers' money on partisan ads.

Interjections.

A. Dix: Oh, I know. Sneaky.

She promised equal funding for both sides in the debate. She broke that promise. She promised that the referendum will be conducted in the same manner as a provincial election, and she broke that promise.

How can the people of B.C. believe anything the B.C. Liberals or the Premier have to say about the HST?

Hon. C. Clark: I'd like to welcome the Leader of the Opposition. I'm glad he showed up today. It's nice to hear him with a question about the HST. I'm delighted to have my opportunity and get up and speak to it.

Of course, the member for Cowichan Valley was so eloquent today. He talked a lot about going backward to the decade that we saw in the 1990s when 50,000 people fled the province. I think he reminded all of us about what the future could hold if we go back to a party where they're talking about having a 12 percent tax for British Columbians versus a 10 percent tax. I think that when British Columbians fill out their ballots on the 24th, they're certainly going to be making their own decision about it, and we will live by the verdict that they hand us.

But I do think, though, when they're faced with that decision, when they're faced with the decision for the opposition's call for a 12 percent tax or the government's proposal for a 10 percent tax — which, after all, is a whole lot better for B.C. families, I think — I know which one they'll choose.

Interjections.

Mr. Speaker: Members.

I want to remind members on both sides of the House: we want to listen to the question, and we want to listen to the answer.

The Leader of the Opposition has a supplemental.

[1405]

A. Dix: You know, I have to say, hon. Speaker, for the Premier, that it's not every day you bring in closure on yourself.

She wants a 7 percent tax on a sandwich in a coffee shop. I want a zero percent tax. She wants a 7 percent tax on children's sports programs. I want a zero percent tax. She wants a 7 percent tax on bicycles. I want a zero percent tax.

Now, if the Premier had kept her word, there would be third-party spending limits in this referendum campaign. If the Premier had kept her word, there would be disclosure of who paid for the ads, and the Premier's taxpayer-funded stick men wouldn't be allowed. They're costing us $5 million — money that could be better spent keeping group homes open for people with developmental disabilities. Partisan B.C. Liberal ads in a provincial election put out by the provincial government would be illegal.

The Premier has changed the rules, broken her word to stack the deck. So why doesn't she do the people of B.C. a favour and put a stop to those partisan ads today.

Hon. C. Clark: You know, for over a year now the members of the opposition have been saying that the government didn't do enough to talk to people, that the government didn't do enough to listen to people. What we've done is we've gone out and we've listened to British Columbians. We've listened to about 300,000 British Columbians. It's the biggest listening exercise in the history of the province.

We are communicating with British Columbians. We are making sure that British Columbians have all the information they need to be able to cast an informed ballot on this issue. And I think, while the member can come up with all kinds of excuses and all kinds of reasons in advance why he thinks people might not vote his way on it, the real reason that people will probably — I hope — decide not to support the New Democrats' position on this is because they want to increase taxes by 40 percent on iPods, on furniture, on new cars.

When they're talking about a 12 percent tax versus a 10 percent tax, that's exactly what they'll be presenting British Columbians with. And you know what? I think that when they go to the polls, British Columbians are going to say: "Shelve the 12."

Interjections.

Mr. Speaker: Members.

The Leader of the Opposition has a further supplemental.

A. Dix: I'd like the Premier to tell us one person in British Columbia who thinks it's a good idea for them
[ Page 7657 ]
to spend taxpayers' money on partisan ads in this referendum — one person that she talked to. The stick men, you know, don't really exist in time and space. They don't really exist.

Other than the advertising executives that she contracted to do the ads, can she name a single person in British Columbia who thinks it's a good idea, when her government is closing group homes for adults with developmental disabilities — closing group homes — to spend $5 million on partisan ads on the HST?

Hon. C. Clark: I don't know why the member seems to have an issue with us engaging with British Columbians and making sure that British Columbians have the information they need to cast an informed vote. This could be the most important vote on a taxation issue….

Interjections.

Mr. Speaker: Premier, take your seat for a second.

Members.

Continue, Premier.

[1410]

Hon. C. Clark: I don't know what the member has against the government listening and engaging with British Columbians, making sure that British Columbians have the information that they need to be able to cast an informed vote on what could be the most important referendum on taxation issues that any Canadian has ever been asked to decide.

Now, there have been a number of things that have happened since I became Premier. We got the independent panel report which said that it's going to add a $350 burden under the old HST for families. I didn't believe that was fair. We also learned that British Columbians, when we went out and we listened to them, wanted to find a way to rebalance the burden of taxes so that we could raise it on business and lower it on families. We've done that. We've also gone out, and we've listened to 300,000 people.

The opposition, if they spent a little bit of time listening, would probably have heard by now that advocating for a 12 percent tax over a 10 percent tax is not what British Columbians want. We engaged. We listened.

I could be rigid. I could be stubborn. I could be ideological. I could be stuck in old-fashioned ideas. But if I was all those things, I'd probably be running as a New Democrat.

Interjections.

Mr. Speaker: We're not going to continue. It's your time, Members.

IMPACT OF HARMONIZED SALES TAX
ON FAMILIES

C. James: I'd like to say to the Premier and the B.C. Liberals: if they'd been listening in the first place, they wouldn't have brought in the HST in British Columbia. British Columbia families, under this Premier and the B.C. Liberals, are paying up to 7 percent more on countless items in their day-to-day life.

This Premier and the B.C. Liberals want families to keep paying more now and after the referendum. The HST touches families in every part of their life, from birth to grave. Even prenatal classes, classes that have parents prepare a safe and healthy arrival for their newborns, are now fully taxed under the HST.

My question is to the Premier. Why is she taxing young families under her family-first agenda?

Hon. K. Falcon: I know that the math is difficult for the members opposite, but I'll try and walk them through this pretty straightforwardly. The fact of the matter is that if you're paying 10 percent on all your retail purchases — all your furniture, all your clothing, all of the purchases that people make every day in their lives — you're actually farther ahead than you are paying 12 percent under an inefficient PST-plus-GST system. That's actually how it works.

You know, I do think that there is something of interest I have noted. We have listened to now two days' worth of arguments from the NDP about why they don't like the HST. I heard all the different arguments, including from the Leader of the Opposition.

One thing none of us did hear, one thing none of us did hear was the impassioned arguments about why the PST makes sense, why they want to go against the tide of every other jurisdiction in Canada and around the world and go back to a retail sales tax. That's what we have yet to hear from the NDP opposite, Mr. Speaker.

[1415]

Mr. Speaker: The member has a supplemental.

C. James: It's very clear that the minister isn't listening at all. It's no surprise to anyone on this side of the House or the public in British Columbia, because the B.C. Liberals haven't been listening from the beginning on the HST.

The HST is costing families more. Parents want opportunities for their children to grow and to thrive. They want to provide them opportunities to learn, to discover their talents. We're coming up to summer, and summer camp now will be subjected to a tax. Parents will be paying 7 percent more so that their children can go to camp in July and August. They'll be paying 7 percent more for art courses, for sports camps, for tutoring, for hockey school.
[ Page 7658 ]

Again, my question is to the Premier. Why is she trying to force families to choose 7 percent over zero percent? How is that putting families first?

Hon. K. Falcon: I'm not sure what part of listening to almost 300,000 people in the largest listening exercise in government is not listening to the people. What we actually did was listen, and we responded with what we heard, which was to reduce the rate to 10 percent and provide transition payments for families with children — $175 for each and every child and $175 for seniors under $40,000.

But you know, Mr. Speaker, I'm afraid I'm going to have to come back to the second edition of uncomfortable NDP facts, because clearly….

Interjections.

Hon. K. Falcon: Yes, I'm afraid I'm going to have to. I would like to point out that when the NDP first ran in 1991, they promised not to raise taxes at all. In the first two years after raising taxes by nearly $2 billion, one of the interesting taxes that they raised was the PST rate from 6 to 7 percent. But they didn't just raise the PST. That's consistent with what they always do. They also expanded the coverage to include engine tune-ups, tire installation, appliance repairs, repairs to business equipment, alteration and repairs to clothing and shoes. If it moved, they wanted to tax it and tax it higher.

We want to move it lower. Mr. Speaker, 10 percent HST is far better any day than a 12 percent GST plus PST, which is the NDP's preferred approach.

B. Ralston: You'd never know from listening to the Minister of Finance that he's proposing a $2.6 billion tax increase to be paid by families and small business over the next two years.

Let's turn to something else that touches B.C. families. At this time of the year many parents are looking forward to the marriage of their children — the weddings of their children, yet these families are being forced to pay more under the B.C. Liberal HST. Does the Premier really think, based on what she said in the recent past, that British Columbians are going to accept her HST gimmick and be bought with their own money?

Hon. K. Falcon: Mr. Speaker, imagine. This is the same group that just voted against the motion that would reduce the tax burden on every family in British Columbia and increase it on large corporations. They just stood up, to a person, and voted against it.

Now, I know why they did that. I know why they did it, because they voted against every single one of the tax reductions for personal income taxes — almost 40 percent since we first got elected. They voted against every single reduction in the general corporate tax rate from 16½ percent down to 10. They voted against every reduction in the small business tax rate. They voted against the elimination of the corporate capital tax. Not surprisingly, they vote against another reduction for families and individuals across British Columbia, which is marching the HST rate down to 10 percent.

[1420]

In their world, I can't understand how their math works. How does their math work when we know from the independent panel report, which they were fond of quoting only a week and a half ago, using the same numbers, every single family at every single income level is ahead to the tune of $120 on average as a result of a 10 percent HST? Those are incontrovertible facts.

NDP math has never made sense to British Columbians, but they get that when you're paying 10 percent on everything, not 12 percent, you are better off.

Mr. Speaker: The member has a supplemental.

GOVERNMENT CHANGES TO
HARMONIZED SALES TAX

B. Ralston: Well, let's hear some B.C. Liberal Premier math. The Premier explained not too long ago that a 2 percent cut in the rate would create a fiscal disaster. She said: "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 mean, that's where the money comes from, ultimately. So yes, government could cut it, but at what cost to the citizens?"

Indeed, to the Premier: at what cost to the citizens?

Hon. K. Falcon: Of course, this is often the case with the NDP. They selectively quote, so they missed the rest of what the Premier said, which was that we may have to raise other taxes to make up for the revenue. She's absolutely correct about that.

That's why we listened to British Columbians, and we rebalanced the equation so that families and every British Columbian at every income level will be net beneficiaries as a result of 10 percent HST. We are temporarily increasing the general corporate tax rate for large companies by 2 percent to help do that. That's exactly what happened.

I can tell you this. The Finance critic across the way and the Leader of the Opposition want to go back to a 12 percent PST plus GST, which not only doesn't make sense by almost any independent analysis, but also hammers the fiscal plan to the tune of over $3 billion to the negative. Yet every day in this House they say they want to spend more in health care and education, in parks — in every other ministry of government, spend more — and they want to do it with a budget decision that will cost them $3 billion to the negative. That makes no sense.
[ Page 7659 ]

Interjections.

Mr. Speaker: Members. Members.

IMPACT OF HARMONIZED SALES TAX
ON SMALL BUSINESS

H. Lali: B.C. families are being hit twice by the B.C. Liberals because many are also small businesses. Small businesses can distinguish between fact and Liberal fiction, so they know that when the rate is zero percent, their customers, who are B.C. families, have more purchasing power, compared to the 7 percent Liberal tax increase.

In Kelowna the Friends Neighbourhood Pub, which is owned and operated by the Dhaliwal family, has witnessed a dramatic 15 percent decline in sales due to the HST. Why does this Premier's version of the so-called families-first agenda include punishing family-run small businesses like the Dhaliwals'?

Hon. K. Falcon: I'm pleased that the NDP opposition has finally released some of the big guns to answer the questions here. I take this with some trepidation.

The two organizations that represent the vast majority of small business in the province — the Canadian Federation of Independent Business and Shelfspace B.C., which represents all of the retail outlets — have said that at a 10 percent HST rate, their members support it, to the tune of 83 percent for the Canadian Federation of Independent Business and 93 percent for retailers right across the province.

[1425]

Having said that, we certainly recognize — we've been clear, in fact — that the change we made to the .05 drinking law has had some impact on some restaurateurs, particularly on liquor sales. But of course when you make a change like that, you also have to balance that against some of the benefits. As the Attorney General has pointed out, there are 23 more people alive today as a result of not being involved in fatalities as a result of drinking and driving.

We will keep working with the restaurant association to make sure we can do everything we can to try and minimize that impact as much as we can.

CONDITIONS AT HOSPITAL FACILITIES
ON HAIDA GWAII

G. Coons: The B.C. Liberals promised health care when and where you need it, and that promise has been as good as their promise not to bring in the HST. One wonders when they'll make the next promise they won't keep.

The people on Haida Gwaii sure don't believe their promises. The northwest regional hospital district has practically been begging for support for Queen Charlotte General Hospital. They're using half an ATCO trailer at the edge of a parking lot for a morgue. Will the Health Minister get up in this House today and finally live up to their health care promises and give patients on Haida Gwaii the health services they deserve?

Hon. M. de Jong: Thanks to the member for the question. Actually, I am proud of the record of a government that has invested, over the last decade, $7 billion in improving capital infrastructure for health care right around the province. I am proud of a government that has taken concrete steps in the aftermath of the 1990s to actually train twice as many physicians in British Columbia as was formerly the case, train more nurses and health care professionals.

I also understand that there are still places in British Columbia that are confronted by challenge, as I indicated during the course of four days in estimates, and I am anxious to address those challenges in a constructive way and in concert with the member.

Mr. Speaker: The member has a supplemental.

G. Coons: They're mixing chemo drugs outside in a wooden shed because the hospital pharmacy lacks the space and adequate ventilation. The only reason they're not using the Tim Hortons for a care model is because there isn't one on Haida Gwaii. The hospital district says: "Though staff do the best they can, there is a tremendous negative impact on families and human dignity. We are past the make-do phase."

The situation at Queen Charlotte General Hospital is totally unacceptable. Will the minister do the right thing for patients on Haida Gwaii and ensure that the redevelopment at Queen Charlotte General Hospital goes ahead?

Hon. M. de Jong: In the last number of years the provision for cancer treatment in British Columbia has expanded dramatically to where we now have five centres right across British Columbia where people can go to receive cancer treatment, and another facility just being opened in Prince George was announced several days ago. So the provision for service has expanded dramatically.

Interjections.

Mr. Speaker: Continue, Minister.

Hon. M. de Jong: If you look across the province at the provision of services that are now in place, it is an improvement, a dramatic improvement over what was in place ten years ago. In the last week I have had sub-
[ Page 7660 ]
missions from the member's colleagues that amount to over $3 billion in additional capital construction. We have spent $7 billion over the last ten years, and we have balanced in an appropriate way our desire to provide the very best to B.C. families with the capacity of the taxpayers to pay for the very best.

[1430]

M. Farnworth: We're not talking about the rest of the province. We're talking about Haida Gwaii, one of the most remote, isolated parts of British Columbia, where they're mixing chemo chemicals in an old smokehouse, where an ATCO trailer is functioning as a morgue, where an old greenhouse is the physiotherapy centre — the types of conditions that make Tim Hortons care at RCH look like Cadillac service. That's not acceptable to the people of Haida Gwaii.

They have used their own money to prepare a plan to change this situation, to actually put in place proper facilities. The question is really straightforward. When are the people of Haida Gwaii going to get some attention from this government and get some facilities that they can be proud of in the 21st century, instead of an ATCO trailer?

Hon. M. de Jong: Thanks to the member for the question. In fact, progress is being made. Progress is being made on the development of a plan that will see the hospital campus renewed and improved in a dramatic way.

Interjections.

Hon. M. de Jong: I thought members were interested in hearing this.

Steps are being taken to employ and partner with the same talented agencies and individuals that have given us new facilities in places like Abbotsford, in places like Vernon, in places like the Lower Mainland, facilities…

Interjections.

Mr. Speaker: Continue, Minister.

Hon. M. de Jong: …and partnerships that members of the official NDP opposition spoke against time and time and time again.

We are going to move ahead. We are going to move ahead in partnership with Northern Health. We are going to move ahead in partnership with the folks on Haida Gwaii, and we are going to ensure that the families on Haida Gwaii have the very best provision for medical health services right in Haida Gwaii.

[End of question period.]

Petitions

J. Horgan: I have a petition signed by 1,897 students, families, administrators, trustees and MLAs from the West Shore region in Victoria calling on the government to replace the aging, decrepit and obsolete Belmont high school with two new high schools. I do this gleefully. The AVID class, led by Ravi Parmar, collected almost 2,000 signatures in seven days.

Tabling Documents

Hon. S. Bond: Today I present the annual report of the Insurance Corporation of British Columbia for 2010.

Hon. B. Penner: In the same vein, I rise to present the annual report for the Forest Appeals Commission, 2010.

S. Hammell: I would like leave to present a petition.

Petitions

S. Hammell: I would like to present petitions with over 4,200 signatures calling on the government to fulfil its promise to open an additional three neonatal care beds at Surrey Memorial Hospital.

K. Heed: I rise to present a petition generated by the Southeast Vancouver Seniors Society, South Van Neighbourhood House, Killarney Community Centre, Champlain Community Centre and Sunset Community Centre and signed by over 5,200 people who endorse and support the building of a seniors centre to serve the communities of southeast Vancouver.

Tabling Documents

Hon. I. Chong: I have the honour to present the annual reports of Islands Trust for the fiscal years 2008-09 and 2009-10.

[1435]

Orders of the Day

Hon. R. Coleman: This afternoon in this House we will be doing Bill 14, intituled the Coastal Ferry Amendment Act, 2011, till 4 p.m. From 4 p.m. to 6:30 p.m. we'll be doing Bill 12, intituled the Police (Independent Investigations Office) Amendment Act, 2011. From 7 p.m. to 8:30 p.m. we will be doing Bill 11, intituled Yale First Nation Final Agreement Act, under second reading. At 8:30 p.m. to 9 p.m. we will be doing Bill 2, intituled Budget Measures Implementation Act, 2011.
[ Page 7661 ]

In the committee room this afternoon we will be continuing with the Ministry of Finance estimates till 4:30; and from 4:30 to close, the Ministry of Energy and Mines.

Second Reading of Bills

Bill 14 — COASTAL FERRY
AMENDMENT ACT, 2011

Hon. B. Lekstrom: I would move that the bill now be read a second time.

Bill 14 amends the Coastal Ferry Act. The amendments are required to enable the B.C. Ferry Commissioner to undertake a review of the act, as he has requested, in order to recommend to government potential changes that would better balance the interests of ferry users with the financial sustainability of the ferry operator.

[L. Reid in the chair.]

The commissioner currently does not have the authority to undertake this type of review. Currently the commissioner is required to release the final price-cap decision that sets the maximum fares for the period April 1, 2012, to March 31, 2016, by September 30, 2011. We are amending the act to provide a one-year extension to that deadline to enable the commissioner to conduct his review of the act prior to setting the final price-cap decision.

An amendment is also being made to extend the deadline for the province and B.C. Ferries to file any changes to the coastal ferry services contract with the commissioner by one year, to June 30, 2012. This will enable the commissioner to have the latest version of the contract prior to setting the final price caps.

As the final price-cap decision is being delayed by one year and the current price caps go until the end of March 31, 2012, the bill amends the act to provide a price cap for 2012-2013 of 4.15 percent for all route groups. This provides a balance between the interests of the ferry users and the financial needs of the ferry operator for that year, until the review is completed and the final price-cap decision can be delivered by the commissioner.

The amendments will also provide the ferry commissioner with the financial resources from the province necessary to undertake his review.

The act is also amended so that the ability of the ferry operator to request an extraordinary price-cap increase is withdrawn, and the ability to discontinue services is constrained until the commissioner releases the final price-cap decision on September 30, 2012.

These amendments are of a temporary nature and will only apply for setting the price caps for the upcoming four-year performance term, commencing April 12, 2012, and ending March 31, 2016.

I look forward to the debate.

G. Coons: I rise to speak to Bill 14, the Coastal Ferry Amendment Act, 2011. It's a great opportunity to look at where we've gone in the last eight years since 2003.

I remember back in September 2005, I think it was, standing in the House and talking about ferries and acknowledging that for close to 40 years, at that time, we'd had one of the best ferry systems in the world — one of the unique transportation networks, a marine highway that connected dozens and dozens of island and coastal communities and was a lifeline, a vital link and basically a marine highway that is vital to the economic and social well-being of the province.

When I talked about the Coastal Ferry Act — and we're seeing some amendments coming down through Bill 14 — I acknowledged that if it worked out the way that it was supposed to, where they were looking at predictable and fair fare increases and running it in a way that was businesslike and looking at adopting a commercial approach, there may not be too much with this approach.

[1440]

At the time, I started reading through it, and I acknowledged that there were some key issues, especially the one principle for the commissioner — and he's going to be looking at this in his review, which this Bill 14 gets down into — that the priority be placed on the financial sustainability of the ferry operators. There's a bit of a problem there, because there was no definition at all in the Coastal Ferry Act in 2003 for "public interest."

In the last eight years we've just seen a corporation basically gone wild, with fares skyrocketing anywhere from 45 or 50 percent up to 120 or 125 percent, depending on the route. The minister and I have had discussions about this, and sometimes we disagree, but we're trying to get closer with our numbers.

But it's been devastating to coastal and island communities as far as businesses and B and Bs and tourism and just day-to-day life of going from point A to point B with your family or to work or to school or to cultural events, sporting events. There's been a huge issue with that throughout the minor routes, specifically.

When we've looked at the cross-subsidization from major routes to other routes being eliminated as also one of the mandates…. The commissioner is going to look at that in his review. That's a huge issue. The moneymaking routes, the major routes, used to support and help some of the minor routes, because it wasn't meant to make money.

Our B.C. Ferries was not put there to be a moneymaker. It wasn't meant to be a profit centre. It was meant to be the social and economic driver of the province, and in 2003, when this B.C. Liberal government rammed through the Coastal Ferry Act, we saw a complete change to a quasi-privatized model of our B.C. Ferries. We've seen the result.
[ Page 7662 ]

Previously, in my final comments back in 2005 in this House, I said:

"We must restore public accountability to B.C. Ferries to ensure that the public has oversight over this creation and fares and oversight on how our fully integrated marine transportation network is being reduced to a flotilla of…floating profit and loss centres. We need a public inquiry. We need a special committee dealing with our marine transportation network. We need to do something to save our ferries."

That was six years ago, and that was just two years of me and some colleagues trying to study the Coastal Ferry Act and acknowledging that, hmm, there are going to be some difficulties. Here we are, amending the Coastal Ferry Act for the second time. We're looking at putting amendments in here because of a failed model that was put in, in 2003.

I put forward some motions about creating a special committee to strategize on what we need to do with our ferries, and this government failed to acknowledge that. We put forward, on this side of the House, a private member's bill that basically looked at restoring some accountability.

We wanted to return B.C. Ferries under freedom of information, because it was exempt from freedom of information. It was also exempt, is exempt, from the Ombudsperson. It's exempt from the Auditor General going in and looking at the finances.

So the accountability and the transparency that we've seen under this act for the last eight years have been dismal, and we've seen the impacts of that. But what did happen was that the last time the Minister of Transportation opened up the Coastal Ferry Act, they put it under freedom of information. So they did follow some of the suggestions from this side of the House.

Also, we had a concern during our private member's bill that the directors of B.C. Ferries…. Now, they created these two boards — you know, one ferry board and….

The directors of the board were getting outrageous compensation for what they were doing. We brought that forward in our bill, and lo and behold, the last time that we opened up the bill, the government listened to this side of the House and they did something with the directors' fees and honorariums that they got to make it more in line with public sector and Crown corporation honorariums.

[1445]

We have put forward other suggestions. We wanted to put in a definition of "public interest," and again, that was somewhat ignored. The last, but not really, to some degree…. When you looked at the last legislation they put in, they wanted to look at — and the minister is having a problem — the interest of the users and the financial sustainability of the corporation. He's having a problem weighing that out.

What we need is a definition of what public interest is. We tried to put that in, and hopefully, when we go through committee stage, there will be some amendments put in that will make the Coastal Ferry Act more conducive to working for the public.

When we look at where we've gone in the last eight years and how we got here, we've seen a lot of issues. When the Coastal Ferry Act was put in, it did not take in the interest of coastal communities. There used to be a committee, the coastal community committee, that was out there and worked on their behalf.

Then they created, through B.C. Ferries, a ferry advisory committee in each of the minor routes. For quite a few years the ferry advisory committee chairs of those 12 committees were strong advocates on behalf of their constituents, on behalf of the ferry service that we have, acknowledging and realizing the value and importance of our marine highway.

I referred to marine highway on a couple of occasions, because when the Coastal Ferry Act was put into play, this government, through amendments and consequential amendments, actually took ferries out of the Highway Act. So it was not part of our public transportation network. I think that was a huge sign on behalf of this government that they had abandoned and washed their hands of our vital marine highway, especially those communities and those people who live in those communities, who saw fares skyrocket. They saw ridership go down.

The minister and I have talked about price elasticity. I've talked about price elasticity with the commissioner and with B.C. Ferries.

Price elasticity. As fares go up, ridership goes down. As we've seen, the commissioner, in his review, is going to be looking at all types of issues like that, including demand and elasticity. In some of the studies that I've seen, as fares go up 10 percent, ridership goes down 7 percent. That's significant when we've seen fares go up on the major routes anywhere from 45 to 50 percent and on the minor routes anywhere from 80 percent to over 125 percent, depending on the route we're talking about.

When we look at the impacts on island communities, when we look at what happened with the Coastal Ferry Act in 2003, there are many, many issues that we've got to deal with. There's been a real restriction and hindrance of economic growth on island and coastal communities.

There has been a demand, through legislation, that B.C. Ferries has to find alternate service providers. They have to go out and find somebody else to try to take over the route.

B.C. Ferries, I guess in their wisdom, have decided not to even try to privatize the major routes that make lots of money, because they can probably privatize those. They go out and try to privatize the small routes, whether it's the northern routes or the Mill Bay route or other routes where they think they can find somebody to come in. But that alternate service provider has
[ Page 7663 ]
to come in with their own vessel and perhaps lease the terminals from B.C. Ferries.

[1450]

So it's not a moneymaker, and B.C. Ferries has never been a moneymaker. I've said that on many occasions. The comptroller general also indicated, when she did a report, that that's what B.C. Ferries seems to do. It's trying to make a profit. We've had a real change in the social and economic contract that we've had with coastal communities and island communities for 50 years.

This past year is the 50th anniversary of B.C. Ferries. We celebrate that — the workers, the people who are on the ships and at the terminals who ensure that we have the best service possible. But again, we've got a system that is in disarray, and it needs fixing. We've been trying to encourage the government to do this on many occasions.

When we look at a lot of the concerns that we've had with management…. We've got a CEO making a million dollars for running a monopoly. We've got a monopoly advertising at the Canucks games. I'm not quite too sure who their focus is on, but if you're at a Canucks game and you've got to get back to Victoria or Nanaimo or somewhere on the Island, I think you probably know that you're going to be taking a B.C. ferry after the hockey game.

There are a lot of issues out there that we've got to deal with. The last time we put in our private member's bill, we didn't talk about executive compensation because we didn't know how much David Hahn and the boys at the top made. We didn't know that David Hahn made over a million dollars and that the other three or four made up to $3.5 million a year, because they were exempt from freedom of information.

As soon as we found that out, oh, it hit the fan. The previous Minister of Transportation threw up her arms and went: "Oh my gosh. This is outrageous. We've got to do something about this." The million-dollar man at the helm of, it looks like, a sinking vessel.

The debt to B.C. Ferries is $1.4 billion. Their finances are very questionable. I've brought this up for the minister and asked him about it, and he's referred to the review that's coming up before us. But I think when we look at where we need to go with B.C. Ferries…. It's got no competition. It's a monopoly. It's a cruise ship transformation.

They run a vacation centre. There's a bit of a drop-trailer situation going on, where they tried to develop a new business, and it was seen as inappropriate by the commissioner. They've got the Operations and Security Centre and many issues that are not relating to a public service, to a marine highway being part of an essential link to communities and people that live on islands. There's no long-term vision or strategy.

Both the comptroller general and the ferry commissioner have acknowledged that they've scratched their heads. They looked at what's going on, and they said: "We can't find a vision." What's the vision that the B.C. Liberals had for the coastal ferries? There isn't one.

The Auditor General, when they did a review of the governance model — not the finances but under the governance model…. I found it a bit unbelievable that the Auditor General of the day sort of scratched his head and said: "Well, I couldn't find out the mandate or a vision or a strategy. I had to look at the legislation. I had to look at Hansard. I had to look at press releases." That's what the Auditor General said — no long-term vision, no strategy.

The ferry advisory committee chairs over the years have developed from: "Okay, let's try to make this work" to "This hasn't worked. Damage has been done, and we need to stop."

[1455]

What they've asked for is something simple. They've asked that while this review is going on, fares be frozen so that people can take a deep breath and go: "Oh, we just had a fare increase last April. Next June and next week we're having another 2.5 and 5 percent fuel surcharge."

Let's just take a break from the outrageous fares we've seen, and while this review is done, let's freeze the fares. You know, it's time that we treat ferries as an integral part of our highway.

Hon. Speaker, I've got another, say, ten minutes or five minutes I'd like to take before some of my colleagues have a chance to respond to this.

When we look at the monster created — a huge impact, with fares and fuel surcharges and ridership and the impacts on island and coastal communities, the unaffordable fares, the management issues….

Right now B.C. Ferries is trying to exclude 155 or 157 of their management, their senior officers and chief engineer officers. They want them out of the union and into management, and 80 percent of these officers are refusing to go. It's going to create a huge dilemma. We're going to have vessels tied up at shore. We're going to have a shortage of crew. I've brought this to the attention of the minister and the Labour Minister.

I think there are issues out there. There are issues of safety. The ferry captains or officers are saying there's an issue of safety when this happens.

As we go along with this, I'm going to look at amendments to be made. We're going to be looking at trying to make Bill 14, which is before us today, a better bill, which is going to work for the people.

When we look at and listen to people in communities…. I did a ferry tour. The minister probably knows that about two years ago I visited 28 communities. I sat down, I listened, had public meetings, and I heard the stories. That was 2½ years ago. That was before, probably, another 10, 15, 20 percent fare increases or fuel surcharges — huge impacts on communities. It's devastating, most of the ferry advisory committee chairs say.
[ Page 7664 ]

They've written a report called Ominous Clouds. I've passed that to the minister. It's outlining what's happened with the Coastal Ferry Act in the eight years. It's been one of disarray, a failed model. I just hope this government says: "We attempted to do something, and we failed. Let's sit down, have a long-term vision, have a strategy, listen to people and move forward."

On that note, I'm going to pass the floor to other colleagues of mine from ferry-dependent communities that rely on ferries, and they will have a chance to say a few words.

N. Simons: It's my pleasure to speak on the bill before the House, Bill 14, Coastal Ferry Amendment Act, 2011. I point out to those viewing at home that we have a very short amount of time in order to do this, due to some interesting arrangements around timing in this Legislature and a vote we took earlier today to say that no matter where we are in debate, we're stopping everything Thursday night.

I would also like to start by acknowledging the Minister of Transportation, the third since I became an elected member for Powell River–Sunshine Coast and, I would say, the first to actually take some action on the issue of ferry fares. I want to acknowledge him.

Despite the fact that he's a Bruins fan, in fact, he may have a couple of proper judgments inside that noggin of his. I understand his need to support the Bruins. It's something that…. You see a logo when you're five and you can draw it, and that'll get you locked in for the rest of your life.

That aside, I do think that there are some important aspects of this bill that need to be discussed. A little more time would have been helpful, but I will start by saying that the people of Powell River–Sunshine Coast are residents of the only entirely ferry-dependent constituency in the entire province.

[1500]

Out of 85 seats in this Legislature, it is the only one that you can't get to without using a B.C. ferry, unless of course you take an airplane or you have your own boat or you're a very good swimmer or you find some driftwood.

The impact of ferry fares on my constituents is significant. They are daily, they are costly, and they certainly dominate the discussions when we're talking about issues of provincial importance when I'm in my constituency.

I'd like to start by saying that since 2003, when the government proudly introduced the Coastal Ferry Act — proclaiming in a press release that the act would result in stable fares, more jobs and better service — what we've seen is an absolute skyrocketing of the daily cost of living for residents of Powell River–Sunshine Coast.

The costs of ferries are built into the cost of food; they're built into the cost of building material. They're built into costs of goods and services that we all consume on the Sunshine Coast, but they also are the cost of every export that we provide that isn't using barge service.

I think when you consider the impact of a 125 percent increase in a ferry fare for a resident of Texada Island, an island that is not only a wonderful place to visit and a tourist destination with wonderful historic and heritage values, there are also industries on that island where workers and businesses suffer greatly when prices of ferries seem to rise exponentially.

I'm pleased that there's a review. It's a review that's been asked for by successive members of the opposition. I believe that in fact it's been called for by ferry advisory committees, by regional governments and by municipal governments from Gibsons to Powell River and Sechelt, and I think it's good that there's a review. I'll say it's good that there's a review. I worry, though, that we're going to see an almost 6 or 7 percent increase while it's being reviewed.

It kind of reminds me of a joke that a police officer once told me about. Okay, I'll have to tell that story. You get to a stop sign. You don't quite stop, and you continue. You know, you think you've stopped. You've done a stop. If you learned to drive in Quebec, you know what I'm talking about.

The police officer pulls you over and says, "You didn't stop at that stop sign," and you say: "Well, I really did. I mean, it was almost a stop. You can't really tell the difference." The police officer says: "There's quite a difference between slowing down and stopping, and you didn't stop." You say, "Well, I slowed down to almost a stop. It was as good as a stop."

The police officer says: "I'm sorry. There's a significant difference between slowing down and stopping." "You can't tell me," the irate driver says, "that there's a difference between what you saw and me slowing down and stopping," at which point the police officer pulls out his truncheon and starts hitting him on the head and says: "Would you like me to stop, or would you like me to slow down?"

In this particular instance, we have an increase that's coming while we're talking about maybe not increasing the fares. I'd like the minister to stop, not just slow down. Don't allow these increases to happen pending the review. I think a review is called for. It's necessary. But pending this review, we see a 2½ percent….

Interjections.

N. Simons: I only have ten minutes.

We have a 2½ percent fuel surcharge coming into effect in a couple of days. We also have next year's 4½ percent increase.

If you look at Langdale-to-Horseshoe Bay, Horseshoe-Bay-to-Langdale, a ferry route that's used by hundreds of commuters every day, we've seen an increase since
[ Page 7665 ]
2003 of over 75 percent. That's a significant daily cost for every single commuter going to Vancouver to work or to support their families on the Sunshine Coast.

Powell River-to-Comox is the route taken by people who are going for hospital services, going to visit loved ones in seniors care facilities, going for shopping or going to the Island. They are being required to pay a significant increase as well, upwards of 70 percent in terms of increases in fares, and that is a significant impact on every family living in Powell River–Sunshine Coast.

I would also point out that despite the fact that Powell River–Sunshine Coast is one of the most beautiful vacation spots in British Columbia and easily accessible from the Lower Mainland and from the Island, we've seen tourism numbers significantly decrease, not due to weather or anything else but due in large part to the cost of bringing your family over on the ferry.

[1505]

The ferry rates. If you're pulling a tent trailer as my parents used to do with their Volkswagen bus and their little Apache and five or six kids in the bus…. We would probably never have come to the Sunshine Coast. This is something that I think every sector of community on the Sunshine Coast is impacted by, and I would sincerely hope that the minister will ensure that the review is done in a fulsome way, also a wholesome way, that actually looks at the issues that are concerns to residents.

One issue I think I did not see in the outline of the ferry commissioner's review is the importance of surveying public opinion. I don't know anyone who has had a survey on ferry service on the Sunshine Coast, and if they have, I'd like them to let me know. But I understand that surveys for public opinion should really attempt to reflect the true feelings of the community and not simply be an attempt to put the best light on that particular service.

If you're going to do a survey of an individual travelling on a B.C. ferry, I recommend that you do that survey on morning trips, afternoon trips and evening trips; perhaps in springtime, perhaps in winter and perhaps in summer. But if you do them all on a bucolic afternoon on a Saturday where there's no lineup and the food is piping hot and the coffee is better than usual, you might actually find people saying everything is fine.

If you talk to residents who are the most dependent on these ferries, you need to know the truth in order to be able to actually create public process or public policy that is reflective of the needs of the public. Powell River–Sunshine Coast, as I said, is a community of mixed economies, and none are left unimpacted. That's a double negative. All are impacted by the price of ferry fares.

I would just like to make sure that residents on the Sunshine Coast are aware that there is a review taking place and that they are aware of their opportunity to contribute to this review, and I would say that I certainly will be relaying my concerns and the issues that I have about B.C. Ferries to the commissioner. I think that's something that every resident on the Sunshine Coast who has expressed concerns about ferries should do, I would recommend.

At one time, residents on the Sunshine Coast — I include Powell River, obviously, the pearl of the Sunshine Coast — were able to have residents' cards. That gave them priority, and that gave them assured loading. It gave them a lower price, as far as I know. I was not around at the time. Such ideas as those should be contemplated by the commissioner as well.

I know that there are a number of residents who have contacted me about different issues around ferry services that have caused them consternation. One is to arrive at a ferry terminal when there are very few cars in the lot, yet to find out the deck space is already significantly taken up by reservations, and not everybody can afford reservations. So I think that it's important to make sure that we limit the ability for B.C. Ferries to get the most out of every passenger by limiting the percentage of deck space for reserved passengers.

Other issues around safety and health, around the attempt to, well, not decertify but weaken, I would say, the union by continually trying to exclude managers, captains and engineers from the bargaining unit, I think, is not good in a ferry service, shall we say.

There are a number of issues. I could go on. The asbestos in these ferries is a concern for our health. On some of the minor routes we're not blessed with the ability to go to the spa as we travel across the Georgia Strait. We're hopeful that the washroom facilities are working. We're hopeful that in fact the elevators will get our friends who maybe have mobility issues up to the top.

On too many occasions, unfortunately, we've seen porta-potties on the car deck for the disabled to use because the elevator is out of service or washroom facilities are not working because of problems with salt water, etc.

[1510]

The review. Unfortunately, we're going to get hurt while the review is going on. It would have been nice if, as I said earlier, the minister could have allowed the prices to be maintained as they are. We've seen a cost-of-living increase over the years. It's about 2 percent, but the ferry increases have gone up 8½ percent. That is unsustainable. It's unsustainable from any perspective, partisan or not.

I think this is an important issue for the public or the transportation system of this province. The contributions of Powell River–Sunshine Coast to the economy of this province are significant. People do not want feel that they are being given no choice in their transportation options. In fact, I've heard people use terms like that they're hostages to the ferries or that they're basically at the whim of Ferry Services.
[ Page 7666 ]

I would like to point out, lest there be any attempt in the future to say that I have made critical comments about Ferries, that I'm not making any disparaging remarks whatsoever about any of the people that work on B.C. ferries. We know them. We all know that they're hard-working and that they deserve our respect and thanks.

I think what we really have here is a structural problem created by the Coastal Ferry Act that disallows cross-subsidization. An example of how this cross-subsidization problem impacts us. If a ferry from a major route happens to forget to stop and crashes into a ramp, causing that ramp to become unusable, then the little ferry from another place might come along and have to wait. If that little ferry has to wait too long, then eventually it will incur overtime costs. Those overtime costs will be borne entirely by the small-ferry routes and not by the larger-ferry routes.

In terms of equality, in terms of fairness…. I think that if this review could do something about fairness, wouldn't that be a lovely result? I'm going to be hopeful that it will. I'm going to be hopeful that residents of Powell River–Sunshine Coast have the opportunity and take full advantage of the opportunity to express their concerns, as the minister suggested to me when I met with him recently.

In fact, I like to point out to people that I met with him two days before the review was announced. I like to take credit for that, but I know I can't. I know that this was the result of a lot of work from ferry advisory committees, regional governments — all sorts of people advocating for safety and good service on the Sunshine Coast, Powell River and Texada Island.

With that, I'm just pleased to have had the opportunity to say this is….

Interjection.

N. Simons: I'm not being negative. I'm being positive. I just say there are important….

Interjections.

N. Simons: I'll come back next week. I'm hearing members….

I'm pleased with the review of the Coastal Ferry Act. I hope it brings changes that bring fairness to residents of the Sunshine Coast and Powell River, and I thank you for this opportunity.

C. Trevena: I think that residents who live on the islands and who rely on the ferries would look at this review as well overdue. In fact, I think that if they could go back a few years, they'd like to turn back the clock and be in a position where the ferries were part of the highway system, where it was realized that B.C. Ferries is an integral part of the way that we live and communicate on the coast.

Those of us who live on islands are contributing to the economy and have every right to live on the islands, as do people who live up in the remote parts of the northeast and who therefore have access to the roads. In fact, in the congenial spirit of this debate, I wrote to the minister about this and mentioned that the people in his constituency are driving on very nice roads. I've been through his constituency, and I've been on some very nice paved highways. They are not paying every time that they get on them.

However, I think that one of the real problems with B.C. Ferries in its present iteration — and I hope it will be examined with close scrutiny by the ferry commissioner and taken on board by the minister — is the issue of fares. My colleagues have talked about the fact that we have the fuel surcharge coming up. We have the 4½ percent increase coming next year, even though a review is on.

[1515]

There has been a call both for freezing the present fares and also for rolling back.

On this side of the House we have a friendly debate about who represents the communities with the most ferries, who has the most ferries in the communities and which are the most ferry-dependent communities. I think we're still working this one out, as many of us live on Vancouver Island, which is also ferry-dependent.

However, when you are relying on ferries, you are very, very conscious of the cost, so the concept of freezing and potentially rolling back fares is very, very germane. People are exceedingly frustrated about the fact that they are paying more and more. They're going to be paying while the review is going on…. By this time next year they'll be paying at least 6 percent more, and this is supposed to be a good thing. On minor routes it was going to be 8 percent, but that was rolled back.

I would just like to cite some examples of what this means. I think if people start to listen to real figures about what it means, they will start to understand why we who live and work and rely on the ferries are so angry about the fact that it's become a commercial proposition rather than part of our highway system, that we are expected to pay when people who get on the roads don't have to pay at all.

It costs to get from Campbell River to Quadra Island. I use that as an example. It's a very busy route. I confess I live on Quadra Island. My office is in Campbell River. I'm doing that route a lot. I often take my bike along because it is easier to walk on than to take the car and because it is much, much cheaper. To go from Campbell River to Quadra Island in a car with two people, it costs $37.95. I actually have my ferry tickets here; I will not use them as a prop. One car, two people, a ten-minute ferry ride: $37.95.
[ Page 7667 ]

It's no wonder that people are being forced to leave the islands. It is no wonder that people are worried about their business. It's no wonder that we have a tourism sector that is trying to build up and that is really frightened it cannot maintain itself.

This weekend on Quadra Island we have the studio tour. It's a really nice event. All the artists on the island — the potters, the artists, the glass-blowers — all the people on the island will open up their studios and invite people in. But when you're talking about almost $38 just to get to the island…. That's before you pay for the gas, because it's quite a big island, before you buy a meal and before any items I hope you buy from the studios. You're talking, effectively, a hundred dollars at least for a day trip. If you're staying overnight, as we hope people are, it's that much more.

I think it's this reality that is not understood by so many people when they say: "Oh, it's just the ferries; it's not something we've really got to worry about." It has a serious impact.

We also have these Coast Cards that are supposed to bring down the fares, but I'll use the same example. It's $37.95 for one car, two adults, a ten-minute ferry ride Campbell River to Quadra Island. So you get a prepaid card. You have to put at least $80 on this card before it can work, and there are many people who cannot afford $80.

There are many people who live on the islands who are struggling to get by. It is not a place for the elites. It is becoming a place for elites because of the ferry fares, but there are many people struggling to get by who find it a real difficulty to put that $80 on their card. But you have a card, and it still costs $23.15 for two people and one car.

It is now cheaper when the water taxi is running in that route, which it does at peak hours, for a foot passenger to take a water taxi than it is to take the ferry. There is something absurd in that situation, when the ferries are part of our highway system and should be integrated into the regular working life of the islands.

[1520]

Madam Speaker, as I say, we have this friendly debate on this side of the House about who has the most ferry-dependent communities. I have a number. I have the Campbell-River-to-Quadra run, the Quadra-to-Cortes run. There are a number of areas that aren't ferry-linked. But also up-Island, we've got the big route from Port Hardy to Prince Rupert and to Bella Coola and Bella Bella in the summer and so on, and also the Alert Bay–Port McNeill–Sointula — the triangle ferry, as it is now.

I'd like to raise a couple of points about that as well. I've been talking about the fares from Campbell River to Quadra Island. Short run, extraordinarily expensive to take the ferry. From Port McNeill to Alert Bay, ferry fares there have gone up 104 percent. Alert Bay is not a wealthy community.

For those who don't know it, it's a small island. It used to be a very busy fishing community. It's now an island which has two communities. It's got the First Nations 'Namgis community — very active, very involved with the other community, the village of Alert Bay.

They work very well together, but these are not rich people. These are people who are struggling just to make ends meet. The fishing is gone. There is very little work there. We have real difficulties for people to find a living, and yet there it costs $44.20 for the same situation — two people and a car. So $44.20 to get over on the ferry — 104 percent increase.

That isn't sustainable. When you talk about sustainability of ferry fares — and this is something that the commissioner will be looking at, the sustainability of it — you've got to look at the communities and how communities and how people in those communities can live. How families are expected to take the kids over to the hockey. These are their homes. The 'Namgis First Nation is not going to go anywhere. They are staying in Alert Bay. It's their land, their territory. They don't want to leave.

They want their kids to play hockey. You've got to get on the ferry. You've got to go to McNeill. You've got to get from the ferry terminal to the arena, and that's just if you're playing in McNeill. If you're going anywhere else, you've got the added costs.

These fares are really hurting small communities. That's why when we talk about freezing…. I really don't think freezing is enough. I think we have got to start looking at rolling them back. We're not looking for any Cadillac. We're not looking for a cruise ship. We're not looking for something that is going to give us a spa or the hot breakfast or anything like that. We just want, basically, a road that will take us there and back.

My colleague was talking about asbestos. The Quadra Queen on the Alert Bay run had problems with asbestos. It was fixed, and a few days later it broke down again. I have to say that the people in the communities, in Sointula and Alert Bay…. There was a very quick response from the ferries. But still, they had a ferry that didn't work. They didn't need a Cadillac; they just wanted to be able to get from their community to go and do their business.

Likewise, I understand that the Powell River Queen on the Quadra–Campbell River run is going to be having a makeover. Again, it's not a Cadillac that is wanted. It is a simple roadway.

We live and work on islands because there is a community there — because there are businesses there, there are families there. People have lived there for many years. It is not, as has been so often said, a lifestyle. It is a community.

I always come back to my puzzlement — I'm not originally from B.C. — of being on Highway 1 and driving across Canada, and you get to the ferry, and you get off
[ Page 7668 ]
on Vancouver Island, and you're still on Highway 1. So what's the difference? Why are people having to pay for linking those two pieces of road? Why are people having to pay exorbitantly?

I hope that in the ferry commissioner's analysis in the six months, he looks seriously at the way that our communities work, the way that our infrastructure as a whole province should work, a government's commitment to upholding that infrastructure. Unless a government commits to upholding an infrastructure, we can just basically walk away with it.

We have to get the government commitment to uphold the infrastructure. As the government will uphold its roads and as the government will uphold the bridges, the government has got to uphold the ferry system.

[1525]

I hope the commissioner looks at that. I hope the commissioner goes further than the indications that we have seen, which is just saying that we're going to hold on with the increases. I hope the commissioner will look, at the very least, at a freeze, and I think that people in the coastal communities would want to see the fares rolled back. I know that's what I'm hearing from my constituents. They want to see the fares rolled back.

I hope the commissioner realizes that B.C. Ferries became the way it was, by W.A.C. Bennett, because ferries were not seen to be a profitable proposition. Ferries were seen as part of our highway system. They were not supposed to come in raking in a profit. They were not supposed to come in as cruise ships. They were there to support and sustain our coastal communities.

Madam Speaker, that's what ferries are supposed to do. I hope this review will ensure that, once again, we can claim B.C. ferries as our B.C. ferries.

L. Krog: The great thing about being a Liberal, a B.C. Liberal in particular, is never having to say you're sorry. You just bring in more legislation that recognizes the fact that you made a mistake a while ago and that it needs to be fixed.

Even a free-enterpriser of stern stuff like W.A.C. Bennett understood that there were certain things that had to be accomplished through government, not through private enterprise. You know, T.C. Douglas said it best. What government does for us is it does collectively what we cannot achieve individually.

W.A.C. Bennett understood that if the economy of British Columbia were to prosper, if the people who lived on Vancouver Island and in ferry-dependent communities up and down the coast were to enjoy their share of British Columbia's full prosperity, it required an effective ferry system that was affordable by British Columbians.

For several decades it was operated that way, and then we got into the wonderful last decade of deceit, as one of my colleagues referred to it. And what's happened? Between 2003 and today, ferry fares have increased 45 percent on major routes and 85 percent on minor routes, and the general inflation rate has only been 11 percent.

Hon. Speaker, if that's an example of good fiscal management and the sound economic policies of the Liberal government, I must tell you that those figures stand out in stark contrast to what they say and what they have in fact delivered. We have anything but a family-friendly ferry service anymore. We have a ferry service that is regarded by the public and understood to be absolutely essential but not terribly effective.

The fact is that ridership is down. The fact is that people are having to make serious choices about whether they can continue to live on Gulf Islands anymore or pursue and support careers in the Gulf Islands.

In my community I can tell you that we are the major port centre on the east coast of Vancouver Island. We are completely dependent on ferries for a whole series of things. We have this ridiculous situation where we are now in this chamber still pretending that somehow this ferry corporation is this independent entity divorced from government, unrelated to the B.C. Liberals.

Yet what we're doing is legislating a fare increase. That's part of what we're doing here today. We're literally legislating a fare increase. My friend the member for North Coast, who has been a very effective ferries critic for the last several years, has made it very clear. Opportunities were offered by the opposition through a private member's bill, through advice, through criticism and through questions as to how to operate the ferry service effectively.

Yet this Liberal government still continues to pretend that this farcical arrangement where the taxpayer through the government of British Columbia…. The citizens of British Columbia are the only shareholder in the corporation, yet somehow it is divorced from government control. Yet here we are legislating a fare increase and finally establishing what many have called for, for a very long time. That is a review of how B.C. Ferries operates.

[1530]

It is astonishing to me that at a time when you have the head of the corporation making a million dollars a year; when you have a government that built its ferries overseas and boosted the German economy, put tax dollars in Berlin instead of Victoria; when you have a government that insisted it needed to be operated in a businesslike manner for the benefit of the corporation itself, that same government, through that process, allowing that to happen, saw literally hundreds of millions of dollars of economic activity taken out of this province.

This is the very same government that yesterday, happily, with the opposition, supported a motion to try and revitalize shipbuilding in British Columbia by ensuring
[ Page 7669 ]
we get our fair share of federal shipbuilding contracts for the department of defence and for the navy.

If there was ever a dumber idea, it had to be that — the concept that you would build your ferries overseas when there was the expertise, the knowledge, the workforce, the skills, the training, the desire and the economic necessity of doing it here in B.C. All of those things were in place. Instead, we built them overseas. Then — surprise, surprise — guess what. They really don't suit the run.

In an age when the government pretends to be so strong on the issue of reducing carbon footprint, so pro-environment, so desirous of putting us on the cutting edge, these things are gas hogs. They suck up fuel like they're great sponges drifting across the Strait of Georgia. So what does the government do? They tie them up. They tie them up at the docks because we can't afford to operate them. What a complete farce this has been.

Hon. B. Penner: Can we talk about the fast ferries?

L. Krog: The member talks about the fast ferries. I must admit that when I hear the Attorney General start to heckle, I know I've sunk one of their battleships in the little game over here, and I'm delighted to do so.

I think British Columbians would rather have a FastCat built in British Columbia that actually ran once in a while any day over ferries built in Germany that are tied up at the docks. I think the members on this side of the House and British Columbians would love to see British Columbians at work earning money and paying taxes in British Columbia and supporting the social services that this government can't seem to manage. I think British Columbians would love to see the Attorney General sitting over here asking the questions of government instead of the reverse.

What we're talking about here, as I said when I started my remarks, and I'm going to have to close soon, is an admission by this government once again of failed Liberal policy. We have this farce of an independent corporation. We have a ferry system that can't operate appropriately. We've got a ferry system whose costs are going out of control, and we've got a government that's finally, only today, admitting that it's made a mistake and is requiring review by this legislation.

Best thing that's happened. At least it's a tiny demonstration of some honesty from this government — that they're going to have a review, that British Columbians will, hopefully, have an opportunity to hear why this ferry corporation is operating the way it is.

One final note on behalf of one of my constituents who was just so thoroughly disturbed by this, and the member for North Coast mentioned it already. The concept of B.C. Ferries having to spend the money it does on advertising, when it is the only ferry service connecting Vancouver Island of any substance, is beyond belief. Why we're advertising at Canucks games and spending that kind of money when fares are rising is beyond belief. It's offensive to my constituents. I want it on the record that I likewise find it offensive.

Let the ferry corporation do what it does best, if it can, and that is transport people back and forth as cheaply and safely as possible. But let's not pretend any more that this corporation has been managed appropriately since the Liberals set it up. Let's move forward. Let's hope this review does the right thing, and then let's hope that this government has the courage to do the right thing and follow the recommendations if they make sense.

B. Routley: I'm happy to rise again and have this opportunity to speak out on behalf of the fine people of the Cowichan Valley. Certainly, part of the important infrastructure that we have in the Cowichan Valley is the ferry service, the Mill Bay–Brentwood ferry.

[1535]

You know, I've seen reports from the B.C. Ferry Services. I have with me here the Opportunities for Enhanced Efficiency in Performance Term Three, October 2010 document, where the ferry service is being looked at. They are talking about the possible elimination of route 12, the Mill Bay to Brentwood ferry.

Now, we know that what they say is partially true. They talk about the fact that a major part of the traffic…. Of the over nine million cars every year, 25,000 vehicles per day, only a small percentage of them — and they talk about 1 percent — actually utilize that ferry route. They make the claim there's an alternate route available.

Well, let me be the first to add that when we have a crisis…. I'll give you some examples. We just had one. The entire highway system going north from Victoria, the Malahat highway, was shut down as a result of a major oil spill. Not only was there the environmental catastrophe; there was the fact that that entire system was shut down for hours and hours.

It kept getting delayed. The Ministry of Transportation kept saying, "Oh well, it'll be open maybe at eight o'clock," then "at nine o'clock" and "maybe at midnight" and on and on right through the evening. People were forced to drive huge distances around, and I know for a fact that that ferry had lineups. People were there.

There was actually a constituent in the Cowichan Valley that had heart surgery. Fortunately, he was able to go over to the Brentwood side and take the ferry home. The staff there were very understanding and recognized that this was an urgent and important matter, and they allowed him to get home in a timely way.

There were a lot of people inconvenienced. But people were making the point — and certainly phoning our office — saying they're very thankful that there's the opportunity to have that alternate route.

I myself have taken the route. I remember a big snowstorm several years ago. My wife and I were travelling up the Malahat, and we got turned around. It was simply
[ Page 7670 ]
too unsafe to go the rest of the way to the top. We turned around, went down, got in the lineup for the ferry, and we were very grateful that that ferry was there.

Now, I understand that the government has made some changes. They brought in a different ferry, and they're working on some infrastructure. But the residents and people of the Mill Bay area, including the chamber of commerce in Mill Bay and the Cowichan Valley regional district, have contacted me. I've sat down with Gerry Giles and gone through this important issue and said that I'm very supportive, that we need to have that infrastructure.

It's important for the people of British Columbia, it's important for Island communities, and it's certainly important for the people of the Cowichan Valley, for tourism opportunities. It's a beautiful route to take over to go to Butchart Gardens, for example. People quite often do those kinds of things. The fact is that as tourists come through in the tourism season, there are spinoff benefits to communities like the Mill Bay region as a result of that service.

It's an important part of our system. We want to make sure that that's continued. Right now we look at the ferry system in this bill, Bill 14, Coastal Ferry Amendment Act. The government clearly understood that there was public pressure, that the public were outraged. We think, being as skeptical as I might be from time to time, that this government is playing politics with the people of B.C. They've foisted this off to a later date, and they've put a cap.

Suddenly now they want to manage. Originally, "Oh, we've got to have this independent body to manage things; we can't possibly be managing things" — totally against the original vision of W.A.C. Bennett.

I have spoken in this House before about W.A.C. Bennett. If he were to come back today, he'd have to be a New Democrat. Why? He would understand that infrastructure is important, as our ferry system. In fact, it was W.A.C. Bennett, when I was just a kid, that bought back the ferry in 1961 for $7 million. What a deal. For seven million bucks he bought the Black Ball ferry.

[1540]

He understood, and he used to stand here in this House, this very House. He would stand here and say that the purpose of the ferry system, the reason we ought to own it and not some American company, is so that we can take care of the transportation needs of British Columbians.

That was visionary. That was understanding our tourism opportunities, the opportunities for our island and coastal communities, certainly the people on Vancouver Island and all of our needs for every truckload of goods that comes to Vancouver Island. This is one of those opportunities.

This government likes to give buckets full of cash away to big business. But when it makes sense to subsidize something that helps every island community and helps families, I might add, move back and forth more easily to visit family members…. I've talked to more than one member in the Cowichan Valley that has said to me that they used to go over and see their brother or their mother or their pal more often on the Mainland. When it was reasonable, they would do those kinds of things.

Now that this structure has been…. We've got the million-dollar man running things. We've got all this board of directors. Now it's become a cash cow. They're cashing in every time you go there. Even if you park your car to pick up a friend, they want to cash in. The way this government sees the future is cashing in.

As has been said here, every time you increase the fares by 10 percent, ridership goes down by 10 percent. Do they care? Oh, well, they woke up now, and they say: "Maybe we better put some kind of cap on here." Well, about time that we thought about putting some kind of cap on here, but it's almost too little, too late.

It is so, so difficult for families throughout British Columbia to get back and forth to see one another. They've actually damaged the ability of families to connect.

You know, it's part of our transportation system. We've got millions of dollars spent on infrastructure all over B.C., on roads and bridges and all the rest of it, yet they can't have the wherewithal to understand that it makes sense for government to intervene and give a fair hand to the people on island communities. Instead, it's user-pay. We're going to gouge them — just fleece them some more and make it impossible for tourism operators.

You've got the chamber of commerce sitting down with us and saying: "You know what? We need this. We need you to talk some sense into them." We're trying our best to come down here and talk about what's important. It's important for our communities. It's important for tour operators.

When you think about it, if you lower the cost of fares, you increase the opportunity for people to go and have tourism opportunities — to eat at restaurants, to stay in hotel rooms.

My wife and I, when we first moved to the Duncan area from Lake Cowichan, one of the things that we liked to do was go over to Saltspring Island and stay in one of those lovely hotels in Ganges and experience the life over there. Well, now it's prohibitive. I used to go over there with the kids and walk through the mall and have a good time. Now it just doesn't happen because it's so onerous, so costly. It actually takes so much money to get over there. It's a night's stay.

Wouldn't it make a whole lot more sense to have the ferry system be reliable, be affordable for families and allow them the opportunity to move back and forth more freely and to actually promote tourism — the things that they say are important to them? However, they are acting against the interest of common sense in this matter.
[ Page 7671 ]

Instead, oh, it's no problem to give more than $100 million a year back to the biggest banks in North America. Oh, that ma8kes sense. What do you think? Does that make sense? Let's give money back to the banks in North America. Instead, we could have provided honourable service to the good people of Vancouver Island and island communities and businesses, and they would have thrived. They would benefit in a major way. There's no question about that.

[1545]

Now, I am concerned about what's going on here with our Mill Bay–Brentwood ferry, and I want to ask the minister to pay particular attention to the safety concerns that I'm about to address, the fact that we have had serious safety issues as a result of this. That includes seniors getting over the Malahat in snowstorms and that. We need to have that infrastructure and that option available.

When you're pushing people that are not able or don't feel safe challenging that Malahat in wintertime, forcing them to have no other alternative, other than an even longer ride around, going through Port Renfrew — I know people that did that; you can get there from here — it's not acceptable to think for a moment about shutting that opportunity down.

With that, I'll take my seat. Again, I would encourage you to think carefully. Make sure that we keep the Mill Bay service for the community, for the businesses.

D. Routley: I'm rising to bring some concerns about Bill 14 from my communities. I represent a number of communities on Vancouver Island that are dependent on ferries. In fact, I think all communities on Vancouver Island can count themselves as being ferry-dependent communities.

In my particular constituency I represent the areas that encompass the Crofton terminal of the Crofton-Saltspring run. I represent the community of Chemainus, which has the terminal that leads to two other islands that I represent; Thetis Island; and Kuper or Penelakut Island. I represent the area of Nanaimo, which is home to the Duke Point terminal of the major route, Duke Point–Tsawwassen. I also represent the island of Gabriola, which has a ferry run from Nanaimo to Gabriola. So ferries are an incredibly important issue to the people I represent.

When we examine what it means to be a coastal British Columbian, we cannot really separate the identity and the nature of what a coastal British Columbian is from that ferry service. It is so integral to everything that we do — the development of our communities, our society; the development of our economy; and the provision of services, both emergency and essential services, as well as the provision of goods and services. So much of what we depend on is transported by B.C. Ferries.

It also has a distinct human rights component. I would make the argument that there's a distinct human rights component that needs to be discussed here and needs to be considered by anyone reviewing the act. I'll explain that.

This is particularly true when we examine the lives of children. So many of the schools that we represent are dependent on ferries in order to participate in intermural sports, where teams can have such a difficult time travelling to events, to tournaments. It's a very costly proposition for any school to send a team of youngsters on a trip to schools that are really in the same school district. They're neighbouring schools, yet these kids have a very difficult time participating.

The human rights issue of ferries and what they represent to Vancouver Island communities is no better represented anywhere than on the run between Chemainus and Kuper Island, or Penelakut Island.

The Penelakut people, the Penelakut First Nation, used to inhabit the foreshore of Chemainus Harbour. Chemainus Harbour now is home to a sawmill and several developments and the community of Chemainus. When the community of Chemainus was developed, the people of the Penelakut First Nation were essentially shipped to Penelakut Island, which was also in their territory and now is their reserve.

The people on Penelakut are so challenged economically. There is virtually no economy. There are many homes that don't even have running water more than a few hours a day. The conditions are terrible. The people are suffering a level of poverty and a level of exclusion and isolation that should be absolutely unacceptable to any British Columbian.

[1550]

I'm sure the minister would agree. If he visited Penelakut and saw the community and the standards which they endure, he would be horrified, as I am. Despite that, it's a beautiful and thriving community that does its best to develop and to offer its children and its community the experience they deserve.

I attended a ferries meeting on Penelakut Island, and I was hearing from the people of the island just how concerned they are about the rate increases. I should say that the rate increase for prepaid ferry fares on the Chemainus-to-Penelakut run over the past eight years has been 114.9 percent — a 115 percent increase for people who get to Vancouver Island to do shopping or to take their kids to the doctor or do whatever they must do. When they come back, many of them are forced to collect bottles and cans and turn them in for a refund in order to afford the ferry fare back.

When I was at this meeting, one of the elders, a woman from Penelakut First Nation, was in tears as she described the shame she felt when, after collecting bottles and cans for hours and being unsuccessful in generating enough money to get back on the ferry, she took the money she had down the ferry ramp and handed it to the deckhand who, of course, couldn't take her money.
[ Page 7672 ]
He told her: "I'm sorry. I can't take it." They know each other. All the people in these communities are so well connected, and we support each other.

This lady was refused her passage on the ferry. She refused to leave the ferry, so eventually the RCMP was called to remove her from the deck of the ferry. She was taken by the elbows up the ramp. Someone in a car waiting to get on board gave her the money to get back to Kuper, to Penelakut Island. She made it home, but she left her dignity, or a large portion of it, there on the dock in Chemainus.

This is a terrible example of what it means to increase the cost of living on ordinary British Columbians in this way. This is an essential service to people. These folks — it's not as though they have an option. It's not as though there are other options like driving around a toll bridge or something of that nature. This is their lifeline. This is their only passage.

I think that's a really powerful example of why it's so important for us to take very seriously these issues. They may seem small to people who earn the kind of living that we do, sitting here as members of the Legislative Assembly, but when people are living in abject poverty, that kind of increase has that kind of impact on their lives.

This ferry system ought to be run in the public interest. It is a part of our public highways, our marine highway system. We on this side of the House believe that. We call on the government to recognize that and return it to being part of the highways system.

The communities on Gabriola Island, which is connected to Nanaimo, had the same increase — 115 percent over the same time. Small businesses are suffering and finding it so difficult to develop and thrive. I was told by one Gabriolan that the most endangered species on the Gulf Islands are working families. It's impossible to operate a business when this kind of increase is imposed on an operator.

Many of these businesses are exactly the kinds of businesses that we're looking to, to diversify our economy and to provide green employment. They're tourism-based businesses, and they're suffering. The people of Gabriola…. There's a thriving arts community. They rely on people coming to the island to see what they can offer, and it's happening less and less.

This was all set up when B.C. Ferries was removed from the highways system and put under the Coastal Ferry Act. The B.C. Ferries Corporation is a pseudo-privatization with one share. It's not really a private company, but it has one share, and it's owned by one person, and he's sitting on the other side. That's the Transportation Minister.

They've claimed that they did this in order to end political interference with ferries, but then what do we see? We see just before the last election a $20 million injection from the government in order to decrease fares when they needed a political boost. For two months they put in $20 million for a one-third discount. In fact, ridership went up. It only proved the point that price elasticity is having its toll.

[1555]

In the last eight years we've seen one million fewer passengers on B.C. ferries. We've seen car traffic decline by 3.5 percent and passenger traffic decline by 5 percent. This is because of the increased fares. This is because the B.C. Liberal government fails to recognize the public interest value of the B.C. ferry system. It is not a cruise ship line. It is transportation infrastructure, part of the network we depend on. It's a marine transit system, and that's the way it should be treated by this government. We're calling on this government to do just that.

There's been so much hypocrisy — the hypocrisy around political interference. First we see this tearing apart of the public interest mandate of B.C. Ferries because of an effort to reduce political interference, which wound up being such a hypocrisy. Then we see the building of ships in Germany, and this is supposed to give taxpayers the best value.

Well, you know what, Madam Speaker? The super C–class ferries were built in B.C. They're still doing a great job. They carry 24 fewer cars, but they do it at much lower costs, because these German ferries are gas-guzzling machines that are eating up resources. In fact, the ferry corporation can't afford to run them a good deal of the time and have them tied up at the docks.

Those ships were such a good deal, and yet everything to maintain them has to come from Germany. Even lightbulbs for those ferries have to come from Germany, at a cost of $7 per lightbulb. It's absolutely ridiculous. This is the fine deal these Liberals have negotiated for British Columbia. If we had built more ferries in this province, we could have provided employment and training that could have helped equal the balance, closed the gaps that the B.C. Liberals' policies have created in this province. Some of the poverty in this province wouldn't be so bad if we were able to train young people in those industries.

[Mr. Speaker in the chair.]

It's really tragic that we see such a fine ferry system — probably one of the best in the world, if not the best in the world — being robbed of its essential mandate, which is public-interest delivery of public services. We're not asking that the fares be zero, but we are asking that the fares be frozen now. This review, in fact, legislates another increase. People on the coast of British Columbia, people on Vancouver Island, the people I represent, don't need a study to know that fares are too high. They don't need a study to know that B.C. Ferries has forgotten, because of the Coastal Ferry Act, its public interest mandate, its primary purpose.
[ Page 7673 ]

What we need to do is not to engage in another study, but to remind this B.C. Liberal government that that ferry system does not belong to them. It's not a plaything for their agenda. It is a public institution — a publicly owned, publicly operated infrastructure piece that is essential to the transit realities of all the people living on the coast of British Columbia.

We would call on the government to offer a fare freeze. We would call on the government to return B.C. Ferries to the Highway Act. We would call on the government. It showed more of its hypocrisy today by supporting a motion that would encourage the federal government to allow B.C. to be the home of one of the shipbuilding hubs, so that all federal ships need to be built in Canada. Well, shouldn't all British Columbian ships be built in British Columbia, Mr. Speaker? Isn't their call on the federal government proof of another hypocrisy in their policy?

I know the minister is listening, and I know he's a reasonable fellow and will take under good consideration all that he's heard here today. But essentially, it can all be boiled down….

[1600]

Mr. Speaker: Noting the schedule of time, Member.

According to the schedule that was submitted by the Government House Leader, it's now four o'clock. Second reading will now be called on the motion.

Motion approved.

Hon. B. Lekstrom: I move that the bill be referred to a Committee of the Whole House to be considered at the next sitting after today.

Bill 14, Coastal Ferry Amendment Act, 2011, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

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

Mr. Speaker: Proceed.

Introductions by Members

Hon. B. Lekstrom: Joining us in the gallery today I see the former member for North Coast — his timing is exceptional, speaking about ferries — a man who worked diligently on behalf of the people he represented. Will the House please give a warm welcome to Mr. Bill Belsey.

Hon. B. Penner: I call committee stage debate on the Police (Independent Investigations Office) Amendment Act, 2011.

Committee of the Whole House

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

The House in Committee of the Whole (Section B) on Bill 12; L. Reid in the chair.

The committee met at 4:03 p.m.

On section 1.

K. Corrigan: I have a question about the definition in section 1(c), which says "Section 1 of the Police Act…is amended" and "(c) in the definition of "officer" by striking out "except in section 47 (2)," and substituting "except in Part 7.1 and section 47 (2)."

The effect of that is that the definition that is in section 1 of the Police Act, which originally said an officer "except in section 47 (2), means a person appointed under this Act as a provincial constable, special provincial constable, designated constable, municipal constable, special municipal constable, auxiliary constable or enforcement officer, but does not include a person who is a member of the Royal Canadian Mounted Police."

So now it just adds to that except in part 7(1) and section 47(2) that that's the definition of an officer. If you go back to section 7.1 — I'm sorry I have to refer forward, because it refers to it — which talks about the setting up of this independent investigation office, it defines officer as "includes a person who is a member of the Royal Canadian Mounted Police."

My question is: does this mean that with regard to the independent investigations office, given that the definition of officer says that except in section 7.1, the definition is all those people…? Does that mean that the only person, type of officer, that is included in this section is a member of the Royal Canadian Mounted Police?

[1605]

Hon. S. Bond: First of all, I want to begin by introducing the terrific staff that I have with me today. They have done just an exceptional job drafting this legislation to bring to life in British Columbia an independent investigations office. We have Clayton Pecknold, who is the assistant deputy minister, policing and security programs; Kathy Kirby, who is the director of policy and legislation, policing and security programs; and Jeremy Wood, who is our senior policy and legislation analyst in the policing and security programs of our ministry.

In fact, the amendment expands the definition of officer in the new part, 7.1, which includes a person who is a member of the Royal Canadian Mounted Police.
[ Page 7674 ]

K. Corrigan: Well, I read that section, and it defines an officer. The definition that is there says that "except in part 7.1," this is the definition of an officer. My reading is that then you need to go to part 7.1, the definition of an officer, and the only thing it mentions is that it "includes a person who is a member of the Royal Canadian Mounted Police."

I am being precise and picky, I guess it could be seen, about this definition because I am concerned about what could potentially happen in the future. I have practised law in the past, and I know there will be or could be an enterprising lawyer who would take a look at this definition and make the argument under the definition in this act that it could certainly be interpreted to mean that an officer would only be a member of the Royal Canadian Mounted Police for the purposes of Part 7.1, "Independent Investigations Office."

I would be really concerned if at some point in the future there is going to be a legal beagle who is arguing this case and suggesting that that is the only type of police officer that is covered under this definition.

In addition to that, I would point to the fact that that section already says an officer, except in section 47(2), is defined in the way that we were just discussing — all those other types of officers — and in 47(2), which previously existed, they make a particular point of saying that the police…. It references: "The police complaint commissioner and an acting police complaint commissioner appointed under this Act are officers of the Legislature."

So it seems to me by comparison that the original drafting of the Police Act was very concerned about any confusion there might be in the definition of an officer, which to me would point again to the possibility that the interpretation I've just posited is one that would be upheld by a court — certainly was the natural interpretation that I had.

I understand it's not the intention. But I would again like to ask the minister about whether there's a possibility that there could be a challenge of this legislation on the basis of my interpretation or possible interpretation of the definition of officer.

[1610]

Hon. S. Bond: We don't believe that there is room for a challenge there. We believe that the definition and the substitution of "officer" is required to include an expanded definition that includes a person who is a member of the Royal Canadian Mounted Police. One of the key principles that Justice Braidwood wanted us to be clear about was inclusion of both municipal forces and the RCMP. Legal opinion advises me that there is not a concern related to what the member has brought up.

K. Corrigan: I certainly would not suggest that I have nearly the legal knowledge or experience as the drafters of this bill.

On the other hand, I do recall in an earlier discussion with the minister, in estimates, that when there was a description of a particular person…. I think it was under the Civil Forfeiture Act. When I asked the question about whether the definition of that person, which said: "It includes a person who is…."

My question was: is that definition exhaustive? The answer I received was that the definition was exhaustive. In other words, a very similar phrase — from my memory, because I haven't looked at it recently — that said "includes" meant that that was the only person the definition referred to.

In this case, the suggestion is that it's supposed to be expanding the definition. So I'm wondering if I could get a response to that.

Hon. S. Bond: Well, the bill that we're debating today is the independent investigations office. The amendment of the definition that has been included in the bill is required to ensure that, in fact, we have an expanded definition of "officer" and that it includes a member of the Royal Canadian Mounted Police. So I am assured by the legal drafters who are here that the amendment does exactly that.

K. Corrigan: Could I just ask: was there any concern or investigating of this issue or any concern at any point about whether or not my interpretation could possibly be the correct one?

Hon. S. Bond: The drafting was done based on a policy that requires us to include the RCMP and municipal police forces. So I'm sure great care was taken to ensure that the bill that's presented reflects the policy decision that was made.

Section 1 approved.

On section 2.

K. Corrigan: Section 2 says that section 1.1 of the Police Act "is amended by adding the following paragraph: (d) the independent investigations office." I just want to confirm that the intention of this section is simply to add the independent investigations office to the list of police forces in British Columbia.

Hon. S. Bond: In fact, that's correct. The amendment is necessary to establish the independent investigations office and, in essence, give it the same powers as a police force. Obviously, the makeup of the investigators will be clearly defined. But in essence, it's placed in the Police Act, and this section creates the independent investigations office and gives it the powers of a police force.

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[ Page 7675 ]

K. Corrigan: Just a short question now. I will have some more questions related to this later.

Would the minister say that the independent investigations office is similar, then, to the other types of police forces with the same kind of powers — investigative powers and responsibilities and scope — as other police forces in the province that are mentioned in this section?

Hon. S. Bond: Obviously, the investigations that are conducted by the independent investigations office require a great deal of scope. It means that the independent investigations office will be designated with similar powers as a police force. For example, they can have access to PRIME, to CPIC databases — those things that are essential when you're looking at investigating deaths or serious harm.

In essence, there would be equity in terms of access to information that is going to be critical to successful investigations.

K. Corrigan: I'm wondering if the minister could just elaborate a little bit more. I think that was a good answer with lots of information in it. What other types of things that a police force does will this independent investigations office have the capability of doing?

Hon. S. Bond: Well, in fact, these will be criminal investigations. Some of the things that may be necessary is the ability to have a search warrant, looking at, for example, executing judicial orders, potentially other types of serving of warrants — those kinds of things.

We need this investigative team to have access to the same types of tools that are currently available to police forces.

K. Corrigan: Because it's not really clear what this police force is going to look like, I'm wondering whether it's contemplated…. When we talk about setting up this police force and it having the powers of police forces in British Columbia under the Police Act, are we expecting that this will be a police force that, for example, has a forensics team, has a special motor vehicle accident team? What is contemplated in terms of those other powers and, I suppose, the scope of this police force?

Hon. S. Bond: We certainly expect that there will be a great deal of expertise required, as there is in police investigations today.

So absolutely — forensics experts. There may well be motor vehicle experts. We would need the ability to access experts of that nature. Our critical concern is that we have the expertise necessary to ensure that any charges that are brought are successful.

Critical to us, while we are obviously concerned about the civilian nature of the investigations office, we're also concerned that the office can do credible and excellent criminal investigations. We want to make sure that if there are charges laid, they are carried through with.

[1620]

K. Corrigan: The types of police forces are mentioned in section 1.1 of the Police Act, which is being amended by this section and many others. When we talk about those provincial police forces and municipal police departments, what is the governance for those other types of police forces? I wonder if you could compare it to the governance that is going to be put in place in the case of the independent investigations office.

Hon. S. Bond: Well, I think there is a significant difference from the perspective that Justice Braidwood made it very clear that the governance model would be civilian-led. In fact, the chief civilian director will build a team of civilians around himself or herself as they create the independent investigations office. So the governance model is completely civilian-led, and that matches the expectations of Justice Braidwood.

K. Corrigan: In the act, when we're referring to a municipal police force, there is, for example, a municipal police board. When there is a provincial police force, when there's a designating policing unit, there are boards that oversee the governance. Is there any other police force in British Columbia that does not have a board that governs the affairs of the police force?

Hon. S. Bond: In fact, our special investigations unit does not have a board. The AG has kindly provided another example, which is that conservation officers, who are also peace officers, actually report through an assistant deputy minister. Again, no board is in place there. It certainly was not a recommendation of Justice Braidwood or Mr. Davies. In fact, this model clearly aligns with the recommendations of the Braidwood Commission.

K. Corrigan: Maybe I'll just go through them, then, and find out. The officers mentioned in the Police Act are provincial constable, special provincial constable, designated constable, municipal constable, special municipal constable, auxiliary constable or enforcement officer but does not include a person who is a member of the RCMP. A provincial constable — would that constable be governed by a board?

Hon. S. Bond: As I said earlier, there are a variety of models, but some constables do report through…. There is a governance system that includes a board, but not every police force has a board governance model. Certainly from our perspective, what's critical here is that we have aligned this bill and the office that we will create very directly with the recommendations received by Justice Braidwood. There is no intent to have a board in place.
[ Page 7676 ]

K. Corrigan: I'm wondering, for clarification, if the minister could tell me what the police forces are that have been created or come under the aegis of the Police Act.

[1625]

Hon. S. Bond: There are 11 independent police forces in British Columbia. Each of those has a board. There are designated organizations that also have a board, such as the organized crime unit and transit police. But there are also other organizations, including the RCMP, which as you can imagine represents a vast majority of British Columbia in terms of the number of detachments. They do not have the same governance model. Also, as we looked at other jurisdictions, the Ontario model of the independent investigations office does not have a board either.

K. Corrigan: Does the Ontario office have the same scope of powers as are contemplated under Bill 12 in setting up a police independent investigations office? In other words, does it have the same investigative types of powers and other powers?

Hon. S. Bond: In fact, if you look at the Ontario model, I'm advised that after much of the research was done, we learned from their circumstances. They did not designate their investigations office as a police force and had a great deal of challenge accessing information, for example, from CPIC.

Now, as you can imagine, if you're going to do a credible and important investigation, you have to have those tools. So in our view, looking at learned lessons from other jurisdictions, we felt that from the beginning this investigation office needed to be basically equitable with a police force. That is to guarantee that as these investigations take place, they are credible and hold up in a court of law. From our perspective, we learned from Ontario and changed our model to reflect the importance of having access to those tools.

K. Corrigan: Well, I appreciate that the minister has now outlined the differences and the improvements, arguably, with Ontario. But I think it highlights exactly what I was asking about — the differences with Ontario. It does not apparently have the same scope and abilities and again points out that what we're dealing with here is a police force.

My understanding from a previous answer from the minister is that nine police forces covered by the act do have boards, and there are a few that don't. I'm wondering if you could go through them and let me know what they are so that I have a clear understanding of what forces are and are not governed by boards.

[1630]

Hon. S. Bond: We're happy to provide a list of the specific names of the 11 independent police forces. We were stretching our minds here to come up with all 11 of them. We don't want to leave anyone out.

The major goal behind including the independent investigations office as a police force and giving them the same scope and access to information is to actually address the concerns expressed by British Columbians and by Justice Braidwood. He said we needed a force that was able to independently investigate.

We decided that the best way to do that was to make sure they have equity, they have access, they have the ability to readily get the information that would give them the opportunity to conduct criminal investigations in the same way that a police force would.

K. Corrigan: For exactly that reason, because it does, apparently…. This independent investigations office will have the same powers, and rightly so. I'm not suggesting that that shouldn't be the case.

But when you have the same powers as other police forces, which are some fairly serious powers that we as citizens all view, I think, as ones that need to be watched carefully…. It seems to me that in the majority of other cases — in almost all other cases, if not all other cases — police forces that have been created in British Columbia have traditionally had a board.

It's important, because what kinds of things…? Perhaps I can ask the minister: what kinds of matters, what kinds of issues does a police board…? What is its governance? What does it govern?

Hon. S. Bond: I remind the member opposite that there are police forces that have governance models that include the boards and there are police forces whose models do not. The independent investigations office will not have a board.

In terms of police boards, I am told that the work the police board does deals with policy. It deals with issues such as the budget. It deals with hiring and personnel-type decisions.

It is clear that we have made a decision that we would entrench the investigations office in the Police Act but in fact have chosen to use the model that many other police forces do use, and that is not to have a governance model that includes a police board.

K. Corrigan: So when there is a board dealing with, I would assume, policies, procedures, budgets, hiring and firing — all of these things that police boards around the province do…. I understand that with municipalities, they're required to have a police board.

My question to the minister, then, is: why in this case is there not the same standard set for a provincial investigative force that there is for municipal forces around the province?

[1635]
[ Page 7677 ]

Hon. S. Bond: Yes, indeed, the independent investigations office will be subject to all of the same standards. In fact, the model, as I have said to the member opposite, conforms with the recommendations that Justice Braidwood made, and it learns from the examples that have been put in place in Ontario. Absolutely, it is entrenched that the independent investigations office will be subject to all of the same standards.

K. Corrigan: But we've already established that in Ontario the office there does not have the same powers as the office does here. And we've already established, I believe, that most police forces in British Columbia — including all the municipal police forces and, I understand, other police forces as well, the provincial constables…. Almost all of them do have a police board.

Again to the minister: why was the decision made, then, to have…? We'll see later that essentially, this office is reporting to the Attorney General, who is an elected official. Why is the reporting to the Attorney General, as opposed to a board?

Hon. S. Bond: The Braidwood Commission recommended that the reporting out be separated from the person or the ministry that's responsible for policy and governance of policing in British Columbia — i.e., the Solicitor General — and recommended that the independent investigations office report to the Attorney General.

K. Corrigan: So the decision was made to have this particular police board, among all of the police boards in British Columbia, report to an elected individual, albeit that apparently, this was the recommendation of Mr. Braidwood. Now, Mr. Braidwood also recommended there be oversight by the Ombudsperson's office, but the decision was taken not to follow that particular recommendation.

Hon. S. Bond: In fact, there was a significant discussion with Justice Braidwood about the decision around the Ombudsperson versus the Police Complaint Commissioner. In our discussions Justice Braidwood had no difficulty with us looking at the alignment with the Police Complaint Commissioner. It is an independent office, and that office deals with the same type of subject matter.

There was a concentrated and thorough discussion with Justice Braidwood about the change from the Ombudsperson to the Police Complaint Commissioner, and he agreed that that would be an appropriate alternate.

K. Corrigan: I'm wondering: in cases when there is a police board appointed, what difference is there in terms of transparency, openness, accountability of a board that is mandated under the act, as opposed to the Attorney General?

Hon. S. Bond: In fact, Justice Braidwood…. One of his comments was the fact that we had gone beyond his expectations when it came to accountability, because we added a civilian monitor. That doesn't exist, and that certainly wasn't part of the recommendation that Justice Braidwood brought to us.

In fact, there were three levels of accountability, because if you follow through the bill, we have the opportunity for a special review of this by a special committee of the Legislature. We have a civilian monitor who can, at the request of the chief civilian director, actually go back and look at the integrity of an investigation. In addition to that, we have the Police Complaint Commissioner.

[1640]

I think that not only have we met the absolute intent and expectations of the Braidwood Commission, but we've gone one step beyond that.

K. Corrigan: Well, at no point is there any appointment which is completely independent or oversight that is completely independent, because the Attorney General, while I have a great deal of respect for our Attorney General, is a politician.

In addition, it is going to be cabinet — and we'll talk about that later — that is going to appoint the director of the independent investigations office. The civilian monitor will be appointed, as well, as part of this inside appointments process.

I'm not comforted by the fact that we're going to have a monitor who is going to be put in place — again, a political appointment. So I will not ask any more questions about this, simply to say I do not see the independent and open oversight.

Maybe I'll ask just one more question. Are meetings of police boards public?

[D. Horne in the chair.]

Hon. S. Bond: First of all, we need to be extremely clear here that the reason this office is reporting to the Attorney General of British Columbia is because the Braidwood Commission made that recommendation to government. We simply agreed with Justice Braidwood. He clearly defined the separation between the Solicitor General's office and the Attorney General's office and was very clear that he was comfortable with that reporting arrangement.

In addition to that, the chief civilian director will be appointed by OIC. In fact, we will discuss that later.

After that point the chief civilian director has the exclusive command of the independent investigations office. A civilian monitor would not be a political appointment. That will be a decision of the chief civilian director, as will be the selection of the team that will be entirely civilian in terms of the administration and operations, other than the investigative unit.
[ Page 7678 ]

K. Corrigan: I appreciate that we have upstanding people in the position of the Solicitor General and the Attorney General of this province. Nevertheless, these are politicians, and what I do not see in this governance structure is public oversight.

I'm just wondering if the minister could answer the question that I asked previously, which is: do police boards have open meetings?

Hon. S. Bond: Yes, police boards do have public meetings. They also have meetings that are in camera, when that's appropriate, in terms of, I'm assuming, dealing with personnel matters.

The fact of the matter is that if the member opposite has a concern about the differentiation between the Solicitor General and the Attorney General and the recommendations of Justice Braidwood, that's a discussion she's entirely welcome to have with Justice Braidwood.

I had the discussion with the commissioner, and he was very comfortable with the added accountability of a civilian monitor and was very complimentary of government and the bill that had been drafted to bring the independent investigation office into force.

Section 2 approved.

On section 3.

K. Corrigan: Section 3 deals with the amendment of section 10 of the Police Act. Section 10(1) of the Police Act previously, or at this point, says that says:

"Subject to the restrictions specified in the appointment and the regulations, a provincial constable, an auxiliary constable, a designated constable or a special provincial constable has, while carrying out the duties of his or her appointment, jurisdiction throughout British Columbia to exercise and carry out the powers, duties, privileges and responsibilities that a police constable or peace officer is entitled or required to exercise or carry out at law or under an enactment."

[1645]

Here's the other section, the second subsection:

"If a provincial constable, auxiliary constable, designated constable or special provincial constable exercises jurisdiction under subsection (1) in a municipality having a municipal police department, he or she must, if possible, notify the municipal police department in advance, but in any case must promptly after exercising jurisdiction notify the municipal police department of the municipality."

That's the old section.

The new section says:

"Subject to the restrictions specified in the appointment and the regulations, a provincial constable, an auxiliary constable, a designated constable or a special provincial constable has (a) all of the powers, duties and immunities of a peace officer and constable at common law or under any Act, and (b) jurisdiction throughout British Columbia while carrying out those duties and exercising those powers."

Would the minister clarify that the effect of this change to section 10 is that it takes away the requirement to notify a municipal police department, either in advance or as promptly as possible after exercising jurisdiction — that it removes that requirement from the act?

Hon. S. Bond: There are no changes to subsection (2), so that does not change.

K. Corrigan: Well, I'm confused, because I've got both before me, and section 10(2), unless there was a previous amendment that was not on the Queen's Printer website, where I took the previous Police Act out of, where I printed it off from. It says it's up to date until, I think, May of 2011, so I would assume that this is proper. But I could be wrong. Maybe there's an amendment I don't have.

Could I just maybe clarify: is that section as I read it, or has there been a change?

Hon. S. Bond: I'm not sure about that, but the current Police Act, in section (2), which we are not touching at all, says:

"If a provincial constable, auxiliary constable, designated constable or special provincial constable exercises jurisdiction under subsection (1) in a municipality having a municipal police department, he or she must, if possible, notify the municipal police department in advance, but in any case must promptly after exercising jurisdiction notify the municipal police department of the municipality."

That's subsection (2), and it's not changing.

R. Chouhan: May I have leave to make some introductions, please?

Leave granted.

Introductions by Members

R. Chouhan: Today we have in the gallery upstairs 44 students from a wonderful school in my constituency, Burnaby South. Along with these students from grades 10, 11 and 12, we have Ms. Ghani and Ms. Steed, the teachers, as well as Mrs. Tallarico, a parent supervisor, and Mr. McDonald, adult supervisor. Please join me to welcome them.

Debate Continued

K. Corrigan: Thank you to the minister for that clarification.

So what is the difference, then, between the old and the new section 10(1)?

Hon. S. Bond: All it does is it is required to ensure that there is consistency of language in the Police Act between the existing act and the amendments.

Section 3 approved.
[ Page 7679 ]

On section 4.

[1650]

K. Corrigan: I assume that all this is doing, this section, is adding IIO investigators to the list of investigators for which the minister is jointly and severally liable for torts committed by the various officers.

Hon. S. Bond: That's correct.

Sections 4 to 6 inclusive approved.

On section 7.

K. Corrigan: Section 7 says that section 38, which I have to flip to, is repealed and replaced with…. Maybe the minister could just explain the intent of this change.

Hon. S. Bond: It's exactly the same rationale provided in the previous question. It simply clarifies the language and makes it consistent with…. This is necessary to ensure consistency of language with the amendments to section 10(1).

K. Corrigan: So in the previous section 38(1) it said, "A municipal constable or a special municipal constable has jurisdiction throughout British Columbia while carrying out the powers, duties, privileges and responsibilities that a police constable or peace officer is entitled or required to exercise or carry out at law or under any Act," while this one talks about "all of the powers, duties and immunities of a peace officer and constable at common law or under any Act…."

So there's the change of the word. It says "immunities." As well, instead of "to exercise or carry out at law," it says "at common law or under any Act."

I'm wondering if the minister could explain the differences of those two, what the implications are.

Hon. S. Bond: Again, it is a language change. It is basically intended to provide clarity, particularly around jurisdiction. There are no policy or legal changes. It's simply a clarity of language, and perhaps the best way to describe it is that it's the modernization of the language.

K. Corrigan: Why would it be changed from talking about the "powers, duties, privileges and responsibilities "and instead saying "power, duties and immunities"? Are there no legal implications? What was the reasoning for that?

Hon. S. Bond: I'm advised that there are no legal changes. It's a matter of clarity, and it is a matter of consistency of language throughout the act.

K. Corrigan: What would we be talking about when we're talking about immunities that were not mentioned in the previous act?

Hon. S. Bond: Again, this does not expand scope. It does not add any additional legal changes. It simply is a matter of clarity. It is a matter of providing better definition and consistency to current practice.

[1655]

K. Corrigan: The government and the minister felt that it was worthy of change. I'm trying to understand what the change means — just the definition of what "immunity" means and what would be covered by that, because it's not in the previous act.

Hon. S. Bond: As I said to the member opposite, it does not expand powers or protections. It simply more clearly articulates and modernizes the language around both the powers and current immunity that exist for police officers.

K. Corrigan: What are those immunities?

Hon. S. Bond: I think it's clear that police officers have both additional powers and responsibilities. With that comes, for example, the ability to legally use certain powers, and that would be the definition that would apply with the word "immunity."

The key point around this section is that there is no additional scope. There are no changes to current practice. This was a legal advice that would suggest it was more appropriate for us to clearly outline and strengthen the definitions that are included in this way.

There is no change of scope. It is current practice. There certainly are examples of powers that police officers have that other people do not.

K. Corrigan: Well, this is a learning experience for me. I'm an inquisitive person, so when I see that words have been changed, I'm curious about what that means. I appreciate the lengthy answers that the minister is willing to provide in an area where I don't know what the definitions mean.

I guess I'll just ask one more question about this, then. Have there ever been any challenges or perhaps cases at court about the definitions that were previously used that would have impelled the ministry to change these definitions within this section?

[1700]

Hon. S. Bond: The crackerjack team that I have with me tell me that they don't believe so, but they can't necessarily articulate that. They're not aware of any, but there may well have been.
[ Page 7680 ]

K. Corrigan: Actually, I have no more questions on that.

Section 7 approved.

On section 8.

K. Corrigan: Excuse me. Section 8 — does that include this whole area?

The Chair: It does, yeah.

K. Corrigan: Okay. That's fine, then.

The Chair: Under section 8, is it the will of the members to do part 7.1 by the new sections?

Some Hon. Members: Yes.

On section 8, section 38.01.

K. Corrigan: This is the part…. Section 8 establishes a new part to the Police Act, and this is really the guts and heart of this bill. This part establishes the independent investigations office, starting off with definitions.

Section 38.01 is in fact definitions, and one of the definitions that I am interested in is "serious harm." It says in this part that serious harm "has the same meaning as in Part 11."

I'm wondering, first of all — because I can't seem to find it in my original act, although I have looked at it — what section that is, if perhaps the minister could help me. Which section are we referring to in the Police Act so that I can flip to it in my 173 pages?

Hon. S. Bond: I think the question was: which section of the Police Act? It's part 11, and the definition of serious harm is there. The member can let me know if she wants me to read that to her, but it's part 11.

K. Corrigan: I knew it was part 11, because it says it right there in the definition. I was just trying to remember exactly where it was in the act, but it looks to me like it comes right after section 75. So I should be able to flip to it there.

Serious harm. It says it has the same meaning as in part 11. So that means "injury that (a) may result in death, (b) may cause serious disfigurement, or (c) may cause substantial loss or impairment of mobility of the body as a whole or of the function of any limb or organ." That is the definition that is going to apply when we are talking about referrals to the independent investigations office — serious harm and death.

I'm wondering if the minister could perhaps provide a little bit of background about the decision that was made and how the decision was made to use that definition and the scope generally of what is going to be referred to the independent investigations office.

[1705]

Hon. S. Bond: I know we'll have further discussion about the scope, because obviously serious harm and death are part of the approach we are taking. But in the summary of recommendations at least — and I've been assured that these do reflect the words of Justice Braidwood — recommendation 8(b) is "that the IIO has a mandate to investigate police-related incidents involving the death or serious harm of a person…." So in fact, the language was captured based on the recommendations of Justice Braidwood.

K. Corrigan: We will talk about, I guess, at a later point…. But it is interesting that one of the concerns that has been expressed publicly by members in this House as well as by other individuals or organizations is the suggestion that that is too limited, that the definition of serious harm perhaps could not include, for example, the case of the 11-year-old boy who was tasered in Prince George.

I'm wondering if the minister would agree that this definition of serious harm or the other provisions in the act, which will trigger the involvement of the independent investigations office…. Would that include the case of the 11-year-old boy who was tasered?

Hon. S. Bond: Obviously, I'm going to be extremely cautious about commenting on a case that is currently under investigation. I do not want to jeopardize that in any way. But it's clear that we have a framework also that will be created for prescribing offences. As we look at the three ways that that is described — offences against, basically, justice; serious offences against a person; or undermining public confidence — there is every likelihood that an incident like a tasering incident may well be captured and could very likely be captured under that definition.

N. Simons: Just to clarify: who actually makes the decision whether or not it's serious harm?

Hon. S. Bond: Anytime a police officer is involved in an incident and it is captured by one of these descriptions, there would be an expectation that it automatically would be transferred to the IIO. The chief civilian director would also have the opportunity and would be expected to monitor and look at those cases. But anytime a police officer is involved with something that would fit under one of the prescribed offences, and certainly under the definition of "death," obviously, and "serious harm" as outlined here.

[1710]

N. Simons: So there's some discretion involved? If there is discretion involved, where does that exercise of
[ Page 7681 ]
discretion take place, and who is responsible for exercising that discretion?

Hon. S. Bond: If the incident occurs within the mandate that's been outlined, obviously death and serious harm, and then the prescribed offences. For example, if there is a police officer that may have committed a serious offence against a person in which that person is hurt or there is injury to that person, there is an automatic responsibility for that case to be managed by the IIO.

So the triggers are: police officers involved; then using the definitions that have been included of "serious harm" and death; and then the list of prescribed criminal offences, which will be, obviously, created in regulation.

N. Simons: The minister mentioned offences against justice. The other three categories…. I'm sorry. I don't have them exactly in my mind. The question some might have is that if a civilian makes a complaint, where is the discretion exercised as to whether their case gets forwarded to the IIO?

Hon. S. Bond: There are a number of ways it can get there, but the most obvious one is that if it fits clearly under the mandate and if a police officer is involved, it would automatically go to the IIO. Again, the framework will outline potential prescribed criminal offences where it would be automatically handled by the IIO.

It could also be sent there by the Police Complaint Commissioner. If, in the event of an investigation that's being done there, there is a need to pursue it from a criminal perspective, the case can be referred in that way. The third way is that, ultimately…. The power exists already, but for example, the Solicitor General can also require that a case go to the IIO.

The three categories are: against justice, something that undermines public confidence…. The member can, I'm sure, imagine that there would be cases, potentially, that particularly undermine public confidence. So there are a number of routes for those cases to be in front of the IIO.

N. Simons: Is it possible for a third party to make a complaint?

Hon. S. Bond: I appreciate the question. I think the best way to describe it is that under the mandate there would be clear parameters under which a case would go directly to the IIO. Under our current system, if it is about the conduct of a police officer, obviously not related to death or serious harm or the prescribed criminal offences, the route would very likely today continue to be through the Police Complaint Commissioner.

[1715]

During the course of, currently his, investigation, he could then send the case or refer it to the IIO if there needed to be a different approach.

The mandate will be clearly outlined so that in essence, a complaint wouldn't be necessary. Yet there would be an automatic trigger, especially in the case of, unfortunately, death or serious harm and the prescribed criminal offences, but the route in terms of conduct or those issues today will continue to go through the Police Complaint Commissioner. There's lots of discussion about whether or not there should be a more holistic approach to this and certainly something that I think over time we may want to explore. Obviously, we want to make sure this is up and running properly first before we start thinking about an evolution that might change that process.

K. Corrigan: I'm just clarifying a previous answer from the minister and looking ahead a little bit. When the minister was talking about the fact that serious harm is one situation, this is simply a definition in section 38.01, and that is one of many situations in which a case could end up going to the independent investigations office.

When the minister mentioned the various other ones, I assume the minister is talking about the various situations that are mentioned in the next section, 38.02, which then references further sections — investigation of an incident under section 38.09, 38.10, 44 and 177.1. Could the minister just clarify that that's what those references were to?

Hon. S. Bond: That's exactly correct. I wanted to be able to give the member opposite the scope and the process that might be involved in trying to understand. There will be a lot of understanding as we go through this as to which cases would appear before the IIO. So yes, the member is correct.

N. Simons: If I may, just to get an idea of what kind of caseload that might entail. When the minister was contemplating this particular act, was there any anticipation of how many would, by statute, have been referred to this independent officer in previous years had the position existed? What is the expected caseload of the independent officer?

Hon. S. Bond: A lot of work has been done to try to do the math around caseload, and we've looked at a number of files. Obviously, in-custody deaths and serious harm are easier to determine. But if you look at what's happening in Ontario right at the moment, the number of cases they had in 2009-2010 that their unit actually investigated was 287. If you look at the number of police officers, for example, in British Columbia we have about 9,000. In Ontario there are about 26,000 police officers.

[1720]
[ Page 7682 ]

I'll just repeat that. I was moving rather quickly there. In Ontario the number of cases in 2009-2010 was 287. That was the caseload. The number of police officers, if you look at it — British Columbia has about 9,000, roughly, and Ontario has about 26,000 or so.

Having said that, because of the way that we're going to look at prescribed criminal offences in addition to serious harm and death, we anticipate that our caseload, despite the very large difference in the number of police officers, would be somewhere in the range of 200 and 300 depending upon the prescribed offences. So broader scope, fewer police officers and a similar caseload to Ontario — and that's the best we've been able to do despite looking at all of the numbers.

K. Corrigan: Actually, I think I'll just let that section go right now.

Section 8, section 38.01 approved.

On section 8, section 38.02.

K. Corrigan: This is the section which establishes an independent investigations office. It says: "An independent investigations office is established in the Ministry of Attorney General, the purpose of which is to conduct" investigations. This is the one that mentions a number of situations. I think what I will do, at this point, is…. I am not going to go through all of those and probably will just wait until we actually get to those sections to talk about them.

Section 8, section 38.02 approved.

On section 8, section 38.03.

K. Corrigan: Not sure exactly at what point to ask this question, but perhaps now is as good a time as any. "The Lieutenant Governor in Council may appoint a person as chief civilian director." Through all of this process now, we have the establishment of the office starting with saying it will be established. Then we're going to appoint a chief civilian director, and we're going to go on to say what this chief civilian director is responsible for. What is the budget for this office going to be?

Hon. S. Bond: I think we've had some discussion about this potentially in estimates or somewhere. I'm not exactly sure where. But in fact we are working through the final details of the structure of the IIO. It will report to the Attorney General's ministry, and they will then build the budget necessary to resource the office.

Introductions by Members

N. Simons: If I may just interject with the introduction of a class from Powell River. I would like to welcome about 20 students from Henderson Elementary School in Powell River. They're here with their teacher Rebecca Harrison as well as some other adults — Rebecca Vincent, Erin Gatt and Michelle Merrick. It's just so good to see you guys here. I'm really pleased that they're visiting. Will the House please join me in welcoming them.

Debate Continued

K. Corrigan: We earlier talked about…. I asked questions and the minister answered questions about governance, about oversight, about who was going to be responsible for what, the fact that there will not be a board. One of the things that…. For example, if there was a board, a board would publicly probably — maybe some of it in camera — set things like budget and would talk about the needs and so on.

I'm wondering if the minister can explain to me how this process is going to be transparent when we're going to have a police force that is going to have some budget that is going to be set in the future, when we don't have a public kind of process that we can, all of us in this province, see what the budget is, see what the manpower is, the person power is, and what the roles and responsibilities are within this unit.

[1725]

Hon. S. Bond: The chief civilian director will have exclusive command of the independent investigations office. The budget will be provided by the Attorney General, and just as any budget is subject to discussion in this Legislature, that will indeed, I am certain, be part of the discussion. Perhaps as early as next budget cycle the member opposite will have a chance to have that debate.

The fact of the matter is that this is a model of governance clearly endorsed and outlined by Justice Braidwood, and in fact, the budget will be provided through the Ministry of Attorney General.

K. Corrigan: Other than the RCMP, of course, which is a federal force, are there other police forces in British Columbia where matters like the budget for it and the governance for it are not publicly discussed?

Hon. S. Bond: Certainly, we've debated the issue of the governance model. It is equivalent to a police force, but it is different than a police force, and I think British Columbians expect it to be. Certainly, Justice Braidwood clearly said that he was comfortable and, in fact, requested that it report to the Attorney General. In working through the legislation and the decision to
[ Page 7683 ]
pursue the office, we adhered to the recommendations of Justice Braidwood.

I think what's important is that they will have the same tools, the same ability to do an exceptional job in their criminal investigations, but it will not be the same governance model that municipal police forces have.

K. Corrigan: Well, because I've chosen this moment, and it could be any and many moments, to ask about budget…. I mean, I think that it is legitimate to express a concern where you have the Lieutenant-Governor-in-Council — in other words, cabinet — making the decision about who the chief civilian director is going to be, reporting to the Attorney General, no oversight in terms of policy and procedures and no idea of what the budget is going to be.

You know, it seems to me that in police forces there is a tremendous pressure constantly for increased resources. I think we've seen it in security and safety issues. It was certainly an issue in the Olympics, although we all wanted to be safe in the Olympics. There was an escalating cost associated with the Olympics.

Police forces are necessary and a wonderful part of our communities. I love my local RCMP detachment. It is a wonderful detachment. But the reality is that policing is expensive, and without controls, policing can be very expensive because there is no end to the measures that we could put in place in terms of safety or in terms of sophistication of investigation. I just look, for example, at the PRIME system which has recently been brought in, in this province and for which the fees doubled in one year.

I would like the minister to provide some comfort to me that there is some kind of oversight to what the cost and what this force is going to look like.

Hon. S. Bond: The budget that's created in the Attorney General's ministry will resource the independent investigations office. It will be part of the Attorney General's budget discussions, as any other budget item will be. In fact, the government has by the introduction of this bill made a commitment to bring into place in British Columbia an independent police investigation process. It will be resourced out of the Attorney General's ministry, and it will carry the accountability that budget discussions have in any ministry in government.

[1730]

K. Corrigan: I'm wondering whether, when considering putting together this act, the minister ever considered that because the chief civilian director has to go to the Attorney General for money — go begging every year to cabinet, go begging to government — that it in any way potentially compromises the independence and the effective operation of the independent investigations office.

Hon. S. Bond: Absolutely not. Justice Braidwood recommended that this investigative office report to the Attorney General and, in fact, endorsed completely the drafting of this bill and the creation of the independent office in the way the government presented it.

K. Corrigan: Well, maybe I'll ask the minister: was there any discussion or contemplation about the possibility of having a different model, wherein there would be a board, where there would be a more public oversight of things like, for example, the budget?

Hon. S. Bond: What government did was keep the promise that it made that it would embrace and implement the recommendations in the Braidwood Commission. We did exactly as Justice Braidwood requested that we do. Where there were any variations, they were with his agreement.

We sat down and worked through the model that he had presented to us and agreed to make a couple of changes, one of which has already been referenced — the decision around the Police Complaint Commissioner rather than the Ombudsperson.

In addition to that, government added two additional levels of accountability which were not in the recommendations. Again, Justice Braidwood was very pleased by that. One is the civilian monitor, and the second one is actually a fairly significant degree of accountability. There will be a review conducted in the Legislature by a special committee at year 4. That is significant, and that was the decision of this government.

We went to Justice Braidwood and said: "Because we can't be immediately civilian on the investigative side, we believe we should come back at year 4, have a joint committee, bring it to the Legislature and look very transparently at the success of this office." I think that exceeded the expectations that Commissioner Braidwood had.

K. Corrigan: Well, I do appreciate and am pleased that the recommendations of Justice Braidwood have, for the most part, been implemented in this bill. I'm very supportive of that. I'm disappointed, as mentioned, in second reading. I'm certainly disappointed in how long this has taken. It's unfortunate that it has taken this government so long to do it.

Some of the questions that I'm asking, I'm asking because it seems to me at times that certain sections of this may have been rushed a little bit in order to get this prepared. So I'm asking very detailed questions about the way that this bill was put together.

I do have a concern about the Lieutenant-Governor-in-Council being the body…. That's cabinet, which is closed-door. We don't know what goes on in there. We don't know the reasons for a decision that's being made. It's a political body. The Lieutenant-Governor-
[ Page 7684 ]
in-Council is the body that is appointing a person as chief civilian director.

I'm wondering if the minister could tell me why the decision was made to have Lieutenant-Governor-in-Council — this is such a political body — be the body that appoints the chief civilian director when obviously one of the aims of this act, in creating the independent investigations office, is to create what is perceived as a highly independent office.

[1735]

Hon. S. Bond: In the same vein of the other answers, the Braidwood Commission's title of their report was Why? If you actually look at recommendation 8, it says: "The IIO be led by a director who is neither a current nor former police officer, appointed by order-in-council for a fixed, renewable term of five or six years."

Government didn't sit in a room and decide that it was going to be an order-in-council appointment. It took the report, which is over 400 pages, and gave it credibility and said: "Justice Braidwood came to government. We made a commitment, and one of the substantial recommendations he made was related to the order-in-council." We took Justice Braidwood's advice.

K. Corrigan: Well, surely the minister is not suggesting that the minister simply said: "We will take the Braidwood report and, in almost all respects, implement it." I would assume that the minister considered each and every section carefully and this section, as in others. So is the minister saying that the minister did not think about who it should be that appointed the person as chief civilian director?

Hon. S. Bond: The member opposite is wrong. It is exactly what we said to Justice Braidwood. We said that when he came with his report called Why? about the tragic death of Robert Dziekanski, we would follow his recommendations, and it was only with a great deal of discussion with him that I even contemplated varying the recommendations that Justice Braidwood made.

The government made a promise. They made a commitment, and we indeed said that we would keep those commitments. So only in two circumstances — additional layers of accountability, the civilian monitor and the review; plus the discussion about the Ombudsperson and the special prosecutors — did we have discussion that varied from the promise we made to Justice Braidwood.

K. Corrigan: I don't think the minister is suggesting that where there could be an enhancement or improved accountability or openness or transparency, the minister would simply say no because that's not what Braidwood recommended. In fact, the minister herself has just pointed out that there are civilian monitors, which the minister says is an improvement to what Mr. Braidwood recommended.

With that, I think that it would be an improvement to have the Legislative Assembly as a whole make the appointment of the person who is going to be the chief civilian director of the independent investigations office.

To that end I am moving a proposed amendment to Bill 12, to amend section 38.03 as follows, by striking out section 38.03(1), which says, "The Lieutenant Governor in Council may appoint a person as chief civilian director" and replacing it with a new section 38.03(1).

[Section 38.03: by striking out s. 38.03 (1) and replacing it with

38.03 (1) the Legislative Assembly, by resolution, may appoint as the chief civilian director, a person to exercise the powers and perform the duties assigned to the chief civilian director under this Act.]

I so move it.

Amendment negatived.

K. Corrigan: Well, that was quick — no discussion. I think it's unfortunate that government rejects the possibility, rejects this suggested amendment, which would have had this assembly as a whole appoint the chief civilian director.

[1740]

What that would have meant was that the appointment would have been a public appointment, it would have been subject to discussion, and it would have been subject to debate. Like so many things that this government does, the government has decided that, no, this will be a decision that is done behind closed doors, as opposed to, for example, the appointment of the child and youth representative; the appointment of the complaint commissioner, which is another independent officer; and as compared with the Ombudsperson, which is another independent officer of this Legislature, also appointed by the Legislative Assembly as a whole.

It is a very different thing to me to have a Lieutenant-Governor-in-Council, cabinet, making this appointment without us having any idea. Somebody is going to be marched in here one day, and we're going to be told who the new chief civilian director is. No chance to debate it. No chance to have public discussion in this Legislature.

Mind you, that is sort of the way things have been going around here lately. Of course, we've only sat for around 25 or 30 days in the last year, and we are going to have closure on Thursday night, so we won't be able to fully discuss a whole bunch of the bills that are coming forward. So it is typical of this government to want to keep things more closed, more controlled, rather than more open.

Okay, I do have another question on subsection (2), which says, with regard to the appointment of the chief
[ Page 7685 ]
civilian director: "A person who is a current or former member of a police force or the Royal Canadian Mounted Police may not be appointed as chief civilian director." I'm wondering if the minister could define what is meant by "police force" in this section.

Hon. S. Bond: I think that the definition is clear. If you have been a police officer, you will not be the chief civilian director.

However, I need to digress just for a moment because the member opposite implied that government just ignored a number of processes and decided we were going to appoint by order-in-council.

I will reiterate for the record, one more time, that in fact, in the 470-page report called Why?, recommendation 8, section d, from Justice Braidwood asks the government to do this: "The IIO be led by a director who is neither a current nor former police officer, appointed by order-in-council…." That's not the Minister of Public Safety coming up with that idea. It's Justice Braidwood, who spent a lot of his life's work wanting to reform a system.

I also would like to read to the member opposite…. The other person we contemplated in this was actually of the Davies Commission. Here's what Mr. Davies said: "Officers of the Legislature are created when there is a concern that the executive branch, by definition partisan, cannot impartially deliver or oversee the public service under consideration. The regulation and administration of provincial elections is an example, where the Chief Electoral Office is accountable to the Legislative Assembly. I am not persuaded that the IIO needs to be an officer of the Legislature."

So two significant inquiries in British Columbia, two commissions, came to government and said: "Here's the model we would like you to use." In both cases they agreed that an order-in-council, in this case, was appropriate. That needs to be made incredibly clear on the record.

[1745]

N. Simons: With all due respect to the two individuals quoted, I think that there is an opportunity for government to go beyond recommendations of any inquiry. One would possibly ask themselves: why was it that government decided to appoint the Representative for Children and Youth in a different manner? Why was it that this same government made other decisions that seemed to reflect this need in the public to have not just arm's length but the obvious arm's-length position?

I'm not saying that it's necessarily a bad thing. I don't think that my colleague is saying that either. But I would say: what was the decision-making process not to go further when we've had such a significant number of concerns raised in this province around this issue?

I don't suppose, you know, anybody would have had a problem if there was an appointment or a selection committee, a bipartisan committee, set up to select this individual. I would say that those are good recommendations from both the Davies report as well as the Braidwood Inquiry, and those are fair. The government still had to make a decision whether or not that went far enough, and it's an absolutely fair question, in my mind.

I'm thinking that it would give an opportunity for the public to see an open and transparent process — which, I might add, would allow for the possibility of a person who may have been a police officer between the ages of 20 and 24 and gone on to a successful career as a doctor for the next 40 years. That person would be unable to be the civilian oversight. I think that only when you have a public and open discussion would the fears and concerns and suspicions of the public be alleviated. It's not necessarily what that person was or what that person did. It's what the qualifications of that individual bring to the job, and that is seen in a public and open way when there's a deliberate process that is undertaken by a bipartisan committee.

I simply would suggest that as much as the recommendations…. They're sort of like…. At least there be an appointment from the Lieutenant-Governor-in-Council. That's not to say that there shouldn't be another way of doing it.

I would suggest, with respect, that another way of doing it would not have eliminated a large number of qualified former police officers who are maybe professors now. I've studied with police officers who are professors, and I would say that they probably carry with them the greatest respect for human rights of people that I've met. To simply dismiss them because you want to have a process of appointing the person…. I'm just saying that there could be a reason for an explanation as to why the government didn't go even further when the opportunity arose.

Perhaps it was not just because these two individuals said it, and that's a good reason in itself, but was there any further contemplation on the part of cabinet in this regard?

Hon. S. Bond: We were very concerned about accountability. That's why we added two additional layers, which, as I said on numerous occasions, go above and beyond the recommendations to improve accountability from our perspective, and that's the civilian monitor.

We also believe that the other independent units will probably eventually move, and may be doing that as we speak, to look at a civilian monitor in addition to the chief civilian director. There is an enormous discussion that takes place about the ability to conduct independent investigations without utilizing police officers. It is very challenging. In fact, in Alberta, the model uses current police officers, and in Ontario, they use former police officers.

Part of the challenge we face is the skill set necessary to conduct criminal investigations that we want, ultimately, to be successful.
[ Page 7686 ]

So I think that my point is simply that when it came to the decision around where the appointment should be made, government responded and recognized the two commissions that had been provided to us. In addition to that, we added extra layers of accountability through a civilian monitor and a special committee in the Legislature.

I think there is transparency. There is going to be an opportunity for a committee of the Legislature to review the progress we've made, particularly in regard to how quickly we can move to a completely civilian organization.

[1750]

K. Corrigan: I actually agree, I think, with the minister on subsection (2), that it is a good move, probably, to have a person who is a current or former member of a police force or the Royal Canadian Mounted Police not appointed as the chief civilian director, although certainly my colleague thinks that there probably would be some excellent candidates, and there may well be.

It's a matter to ensure and to be seen to be ensuring that the individuals who are appointed are separate from the police forces in British Columbia and sometimes, what had been talked about, some of the cultures of the police force. Now, I suspect probably that means that an incredibly good candidate might not have the opportunity, but on balance, I think it's a reasonable provision to make.

On the term of office, I'm wondering if the minister could explain why the choices were made for those terms of office. Is this consistent with, for example, the appointment of the Auditor General and other independent officers of the Legislature?

Hon. S. Bond: It is consistent with the independent Police Complaint Commissioner in terms of term. Again, it was also recommended by Justice Braidwood.

Section 8, section 38.03 approved.

On section 8, section 38.04.

K. Corrigan: This section sets out the responsibilities of the chief civilian director. It says: "The chief civilian director is responsible for…(a) the management, administration and operation of the independent investigations office; (b) overseeing investigations conducted by the independent investigations office under this Part" — in other words, investigations they will be dealing with because of those various sections that will automatically refer investigations to them, which will be when "a person may have died or suffered serious harm as a result of the actions of an officer" or an officer's prescribed provision of the Criminal Code or another law or other situations.

I want to get back to the issue in this section, again, about budget and control of budget. Here the civilian director is given responsibility. In the following section it says — I'm jumping ahead a bit, but I think it's all part of the same question — that the chief civilian director will appoint "the employees the chief civilian director considers necessary to enable or assist the chief civilian director in exercising powers…."

How is it that when the chief civilian director has the ability to manage, administer and then later make the decision about what employees are necessary in order to fulfil the chief civilian's obligations under this act…? How is this going to be navigated, when the budget is going to be controlled by the Attorney General?

Hon. S. Bond: Obviously, there has been a great deal of work and time spent putting together the concept of an independent investigation office. So there will be a framework.

[1755]

There will be a plan that looks at the Alberta and the Ontario models. In essence, the resources will be determined based on the size and shape of that investigative office. The chief civilian director is responsible for managing, administering and overseeing the independent investigations office and will work within the budget that is ultimately determined by the Attorney General.

K. Corrigan: Maybe I'll put a scenario to the minister, then. What if the chief civilian director, who must under section (2)(b) "ensure compliance with the director's standards as they relate to the independent investigations office…"? I assume that "director" is referring to themselves as a civilian director.

The act implies a certain amount of independence and decision-making by the chief civilian director. I'm wondering how it is expected that this is going to fit within the budget-making process that happens in the Legislature.

Hon. S. Bond: As I pointed out earlier, the office will report to the Attorney General. In essence, I carry through the legislation and help design the model and draft the legislation, but ultimately, the Attorney General will work to create a budget that is based on the practices that exist in both Alberta and Ontario. We will look at that.

A previous member opposite asked about caseload. We will look at what we anticipate the numbers will be. Just like any other organization, there will be a budget created.

A chief civilian director. There will be a position advertised. That person will be selected and will operate within the budget that's been created based on the model for which we will seek someone to be the chief civilian director.
[ Page 7687 ]

K. Corrigan: Is the minister suggesting that the way this is going to work is that the budget is going to be set first? The structure of this office is going to be set first and how it's going to be operated, and so on…. Location. What about location? What kinds of things are going to be decided before the chief civilian director is appointed by cabinet?

[1800]

Hon. S. Bond: We are anxious to help rebuild public confidence in the police officers in British Columbia by getting this office up and running. In fact, we've faced criticism from the member opposite for the fact that we haven't been moving quickly enough.

We are working on this simultaneously. We are working on preliminary budgets based on things like extrapolating numbers from the Ontario and Alberta model. We're looking at how that might work in British Columbia. We are, obviously, going to make the first major appointment, which is the chief civilian director. I want to get moving on that as quickly as possible. Then that person will have, as the head of any organization does, the opportunity to have input and dialogue and shape the office that he or she will direct. So we are working on this as quickly and as carefully as possible.

We're looking at a number of things simultaneously. In terms of location, one of our major concerns is that the investigative team be able to move about the province as quickly and efficiently as possible. So we'll be looking at a location that allows the office to do just that.

K. Corrigan: Well, I'm not really sure. You're saying simultaneously. What comes first: the budget or the appointment of the chief civilian director?

Hon. S. Bond: The government has been working on this plan for a year in order to design a model that will work for the province, and "simultaneously" means "at the same time." We are going to continue to build a framework around what the office might look like in terms of the dollars that are required, and that's the responsible thing to be doing.

At the same time, we are in the process of drafting and finalizing a job description. We don't expect to be able to find a chief civilian director overnight. We need to make sure that the appropriate people have the opportunity to apply. So we're working as hard as we can simultaneously to look at what the office will look like and also finalizing a job description and an opportunity for people to be considered for the chief civilian director.

Section 8, sections 38.04 and 38.05 approved.

On section 8, section 38.06.

K. Corrigan: Again, the questions that I was asking previously about what controls are in place, how do we know what the budget is going to be and so on become very clear in section 38.06, which talks about the independent investigations office staff and investigators. So 38.06(1) says: "The chief civilian director may appoint…the employees the chief civilian director considers necessary to enable or assist the chief civilian director in exercising powers or performing duties of the chief civilian director under this Act."

It goes on to say in subsection (2): "The chief civilian director may appoint…any of the following persons to serve as investigators…" and says who that can be. Then: "The chief civilian director may retain consultants, experts, specialists and other persons the chief civilian director considers necessary to enable or assist the chief civilian director in exercising powers or performing duties of the chief civilian director under this Act."

Again we have what seems to be power of the chief civilian director to make the decisions about what is necessary, and yet we don't understand how this is going to fit within a budget that is going to be set by the Attorney General.

So in these specifics, I'm wondering if the minister can tell me what the process will be, particularly if somebody is chosen and the budget hasn't been set and suddenly this person says: "This is what I need." Or the budget has been set and the person who is appointed as chief civilian director says: "These are the things that I need to do."

I think my question goes back, again, to the amendment that was suggested, which said that the person should be appointed by the Legislative Assembly generally. It's very clear that whatever the chief civilian director believes is important, is in some way definitely going to be limited by the budget and is going to be limited by the fact that the chief civilian director is going to report to the Attorney General.

[1805]

Hon. S. Bond: As in any budget process, taxpayers in British Columbia expect us to be reasonable about this as well. We're not going to give the chief civilian director a blank cheque. What we are going to do is do the work so that as we search for the person who will ultimately be the chief civilian director, there is a notional budget and framework that would look at experiences in Ontario.

Today we could tell you how many cases have been looked at in Ontario. We can look at the way the model is operating, the same as Alberta. I'm sure the member opposite is not suggesting that we sit and twiddle our thumbs while we look for a person of the stature that we need to find for the chief civilian investigator. There have been hours and hours of work put into looking at a model for British Columbia.
[ Page 7688 ]

The point of this section goes to the point that the member opposite made earlier. The government isn't going to be hiring the staff. They're not going to be choosing the investigators. This does delegate authority to the chief civilian director. That's precisely what a civilian-led organization is about.

In the meantime, we are going to work and do our best to find a way to articulate what the office might look like, generally speaking, look at a budget.

We should be clear. By the time we actually find the chief civilian director, we're not looking at a full budget year either. We need to make sure that we are transitioning to a budget that will support the office, and we're going to do exactly that, but we are going to continue to work at the questions like where the office might be located, making sure we have job descriptions ready for the chief civilian director and doing the prudent fiscal work to prepare a notional budget.

We will work in conjunction with the selected person as soon as we have that person in place.

[L. Reid in the chair.]

K. Corrigan: I think the minister is saying that there will be a notional budget in place prior to that person being hired. So I'm wondering if the minister has any idea at all what the budget for the independent investigation office is going to be, because I believe the minister has said that this will be in place, I think, before the end of the year. So I would assume a lot of that work has been done, and I'm wondering if the minister could come up with a guess.

Hon. S. Bond: In fact, we do not have preliminary numbers. That is work being undertaken as we speak by the Attorney General, since this office will report to him. Our team will continue to support the Attorney General's ministry as we continue to see the model evolve and also as we work to secure a chief civilian director.

K. Corrigan: I'm just wondering. In section 38.06(5) it says: "The chief civilian director may retain consultants, experts, specialists and other persons the chief civilian director considers necessary to enable or assist the chief civilian director in exercising powers or performing duties of the chief civilian director under this Act."

The word "retain." I'm wondering if I could have a definition of what is meant by retain.

Hon. S. Bond: One of the things we want to be sure to do is give the chief civilian director the opportunity to have flexibility about the expertise that he or she may need in a particular investigation. For example — Kathy gives me a good example of that — there may be need for a traffic reconstructionist. It doesn't mean you necessarily have to have a person on staff full-time to do that. It allows the chief civilian director to find a way, where necessary, to ensure that we have the expertise, as I said previously, to ensure that any charges that are laid are actually carried through successfully in the courts.

K. Corrigan: Does retain mean…. Would it be more a contracting kind of situation, or are we talking here about hiring and having on staff?

[1810]

Hon. S. Bond: No, I think the point of this section is to give flexibility for the chief civilian director to ensure that, as necessary, the appropriate experts may be retained for a particular case, a particular period of time. There certainly may not need to be experts of, for example, traffic reconstruction on staff full-time. This allows the chief civilian director to have that discretion.

K. Corrigan: I am just trying to get my head around what this office is going to look like and how this is going to work. We don't know what the budget is. We don't know whether we're going to appoint the director first. We don't know who's going to make the decision about what is necessary.

I do appreciate that the work is being done, but I think it's important, before you pass an act like this, that it's clear that there is a plan in place and that we know the powers, the scope, the governance and what this office is going to look like. We will be passing this today, but I have a lot of unanswered questions about how these decisions are going to be made and what it's going to look like.

Hon. S. Bond: For the past two hours that's exactly what we've been discussing. This bill lays out the road map. It basically says that in British Columbia, we're going to have an independent investigations office with a chief civilian director who has the authority to hire and make decisions about the experts that are required, who will actually manage the office, look after the management of the investigations office.

They will have the ability to hire staff and experts as necessary. Today I don't have a job description for every position, because we haven't hired the chief civilian director. The member opposite makes it sound like we're here with a plan on the back of a napkin. That actually is, with all due respect, fairly disrespectful to the people who've spent a year of their life trying to sort out how to move this forward as quickly as possible to honour the commitment that the government made to Justice Braidwood.

There is a framework. This is the road map. This lays out the plan that eventually will be shaped by the chief civilian director. I have every confidence that with the
[ Page 7689 ]
expert team both in the Attorney General's ministry and the Solicitor General's ministry, they will carry this through in a very competent manner.

K. Corrigan: I have many more questions in this section and in some of the subsections, but I know that we are going to have to stop debate, that we've been limited to stopping in a few minutes. I will actually be letting a couple of sections go by that I would have liked to have asked some questions about.

Section 8, sections 38.06 and 38.07 approved.

On section 8, section 38.08.

K. Corrigan: This is the section that appoints civilian monitors. It says: "The chief civilian director may appoint a person who is not a current or former member of a police force in British Columbia or the Royal Canadian Mounted Police to review and assess the integrity of a specific investigation in accordance with this section and the terms of reference, if any, established by the chief civilian director in the appointment."

I'm wondering if the minister can just describe to me at what point — I know it's in the section — the monitor would come in and what their position would look like.

[1815]

Hon. S. Bond: This is one of the additional levels of accountability that we made a decision to add, which goes above and beyond what Justice Braidwood asked for.

In essence, it is about the integrity of a process. It's about the integrity of a specific case. If the chief civilian director believes that there may have been potential bias — for example, conflict of interest or whether or not a case has been handled in a culturally sensitive way — he or she would have the opportunity to ask a civilian monitor to review the process.

It's not about redoing the investigation. It's about the integrity of a case and looking at whether or not there is the potential for anything that would have compromised the integrity.

K. Corrigan: So the intention is that the civilian monitor, who is not supposed to participate in the investigation, would come in after the investigation is complete because, for example, the chief civilian director may have concerns about the integrity of a particular investigation.

Hon. S. Bond: It does not require for the investigation to be complete. In fact, the provision of 38.08 allows the monitor to observe, review and assess an investigation. They can't participate in or conduct an IIO investigation. So they can't redo or participate in the investigation.

Their job is to do exactly what the title suggests, and that is monitor the integrity of the case for situations like I mentioned — a potential conflict of interest or bias. Once again, an additional level of accountability and certainly ensuring that it is even more arm's length from the concern that many of the public have expressed about police investigating police.

K. Corrigan: Taking the example that the minister has provided, I'm wondering what kind of situation the minister would anticipate, possibly, when you're talking about conflict of interest or bias. What kind of situation are we talking about there?

Hon. S. Bond: One of the things that we discussed fairly significantly in the creation of this is that this is an emerging best practice. We believe that in order for British Columbia's model to be as progressive and as relevant as possible, we wanted to embrace this concept.

Specific circumstances are hard to describe, but for example — and I'm trying to think of how to do this carefully — with a First Nations circumstance, we want to be sure that an investigation is done in a culturally appropriate way. So the civilian director may decide it's important to have a civilian monitor. Certainly, we've seen cases where I'm sure British Columbians would have felt much better if those investigations had had a civilian monitor or something comparable to that.

But most importantly, it is an emerging best practice, and we felt it most appropriate to include it, as other jurisdictions are contemplating it as we speak.

Section 8, section 38.08 approved.

On section 8, section 38.09.

K. Corrigan: A couple of questions on this section. This says that "When an officer is at the scene of an incident where it appears that (a) a person may have died or suffered serious harm" — taking note of what serious harm is — "as a result of the actions of an officer, whether on or off duty, or (b) an officer, whether on or off duty, may have contravened a prescribed provision of the Criminal Code or a prescribed provision of another federal or provincial enactment," then they must notify the independent investigations office in accordance with the guidelines.

[1820]

This is really the meat of the bill. I know this is again going to be a cabinet decision. It's going to be by regulation. I'm wondering if the minister could give us some idea of what is contemplated as "…a prescribed provision of the Criminal Code or a prescribed provision of another federal or provincial enactment" which would trigger the intervention of the independent investigations office.
[ Page 7690 ]

Hon. S. Bond: Again, we want to be thoughtful about how we describe this, because there will be further work done in terms of the list of prescribed criminal offences. Again, there are three areas.

The first would be offences against basically what we consider justice. An example of that would be obstructing justice. There may well be other offences that are included, but we're going to obviously have some discussion about what that would look like.

In terms of serious offences against persons, an obvious one would be sexual assault. Again, we will look at how we prescribe the criminal offences, and that may be one of them. In terms of undermining public confidence, an example of that might be trafficking in substances.

Those are examples of prescribed criminal offences in those three areas, and much work will be done to look at what else may be included on the list of prescribed offences.

K. Corrigan: In subsection (2) it says: "Until IIO investigators arrive at the scene of the incident, the officers at the scene must take any lawful measures that appear to the officers to be necessary or expedient for the purposes of obtaining and preserving evidence relating to the matter."

A logistical thing, and I know there is a lot of work to be done. But what is the expectation, for example, if an incident was to occur in northern British Columbia and there was a shooting. I mean, something, I guess, like the Bush situation. How is this section going to work?

I don't anticipate that the IIO is going to have investigators all over the province — or maybe it is, but I can't imagine that. So what are going to be the mechanics that will…? And how is that investigation going to happen when you have, for example, an offence that takes place in northern British Columbia?

Hon. S. Bond: The officers at the detachment in the jurisdiction where the incident occurred would be required to preserve the crime scene, exactly as they would today, and immediately contact the independent investigations office. In fact, there would be a duty to report, and the IIO would make every effort to move as quickly as possible to that part of the province. Obviously, that's why location is very key.

We've looked at the other models as well. There is discussion about whether or not there needs to be a regional geographic presence, and again we have to look at the context of the entire office. But the major responsibility is for the detachment to secure the crime scene and contact the IIO, and we would expect there to be an immediate takeover of that case by the independent office.

K. Corrigan: One of the criticisms that has occurred in serious incidents that would be covered by the independent investigations office is the situation where the local police officers or the police officers involved have the opportunity to confer with each other, frankly. I think in Braidwood, the report made it very clear that that was a concern.

[1825]

I think the public would be comforted to know that there is no possibility that police officers can act in a way any differently than any witness to a crime can. I'm wondering what there is going to be in place to ensure that, particularly in remote jurisdictions, some of what has been clearly really concerning behaviour by officers will be prevented under this model.

Hon. S. Bond: In fact, there are legal requirements for police officers to meet standards. We've actually talked about that in this very bill. I think that the fact that the RCMP and municipal police forces stood up with us and Justice Braidwood and said, "We know we have to do things differently, and we welcome the independent investigations office." That will help not only the public understand and recognize that police officers are professionals and they work very hard every day in our province….

There will be protocols in place. There will be an expectation that in the event of an incident that fits the mandate of the IIO, there will be a duty to report, there will be a duty to secure the scene and to adhere to the professional standards that policemen and -women are required to follow every day in this province.

The Chair: Hon. Members, as per the schedule, shall sections 8 through 22 pass?

Sections 8 to 22 inclusive approved.

Title approved.

Hon. S. Bond: I move that the committee rise, report the bill complete with no amendment.

Motion approved.

The committee rose at 6:29 p.m.

The House resumed; Mr. Speaker in the chair.

Report and
Third Reading of Bills

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

Bill 12, Police (Independent Investigations Office) Amendment Act, 2011, reported complete without amendment, read a third time and passed.
[ Page 7691 ]

Hon. I. Chong: I move that the House do stand recessed for 30 minutes.

Mr. Speaker: Hon. Members, this House stands in recess until seven o'clock.

The House recessed from 6:30 p.m. to 7:02 p.m.

[Mr. Speaker in the chair.]

Hon. P. Bell: I call second reading of Bill 11, intituled Yale First Nation Final Agreement Act.

That said, I am pleased to rise and allow my colleague the Minister of Aboriginal Relations and Reconciliation to speak to her act.

Second Reading of Bills

Bill 11 — yale first nation
final agreement act

Hon. M. Polak: It is my great honour to rise in the House today to move second reading of this historic bill.

This is the third treaty to reach the floor of the House under the made-in-British-Columbia treaty process, and I would like to take a moment today to provide some context, to tell the story of how we arrived at this remarkable moment.

Most of us know Yale as a small community outside of Hope, located deep in the beautiful Fraser Canyon. You may be surprised to hear that at one time Yale was said to be the largest city north of San Francisco and west of Chicago.

[L. Reid in the chair.]

The gold rush in British Columbia lasted only a relatively short period of time, but it was a key factor in the creation of British Columbia, bringing colonists, settlers, prospectors and vagrants to the country, specifically to the Fraser Canyon.

In fact, the first gold strike that started the rush was at Hills Bar or Qualark, which is adjacent to Yale's Qualark Indian Reserve 4. In the mid 1800s Yale was a real wild west town. Miners came to the Fraser River from all over the world, and more than 30,000 of them passed through the town. Many of their descendants are still there.

Every sandbar along the mighty Fraser River was full of prospectors, and hotels and saloons sprang up everywhere. Lawlessness was the order of the day, and robberies, murders and claim-jumping were everyday occurrences.

Initially, First Nations tried to accommodate the newcomers, and they were willing to share the river. Increasingly, however, waves of settlers panning for gold in the Fraser from the United States, Europe and even Asia made tensions run high. The staking of claims up and down the Fraser meant that Yale's traditional territory was disappearing to become the property of newly arrived entrepreneurs.

Yale lies at the southern entrance to the almost impenetrable Fraser Canyon and was a challenge from the very earliest days, whether travelling by foot, by horse or by boat. Hudson's Bay Company traders used native footpaths they later called the Douglas Portage and Anderson Trail. Mule trains and later the Cariboo Wagon Road, initiated by James Douglas, were used to access the canyon.

Later the Canadian Pacific Railway replaced the trails with rails. On the opposite side of the river the Canadian National Railway was laid down on a parallel path. In 1926 the Fraser Canyon Highway was built. The final transportation link was completed in 1965. The Trans-Canada Highway ran through Yale with a total of seven tunnels cutting through the previously impassable mountains. From those days in the gold rush more than 150 years ago, people trekked in and out of the Fraser Canyon, and in fact they've never stopped.

[1905]

While many British Columbians look back on the 1950s and '60s with nostalgia, for many aboriginal Canadians it was a time of realization that their cultures could disappear. What many thought of as progress left First Nations communities isolated on reserves, their cultures dismissed as primitive. Aboriginals had neither the vote nor, in most cases, a tradition of private property. By the time they realized their way of life was in danger of disappearing altogether, they had almost no means of making their claims heard.

Yale First Nation is a small but proud salmon-fishing nation in the Fraser Valley north of Hope, whose claimed traditional territory covers 104,000 hectares. Early generations of Yale people were artisans and craftspeople known for their fine coiled cedar-root baskets.

They were a pastoral people, gathering mushrooms and berries from the surrounding mountains and fishing the salmon and sturgeon. They dried the salmon as they do now, on racks set up along the Fraser River where warm, dry winds preserved the flesh for leaner times. They hunted deer and moose in the mountains rising up on both sides of the Fraser.

The Yale people traditionally lived in large, single-room dwellings dug from the earth and covered in sod, with a single hole in the top that allowed smoke out and people to enter and leave. The sod mounds, the remains of which can still be seen today, were located close to the shores of the Fraser River upon which they depended for their very existence.

The story of the Yale people is a tribute to the resilience and adaptability of a people who would not allow the future to leave them behind but who instead sought rec-
[ Page 7692 ]
onciliation of their rights, title and a way of life from the province of British Columbia and the nation of Canada. While people from all around the world were coming to the Fraser Canyon to make their fortune in the gold rush, aboriginal people around the new country of Canada were seeing their futures eroding.

In 1867 Canada was created through the British North America Act. It carved off jurisdiction for lands and resources to the provinces but retained responsibility for aboriginal peoples and their lands for the federal government.

In 1876 the Indian Act came into force. It was modified repeatedly in the decades that followed. The Indian Act oversees the reserve system, band governance and the designation of native identity under the Indian register. It also oversees the federal government's obligations in broad areas of housing, education and financing.

The Indian Act was a double-edged sword for aboriginal Canadians. As the framework through which Canada discharged its obligations to First Nations, it defined their unique standing in relation to the federal government. But it also left aboriginal people with little control over their lands and their resources.

Under the Indian Act, municipalities and companies could expropriate reserve lands for roads, railways and other public works, as was done for the railways that were built through Yale. With few exceptions, land title is held by the Crown. It can be neither borrowed against nor inherited. As a result, simple things that many Canadians take for granted are out of reach for most First Nations people living on reserves, such as acquiring a mortgage to purchase a home.

The boundaries of the Yale reserve were laid out over a hundred years ago around the site of their traditional village. So 217 hectares were carved out for their new permanent home.

In speaking about the reserve system, the late Yale Chief Lawrence Hope once noted: "We are put on a little piece of land called Indian reserves. We cannot step off that land. On that piece of land they give us, they say: 'Okay, you can farm, but you can't go across that line. That line is a wall.'" Throughout most of Canada, historic treaties between colonial governments and indigenous groups set out the rights of aboriginal people with respect to land, hunting and fishing, but British Columbia's early treaty work was never completed.

James Douglas, chief factor of the Hudson's Bay Company and later governor of Vancouver Island, made only 14 purchases from native communities between 1850 and 1854. The Douglas treaties covered less than 1 percent of the colony and left the rights and title of the overwhelming majority of native groups unaddressed.

The Mainland became a direct colony in 1858, and Douglas left the Hudson's Bay Company to become governor of the Mainland as well. But he made no treaties there, due in part to the shortage of funds from Britain, so British Columbia became somewhat unique among the provinces of the dominion.

[1910]

After Treaty 8, which the federal government alone negotiated with northern aboriginal groups in 1899, there would be no more treaties in British Columbia until the modern day. After a slow start, the B.C. Treaty Commission process is finally building momentum.

The Tsawwassen First Nation treaty took effect April 3, 2009. The Tsawwassen treaty is the first modern urban treaty and the first treaty completed under the British Columbia Treaty Commission. The community is young and growing, with 40 percent of its members under the age of 18.

Since their treaty was implemented, the Tsawwassen Legislature has enacted 26 laws. The treaty also provided the First Nation with tools necessary for it to participate in the local economy. Already, after two years, we are seeing success, as Tsawwassen moves forward on a number of development projects.

It was just over a month ago that the Maa-nulth treaty took effect — April 1, 2011. Like Tsawwassen, Maa-nulth First Nations now have the tools to participate in the local economy.

These First Nations are already acting on the opportunities available to them. Yale is the next final agreement, and following this, there are other treaties that are very close.

Today some people still wonder why we negotiate treaties in British Columbia. The answer is that we are moved by interconnected social, economic, constitutional and legal motivations to make treaties. But taken together, we make treaties because it is the right thing to do.

We have inherited uncertainty because of our ancestors' refusal to address reconciliation of aboriginal and non-aboriginal interests. Treaties are our major instrument for recognizing and reconciling the rights and interests of First Nations with those of the Crown, and they are always our first priority. We think that they are the best and most complete solution for not just land and title issues but also resource-sharing issues, and even taking a look at the whole gamut of issues that surround closing the gap for aboriginal people on socioeconomic issues.

The social requirement is obvious and pressing. Aboriginal people must enjoy the same quality of life as other British Columbians. Yet at this point in time they do not. Living under the restrictions of the Indian Act, they do not enjoy the freedoms other citizens do.

The economic argument for treaty is not mere self-interest. It's true that the implications of not addressing our outstanding land question affects B.C.'s economy and discourages investment in some cases. But uncertainty over ownership of land impedes the development of aboriginal communities and econ-
[ Page 7693 ]
omies as well. All our social and economic destinies are inextricably wrapped together.

For the Yale First Nation, the treaty contains tools for harvesting economic benefits, building improved infrastructure for residents, and creating jobs and business opportunities. As important to Yale members are the benefits and opportunities that a treaty will provide to the youth and children of Yale, who will grow up with the advantages treaties provide both socially and economically.

The Yale people are entrepreneurial in spirit and look forward to the many potential opportunities treaty will bring — such things as gravel extraction, forestry and opportunities for independent power projects.

Yale First Nation already has a respectful, friendly relationship with its neighbours in Hope and the Fraser Valley regional district. Through the final agreement, Yale becomes a member of the regional hospital district on the effective date of the treaty, and it is possible for Yale to become a member of the regional district in the future, when they are ready. It allows Yale the chance to negotiate with its neighbours to secure mutually beneficial agreements, including service agreements.

The biggest alteration will be to the bureaucratic fences that have long separated Yale and their neighbours. Though they have been neighbours for more than a century, the final agreement will bring these neighbours into closer reliance on one another. Yale will be able to operate from a new position with its business neighbours as well, a position of influence and strength.

Chief Robert Hope has spoken about the possibilities under treaty, saying: "The federal government owns our Indian reserves. We don't own them. We're using them, but we don't own the land, so we could never borrow money against it."

That was before treaty. When asked a few years ago about the benefits of having a treaty, he said: "Post-treaty, this is going to be a better place to live for our children. I would like the standard of living for the Yale First Nations people to be at least the same as our non-native neighbours."

[1915]

He added: "Young people have to understand that this is their treaty. We may have negotiated it, but we've done so with young people in mind."

I'd like to extend congratulations to the negotiators for Yale First Nation and the provincial and federal governments, who have worked together for more than 15 years to build the treaty that is before us today. We are grateful to you for your dedication and your determination.

Of course, when speaking about the Yale First Nation, I must recognize Chief Robert Hope in particular, who joined us in the chamber on May 18. Chief Robert Hope is the son of the late Chief Lawrence Hope. Robert Hope first became Chief more than 30 years ago. He is the father of two and grandfather of six.

As Chief for more than 30 years, Chief Hope has been involved in the negotiations for this treaty since the very beginning, and many of his important life events have taken place against the backdrop of negotiations with government. His contribution to the success of the Yale treaty is difficult to overstate, and yet we cannot overlook the vision and wisdom that were clearly passed down from his father, the late Chief Lawrence Hope. Both men have shown, through their commitment and tenacity in achieving this momentous agreement, the hope that lies at the heart of all great causes.

The province is committed to negotiating treaties with First Nations to bring certainty to land and resource ownership, prosperity to aboriginal communities and recognition of First Nations rights. Treaty is a complete package providing tools for economic and social development, taking First Nations out of the Indian Act and providing governance authority.

But the end result of all the work we do is self- determination for aboriginal people across B.C., and that includes their choice of how they get there and what tools they choose to use along their journey. The provincial government has developed a flexible tool box, including revenue-sharing and shared decision-making. These non-treaty agreements are building blocks to a fuller reconciliation.

For some First Nations communities, those building blocks are enough. However reconciliation occurs, it is one of the foundations of the new relationship, along with respect and recognition. We will continue to build that relationship incrementally, one community at a time.

We can never right the wrongs of the past. We are committed, though, as a government to advancing the principles of the new relationship. It is and will continue to be the cornerstone of our government's direction.

The examples of success as a result of the new relationship are too numerous to list here. Since 2005 the provincial government and First Nations have together achieved agreements that touch every corner of the province and range from the symbolic yet powerful recognition of First Nation names to practical, on-the-ground agreements that increase economic and legal certainty for resource and land use. Never before in the history of our province have we seen the commitment and tangible successes we are seeing in British Columbia through the new relationship. With the Yale treaty, we add to these successes.

We are witnesses to a remarkable point in time. More than 120 years ago the wall that was created by the reserve system was placed around the Yale people. Today we remove a significant section of that wall. The dream of the late Chief Lawrence Hope that the Yale people should not dwell behind a wall but should have the freedom to go in the direction of their choosing is coming true.
[ Page 7694 ]

Through this legislation, under the leadership of Chief Robert Hope, the Yale First Nation can realize the elder Chief Hope's dream. As we approach this significant milestone, I am proud that the province is reconciling the past through the new relationship, that we are building a relationship with First Nations and aboriginal people founded on the principles of mutual respect, recognition and reconciliation. I am honoured to be here as we enter into debate on this legislation to reconcile the injustices of the past and move forward to a more just and inclusive future for our province.

I will close my remarks with a quote from the late Chief Lawrence Hope who, I think it is clear, was a man of vision. He said: "We accept you as a people. You have taken up the land and used it for your own good, and that's fine. Now give us a chance to use some of that land for our own good and improve our economy and dignity — and not only my dignity, but your dignity also."

[1920]

S. Fraser: I take my place in the debate today on second reading of Bill 11. I would like to begin by congratulating the Yale people and Chief Hope, recognizing his father, Chief Lawrence Hope, and the work that's been done to get out from under the yoke of the Indian Act — finally, I'm sure. It's a huge accomplishment for the people of Yale, and it's something that all First Nations in this province, in this country, strive for.

I would like to just elaborate. The Indian Act, to my knowledge, is the only race-based piece of legislation in any country in the world left today. I would also like to just remind that apartheid was based at least partially on our Indian Act. So it is a big deal for any nation to be able to achieve independence from that act. I applaud the Yale people and would like to celebrate with them in this great moment.

We are in second reading. We're in a session here that's very abbreviated, so we do not have much time, Madam Speaker. I would like to, for the record, say that we have an hour and 25 minutes today to debate all of second reading, to my knowledge. So I have to be brief; there are other speakers that also need to speak.

This is the third treaty under the B.C. treaty process. The minister is correct. She did omit, though, another treaty — the first modern-day treaty at Nisga'a. I'm not playing politics here, but I would suggest the minister might be. It would be a glaring omission to just omit Nisga'a in her discussion of modern-day treaties. I do acknowledge that the treaty process has led subsequently, since Nisga'a — the treaty process that the New Democratic government brought in — to Tsawwassen, Maa-nulth and now Yale, and others coming forward.

By definition, I believe the treaty process was always intended to be and should always intend to be apolitical. Treaty is about justice, in my opinion. It must span the politics of this place, whether it's past, present or future politics. There will be other governments that follow, of other stripes — maybe other stripes than what we have on both sides of the House, at some point in time. The treaty process should span all of that. So I'd just like to clarify that omission.

Again, this treaty for the Yale people, this agreement, includes self-government provisions, economic opportunity, and ownership and management of minerals, of forestry and other resources on treaty settlement lands. It phases out tax exemptions, and it provides the Yale people with a capital transfer of $10.7 million, economic development funding of $2.2 million and 1,966 hectares of land owned in fee simple.

The Yale First Nation has been in this treaty process since 1994, and I support their patience and the long years of work to get to this place in this session of this legislation.

With that in mind and with that celebration of the Yale treaty and the Yale people, I do need to point out, I think, some problems with the treaty process as it unfolds.

I have just been through an event in my constituency with the Maa-nulth treaty. There was a territorial issue there. The Tseshaht First Nation, whose territory was smack in the middle of Maa-nulth treaty lands, was not recognized in the treaty. They were not part of the treaty; the Tseshaht were not. They achieved an accommodation days before the implementation of the Maa-nulth treaty — very close. But because an accommodation was achieved between the five Maa-nulth nations and the Tseshaht, all were able to celebrate and take part in that celebration on behalf of the Maa-nulth peoples.

[1925]

The recognition of the Tseshaht, their traditional territories, the access and use of those territories was essential for that to happen. That is true nation-building. I fear 17 years in the treaty process…. In this one, the latter years have been handled somewhat differently. We in the opposition were given really no notice of this bill. We have had no ability whatsoever to have input into this process. I lament that, Madam Speaker. I think treaty is much bigger than all of us in this place, but we all must be part of it, and we all must help celebrate on behalf of the people of British Columbia.

Other nations that have issues proximal to the Yale people must also have input. I must point out that supporting the Yale people and the work they've done to this point and celebrating the treaty…. I do not mean to diminish that in any way, shape or form. But Stó:lô people, too, have rights to the canyon, have the rights to have a say in this process to ensure that the rights of the 10,000 Stó:lô are also recognized — whether directly in the treaty or not is, I guess, a matter for debate.

I would submit that to get to this point, second reading of Bill 11, and to not have made even the most basic efforts to reconcile those differences with the Stó:lô, the
[ Page 7695 ]
neighbouring First Nations — 29 neighbouring nations — is unfortunate.

Going back to Nisga'a, going back to the last millennium, to the first modern-day treaty, I would comment that the Standing Committee on Aboriginal Affairs met a total of 31 times. For the record, that's in 27 communities — First Nations and non — to try to get it right. There's no guarantee that all issues around access and territorial boundaries can be solved, but every effort should be made, as I think was made in Nisga'a.

The importance, I think, of the Standing Committee on Aboriginal Affairs in this place is that it also spans politics. It is a non-partisan part of this place. It has representation from all members of this House one way or another, and that's important, I think. Such a committee empowered early on in the process, certainly with agreement-in-principle signing, could have gone a long way to addressing what is seen by Stó:lô as potential infringement of their historic use and those territories. The standing committee under this government was never empowered — not once.

I guess I would make this a plea to the minister, to this government, to consider empowering that committee. It's better late than never. We're going ahead with second reading. I have no problem in supporting the Yale people in their treaty. But to leave these other issues around access unsolved and not use the resources that we have in this House, which have been used previously in this House — I would suggest successfully — would be an injustice.

I would plead with the minister to please work with the Premier and empower the Standing Committee on Aboriginal Affairs to meet with affected parties to address key access issues that certainly the Stó:lô have raised through this process. They argue that they have not been heard, and they do fear that the ratification of this treaty will be an infringement on their rights. That is unfortunate, especially considering that all efforts weren't made to address that earlier on in the process.

[1930]

This has been 17 years. We have come back for a mere several weeks in a very, very short, abbreviated sitting in which this side of the House has asked for an extra two weeks, please, which we did not get. We have a treaty that's come forward with no notice, no bill notice to our House Leader.

I believe it's an injustice to the Yale people, to the people of Stó:lô and to the people of British Columbia to make this a political issue, as opposed to making it something that all British Columbians, regardless of political stripe, regardless of what First Nation, regardless of the communities in the area…. All should be able to celebrate with the Yale people in this treaty, and that may not be happening now. That is unfortunate.

I would also submit that this debate has been a changing thing — the debate, such as it is. The minister took over 20 minutes in it. An hour and 25 minutes is what we ended up getting for second reading. I would submit that under Nisga'a, second reading debate was 27 hours over 13 days.

Committee stage. This government has allotted 2½ hours for the entire committee stage of this Yale agreement. Under Nisga'a, there were 76 hours 15 minutes over 31 days.

So the comparison, as we've seen — Nisga'a, with 107½ hours in total over 46 days of debate in this House, after 31 sessions and community meetings, with the standing committee involving both sides of the House….

We've seen it go to Tsawwassen, which was a substantial drop in participation, certainly, taken from the opposition side in having any part in this and, largely, the people of B.C. also. Then Maa-nulth dropped to a lesser number again.

Then we are at the Yale treaty, where we as the official opposition and independent members received not a notice that the bill was coming forward and virtually, relatively speaking, no time to go through this treaty in a way that does it justice.

Now, as the critic for the official opposition, I will be supporting the Yale people, but I have made a plea here, and I want to reiterate it. I would ask that the minister seriously consider empowering the Standing Committee on Aboriginal Affairs.

Subsequent to this bill, as we move towards ratification, I guess, at the federal level, which may take up to a year, according to the treaty negotiators…. That is the time. We must seize that time, utilize the standing committee, where it's on record — it's the beauty of the committee that it's already in our process — to address the key access issues, the historic fishing rights that are claimed by the Stó:lô.

There's no guarantee that the process will solve all territorial issues, but not to put all efforts forward to do so could arguably be creating winners and losers in a treaty process that is about reconciliation for all.

I would also submit that as this government moves ahead with the treaty process, it must recognize that not all nations are in the treaty process and that they too have rights that must be accommodated and that the treaty process itself, as designed so many years ago, was never etched in stone.

It was meant to be a dynamic process, one that evolved, one that was inclusive, to try to bring in more First Nations in British Columbia and certainly to meet the needs of all involved First Nations and non-involved in this province. I would ask that that advice be heeded.

Noting my limited time in this House and the other speakers that wish to come forward, I again want to congratulate the Yale people and Chief Hope and wish them the very best. Their future without the Indian Act is a much brighter future.

[1935]
[ Page 7696 ]

Hon. M. de Jong: Thanks for the opportunity to participate. If you've been around this place long enough, you are honoured on occasion to see some of the seeds that are planted along the way bear fruit. Today we are, I believe, jointly celebrating one such occasion.

When one considers that this agreement, this treaty, is the product of a specific negotiation that has lasted 17 years and a process that began almost 20 years ago, it is that much easier to understand the significance of the occasion and the significance of the ratification that is taking place in this chamber.

I confess that my remarks will be focused on the celebration that I think is warranted by virtue of what has been accomplished here. I acknowledge, by the way, that as we celebrate this agreement involving the Yale First Nation, the Crown in the right of the province of British Columbia and the Crown in the right of Canada, it represents, I believe, the eighth community to have reached an agreement pursuant to the treaty commission process.

The first community, in fact, did not ratify. Therefore, that agreement did not come to fruition. But it is, as the previous speaker has mentioned, important not to neglect to consider that there was also an agreement in Nisga'a. I'll mention that in a moment, because it in many ways has played a significant part in how I have come to regard treaties and how I came to learn more about their significance and their place in the fabric of our evolving nation — as an MLA, as a minister, as a Minister of Aboriginal Relations and Reconciliation.

I should say that it is important, as other speakers have done, to congratulate the participants of this negotiation: Chief Robert Hope, the Yale First Nation.

I recall the first time meeting with Chief Robert Hope, and anyone that has met him will know what I mean when I describe him as a character. He is an individual who has been committed to the leadership of his community for over 30 years. He has inherited a commitment to that community from his father, former Chief Lawrence Hope, and he has applied himself with passion and diligence over the better part of three decades.

As the negotiations took place and issues came up, he has been, throughout the exercise, someone who was committed to finding solutions. If it involved a new or innovative way of thinking or approaching a problem or an issue, he was not at all hesitant to consider that new approach. That is largely the reason that we are here celebrating today.

I remember that on the occasion that we sat down as a province and the Yale First Nation two or three years ago, Chief Robert Hope — I think in the rotunda here at the buildings — made it clear that we were going to get this done. There was going to be a ratification vote in his community, and we were going to move forward in a new relationship.

There are some other people on an occasion like this that I think it is worth at least acknowledging. I start with a former Premier, former Premier Gordon Campbell, who at a formative time in the history of the province came to understand and embrace the notion of agreements like this as a form of reconciliation, and his role is not to be diminished.

[1940]

At the federal level I recall — when we thought perhaps there wasn't the same measure of interest in moving forward in Ottawa as there was in Yale, in the Fraser Canyon, and Victoria — a minister by the name of Jim Prentice stepped forward. Minister Jim Prentice had an understanding, a background and, more importantly, was prepared to take a leadership role with his colleagues and in the Parliament of Canada and say: "This is the right thing to do. This represents the recipe for moving forward in this country." But for that timely intervention by Minister Prentice, we would not perhaps be here celebrating.

All of those people, if they were here — Premier Campbell, Chief Robert Hope, Minister Jim Prentice — would say that the work that has gone into this over the years involved teams of individuals who put their lives on hold, who told their families night after night and weekend after weekend that they were going to be somewhere in British Columbia, somewhere in Canada negotiating these agreements.

To all of those people whom I'm sure at various stages along the way have paused to consider the significance the work they are doing: I hope, as this ratification process unfolds, that they will take another moment to pat themselves on the back and take pride in the contribution they have made to what I think we in this chamber collectively believe represents an important step forward for our nation, important progress.

The last thing I think I want to say relates to my own journey. The Yale First Nation entered the treaty commission process, began negotiating, just a few short months after I walked into this chamber for the first time. You were already here, Madam Chair, but there aren't many who can say that.

The previous speaker mentioned the debates that occurred around the Nisga'a treaty, and they were long. It was the first time this chamber had considered a modern treaty, and I played a role in that as a critic. It was a long debate, and it was very critical, as is the role of oppositions at times, hopefully constructively.

If I look back on what lay at the root of my not political concern but personal concern, it was a concern — genuinely held, I might add — that by negotiating treaties of this sort, we were creating, erecting constitutional barriers that would divide us as Canadians. I have said on a couple of occasions since then — happily, it turns out — that I was wrong.

If you travel to Nisga'a, if you travel to Maa-nulth, Tsawwassen — communities where even if it isn't a full-blown treaty but a benefit-sharing agreement, a rec-
[ Page 7697 ]
onciliation agreement that has been negotiated — what you find is exactly the opposite. You find that those impediments to us being a nation have disappeared or begun to disappear.

I remember the young fellow in one of those communities who said to me shortly after the ratification process had taken place…. He had done something we're all probably going to do tomorrow night. He was watching a hockey game. He'd always watched hockey games. He was a hockey fan. But he said that when they sang the national anthem at that game, for the first time he felt like he could stand up and sing along.

[1945]

So to the extent that these complicated, complex constitutional documents we call treaties enshrine the basis upon which we are going to work together and live together going forward…. That is important, but their significance as an instrument in nation-building in the grandest sense, both for the First Nation and the nation we call Canada, is something that we cannot, I have learned, underestimate. So I'm glad I was wrong. I'm glad I was wrong about that.

Today we celebrate the step the Yale First Nation and their people, under the leadership of Chief Hope and the band council, have decided to take, and we wish them well. We know that the future will undoubtedly be fraught with challenge and issues and concerns. But we know that the step we are taking together is an important one, taken in good faith and taken in the hopes that the future we build for all of our children and grandchildren will be that much brighter as a result.

I congratulate all. I congratulate the minister, all of the people who worked to make this a reality and join with, I'm sure, everyone in this chamber in wishing them the very best.

C. James: Thank you to the Minister of Health for his heartfelt words. I think it was important for everyone, not only in this House but in this province, to hear those words.

I rise to offer my congratulations, as well, on Bill 11, the Yale treaty, to Chief Robert Hope and the Yale people for this incredibly historic achievement. This treaty really has been a long time coming, as I think other members in this House have said, and I'm certain that the Yale people are rightfully looking forward to a future where they'll have much greater say over their own destiny, as they should.

Now, we don't have time to go through all the history that's brought us to treaties in British Columbia. The minister ran through some of that history. But I do want to remind the House and put on record the Royal Proclamation of 1763, because I think it's important to remember that that proclamation, which was brought in by the then government in London, affirmed tribal ownership of lands.

It recognized tribal governments. It required the public negotiations of treaties before settlers could purchase those lands. But the important piece of history that we all have to remember in this House and that we all have to remember in British Columbia is that only one British colony rejected that proclamation, and that was our province. That was British Columbia.

Later James Douglas, the colonial governor of Victoria, did make some treaties on Vancouver Island. But after we entered Confederation in 1871, beyond an extension to treaty 8, there would be no other treaties coming forward until Nisga'a — from 1871.

From the beginning we've seen that treaty processes really have divided this province. James Douglas made some treaties. Joseph Trutch, in the new colony of British Columbia, refused to make treaties. Tom Berger went to the Supreme Court of Canada on behalf of Nisga'a and never stopped fighting for aboriginal rights.

Melvin Smith, who advised several British Columbia governments on aboriginal treaties, opposed modern treaties. Premier Bill Bennett said his government didn't recognize aboriginal title. Former Premier Mike Harcourt worked to establish the B.C. Treaty Commission, and former Premier Glen Clark brought forward the first treaty in B.C.'s history under the commission, the Nisga'a treaty.

Later, as we've heard, former Premier Gordon Campbell, as opposition leader, fought against the Nisga'a treaty but later as Premier brought forward the Tsawwassen and the Maa-nulth treaties.

I raise this history to just remind us where we came from but also to point out the work that still needs to be done. The creation of the Treaty Commission didn't fix all the challenges that we face, and it's certainly not a perfect endeavour. But it is a huge step in the process for many First Nations.

We face challenges at the treaty table, ranging in everything from the formulas that are being used to land issues to overlap. I want to take a minute to talk a little bit about overlap, because there are real concerns related to the Yale treaty that are important to talk about.

Now, all B.C. First Nations have competing claims to lands in their traditional territories. One First Nation might have used a river valley for one purpose, another for a completely different reason. One may have hunted it; one may have fished in its waters. To successfully conclude treaties, both nations' interests and issues must be addressed.

[1950]

This is nothing new. All treaties deal with this issue. Yukon land settlements dealt with it. Nisga'a dealt with it. Tsawwassen dealt with it. Maa-nulth dealt with it.

Now, in the Yukon the nations were required to settle the overlap issues before treaties were signed. In British Columbia overlap hasn't been resolved, and this is one area where I think improvement could be looked at and
[ Page 7698 ]
should be looked at. It's a place where the B.C. Treaty Commission could actually play a much larger role.

When the Treaty Commission was established in 1992, many hoped that it would extend its activities into the area of mediation. Overlap would be a perfect area for the Treaty Commission to take a look at active mediation.

As we know in this House, concerns have been raised by neighbours to the Yale people, the Stó:lô people, with valid concerns that could have been addressed before this treaty came forward. The Stó:lô have traditional fishing rights in an area in the Fraser Canyon called Five Mile. The Stó:lô people use and rely on this fishery to support their people culturally, economically and socially. Under the Yale treaty, the Yale people will take control of this area.

The direction of government is that First Nations should go to court to deal with the overlap issues, but the court system isn't a direction that brings resolution to anyone. It's certainly not a direction where First Nations want to spend their time and energy and resources.

This is a failing of the current treaty process. I would hope, in the next number of years of implementation, that whatever government is in power will offer support and resources and a commitment to assist in the resolution of the overlap in a way that brings forward successful implementation and resolution for the Yale people and the Stó:lô.

With our process, the B.C. Treaty Commission is supposed to end its involvement when treaties have been negotiated. This is another area where I believe improvement could be looked at. Why wouldn't the Treaty Commission take on an active role in what could be seen as the most important part of a treaty, the implementation? This certainly would be a lot less expensive than going to courts and, I hope, would bring a more successful conclusion for First Nations than the existing process that we face right now.

As our critic said earlier, the treaty process doesn't solve everything. It certainly doesn't solve all of the challenges facing First Nations and aboriginal people in British Columbia.

While we debate this treaty, I believe it's important to talk about the life for many aboriginal people in our province. The statistics are shocking, but they only convey the challenges that are faced by aboriginal communities all across B.C.

I want to run through a few of those, just to remind all of us about how important this work is. Aboriginal people on average live seven years less than the rest of the population. Aboriginal infant mortality rates run between two and four times the average for non-aboriginal.

HIV and AIDS rates for aboriginal people are twice as high as the general population; the rate of diabetes, triple the rest of the population; alcohol deaths, four to nine times higher for aboriginal people; drug-related deaths, two to four times higher; hospitalization rate, 40 percent higher for aboriginal men and 80 percent higher for aboriginal women.

Between 1997 and 2005 the number of aboriginal children in care increased by over 50 percent. Some 50 percent of the children in care are aboriginal, and only 16 percent of aboriginal children in care graduate from high school. With poor health and education outcomes, it will come as no surprise that aboriginal people struggle with employment. Their unemployment rate is double the rest of the population.

[D. Horne in the chair.]

I cite these statistics, I have to say, with both sadness and anger. These conditions are, in part, perpetuated by not settling fair and reasonable treaties.

Many First Nations see treaties as a key component of their efforts, but treaties are not the only response to these statistics. Change has to happen in every area — from housing to education, from health to economic development — for aboriginal people both on and off reserve.

The conditions of aboriginal people throughout this province continue to rival those in Third World countries. We all, regardless of our politics, need to open our eyes and our ears to see and hear what is going on around us. Our province was built on the backs of our first citizens. Our future cannot be built on a foundation worn by generations of neglect, injustice and oppression.

[1955]

I look forward to the day when aboriginal people have control of their own destiny. I look forward to the day when aboriginal people are equal members of our society in law and in condition. I look forward to the day when we can celebrate the victory over poverty and despair. Most importantly, I look forward to the day when our children and our grandchildren learn about the injustices of aboriginal people as part of our past, not as part of our present and not part of our future.

I'm proud to support this treaty with Yale as an important milestone on this journey, but I see it as simply that, one step, and would hope that everyone in this House will commit to the further steps needed for all aboriginal people in our province.

Hon. G. Abbott: It is an honour for me to rise and speak briefly in support of the Yale First Nation Final Agreement Act, Bill 11.

Like the Minister of Health, who spoke previously, I had the honour to be Minister of Aboriginal Relations earlier in my tenure in this place, as well, and do want to say a few words of congratulations to all of the parties who were part of putting this very important agreement together.

Foremost among those who deserve congratulations — and this has already been noted by the minister and
[ Page 7699 ]
by others who have spoken — is Chief Robert Hope, the Chief of the Yale First Nation. Chief Hope is a remarkable leader and deserves all of the accolades and more that he has received in this debate. He's an exceptional, thoughtful, warm, wonderful leader of his people. This is a great achievement for him, a great achievement for Chief Hope and his council, and a great achievement for Chief Hope, his council and the Yale First Nation. It is a great day for them.

I had the opportunity as Minister of Aboriginal Relations to visit Chief Hope and to visit the Yale First Nation on a couple of occasions as we celebrated milestones on the way to this day. There were some things that stood out for me in terms of those visits. One is the remarkable physical beauty of the Yale First Nation territory. It is a very, very beautiful part of our world, and I certainly enjoyed the wonderful hospitality that was provided by the Yale First Nation on the occasions that I visited.

The second thing that was wonderful to note was the way in which Chief Hope, the way in which the Yale First Nation, celebrated youth in the ceremonies that I was a part of. Chief Hope took the time at the start of the meeting, in fact, to introduce every young member of the Yale First Nation as they commenced the celebration. To me, it was a remarkably poignant moment as they celebrated not only the youth of the community but also the elders and the ancestors that had brought them to that day.

Chief Lawrence Hope has been noted. I'm proud to have on my wall a memento of my first visit to Yale, which is a photograph of the snowshoes of Chief Lawrence Hope. Chief Robert Hope provided that to me. It was a very special gift.

The treaty for Yale First Nation, and for Chief Hope in particular, is first and foremost a vehicle to provide much greater opportunity to the young members of the Yale First Nation. Yale First Nation puts enormous emphasis on education, enormous emphasis on economic opportunity and building a brighter future for the young people of the Yale First Nation. I very much respected and admired that devotion to young members of the Yale First Nation that was exhibited so forcefully that day and on my other visit to Yale as well.

[2000]

The third thing that very much stood out for me in terms of visits to the Yale First Nation was the determination to, first of all, reach this agreement but to also achieve that recognition as a distinct First Nation.

Members have referenced the controversy that has existed and continues to exist with respect to the Stó:lô and the Yale First Nation. There are some, perhaps, fundamental differences of view with respect to the relationship between Yale and the Stó:lô, but the Yale First Nation are very much determined to be recognized as that distinct First Nation.

They achieve that through their treaty, which we are today in the process of ratifying. It provides that recognition, and it also provides an economic package of land and dollars and other supports which will greatly enhance opportunity for the Yale First Nation in the future. That's hugely important.

As the former Leader of the Opposition just said in her speech, and I thought said very ably, very eloquently, there is much in the history of British Columbia and Canada to be regretted. We have a history of over 200 years, much of which involves bad public policy — what in retrospect is bad public policy by federal and provincial governments — which led to the creation of reserves, which saw the economic and social marginalization of First Nations in this province and in this nation, and in many cases led to the exclusion of First Nations from professions — the opportunity to sit in this House, to vote, even to participate in the fishing industry, which had been their mainstay for thousands of years.

There is much to be regretted. There is much to be built. But the treaty is an important step on that road to — as the former opposition leader recognized — this important day when we can look to the full participation on an economic, social and political perspective of First Nations in our province and in our nation.

I also want to take a moment to congratulate the federal government. These are tripartite agreements. The federal ratification of this will follow provincial ratification, and that's, again, a hugely important step. So I do want to congratulate Minister John Duncan, who I'm delighted to say has been reappointed.

I think the ministry has changed slightly now to, I believe, aboriginal and northern affairs Canada. John Duncan was an exceptional leader for his ministry, as was Chuck Strahl before him. I'm delighted that we have a British Columbian leading that ministry again, particularly a British Columbian as thoughtful and supportive as John Duncan has been at every turn.

I also want to congratulate Chief Sophie Pierre as chair of the B.C. Treaty Commission for her role in leading to the ratification of the Yale First Nation Treaty Act. Chief Pierre has done an exceptional job as the leader of the Treaty Commission, and we will see progress, I hope, continue to move along as it has in recent years under her leadership. So congratulations to Chief Sophie Pierre and the commission.

And congratulations to the provincial Ministry of Aboriginal Relations and Reconciliation. I want to congratulate the minister, in particular, and compliment her on an excellent speech introducing the issue tonight but also to say thank you to some people who we don't often enough thank, and that is the remarkable and dedicated career public servants who really make things happen. We line up to get alternatively either the credit or the blame for these things, but the….
[ Page 7700 ]

Interjection.

Hon. G. Abbott: Always the credit, yeah.

The public servants who year after year and decade after decade work selflessly towards better government in B.C., I think, deserve recognition as well.

[2005]

I want to just note briefly the deputy minister, Steve Munro, a great guy who I had the good fortune to work with, and former deputy minister Bob de Faye, who is retiring later this week and who did a wonderful job in leading the Ministry of Aboriginal Relations and Reconciliation and other ministries, as well, earlier in his career. Bob de Faye deserves lots of credit and accolades for the great work that he performed as well, and Mark Lofthouse, who is the lead negotiator for MARR on this file, does a great job for the province.

I'll just say in closing that modern treaties have proven tough to achieve. We have seen far fewer modern treaties than certainly anyone in this chamber or this province would like to see. For the Yale First Nation to achieve what they have, a comprehensive treaty agreement, that is a great achievement indeed. Congratulations to all who have been a part of that, but especially congratulations to Chief Hope, to the Yale First Nation and to the young people in the Yale First Nation who in the next generations ahead will be the beneficiaries of this very wise agreement.

B. Simpson: Of course, everyone knows debate ends at 8:30, and I do want to leave time for the member for Fraser-Nicola to speak to this, so I'm truncating my remarks. However, I stand here in full respect of the Yale and of Chief Robert Hope and the work that's been done on this treaty, but I do struggle with it being a final agreement. It is my intention to register my concerns about that with my vote in this House.

I want to quickly lay out the arguments for that. I listened with interest to the Minister of Education talk about redressing wrongs and about bad public policy in the past. I'm not convinced, after having significant conversation with the Stó:lô, that we are not potentially creating bad public policy with this particular treaty.

I think it's very difficult for us to argue that addressing one grievance or injustice by creating another is good public policy, and in this case the grievance is deep. We haven't had an eleventh hour reprieve, as the opposition critic pointed out in the case of the Tseshaht, when an accommodation was reached at the eleventh hour and there was a certain level of comfort that that treaty could proceed.

In this case the Stó:lô have made it absolutely clear that they will protest this with every power available to them. I think for us in this chamber to hear the Stó:lô say that, when the first "whereas" of treaty is that Canadian courts have stated that this reconciliation is best achieved through a negotiation and agreement rather than through litigation….

[Mr. Speaker in the chair.]

To have a treaty process that fails to address a fundamental right of title recognized by the constitution — and I'll speak to the specific claims momentarily — is really a failure of the treaty process in bringing forward a treaty to this House that I do not believe still represents the final agreement. That's what the treaty is called.

With great respect for the member for Victoria–Beacon Hill, I think her words are absolutely accurate: in our inability to equip the Treaty Commission with the ability to be proactive in its mediation of these overlapping claims so that that work is done in advance of treaty.

My fear in this case is that it's going to explicitly force First Nations to then go at each other in litigation afterwards — very serious litigation if not serious protest. The ministers know there have already been clashes. There have already been threats about the restriction of access to the Fraser around this. So I do think it behooves us as legislators to make sure that we understand what's at stake here and that the voice of the Stó:lô is brought into this room.

[2010]

With respect to the treaty itself, there are three major areas that the Stó:lô continue to have concerns about. Ministers have indicated those are concerns that have been throughout this process. First is access to the Fraser fishery. The treaty gives rights — gatekeeping rights, permitting rights — to the Yale First Nation, which the Stó:lô indicate is absolutely an extinguishment of their constitutionally guaranteed rights and of their title to that area.

In the words of Chief Joseph Hall, in some briefing that I was presented with on this issue, the indication from the Stó:lô is:

"The Yale First Nation has never functioned as a gatekeeper to the canyon for the Stó:lô. Stó:lô do not now and never have asked permission for the Yale First Nation to access their fishing sites, which are property fully owned by Stó:lô families. It is not acceptable to establish a permitting system whereby Yale First Nations will be able to determine whether Stó:lô can access their property and on what terms."

That's the first contention.

The second is on the Kuthlalth Reserve, which the treaty gives to the Yale, or is in the process of giving to the Yale. According to the Stó:lô:

"This is a national treasure. It contains a unique archaeological site, the likes of which do not exist anywhere else in B.C. It's a Stó:lô site and does not belong to Yale. It is objectionable that this treaty proposes to hand Kuthlalth over to the Yale."

That's the second contention that we're going to see in the court system post the passing of this treaty.

The third is the issue of Frozen Lakes, and according again to the Stó:lô:
[ Page 7701 ]

"The Stó:lô have used the Frozen Lakes area since time immemorial for their spiritual, cultural and gathering practices. The clause only contemplates giving access to recreational rights. It does not give access to the Stó:lô or recognize Stó:lô rights."

Now, I understand overlapping claims are an issue, but in this case the argument being made to me is that this is an extinguishment of Stó:lô rights, that it is an extinguishment of Stó:lô title, and that that claim will be made after this agreement.

I propose, and I wish to move, a motion to the Speaker. I move:

[That the motion for second reading of the Yale First Nation Final Agreement Act, Bill 11, be amended by deleting the word "now" and substituting the words "six months hence."]

On the amendment.

B. Simpson: To speak on my amendment to the second reading motion: there are three arguments for this that I would like to propose. First, the MLA responsible for this area, the Attorney General, and the minister responsible have indicated that they are hoping that ongoing work will be undertaken to ensure that this issue of the Stó:lô is resolved. As, again, the opposition critic has pointed out, work on that, in the Maa-nulth case, led to an accommodation at the eleventh hour that allowed all of those First Nations to celebrate the final agreement.

That work, I believe, is still possible. I've been told by the Stó:lô that they are in agreement with 90 to 95 percent of the treaty. They simply want an assertion of Stó:lô in the agreement. I asked the chief negotiator that question, in a briefing with the chief negotiator. The chief negotiator indicated that if that language was in the treaty it would reconcile this issue. But the Yale Chief does not want it in the treaty. I believe that the leadership exercised by British Columbia could actually make that happen. So it is possible.

Second, this is truncated debate. As the opposition critic pointed out, we're being asked to debate in this House, in a very short period of time, 495 pages of an agreement that we're seeing for the first time within the last couple of days. I have in front of me reasoned amendments to many of those clauses that would resolve the issue that the Stó:lô believe they do not have the opportunity to speak to.

Then third is the issue that, as the opposition critic put forward, MLAs have not had an opportunity, through the aboriginal relations committee, to actually engage, to see if they could be the ones that are involved in reconciling this, since the Treaty Commission has not been able to and since the treaty table has not been able to.

I think a six-month delay…. Don't rush the debate. Allow us to try and get an eleventh-hour reconciliation of this, an accommodation of this. Allow the Stó:lô to celebrate with Yale the final agreement, a true final agreement. I think that's a reasoned motion to put forward.

[2015]

I would hope that the government would take advantage of it, as the opposition. I will allow the member for Fraser-Nicola to get his time allocated.

H. Lali: I take my place on the amendment that the hon. member for Cariboo North has presented, hon. Speaker.

You know, a number of folks have talked about Yale and the beauty. Obviously, Yale is the head of river navigation, as several members, the member for Shuswap, mentioned. It has just boundless beauty in the area, and, really, it's at the heart of the Fraser Canyon there as well.

I had the honour to represent Yale and the area, in the Fraser Canyon, for 14 years. They were my constituents, and I was their MLA over that number of years. It wasn't just Yale. It was the surrounding area. Ethnographically, Yale is identified as "Tait" — a term used to refer collectively to the Upriver Halkomelem, occupants of the villages located on the Fraser River beyond the upper end of the broader part of the valley at, near or around the communities of Hope and Yale.

The traditional territory presently claimed, obviously, by the Yale First Nation covers a portion of the area that's attributed to the Tait. In addition to the Yale, there's the Union Bar Indian band, the Skawahlook, Shxw'ow'hamel, Popkum, Peters, Chawathil Indian band. There's also Seabird Island First Nation. Unfortunately, I didn't have the opportunity to serve as the MLA for Seabird Island, but all of those other communities are part of the area of the Stó:lô Nation.

I want to take the opportunity, along with others, to congratulate Chief Bob Hope, whom I've known since the early 1990s — well before I got elected. Chief Bob Hope is like a dog with a bone. He's very tenacious. When he gets on to something, he's not going to let it go. Obviously, I want to congratulate Chief Bob Hope and the Yale First Nation.

Several of the members on this side of the House have mentioned some of the problems that, obviously, exist as a result of this treaty — not the least of which is coming from the Stó:lô Nation themselves. I'd like to point out that in a press release, actually, announcing the Yale First Nation final agreement, the B.C. treaty commission chief, Commissioner Sophie Pierre, announced this caution: "As Yale First Nation begins to turn its attention to treaty implementation, an important task will be working out the relationship with its neighbours."

This actually underlines the concerns of the neighbouring Stó:lô that have not been addressed. Therefore, my colleague from Cariboo North has put forward this hoist motion. With this treaty, the Yale people will own, in fee simple, former Stó:lô fishing and drying rack sites in the Fraser Canyon at Five Mile. From these sites, the Stó:lô obtain and also process up to 60 percent of their yearly salmon.
[ Page 7702 ]

The treaty will require, when implemented, that the Stó:lô actually request a permit from the Yale First Nation in order to access these historic sites, Hon. Speaker — a permit to enter their own lands. This is what the treaty will allow to happen: for the Stó:lô to require a permit to enter their own house. That's what this means.

I just want to point out that, aside from that, there is also the issue of, really, the lack of proper consultation. I'm not speaking about consultation with the First Nation but, rather, any kind of consultation.

[2020]

I want to remind the members across the way about the Nisga'a agreement-in-principle when it was before this House about 15 years ago. At that time I also want to point out to the members here, the Nisga'a treaty followed years of negotiation after the courts had directed that there ought to be negotiations taking place.

Following years of negotiations between the province, the feds and the Nisga'a, the AIP, the agreement-in-principle, was obviously made public and came before this House. What took place was the most extensive consultation of any such issue in the province of British Columbia. The select standing committee was put to work by the NDP government of the day. The member who is the Minister of Health was on that committee, and so was I.

I was the vice-Chair, and we travelled extensively. It was the most travelled select standing committee in the history of British Columbia. I just want to read into the record how extensively travelled it was. There were 31 public hearings which were held in 27 communities. I think that at the time most members of the committee commented that they actually got to see parts of the province they never even envisaged.

Pardon me, hon. Speaker. I should point out that you were a member of that select standing committee, and we shared a lot of moments as we travelled. We saw parts of the province that we wouldn't have otherwise been able to see and talked to people in those communities.

There were 560 oral presentations and an additional 233 written submissions that took place. There was a total of 107 hours and 30 minutes of debate over 46 days in this House, where every MLA on both sides of the House, including the Speaker and including the Minister of Health…. They could speak as long as they wanted and, at the committee stage, went through every clause during that time. There were even a couple of dozen other meetings in order to write the report, here in Victoria mostly and some in Vancouver as well.

The government of the day for the first time in history allowed a minority report. I'm building the case as to why the member has posed the hoist motion. That was a first in the history of British Columbia to have a minority report. I know at that time that Jack Weisgerber, a Reform MLA, was a member of that committee as well.

Basically, what the B.C. Liberals did at the time was they kind of let Jack Weisgerber write their minority report for them and took over hard-line, extreme positions that Jack Weisgerber had been talking about for years, not the least of which was to hold a referendum on aboriginal rights. They took court action when the Liberals formed government.

I know this is what they talked about then. This is what the Liberals talked about then: referendum on aboriginal rights, court action. They didn't want to deal with treaties, because they didn't feel aboriginal people actually deserved to have a place in Canadian society alongside of that and through negotiation of treaties.

Now, I know the Minister of Health got up earlier and said that that was then. Now, after years of reflection, he admitted that his position was wrong. Can you believe that? A Liberal actually getting up in this House and admitting that he was wrong or that the Liberals were wrong? We had the Minister of Health actually admit that he was wrong. That is also a first in the history of this Liberal government in this province — a Liberal admitting that he was wrong. Now, also, they're in a hurry to try to consummate treaties and try to push them through the Legislature.

[2025]

I talked about the record amount of debate that took place: 46 days, 107 hours and the most travelled committee in terms of consulting people to get their opinion. We went all over the province talking to people — all over the province — and on an important issue such as this, where you've got the 29 bands in the Stó:lô Nation and you have this one small band…. And I don't hold it against Chief Bob Hope and the Yale First Nation, but this government doesn't want to actually have some consultation in this province or at least around the surrounding areas of the Yale First Nation. They don't want to do that.

What are we getting in this House at the eleventh hour where we're getting closure after closure after closure on debate? And they'll do that on this one as well. What is it? I think they're allowing us three hours. An hour and a half of debate and committee stage tomorrow for about a total of — what? — three hours? How does that compare with a previous government and consultations in 27 communities around this province, 31 public meetings, and hundreds of letters that were written in submissions and just umpteen hours — 107 hours' worth — of debate?

They're allowing us in this House, total, on all three stages, three hours. That's it. We get to have three hours. Three hours aren't even enough to go through one paragraph of the 495 pages of this document. The Liberals demanded they wanted debate way back, ten, 15 years ago, and as the government of the day, we gave it to them. The NDP said: "Take as long as you want in this
[ Page 7703 ]
Legislature." We opened the Legislature, and the rule of thumb was that the government opened the Legislature, but it was up to the opposition to close it. They could go for as long as they wanted, and they did — over 46 sitting days. And what are they giving us? Three hours with closure. That's what they're doing.

What are they afraid of? Why won't they put the Select Standing Committee on Aboriginal Relations of the Legislature to work and say to the committee: "Go out there"? You know, they've shut the opposition completely out. They were an intimate part of those consultations that took place that travelled around the province to talk to people, to hear what they had to say on the Nisga'a agreement-in-principle.

They got that. They had it when they were on this side of the House as long as they wanted. They got to say what they wanted, and they had their input. They not only had their input; they got to write a minority report, which was a first. Here, now that they're on the other side of the House, they have shut not only just this side of the House completely out of the process. They shut out the people of British Columbia. They shut out the Stó:lô. They don't want the select standing committee of the people to go to the Stó:lô lands and talk to people and hear why they're so upset with this treaty.

Mr. Speaker: Members, at this point I'll now call the motion on the hoist motion reading: "The Yale First Nation Final Agreement Act, Bill 11, be amended by deleting the word 'now' and substituting the words 'six months hence.'"

Amendment negatived on division.

Mr. Speaker: I'll call the motion on second reading.

Motion approved.

Hon. M. Polak: I move that Bill 11 be placed on the orders of the day for consideration by the Committee of the Whole at the next sitting of the House after today.

Bill 11, Yale First Nation Final Agreement Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. P. Bell: I call second reading of Bill 2.

[2030]

Bill 2 — Budget Measures
Implementation Act, 2011

Hon. K. Falcon: I move that Bill 2, Budget Measures Implementation Act, 2011, be read a second time now.

Bill 2 includes both non-tax provisions, which are primarily housekeeping in nature, and tax provisions, which continue or clarify existing tax policy.

With respect to the non-tax provisions, Bill 2 amends the Balanced Budget and Ministerial Accountability Act to clarify ministerial accountabilities within a vote that authorizes spending by more than one minister.

[L. Reid in the chair.]

As well, the Minister of Finance will be required to make public any reallocations of spending authority by Treasury Board within such a vote within 90 days.

Bill 2 also amends seven statutes to implement some of the tax measures announced in Budget 2011. As Budget 2011 is a status quo budget, the tax changes in Bill 2 are limited to improving property tax and homeowner grant administration and fairness, ensuring that British Columbians do not pay carbon tax on purchases of carbon-neutral biomethane where the amount of biomethane can be identified, clarifying the intent of various statutory provisions and providing for the implementation of a measure announced last year.

Legislative authority is provided under the Taxation (Rural Area) Act to correct errors made during the preparation of the annual property tax roll. Under this act the provincial surveyor of taxes prepares a taxation roll and collects taxes on behalf of more than 200 rural taxing jurisdictions throughout the province. Although few errors are made during the preparation of the roll, they do occur. This change will ensure that the province has the legal authority to continue to correct such errors so that all British Columbians pay the amount of tax they were intended to pay.

The Home Owner Grant Act provides a grant to reduce property taxes payable on an eligible person's principal residence. In cases where a claim is made incorrectly, the claimant is issued a notice of disentitlement and billed for the amount owing. Amendments to the act clarify that the claimant is obligated to pay the amount as set out in the notice of disentitlement.

Biomethane is a carbon-neutral fuel produced from biomass such as agricultural and industrial organic waste. As a carbon-neutral fuel, it does not contribute net greenhouse gases into the atmosphere or to climate change. It is therefore not intended to be subject to the carbon tax. However, under current legislation biomethane is subject to the carbon tax if blended with a taxable fuel such as natural gas in a way that does not allow the amount of the biomethane in the blended fuel to be identified.

Effective February 16, 2011, a biomethane credit is provided to ensure that British Columbians who want to reduce their greenhouse gas emissions by purchasing this more environmentally friendly product under a qualifying contract do not pay carbon tax on the bio-
[ Page 7704 ]
methane portion of the blend. The credit is provided to purchasers on the utility bills by registered suppliers for the specified volume of biomethane purchased under the contract.

The School Act is amended to provide regulatory authority to clarify eligibility for the 50 percent tax exemption for land used under a "farm purpose" under the act. A regulation will be passed to clarify that managed forest land, which generally receives preferential property tax treatment in its own right, is not land used for a farm purpose and is not eligible for the 50 percent tax exemption.

The University Act and the Health Authorities Act are amended to clarify the conditions that businesses and other third-party operators must meet on university and health authority property in order to be eligible for property tax exemptions. To qualify for an exemption, university property must be both owned by the university and used "by or on behalf of" the university or an affiliated student society.

Health authority property must be owned by a regional health board and used by or on behalf of the regional health board. This clarifies that third parties occupying university or health authority property on their own behalf will be subject to property tax like other occupiers of properties owned by tax-exempt entities and other taxable businesses with whom they may compete.

[2035]

While this clarification is generally consistent with longstanding administrative practice and legislative intent, there may be a small number of businesses affected by the change. A transition period is therefore provided for those businesses.

Any business that was exempt from property tax in 2010 that would no longer qualify for exemption under the amended legislation will continue to be exempt until the current tenant vacates the premises or until December 31, 2015, whichever comes first. With the potential for significantly more multipurpose development, particularly on university lands, it is important to clarify these rules so that all businesses operating both on and off university and health authority property operate on a level playing field.

Finally, as announced last year, the International Business Activity Act is amended to provide for the inclusion of schedule 3 banks.

With that, I thank you, Madam Speaker.

B. Ralston: I rise to address second reading of Bill 2, which is the bill that implements the budget measures which are set out in the budget of 2011.

As the minister has stated and as his predecessor stated at the time the budget was introduced, the budget…. I'll quote from his speech of Tuesday, February 15: "However, it does not set out new directions. That will be in the purview of the next Premier, who will set the course for the next decade of growth and opportunity for this great province." Earlier in the same speech he described it as: "…this can best be described as a status quo budget."

The opportunity to provide new direction was left to the incoming Premier, but thus far that opportunity hasn't been taken up. The opportunity was there, should it have been desired to create a new budget, but I think that was rejected because it would simply be too big a task at this stage in the political cycle, given what some of the….

They're always shifting and varying from the Premier as to what her intentions are as we confront a possible election. The first rumours were June. Current rumours are September, but we'll see.

So the budget is a status quo budget from someone and is continued here in this House. Status quo means something that doesn't involve change, so you have the irony or the contradiction of someone promising change yet tabling and continuing with a status quo budget.

Ordinarily, the budget implementation act is only part of the budgetary process. The Committee of Supply and the debate of estimates in this House are an integral part of the budget process, and that process of scrutinizing the budget is something that has a lengthy and deep constitutional history and authority in the British parliamentary system from which we draw and look to our origins.

The Committee of Supply and individual ministries are scrutinized by members of the Legislature in a process which requires the minister to answer a wide range of questions on departmental budgets. During the course of that, ordinarily, issues that are of concern to citizens across the province are raised ministry by ministry.

In this particular process, in debating this budget, the budget that this legislation seeks to implement, the opportunity to speak at Committee of Supply has been sharply and drastically limited. Some may see this as a mere bureaucratic quibble, as something between politicians and not worthy of any serious consideration, but I think the history of the British parliamentary system and, indeed, the rule of law generally prove that where accountability is present, where government budgets are scrutinized, there is a fuller democracy and, ultimately, a better-functioning society.

[2040]

I have had the honour to chair the Public Accounts Committee in recent years. We hear from public servants who come from other countries, and there's an admirable program that is sponsored by the Committee Clerk's office where senior public servants and sometimes, occasionally, politicians from other countries, sometimes in Africa, sometimes in Asia, come to see how our Public Accounts Committee works and generally how the spending of money in the parliamentary process is scrutinized.
[ Page 7705 ]

In a world not characterized universally by the rule of law, where the budgetary process can be subject to all kinds of deviations from the rule of law — some might characterize it in some countries as corruption on a grand scale — the parliamentary process, the scrutinizing of the budget, is much admired and much envied by countries that don't have this opportunity.

So when the government decides and takes these arbitrary steps to contract a very brief legislative session and impose what's euphemistically called time allocation, we don't have a full opportunity to debate what we should be debating and what we should be scrutinizing.

The government is wont often to make reference to time gone by. In this case, I want to make some comparisons between the time allocated in the fourth session of the 36th parliament — that is, in the year 2000 — and the time we've spent in estimates in this particular parliament.

For example, in Aboriginal Affairs in 2000, 11 hours and 35 minutes; here, three hours and 30 minutes. In Health in 2000, 27 hours and 35 minutes, with two supplementary estimates, one on September 17 of eight hours and 35 minutes and a further supplementary on December 7 of 11 hours and 18 minutes; contrasted with 11 hours and 39 minutes in this session. The Ministry of Labour, Citizens' Services and Open Government in 2000, 19 hours and 34 minutes; here, eight hours and seven minutes. Agriculture in 2000, 15 hours; here we've dispatched the estimates of that ministry in four hours and 41 minutes.

I give those examples as illustrative of the difference. The position of the government and, I think, the Government House Leader is that this is simply wasting time, that legislative scrutiny of ministers' estimates is a waste of time, at least when this side of the House attempts to do that in pursuit of what they're elected to do and their duties.

Clearly, that's not the case. The estimates that I've listened to and reviewed and the vast majority of questions are substantive and thoughtful and pursue issues that are of relevance and of public concern.

When we debate budget implementation as part of the overall budgetary process, one should be mindful of the limited opportunity and the reduced opportunity that's been given here to pursue these matters.

The budget itself. Certainly, it was suggested and constitutionally available that rather than simply reintroduce without any change the budget that was tabled back in February and spoken to by the then Minister of Finance on February 15, 2011, and reintroduced on May 3, 2011…. It doesn't really change or reflect any of the alleged priorities of the new Premier whatsoever.

[2045]

In fact, the way in which the budget is constructed raises the contingencies to an allocation of over $600 million.

The writers of the budget note that that dramatic increase in the contingencies vote…. This is for things that allegedly you hadn't considered before you drafted the budget. Certainly, there are provisional things that do arise, like emergencies that occur, things that require immediate attention, and it's rational and prudent to set aside a certain amount of money for that. But the writers of the budget said that this increase is to address unforeseen issues and provide "fiscal management flexibility for the next executive council."

There are, I suppose, other ways to characterize fiscal management flexibility, but it essentially means that without going through the ordinary budgetary process, the executive council — that's the cabinet — has access to $603 million to do what they think is appropriate in pursuit of their own political agenda rather than be subject to the scrutiny of the ordinary budget process or estimates or any of the other processes that we ordinarily expect a budget to follow.

The way in which the budget implementation is being brought forward is one part of the process, but the nitty-gritty of it, the heart of the budgetary process, the estimates process, has been reduced, diminished in time. Many MLAs, myself included, have not received the time to debate and ask questions of the relevant minister in the way that ordinarily one would expect.

I, for example, was given to debate the estimates of the Minister of the Finance, three hours on Thursday, two hours this morning and two hours this afternoon on a range of broad topics. Despite asking questions steadily and, I think, on significant topics, I was not able to complete the range of questions that I had on other significant topics, and I think the public is the poorer for that.

For example, I was not able to ask a series of questions I had prepared over some months of Partnerships B.C. That's a responsible agency for, in some calculations, a number of contractual obligations that in the public accounts total some $53 billion. There's a process for engaging in those contracts. There's a process for evaluating them, yet the time that I was given didn't permit that opportunity.

I wasn't permitted to ask questions about the capital spending plans of the ministry, in particular in Surrey. There are a number of citizens. It's the biggest school district in the province, 68,000 students in the public school sector.

There's a group of citizens, a wide range, headed up by the Surrey Board of Trade, who are concerned about the capital program as it concerns the construction of new schools, and schools in, for example, the Minister of Finance's riding — Lord Tweedsmuir, Earl Marriott School — where students walked out to protest what they regard as the overcrowding and the long delay in constructing new capital facilities. Those were issues to canvass as part of the capital plan.
[ Page 7706 ]

I was able to ask some questions in a number of other areas about the Securities Commission — for example, some questions about the Financial Institutions Commission — but as one can appreciate, the Ministry of Finance has a very broad ambit of agencies that it's responsible for, and it's important, at least once a year, to engage in some questions about these agencies.

That's a decision that the government has taken. That's a decision that the Premier apparently has taken. She took her seat here yesterday in the Legislature and today supported a motion to end debate in the summary and truncated way that we've just seen in relation to an important treaty that took 17 years to negotiate and consisted of 495 pages. Protracted negotiations took place over many years, and the time being given to debate that in principle is an hour and a half, and the time in committee, I think, two hours.

[2050]

This is not the way to do the public's business. This is not the way to bring about the implementation of the budget. For those reasons, we are, on this side, deeply troubled by the position that the government has taken in terms of the length of time allocated to deal with estimates.

The Opposition House Leader has proposed that we stay and add some additional time. We are here prepared to stay, and there's no imminent election at least in the next couple of weeks. We're prepared to stay here. The offer was a couple more weeks, two more weeks at least, but if needed, we would stay longer. That offer wasn't taken up by the government, so we're now in a position where we're scrambling pell-mell to complete estimates in an unsatisfactory and incomplete manner. The scrutiny of ministers, of budgets and of the $41 billion provincial budget is not what it should be and not what it could be. I don't think in the long run it's good for the citizens of the province.

With those brief remarks on this aspect of the budget, the Budget Measures Implementation Act…. Ordinarily, I think there's some pressure to bring this forward sooner just because the Ministry of Finance understandably appreciates some certainty. It's surprising that it's here at this late hour, but here we are. We will debate it in committee. I believe we have some time allocated tomorrow, and I will ask the detailed questions of the minister that are required in order to make a judgment about whether this bill should be supported or not.

With those comments, Madam Speaker, I take my place.

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

Hon. K. Falcon: I move second reading of Bill 2, Budget Measures Implementation Act, 2011.

Motion approved.

Hon. K. Falcon: I move that Bill 2 be referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Bill 2, Budget Measures Implementation Act, 2011, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

[Mr. Speaker in the chair.]

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

Hon. P. Bell moved adjournment of the House.

Motion approved.

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

The House adjourned at 8:54 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 2:43 p.m.

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

B. Ralston: I've also had a brief discussion with the member for Cariboo North. I understand he has some questions. I'm proposing, given the relatively abbreviated time that we have here, to deal with those after four o'clock. I was suggesting 4:15. Obviously, that's something that's at the discretion of the Chair. As he has pointed out to me, he has the ability to attract the attention of the Chair, and you can so rule as you choose. But I just wanted to make that clear in advance.

What I wanted, though, to begin with is to resume some questions about the Securities Commission. I note that Paul Bourque, who's the executive director of the Securities Commission, is here this afternoon, so I wanted to resume some questions on that.
[ Page 7707 ]

I wanted to begin first with an opportunity perhaps to just clarify what was said the last day about the exempt mining finance operation that was run by Mr. Stanfield. The response that was given by the minister, presumably on advice, was that "a temporary order was issued last fall to the company of the former Mr. Stanfield that will require them to produce a technical report on the resources and the reserves that exist or don't exist, whatever the case may be, with respect to the properties in question here in British Columbia. That report is required to be delivered to the BCSC by July this year."

[1445]

The question that I had was…. I think that answer is at the very least incomplete. Initially, I'm told, the commission ordered the group to produce an interim report by October 2010. It failed to produce the report. The commission then moved the date to March 31, 2011, and the report has still not been provided.

In the meantime, the company has told the commission that the company doesn't have the money to fund the full report, so it may mean that the report will not be ready for the B.C. Securities Commission by July 15. The company apparently told the commission that in writing.

So will the B.C. commission or the Alberta commission, or them jointly, fund the report to determine whether the operation that went on and raised $233 million is, in fact, one of the biggest mining frauds in history, or will they simply sweep this under the carpet?

Hon. K. Falcon: I am advised that the B.C. Securities Commission does not pay for companies to produce disclosure information. They don't pay for them to produce financial statements or any other issues of the sort, nor have they ever. Because I asked that as a further query: has there ever been a case where they've done that? And the answer is, no, not to the best of their knowledge.

You do have a situation where they have asked them to produce, under the public interest, a portion of the act. There is no obligation for a private Alberta company to produce that information, but the B.C. Securities Commission, I understand, under the public interest provision, has asked for them to produce that information. I think the member is correct that they have indicated that they will have difficulties doing that, but that is something that is currently in the hands of the panel, and they are charged with dealing with this. Hopefully that answers the member's question.

B. Ralston: Well, I suppose one is drawn to the conclusion that this company that operated under the exempt rules in terms of its ability to raise capital…. It raised $233 million from close to 4,000 citizens.

[1450]

One will never know whether this was indeed, as is widely suspected, the biggest mining fraud in the history of the country. It seems to be rather narrow and bureaucratic, at the very least. I know that the minister certainly has expressed his disdain for those kinds of steps by government on previous occasions, on other issues. To fall back on the regulatory regime that failed those 4,000 investors yet not get to the bottom of this, at least to make the point, and clearly demonstrate, that what was going on for all these years and all those tens of millions of dollars was a fraud….

I think it's astonishing, and I think it reflects very badly upon the B.C. Securities Commission and upon the ministry and the minister that supervises it.

There's $650 million in the government's contingency fund. The government has just spent $200 million on cutting some cheques, or proposes to cut some cheques, to a number of British Columbia citizens. Surely there's a small amount of money available to fund a proper report in these circumstances. I just don't think that's an acceptable answer, with the greatest respect.

Hon. K. Falcon: I am advised by the Securities Commission that there is not yet evidence of fraud, though a high degree of suspicion by the people. I would certainly recognize that there is that. I am reminded that if the B.C. Securities Commission finds any evidence of fraud, they will prosecute. As we talked about in our last session last week, they do have peace officers that are employed for doing nothing but following up and charging people that are engaged in criminal activity within the exempt-market.

Frankly, I think it's safe to say that the B.C. Securities Commission always tries to learn from any event that takes place on how things might be improved.

It is the case, of course, with the exempt-market that…. For the benefit of listeners — I know the member opposite knows this — this is a market that is available for what are termed "sophisticated investors," investors that have a minimum income threshold. I believe it's at least $200,000 of income and at least a half a million dollars of assets. The thinking behind that is that sophisticated investors are capable of understanding that the exempt-market contains much higher risk than investment-grade investments, for example. There is a presumption that some element of due diligence goes into the equation.

I cannot speak to the specifics of this case. I am just stating what is generally the case with respect to the exempt-market.

Having said that, I am assured by the BCSC that if there are any lessons learned…. Unfortunately, the history, particularly of venture capital markets, over the years has been checkered, to say the least. There are cases that come forward where the Securities Commission tries to learn from what has taken place and tries to anticipate what could happen in the future.

[1455]
[ Page 7708 ]

I am advised that they will certainly take whatever lessons need to be taken, if any, from this situation and work to see how they can be applied in the future.

B. Ralston: Last day the minister made a reference to a reporting system, and I just wanted to clarify what he meant by that. From what I understand, all offering memoranda are electronically filed on the B.C. Securities Commission website, and reporting issuers who use exemptions have all sorts of reporting requirements, but non-reporting issuers have none, other than the exempt distribution reports, which I'll deal with shortly. Is that correct?

Hon. K. Falcon: I'm advised that they have an electronic filing system for exempt distribution reports and for offering memorandums.

B. Ralston: I'm taking that as a confirmation of the suggestion I made in my question.

Will the minister confirm that this reporting requirement requires that issuers who distribute shares under exemptions must file reports disclosing who bought their shares, how much and what price? Since 2003 the commission has heavily redacted these reports, so the names of the purchasers are no longer public. That results in the situation where, when things go wrong, investors have great difficulty finding out who else bought the shares so that they can band together to fight back and recover their money.

Will the minister confirm that that's the situation now — that these reports are heavily redacted and prevent people from finding out who else invested in that issue?

[1500]

Hon. K. Falcon: The member is correct in that prior to 2003 these reports were published and made publicly available on the BCSC website. Some controversy arose when individuals argued, for privacy reasons, that that information should not be available. Apparently B.C. was the only jurisdiction in North America that provided that type of information to the public, so after reviewing the privacy legislation, the commission decided to remove that information from the website.

Frankly, I always was a little bit concerned about that, because I know that we have a very well renowned columnist in Vancouver for the Vancouver Sun who has written very, very good reports about nefarious activities, apparently largely based on a lot of this information that was available.

[J. Thornthwaite in the chair.]

What I can tell the member, on an encouraging side, is that the B.C. Securities Commission has put forward a proposal in the fall for comment that is in process right now. So they've received the commentary, and that is in process and will make it ultimately to my office, which would provide for the names of purchasers and whether they're insiders or not and whether they're registrants or not.

Again, though we would be the only jurisdiction providing that additional information, as I'm led to understand, that is something that is being contemplated by the Securities Commission in response to some concerns that have been raised about that information not being available.

B. Ralston: Just so I'm clear, that's for exempt-market issuers?

Hon. K. Falcon: Yes.

B. Ralston: I have a similar question as it relates to publicly trading reporting issuers, particularly junior issuers — the ability to discern who buys large blocks of cheap stock, which is often sold to unknown companies in offshore secrecy havens. Apparently, last year the commission proposed to restore most of this disclosure, but nothing has taken place. Can the minister (1) confirm that that's the case and (2) advise whether there's any intention to make a public disclosure of those reports?

Hon. K. Falcon: I am wondering if we could just have some clarifications of what reports the member is referring to. Presumably these are publicly traded companies on the TSX Venture Exchange that have ongoing reporting requirements. Maybe the member could clarify.

B. Ralston: What I am told is that the B.C. Securities Commission has not made the reporting of large block trades, particularly in the junior sector, publicly available. Frequently those transactions take place with parties that are outside the country in offshore havens, so there's no way to trace who may have bought those shares when they're issued.

[1505]

Hon. K. Falcon: I'm advised that this challenge has been a real problem — the inability of knowing who is trading and utilizing offshore accounts. The big challenge there, as the member opposite would know, is that bank secrecy laws are a real problem in certain jurisdictions.

The BCSC is doing some work in this regard. Two primary areas where they're doing some work. First of all, they're part of an international MOU on information-sharing, where they're trying to engage with other jurisdictions to create some foundational rules that can deal with the sharing of information that can provide reasonable transparency.
[ Page 7709 ]

The second is working with the local industry in B.C. They're undertaking some work right now on the know-your-client rules, trying to get a determination of what kinds of efforts are undertaken by the local financial industry in B.C., to determine what steps they take to know who their clients are that are making these trades.

That work, as I understand it, is currently underway, and that will help inform them. Apparently, part of their service plan objectives this year is to try and find better ways to deal with these bank secrecy laws that can create challenges in jurisdictions around the world.

B. Ralston: I want to turn now to another example of a scam that operated in the exempt-market. I'm sure the commission will be familiar with this.

The Royal Indian Raj International Corp. was supposedly set up to build a $3 billion smart city near Bangalore in India. The promoters, Manoj Benjamin and his father, Collins, sold millions of dollars' worth of shares under this pretext. Disgruntled investors never saw any money. They listed on their website 17 false and misleading statements that were made by the company since the year 2000.

In October 2005 the B.C. Securities Commission commenced an investigation, but nothing ever came of it. Can the minister confirm that that's the case and give some sense of the dimension of the fraud and explain why deals like this, marketed to unsophisticated investors using the offering memorandum exemption, should continue in British Columbia?

Hon. K. Falcon: I don't have much information, to be honest, on what is referred to as the Royal Indian Raj project.

I do think that it is important, when the member raises issues like this, first of all to acknowledge that this kind of thing, I am certain, does occasionally happen in the exempt-market. But it is important to go back to what the exempt-market is all about. It is about raising billions of dollars annually that are dollars raised for venture capital projects, which by their very nature are much higher-risk than are the typical sort of investment-grade alternatives that sophisticated investors often also invest in.

[1510]

Sophisticated investors, by their nature and their income levels, the fact that they earn a minimum of $200,000 a year and have at least half a million dollars in assets, are considered to be able to evaluate the level of risk they're comfortable with when thinking about making investments in the exempt-market.

I think it is worth pointing out that it is not just sophisticated investors that sometimes end up investing in decisions that don't turn out well. The member would well know that under the NDP government in the '90s…. I can't remember how much they lost on the Pakistani Raiwind energy project, but I believe it was in the order of $10 million. That was presumably a rather sophisticated group of Crown corporation and government individuals.

I remember we took a write-down on the construction of what is now SFU Surrey. I can't remember the write-down, but I believe it was certainly in the tens and tens of millions of dollars as a result of government getting into the development business.

So an investment in the exempt-market by its very nature certainly entails risk. Unfortunately, the information on the Royal Indian Raj project is not information that we have available at our fingertips.

B. Ralston: Just to make the broader point, then. The minister says: "Well, this market is very important. Lots of money is raised there." Then why should investor confidence and overall confidence be damaged by repeated abuse of this market due to an absence of a regulatory regime that would reduce these numbers of occurrences?

I go back to my question earlier. The Canadian Securities Administrators devised a national policy that would require people who sell these exempt products to register as exempt-market dealers. This would require them to know the investment, know their client and adhere to suitability requirements, and their firms would also be subject to auditing and compliance reviews.

The minister said yesterday: "Well, we didn't want to participate in that. There are billions of dollars raised. This would be some kind of regulatory impediment." But don't people who invest in this market deserve to have some sort of regulatory protection, better than they're getting now, given the number and the ongoing nature of these frauds that are chronicled very regularly?

The minister has mentioned David Baines of the Vancouver Sun — chronicled very regularly. It's well known, and nothing that exists in the current regulatory market seems to be doing anything to reduce the number of these momentous frauds.

Hon. K. Falcon: The B.C. Securities Commission, by its very nature…. The whole point of the commission is to try and ensure investor confidence is maintained in the exempt-market, in the markets generally. That's why they work to have integrity in the market. It is not a perfect system, particularly when you…. As the member would well know, sometimes you see in the exempt-market high-risk ventures that sometimes attract some pretty interesting characters.

But what they have tried to do is to ensure that there is integrity in the market through the electronic filing system, through a dedicated investigation team of peace officers that have the ability to go out and initiate criminal investigations and charge individuals, as they have
[ Page 7710 ]
done. I mentioned a number of examples from just the most recent year.

They've got a dedicated compliance team, again to be able to issue cease-trade orders quickly if they determine that an exempt-market participant is not in compliance.

They, as I say, continue to be informed by lessons learned as they go on. People can be extraordinarily, remarkably innovative in the ways that they try to find methods by which to get dollars out of investors' pockets without realizing sometimes on the promises that are originally made.

It is an ongoing effort, and they continue, as I say, to make sure there's integrity in the market by having as vigorous a team of investigatory and compliance staff as possible and continue to work through the electronic filing to constantly update and improve their efforts.

[1515]

B. Ralston: I'll give one more example, and then I'll move on to another topic. There are lots to choose from in terms of ongoing examples.

A final one I want to deal with is the Freedom Investment Club, so-called. This was set up as an alternative to traditional mutual funds. At the beginning it had 200 members and $600,000 in assets. Net assets are now just under $10 million.

It operates under a loophole of sorts under the B.C. Securities Act, as we mentioned earlier, that any company selling shares can be exempted from registration requirements as long as the investor signs a statement acknowledging the risk. That's the statement that the minister has referred to.

The company doesn't have to file a prospectus. They need only file an offering memorandum, which is a much less rigorous disclosure document. Freedom Investment Club is not required to include performance figures, for example, or even provide a list of its holdings. Of course, it's gone south, ceased redemptions, and the B.C. Securities Commission has another embarrassing regulatory failure on its hands.

Before I leave this topic, is the minister prepared to reconsider his position, which he took yesterday or the previous day, that the B.C. Securities Commission, under his direction, would not consider entering the national policy that would require people who sell these sorts of exempt products to be registered as exempt-market dealers, as the Canadian Securities Administrators has suggested?

Hon. K. Falcon: Yes, as confirmed last week, British Columbia is part of what is called the northwest exemption, where all the western provinces agreed that the exempt-market was important enough to western Canada and western Canadians, in terms of the billions of dollars that are raised each and every year, that we would form part of that northwest exemption due to the important role that the exempt-market plays.

[1520]

Having said that, taking the concern that the member has raised — they're not illegitimate concerns — I have asked the Securities Commission to come back to me and give me some more advice and thoughts on ways that we might…. Certainly, I'm open to looking to see how things are proceeding and progressing as a result of the northwest exemption, whether there are ways we can look at improving that. They have committed to coming back to me and providing me with more information. Then perhaps in the future I might be able to share some of that discussion with the member opposite.

B. Ralston: Ordinarily, if we had more time in estimates I would ask a further series of questions in this area. But given that the government is about to invoke closure on most of the budget in the next few days, I'm going to move on to another topic and try to canvass some other areas before my time is cut off.

I have some general questions about the budget. This is a policy question. The government and the Finance Minister have provided in the budget forecast allowances of $350 million in each of the fiscal years 2011-2012 through to 2013-14. The note that's signed by Mr. Milburn as the deputy minister at the front of the budget says: "These allowances are intended to help recognize uncertainty in revenue forecasts, commodity prices and the global economic recovery in general."

Does the minister agree with that rationale for putting forecast allowances into the budget?

Hon. K. Falcon: The answer is yes.

B. Ralston: If the minister will reflect back to the budget in 2009 where we were in similar, probably more uncertain economic times, revenue forecasts were more uncertain. Commodity prices had sunk. The global economic recession was on. There were no forecast allowances in that budget. Obviously, the minister supports forecast allowances now. Does he recognize that it was an error to not have forecast allowances in the budget in 2009?

Hon. K. Falcon: Certainly, Budget '09 and the collapse of the international financial system and all the attendant challenges that left not only governments but business around the globe taught us…. An extra measure of prudence was one of the lessons coming out of that.

That's really what the forecast allowance is all about. It's to ensure that in addition to the contingency reserves, we have that extra step — that extra level of prudence — should we find ourselves in another shock like that. There are potential landmines all around the globe, as the member will be well aware.
[ Page 7711 ]

There are still sovereign debt issue challenges in countries like Greece, Portugal, Spain and others, even in the United States — nowhere near that level of challenge, obviously, but still dealing with fiscal and debt challenges and rating agency warnings about its triple-A credit rating level. All of those are potential instabilities that we believe reflect the importance of ensuring that we have an additional forecast allowance of $350 million per year this year, the next year and the year following as an added measure of prudence.

[1525]

B. Ralston: I really have to differ with the minister on forecast allowances. I don't think they are something that came along after the recession and the 2009 budget. They were regularly included in budgets up to 2009. But for some reason in 2009, probably because they would have made the projected deficit a little bit more accurate, they were excluded.

Moving on, again from the attestation of Mr. Milburn as deputy minister and secretary to the Treasury Board, the assumptions in this budget document, on the top of the next page, are that spending forecast in this budget assumes "annual spending growth will not exceed an average of 2 percent over the three years of the fiscal plan. As this assumption is below actual historical spending levels, to achieve this will require continued fiscal discipline."

Given what the minister has announced in recent days in terms of a major renovation, prospectively, of the fiscal prospects of the province, can the minister advise whether it's now required to amend that projection of spending growth to something lower than 2 percent?

Hon. K. Falcon: The answer is no. Under the scenario that we've presented, as the member would well know, there are offsetting measures that we've put in place. Chief among those, of course, is the increase in the general corporate tax rate from 10 to 12 percent, to take effect on January 1, and the freezing or the postponing of any future reductions, additional reductions, in the small business tax rate that were due to kick in on April 1 of next year.

The member would also know that we also have very healthy contingencies in our budget fiscal plan this year — $600 million and $450 million on each of the out-years. We feel comfortable that we can manage within the fiscal plan, and that remains unchanged.

What I will point out, though, that I think that the member would be interested in is that the scenario that the NDP is pushing — their preferred approach, if you will — of going back to a 12 percent PST plus GST actually has an extremely damaging effect on the fiscal plan to the extent that we would be unable to maintain the current fiscal plan of getting back to a balanced budget within '13-14 without some really serious decisions having to be made on the program spending side.

I'll put aside for a second all of the spending increases that the members opposite are committing to. Just going back to the status quo — 12 percent PST-GST, for example — blows a hole in this year's fiscal plan of about, if my memory is correct, $2.566 billion and continued larger deficits…. Yes, $2.566 billion in '11-12, as opposed to a projected deficit in the 2011 fiscal plan of $925 million.

Under the NDP's preferred plan of going back to the PST-GST, that now becomes a $2.566 billion negative hit to the bottom line. Under the '12-13 year the projected fiscal plan deficit is $440 million; under the NDP's preferred plan of PST plus GST at 12 percent, that now rises to a $543 million negative impact.

[1530]

Of course, in the critical year, which is the '13-14 year in which balancing the budget is required, that projected $175 million amount in the fiscal plan of positive on the budget bottom line now becomes a $356 million negative hit in '13-14.

It's not only just because of the repayment of the $1.6 billion, but the fact is that now taxpayers will enjoy the repayment costs on that $1.6 billion because that's added to the provincial debt. That means a continuing $85 million cost of servicing that additional debt, which is $85 million that doesn't go towards schools or health facilities or other spending priorities the government might have.

B. Ralston: I thank the member for reducing the so-called hit on returning to the PST down to $2.6 billion. Usually, when he's in full rhetorical flight, he rounds it up another $400 million to $3 billion.

Would the minister agree that the premise of the $2.6 billion hit in the first year involves full repayment of the $1.6 billion from the federal government, and will he also acknowledge that the government itself did not take that money in one fiscal year and has yet to take the full amount of $500 million or $505 million due to be taken on July 1?

The Premier herself has acknowledged that negotiation with the federal government on repayment of that is certainly a real possibility. In addition to that, will the minister also acknowledge that the federal Minister of Finance has said in the recent election that he would respect the decision made by British Columbia if it were to vote yes in the referendum and extinguish the HST and would be open to some form of negotiation.

So would he agree that the scenario that he paints is unrealistic and inaccurate and designed totally, solely for political reasons?

Hon. K. Falcon: The member should know that he's correct in pointing out that the final payment due to the
[ Page 7712 ]
province, just over $500 million — I believe it's about $538 million; I could be wrong by a few million there, but it's in that order — actually will be coming forward in early July. I've confirmed that that payment will be coming forward to the province, and that $1.6 billion obviously has gone a long way towards helping us manage our fiscal plan and support and fund important services.

I think what the member is confusing, though, is that whether there is any agreement to be able to repay that in instalment payments or whatever manner the member might believe we are capable of negotiating with the federal government, the early advice from the comptroller general is that regardless of how it's repaid, it is an obligation that must be booked as such in the year in which the obligation becomes due. In other words, once it is clear that we have a $1.6 billion repayment obligation, the early advice from the comptroller general is that we must book that in the current fiscal year.

So again, to remind the member that when I talk about an almost $3 billion hit to the fiscal plan, I am not just including the hit that takes place in this current fiscal year under the NDP's preferred approach of going back to a 12 percent PST plus GST, but the additional impact in terms of the additional revenue hit that takes place as a result of going back to the NDP's preferred approach of going back to a PST plus GST, which is why I am puzzled by the approach that they wish the government to take.

[1535]

It just doesn't seem to make any sense whatsoever. You've got an approach where you can march down the rate of the HST. You can provide a benefit for every family at every income level, where they will be $120, on average, ahead of the game in terms of benefiting as a result of the lower HST, despite the fact that the PST is harmonized with the GST, in reducing the PST portion from 7 to 5.

Why the NDP would want to do a 40 percent increase back on the PST to get it back up to 7 percent and hit the fiscal plan with a $3 billion hit negatively to the bottom line of the province while at the same time still wanting to promise increases in spending in every administrative government just is math that certainly doesn't make sense for me.

But I imagine that's something that the public will analyze — the two scenarios — and determine whether they wish to support a responsible marching down of the HST to 10 percent and the transition cheques that would be made payable to families with children — every child under 18 receiving $175, and every senior earning under $40,000 also receiving $175. I think that that commonsense, responsible scenario as a Finance Minister is far, far more attractive than the fiscal hit that would happen to the province as a result of going to the NDP approach.

B. Ralston: I can see the minister isn't interested in anything other than a rhetorical exchange on this point, so I'll move on. The other thing that the minister has spoken of, arising out of the Dinning report, is this issue of the HST generating revenue beyond what was anticipated.

The minister may know — I don't know whether he does, but usually the former public affairs bureau was pretty good at clipping what I had to say — that shortly after the HST was announced in July of 2009, I found a C.D. Howe study that said that the HST would generate $5 billion over three years more than the PST. That was something that…. I had published an opinion piece in the Vancouver Sun. I was shortly told by C.D. Howe economists that the B.C. plan was different, and it was going to be very close to revenue-neutral.

Indeed, the minister's predecessor, the member for Vancouver-Quilchena repeatedly said in question period that the HST would raise about the same amount as the PST. He said that that's what he had said all along. He said that in March 2010 during question period shortly after the budget.

So the position of the government was clear on this, and yet now the minister has adopted what the Dinning panel said. The Dinning panel reported:

"The HST is raising more revenue in its first year than was predicted. With each passing year the HST will continue raising more revenue than the PST-GST system did because it taxes a broader base of goods and services. If we go back to the PST-GST, the province would see a sales tax revenue loss of $820 million in the first year. That loss would widen and increase to $893 million in the second year, and would widen each year."

Now, it doesn't say which year it's talking about, but I think it's reasonable to assume that it would probably be 2013-14, because it said it would take 18 to 24 months to return to the PST.

In the budget and the budget projection — the budget documents on page 16, in the three-year plan — what is projected is set out on page 16, "Harmonized sales tax." The increase is about $315 million for 2011-12, $335 million for 2012-13, and the total projected revenue for 2013-14 would be an increase of $422 million from the previous year. The conclusion of the Dinning panel was that that excess HST revenue would be over $800 million.

[1540]

But the Finance documents on which the minister has tabled the budget and which Mr. Milburn has signed as the deputy minister and secretary to the Treasury Board attesting to their accuracy within the usual reasonable limits…. So there is a gap between the Dinning panel estimation of HST revenue and the Finance budget documents, the very linchpin of the whole operation here and what the deputy minister signed off on.

Can the minister explain that disparity of over half a billion dollars? Is he relying on the Dinning panel as opposed to his own Treasury Board, his own Finance
[ Page 7713 ]
officials and their capacity to model the provincial budget? Surely they know better than any panel that comes from outside as to what is reasonable to expect in terms of projected revenue. If that's the case, can the minister explain why he didn't table a revision to the budget when it was retabled on May 3?

Hon. K. Falcon: I'm going to walk the member through a few things. First of all, as I have pointed out on numerous occasions in the House, and actually, as I have taken pains as the Minister of Finance to point out on virtually every occasion since I became Minister of Finance, I have been very clear that the HST generates additional revenues to the government.

[1545]

I've said it generates additional revenues to the government because 80 percent of what consumers are currently spending, 80 percent of consumer spending on average, is unchanged. It either had no tax whatsoever — no PST, GST or HST — or it is exactly the same as it was under the PST-GST — in other words, paying 12 percent.

What I would then take pains to emphasize — and I did this on my public phone calls too; if the member participated in any of them he would know — is that on 20 percent….

B. Ralston: You didn't call me.

Hon. K. Falcon: I didn't call you. I'm sorry, I missed your number. I don't know if it's unlisted or not, but we certainly got almost everyone else in Surrey.

Nevertheless, I take pains to point out that on 20 percent of consumer spending, the PST now applies. That 7 percent, prior to the announcement of the change that we made, that PST portion now applies to 20 percent of goods that were formerly just GST, and that's the additional amount people are paying. I've always made a point of emphasizing that as Minister of Finance.

I even went back, because I heard the suggestion — again, they try to propagate this idea — that somehow we always said it would be revenue-neutral. I didn't have time to check through everything that was said by the former Minister of Finance nor the former Premier, but I tried to scan some of what they said, without having time to go through everything, because they do lots of interviews.

Sure enough, there I would find that they talked about it being roughly fiscally-neutral initially — that was anticipated — but the revenues would grow over time. Sure enough, as I've read out in the House and won't bore the member with it again, in the September 2009 budget update it stated very clearly that harmonization is initially expected to be roughly fiscally-neutral.

They don't know for sure, of course, because you won't know until you get the numbers from CRA at the end of the calendar year, when they will determine whether or not that indeed was the case. It went on to say that in future years harmonization is expected to result in increased revenues because the HST is a more stable and robust revenue source than the PST and will contribute to enhanced economic growth.

This is a very, very important principle and why I disagree with the members opposite, respectfully — going back to a PST system makes no sense. When the PST was introduced in 1949, we were largely a goods-producing economy. One of the reasons why we want to move to a harmonized sales tax is because it harmonizes with the GST, which is a tax that replaced the manufacturing sales tax, which was also an extremely inefficient tax that the federal government moved away from.

Why did they move away from it? Because the goods and services tax applies to the fastest-growing part of the economy, which is actually the services sector. We've lost a lot of our manufacturing base to other countries that can do a lot of that cheaper — not exclusively but predominantly. There are lots of other countries that can manufacture and produce goods very, very cheaply.

We want to make sure we have a modern taxation system that reflects what's happening in the economy.

As I've certainly acknowledged many times, we've certainly mishandled the introduction of that and the lack of explanation in a pretty spectacular way. But the political repercussions of that are not dissimilar to what happened to the federal government when they introduced the GST, replacing a manufacturers sales tax.

Today there's nobody out there, including the NDP and others, that is saying we should go back to the manufacturing sales tax federally, that that's really good public policy. The reason they're not saying that is because nobody believes it.

So it is today that we are now in a situation where we are harmonizing our antiquated PST with the GST to produce the same kinds of benefits that have been brought about as a result of having a GST.

Now, what the member should be aware of, when the member's talking about the additional revenues…. Again, I've taken great pains to try and point out that if people go back to the February '10-11 forecast update, it states very clearly: the harmonized sales tax, total changes, $387 million to the positive in terms of additional revenues being generated as a result of HST.

It is important to point out that the HST revenue was projected to be higher in the Budget 2011 forecast compared to the Budget 2010 outlook. So it's up $387 million in '10-11, $447 million in '11-12, $436 million in '12-13.

Now, the member refers to the independent panel report. It's comparing apples and oranges. The member should know that. They were looking at what happens if you go back to the NDP's preferred ap-
[ Page 7714 ]
proach, which is a PST-GST. They were pointing out what the negative revenue impacts would be in terms of the net revenue losses.

[1550]

The member talked about the gross revenues, but he forgot to mention the net revenue losses. As I've pointed out, in '13-14 — and I've referred to this before too — the independent panel points out $531 million and, in '14-15, $645 million in net revenue loss to the province. It's two different scenarios.

Perhaps what would be helpful for the member opposite, and I would be happy to arrange, is a detailed, comprehensive budget briefing to walk the member through all of this so that he can fully understand and appreciate where in the budget documents this information has been sitting.

B. Ralston: Well, that's a very generous offer, but I think I'd rather do it here in public on the record, where the public can get a chance to judge the answers for themselves.

I don't think the minister has answered the question. The Dinning panel projects extra revenue generated by the HST, which the Finance estimates do not project. It's not a question of: is the HST going to raise more? It's the magnitude of the difference, and there's a substantial gap there of $500 million. The minister has not answered that question. I suppose we can leave it to the public to judge why he has chosen not to answer.

Certainly the Dinning panel doesn't explain how they came to that calculation, the sources they used. Whereas here, we have the traditional budget projections put together by the Treasury Board and a host of officials and attested to by the deputy minister at the front of the Budget on page 2. That difference has not been explained, and I'm asking the minister to please give it another try.

[1555]

[D. Horne in the chair.]

Hon. K. Falcon: It is something that, again, I would encourage the member to receive a technical briefing on because I think it's important. As the member points out, on page 16 under the plan 1213, you can see $6.164 billion in harmonized sales tax revenues over the previous '11-12 budget estimate of $5.820 billion.

That's where you get a year-over-year increase on harmonized sales tax revenues of $352 million. Where the member is perhaps getting confused is that he's looking at what the sales tax revenue loss is, going back to a PST, so it's comparing apples and oranges.

As I say, we would be happy to make staff available for a technical briefing so that staff could walk the member through what admittedly is a complex part of public policy. It is important not to confuse the two, because you are talking about a comparison of apples and oranges. You're talking about the estimation of what the revenue tax loss is going back to a PST system, as opposed to what the revenue gains are year over year under an HST world, utilizing a more robust tax revenue and economic growth and all the other things that play into the revenue growth that you're bound to see under HST.

B. Ralston: My time is drawing to a close. I'm disappointed that the minister feels he has to resort to a technical briefing. This is part of the political argument that he's been making to the public, yet he doesn't seem to be prepared to defend it here in public on this occasion.

[1600]

I'll decide whether I can find time for a technical briefing, but I had hoped that the minister would explain that here on the record. Apparently he's choosing not to, but I will move on.

I want to deal with, in the time that I have, one of the minister's recurring examples, and I want to give him an opportunity to set the record straight.

He likes to refer to a desperately poor single parent, three children, with an annual income of $24,000. I think that in the recent example they came from Kamloops. What he says is that if the HST should…. If they vote yes and it's extinguished, that person will no longer get anything. They'll get nothing, if I can paraphrase him or quote him exactly. I just want to give the minister an opportunity to clarify that.

This is from the Canada Revenue Agency site. There are programs that are administered by the Canada Revenue Agency on behalf of British Columbia. They administer the B.C. Family Bonus and the British Columbia earned income benefit. They administer the B.C. HST credit and the B.C. Low Income Climate Action Tax Credit. But the total payment that someone receives…. I'm quoting again from the website of the Canada Revenue Agency. The B.C. low-income tax credit "is combined with the quarterly payment of the federal GST-HST credit and the B.C. HST credit."

This is a fairly obvious and simple point, but the minister states it publicly in such a way that I'm sure that people are misled, and I'm sure that is not his intention. At least I hope that's not his intention. I wouldn't want to ascribe that motive to him, because that would be improper — here in the House, in any event.

What will happen to that person should…. First of all, I suppose we should begin with the suggestion that the B.C. HST dividend is to compensate the person for the increased personal cost to running their household of paying the HST on a number of goods that they previously didn't have to.

Secondly, if that program was to be ended, they would still be eligible for…. In the example that he's chosen — and it's the most extreme example — the family would
[ Page 7715 ]
still be eligible for $893 in federal GST credits after the HST credits had ended and, in addition, the B.C. Low Income Climate Action Tax Credit and other credits that are administered by the Canada Revenue Agency on behalf of the B.C. government, including the B.C. earned income benefit.

So rather than saying that if it ends, it's zero, we would revert back to the GST credit and the other B.C. credits. Would the minister agree that that's a more accurate and fair characterization of the situation of this person than the one that he has publicly stated?

[1605]

Hon. K. Falcon: I thank the member for that question, because it is very timely, given that the member finished off his last question trying to suggest that there is information that is not being shared or relayed properly, and this is a very good example.

I took the member to task for this in the House because by asking the question the way the member did, it demonstrated that he did not understand that the B.C. HST rebate was provided by the provincial government to these individuals. It was separate and distinct from the federal GST credit which is applied. So I'll walk the member through this, because I do think it is important.

B. Ralston: Why don't you stop being so bloody condescending?

Hon. K. Falcon: Well, the member opposite is suggesting I'm being condescending, but I think I just heard the member opposite criticize me, going so far as to suggest that maybe inadvertently I had misled the House. That's a pretty serious…. I don't know if I would call it condescension, but it is certainly a statement that I take very seriously, and I imagine the member opposite would too.

I'm going to take a little time on this because I do think it's important. So under the member opposite's preferred approach of going back to a PST-GST…. I'll just remind the member what world existed under the PST.

So a single mom like that single mom — any single parent in B.C. or anyone with an individual income, not family income but individual income, up to $15,000 — was entitled as an adult to receive a $75 tax credit under the PST. With a family income of $18,000, they would be entitled — if there were two adults in the family — to $150. Nothing for the children. That was it.

So this single mother in Kamloops that I've referred to, earning $24,000, with three kids, would receive nothing — zero — under that PST option that the member opposite and the NDP wish us to go back to, the PST-plus-GST world. Under the HST, that individual, that same single mother with the $24,000 income, is entitled to a low-income HST rebate credit amount in the form of a cheque for $230, not just for herself but also for her three children.

As I've mentioned before, that totals $920 a year. That is distinct and separate from the federal GST credit of about $905 that they will continue to receive and would receive irrespective of the HST. That is what I have clearly pointed out is important to me, at least, as the Minister of Finance — that that single mother knows that under the critic opposite's preferred approach of going back to a PST, that $920 disappears.

Now, the member correctly points out that the $230 low-income cheques that we send out to low-income individuals with a much higher threshold, of course — up to $25,000 in family income…. And I believe the individual income was $20,000. Thank you, staff — so many numbers. So it's a much more generous rebate system, obviously.

Now, what is interesting is that for that single mom who is now receiving $920 in cheques from the province annually…. It's an annual amount of $920. For the benefit of the member opposite, for $230 you would have to spend about $3,300 additional dollars on PST in your typical spending.

[1610]

And $3,300 is a lot of PST. That's a lot of haircuts. It's a lot of extra PST that, the members are quick to point out, you now pay on junk food or whatever — haircuts and the other things that it may apply to. But if you multiply that by four — because in this case, of course, with three kids you're getting $920 a year — that would require spending more than $13,000 of additional PST spend, which I think the member opposite would concede is highly unlikely in a low-income situation like that.

That's why I have consistently pointed out that the HST rebates, particularly as we now are moving to lower the HST rate down to 10 percent, which will provide low-income, high-income… Every income family benefits as a result of having cheaper prices on retail goods, on furniture, on appliances, on cars — whatever they're buying.

We do not reduce the HST amount for low-income individuals, the 1.1 million British Columbians that receive it. So I'm glad the member referenced that. I'm sorry it's an uncomfortable fact, but it is true that if that individual votes to get rid of the HST, which is an entirely legitimate vote for them to make, I do think that it is an obligation I have — to make sure they understand that they're also voting to eliminate the $920 a year they are receiving as a result of the HST low-income cheque that is sent out to 1.1 million families across British Columbia. And I'm glad that the member allowed me to correct the record on that.

B. Ralston: Well, I'm quoting from the Canada Revenue Agency site, which says that the B.C. low-income tax credit is combined with the quarterly payment of the
[ Page 7716 ]
federal GST credit and the B.C. HST credit. So if the B.C. HST credit was discontinued, the person….

I'm concerned — the way it's being stated publicly — because the minister has repeatedly said that person would get nothing. That is just not accurate, and he's acknowledged it here. I thank him for that. They would continue to get the GST credit of $905, and they would continue to get the B.C. Low Income Climate Action Tax Credit as well.

It all comes in one cheque. So for the minister to say, "You're getting a cheque now, but if this changes you'll get nothing," I think has the potential to mislead. I'm glad that the minister has clarified that, and I thank him for that because that person will still continue to receive a cheque composed of the B.C. Low Income Climate Action Tax Credit and the federal GST credit as well. So I thank the minister for that.

I'm going to turn now to cede the floor to my colleague from Cariboo North, who has some questions.

Hon. K. Falcon: I don't want the member to try and wiggle out of this. I want to be very clear about that. What I have said is exactly accurate. The fact is, yes, they continue to receive the GST credit. I've never said anything different. In fact, I've pointed that out in the House, I believe. I pointed out that this single mother with three kids would continue to receive the $905.

I've never suggested that they don't continue to receive the Low Income Climate Action Tax Credit and the B.C. family bonus. I've never said that. Of course, they would continue to receive it.

But what I have said is that if that low-income individual…. The members opposite always talk about wanting to be there to protect the interests of low-income British Columbians. I take that at face value. But I do believe that we have an obligation to at least let them know that they will not be receiving the $920 HST low-income cheque amount that is included, admittedly, as part of the GST $905, and of course, the Low Income Climate Action Tax Credit and the B.C. family bonus.

I am pretty certain that they deserve to know if they're going to be losing a substantial amount of money annually. It's probably at least appropriate that we allow them to know that so that they can make, again, an informed decision. The informed decision may still be that we wish to continue and go back to the PST-GST. That's entirely legitimate. I just want to make sure that they have those facts in front of them. I appreciate the member allowing me to restate what is factual and important for 1.1 million modest- and low-income British Columbians across the province.

B. Simpson: I have some specific questions about the Pacific Carbon Trust for the public record, while staff change. This debate will be truncated at 4:30 because of time allocation. I thank the critic for making some time at the end of debate available to me.

I did have a briefing with the CEO of the trust. I'm thankful for that; it was a meaningful briefing. I've asked the minister's office for a briefing, as well, because I do have some questions around the structure of the trust.

[1615]

I'm not going to go to those questions. I think there are legitimate questions about how this is structured and where the money comes from.

My questions are very deliberate and specific, the first one being: how much money was the trust given from government to be established in the first place? What was the total allocation from government to the trust for the establishment of the trust?

Hon. K. Falcon: The number is $21 million that was provided to the Pacific Carbon Trust.

B. Simpson: So $21 million is what ended up being transferred. It was originally intended to be $9 million, $5 million, $5 million.... So $24 million, but because of a specific dialogue between the government and the trust, the last allocation was diminished.

How much did the trust actually require of that $21 million to get through its startup phase? What was the portion of that money that was required to start the trust before the public sector money started to come into the trust?

Hon. K. Falcon: By the way, I apologize for not introducing Scott MacDonald, the CEO of the Pacific Carbon Trust, who joins us here today.

What I can tell…. The member knows, of course, that the Pacific Carbon Trust was set up in 2008. The goal was to provide it the resources necessary, at that time estimated at $21 million, to build a market relatively quickly to help meet the 2010 carbon-neutral government timeline, the goal of getting to a carbon-neutral government by 2010. Frankly, I'm advised they didn't actually know what it was going to cost to get a market like that set up. So they will have retained earnings, I understand, this year of $16 million.

B. Simpson: I'm going off last year's report, the 2011-12 through to '13-14 service plan, so that's a downgrade of the $21.8 million that was projected at that time for retained earnings.

[1620]

Just again because of time, I'll put the question to the minister. My understanding is that the way this trust was structured, as the minister indicated, nobody really knew what the cost was going to be, how fast you could get in and how fast you could start making the purchases, particularly in advance of the public money starting to flow through the trust.
[ Page 7717 ]

It's my understanding that in the structure of the trust — the flow-through of public dollars at $25 a tonne and a stated objective by the trust to purchase less than $25 a tonne — the overall operating budget of the trust should be self-sustaining. Its approximate $3 million to $4 million operating cost should be absorbed by the difference between what the public sector pays and what the trust buys — therefore, the retained earnings, which in June showed to be accruing through to $35.2 million in 2013-14.

My question to the minister is: as these retained earnings accrue, are they essential to the ongoing operation of the trust? Is that retained earning an essential aspect of the trust's success in its operations?

Hon. K. Falcon: I commend the member because I think it's a great question. It's a great question that I, also, had. I asked the board to come into my office in early April. It's not often that I recommend Crowns that I'm responsible for to come visit me, but I generally do if I have some concerns or something that I wish to have clarified. So I did ask the chair and Mr. MacDonald to come see me about this very issue.

I was concerned. Well, at least I wanted some questions answered about where this would go. I wanted to get a sense from them, from the board chair — who is a highly respected individual, a former highly respected Deputy Minister of Finance, actually — and the CEO.

So we met. I asked them to review the overall cost structure of purchasing offsets. Part of that review will include recommendations about the long-term revenue projections and the use of retained earnings. Just like the member, I, too, want to have some sense of where they're going on that and what that's going to mean.

They've committed to…. They have a board meeting in June, I understand, and at the board meeting this will be item No. 1 of discussion. They are going to be reporting back to me as a result of that discussion.

B. Simpson: Thanks to the minister for that frank appraisal of what's going on.

Let me ask the minister a question. If he doesn't have the staff there…. I mean, I know the answer to the question, but I need to ask it for the record.

How much money was allocated to PSECA, the public sector energy conservation agreement, for this fiscal? That was funded over the last three fiscals, but in this fiscal my understanding is that it did not receive any renewed funds. I'd just ask the minister if he can confirm that or not.

Hon. K. Falcon: Under the public sector energy conservation agreement, as the member would well know, there was $75 million paid out over the last three years to help the public sector to reduce emissions. There are no dollars available this year in the fiscal plan.

[1625]

B. Simpson: It will be the final question, I guess, on this, so I'll do a little bit of a preamble.

I wouldn't mind the briefing with the minister, because as the CEO knows, I have struggled with the, effectively, public sector tax on operating budgets coming into a trust that's only available to private sector entities — the public sector being capped and taxed to achieve carbon neutrality; the private sector on large emissions, no cap and, unless the cap-and-trade eventually comes, no tax — yet being the beneficiaries of that public operating fund.

I do think that the trust structure needs to be reviewed. I've had a dialogue with the CEO about even a $10 emissions tax coming into that trust fund that doesn't come to general revenue but actually flows right back out to the EnCanas and Lafarges who want to reduce their emissions. It's a private-to-private relationship.

The specific reason for linking these two together. The minister well knows that he will be writing the shareholder letter of expectations to the trust, as part of the dialogue with the board. I guess I'm putting a marker on the table that in order to offset some of this public sector tax, if you will, it strikes me that there is a possibility of refreshing PSECA with money that is currently in retained earnings in the trust and allowing the public sector to actually begin again to do greenhouse gas emission reduction projects, as well as buy offsets.

I would pose that to the minister for consideration. I think it's fair to the public sector for PSECA to be refreshed, and I think it's fair and would not hurt the trust if the money was taken from their retained earnings and put into that account.

Hon. K. Falcon: I commend the member on his knowledge of this issue. He has, obviously, spent a lot of time thinking about this. I'll be candid. He's much more advanced, frankly, in his thinking on this issue than I am as the Minister of Finance, just in terms of how much thought he's given it.

As I say, in early April I asked them to come and talk to me because I had some high-level concerns that mirrored some of what the member talked about. I have asked the board to go and do some work in that regard, but the member has given it even more thought.

What I'll commit to the member is that I'll be getting a report back from the board, and I'll certainly share that with the member. He obviously has a keen interest in this area. Perhaps we can even sit down and have an additional discussion once we get that information back and just talk about it. I am definitely open to what the best way is to achieve our common goals that I think we all believe are worthwhile.

Thank you for that question, Member.

B. Ralston: I believe the time allocation rules are going to come into effect shortly.
[ Page 7718 ]

If there was further time, I would ask questions about Partnerships B.C., including a recent report of the Auditor General on the Diamond Centre; the research and tax credit, the provincial portion that's come under question; obviously, many more questions about the HST, the regulation of companies who do foreign remittances, revenue collection and the underground economy; the provincial debt; and the capital budget, particularly as it concerns a new high school in the minister's own riding.

With that, I move that we rise, report progress and ask leave to sit again.

The Chair: Pursuant to the schedule tabled by the Government House Leader this morning, it now being 4:30, I'll put the question on Vote 27.

[1630]

Vote 27: ministry operations, $103,516,000 — approved.

Vote 28: Public Service Agency, $49,677,000 — approved.

Vote 29: benefits, $1,000 — approved.

ESTIMATES:
MANAGEMENT OF PUBLIC FUNDS AND DEBT

Vote 42: management of public funds and debt, $1,349,301,000 — approved.

ESTIMATES:
OTHER APPROPRIATIONS

Vote 43: contingencies (all ministries) and new programs, $602,942,000 — approved.

Vote 44: capital funding, $1,543,311,000 — approved.

Vote 45: commissions on collection of public funds, $1,000 — approved.

Vote 46: allowances for doubtful revenue accounts, $1,000 — approved.

Vote 47: B.C. family bonus, $4,317,000 — approved.

The Chair: Pursuant to the schedule tabled by the Government House Leader, this committee will take a short recess, and we'll recommence with the budget estimates for the Ministry of Energy and Mines and Housing.

The committee recessed from 4:33 p.m. to 4:38 p.m.

[D. Horne in the chair.]

ESTIMATES: MINISTRY OF
ENERGY AND MINES

On Vote 23: ministry operations, $47,926,000.

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

Hon. R. Coleman: No.

J. Horgan: It's a pleasure to be here again for the estimates of the Ministry of Energy and Mines, in the current configuration. I look forward to the almost five and a half hours we'll have at our disposal to review the work of one of the revenue generators in the province.

Just for staff's benefit, we have very little time and much to do. So I proposed, hon. Chair, to the minister and to those paying attention, that in the two hours we have available between now and the meal break at 6:30, we start with and we focus on mines issues. This would perhaps include the northwest transmission line, which is a Hydro issue, of course, but also has significant relevance to the mining sector. My colleague from Stikine will be carrying the bulk of that discussion.

[D. Hayer in the chair.]

Then I would propose that in the evening, after we have the nutrition break, we come back and talk about electricity, B.C. Hydro, Columbia Power, perhaps some discussion around the Columbia River treaty — issues that were raised in the Legislature today and, of course, issues profoundly important to the development of the economy here in British Columbia well into the future. Then, in the time available tomorrow, about one and a half hours, I propose that we focus on the oil and gas sector.

I know that we would have wanted to spend more time. I know the minister is anxious to dive into the meat of his ministry and stand and defend expenditures and policy decisions that certainly, I feel, in many instances are wrong-headed. Nonetheless, I'm confident that he will defend them to the best of his ability.

With that, hon. Chair, I'll give the floor to the member for Stikine, and we'll pick up on the mining sector and see how it goes.

[1640]

D. Donaldson: Thank you to the minister and to the staff accompanying him here today and in the gallery as well.

I will try to cover a lot of ground because, as my colleague said, unfortunately we only have a few hours to discuss this very important component of provincial activity. As it points out in the service plan, mining has contributed $6 billion to the provincial economy in
[ Page 7719 ]
2010, and 11,400 directly employed. It was $376 million in direct government revenue forecast in 2010 and 2011, and $493 million targeted for 2011-12.

Again, it's significant to the provincial economy, this sector. It's significant to provincial revenues and jobs in rural areas especially. Unfortunately, directly as a result of government's decisions around not wanting to sit more often in the Legislature, we're limited to just a few hours on this topic — a $40 billion budget to discuss in four weeks. Having said that, I will now get moving on the questions. It's just unfortunate we don't have more time on it.

The first question I have is in regards to the service plan. I note under Goal 1, "Thriving and competitive energy and mining sectors," under the performance measures, there are two new performance measures in this service plan compared to other years.

One has to do with sales value of products sold from mines, pits and quarries. I have to concur with the description underneath that, the targets, and I mentioned the $6 billion target already. But what is described here is: "Targets are heavily dependent on commodity price fluctuations and new mine developments; for example, in the last 12 years, 1998 to 2009, this measure has fluctuated annually by as much as $1.6 billion."

We can understand from that that these targets are heavily dependent on commodity price fluctuations and — when we look at copper, for instance, being 70 cents a pound in the mid-'90s and over $4 a pound now — why we would see these major fluctuations.

There's another new performance measure on the relative ranking in Canada for mineral exploration and spending. My question is: especially in the context of the HST stimulating jobs and $80 million in tax savings that are projected to the mining, oil and gas sector, why would the ministry not have a performance indicator to do with jobs and job creation in this sector?

Hon. R. Coleman: It's because we didn't pick it. I mean, when we did the service plan, it was really about what we thought we would be able to quantify. The trouble with something like a mine…. It can be cyclical. The downstream jobs are more difficult to measure. We have to rely on information from the companies with regards to that, but we can watch the numbers on, basically, the commodity prices to help us with that particular measurement, so it's never been chosen as a measurement for this particular category in this service plan.

D. Donaldson: Thank you to the minister. Well, we know that commodity prices can fluctuate quite wildly as well. Jobs seem to be on the mind of my constituents and the people in B.C. and also, apparently, this government. So I would encourage that kind of performance indicator in the future.

[1645]

I think in the service plan you're able to quantify the number of jobs in 2010 as being 11,400. Then, to quote from the service plan: "Overall, B.C.'s mining and mineral sector employs about 28,400 people, direct and indirect employees" — so 11,400 direct, 28,400 direct and indirect. It seems to me that that's even less than a 2-to-1 multiplier effect. We know other industries such as forestry, tourism, arts and culture are higher than that. Could the minister advise as to measures this ministry would have in the next year to try to increase the multiplier effect from those direct jobs?

Hon. R. Coleman: These are the multipliers established for this sector. It will vary from sector to sector. Tourism might have different multipliers, because of its different effects, but these are the multipliers we use for this sector.

D. Donaldson: Considering that the goal of the ministry is to try to enhance, advance, develop this sector more, does the minister have interest in trying to improve those multipliers by government actions that could assist in that regard?

Hon. R. Coleman: Obviously, our goal is to enhance mining, to improve processes so that they can get done quicker and so that we can actually get on the land base. We saw a dramatic increase in exploration last year at about $330 million in exploration, which obviously is jobs pre-mine that all have certain multipliers to them on the ground.

Plus, the priority here right now is to get through the processes on mines or on opportunities that exist in front of us so that we can get them up and running, whether it be through an EA process, which the member will know can take an extensive period of time because there's lots of consultation there, or other opportunities we think we see in front of us.

The priority of the ministry right now is to bring things to fruition within the guidelines that we have to get something up and running — if it's available to get it done, given the processes that we have to follow.

D. Donaldson: I will get to the EA process eventually, and hopefully, we can spend a bit of time on that today. I'm going to move on to the actual budget.

Gavin Dirom, president of the Association for Mineral Exploration for B.C., pointed out last year — and I know we have different reorganizations here, but the general thrust: "The government has chosen to cut the budget of the Ministry of Energy, Mines and Petroleum Resources by approximately 14 percent." That was 2010. "This follows a 4 percent cut in 2009."

The decrease in the mines and mineral resources budget this year is 1.6 percent. That's not huge, but looking in retrospect at the last three years, that's three years
[ Page 7720 ]
of cuts. The minister mentioned the increase in mineral exploration and the hope that this sector will also increase in activity in the coming years, so one would think that you would see an increase in the budget in this ministry.

Could the minister advise as to where the cuts this year are taking place in the mines and mineral resources part of the ministry — the 1.6 percent?

Hon. R. Coleman: They'll be found in the operating costs. We do all have to tighten our belts in a time of recession and given the cost to government in certain areas. The challenge I've given to my ministry is to find ways to do things differently or more efficiently as we come through this period of time so that we can actually deliver — maybe sometimes in a different way — in such a way that we can be successful. We feel that we are fine to handle the work in front of us given this particular reduction in operating costs.

[1650]

If the member wanted to advocate for additional money for our ministry, he should have been here for the Minister of Finance's estimates a little while ago. Mind you, it wouldn't have done me any good, but thanks.

D. Donaldson: Maybe you could have come over here on this side and advocated to your own minister for that. That would have been refreshing for sure.

So 1.6 percent on operating costs — $169,000. In the world I came from, that was a lot of money. In this world it doesn't seem to be that much. I'll take the minister for his word on that and not go into operating costs for a 1.6 percent drop in a budget.

There is another part of the ministry, titles and corporate relations, that's seen a 22 percent drop in its budget this year, over a million dollars. I find that potentially of concern because one of the responsibilities of this part of the ministry is leading cross-ministry and intergovernmental initiatives, which obviously will have an impact when we talk later about First Nations and the environmental assessment process.

Could the minister explain the million-dollar cut in that part of the ministry and what it involves?

Hon. R. Coleman: That's in workforce adjustments. Some marketing costs and staff reductions are where that's been picked up.

D. Donaldson: Could the minister explain the difference between a workforce adjustment and a staff reduction?

Hon. R. Coleman: There is none. Sorry, I just repeated two statements that I was given, put them together and gave them to you. You can have either one or both.

D. Donaldson: We'll say that's double up, then. Well, that's a good point, so let's pursue that point.

Could the minister explain in this budget estimates the number of full-time-equivalents, FTEs in short form, in relation to the mining responsibilities of this ministry compared to previous years? I understand that we're under reorganization. Perhaps you could, first of all, just give me the FTE number for this year in relation to mining responsibilities.

Hon. R. Coleman: You're right. It's a bit difficult to compare year over year sometimes when a reorg has been done. You do get some adjustments that are not easily compared, but we'll try and get you some numbers if you ask more questions about that. The FTE number for this portion of the ministry is 85 people.

D. Donaldson: That would be in the mines and mineral resources and the titles and corporate relations, or in the mines and mineral resources alone?

Hon. R. Coleman: That is only the mines and mineral resources side. The other piece which the member mentioned is 41 people. We call them titles and corporate relations. That would be another 41 people.

[1655]

D. Donaldson: I guess the next question: is this a decrease in FTEs from previous to the reorganization, in relation to the responsibilities now under the ministry? I think the minister understands the gist of the question. I'll let him go at it with his staff.

Hon. R. Coleman: It would appear to be a decrease, but that's because the support functions all are over at Natural Resource Operations. That would be the people doing things like FrontCounter B.C., First Nations consultation, taking the application. Those sorts of things are over at NRO, and I don't have the numbers of how many people stayed there versus coming here. What we'd be doing is geoscience, inspections, policy and mineral titles with these folks.

D. Donaldson: Thank you for that. Yes, the responsibilities have been split out. I understand that. I was trying to get at whether there was an ability to get a handle on whether the responsibilities that now lie with the minister's new ministry have decreased compared to what it was when it was a more comprehensive ministry.

I'll leave that to another question. I think what I'd like to do here is quote Pierre Gratton, the president and chief executive officer of the B.C. Mining Association, soon to be leaving — in June, I believe — to the Mining Association of Canada. It's unfortunate we're losing Pierre, but we will wish him well and know that we have someone to talk to in Ottawa about mining.
[ Page 7721 ]

He appeared before the Finance Committee, and in regards to mining and the staffing levels, he said that "we are concerned by the level of cuts to key permitting agencies…. We feel that it's gotten to a point where it's compromising their ability to get permits done. That, of course, impacts the economy."

Does the minister believe there are adequate staffing resources in the ministry to get the job done?

Hon. R. Coleman: I had heard that same concern in different meetings. I did spend two and a half hours with the B.C. Mining Association board of directors and about 30 other people in a round-table conversation. It wasn't anything about speeches. It was just any questions they had or issues they had.

They had brought up some issues with the timing of permits, but when we came back and looked at it, actually, we seemed to be managing our volumes fine. It's how we triage our applications. I'm satisfied that we are able to deliver with the folks we have, with the people that we have in place.

D. Donaldson: Then, of course, I will quote from the former Energy and Mines Minister, who said as recently as this fall: "The fundamental problem facing the natural resource ministries is that they're underfunded. We work the heck out of…employees…we don't have enough funds within these ministries to get the permits out the door, to develop policy, to deal with the stakeholders, to do the work that actually leads to the majority of the revenue that comes into government."

[1700]

Given that quote from the former Energy and Mines Minister, does the minister now believe….? Six months later in a new budget cycle, does the current budget have enough funds to get the permits out the door, to develop policy, to deal with stakeholders?

Hon. R. Coleman: Yeah, I'm actually…. The way we're doing it now, using folks that are able to have time to do additional work in the field — where we're using folks that might be able to do some permitting stuff with regards to forestry, but also using them on mining and some of the other functions — is actually starting to show results as far as efficiencies are concerned. The challenge, when you make some change like this, is maybe training up some folks as far as in the early stages of it.

If I look at it, and in the conversations I've had with my staff since I've become the minister…. Looking at that and looking at how I think we've improved that piece of our business across government — it's still a work in progress; always is — I think it's important that we do, do this. At the same time, we'll also look at how we can improve our own services and efficiencies, because you have to sometimes think outside the box.

When you have adjustments to budgets, sometimes you actually find out you can do the same work or more in a different way by structuring how you do your business. That's the intent of what we're doing now, and I think we're starting to see the early results of that.

D. Donaldson: I'll have some suggestions to the minister for thinking outside the box a little later in our budget estimates discussion, so I'm happy to hear that he's open to thinking outside the box on these issues.

I wanted to address another topic. I know we're moving through quite quickly here, and I appreciate your fast and direct responses. We have a lot of ground to cover, and we don't have a lot of time, and it's an important sector, as you agree.

In December I attended an international conference on mining risks in B.C. It was co-sponsored by the Fraser Institute. There were over 70 jurisdictions surveyed each year by the Fraser Institute survey of mining companies. This was the 2009-2010 presentation of that data.

What really became apparent was the deterrent to investment. The question was on uncertainty concerning native or aboriginal land claims. Out of these 70-odd jurisdictions that were surveyed, B.C. came in last as mild, strong or would not invest due to this factor, well behind other countries — in fact, behind other countries that are often not held in the greatest regard by an organization like the Fraser Institute. Countries like Venezuela and Bolivia even ranked ahead of us. So the uncertainty is a major issue.

I know that in asking representatives of the mining industry at the Finance Committee hearings over the last couple of years, they see this as the biggest single impediment to investment, which brings us to the Prosperity mine and the Taseko Mines', well, failure, I would say, and fiasco that happened last year.

There was a process where…. The federal environmental assessment process, as the minister knows, rejected the proposal after it being passed by the provincial environmental process.

The comment from the federal Minister of the Environment at the time was, "This was science-based and an independent panel of three respected Canadians that made this recommendation to us," in regards to the federal decision. He went on to say: "A number of the stakeholders didn't take part in a provincial process, and this is why the federal and provincial processes arrived at different conclusions."

[1705]

One of those stakeholders that didn't take part was the Tsilhqot'in National Government. It wasn't simply, as the federal process pointed out, the issue of Fish Lake, but there were other failings in Taseko's application: fish habitat being one; grizzly bears in the south Tsilhqot'in region; traditional First Nations land use; and cultural, heritage and potential aboriginal rights and title.
[ Page 7722 ]

The panel actually said there would be no other viable alternatives that could be explored to avoid the significant adverse environmental impacts.

In February of this year Taseko, according to their website, revised the proposal and resubmitted it to the federal government. My question is: has the province received this submission as well?

Hon. R. Coleman: There are a number of questions in that, so let me try and deal with them. The Fraser Institute report with regards to First Nations. I think it's important for all of us to understand that the respect for the First Nations and their traditional territories and the consultation and accommodation that has to take place with regards to the land base is very important.

I think companies, whether they would be from anywhere in the world, if they would sit down and take the time to understand that, they would have a better outcome sometimes with their consultation. It's about respect. It's about working with people.

The Tsilhqot'in are a very proud nation, and I've had a significant number of meetings with them in the last little while on a number of issues for them — not the Prosperity mine. They are a group of folks that are very proud of their territory. They see important values there, and anybody that wishes to go and do business in these areas needs to understand that respect has to take place.

I don't make apologies when it comes up with the mining industry or anybody that that's part of British Columbia. It's part of our heritage, it's part of our lives, it's part of our pride, and we should actually respect those consultations and accommodations and discussions with First Nations. The sooner anybody who is entering into a process understands that, the better it is, I think, for all the parties involved.

On the second piece, no, we have not received the new application. They still have not completed their work with the federal government, from my understanding, on the details that they would want to have. We are not in possession of anything, and they haven't resubmitted a final new application as yet because there's evidently a bunch of more work that has to be done.

D. Donaldson: Thank you to the minister. Given the potential importance of this issue around First Nations consultation and the environmental assessment process to the mining sector, has this government and this ministry requested the submission that was sent to the federal environmental assessment office, given that you know the concerns and the major issue that this represents?

Hon. R. Coleman: Two stages to that. We have actually asked them to share with us any submissions they would make to the federal government. They're not ready to make them yet. We've also made it very clear that upfront, at the very beginning, they should be sharing that with the Tsilhqot'in.

D. Donaldson: Are you aware whether that's been done with the Tsilhqot'in?

Hon. R. Coleman: No, it hasn't because they're not ready to do it. They haven't given it to anybody yet because they're not ready. They haven't got their presentation ready.

D. Donaldson: Thank you again. So they've resubmitted it to the federal environmental assessment review process. They're not ready to submit it to the province or the Tsilhqot'in — that's what I understand, hearing from the minister.

[1710]

The Premier actually had a discussion with the Prime Minister shortly after she became leader. Premier Clark, in regards to this project, said to the Prime Minister: "I told him I'm interested in making sure we find a way to get that mine going in British Columbia."

This is curious because, as the minister says, the province hasn't even seen the resubmission to the federal government, yet the Premier is already prejudging that submission and saying that she believes and that she wants to get the mine going in British Columbia.

My question would be, then, in relation to aboriginal consultation and coordination: what does this province intend to do differently than they did in the first environmental assessment review process?

Hon. R. Coleman: Let's be clear. There has been no official project description submitted to the federal government into an EA process on Prosperity mine by Taseko. All they actually told them was…. They let them know that they had a new idea and a plan on how to deal with some of the issues.

Until they actually resubmit a new official project description, which they haven't done, to the feds…. They obviously haven't copied to us, and they haven't done it with the Tsilhqot'in. There is no process for consultation to take place with regards to that plan until it is actually submitted. At that point in time the consultations would commence.

D. Donaldson: I'm glad that the minister brings up consultations, because that's essentially what this issue is about. Referring back to the Fraser report, it is a very important deterrent right now — the uncertainty over the land base that this government hasn't been able to get clear in its ten years in government.

I know the minister talked about respect. I know that many companies, and I think he would agree, do respect the land question. But I believe it's up to the government
[ Page 7723 ]
in their role as government to set the framework in that. I'd like to talk a little bit about that framework, because if the framework has improved for addressing the uncertainty issue around the land base, then there will be fewer unnecessary delays. I know the government is interested in that around this sector.

The consultation with the existing mechanisms for consultation around the environmental assessment process and the participation of First Nations is what I want to ask the minister about. I'm going to give three examples in the original B.C. Environmental Assessment Act, which was introduced in 1995, that related to First Nations participation and the general topic of consultation.

The 1995 act explicitly stated the objectives of the legislation, and one of them was to provide for the participation of First Nations in the process. In 2002 amendments by this government deleted that objective. In 1995 the act established a project committee to conduct assessments and established a clear role for First Nations on that committee. In 2002 this government's amendments eliminated that project committee.

In 1995 the original act required that project report specifications be prepared as a guide for the proponent to write its project report, and in this was set out a list of content topics. Those included effects on aboriginal rights, plans for proponents consultation with affected First Nations and a number of other topics. The amendments brought in, in 2002 by this government remained silent on the project report content and left that to the discretion of the project officers.

[1715]

The act was gutted when it came to First Nations participation being clearly laid out. Problems have resulted, and unnecessary delays, and we know that even recently there have been a couple of examples of that. We know that last year with Taseko Mines was a big example.

There's a report from last week. The B.C. Court of Appeal backed up the West Moberly First Nations in a judicial review, and they sided with the original judgment regarding the Ministry of Energy, Mines and Petroleum Resources amending existing permits to allow coal exploration in the northeast. Sadly, a Court of Appeal said that "the Crown breached its duties to consult and accommodate West Moberly First Nations."

Here's a letter I have addressed to the environmental assessment office, May 30, just yesterday, from the Gitanyow Hereditary Chiefs around the environmental assessment preapproval process regarding the KSM, Kerr-Sulphurets-Mitchell mining project.

They said: "We're very disappointed to see that you have once again disregarded your duty to consult on other important issues such as potential impacts on water quality and fish production in regards to but not including the entire Gitanyow First Nation under the proposed environmental assessment process for that mine." These are unnecessary delays caused by not having proper process in place.

I'll get to the question now. One aspect that typifies how this government handles the topic of First Nation accommodation around mining projects is under impact and benefits agreements under the EA process. Right now under the current process impact and benefits agreements are seen as, really, an accommodation tool, a mechanism between the environmental assessment office and a proponent.

The unfortunate part is that the environmental assessment office takes an impact and benefits agreement — and I'll use the acronym, IBA — takes the willingness of a proponent to come to terms with a First Nation on a mining project with an IBA as good enough in order to sign off on the permit.

My question is: wouldn't it be better, for certainty, to reduce some of these unnecessary delays that I've outlined and we see, that the Crown compel the parties to reach an IBA before the minister makes a decision on the project — in other words, compel a proponent around a mine and a local First Nation to reach an IBA before the project is approved? Therefore you head off the future possible conflicts and confrontations, which we see in many cases, that lead to unnecessary delays.

Hon. R. Coleman: I'm hesitant to get into the discussion about the environmental assessment office and its operations since it's not in my ministry and neither is the act's responsibility here. In actual fact, it sits with a different ministry, but the duty to consult sits with the Crown, and that's why we do IBAs.

[1720]

We share mineral tax revenues. We've actually had two successful ones that we've signed that are going forward with New Afton and Milligan, which have both had mineral tax revenue–sharing agreements attached to them. We try to work with all the First Nations with regards to consultation. The member will know that geographically and across the province different First Nations have different priorities, so you have to be sensitive to that and work through their issues as you work through these things the best you can with the groups.

D. Donaldson: I appreciate the minister's hesitancy to get involved in the EA process, which he says comes under another ministry, because it is a difficult question.

However, under the service plan, one of the strategies under the goal of "the ministry, stakeholders, First Nations and industry working cooperatively for the responsible development and use of British Columbia's…mineral resources" is: "Foster working relationships between industry, the public, First Nations…clarifying and simplifying resource exploration and development management processes, enhancing dispute resolution methods and offering more support and information."
[ Page 7724 ]

In the service plan it also talks about this ministry taking the lead on the First Nations consultation and leading that through interministry discussions.

It's true that the ministry and the Crown have a duty to accommodate. What I'm asking the minister is: in his desire to think outside the box, would he not think it's a better method to encourage the parties and actually compel the parties to arrange those IBAs before an EA permit is given in order to avoid unnecessary delays down the road?

Hon. R. Coleman: The area you're reading from, I understand from the service plan, deals with the surface rights board, which is basically oil and gas and not mining. On the other side of this we do have the duty to the Crown, and we do encourage the economic development agreements, which include, like I said earlier, shared mineral tax and revenues, and we can work with that.

We also encourage companies…. What I was alluding to earlier when you were talking about the Fraser Institute report was that the companies have to recognize that they need to, at the front end, get into negotiations with First Nations to find common ground where they can actually get to accommodation and understanding of business relationships that work for all the parties. We encourage that to happen.

D. Donaldson: Well, I'm reading from the service plan right here, and it does say energy and mineral resources, so I assume that has to do with mining. Energy and mineral resources under objective 3.1, again, is mineral resource development, foster working relationships. That's what the service plan says.

[1725]

As far as fostering those relationships between companies and First Nations, what role does the ministry play? Do you just introduce them and say: "We'll see you in a few months; I hope you have a good time; come back with a solution"? How do you typify the role that the ministry is playing in that regard?

Hon. R. Coleman: We have staff around the province who are very well versed in working with First Nations with regards to the mineral side. We basically bring the parties together. We follow up the files, we track them with the folks to see how things are going, and we give advice where necessary.

The one thing we can't do is interfere with any of those negotiations between a corporate entity and a First Nation, for instance. That is something we don't do. We can't dictate to them what they have to do as part of their deal to get to their accommodation or their business relationship with a First Nation. That's something that they are encouraged to do.

In actual fact, we don't have the ability to dictate those commercial relationships — that is not the role of government — but we do encourage it. We do try and have people understand the role of First Nations if they're new to B.C. We have a number of companies in B.C. that do understand that those relationships are more successful than some others.

D. Donaldson: In regards to the advice, what advice would your ministry give…? I will recognize that we can't go back and talk about last year, and that was Prosperity and Taseko. It was a failed process and a failure by the government to move it forward. So what advice would the ministry give in a similar situation to that kind of situation that we saw with Taseko? What advice would they give to companies to try to move that forward?

[J. McIntyre in the chair.]

Hon. R. Coleman: We advise them on best practices. We make sure they become aware of the sensitivities within a particular area. We do have guidelines that they can use. The fact of the matter is, Member, that each file is different because each one is a different company, usually.

If I was giving them advice — seldom do they ask me, but having been around different resource ministers over the last number of years…. If you want to do work on the land base and you do have an ore deposit, in this particular case or any case like that, my advice would be that you best get to know the sensitivities, the issues and the concerns of the First Nation.

[1730]

You best get to know and understand what their goals are for their community and understand how you can work with them to have mutual success together. I think that when companies stray away from that, that's usually when they have difficulty downstream. From my perspective as a minister, that would be the encouragement I would give to any company. I know our staff does that too.

At the same time, we try and make them aware, give them the best practices, give them guidelines and give them the advice that's necessary. But at the end of the day, they need to build a relationship with the First Nation as an organization, which I think is really important that they understand at the front end.

D. Donaldson: I would say I concur with many elements of what the minister said. Unfortunately, sometimes it takes a little bit more than encouragement, and by removing — some would typify it as gutting — elements around First Nation participation and consultation in the Environmental Assessment Act, this government has removed the lever that is often needed to get these important projects moved along and avoid unnecessary delays.
[ Page 7725 ]

I wanted to finally touch on an area of the environmental assessment process that has to do with mining. The minister earlier mentioned around trying to improve that multiplier effect when it comes to jobs in the industry, which seems quite low at around two to one, by getting through processes. One of these processes in relation to mining is the environmental assessment process.

One of the problems that affects the process is that effective and meaningful participation in an environmental assessment process requires proper resourcing for First Nations. Sometimes it's a bit of a battle back and forth. The environmental assessment office takes the position that proponents ought to pay for that. Proponents take the position that the Crown should pay.

Sometimes the proponents are pretty good — the minister has mentioned differences between companies — and to be fair, the environmental assessment office now does usually offer some minimal funding, but usually not at levels that are sufficient to move the process forward.

Considering that mining is an important responsibility of this ministry, where would the minister suggest that funding for First Nation participation should come from? Secondly, is it adequate?

[1735]

Hon. R. Coleman: I don't want the member to feel like I'm about to bounce him around government, but I am.

Basically, we participate in the best practices and the guidelines and help with putting the processes together with folks. The actual strategic engagement agreements are negotiated by the Ministry of Aboriginal Relations and Reconciliation, because they have folks that do that, they're funded, and they actually have funding for helping with capacity on those agreements. The EAO also has some funding for capacity with regard to First Nations on this as they go through their processes.

As these things mature and they come close to the larger agreement and negotiation and that sort of thing, then what would usually happen is that a capacity issue could be identified, as well as revenue-sharing, whatever the case may be. That forms itself as a subject of a Treasury Board submission that would go forward to Treasury Board by the minister responsible and the other affiliated ministries.

It would be led by, probably, the Minister of Aboriginal Relations and Reconciliation to Treasury Board but supported by the ministers that would be a part of that process, whether it be in mining or forestry or whatever the case may be. Then that goes forward for an approval for additional funding, and usually a range is provided.

I've seen these come through when I've been on Treasury Board. They mature as the project matures, so that at different stages along the way, different ministries provide certain levels of capacity funding, depending on the project.

D. Donaldson: That was quite a succinct tour. I must say I was expecting a longer tour through the…. But I don't need it, thank you very much. Thanks for that answer.

The other aspect of this, you know, was funding to participate in the process, which is necessary in order to reduce delays and improve the job potential. Then there's First Nations funding to get to participate in the ongoing permitting and regulatory process, which is never addressed, and I just want to flag that before I move on to another topic.

A First Nation government will require effective involvement in the environmental management and oversight of the mine through its lifetime until reclamation and closure are achieved, and those concerns are not usually addressed through funding. Just to point out in 2006-07, if you looked at the potential projects that the EAO reviewed, their worth versus what the EAO had in financial resources to review those projects, it was about 28 cents per $1,000 of potential investment in assessing proposals.

So I'd be on the minister's side to advocate for the EAO to have much more funding in order to drive this sector forward, in order to fund First Nations' full participation — plus in the monitoring afterwards, after the projects are approved.

I'll move on to monitoring, the topic of monitoring and reclamation. The minister and staff know that this is a very important aspect once a project is approved because it builds confidence in the industry from the public. There are certain areas of our province that are facing a potential huge investment in development and many projects. Knowing that the proper monitoring and reclamation processes are in place builds confidence.

I wanted to quote from the Taku River Tlingit First Nation, which is up in the Atlin area in the northwest corner of the province, in Stikine. They say: "What good are the certificate requirements if they're not complied with" — this is in regard to mining — "or if there is no effective control to deal with non-compliance."

That brings me to a question in regard to the chief inspector of mines. The chief inspector of mines must submit an annual report showing the results during the previous year in achieving the purposes under the act. The latest annual report we had was in 2008, so the 2009 and 2010 annual reports are outstanding, and the chief inspector of mines is in noncompliance with the act. When asked, as reported in a print media publication, he said: "To be honest, it's partially from lack of staff."

[1740]

Under these budget estimates could the minister describe whether there will be an increase in staffing for
[ Page 7726 ]
that sector, the chief inspector of mines, in order for him to fulfil the duties that are needed and to restore some public confidence in the monitoring aspect of projects?

Hon. R. Coleman: There are a number of things that are going on in the ministry, obviously, and we're doing a review going into our budget cycle this fall with regards to our capacities and what we want to deal with. We would go through a presentation on our budget going into the next budget cycle. All that work is being done now.

The chief inspector's office is in compliance. It is not out of compliance. It posted the 2009 report about a week ago. The 2010 report will be probably posted this fall. It does lag a little sometimes because it relies on statistical information from other sources like WorkSafe B.C. or from mining companies with regards to that and some other fieldwork that has to come in, in order to get the final report done.

We are, the member should know…. One of the things that happens to us is this. We have some very good people that work for government, and when mining starts to pick up what happens is that people come along and actually hire our staff away to work for them in the industry. So we have some posted positions now. We're out there posting positions for some folks to fill in some vacancies that we have right now.

D. Donaldson: Earlier the minister stated he was confident that staffing levels were in place to get the permits out the door, get the work done, get the plans done. How many vacancies are there currently?

[1745]

Hon. R. Coleman: About eight positions, but under ten for sure — positions that are vacant right now that are being staffed up. That is just the cycle of our business in government. We still manage to get the work done, but we're always looking to make sure we're fully staffed up as well, and that cycle can sometimes be off a little bit.

D. Donaldson: Are these senior positions, and how long have they been vacant?

Hon. R. Coleman: Some senior, some junior. We have a few geologist positions — a couple of those from senior folks that have retired or gone to other sectors — as well as a couple senior inspectors. Obviously, what we try and do is train people up or bring them through, but we also have to post the positions to see where other qualifications may be available from other ministries of government and that sort of thing.

D. Donaldson: I take note in the supplements to the estimates for this ministry that under STOB 60, "Professional services," under "Mines and mineral resources," is $558,000 for this year — over half a million dollars. Is that higher than last year, and are those kinds of contracts due to lack of staff?

Hon. R. Coleman: That's down by about $90,000 over last year. What it is…. You can't always have all the expertise in government, particularly when you're in technologically driven industries and what have you, and sometimes you need highly specialized people. That's when we contract out those services to meet our objectives.

D. Donaldson: Just to pursue this a little further, what are some examples of those services?

[1750]

Hon. R. Coleman: The majority would be on geotechnical engineers and environmental scientists, particularly specializing in things like acid rock drainage, which is a specialized expertise. From time to time we need that, and that would be the majority of it.

D. Donaldson: Thanks to the minister. Going back to the annual reports that the chief inspector of mines must submit, will they include…? From what I understand, they don't include a non-compliance reporting system in them. This, of course, is of concern to the members of the general public who want to have their confidence built around how good a job this ministry and we, as a province, are doing in monitoring mines. So will there be non-compliance reporting systems reported in these annual reports?

Hon. R. Coleman: We don't now, but I will take the member's question with respect and look into that and see whether we could do that in the future.

D. Donaldson: Yes, that's good news. I think people would like to see that, and I believe that the ministry would keep track of that kind of non-compliance issue, so it shouldn't be too hard to report them in an annual report.

I want to move on in this area to actual inspections. Mine visits by inspectors were over 2,000 in number in 2001, but about half of that in 2008. So my question to the minister is: how many inspections will occur this year?

[1755]

Hon. R. Coleman: There were 1,015 mine visits in 2008, 1,039 mine visits in 2009 and 1,058 mine visits in 2010. These visits resulted in the creation of 506 inspection reports in 2005. I won't give each year, but it's 807 in 2010.

We also do ongoing audits with specialists, to go look at other aspects of these inspections, with regards to
[ Page 7727 ]
water management and that sort of thing. We also do those audits on top of the inspections.

D. Donaldson: I believe the minister said 807 visits in 2010. Is that correct, or was that 1,050 in 2010?

Hon. R. Coleman: It was 1,058 mine visits in 2010.

D. Donaldson: Thank you for that clarification. So 1,050 in 2010. Well, that's still almost half of what occurred in 2001. By reading of the material, I would assume mining activities increased in 2010 compared to 2001. Would the minister think that that number is adequate number of inspections?

Hon. R. Coleman: It's tough for me to say for sure how many inspections are appropriate, but I can say to the member that the results are there. We maintain the safest heavy industry. Mining is the safest heavy industry in the province, for safety for employees, as a result of these types of inspections. I also mentioned to the member that we do audits as well.

Madam Chair, I would expect that right now we're going to recess for 30 minutes for dinner.

The Chair: This schedule says 6:30.

Hon. R. Coleman: That's fine. Sorry about that, Madam Chair. I look at my House schedule as the House Leader.

I will apologize to the member opposite. We're going to not take a recess until 6:30, so you'll have to hang in there a little bit longer, if you're hungry.

That's basically the audits and the inspections combined. It's the safest heavy industry in the province, and I think that the results speak for themselves.

D. Donaldson: We'll get to safety, since we have this bonus half-hour of time, apparently. I was always counting on 6:30. I mean, it's too important a file to not take every minute.

The inspectors. Could the minister advise how many of the inspectors these days actually have mining backgrounds rather than forestry backgrounds?

Hon. R. Coleman: They all have mining backgrounds.

D. Donaldson: Well, I suppose that it depends on how you define backgrounds. From what I understand, many of the inspectors have come over from a reorganization and have been educated in a formal education as forest technicians and in forestry. That raises some concerns about what the on-the-ground eyes are in the mining industry.

Maybe we can move on to reclamation, another important confidence-inspiring aspect for the public, in mining. Reclamation is essential for early mitigation of environmental impacts, as the minister knows. The reclamation staff in the ministry numbered ten in 2000. That was a high. It was three in 2007. Eight years ago the reclamation inspectors in regional areas like Cranbrook, Kamloops, Prince George and Smithers were removed, so how many reclamation inspectors are there now in the ministry?

[1800]

Hon. R. Coleman: First, I want to clarify the previous comment to the member with regards to the inspectors. All our inspectors have the appropriate qualifications as mines inspectors. What the member was probably referring to, with the people that may have forestry backgrounds, would be the people coming over in the combination of the reorg. When they're busy, they're also being trained to be able to do mining permits and forestry permits, but they're not inspectors. They haven't been moved into that particular aspect of the work.

We have a couple of people that do the reclamation work, plus that's where we also hire contractors to do specific jobs who have qualifications to do the reclamation visits.

D. Donaldson: The couple of people doing the reclamation work. Where are they based out of?

Hon. R. Coleman: They're based out of Victoria.

D. Donaldson: When you say reclamation work, do you mean reclamation inspectors based out of Victoria?

Hon. R. Coleman: Yes, hon. Member.

D. Donaldson: Considering the tight budget atmosphere we work within these days and the thinking outside the box, as the minister put it earlier in our discussions, what would be the cost-effectiveness of having a reclamation inspector actually situated closer to where mining activity is set to occur, in the regions, and the cost savings that would provide in travel, for instance?

Hon. R. Coleman: They do other work as well. That's why they're stationed in Victoria. They do some stuff with securities and bonding. They're also part of the reclamation work that they would do. That's why we also have contractors that we can go into regions with, so we can be flexible on the ground to send folks to where we think they're needed.

D. Donaldson: The minister brings up securities, which for those not familiar, are funds put aside to cover the cost of mine remediation should the mine company default on its obligations.
[ Page 7728 ]

There is a B.C. Auditor General's report criticizing the way that security is handled by this government. There's not a requirement to post a bond, and sometimes it's up to the discretion of the chief inspector how the security and the form of the security…. Sometimes the form of the security is the company putting up machinery as security.

[1805]

As the Auditor General points out, there could be competing interests on this, and that practice is questionable.

I also think it would be a surprise to some people in the province that the government is becoming what I guess you could typify as a Richie Bros. Auctioneer on security when they take equipment as a security for mining companies' obligations when it comes to future remediation.

Other jurisdictions like Colorado are required to include a financial warranty in security. Why does this province not have that kind of requirement here?

Hon. R. Coleman: That's a very rare occasion, actually, in the memory of my staff here. To take equipment in lieu of cash was done once, and that was in the downturn of 2008 at the Gibraltar mine because they didn't have quite the cash for the security. So we took some equipment as security, which allowed us to…. By being able to take discretion, we were able to keep the mine operating with the jobs there for folks. They have since paid back all the security.

D. Donaldson: Well, thank you for that answer. Is the security for the Red Chris project not in equipment?

Hon. R. Coleman: They haven't got a mines permit yet, so they haven't had to post security yet.

D. Donaldson: Thank you for that answer.

I'd like to move on to one other segment of the responsibility of the ministry. The minister brought it up already, and that was safety. Of course, when we're talking inspection, that's a major component of the service plan and the minister's responsibilities, although inspection also involves environmental inspection. But I'd like to focus on the safety aspect.

We know from 2006 during the tragic circumstances around the Sullivan mine when four workers died, that there was an inquest. I believe in 2007 they came out with their recommendations to the Ministry of Mines. Top of the list was to amend the Mines Act regulation to meet or exceed WCB standards with regards to confined-space provisions in the occupational health and safety regulations.

I think people would be surprised that mineworkers are not covered under WCB, now WorkSafe B.C., standards. They are covered under the mining standards. In fact, this is the only jurisdiction in Canada that still has mine safety under the Mines Act. All other provinces have mine safety under the jurisdiction of provincial occupational health and safety regulations, and the administration is the responsibility of either WCB or the Ministry of Labour.

[1810]

During the testimony around the Sullivan mine inquest, expert witness Marshall Denhoff told the jury that the mining legislation in B.C. in regards to work safety is from a different era. Again, to the minister: would he think it is a better idea and would he work to ensure that miners are covered under WorkSafe B.C. rules rather than the Mines Act or, alternatively, to bolster the Mines Act to meet or exceed WCB standards?

Hon. R. Coleman: We changed the code in 2008 to meet all the recommendations of that particular report all around health and safety and all the rest of it.

D. Donaldson: So is the minister saying that the mineworkers are now covered under WorkSafe B.C.?

Hon. R. Coleman: The recommendation was to improve our regulations on health and safety under the act, which we did, which was the Sullivan mine report recommendation.

D. Donaldson: Thank you for that. I'm going to move on to the northern transmission line questions. I don't know if you have the…. Well, I'm going to move ahead as was forecast by my colleagues. So I'll ask a question and….

Hon. R. Coleman: I'm sure I've got somebody here that can answer.

D. Donaldson: Yeah, I'm sure you'll have somebody here to answer some questions.

Recently northern transmission line contracts — the design-and-build parts of the project — were awarded. One of the companies that was awarded part of the design-and-build contract was Burns and McDonnell. It's an international engineering, architecture and consulting firm based out of Kansas City, Missouri.

What local hiring and training provisions will be included in B.C. Hydro's contract with Burns and McDonnell to ensure that we have local people benefiting from the spending of several hundreds of millions of taxpayers' dollars on the project?

[1815]

Hon. R. Coleman: Sorry it took a second there, Member. The evaluation criteria under the RFP included local hire as a provision of the RFP — that people had to meet. Local workshops have been held to help prepare
[ Page 7729 ]
people for this project, and the contractor would be involved in hiring local folks and training.

V. Huntington: This goes back a couple years now, but it's my annual set of questions about the hydro transmission lines and the high-voltage transmission lines in Delta. Given that Hydro has now indicated that they've completed the sale of the homes, I'd just like to wrap up that issue with finding what the total carrying costs have been to date.

The member for Kootenay East replied to my series of questions last year, so perhaps you'll be able to do so this year. Because there's quite a long series, I have no problem with being responded to by letter. So I'll just go through my set of questions, and I'll look forward to your replies.

[D. Horne in the chair.]

I'd like to know what the total carrying costs have been to date for the construction, purchase of the homes, etc. — the total costs. I would like it broken down into the cost of purchasing the homes, the security costs, the renovation costs and the landscaping costs.

I'd like to know how many homes have been sold — and if any remain unsold, obviously. Are there any of the homes that are being leased by the original occupants? How many are rented in lieu of having been sold? And I'd like to know what the average price of those home sales is and whether or not I can receive a list of the sale prices.

Most importantly, given that the OIC enables Hydro to recover its losses in this fiasco through the rate structure, I'd like to know how and when Hydro will be using the rate structure to recover its losses?

Hon. R. Coleman: I don't know if I could reach the same standard of answers as the member for Kootenay East in my lifetime, but I will try. All homes are sold. The information that the member…. We've taken a list. We'll refer to Hansard. We'll get you the details of all the selling prices and all of that and the costs — all costs.

V. Huntington: And the question, I hope, relating to the recovery of losses through the rate increases.

Hon. R. Coleman: Yes, that too.

R. Austin: I'd just like to ask a couple questions back to the northwest transmission line. My understanding is that as part of the agreement with Nisga'a Lisims Government, the route that was chosen, the more westerly route, goes through a small portion of a provincial park that is in Nisga'a territory. My question is: in order to make an adjustment or variation to go through that park, will that be done through an order-in-council through cabinet, or is that something that has to be brought back to the Legislature for a change?

[1820]

Hon. R. Coleman: As the member knows, the Nisga'a Lisims Government actually wanted this route to go this way and made the request. I think that it's called the Lava Provincial Park. That is actually before the Legislature now in a miscellaneous statutes amendment act. It will be dealt with this week.

R. Austin: With regards to agreements that are made with First Nations, benefit impact agreements, obviously the government doesn't want to bring those out into the open while one is still negotiating with other First Nations. I can understand that, but in the case of, for example, private highway contractors, once all the agreements are signed, they're then made open to the public.

Could it be our expectation that once all First Nations bands who have an interest in the northwest transmission line conclude their various negotiations, those benefit impact agreements will be made public?

Hon. R. Coleman: Just to correct, it's the Lava Bed Provincial Park. I had a piece of it but not all of it.

It's done in some cases and not all. It'll depend on what the proprietary interests of particular agreements would be. I don't see any reason why we wouldn't look at it, though — that it was possible to do it.

R. Austin: One last question. I realize there are still some First Nations groups that are in negotiations with Hydro with regards to the northwest transmission line in particular — the Gitanyow Hereditary Chiefs and, I believe, Lax Kw'alaams.

My question to the minister is this. Could the minister share with us the government's prospective timeline in terms of when we can expect work to start on the northwest transmission line and how long it will take to complete?

Hon. R. Coleman: We expect to be starting construction shortly. The answer was this spring. I mentioned that spring has only got about another 25 days to go, so it will be shortly, and it will be completed by the end of 2013.

J. Horgan: Two hours in, and I get to have five minutes at the end. I'm too generous, hon. Chair. Maybe I'm learning from the minister on the other side — who could, I might add, give a tutorial to those ministers present on how to dispatch estimates in an efficient way in the interests of the public.

I'd like to ask the minister, while we're on the northwest transmission line, if he could identify the number of ratepayers that will be serviced by this line.
[ Page 7730 ]

Hon. R. Coleman: There's Iskut, and there's AltaGas that's going to feed into it, but I don't have the total details. I'll get them for the member.

J. Horgan: Well, absent a Utilities Commission review, we're left to five minutes on a Tuesday night, before the biggest hockey game in Canuck history, to have an answer as to how much $400 million worth of transmission line is going to impact ratepayers.

I appreciate that as we get into the evening, we'll have a couple of hours to discuss the electricity rate review that's underway, the role and function of government and B.C. Hydro. But while we're on the transmission line, perhaps the minister could….

[1825]

If we can't identify the number of ratepayers that will benefit — you did make reference to AltaGas, which is having a contribution — perhaps we could start by having a breakdown of the partnership that's going to lead to the construction of the line. Is it still a $400 million project? Is the scope expanding? Is it a higher cost for that, and who's going to pay for it, ultimately?

Hon. R. Coleman: First, I should say about this particular transmission line…. I think it is actually a good project for northwestern British Columbia because it will open up opportunities for jobs and economic development — in particular, I think, with regard to some of the mines like Red Chris and those sorts of things that will come on stream.

It's a $404 million project. There's a contribution agreement with AltaGas for $180 million. The federal government is in for $130 million, which leaves $94 million for Hydro. The intention is to recover that from generators and also from the mines and other mineral development that may take place in the area over time.

J. Horgan: The minister references generators and mines. I'm wondering…. Of course, we don't have crystal balls, but certainly Galore Creek….

A Voice: I don't have a crystal ball.

J. Horgan: I was referring to the minister and me.

Galore Creek clearly has got some difficulties. They overestimated their capital costs significantly. Red Chris, I think, is the one most likely to proceed in the short term.

But 400 million bucks — even if we're taking money from our friends in Ottawa and a contribution, which I believe was quid pro quo, for a 60-year energy purchase agreement for AltaGas — still strikes me as an awful lot of money, for which, when we do find the final numbers, there are not a whole lot of ratepayers. So we're building the line, as the minister says quite rightly, to enhance and encourage economic development in that sector. I support that, but without the Utilities Commission to quantify what the subsidy is going to be for this activity, it's left to us in the minutes remaining to answer that question.

So I'll put it again to the minister: can he identify the generators that he spoke to? How many independent power projects did they propose in the corridor, and how many mines do you foresee opening up in, say, the next five years?

Hon. R. Coleman: That is a bit of a crystal ball question. I know that there are three or four potential mines, I've been told, along the corridor up through Highway 37. I've been told and advised over time that there are some very good opportunities for some of the First Nations who may be interested in some projects up there for economic development, like run of river and those sorts of things.

They will go through an EA process. Whether it'll be successful, it's hard to quantify. The best I could do for the member is sort of give him as many details as I can relative to his question and give him some more information. But that would be the basic understanding that I would have at this point in time.

The Chair: Noting the hour, in conjunction with the schedule tabled earlier today, this committee will recess until 7 p.m.

The committee recessed from 6:29 p.m. to 7:04 p.m.

[D. Horne in the chair.]

J. Horgan: It's delightful to be back here in the committee room to spend a little bit of time with B.C. Hydro and the good work that they do, building British Columbia every day.

I want to start, actually, by going back to some of the issues we were raising before the break. We were talking about the northwest transmission line, a $404 million capital project with $180 million coming from AltaGas, which is an independent power producer in the region. It has a 60-year contract with B.C. Hydro which, I believe, has an inflation escalator built into it. So for that $180 million investment over a 60-year period I'm thinking that as an income trust rather than a power utility, they're in a pretty good spot.

[1905]

I'm wondering if the minister could advise, through his staff, what the value per megawatt hour of that 60-year contract is.

[M. MacDiarmid in the chair.]

Hon. R. Coleman: The $180 million is the avoided cost for AltaGas. They would have had to build down to
[ Page 7731 ]
the area that they would have connected into the grid. That's what it would have cost them to build into the system, and that's the $180 million we're paying there.

Their power arrangement is benchmarked by Hydro's average call at about $124 a megawatt hour. They have a 40-year water licence, but the contract allows for a renewal after 40 years, if they get their water licence renewed for another 20 years.

J. Horgan: Well, I believe the industrial rate for electricity for a new mine would be in the range of $40 a megawatt hour, so are we anticipating that the $124 megawatt-hour power that's being produced in the region will go past the mines and to a market somewhere else where you can get $124 a megawatt hour, and then we're going to send heritage power or some other source to the new mines at $40 a megawatt hour?

[1910]

Hon. R. Coleman: Basically, what we do when we buy this power is that we buy it in the blended rate of all the power calls. That's what we do. We take the average, if we're buying power, at a blended-in load mix. It's blended in. The new power we're buying is blended into that load mix.

To the member's second part of the question, the mines would be anticipated to be paying the industrial rate.

J. Horgan: So the mines will be paying $40 a megawatt hour. We are buying power from independent power producers in the most recent call at an average of $124 a megawatt hour, and the market mid-Columbia price — which is a material assumption in the budget that we're debating, 2011-2012 through to '13-14 — is $34 a megawatt hour.

I think either way you cut it, we're paying too much to buy the power, and we're selling it, for less than we can buy it on the spot market, to new mines at the top of British Columbia with a $94 million contribution from the ratepayers to get the power there, plus the $130 million from the federal government.

My question to the minister is: how in the world could that possibly make any sense at all?

Hon. R. Coleman: What we do in British Columbia is that we take the heritage power — which is lower, obviously, because it's been here a long time. We buy through a competitive process for new power, and we then blend the cost of the two powers and serve it to our customers. Basically, we don't serve our domestic market by just going onto the spot market because of its uncertainty. We blend the power for certainty, and the price is there, and that goes through whatever processes.

J. Horgan: Well, I appreciate the minister's answer, and I know he's got very capable people around him. This is a complicated area, and I've been trying to understand it for some considerable period of time. I've had a number of ministers sitting roughly where you're sitting today, with many of the faces that are sitting around you, trying to answer this question, and I'm still not satisfied. You'll forgive me, hon. Chair, if I come at it from a different direction.

The government of British Columbia, when they're making material assumptions about the economy going forward, assumes that the value of electricity, the mid-Columbia electricity price…. This is a price that they average over the course of the year, they average it over the course of the day, they take into consideration freshet, and they take into consideration the time of use. The people that run the government of British Columbia have assumed that this year the value of electricity will be $34 a megawatt hour — that's the mid-C price — next year, $37; the year after that, $43.

[1915]

Now the minister has just advised that we've signed a 60-year contract with an independent power producer for approximately $124 a megawatt hour and that if we do have mineral or metal mines opening in the corridor, they'll be able to access B.C. Hydro electricity for $40 a megawatt hour, which is the industrial tariff. So I think there's got to be a subsidy somewhere in there, and it's likely to be coming from industrial ratepayers.

The minister has a review underway. Would the minister confirm that he is taking into consideration through that review the potential for subsidizing new mines in the northwest on the backs of ratepayers in Vancouver and Victoria?

Hon. R. Coleman: Everything is on the table for the review, as far as I'm concerned. That was the direction I gave the three people that are doing the review when I met with them the couple times that we've had the discussion.

It's basically a rate, but it's really about making sure that we look at the rate costs and what the costs will be so that we can keep the rates down for families in B.C.

As the member knows, there was a rate for three years through to the B.C. Utilities Commission that was proposed. There was concern raised with regards to that. We felt that it was a good time for the new minister to be able to go in and have a full review of Hydro and look at all the ways they're doing business — procurement, all of those things as well as the other pieces of their business — and to come back with recommendations.

J. Horgan: I didn't really want to segue into the review. I wanted to kind of focus on the $124 a megawatt hour, $40 a megawatt hour to customers and, if you want to buy it cheap on the spot market, $34 a megawatt — not just this year but, according to the good people in the Ministry of Finance who make decisions every day
[ Page 7732 ]
based on these material assumptions, a price that is well below $40 a megawatt hour, well below what we're providing to our industrial customers.

I want to just submit another piece of information for staff and the minister to consider. Hydro-Québec does an annual comparison of electricity prices in major North American cities. They have their most recent document going, looking at cost pressures and cost increases from 2006 to 2010.

It shows, in fact, that Vancouver, which is the city that they use for their analysis, is no longer among the three lowest-priced jurisdictions in North America, but in fact is at No. 4 and heading upwards. In fact, the percentage of rate increase was 21.5 percent between 2006 and 2010.

Where I'm going with this, to the minister and staff, is I'm trying to think, over the time I've been able to stand here and have the benefit of the wisdom of B.C. Hydro staff and capable ministers of the Crown, of asking the question: "Why is it that costs are going up?" The only thing that I can think of is that we're buying power at a rate that is unsustainable.

We have, as I understand it, liabilities to the tune of $20 billion to $25 billion to independent power producers in British Columbia. I have evidence not from the NDP, not from some active trade union or some Marxist economist at SFU, but Hydro-Québec, our competitors, and they're telling us that we are losing our competitive advantage.

I would wonder if the minister and his staff could reflect on that and give me an answer as to why it is that we're no longer as competitive as we used to be.

[1920]

Hon. R. Coleman: You are not correct that, by and in itself, the power we buy is driving up the costs. I will try to cover the question off for the member.

We could risk going into the market and trying to buy lower, and that risk would be like having a fixed- or variable-rate mortgage. Or you can look long term and enter into long-term contracts that will give you the stability to blend into your rates at a price that you can be competitive at and keep your rates competitive across the structure by blending your heritage assets and your other assets that you're buying long term. You now know you have that power versus risking that if the market changes in North America or the market changes somewhere else, because of pressures and changes in the economy, and power shoots up so that you no longer have the ability to get it at the price, you could put that at risk.

The business plan case for Hydro has been to look at it a bit more conservatively and try and build or buy long term. At the same time, we have some other costs. We have some aging infrastructure that needs some significant upgrades, so our capital costs are going up, simply because of the fact that we have a few dams that we're working on, and another one is to come.

Some of the projects we have actually incorporated money into, like Mica and Revelstoke and what have you — the money we've spent there increases our debt and actually affects our operating, but it does give us more stable power long term, so we make those investments.

We have some other infrastructure that needs to be upgraded for seismic and those sorts of things, and those will be going on. They will affect the cost of operations over time. In addition to that, we are always affected by things like water licence costs — stuff like that — that can also affect us.

J. Horgan: I appreciate the inventory, and I don't disagree with the minister that we have to maintain our infrastructure. That is something that B.C. Hydro has been doing in the 1980s, 1990s, the past ten years. I will maintain that position firm, and I know that I would get support from at least one person there, because I worked with him at the time.

I know, as I watched not just the press releases go out but the jobs get created and the infrastructure developed and improved. So I reject that.

But that's not to say that we don't need to continue to do that. I understand that the corporation has to maintain its competitive position and involved in that is investing in existing infrastructure.

But I'm wondering if the minister could advise if there is an additional capital cost to service some of the independent power projects in terms of transmission infrastructure, for example. Is there an additional cost to delivering these independent power project contracts to the load centre? Are we increasing and improving our infrastructure to move that power?

[1925]

Hon. R. Coleman: They have to pay their own interconnect costs when they bid. I'll use this as an example. If the IPP was ten kilometres, for instance, away from a power line, the chances are their bid would be a lot less, and more competitive, than one that was, let's say, 150 kilometres away from the connection.

They'd bid in their costs the way they do for their project, for its commercial purposes. But chances are if they were too far away…. They've got to pay for this interconnective price that they'd be trying to sell the power to us. It would be too high, and we wouldn't be buying it, because it wouldn't be competitive. It's got to be a competitive bid, and we pay the rate of power that's most competitive in the power call through the bid process.

J. Horgan: With respect to run-of-river power, it's seasonably variable. It needs to be firmed and shaped. These
[ Page 7733 ]
are services that B.C. Hydro provides. Are those factored into the contracts when they're signed, or is this an additional service that goes unaccounted for?

Hon. R. Coleman: The $120 megawatt hour we've been talking about is firm power that is being bid into a power call, and that's what we're prepared to pay for firm power. It's got to be delivered at time and day and all of that stuff, because it's firm power. Things like you describe, whether on a seasonal, run of river, that sort of thing, we would pay substantially less in a bid, usually down around $50. It's got to be shaped, and that's why we won't pay as much for it.

J. Horgan: Can the minister quantify the amount of seasonal power Hydro purchases annually and what the cost of shaping and firming that power for delivery is?

[1930]

Hon. R. Coleman: Last year we brought 8,890 gigawatt hours of power from IPPs — that would include wind, run of the river, firm power projects, whatever the case may be — out of our total of 55,000 gigawatt hours. We don't have the breakdown tonight of the percentage of each of those with regards to, out of the 8,890, which would be firm and which would be non-firm, but we will get that for the member.

J. Horgan: I'd like to turn to two issues — well, interrelated issues: the provincial position with respect to self-sufficiency, and insurance. Now, I don't know if the minister…. I mean, I know he was here. He had many other responsibilities, and other ministers would have been managing this issue.

Historically B.C. Hydro's responsibility to its customers was reliable supply, reliable supply that could be found wherever Hydro deemed it was in the public interest to do so, wherever they could find the best deal for ratepayers. We had a Utilities Commission that managed that activity. That's all changed, as the minister will know.

It's a year anniversary since the last opportunity I had to participate in discussions involving closure. We were talking about the Clean Energy Act 12 months ago to the day, when $10 billion worth of capital projects that the staff behind you are now managing were exempted from Utilities Commission oversight.

One of the issues that has caused me concern for some considerable period of time is the B.C. Liberal position that all new sources of supply must be purchased from the private sector, and it must be purchased within the borders of British Columbia. Adding on to that was a requirement that seemed to have no bearing on high water, low water, on domestic need, other than a sense that if the rivers were low or our transmission system was down, we needed somehow to have an amount of insurance, power available, which would then, of course, have to be sold if we didn't use it.

If we're buying it for $124 a megawatt hour, and we go back to those material assumptions from the Ministry of Finance that we can't sell it for more than $35 a megawatt hour, why in the world would we buy more power than we need, which is B.C. Liberal policy? Can the minister confirm that is still the case, or is this part of his review?

[1935]

Hon. R. Coleman: The member knows we did do the Clean Energy Act, which basically made…. One of the things in the legislation is that we have to reach energy self-sufficiency by 2016. But the member is not also 100 percent correct with regards to his comment that we had to purchase all the power from the private sector.

In actual fact, we've bought a one-third interest in Waneta, which increased the amount of capacity that we had. We have investments in Revelstoke and in Mica. We will also get about 10 percent more out of Ruskin and out of John Hart when that is done. So we try and buy the power and build towards self-sufficiency based on the legislation in front of us.

The water level, which is the battery, as the member knows, was set in regulation as being critical water.

J. Horgan: Can the minister tell me how much insurance in gigawatt hours is contemplated under the Clean Energy Act?

The minister may not know, hon. Chair, that we didn't get to go through clause-by-clause of the act. We only got to speak to the principles of the bill. So I would have been able to answer these questions a year ago had I been given the opportunity.

Hon. R. Coleman: Basically, the insurance would be 3,000 gigawatt hours by 2020.

J. Horgan: Can the minister explain to ratepayers why it would be that they should have to purchase 3,000 gigawatt hours more electricity than they need?

Hon. R. Coleman: Basically, it's to meet demand during the drought years. It's insurance to make sure that we can maintain the safety of the cost of rates for the ratepayer in years where we have drought years. As an example for the member, in drought years it's not unheard of for the price of power to peak, to go to $1,000 a megawatt hour like it did in the California crisis that took place a couple of years ago.

So it's, basically, to insure and protect the ratepayers with that power for the future, for the demand in periods of time when we would have to pay too much if we had to buy it.

[1940]
[ Page 7734 ]

J. Horgan: Well, I remember well the spike in prices in California. Regrettably, they weren't caused by drought, and they weren't caused by excessive costs for natural gas. It was caused by Enron and people looking to benefit from moving power that they didn't own and a deregulated market in California that didn't foresee that the people they were agreeing to buy power from didn't have any.

In fact, were it not for B.C. Hydro and Powerex, the lights would have been out for a long, long time in California. We benefited here as a result of that, but that was an extraordinary circumstance that really dealt with market manipulation by nefarious individuals who are serving time — still, to this day, I'm hopeful — in U.S. prisons, breaking rocks somewhere. We benefited, and we still….

Just a side question would be: what's the status of the legal arrangement there? Would they still owe us $300 million? The last time I checked….

When Governor Schwarzenegger was here — hon. Chair, you'll be interested in this — I tried to slip him a bill, but I couldn't get past the security and the Entertainment Tonight camera crews.

They owe us $300 million from that time. It would be nice to get that back, and perhaps — I know that there's a briefing note on that somewhere — you could get me an answer to that.

I'd like to go back to the notion of this extraordinary period that the minister uses as an example. It's all well and good, but if I understand the notion of self-sufficiency as opposed to reliable supply for customers — residential, commercial and industrial — we are now going to, by law, purchase 3,000 gigawatts or 30 million megawatts, if you want to do it that way, more than we need.

Then we will be forced to sell it somewhere, presumably for less than we paid for it, because if we're buying that much power and we can't use it, one assumes that we have taken it from somewhere else and we're not going to be able to get the same return on it had we had left it where it was.

Why in the world would we force B.C. Hydro…? It's a company that has served us very, very well by managing its system in the interests of ratepayers. Why would we put an additional burden upon them to find power that we don't need? It doesn't make sense to me, and I'm sure, upon reflection, the minister will come to the same conclusion.

Hon. R. Coleman: First of all, the status of the lawsuit would be that we're trying to negotiate a settlement prior to going to court in the United States, and that is ongoing right now. That's still continuing.

The only other answer coming from the ministry to the member opposite is…. It's about deciding, determining what your level of risk is. You have 55,000 gigawatt hours, and if you have a bad year, you want to insure against that risk, so it's the determination of what level that is. Being conservative, I guess you could say it's a conservative number to try and to protect the ratepayers by ensuring enough power that we have it when we need it at a price that doesn't affect rates.

J. Horgan: Well, perhaps a philosophical question, then, for the minister along these lines. For a long, long time before he and I arrived in this place — before most of the staff, in fact, that are sitting with him arrived in this place — B.C. Hydro was managing the system to meet the needs of its customers without interference from government.

Now, I always feel uncomfortable when the so-called doctrinaire socialist appeals to the free-market minister to allow the free market and allow the Crown corporation to do its own business, but I just can't let the opportunity go by for a rejoinder from the minister. So I will say to him: why wouldn't you just let the company make those decisions in the interest of its customers?

How in the world can cabinet have a better understanding of the needs of ratepayers in British Columbia than the people that are charged with servicing them as an executive of their corporation or even the appointed board members, which are selected by the cabinet anyway?

[1945]

Why wouldn't you just leave them to do their own business? Why force them to buy power that they don't need?

Hon. R. Coleman: You actually raise some interesting issues. You and I have had some side conversations about this. My expectation, as we come through the review of Hydro and how we've affected their business or not affected their business, depending on which issue you want to talk about, is that we will come back with some ideas and recommendations in and around this.

I think the goal of self-sufficiency is important. I believe that if you could be self-sufficient in power, it actually stabilizes your long-term ability in an economy where you want to attract major industrial development and investment. Power is going to become one of those commodities, more and more so over time, that is very important for the building of an economy.

On the other side of that, at the same time, you want to take your responsibility in the global network with regards to clean energy, to not be buying dirty coal power when you can actually create clean power in your jurisdiction. There's a price to pay for that, to be responsible to the environment.

Those are all measured with regards to the same balance you want to achieve by making sure that you keep the rates affordable for your customers and the citizens of B.C.
[ Page 7735 ]

As we come through the review, I'm sure there will be an opportunity to take a look at different things that may affect or could be improved with regards to issues in and around Hydro and some of the things that we're doing. We may find that they're fine, but the beauty of a review is that it's an open opportunity to have an open discussion with government and the company. So that's what we're going to do.

J. Horgan: I do appreciate the minister's response, because these are issues that we've been grappling with in this committee, certainly in the five years that I've been tasked with overseeing this file.

I've had a number of ministers who steadfastly and unwaveringly stuck to the line that they were given, that we had to hold the line and we're moving in this direction come hell or high water — or low water, pardon the pun.

I want to raise an issue that one of my colleagues, who is going to join us shortly, wants to talk about. It's the Columbia River treaty and, specifically, the downstream benefits from that treaty.

This is not a contract with Enron or with EnCana or with Puget Power and Light. It's a treaty obligation between Canada and the United States. B.C. Hydro manages that on behalf of the people of Canada and the people of British Columbia.

We are entitled to the downstream benefits that range, depending on the formula, between 1,100 and 1,400 megawatts of power that we sell in the United States. I believe our colleague from Kootenay East had a statement in the Legislature on it the other day.

This is a benefit to all of us. We take that revenue and we put it into good public purpose.

That is, in my opinion, an asset that belongs to all of us and should be calculated into the equation when we're looking at self-sufficiency and reliability. If we need that power, if there is a catastrophic event or if there is a drought, we can return that energy to British Columbia. That's part and parcel of the agreement.

Would the minister agree — unlike previous Ministers of Energy, just so he knows — that this is a resource that should be calculated into the equation when it comes to self-sufficiency and insurance? Surely to goodness we can save the cost of finding that new source of energy by using one that already exists.

[1950]

Hon. R. Coleman: Sorry, hon. Member. That took a little bit longer than I would normally like. I'm trying to get this so I can understand it, as well for you at the same time.

It doesn't meet up to the energy self-sufficiency because it's not generated in British Columbia, under the act. That's the first piece.

The second piece is…. We return the power, and then what we do…. We will trade it. Powerex makes some money, and that goes to general revenue. It's actually not a Hydro asset; it's actually a provincial asset. So it's available to us most of the time, depending on constraints on the transmission system.

It's not always available, because of those constraints. That's why, first of all, it's not Hydro that has it. Secondly, it's revenue to the province, and it's not, therefore, considered as part of the insurance package, because it's also not generated in British Columbia.

J. Horgan: I thank the minister for a comprehensive answer. But again, I wasn't suggesting that B.C. Hydro owns the asset. I was suggesting that the people of B.C. own the asset. It just seems to me that, as far as I'm aware, 100 percent of B.C. Hydro's customers, domestic customers, are within the boundaries of British Columbia. That's what makes them domestic customers.

As the Crown has this asset, surely to goodness we could sell it to our partners at B.C. Hydro should they need it. So there's no net loss to the Crown — to the province, rather — because we're able to take that asset, and instead of selling it to Bonneville Power Administration or to Idaho Power or whoever the other customers are in the States for that power, we could sell it to B.C. Hydro.

It seems to me, for those that are concerned about the environmental impact of run of the river, the environmental impact of Site C and a whole host of other concerns can be alleviated by using that power domestically — by having the Crown, the province of British Columbia, sell it, instead of to Americans, to Canadians, through B.C. Hydro. Is that something the minister can consider? I appreciate that it would require an amendment to the act, but apparently that's pretty easy to do around here.

[1955]

Hon. R. Coleman: The member opposite makes some pretty good points. I think that I'll make it a part of the review to look at that, to have a look at whether that could be looked at as part of the insurance or whether it could be looked at as part of the way we could look at Hydro. We do use the power in British Columbia a lot of the time, so it's certainly worth a look as we come through the review, and I would undertake to the member that I will include that in some of our discussions.

J. Horgan: I thank the minister for that, and I think it would be a worthwhile exercise. I know that having the opportunity to review it would be welcomed, certainly, by the staff that I'm aware of, who are passionate about these issues. I think that's good news.

I want to go back, if I could, to new mines and new energy and the industrial rate. The minister talked about blending what's called the heritage rates with new sup-
[ Page 7736 ]
ply, whether it be from IPPs, from Revelstoke or from Waneta — wherever we're going to be getting it from. My understanding is that part of the argument for self-sufficiency and insurance was that we needed to have more power.

I'm wondering: if we're going to be purchasing new power at well above the heritage rate and then selling it to these new customers at well below the rate that we're purchasing it for, how are we going to find that balance? If we are maxed out, as the argument went last year and the year before that, and the only way we're going to be able to see in the dark at night is if we found new sources of supply, how can we continue to promise new industrial customers…?

It's not…. For those that are, not in this room but in other rooms in this building, scribbling down things to throw at me some time in the future, I'm not suggesting that we want to shut down industrial activity, but I think it's important for ratepayers to know.

In light of the minister's interest in a review, how are we going to do that? How are we going to take this high-priced new source of supply and continue to sell it at a rate that for industrial customers is well below the cost of that new supply? We need to come to a reckoning at some point. If we've maxed out all of our domestic or our heritage power, this new power costs a lot more, and we're giving it away for the same price — in fact, less than it's worth — on to these new customers.

Hon. R. Coleman: You know, there are a number of factors in this question, but I'm going to try and deal with them. First of all, all new supply costs more. It doesn't matter whether it's something that we're doing in upgrading one of our own facilities, whether we're adding to a facility or whether we're building a new facility. All new supply, whether from us or IPPs or whatever, costs more. There's no question about that.

[2000]

At the same time, we all know…. For the member's information, the heritage power is at about $25 a megawatt hour, so we try and blend our incremental buy into that to keep the prices at a level that is still competitive. Our industrial customers still pay more than the heritage power. They pay an industrial price.

I mean, it's pretty fundamental. There are some fundamental things that drive the business case for B.C. Hydro, and that's legislation and other directions from government. That will all come into the review, quite frankly. All those things will be looked at as they come through the review. I've made that very clear.

At the same time, the irony of all this is that the cheapest power we can buy is the power that we don't use. So any conservation we do is actually the cheapest power that we can get because of conserving. It's not something that we have to build and supply for the future. Nine out of the last ten years we've net imported about 3,000 to 5,000 gigawatt hours a year.

J. Horgan: I support the minister's contention that conservation is the best opportunity we have. Some years ago I applauded…. I was asked by a journalist if I could grade the energy plan. That was the 2007 energy plan. I gave a B to the conservation component, and that was a low mark, really. It was a commitment to 50 percent of new supply from conservation. That was very ambitious. It's even more ambitious today.

I was ridiculed and criticised for supporting the government, so I've not done that since, although I am tempted on occasion to be complimentary to some government policies. When there's a new high school in my constituency I can assure you that I'll be very complimentary to the former Education Minister.

I want to go back to the minister's point. He's absolutely right that we have to find that balance. Within the Clean Energy Act there was a clause that allowed large industrial customers to negotiate their own rates, to negotiate their own deal. It was a way to quiet the waters. I, as the critic, went to speak to the B.C. Business Council energy round table. It's a collection of independent power producers, large producers — Teck Cominco, Alcan — industrial users, COFI, forest companies, mining associations and so on.

They were hot, the consumers, at the notion of buying what they called "junk power." I'm putting quotations around that for those who are writing this down. That was how it was characterized to me. They were unhappy about that, and they were making lots of noise. They were claiming that it was costing their industries — whether it be pulp, sawmills, mining — lots and lots of money.

In the Clean Energy Act there was a clause that said: "Don't worry about it. You can cut your own deals." I am wondering if the minister will include that clause in his review.

Hon. R. Coleman: First of all, for his information, this particular section has not got a regulation applied. It has not been brought into force of the act, so we have not had any incidences of this taking place.

[2005]

The thinking around it is that an industrial customer might want to come in and say, "I'm prepared to pay a higher price now across the term of a contract so I can have stable power in my business plan," whether it be a pulp mill or something, a high user, and contract that way. That, obviously, is not able to be done today. None of it has happened, but it's not unlike when a few years ago I know that we were being offered opportunities to fix our natural gas price. When the natural gas prices were jumping quite dramatically, you could lock in your price even as a domestic customer.
[ Page 7737 ]

I think that was the intent. The intent is still there. The regulation hasn't been done, so it has not taken place.

J. Horgan: There was another section in the Clean Energy Act that talked about B.C. Hydro purchasing and aggregating private sources of power for export, a section that caused me concern. It's my view that if there's a project that could meet the environmental test set, even by the current environmental assessment office, and it can find a market and can get its product to that market, all the more power to them.

But in the act the onus was on B.C. Hydro to purchase the power from private sources, collect it, find a buyer and get it to market. I'm wondering if the minister could comment on that.

I was going through the B.C. Hydro service plan, which is what I do when I can't sleep at night, and I discovered that my friend Larry Blain is on the board. I thought that Larry was packing it in and going to sunnier climes, but I understand he is the chair of the export development energy procurement committee.

I'm wondering if the minister could advise me if the export development energy procurement committee is the body within B.C. Hydro responsible for operationalizing the purchase of private power, aggregating it and finding a market south of the border to send it to.

Hon. R. Coleman: When this particular initiative was being developed, I think there was a whole different world in power in North America looking at the possibility that there could be investment in B.C. above and beyond self-sufficiency, where we could attract investment to create power. We would be able to aggregate it down our system, make some money on it, sell it for export — whatever the case may be.

Obviously, today there's really no activity. First of all, because the price of power…. Well, the price of natural gas really changed power in North America when it dropped dramatically. They're building natural gas–powered plants down in the U.S. probably as fast as they possibly can, and it has affected the rate and probably changed this case.

[2010]

The whole intent of this is, if there would be an integrated resource plan, there would have to be a business case. They would have to be able to sell the power for a profit, and any of the costs related to any export of power would not be allowed to be borne by the ratepayers. It would have to fit within the business case and couldn't go back onto the ratepayer.

As far as the export development and energy procurement committee, it's basically an oversight role, similar to an audit committee of the board. They don't have any involvement in the actual direct implementation of any of this. They're just the oversight part of the board.

[D. Horne in the chair.]

J. Horgan: I thank the minister. The minister raised a couple of things, and one of the tragedies of the truncated estimates process is that this is fun. I know that the minister is having fun. I'm having fun. The people of B.C. are getting educated. We're having the good minds of B.C. Hydro and the able staff of the ministry providing information to me that can be distributed to other members of the Legislature and throughout B.C.

This is a good thing to do. We should do this more often, hon. Chair. I know that if he had his druthers, we might be able to do that, were it not for that nefarious motion that we passed today.

However, before I get on to an abundance of natural gas and why electricity rates are down, I want to go back. I can't resist, because Larry and I are close personal friends, although we don't see much of each other, I have to confess. I'm wondering if you could advise if, as a chair of a committee, Mr. Blain gets any compensation for that, and while we're at it, what's the compensation for board members these days?

Hon. R. Coleman: This is how it works. A director gets $15,000 a year and gets $750 per meeting. The audit committee chair is $5,000. All other committees of the board are $3,000, and they also get the meeting fee, or the meeting per diem, of $750 a day.

J. Horgan: I'm sorry, Minister. As I was writing it down…. Is it a member of the committee or the chair of the committee that gets the $3,000?

Hon. R. Coleman: It's the chair.

J. Horgan: Could the minister, while we're on the topic of compensation, provide me with the compensation for Mr. Dan Doyle, the former public servant who now is the chair of the board?

Hon. R. Coleman: The chair, which would be Mr. Doyle, gets $30,000 and the same daily fee.

J. Horgan: Dan also serves as the chair of the executive committee, and he also is the chair of the capital projects committee. Is there additional compensation for those two positions, or is it sufficient that he get the $30,000 for chairing the board?

[2015]

Hon. R. Coleman: As the chair of a committee he would receive $3,000. He is the temporary chair of the capital committee. There will be a new chair in July. And he's the chair of the executive committee. And, of course, the same meeting per diem would apply.

Hon. Chair, I'd like about two minutes break.
[ Page 7738 ]

The Chair: The committee will recess for two minutes.

The committee recessed from 8:16 p.m. to 8:18 p.m.

[D. Horne in the chair.]

J. Horgan: We were just talking about compensation for board members, particularly my good friend Larry Blain and Dan Doyle.

Can the minister advise…? I'm going to do a bit of a segue into smart meters just for a moment. It has to do with board members recusing themselves from decisions of the board. Last year in estimates I talked about Jonathan Drance, who is no longer a member of the board, who recused himself for some discussions of the Clean Energy Act with respect to the clean call because of some potential conflicts with companies he was involved in.

I'm advised that during the discussions around the smart meter contracts, Tracey McVicar was recused. Can the minister advise if there are any other board members over the past 12 months that have recused themselves from board decisions as a result of potential conflicts?

Hon. R. Coleman: I'm advised that one board member did recuse himself. James Brown recused himself with regards to the discussion around smart meters.

J. Horgan: I'd like to just perhaps move into smart meters for a moment, if I could. This was a subject that….

[2020]

In the last set of estimates I asked the minister if the smart meter program would be subject to Utilities Commission oversight. I asked the minister if there would be a comprehensive business plan that we would have an adequate opportunity to look at and also have the commission review. The minister assured me that would happen. The Clean Energy Act was introduced and none of that happened.

Subsequent to that, I did visit the offices in Burnaby. I had a very thorough review and demonstration by some very keen and eager and excited engineers, who think very highly of the program. I don't doubt their enthusiasm. They made, I think, compelling arguments. But it's a billion dollars.

As compelling as the argument was, my in-box — and I know my colleagues' in-boxes — is filled with concerns about a transition to the new technology. Putting aside for a moment the cost and just focusing on those that are concerned about radiation…. They're concerned about radio frequencies that they didn't ask for being brought into their homes.

I'm wondering, on the first question to the minister, if he could advise if B.C. Hydro will respect the rights of individuals who do not want smart meters installed on their homes and cancel the program for those who have a demonstrated health concern.

Hon. R. Coleman: First of all, there is an opt-out program. People will have the opportunity. We will work with them. People who have legitimate concerns, as we're doing the program now, will be taken to the bottom of the list and not be installed immediately. We will take some time to educate. They will have the opportunity to have the meter somewhere else on the property, like in the garage or whatever, rather than in the living area of the house.

These things will send a message four to six times a day for a total time of one minute — all the four to six combined would be one minute. There is an ability to reduce the number of times it would send messages, as well, for people who have legitimate concerns that we could deal with.

All of those are in play now, those issues that the member brought up, and we're taking care of them.

J. Horgan: I know that I'll be happy to send — and he will know I've been tabling — petitions that have been coming to my office on this question. I'll be happy to advise people that it will be taken care of. The minister will forgive me if I probe a little bit deeper into the legitimate concerns.

How do the minister and the corporation plan to determine what is legitimate, and what process is going to be in place? Is there going to be an Ombuddy-type position within the organization that can review customers who come forward? What's the plan to deal with it?

[2025]

Hon. R. Coleman: First of all, I've just got to clarify something because I used the wrong term. It's not called an opt-out program. So I've been advised that that wasn't correct. Basically, it's a mitigation program for people that have legitimate concerns.

Legitimate concerns. For some people if it's health, then we would work with the health professionals. It's all about working with the individual customer with their concerns — the education and all the rest of it.

Obviously, I guess, the concern on the flipside, way over here, would be for somebody to say, "I don't want a smart meter" because they've got a grow op. We're not going to call that a legitimate concern.

Basically, the program will roll out. I think that our education will improve as we go through this. I certainly have, since I've been minister, spent some time looking at the material and how we start to present it, how we really need to change the discussion around smart meters to the entire smart grid. How it's going to help us to manage the system. How it will show us where we have losses of power on our system and on the lines. If we have, you
[ Page 7739 ]
know, a significant event like windstorms or what have you, we'd be able to send our staff to the location where the problem is and know exactly what equipment they should take with them. It's much safer for them when they're working in the field because we'll know exactly where they're going and those sorts of things.

So it's all about the integrated plan of the smart grid, which is all part of the entire investment.

I don't know if that answers the member's concern, but we will work with individual customers that have concerns, educate them, work with them and mitigate, so that if they have significant concerns about it being in the house, whatever, we'll find another location for the meter.

J. Horgan: My constituency of Juan de Fuca is on the wild west coast of Vancouver Island. Power outages are a common occurrence, and the brave, heroic work of the line crews is unmatched, certainly in my community.

I'll recount a story that the former CEO, Mr. Elton, agreed to bring just shortly after a significant outage. We had estimates. I had an opportunity to ask him: "Where the heck are you Hydro people on this anyway?" He agreed to bring together as many people as possible to come to my community of Sooke to inform the good citizens there of the good work of B.C. Hydro.

It took about two months to get the thing together, of course. About a week after the lights come back on people don't care anymore, as the minister and the staff will know. So there were two Hydro staff to every one public participant at the meeting, but nonetheless, I was grateful for the effort from B.C. Hydro. And the citizens that showed up and the local media were able to send information to a broader audience.

People are concerned about the lights being out when they're out, and when they're back on, life goes on. That's, unfortunately, just human nature.

I am surprised that this technology, which I have seen and talked to engineers about, is so good that we'll be able to tell staff what equipment to bring with them. I didn't get that from the demonstration that I saw, but if that could happen, all the better.

I'd like to focus instead for a moment on the price and the contracts that have been let recently. Can the minister confirm the total capital cost of the program and at what stage we would consider it complete?

Hon. R. Coleman: The budget is $930 million. They estimate today that it will come in between $850 million and $900 million. The smart meters for homes will be installed by the end of 2012.

[2030]

The other elements, which will be the theft elements and the other issues that I was mentioning to the member for the grid…. The intelligence of the grid will be completed by 2014.

Just so I'm clear in the example I was using. For instance, when this system is up and running, if a particular transformer went off in Sooke, actually blew up, we would know exactly what kind of transformer it was and where it was, and we'd be able to send our crews there.

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

I want to talk a little bit about the breakdown of that $930 million. We did talk about James Brown and Tracey McVicar recusing themselves from board discussions around this procurement and this policy. I'm wondering. I understand that Corix and….

The second company is on a piece of paper in front of me that I can't find. I know there's someone over there that has all the companies written down, so rather than me burrow here, I'll just ask the minister if you could please provide for me the names of the companies, the size of the contracts and what competitive bid processes were put in place to ensure that we're getting the best deal possible. And were there any preferential domestic caveats in the RFP that would have allowed us to retain local or domestic suppliers?

Hon. R. Coleman: Corix, which has a $72 million contract, has set up six local offices around the province. It's a British Columbia company hiring folks locally to do the installation.

Capgemini, which is the IT portion of the project — that's the meters installation. On the first comment, that Capgemini is IT. They have an international office, and they also have an office in Vancouver.

Itron is a meter manufacturer. Capgemini's contract was $65 million. With Itron, the meter company which makes the meters, it's a $267 million purchase. All of these were done by a competitive bid for the best price, and for all the bids there was a fairness adviser as well.

J. Horgan: Since we've had some success with the minister taking information and putting it into his comprehensive review, I'm wondering if the minister is going to include the smart meter program in that review.

[2035]

Hon. R. Coleman: No, because we're too far down the road with this particular project. The money has been invested. Obviously, it's going to reduce rates by 2 percent a year over the next number of years. In the business case I saw recently that is the case. There is a business case for the smart meters, and it will have a positive impact on rates.

Our savings to date is about $70 million already, doing the smart meters, and the business case has been well defined. It would obviously be part of the review with regards to the whole business of Hydro, but the piece of
[ Page 7740 ]
this is that the smart meters program has been basically put into the system, has been done by government. The money has been invested, so we'll be moving down the road to continue the program.

J. Horgan: I accept the minister's argument. I'm not going to ask another question; I'm just going to make a statement. He can get back at me later if he wants to. I've got a colleague who has got a more important issue he wants to pursue.

I just want to say that had the Utilities Commission had a look at this, if it was such a good program…. As I said, I met the engineers, and I met the staff at Hydro, who are very excited about this program. I understand their enthusiasm.

Theoretically, it all makes sense to me as well, but a billion dollars is still a whole pile of money. As much as the business plan, to my simple mind, looks all well and good, it strikes me that that was a whole bunch of money that could have gone to the commission for a third oversight so that we would have a third party — not the cabinet, not the board of directors, not the executive committee — making those decisions.

You can get back to me later on, on that, hon. Chair, but I would give the floor to the member for Columbia River–Revelstoke at the moment.

N. Macdonald: Just one question on a very complex issue, the Columbia River treaty. Basically, the minister will know that Kootenay MLAs are meeting and talking about this. We have a shared interest in making sure that the interests and perspectives of the people that we represent in the Columbia Valley are considered and factored in as the province moves into the preparation for negotiations, potentially, for the Columbia River treaty.

We had a commitment from the minister responsible for the Columbia Basin Trust to meet with us in a timely manner. Because it's such a complex issue, we're just looking for a commitment from the minister to, in a timely manner, meet with the Kootenay MLAs to just have a discussion on how we're going forward and how Kootenay interests can be looked after as we approach the time for the Columbia River treaty to be potentially renegotiated.

Hon. R. Coleman: As the member knows, 2014 is the reopener, and we're doing some work on that. I believe I'm participating in the meeting with regards to the one you brought up in estimates with the Minister of Jobs, Tourism and Innovation.

Anyway, I believe I'm participating in the same meeting with the Kootenay MLAs as was brought up by you in estimates and asked of me by the member for Kootenay East as well. I will be participating in that or arranging a separate meeting. At this time I think the understanding is that we'll get the two ministers together with staff and with the Kootenay MLAs. I don't have my BlackBerry here, but I believe the meeting may already have been tentatively scheduled, to start to figure out when all the parties can get together.

M. Sather: I wanted to ask the minister a question about the AltaGas hydro run-of-the-river project up in the northwest, the Forrest Kerr project. Just down the road from that they have McLymont Creek, ten kilometres down the road, which is now in the environmental assessment. It's 55 to 70 megawatt, I think, and the Forrest Kerr is 195 or so, I believe.

It's my understanding that McLymont Creek is not being considered a major project, yet we're looking at well over 200 megawatts of power here. I'm wondering why this project is not considered a major project and going under a major comprehensive review through the environmental assessment.

[2040]

Hon. R. Coleman: We know very little about this. Quite frankly, we're not even sure they have even bid into a process. They would be in the EA process. They'd be at a level that they'd even be doing business with us at a bid level at this point in time, according to my folks. We'll look, and then get more details for the member.

M. Sather: I am very surprised, though, that staff haven't much knowledge of it, as Forrest Kerr is paying, I think, $180 million towards the northwest line.

Anyway, I wanted to ask the minister one more question. It's my understanding that on cumulative effects of these projects and, I guess, other projects, the guidelines are not yet developed. If the minister could tell me: when would these cumulative effects guidelines be developed?

Hon. R. Coleman: The cumulative impact of these things was moved over to the environmental assessment process, which is with the Ministry of Environment. I think the confusion was…. We've maybe not heard quite the right descriptions of who we think we're dealing with. There are a couple of companies there that the member mentioned.

On the AltaGas one, that is a project that goes through all the process, and we will endeavour to get the other processes cleared up for the member. As long as we're clear, I can get it out of Hansard, and I can understand it. Or you can repeat the companies and what you understand the megawatt hours are, which you put into the record, and we'll try and get it clear this time.

V. Huntington: I would just like to add one further question to my earlier list, and that is if you could provide me with the data on the number of B.C.
[ Page 7741 ]
Hydro employees who have purchased homes along the right-of-way, and what the average cost of those homes is.

Hon. R. Coleman: If we have that information, we'd be happy to provide it.

J. Horgan: Again, this is the sad part of the day when we get down to near the end. My friends from Columbia Power are here. I don't know if I'm going to get an opportunity to get to them, because I want to touch on Burrard Thermal for a moment.

The minister, in one of his earlier answers, talked about us being awash in natural gas. We're going to touch on island gas a bit tomorrow, but it's interesting that as we extract natural gas and put it in pipes and send it as quickly as we can to our competitors to turn into electricity to drive down the price, it's going right by Burrard Thermal — which, as I understand it, is supported by municipal politicians in the region for its tax benefit.

It's vital and integral to balancing our system here in British Columbia. B.C. Hydro is dependent on it, not as a load plant but as the backup generator in the garage if we need it. Various ministers under the previous administration rigidly held to the view that we should sell as much natural gas as we possibly can, but we dare not burn it here in British Columbia to create electricity.

My question to the minister is — and I'm hopeful that he'll take some time to consult with his staff on this question: does he see the value of Burrard Thermal to the system in British Columbia in ensuring that rates stay low, that our system is reliable and that the objectives, whether it be self-sufficiency on that side of the House or reliability on this side of the House, are met by having that plant in place?

[2045]

Hon. R. Coleman: It's there as a backup for emergency. It can't be relied on for planning purposes. It's an old plant. We did do some upgrades — I believe, and I'm going back in my own history, it may have been the late '90s — where we spent $100 million plus to take the nitrous oxides out of it.

I don't think it's fair to say that the municipal politicians in the Lower Mainland are all in favour of Burrard Thermal. We certainly get a number of other feedbacks from people up the Fraser Valley with regards to that very sensitive airshed.

It's been one of those issues that's been out there for an extended period of time over the years, with different policy. The policy right now is that it is there for a backup for emergency purposes and can't be relied upon for planning, although it is a valuable resource for backup for emergency purposes because it is like, as the member described it, the generator in the garage.

J. Horgan: I absolutely agree that there are significant concerns in the airshed. I've heard that in spades in the 1990s and also as recently as last year. I accept that position.

I was referring to the municipal council in Port Moody. For them, it is the pulp mill in Campbell River. It is the source of revenue without having to go to voters, and so it's important to them in that respect. That was my point.

The minister is right. It has been a political hot potato for many, many years. But here we are, I'd like to think, although politicians, talking about the importance of it as a planning tool. That's where I believe the government got off track, in directing the corporation to not use it for planning purposes.

The Utilities Commission sees the value of it. I'm sure that the executives sitting behind the minister see the value of it. Perhaps he'll ask them again if they could give him an explanation about the value of it as a planning tool so that we don't buy more energy than we need.

It will be probably part of, if not in the final report in his review, certainly a talking point at some point in time. Perhaps I'll ask the minister again: as a planning tool, will the minister reconsider on behalf of his government?

Hon. R. Coleman: As I say, that's the policy today. It's backup for emergency purposes. But as I said earlier, when I talked about the review of Hydro, I'm certainly open to all. I'm not prejudging what may come out of that review and discussions that may come out of it. I think it's important to realize the reason for this is to put a new set of eyes on the entire package around this so that we can make sure going forward, if there are any adjustments or things we need to do with regards to policies in and around electricity and those sorts of things, that they're taken with reasonable consideration, just like all other aspects of the review should be taken.

J. Horgan: I thank the minister for that response. I have two last quick questions. I know that the minister will want to set up thorough briefings with…. Until that leadership business recently, I had a fairly good relationship with the new CEO. We were talking frequently. We'll re-establish that, I'm sure, in the days and weeks ahead.

I want to speak specifically to the dividend from B.C. Hydro to the treasury — last year about $400 million plus, now up to $600 million constantly across the board for the next three years. Is that correct, and if so, where's that money coming from?

[2050]

Hon. R. Coleman: So next month Hydro will pay a dividend to government of $467 million based on
[ Page 7742 ]
85 percent of its income. That will be the dividend for this particular year. They basically build their dividend around their revenue and their income. I'm sure we could get into that in more detail at another time.

J. Horgan: One more question. You can get back to me on it.

I thank the minister for giving me one more opportunity.

Audited financial statements for the corporation show that the net long-term debt has increased significantly from last year to this year. If the minister or if staff could get back to me on the rationale for that — what appears to me to be a significant increase — in writing or in an other briefing, I'd appreciate that. But I want it on the record. As I read the audited financial statements, there's a significant increase in the net long-term debt, and I'd like an answer to that at some point.

Hon. R. Coleman: It's basically capital. It's upgrades. It's Revelstoke. It's Mica. It's Waneta. But we'll get you some more details around that.

Hon. Chair, I move that the committee rise, report resolution and completion of the Ministry of Finance and progress on the estimates of the Ministry of Energy and Mines and seek leave to sit again.

Motion approved.

The committee rose at 8:52 p.m.

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