2011 Legislative Session: Fourth Session, 39th Parliament
HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

official report of

Debates of the Legislative Assembly

(hansard)

Monday, April 30, 2012

Afternoon Sitting

Volume 36, Number 2

ISSN 0709-1281 (Print)
ISSN 1499-2175 (Online)

MONDAY, APRIL 30, 2012

The House met at 1:35 p.m.

[Mr. Speaker in the chair.]

Routine Business

Introductions by Members

N. Letnick: It gives me great pleasure today to introduce some friends to everyone in this House. From the B.C. Professional Fire Fighters Association we have Mike Hurley, president. We have Larry Hollier and Dennis Miller from the Kelowna fire department. We have Darren Blackwell and Gary Birtwistle from Victoria fire department. We have Aaron Charlton and Rod Sidhu from Saanich fire department and also Len Garis, president of the Fire Chiefs Association of B.C., who's also the Surrey fire chief.

We also have in the gallery, from the Ambulance Paramedics of British Columbia — and there's a theme to this, if you haven't gathered already — Sherman Hillier, provincial vice-president and paramedic chief in New Westminster. We also have James Toll, a Delta paramedic; Lindsay Pernarsky, a Madeira Park paramedic; T.J. Moore from Courtenay; and Tamara McNay from Victoria. We also have the president, who will be introduced by someone else. Would the House please make them feel very welcome.

N. Macdonald: Leonora Britneff is the proud mother of Beatrice and Sebastian, a homemaker and a piano teacher. Leonora is an accomplished pianist who has passed on her gift and knowledge to many British Columbia children, including her own. She is also a great advocate of music in the public school system.

She joins us today in the gallery with her husband, Anthony Britneff, a career forester with the Forest Service and an advocate for our public lands. Anthony represents all that is best about our public servants and our professional foresters. I thank him, and I thank Leonora for giving him the time to work with us. I ask the House to join me in welcoming them both to the Legislature.

Hon. M. de Jong: We're joined in the chamber today by members of the Health Sciences Association. I'd like to introduce those members of the HSA to the chamber. Wendy Sikh is a pharmacist; Alison Martell, a dietitian; Fareba Razoul, a cardiology technologist; Anita Bardal, a medical radiation technologist and director of the HAS; and someone I meet with on a regular basis, an occupational therapist from Abbotsford, Jane King. I hope members will make all of these members of the HSA feel very welcome.

H. Lali: Sitting right up in the galleries in front of me is longtime Merritt resident and a good supporter of mine, Allen Peters. He's a medical radiation technologist. He's with the HSA. They'll be meeting with members of this House. Would the House please give Allen a warm welcome to Victoria.

Hon. S. Bond: I actually have two sets of introductions to make today. First of all, I want to welcome to the gallery Tim McGee. He is the chief executive officer of the Law Society of British Columbia. He's here to witness today the introduction of some legislation later this afternoon. I very much want to welcome Tim here and thank them for the assistance that they've provided us. If we could make Tim welcome.

Today in the gallery also are some very dedicated and passionate advocates of motorcycle safety. I'm very, very honoured — I know that all of the members in the House will be today — to have them here. They've travelled a great distance to be here. They were on hand earlier today as we announced new motorcycle safety standards that will help to protect both new and veteran riders.

I'd like to introduce Denise Lodge and Paul Connolly, the mother and stepfather of 21-year-old Corey Lodge, who tragically died in a motorcycle accident in 2005. Denise's group — called COREY, which stands for Coalition of Riders Educating Youth — has worked unbelievably hard to improve safety standards for new riders.

Joining Denise and Paul are Cindy Adey and her daughter Breeanne. We call her Bree. They lost their son and brother Dillon to a motorcycling accident, also at the age of 21, in 2009.

They have become resolute advocates for motorcycle training and safety. They taught me a lot about the changes that needed to be made, and I can't begin to tell you how grateful I am that they came today to celebrate the new laws that we put in place. I thank them for their advocacy and passion. It's turned something tragic into something that will make a difference in British Columbia.

Thank you for joining us today.

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J. Brar: I'm very pleased to welcome a good friend and constituent, Marg Beddis. Marg is a proud member of HSA. She's also very active in my executive. I would ask the House to please make Marg feel welcome.

D. Hayer: I have two special guests here today. One is Bob Hans. He's a community leader, a very hard worker, helping everybody out, and he's also a small business owner. Would the House please make him very welcome.

A second guest is Len Garis, who has already been introduced. He's the chief of the Surrey fire department, and he's also the president of the Fire Chiefs Association
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of British Columbia. Would the House please make him very welcome on behalf of Surrey.

M. Farnworth: It's my pleasure, on behalf of the opposition, to welcome Reid Johnson, the head of the HSA, and the members of the HSA who are in the gallery today. They have been meeting with the members of our caucus to discuss many of the important issues and challenges that HSA members, very much at the centre of health care, face in the province of British Columbia. Would the House please make them all welcome.

Hon. M. MacDiarmid: As my colleague mentioned, we have a number of emergency responders in the House today, and I certainly want to warmly welcome all of them. I wanted to personally welcome Bronwyn Barter, the provincial president of the Ambulance Paramedics of B.C. and paramedic chief in Osoyoos. Bronwyn and I worked together back a few years ago in Trail, when I was a family doctor working the emerg and she was an ambulance paramedic there. I would ask everyone to make her very welcome.

H. Bains: In the House is my good friend Trevor White. He's a respiratory therapist from Surrey Memorial Hospital and also a member of the Health Sciences Association of B.C. He's an excellent activist and a great promoter, promoting health care delivery in Surrey. Please help me welcome Trevor to this House.

L. Reid: I have the pleasure of introducing new staff in the office of public education and outreach today. This summer 14 post-secondary students have been hired to work in the legislative tour office. Over the next four months these eight summer guides and six Parliamentary Players will provide free guided tours to the more than 75,000 school children and tourists around the world who come to visit our beautiful Parliament Buildings.

You will certainly notice the Parliamentary Players, as they will be dressed in period costumes to portray six prominent personalities from British Columbia's history, including Mary Ellen Smith, Thomas Uphill, Queen Victoria, Francis Rattenbury, Sir James Douglas and Amor De Cosmos. I'd like to welcome Rachel Baker, Mik Byskov, Tamara Chwist, Gerardo Espinosa, Hayley Feigs, Alex Frankson, Robin Gadsby, Carly Haynes, Leah Hughes, Laura How, Luke Pennock, Véronique Piercy, Tom Stuart and Gwen Temmel. Would the House please make them welcome.

As well, Mr. Yuri Fulmer is visiting Victoria today from his home in West Vancouver. On behalf of the Speaker, please make him welcome.

K. Conroy: I have the pleasure to welcome two people from my constituency today in the House. Bronwyn Barter is here with the paramedics union — she's a new person to our constituency, and we are really pleased to have her there — as well as Gwen DeRosa, who is a psych nurse with the HSA delegation. She works in long-term care in Trail and is an outspoken advocate for seniors, as well as the rest of the members of HAS. She comes to meet with me often in my office, but it's great to have her here in Victoria. Would the House please join me in welcoming both of them.

Tributes

PARLIAMENTARY PACERS

S. Fraser: There was a little run that happened in Victoria yesterday. The Times Colonist 10K was yesterday, and thousands of runners took part in that. The fleet-footed member for Surrey-Whalley and I did also run in that. I apologize if members from the government side ran and I'm leaving them out. But I think key from yesterday was that the Parliamentary Pacers, out of all the government teams — 49 of them — was first place. And our Deputy Clerk, Kate Ryan-Lloyd — 43 minutes. That's ridiculously fast.

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Introductions by Members

J. Kwan: I rarely get to introduce guests in this Legislature, but today it gives me great pleasure to introduce Kimball Finigan, an HSA member who is also a radiation therapist. He's here, along with his colleagues, to talk to members around the importance of the HSA members' work in the health care profession as it relates to the delivery of care to all of us, as a network of service delivery. I ask the House to please make him feel very welcome.

D. Black: It gives me a great deal of pleasure to introduce Rachel Tutte to the House today. She is a physiotherapist with HSA. She is also part of the B.C. Health Coalition and, interestingly, now is one of the women who is in the race for the YWCA Women of Distinction Award that's coming up very soon. She's a very active community volunteer and a person who does a lot for our health care system and for our community, so I ask the House to please make her welcome.

C. Trevena: I notice that up in the gallery is Anne Davis, who is the executive director of the Comox Valley Transition Society. She's down here with the HSA delegation. She's been very active in the Comox Valley, a good activist who works exceedingly hard on behalf of everyone in her community. I hope the House will make her very welcome.

D. Routley: It gives me great pleasure to welcome
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Vikki Tellier to the House. She is an HSA member and a physiotherapist in my constituency. Vikki did the service for myself, the member for Nanaimo and the member from Nanaimo-Parksville of arranging a tour of all the services that her members provide in Nanaimo.

We were quite amazed to see how many essential, specific services are provided by these servants to their community and how important it is to the flow of patients through hospitals that the HSA services are provided the way they are by these excellent people.

Thank you, Vikki.

Introduction and
First Reading of Bills

BILL 39 — EMERGENCY INTERVENTION
DISCLOSURE ACT

Hon. M. MacDiarmid presented a message from His Honour the Lieutenant-Governor: a bill intituled Emergency Intervention Disclosure Act.

Hon. M. MacDiarmid: I move that Bill 39 be introduced and read a first time now.

Motion approved.

Hon. M. MacDiarmid: First responders put their lives on the line every day to keep people of British Columbia safe. Good Samaritans voluntarily help people in distress on a regular basis. But by the very nature of their actions, these people are at a higher risk of coming into contact with other people's bodily fluids, putting them into a situation where they could be exposed to a serious communicable disease such as hepatitis B or C or HIV/AIDS.

Emergency workers we have heard from have expressed concern that they currently cannot determine with certainty whether they've been exposed to danger until many months later, often past the window of preventative treatments. So they'll ingest a concoction of prophylactic medications which have side effects. And importantly, for months they, along with their families, cannot be certain that they have not been infected.

The psychological strain this puts on them and their families can be incredibly difficult. We can do better for our emergency workers, and that's why we're introducing legislation today that does five things.

First, it encourages people to offer a voluntary blood sample in cases when their bodily substance comes into contact with an emergency worker and the worker needs to test for the presence of a communicable disease. Second, if a sample is not voluntarily given, this legislation means that emergency workers can apply for a court order to require an individual to give a sample.

Third, it establishes strict privacy provisions by ensuring that test results are shared in confidence only. Fourth, it sets penalties for non-compliance with testing orders and privacy provisions.

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Finally, it amends the Workers Compensation Act to establish a presumption of disease exposure for those seeking workers compensation benefits.

With this legislation, government is clearly stating that supporting the health and well-being of emergency workers is something upon which we will not compromise.

I move that Bill 39 be placed on the orders of the day for second reading at the next sitting of the House after today.

Bill 39, Emergency Intervention Disclosure Act, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

BILL 37 — ANIMAL HEALTH ACT

Hon. D. McRae presented a message from His Honour the Lieutenant-Governor: a bill intituled Animal Health Act.

Hon. D. McRae: Mr. Speaker, I move the Animal Health Act be introduced and read a first time now.

Motion approved.

Hon. D. McRae: Today I am pleased to introduce the Animal Health Act. There are many economic benefits provided to the B.C. economy by industries and farmers engaged in animal production, animal processing and associated activities such as transportation.

Prior to the introduction of this act B.C. has largely relied on the federal government to control animal diseases. Provincial legislation, the Animal Disease Control Act, dates from 1948 and has not been modified substantially since that time. There are very few diseases that are administrated under this act, and the actions that can be taken are very limited.

Modernizing our animal health legislation demonstrates B.C.'s commitment to a healthy animal food production system. The new act will also enhance B.C.'s competitiveness in national and international markets by increasing consumer confidence in B.C.-produced foods.

This new act complements the recent Public Health Act to ensure comprehensive disease management for those diseases that can spread from animals to humans.

Other provinces in Canada have also recently updated their animal health legislation, including Alberta in 2007, Ontario in 2009 and New Brunswick in 2011.

I move that the Animal Health Act be placed on orders of the day for second reading at the next sitting of the House after today.
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Bill 37, Animal Health Act, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

BILL 40 — LEGAL PROFESSION
AMENDMENT ACT, 2012

Hon. S. Bond presented a message from His Honour the Lieutenant-Governor: a bill intituled Legal Profession Amendment Act, 2012.

Hon. S. Bond: I move that the bill be introduced and read a first time now.

Motion approved.

Hon. S. Bond: I am very pleased to introduce the Legal Profession Amendment Act, 2012. The bill will amend the existing Legal Profession Act and create a new, modernized act.

These amendments have been requested by the Law Society of British Columbia, which has worked in close partnership with ministry staff in the development of this legislation. The amendments affirm that the protection of the public interest is the paramount purpose and mandate of the Law Society of British Columbia.

The Law Society wishes to be more transparent and accountable to the public through greater involvement of non-lawyers in disciplinary proceedings and in appeals of the decisions arising from these proceedings. This will be accomplished by having a review board hear appeals from a hearing panel rather than a panel of benchers.

Some amendments are housekeeping in nature. There are amendments that formally eliminate the existence of the special compensation fund, which was used in the past to compensate victims of a lawyer's dishonesty. This fund has already been replaced by a type of professional liability insurance through a wholly owned insurance program run by the Law Society.

There are other amendments that recognize the changing nature of the practice of law. An example is that amendments will enable the Law Society to regulate law firms directly. The amendments are based upon a review of legislation in other provinces and a selection of best practices from those other provinces.

The Law Society of British Columbia believes that these amendments will make British Columbia a leader in Canada in the regulation of the profession of law.

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 40, Legal Profession Amendment Act, 2012, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

BILL 38 — PENSION BENEFITS
STANDARDS ACT

Hon. K. Falcon presented a message from His Honour the Lieutenant-Governor: a bill intituled Pension Benefits Standards Act.

Hon. K. Falcon: I move that the bill be introduced and read a first time now.

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Motion approved.

Hon. K. Falcon: Pension standards legislation in each province and at the federal level set minimum standards for the benefits, funding, investments, disclosure and regulatory oversight for workplace pension plans.

British Columbia's legislation has not been thoroughly reviewed for two decades. In 2008 a panel of experts from B.C. and Alberta conducted a comprehensive review of pension standards legislation in each province which included two rounds of public consultation. Submissions indicated broad support for the recommendations in the final report. This bill implements the recommendations from that final report.

Overall, the new legislation completely rewrites the current act, taking a principles-based regulatory approach. Modernization of current standards is designed to reduce administrative costs and enhance members' rights, including benefit security and disclosure of plan information. The new legislation will also allow the private sector to offer a wider choice of pension plan options so that more British Columbians will have access to pension income during their retirement years.

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 38, Pension Benefits Standards Act, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Statements
(Standing Order 25B)

SKI RESORT DEVELOPMENT WORK
OF DES SCHUMANN

E. Foster: Des Schumann was an Australian by birth but adopted Canada as his home in 1985. Mr. Schumann was a visionary, an old-school entrepreneur.

He was educated in South Australia until his education was interrupted by World War II. He bought his first lift company in Mount Hawthorn, Australia, in 1968 and invested in modern chairlifts and facilities in the village.
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He, with his family, operated that resort until 1995 and transformed it during his stewardship from a one-rope-tow ski area to a major resort.

In 1985 Mr. Schumann was encouraged to invest in Big White Ski Resort outside of Kelowna, which at the time was relatively undeveloped. He bought the resort and proceeded to invest heavily in lift and village infrastructure over the next 20 years. His efforts increased visitations and turned Big White into one of the biggest tourist attractions in western Canada. His son Peter operates Big White today.

In 2001 he bought Silver Star ski resort, which is located near Vernon. He invested initially in the ski area and replaced all but one of the lifts with modern chairlifts. He then focused on upgrading the accommodations and facilities and built Snowbird Lodge, a magnificent 54-unit development in the centre of the village.

Next was the construction of the Vance Creek reservoir at a cost of $7.2 million, which he built to resolve all the issues with water supply in the resort. His daughter Jane operates Silver Star today.

Big White and Silver Star resorts now account for approximately one million skier days a year. Together they employ 1,200 people and are one of the major economic drivers in our region. These resorts operate in accordance with this government's all-seasons resort policy, which is the envy of the world in the ski industry.

Mr. Schumann loved his adopted country and had a vision that both Big White and Silver Star ski resorts would be world-class and would benefit all British Columbians. He certainly achieved that and more. His legacy will be shared by generations to come.

Mr. Des Schumann passed away April 12 at the age of 94.

MARINE USE PLANNING BY
CENTRAL COAST FIRST NATIONS

G. Coons: The central coast First Nations territories are the heart of the Great Bear rain forest. They are known for their old-growth forests, productive salmon systems, diverse land and marine ecosystems, and are home to the iconic spirit bear.

Recently the Heiltsuk, Kitasoo-Xaixais, Nuxalk and Wuikinuxv Nations completed their comprehensive central coast marine use plan to guide the management of human activities in their territories. It covers jurisdiction, resource management, economic development and capacity needs across all sectors of the marine market and non-market economy. It's based on traditional laws, knowledge and values and respects the balance of nature, recognizing the connection between the land and the sea.

It acknowledges that respectful relations must be developed with government, neighbouring communities and industry to address the priority issues. These include shared decision-making, revenue-sharing, fish dock restoration and rehabilitation, access for ceremonial purposes, territory-based economic development and the issue of destructive bottom-trawling.

Central coast First Nations have designed five marine zone types and two subareas to facilitate sustainable resource use — a marine sanctuary zone, a marine conservancy zone, a habitat management zone, an integrated management zone, aquaculture management areas, alternative energy areas — and transportation corridors that protect important species and sensitive habitats from activities such as offshore oil and gas development and crude oil tankers from passing through their territories.

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The plan has the overarching goal to realize a sustainable balance between ecosystem health, social and cultural well-being, and economic development with an ecosystem-based approach to resource use. Respected Heiltsuk leader Gary Housty says: "Everything we do is not about us. It's about our children and grandchildren." Wuikinuxv Chief Alex Chartrand reiterates: "Who better knows about the area than those who grew up on the water?" A Nuxalk visioning feast highlighted that if we do not respect our resources, no one will. I congratulate the central coast First Nations for putting their vision in a marine use plan, one that will work for them and for their children for many decades to come.

UBC RESEARCH ON
ALZHEIMER'S DISEASE

N. Letnick: Alzheimer's disease is the most common form of dementia. It impacts our short-term and long-term memory and also our thinking ability. The disease currently has no cure and can affect one's mood, emotions and behaviour. My mother-in-law has dementia. We are very lucky that she's in a caring home, and our family appreciates the support from the government and those at the Alzheimer's Society. It gives us great comfort to know that neither she nor her primary caregiver is alone in the struggle. But a cure is always the hope.

So imagine our excitement when we became aware last week of the work of some UBC researchers led by Lindsay Nagamatsu. They have found that twice-weekly resistance training can slow down cognitive decline in seniors with mild cognitive impairment.

While they caution that their initial findings should not be generalized to men or women of other ages, the message is clear. We can do something to fight back against this awful disease. These B.C. researchers compared the efficacy of aerobic training, resistance training, and balance and tone training, and discovered that in senior women with subjective memory complaints, six months of twice-weekly resistance training improved selective attention, conflict resolution and associative memory. With impaired associative memory being a sign of the early stages of Alzheimer's, the research demon-
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strates that we can make a difference.

My advice is to keep looking for those early signs of the disease — noticeable memory loss and difficulty with complex tasks, like speaking in front of 85 people, and balancing your chequebook. If you see early signs, contact your primary caregiver and check with your local Alzheimer's support group. We might not have a cure, but sure enough, with more research, one day one may be found in our lifetime.

GATHERING OF NATIONS EVENT
IN HAZELTON

D. Donaldson: Poverty and racism in the north. Those were the themes of a two-day regional education conference, A Gathering of Nations, held Friday and Saturday at Hazelton Secondary School. The featured speaker on Friday was Dr. Martin Brokenleg. His Circle of Courage approach, focusing on generosity, independence, belonging and mastery, hit home with the more than 260 educators and community members in attendance.

I was honoured to participate in a presentation on Saturday that discussed breaking the cycle of poverty through community learning, a model that recognizes supporting individuals to acquire skills to escape poverty goes hand in hand with advocating for change to systems that create impoverishment. Community learning organizations do both at the same time.

On stage I interviewed Chastity Turley, a young aboriginal mother of two from Gitanyow currently living in New Hazelton. Although she has felt the impacts of racism, alcohol and violence in her life, she has not allowed these negative experiences to define her. Chas has chosen instead to define herself by drawing on the positive lessons learned from her family, grandparents and culture.

This is what Chas now passes on to her children. Chas is working with the Youth Works program, catering local food for community events, as well as gardening, composting and preserving traditional foods. Through her work she is gaining new skills and contributing to building a healthier community.

Chas spoke of her experiences in life and her work with the Youth Works program, a social enterprise initiated by Storytellers Foundation under a community learning model. She received a standing ovation from audience members.

With B.C. holding the unfortunate distinction of the worst child poverty rate in Canada for the eighth year in a row and having the second-worst income inequality gap of any of the provinces, it's overdue for the provincial government to change systems that create barriers for courageous people like Chas Turley in their efforts to escape the cycle of poverty. I congratulate A Gathering of Nations organizers Barb Janze and Jody Tetrau and all of the volunteers.

CHILD CARE

L. Reid: It is my pleasure to rise in the House today to recognize and celebrate the month of May as Child Care Month in British Columbia. Every year in B.C. the B.C. government, families, child care providers, early childhood development specialists, professionals, community organizations and municipalities join together to commemorate this important month.

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It's about shining the spotlight on child care providers and the important work they do each and every day for young children and their families. These children are our youngest learners, and they are growing, learning and thriving, thanks in part to the dedication of child care providers across British Columbia.

The high quality of child care in this province is evident, and it definitely shines through when you walk through the doors of child care facilities. Child care providers in family child care environments and in group child care centres organize and offer an array of play-based learning activities for babies, toddlers and children.

Child care also gives young children a chance to interact and socialize with other young children, an important part of the early years. What this means for families is peace of mind. It means that parents can pursue career, education and training opportunities knowing their children are safe, happy and well cared for. We are very fortunate here in British Columbia to provide many options for parents ranging from large group-based child care to smaller family-based care.

Many child care programs are tailored to meet diverse needs. Aboriginal child care offers cultural programs for children to help them stay connected to their cultural roots, and programs are available for young parents who are still in school.

Child care providers and early learning professionals — caring, committed and skilled individuals who take on the important role of helping to care for our children — carry out their extremely valuable work throughout each year. The annual Child Care Awards of Excellence honouring child care professionals, organizations and local governments who have demonstrated outstanding service to children and families will be held on May 11 in Vancouver. The British Columbia government is also recognizing the invaluable service that child care providers provide by proclaiming May 17 as Child Care Provider Appreciation Day.

I ask that the members of the House join me in celebrating Child Care Month and the extraordinary work of thousands of child care professionals across our province.

RIVERS CONSERVATION WORK
OF MARK ANGELO

K. Corrigan: It's my great pleasure to pay tribute today
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to Mark Angelo, who has recently retired from a prestigious career at the B.C. Institute of Technology. Mark was involved with river conservation and restoration efforts for over four decades. He established and was the inaugural chair of the Rivers Institute at BCIT and through that institute has worked with river-related organizations throughout the world.

Mark established B.C. Rivers Day back in 1980, and now World Rivers Day, which he still chairs, on September 25 involves 65 countries and millions of people. Mark has a special passion for our local waterways and was instrumental in restoring Guichon Creek at BCIT, which was essentially a severely damaged ditch but is now a classic example of urban stream restoration.

He's also been an advocate for streams such as Britannia Creek since 1975. He says it was a lonely cause back then. In early September of last year salmon returned to Britannia Creek for the first time in a century.

Mark has received both the Order of B.C. and the Order of Canada. For Mark, the formal career is over, but the work is not. I recently attended the amazing Water for Life Benefit Concert filmed by Global. Due to that success, Mark now has plans to make a documentary on river-related issues with a global reach, focusing on rivers lost, rivers saved and rivers restored.

I don't know how he's going to fit in time for his other loves, which include paddling and his family. Mark is one of those people who has changed and continues to change the world and the way we think about our rivers.

I will finish with a quote from Mark himself. He says: "Our waterways have so many values. They do so much for the quality of life that we all enjoy. They have these spectacular natural…and recreational values. So I think we have to do everything we can to ensure they're properly cared for."

Oral Questions

EUROPEAN TRADE AGREEMENT PROVISIONS
ON PRESCRIPTION DRUGS

A. Dix: My question is to the Minister of Jobs, Tourism and Innovation — I got that right, hon. Speaker — with respect to the comprehensive economic and trade agreement with the European Union. This potential agreement has huge implications in provincial jurisdiction. I'm sure the minister will agree. The minister said last week: "Can't make any comment on CETA." He went on to add: "Love to do it, but you'd be talking to a new minister if I did."

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Now, as terrible as that prospect is for all of us to consider, I have happy news for the minister. The federal minister has said the provincial ministers can comment. Other provincial governments are commenting. So I wanted to ask the minister specifically on the generic drugs provision, on the prescription drugs provision, of the proposed CETA agreement: has the minister or has the government of British Columbia taken a strong position against those provisions, which would hurt public health care in British Columbia?

Hon. P. Bell: The nature of the question that was asked of me last week was whether I could comment on the state of negotiations. There is a confidentiality agreement in place by those that are participating in those discussions, and it's not appropriate for us to talk specifically about the state of play with regards to the negotiations.

I can tell the member opposite that there are a number of issues that the province has represented a very strong position on. Pharmaceutical drugs would be one of those. Our position clearly is that we don't want to see any increased costs that would come as a result of an agreement of this nature.

We do think that this agreement is very positive for British Columbia. It can translate into literally thousands of jobs and millions of dollars of economic activity. We're hopeful that we'll see a conclusion to this agreement and that it will work for all British Columbians.

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

A. Dix: As the minister notes and will know, Don Drummond in Ontario has suggested that this agreement would wipe out any benefit to the changes made to generic drugs in that province. Those issues are otherwise before the House here, but I would also point out that we're talking about billions in increased health care costs over the next number of years. Is the minister saying that he will not support the agreement if changes are made that will hurt health care in British Columbia?

Hon. P. Bell: The member opposite, I would presume, would know that this is a federal government to European Union negotiation. The provinces were invited to participate and to advise the federal government. That's exactly what we're doing.

B.C.'s position on this issue is very clear. We don't want to see any incremental costs that are associated with that.

What the member opposite is referring to are proposals that may have transferred from the European Union back to our federal government. That's exactly what I am not permitted to discuss — the nature of those sorts of proposals. I'm happy to share with the member opposite the strength of our position as it relates specifically to pharmaceuticals, and there are some other positions that we've taken. I am able to share some of those.

However, the actual state of negotiations is under a confidentiality agreement, and I would not be able to comment on those.

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

A. Dix: Well, what we're asking is the position of the government of British Columbia. The position of the government of British Columbia appears to be: "We don't like it if they damage public health care, but we won't do anything about it."

K. Krueger: Baloney.

A. Dix: You know, we had a public policy contribution from other members of the Liberal caucus there.

In any event, I think this is an absolutely critical question for public health care, one that other jurisdictions are dealing with. The minister and the Premier have promised that consultations would take place in British Columbia with British Columbians. They made a specific promise for that.

Is the government waiting — since it's not able to speak about anything here — until after the agreement is finalized and concluded before it starts to talk to British Columbians about something that could damage our public health care system?

Hon. P. Bell: The province of British Columbia has actually pulled together, from a number of different sources, the positions it's taken with regards to this negotiation, one of those being on pharmaceutical drugs. The position that we have is very clear on this. We don't want any new or incremental costs. We want to be able to manage our system, and that's the position we've taken forward to this negotiation.

The member opposite should know that under a governance model, the federal government has sole authority in negotiating with the European Union.

Now, I know the NDP opposed NAFTA when it was under negotiation. That's a free trade agreement that has generated enormous incremental benefit to British Columbians over the years.

[1415]

I think it is absolutely appropriate for B.C. to be at the table on this. I think it's very fortunate that we have a federal government that wants to work with us on this. What I'd really like to know is whether the members opposite have changed their position on free trade agreements or if they'd like to operate in a very small 4.4-million-population silo.

DISCLOSURE OF
INFORMATION ON EUROPEAN
TRADE AGREEMENT NEGOTIATIONS

J. Kwan: Last June the Premier promised British Columbians that she would consult and that there would be public input into the CETA negotiations. A freedom-of-information request last summer revealed that the government had made no plans for such consultation. Now that there's self-imposed secrecy on the deal, can the minister tell this House how he's going to achieve the public consultation that the Premier had promised?

Hon. P. Bell: The member opposite should know that at the Union of B.C. Municipalities there was extensive discussion on the CETA agreement. It was very topical. It was one of the key areas that we talked about. We've also spoken with different levels of health professions about the potential for a CETA agreement, but all of the proposals that are being advanced are simply that.

For the opposition to again take a position on something that is under discussion — it's under negotiation — really shows the risk that would be associated with an NDP government. They're coming to quick conclusions on decisions that they have no idea of the implications of.

Mr. Speaker: The member has a supplemental.

J. Kwan: The UBCM event was actually hosted by UBCM, and I should say that UBCM also passed a resolution asking to be exempt from CETA, as did the BCSTA, the B.C. School Trustees Association.

The minister says: "The nature of the discussions are such that we are not at liberty to disclose the positions that the province has advanced to the federal government. That's the same for all ten provinces." That's what the minister said during estimates debate on April 17. Yet we know the Manitoba government has advanced its position. They're trying to protect their interests. They're doing it openly, and they're doing it accountably.

My question to the minister is this. If there is such a disclosure agreement, which the government says exists, will he actually table that disclosure agreement so that we can know who is trying to hide this information from the public? Is it this minister, or is it the Harper government?

Hon. P. Bell: That's almost comical. The nature of a confidentiality agreement is that you're not allowed to disclose the confidentiality agreement. I would think that the member opposite would understand that.

The Leader of the Opposition and the member opposite asked a very specific question with regard to the province's position on pharmaceutical drugs. I have disclosed that, and I've made it very clear what the province's position is. That has come as a result of discussions at various levels with different professions and with the Union of B.C. Municipalities.

We are fortunate to be at the table and being able to participate in this. That has not always been the case. I appreciate the federal government's willingness to let us engage in this discussion. I think it's an important one. What scares me is whether the opposition would consider that to be appropriate or whether they would just remove themselves from the discussion altogether, as they
[ Page 11261 ]
did during NAFTA.

MEDICAL SUPPLEMENTS FOR
DISABILITY BENEFITS RECIPIENTS

M. Karagianis: Persons with a disability in British Columbia often face various health challenges, and some are being denied support by this government, support that they very vitally need.

For example, a constituent of mine named Jolayne has several types of cancer, including breast cancer. Recently she found out that she needs a double mastectomy, but she is actually too weak for the surgery, and her spleen has been compromised in her health problems. Jolayne's doctor has determined that she needs supplements in order to build up her health so that she can, therefore, be ready for the surgery, but she has been repeatedly denied those supplements by this government.

I'd like the Minister of Social Development to please explain what the criteria are for getting supplements from her ministry.

[1420]

Hon. S. Cadieux: As the members opposite will know, I can't speak to individual cases in this House due to confidentiality, but I would be happy to look into it and discuss it with the member in my office. As it relates overall to support for people with disabilities, the province provides income assistance clients with premium-free medical coverage and no-deductible PharmaCare through the Ministry of Health, which covers a range of medical needs and devices.

In addition to what's provided by the health care system, the ministry also provides additional help for individuals who are on persons with disabilities. Medical equipment and supply supplements do help to reduce serious health risks for some of those clients. Some examples of the things we do cover are canes, crutches, walkers, wheelchairs, scooters, bathroom aids, foot orthotics, knee and hip braces. Certainly, the ministry covers a broad range of medical devices. But if the individual is not satisfied with the coverage being provided, I am more than happy to look into it.

Mr. Speaker: The member has a supplemental.

M. Karagianis: I would be happy to follow up with the minister on the individual case, but this particular constituent actually wrote to both the minister responsible and the Premier.

I do want to draw the minister's attention to the reason that the request was denied for supplements. It was very interesting in reading this supplementary decision summary. It says here: "Has a medical practitioner listed and described a severe medical condition?" In this case, yes. "Is the minister satisfied that as a result, the applicant is being treated for a chronic, progressive deterioration of health?" Yes. "Is the minister satisfied that the applicant is displaying two or more symptoms?" No.

It goes on to explain. The ministry accepted that the applicant has cancer but under "the significant deterioration of a vital organ," her spleen, the ministry says this: "The spleen is not a vital organ. It's possible to live without a spleen, although living without a spleen can stress other organs."

I think this demonstrates the most callous and heartless response to a woman with compromised health. So once again to the minister: why is the government denying people like Jolayne and other individuals living with compromised health vital things like supplements, which her doctor is demanding?

Hon. S. Cadieux: While I appreciate that the member opposite would like to use this House to discuss the specifics of individual cases, I won't do that. I have committed that I would be happy to look into that on behalf of the member and the client that she represents. But let's be clear. The Ministry of Social Development and the Ministry of Health do their absolute best to provide individuals who require assistance the assistance that they require.

All programs of government have criteria established to limit the scope of those programs. While sometimes that may appear arbitrary, there are good reasons for that. As it relates to the specifics of an individual's case, I am happy to look into it, but I am confident that the ministry is doing everything it can to support the individual.

C. James: Sadly, this isn't the only case where individuals have had to go public to try and get help. Last summer I worked with John Barna. John had cancer. He had to come to the opposition and the media to get the doctor-ordered supplements that he needed. He's an individual who is extremely ill. He needed the supplements in order to deal with a serious, life-threatening health condition.

My question is to the minister. Why do the desperately ill in British Columbia have to share their private stories publicly in order to get any help from this Liberal government?

[1425]

Hon. S. Cadieux: Again, while the members opposite may use this House to try to gain points around the very unfortunate cases of some individuals in this province who are going through what any of us would recognize as very difficult circumstances dealing with chronic or potentially fatal diseases, no one would wish that anyone was in those circumstances.

The Ministry of Social Development provides people who are eligible for disability assistance with a wide range of supports — both income supports, medical supports
[ Page 11262 ]
and other supports. We do that to provide the best care that we can for individuals beyond what other programs and services may be available through the Ministry of Health in relation to medical needs.

Again, I won't speak to individual cases in this House. I will commit that if individuals are dissatisfied, they can approach my ministry and myself. We will look into the cases and ensure that we are providing everything we can.

Mr. Speaker: The member has a supplemental.

C. James: I want to read the quote from this minister's ministry once again. "The spleen is not a vital organ. It is possible to live without a spleen, although living without a spleen can stress other organs." If that's the best the Liberals can do and this minister can do, then we all are in trouble in British Columbia.

That is not compassion. That is not dealing with people who are seriously ill. We certainly discovered that when Mr. Barna, in the news last August, had to come forward to try and get supplements he needed to survive. The Minister of Social Development finally dealt with the case, but only after eight months. Eight months of fight by Mr. Barna — going to the media, going to the opposition, taking the issue forward, because the Liberals had to be embarrassed to do something.

The minister at the time said they would evaluate requests for assistance on a case-by-case basis. Well, that's why these cases are coming forward.

This is another case. Jolayne needs surgery for breast cancer and needs supplements to get her healthy enough for her life-saving surgery. Will the minister act for those individuals today in this House?

Hon. S. Cadieux: This government has acted in the best interests of people. In fact, the investments that we've made in our medical system and in supports to the B.C. Cancer Agency…. We now have the best cancer outcomes in Canada.

The member opposite is talking about individual cases. On an individual case-by-case basis, we do look into circumstances where individuals are requesting supplements of a non-medical nature, and we do our best to support individuals where we can.

SKILLED WORKER SUPPLY AND TRAINING
AND USE OF FOREIGN WORKERS

M. Elmore: The Minister of Jobs, Tourism and Innovation says that employers can turn to the newly revised temporary foreign worker program when they are unsuccessful in filling vacancies in highly skilled occupations with existing B.C. workers. But where is the plan for B.C.'s young people and workers who need training?

Liberal cuts in advanced education and skills training budgets mean lost opportunities for young British Columbians and existing workers to fill such posts. Landed immigrants, highly educated and trained, remain on the sidelines because their credentials continue to go unrecognized.

[1430]

To the minister: why is the government not actively pursuing policies that expand B.C.'s skilled labour force?

Hon. P. Bell: The province is acting in significant ways to expand the opportunities, specifically around trades training but also technological services, also immigration, also post-secondary services. Under this government, we just recently announced the 8,759th trade certificate issued this year. That's 20 percent more than any other year on record and double what the NDP delivered during the 1990s in any year.

Mr. Speaker: The member has a supplemental.

M. Elmore: Well, contrary to what the minister is claiming, we're seeing huge shortages in skilled workers, and we just haven't been able to meet the need here in British Columbia. Instead of focusing on skills training and recognizing the foreign credentials of B.C.'s immigrants, the Liberal government is planning on using temporary foreign workers as a band-aid fix for job vacancies.

The Liberals have cut advanced education and skills training. They haven't fixed the apprenticeship system to improve completion rates. There have been few measures to integrate highly skilled immigrants who choose to rebuild their lives in the province. Now we're importing workers, creating an unbalanced labour market environment with no policy to address structural unemployment or growing income inequality. It leaves our economy at risk and creates tensions between workers and between communities and employers that are counterproductive.

Will the minister explain why the Liberals are more interested in flying in temporary workers than in investing in programs that train our young people and skilled immigrants?

Hon. P. Bell: Mr. Speaker, 8,759 — that's the number of credentials we issued last year. During the entire 1990s there was not a year when they did half of that. There is a very clear reason for that, a very clear reason. This government has developed an economy that's resulted in billions and billions — in fact, $60 billion — worth of major projects across northern British Columbia. We're training people for the trades of tomorrow. Those folks on the other side of the House didn't have an economy. That's why they didn't need to train people in the 1990s.

FOREST MANAGEMENT PLANNING

N. Macdonald: Eleven years ago, as the pine beetle epidemic spread across the province's interior, the B.C.
[ Page 11263 ]
Liberals decided (a) not to replant, (b) to cut forestry research, (c) to not fully monitor the spread of the pine beetle epidemic.

Can the minister responsible for forestry explain why, after a decade, the B.C. Liberals still do not have an effective action plan in place for forestry communities to recover from the pine beetle epidemic?

Hon. S. Thomson: The member opposite is wrong. With over $884 million in investment in mountain pine beetle mitigation, we continue to work with communities across the region in putting mitigation programs in place through the pine beetle coalitions. That's an investment in those communities.

We're doing the timber supply analysis. We've undertaken that analysis through the timber supply areas. We continue to look at options to address the future of midterm timber supply. We're going to continue to work on those options. That's the appropriate response. We will continue to consult with communities, with workers, with First Nations in assessing those options across the communities in that area.

Mr. Speaker: The member has a supplemental.

N. Macdonald: Let's just review here. The Auditor General, the Forest Practices Board, the association of professional B.C. foresters all say that the forest inventory is hopelessly inadequate. We even have the regional district of Bulkley-Nechako hiring its own forestry consultant because it does not trust the provincial data.

[1435]

That is incredible. We actually do not know what the timber supply looks like, let alone wildlife habitat or riparian areas.

Will the minister explain to this House how the B.C. Liberals can make decisions about the future of our forest industry when they do not even know what our land base looks like today?

Hon. S. Thomson: We continue to make investments in inventory work. We continue to make investments in reforestation — $236 million in reforestation through the Forests for Tomorrow program; $46.3 million in the Forests for Tomorrow program this year alone, in inventory and reforestation work. We have staff dedicated to doing inventory work — $6.1 million and 24 full-time-equivalent staff doing inventory work.

The timber supply analysis work is being done through the region so that we can appropriately assess the options for responding to the midterm timber supply issues through that area.

As we said clearly last week, we will assess all of those options and will continue to consult with communities, with First Nations, with workers throughout that region and the public to ensure that we do a full analysis of all those options and provide the appropriate response in that region.

B. Routley: The B.C. Liberal approach to forestry in this province is absolutely baffling. At a time when more than two million hectares of forest land is not sufficiently restocked and communities are unsure about the future of their mills and their jobs, can the minister responsible for forestry please explain why the B.C. Liberals have delivered a budget that plans to actually cut $30 million from the silviculture budget over the next two years and why they have simply given up on the future of B.C. forest communities?

Hon. S. Thomson: Again, we're looking at all the options for this region. Members on this side of the House understand the importance of those jobs. We understand the importance of those jobs for the workers, for the Steelworkers through that region. They are saying that we need to assess all the options going forward as we look to address the midterm timber supply impacts.

That's what we're doing. We're continuing to look at those options. We continue to build strength in communities. That's why, since 2001, we've increased community forests, from one to 56 community forests throughout the province.

We built capacity for First Nations participation in the industry. Now 15 percent of the annual allowable cut is in First Nations partnership. That's providing jobs and economic activity for First Nations across the province.

We will continue to work on assessing all those options, as I said. The analysis has been done, and we will continue to consult with all stakeholders in the industry — that includes the workers, the First Nations and the community — as we assess those options going forward.

Mr. Speaker: The member has a supplemental.

B. Routley: B.C. communities need a vision, a plan for the future of forestry and the future of forest communities. Yet on the coast of B.C. we see the Liberals intervening to keep B.C. logs from the local mills in favour of exporting jobs overseas, while in the Interior years of cuts to forest health are leaving communities with little hope of a future for forestry. We've lost tens of thousands of jobs under this government.

Can the minister explain why the Liberals still don't have a plan to add value to logs to maintain B.C. jobs?

[1440]

Hon. S. Thomson: So 7.3 million cubic metres of lumber exports. That's what's building jobs in British Columbia, the equivalent of 18 mills of production; 9,000 jobs created through a balanced diversification policy, balanced market diversification.

Just last week, in the riding of the member for
[ Page 11264 ]
Columbia River–Revelstoke, $38.5 million invested by Canfor — $38.5 million. Reopening the mill in Radium, $1½ million into the mill in Canal Flats — that's creating jobs and protecting jobs in that riding. That's what the diversified-market approach that we have, working with the industry, is doing in British Columbia — 9,000 jobs and the equivalent of 18 mills in production.

[End of question period.]

Orders of the Day

Hon. R. Coleman: In this House this afternoon we will do second reading of Bill 35, intituled Pharmaceutical Services Act, followed by Bill 36, intituled School Amendment Act, 2012. Should we have time, we would then move to committee stage on the Motion Picture Amendment Act, 2012, which is Bill 31, and then to Bill 32, intituled Energy and Water Efficiency Act.

In the little House this afternoon we will be doing the estimates of the Ministry of Forests, Lands and Natural Resource Operations.

Second Reading of Bills

BILL 35 — PHARMACEUTICAL
SERVICES ACT

Hon. M. de Jong: I am pleased to move second reading of Bill 35.

Mr. Speaker: Do you want to wait just a moment, Minister.

Members, if you could hurry off to tend to your other business and a little bit of quiet in the House.

Continue, Minister.

Hon. M. de Jong: Again, moving second reading of Bill 35.

[L. Reid in the chair.]

As I indicated in first reading, broadly speaking, two purposes are being pursued with respect to Bill 35. The first is to create a genuine legislative foundation or framework for B.C.'s PharmaCare program, and that's despite the fact that PharmaCare has been with us for many, many years — the first time that has been the case.

This act is designed to enshrine all of the provisions of pharmaceutical services for British Columbia, but enshrine it in legislation. That part of the act consists of PharmaCare provisions which already exist, such as the establishment of drug plans themselves, the ability to enrol beneficiaries and providers, the setting of a formulary and those sorts of things.

However, it goes further than that and also includes changes, such as giving the minister the ability to regulate drug pricing in the province. I'm going to speak a little bit more about that in a moment, that being the second component to what is being pursued here.

Firstly, a little bit about PharmaCare itself. I think most British Columbians would agree that we are fortunate to have an exceptional public drug plan — in fact, one that I would suggest to my colleagues in the chamber is one of the best in Canada. PharmaCare provides B.C. families with ready access to prescription drugs at affordable prices. To place that into some kind of context, I thought I would just take a moment to point out what that translates into for families.

[1445]

For families who earn less than $33,000, there is actually no deductible, and the ceiling on amounts that they would pay is $400. As income levels increase over time, those amounts are adjusted. For example, a family earning between $50,000 and $52,500 is responsible for a deductible of $1,000, and the maximum they would pay to cover drug costs is $1,500.

Now, that is not a trifle amount, to be sure. But contrasted with what some of the costs for certain drugs can be, it certainly eliminates the possibility that a family in those circumstances is going to find themselves in a position where they can no longer afford medication, which in some cases is required to preserve a quality of life or even to keep someone alive. Sometimes that is what the stakes are.

As family income increases, the amount they are being asked to contribute increases. For example, a family with an income of $106,000 to $118,000 is asked to contribute $3,375 to the costs of their drugs that they may incur. There is, similarly, a deductible of $2,500. So it's a sliding scale.

One of the reasons we think it's important to address the issue of the cost that is paid for drugs is to ensure that we have a sustainable PharmaCare program and that we are in a position to make some decisions, perhaps, about how to further assist British Columbians.

The interesting thing about all of this is that despite having a program that provides upwards of $1 billion worth of benefits, PharmaCare has existed as a series of plans under a regulation of the Continuing Care Act. Bill 35 will change that and, as I said a few moments ago, give PharmaCare the protection and the certainty that can only go with having it enshrined in a piece of legislation.

As I said, we spend over $1 billion on PharmaCare — taxpayers' money that is spent via this program. My guess is that that amount will continue to rise — an aging demographic that tends to live longer, healthier lives. That's good news. People are living longer, but there are costs associated with preserving quality of life and attending to their needs as they do live longer. In our society there is a dependence on medication, and we want to ensure that we have a program that will assist British
[ Page 11265 ]
Columbians in accessing that legislation.

This then brings me to the second part of the bill and, in fairness, probably the part that will receive the greatest amount of attention. I'm sure there will be questions about some of the mechanisms that will be used to do this, and that relates to the cost and the pricing of drugs.

The first thing about that is the Pharmaceutical Services Act will consolidate all aspects of PharmaCare in the legislation. It will encode legislatively much of the policy that presently exists. There are provisions here for the enrolling of beneficiaries as well as pharmacies and others who provide services under the act.

There will be better tools, I would suggest to members of the House, for enforcement. This act has provisions for enforcing orders and administrative penalties and provides remedies that heretofore have not existed in the case of non-compliance either by a beneficiary or a provider, such that we have really been obliged to rely on contractual provisions and seek enforcement by resorting to contractual provisions.

There are also, members should know, provisions for management of personal information.

[1450]

But as I said a moment ago, the part about this act that I think attracts most of the attention is those provisions which provide the authority for B.C. to regulate and lower prescription drug costs and, in this case particularly, generic drug costs.

A very quick history. This government originally negotiated lower drug prices with the B.C. Pharmacy Association and the Canadian Association of Chain Drug Stores in July 2010. The objective was to drive the cost of those generic drugs downwards. Now, the House will know — certainly, the hon. critic will, I'm sure, point out — other provinces sought to accomplish this other ways, most notably Ontario, through the introduction of legislation, which itself attracted a fair degree of attention, and chose at that time to benchmark prices at a lower rate of 25 percent.

The decision was made in 2010, following in the footsteps of recommendations from a task force that had been assigned to analyze the situation, to negotiate an agreement with the parties, and particularly the pharmacists association, to achieve savings. That decision was not without some controversy. People rightly asked: "Why not just legislate, the way Ontario did?"

The short answer is because, confronted by the choice, the government's preference was to negotiate and come to an agreement around the savings that could be realized and be in a position to devote those savings to preserving the sustainability and perhaps even improving the services available under PharmaCare — all of that good, logical and worthwhile. One problem. The savings didn't materialize.

That became clear to me last year when I was provided with material indicating that the savings were not materializing to PharmaCare in the way that all of the parties had agreed that they should and would, despite repeated efforts and attempts to ensure that that would happen and to correct that fact.

We are talking about significant amounts of money, so I wouldn't want to leave the impression that we are talking here about small, insignificant amounts of money. The targets were missed by tens of millions of dollars, and that led to a series of discussions. I was not involved in all of them. I was certainly involved in some where the parties — the pharmacists association, generic drug manufacturers — were told in no uncertain terms that unless the provisions of the agreement dealing with these cost savings were realized, and unless the government could be certain and satisfied that they would be realized going forward, other steps would have to be taken.

I must tell you and the House, Madam Speaker, that by virtue of the bill having been introduced, we were not provided with that assurance in a way that gave the government the confidence necessary to move forward without the abilities created by this legislation to ensure with certainty that those savings are realized. So it was for that reason that the government provided to the signatories to the agreement notice that it would be terminated effective April 1, 2012.

Notice was provided in accordance with the terms of the agreement. I don't think there has been much secret about that. I think that members of the House are aware that that notice was provided. I certainly haven't been shy about indicating that legislation was being drafted to present to the House for its consideration.

[1455]

Our intention, of course — if the House chooses to pass this legislation, and I hope it will — is to lower generic drug prices to be in line with other jurisdictions. Now, when we began to have this conversation, I think it's fair to say that the benchmark deriving from Ontario is 25 percent. I understand from reports that they are seeking to go lower than that. In the committee stage debate I am certain that my friend the hon. critic will canvass in detail the mechanism by which those regulations will secure and achieve the certainty of lower generic drug prices.

I can say now that one of the reasons for providing the price-setting mechanism regulation is to ensure that there is the flexibility necessary to take account of changes that occur in the marketplace going forward. In short, whilst it clearly was not the government's intention at first instance to proceed legislatively, the fact that the agreement that was negotiated failed to realize the savings intended and agreed upon by the parties has placed us in a position where we, and I, believe it is the responsible and necessary thing to do on behalf of the taxpayers of British Columbia.

The Pharmaceutical Services Act, Bill 35, I will suggest, paves the way for a sustainable future for PharmaCare
[ Page 11266 ]
and for prescription drugs in British Columbia, and it will provide the government with a very important tool in ensuring that the cost of drugs in British Columbia is competitive and that British Columbians and British Columbia taxpayers who support PharmaCare have the confidence to know that they are sourcing those drugs at the most cost-effective way possible.

I know that during the course of second reading debate members of the House will share their opinions on this decision to introduce legislation and proceed on this basis, and I know at the committee stage of the debate there will be questions and a discussion about the specific mechanism by which drug prices will be set under the auspices of this act. I await the commentary from members of the House in this second reading debate with interest.

M. Farnworth: It's a pleasure to rise and speak on Bill 35, the Pharmaceutical Services Act, an important piece of legislation that I think deals with one of the areas of our health care system that the public of British Columbia do cherish and are rightly proud of, and also concerned about its long-term future.

My colleague the Minister of Health mentioned that PharmaCare has been around for decades, and he is absolutely right. It has been around since the Dave Barrett government of 1972-75, and it was probably one of the most important initiatives that he undertook during that period.

It is designed to ensure that we have an affordable drug plan that meets the needs of families in the province of British Columbia, and it has done that since its inception. Now, a lot has changed since it was first introduced. The development of new types of drugs has been remarkable, particularly in the last 20 years.

As more and more research has gone into the development of drugs, as patents have gone off of old drugs and we have seen the emergence of a significant number of generics, the pharmacy has changed significantly from what it was in '72-75, but the bottom line has always been the same — that we want to have a PharmaCare program that meets the needs of British Columbians.

The other thing that's important to recognize is that the needs of British Columbians have changed over time. The minister alluded to a changing demographic. We are an aging population. We are a population that is more diverse than it was in 1975. We are a significantly larger population, and with those changes have come significant demands upon our PharmaCare system.

[1500]

One of the things that this bill seeks to do is to, in essence, codify in legislation the PharmaCare program as it exists right now, which is basically a collection of policies and regulations. We think that that is a good thing, and it's something that we will be supporting. We think that most British Columbians would support that.

As I said, the population has changed. Our demographic has changed. We can do far more with pharmaceuticals today than we could almost 40 years ago. One can just enumerate the areas where pharmaceuticals and advances in pharmaceuticals have made significant advances in our ability to treat illness, to prolong life, to create a better quality of life.

It doesn't matter whether it's in organ transplantation, where inhibitor drugs and anti-rejection drugs have played a significant role in our ability to make transplants successful and to extend the life of people receiving many different kinds of transplants…. In terms of the treatment of cancer, we have drugs today that were unimaginable 40 years ago and can not only treat and cure many cancers but extend the life of cancer patients.

All of these initiatives and all of these advances, though, have come with a cost. The growth in cost of pharmaceuticals has been quite significant. We spend in this province, I think, just over $1 billion a year right now on pharmaceuticals. It's something that is…. The cost is increasing on an annual basis more than the rate of inflation. About a third of that is currently spent on generic drugs.

Over time, that's going to increase. In fact, we may well be at the point — and we have been pretty close to it for some time now — where we do more in terms of pharmaceutical interventions than we are sometimes doing with traditional interventions, what people think of as invasive — that is, surgeries. That's how far the role of pharmaceuticals has come. It is a very important component of our health care system and one that deserves our attention.

Much has been made around costs, in our debate on health care over the past number of years, and pharmaceuticals, as I said, are clearly part of that. One of the things that governments of political stripes right across the country have wanted to do is to look at how we can contain those costs at the same time as providing the medications and the pharmaceuticals that British Columbians and Canadians expect.

One area has been the growth of generic drugs — a lower-cost alternative to a name-brand drug, for example. These are often developed as patents on traditional or older drugs wear off, and the marketplace comes in and is able to provide those medications.

But we need to have that supply of medications, and provinces are often at the mercy of the price that's charged for those medications. One of the advantages that we have as a province is the ability to, hopefully, in essence, take advantage of the sheer volume of medications and pharmaceuticals that we require to get a better price. Provinces have been looking at how we can deal with the issue of cost containment for quite some time.

The government engaged in an exercise, as the minister pointed out, trying to negotiate an agreement with the pharmaceutical association and the Canadian Association of Drug Stores, which resulted in an agree-
[ Page 11267 ]
ment in 2010 that was to achieve a certain amount of savings over a number of years. In Ontario they decided to legislate in place an agreement that capped the price for generics at 25 percent. That was 25 percent of the name-brand alternative. So if a name-brand medication cost $10, then a 25 percent cap of that would mean $2.50. That would result in significant savings.

[1505]

Ontario legislated a cap of 25 percent. The province of British Columbia announced an agreement that would put that cap at 35 percent. At that time the opposition was concerned that the cap, the agreement that the government had put in place, would not meet its objectives, that there were a number of issues that would not allow those savings levels to be reached and that the agreement the government had put in place would not be as successful as the legislation that Ontario had put in place.

Two years down the road the Ontario government is looking at extending its agreement — of moving from a 25 percent cap to a 20 percent cap for the top ten drugs that are used in the Ontario pharmacare program. So they will be looking to get even further savings out of their pharmacare initiative.

That'll be one of the questions that we will be asking in committee stage. I'd just like to digress a moment and talk about that a little bit. The committee stage debate on this bill is going to be extremely important. The legislation that is before us, which we're debating at second reading, debating the principle…. One of the key things about this legislation is that its implementation will primarily be by regulation.

Regulation is not something…. While the nature of them is before the House, the detail of those regulations is still to be, in many cases, determined, I would expect, by cabinet and, perhaps, committees out of the Ministry of Health. Those regulations…. As is often said about legislation, the devil is in the detail.

The detail of those regulations, I think, will determine whether this legislation that's before us will, in fact, meet the needs and the expectations of the province and, certainly, those of us on the opposition side.

There are a number of questions around that. One is, for example, the 25 percent cap. Initially, my understanding was that the government was going to go to the 25 percent cap, that that was definitive. Now I'm hearing that that may be the goal of the government.

There are some issues around that. If it's a goal, how long are we looking at to achieve that goal, and why are we not moving to the 25 percent cap? The minister has correctly anticipated one of the questions that we will be raising around the 20 percent cap on the ten most used drugs in Ontario. Is the government planning on doing a similar initiative through this legislation here in B.C.? That's just one of questions that will be coming to mind.

The regulations are a crucial and key part of this bill. It is where, during the committee stage, we will be spending, I think, a fair bit of time, going through the regulations — how they're going to be implemented, the timeline for the implementation, the effect of those regulations, how they are being developed or have been developed — so that we can get a clear understanding of how this bill is going to work, and what the bill will, in fact, accomplish.

The minister has stated that the initial impetus of the previous policy, the agreement, was to achieve significant savings. The minister has stated that some tens of millions of dollars of savings that were anticipated were not met. I think it's important for the House to quantify that a little further.

For members of the opposition and, perhaps, members of the government's side who are not familiar with just how much savings we have not achieved over the last two years, research that was done here in British Columbia independent of government — and, I might add, independent of the opposition — at the University of British Columbia reported that B.C.'s agreement had cost taxpayers at least an additional $157 million per year compared to what had been done in Ontario.

Well, $157 million a year….

Interjection.

M. Farnworth: That is a lot of money, as my colleague the Finance critic points out. I'm always nervous when Finance critics or Finance Ministers go: "That's a lot of money."

With $157 million…. There are small countries that that budget could fund, but it could make an important difference in terms of the delivery of health care within British Columbia.

[1510]

Certainly, it could make an important difference in the types of services, the types of drugs that we are able to provide under our existing PharmaCare program, the type of support that would be available for families in British Columbia. Those are not small dollars that we're talking about.

I think it's important that the legislation that we are debating and the regulations that are put in place are able to meet those targets, able to meet what has been accomplished in Ontario, and do it in a way that meets the needs of British Columbia.

There are a number of other issues that I think, along with this, we've got to address. This legislation has had, and is receiving, comment from a number of sectors. One of the areas — and I've got a number that I want to address, to touch on, before I conclude my remarks — that is important and that we need to hear, I think, from the government on….

The reason the government is doing this particular piece of legislation is about making some cost savings — significant cost savings. One of the things that can impact on those savings is how this legislation is imple-
[ Page 11268 ]
mented. I've talked a little bit about that in terms of the regulation and the details. Those are things the province has control over.

But other areas of public policy, other initiatives being undertaken by other levels of government, can also have an impact on this legislation. The one that comes to top of mind is CETA, the Canada-European trade agreement. I think the issue there is around patent extension and the potential impact it can have on the pharmaceutical industry in this country and thereby, through extension, British Columbia, and how those costs impact on our own provincial health care system.

Ontario, as we know, has made significant impact already. As I have said, they've enjoyed two years of savings already, significant savings. We've had two years of, I would say, failure in that regard, but this legislation is an opportunity to change that.

I would hate to see it undermined by the implementation of an agreement that could see, as Don Drummond, a highly respected economist who has been advising the government of Ontario on cost containment initiatives that they need to undertake…. Those savings in Ontario would be sucked up like a sponge because of the potential impact of the CETA agreement on our health care system.

I take what the minister said today in question period, in terms of that these are proposals and negotiations which are confidential. I do think it's important that we as a province recognize that if we're going to be putting in place legislation like this and we're going to be booking significant savings, that we are able to enjoy those significant savings and that we as a provincial government have an opportunity to allocate those savings to areas of public policy importance, particularly in the health care system.

My concern is that we as a province are standing up and making clear to the federal government that we are trying to do our part in terms of addressing some of the cost pressures on our health care system and that the federal government needs to stand up and do its part and make it clear that while we value trade agreements with Europe, for example, they should not be done at the expense of our public health care system in the province of British Columbia or in the rest of the country.

I think that that is an important message that this government needs to communicate.

That's an area in which I think I'd like to hear the minister's comments, in terms of: has this government looked at the impacts of any potential issues around pharmaceuticals and the CETA agreement and how it would impact on British Columbia and, in particular, on this piece of legislation and the potential changes and the impact on the potential savings that we're looking to achieve? I would hope that there has been work done in that particular area.

[1515]

Another area that has been raised is issues around privacy and privacy concerns. As the minister is well aware, PharmaCare does collect a significant amount of data. When you read the legislation, particularly sections 22 through 29, under "Administration" — information management; around the collection, use and disclosure of personal information.... I think we will want to spend some time on that, to look at it and make sure that issues of privacy have been recognized by the government.

There will be some questions around the regulations, how they're going to be implemented and how they're going to be carried through. In terms of anonymized data, that's one thing, but for example, issues around personal data would be something completely different. That's another area we will be looking at within the legislation — as to how this bill will work and how it will be implemented.

Another key area — I think it's a very crucial area that we need to recognize — is that this legislation also deals with a number of practices that are prevalent, that occur within the pharmaceutical industry and that are addressed within the legislation. In the particular bill it comes under part 3, "Price Regulation."

Section 20 deals with, appropriately enough, price regulation. Section 21 deals with the issue of incentives. Again, this is another issue that we need to look at thoroughly if we are going to see how this legislation will be successful and achieve the goals that the government wants it to.

The practice of incentives is something that is fairly common, whereby pharmaceutical companies can offer a discount, as it's referred to, to carry particular brands of drugs at the expense of other brands of drugs. That can be, and is, a significant cost driver within our PharmaCare pharmaceutical system. I think it's something that needs to be addressed.

Clearly, it appears that the government is anticipating addressing it in this particular piece of legislation. I think what's important, again, is that we know what those details are and get some sense of the government's thinking on how the regulations will be formulated, whether or not there has been consultation on that, whether the government has some policy objectives already in place, what the timelines are, what their thinking is and when the regulations will in fact come into force.

I know, from my own experience around the cabinet table and from having served in this House for some time, that often when legislation is debated, it's examined at committee stage, and it receives royal assent. But unless those regulations are in fact proclaimed, they don't have any force. So that, again, is also an important area that we need to look at.

The issue of incentives is something…. Doing away with them is what I think I get out of this particular piece of legislation, but I'll be looking for confirmation on that from the minister. I think that that's a crucial area that needs to be looked at.

Finally, I want to conclude my remarks by recognizing
[ Page 11269 ]
that our PharmaCare system has a very broad base to it. It's complex; it's not simple. It's something that has been around now for almost 40 years. The pressures on it are…. There's no one single pressure that causes challenges. I mean, yes, demographics is one. Yes, inflation within the pharmaceutical industry is another. Usage is another. How prescriptions are prescribed is another. The types of drugs that are approved for the different formularies are all…. There's a whole series of different pressures.

[1520]

I think what's important to recognize is that this particular piece of legislation is one component of how we deal with the issues and the challenges facing us with our PharmaCare program — which people cherish and that we want to see be around for a very long time, meeting the needs of the people of this province.

Other areas that we have dealt with in the past…. One, for example, is reference-based pricing. Blood pressure medication is the most common category of drugs that's dealt with by reference-based pricing, for example. That's an area of public policy that the government may or may not be looking at, in terms of future considerations.

The Therapeutics Initiative, something that was started by the previous NDP administration — which sadly, I think, the current administration, the current government, has undermined and rendered a mere shadow of its former self. The Therapeutics Initiative — which was recognized by, I think, the Harvard Medical School as a model for drug efficacy and approval processes that could be followed by other jurisdictions — is an area where we could make significant improvements in our PharmaCare system.

Other concepts, such as academic detailing, whereby physicians are educated about drugs not just by pharmaceutical companies but by people within the Ministry of Health, are also potential initiatives.

The bottom line is this. This is potentially an important piece of legislation — if it is done right, if we have regulations that are designed to make it work. If we do that, then we can have something that I think will be supported by this side of the House, as well as the government.

I do think there are a lot of questions, though, that have to be answered, and we'll be dealing with that, as I said earlier in my remarks, in committee stage of the bill. I look forward to that.

I look forward to also getting a sense from this government on what consultations, if any, have gone into the development of this particular piece of legislation, because I do think that that's important as well. You know, there have been concerns raised by the pharmaceutical association. There have been concerns raised by individual pharmacists. There have been issues raised by the Privacy Commissioner. We need to have a thorough examination of all those issues during the committee stage of the debate.

With that, I think I am probably close to my 30 minutes of allotted time. I look forward to hearing comments of my colleagues on both sides of the House. At the appropriate time, when the debate is finished and we've had a vote on this piece of legislation — which we will be supporting, certainly, at this particular stage — I look forward to the committee stage, where we can get a number of the questions answered by the minister.

With that, I take my place.

N. Letnick: I'd like to thank and congratulate the Minister of Health for introducing this very important piece of legislation into the House today, and also to thank the government for bringing this forward. My last thank-you is to the opposition critic for Health for his announcement that the opposition will be supporting this piece of legislation.

The opposition critic is correct when he says that health care is a complex system. It kind of reminds me, sometimes, of those child toys — kind of a rubbery toy where you push in one side of the toy and something pops out in another piece. You push that back in and something else comes out.

It's a complex system, and therefore, with any complex system, you have to come up with usually very intricate answers and solutions to solve problems. It's not good enough just to assume that one little piece will fix everything. I would just like to reiterate that with health care, that definitely is the case.

[1525]

What we see here is a government that was courageous and is courageous in trying something new. They tried something new by negotiating, coming up with a solution that worked in a collaborative way with the industry, hoping that within a reasonable amount of time the government would realize savings in generic drug prices that it could pass on to other areas of that complex system called health care or, perhaps, reduce the growth in the costs of health care so that we could have more money to continue to fund other programs that government is responsible for.

When the government found that the goals that were supposed to be achieved by that collaboration were not, I thought it was very courageous, as I said before, for this government, under the leadership of the Premier and the Minister of Health, to come forward and say that we need to take a different look at this. We need to approach this in a different way.

We need to make some changes and make sure that we continue to deliver on a top-notch Fair PharmaCare program and a health system but at the same time look for a new way so that we can achieve those goals that we've set for ourselves regarding the cost of generic drugs. Therefore, the government has come up with a proposal called Bill 35, the Pharmaceutical Services Act, which I stand here to support.
[ Page 11270 ]

Not only does the Pharmaceutical Services Act help health care, but all of our publicly funded health care system gives us a competitive advantage. When we look worldwide at how much health care costs our competitors to deliver products that we compete with, right here in British Columbia — thanks to our publicly funded health care system and to British Columbia's PharmaCare program — those costs are built into the tax base for the most part.

Therefore, it provides our companies and individuals the opportunity to take risks, to be entrepreneurial in creating new jobs, new industries and new businesses that employ people and, of course, improve quality of life. That comes as a big part of our very affordable tax structure that we have in this province, matched with our very, very affordable health care program covered by the Canada Health Act and delivered by this government.

The pharmaceuticals act that's being proposed here is perfectly in line with that complex system, which will allow for government to deliver not only the important health care services that we do deliver to our citizens — everything from acute care hospitals to primary care in the community, home care to ambulance services and other services that we pay for through our tax dollars — but also to make sure that when someone is in need of affordable, lower generic drug prices and they qualify under the plan, they can have access to those drugs at a cost that we all can afford as British Columbians. That is the crux of the bill.

PharmaCare currently operates a series of plans under the Continuing Care Act. This means that this complex, over $1.1 billion — I believe, currently — program was essentially run from policy only. This policy-based approach no longer meets our needs when it comes to effectively managing the program's agreements. Therefore, enforcing its policies or controlling its costs is problematic.

So the Pharmaceutical Services Act is an historic piece of legislation, and by enshrining the best public drug plan in Canada into law, it provides tools that will allow us to ensure prescription drug costs will remain sustainable for future generations.

As we all know, there are many challenges to sustainability in our publicly funded health care system, everything from the cost of our human resources — in terms of costs for staff and for fee-for-service physicians — to the costs of drugs that are escalating and the cost of new technologies — and a big part of that is the drugs. Also, there's the cost of delivering care in the home, care at the end of life, care in long-term care facilities and the capital costs associated with all of these parts of a very complex system.

It's important for us to continue to look at change and innovation, wherever possible, that will drive the tax dollars as long and as effectively as possible so we can continue to provide excellent service that looks for improvements as we continue to age through the next 25 years and beyond.

[1530]

This is one piece of a very complex puzzle. Government, again, I believe, should be congratulated for looking at how well the previous agreement was working and deciding that it's not quite working to our standards, and therefore, we're going to take the politically courageous decision and make some change and look for those efficiencies.

This legislation will bring more effective management and reinforce our commitment to provide affordable PharmaCare for British Columbians. PharmaCare is the only public drug plan in Canada that currently does not have supporting legislation. After this legislation gets passed, you'll see that it is now in line with the rest of the country.

Beneficiaries — and this important for people listening at home who are on Fair PharmaCare now — will experience a seamless transition of PharmaCare to this act and will not have to reregister or change their PharmaCare account in any way. The services and the practices will be better managed and protected, with considerable savings for British Columbians, and in a seamless way that will benefit each and every one out there.

Now, just some brief statistics on the numbers, and then I will cede the floor to the members of the opposition. As of April 2, 2012, generic drugs cost 35 percent of their brand-name price in B.C. This act will allow our government to further lower drug prices and bring them in line with other jurisdictions. For example, generic drugs currently cost 25 percent of brand-name drugs in Ontario. The Ontario government has signalled that they may reduce prices for some generics down to 20 percent.

The savings will apply to all British Columbians through this program, whether they are covered by PharmaCare, an employee union-paid drug plan, or they are paying for drugs out of their own pocket.

With the leadership of this government, there will be benefits beyond those just on PharmaCare. It will be, of course, in our hospitals, by seeing the cost of running hospitals come down. The cost of businesses will also improve, or at least be sustained, by seeing that our cost of health care as a whole is able to be accommodated within our tax regime.

For example, the current costs, not including standard pharmacy fees, of a 30-day prescription on the cholesterol-lowering drug Lipitor is $55 for the brand-name drug. The cost of the generic version today is 35 percent, or about $10. In another example, if the province were to lower the generic drug price to 25 percent, it would cost $14. A drop to 20 percent would bring down the cost to $11. That's quite a significant savings on one drug, one service only.

We need to expand that to the broader health system, which will also benefit from the savings that can be re-
[ Page 11271 ]
invested back into lower drugs for everyone, reinvested back into pharmaceutical services and medication treatments — and then, of course, continue to protect both remote and rural pharmacies as we do that.

In conclusion, I'd like to repeat that this is a bill that will allow government to put into law what is currently in law in the rest of the country. It is a bill that will help the government continue to fund a sustainable, strong, publicly funded health care system in this province that will be second to none in the country. It will be a benefit not only to the people who qualify under Fair PharmaCare, those who pay for their own drugs or have insurance for drugs but also will help us to maintain our competitive advantage over many of our competitors from around the world.

In the end, if we have strong businesses and strong individuals who pay their taxes, that will flow right back into making sure we have a strong, healthy, expanding health care system that can provide more and more services at a higher and higher quality for the citizens we serve.

Thank you, hon. Speaker, for the opportunity of speaking, and I look forward to supporting the bill when it comes forward in the near future.

G. Gentner: I rise to quasi-support this bill until we finally find out what the final details are. It's quite extensive, Bill 35, the Pharmaceutical Services Act.

I'm quite honoured by the fact that I'm following the Chair of the Select Standing Committee on Health. It's been an interesting journey we've been involved in. One of the big issues we've been discussing on that committee has been that of escalating costs. Of course, we keep hearing about the senior tsunami, but we also know that pharmaceutical drugs are escalating. After all, we do live, like it or not, in a drug culture.

[1535]

It's quite amazing, what's happened to us. We hear about the stories of OxyContin and prescribed drugs. Particularly, I think, for some sectors of society, prescribed drugs are the choice of suicide for many. This is a beginning, I believe, of a legislative approach, a framework, for PharmaCare and other things that, until now, have been governed primarily by policy and regulation. I think it is the right step. The devil is in the details, which we will find during committee stage.

The member from Coquitlam had mentioned before that the provincial drug program known as B.C. PharmaCare has been established. It was mentioned before, of course, that Premier Dave Barrett and his government introduced it way back in the 1970s. What a breath of fresh air that was for many, including my father and many others, to know that in their retirement years there was something they could fall back on to get them through those uncertain times.

The bill, of course, establishes and maintains regulations, establishes and maintains certain drug plans. It's quite extensive in that I think the most important part of the bill, which we seem to forget, is its effectiveness to provide cost-efficient drugs and the safety of a prescribed drug as well. It's also necessary to allow information respecting a drug, and what the substance is, from a manufacturer and a supplier. I think those types of establishments are important.

I also know that it's important to get bang for your buck, particularly with the rising costs of drugs. In particular, under section 3(2)(f), "if 2 or more drugs, devices or substances have different compositions or means of administration or use but have essentially the same therapeutic objectives, treating the drugs, devices and substances differently...." That is referring to: "The minister may do anything the minister considers necessary or appropriate for the purposes of establishing and maintaining…." That's sort of the premise of much of the good work that may be seen in this bill.

There are some interesting parts in this that I welcome the government to entertain, and that's section 32, the whistle-blower protection part. Hopefully, there are some areas there that we can explore during committee. "A person must not dismiss, suspend, demote, discipline, harass or otherwise disadvantage another person, or deny another person a benefit, because…." And it goes on to quantify what that means. I think there are some good starts here. I think we have to pursue it step by step, and we'll do that in committee stage.

To discuss this bill you can't help but look into your own personal life and how you've been affected by pharmaceutical drugs and, in particular, the generic aspect.

I remember a few years ago when I was in Africa, in Tanzania, that I was quite literally blown away by India. India has pharmaceutical factories, if you will. It was amazing to me how a great percentage of those generic drugs had to be used in certain states of Africa. It was a donation made by the state of India as a means of foreign policy. Had the African states not had that type of foreign help, they would be in a very dire situation.

You think of drugs. You don't really think where they come from, but these types of pharmaceuticals, particularly generics, are very much a part of the economy of the developing world. But it has changed. The world has changed regarding the development of drugs, pharmaceutical prescribed drugs. We think about the good old days and the penicillin days when Fleming invented penicillin. Banting, I believe, was a Canadian who invented or helped invent insulin.

[1540]

There it was done through altruistic means. There wasn't a price put on it, per se, because it was invented for the best of humanity.

In today's world, in the multi-billion-gazillion-dollar pharmaceutical industry, young minds are snapped up out of university before they're even pretty well graduat-
[ Page 11272 ]
ing, to help pharmaceuticals and for pharmaceuticals to make money. Of course, any of you that have RRSPs or pension plans know that we are invested in pharmaceuticals as well. So there is that big debate about the public good versus that of private interests, which I'm going to touch upon shortly.

The thing that comes to mind, for me, is a personal story I have to share with the House. When I was young, my mother died. She was given, back then, a certain type of digitalis to keep her alive, and we really couldn't afford the drugs.

Back then it was $150 a month for this powder my mother had to use to keep her alive. I remember it well because my father…. We had no PharmaCare or medicare or any means. My father had to hold down three different jobs. He was a carpenter; he had one job. He moonlighted, and because he had to find the money for the digitalis, he had to find illegal means to make money. Therefore, the government didn't make money off of taxes because of it. He also played in a band late at night in the Legions to pay for this drug.

Consequently, the family…. There are three of us. I was the oldest. At the age of nine and ten, we basically had to look after ourselves because my father was working 70, 80 hours a week. For me it was a scar psychologically, and it's probably one of the reasons why I'm on this side of the House. At a very young age I saw what the social democrats were doing in the country in the Tommy Douglas years, and Dave Barrett. They were putting the interests of the public and those of the needy, particularly those who had medical needs, ahead of the interests of pharmaceuticals and the private medical system.

I was talking to my dear friend next to me. It's why I'm approaching it in this way. We were talking briefly about some seniors who have to line up their drugs on the counter. Now, perhaps $1,000 a month to get by — huge costs, huge implications. For those who may have Blue Cross and those who have a plan, they can get by. But I think about, in particular, some of the elderly — the single women, for example, whose husbands may have gone, the medical plan is no longer the same, and who have a fixed income and are going day by day trying to exist.

It's for those people, those particular people and those who are vulnerable, that we have to support a legislative framework that guarantees an equitable approach to PharmaCare for all British Columbians. For that I have to applaud all the history that's gone before us to get to this point and the rethink and re-examination of the government itself, who I think was on the wrong road up until recently and has now re-evaluated the need for a plan that we can be, hopefully, proud of.

The bill will allow the government, through subsequent regulations, to control the price of generic drugs in British Columbia. This will affect the price paid by the B.C. government, employer- and union-sponsored drug plans and individuals. So it has a wide-sweeping approach for those who can afford it and those who may not be able to afford it.

The impetus of this legislation is, I think, in many ways the original failure of the government, who expected to achieve some savings. Namely, that was generated some time ago by…. In 2007 the Liberal government started what was known as the Pharmaceutical Task Force, and it took those recommendations, and I think those recommendations took the government. It was a folly approach.

[1545]

One minister, who's now the Minister of Finance — he stayed in the House at the time — said: "I want to make sure I get it right…to examine the pharmaceutical policy." He went on to support it. But as it's turned out, as the previous member has mentioned, it's cost us a whole whack of extra money that we didn't think it would necessarily cost.

Under estimates, I've gone back and looked at the record, including some of the statements made by the then Minister of Health who is now the Minister of Education, who was also very much in support of the recommendations of the Pharmaceutical Task Force. He went on to say that we could save about a billion dollars annually on pharmaceuticals. "Are we getting the best deal yet?" Yes, we can by following the task force.

So it was an interesting debate. I was here at the time, and I remember it well. But what was driving that — which is maybe a new culture that is emerging here in the Legislature — of course, were the recommendations from the task force. The task force that the government was listening to was that of private interests, not that of the interests of perhaps children, myself or those who are in need and needed inexpensive means to drugs.

Nine people were appointed on the task force, including Mr. David Hall, chief compliance officer, Angiotech Pharmaceuticals; Susan Paish, chief, Pharmasave Drugs National; and Russell Williams, president of Canada's Research-Based Pharmaceutical Companies. RX&D was also part of…. The list went on and on.

The interesting thing back then is that all the donations at these same companies also were found to have been given to the B.C. Liberal Party at the time. Angiotech, a member, gave the Liberals $2,900 one election. Another drug company, GlaxoSmithKline; Wyeth Canada; and Pfizer Inc. — $6,200, $5,400 and close to $4,000, respectively. So on and on it goes.

That's what has driven, up until now, a PharmaCare system that was governed by, basically, policy and regulations as opposed to a regulatory legislative framework, which I think both sides of the House will be able to work towards.

So I think that there's maybe been a change, a shift, here. I'm hopeful that we're going to be on the right path. Again, through third reading, I think we will be able to explore it further.

The Health Minister has mentioned that…. Of course,
[ Page 11273 ]
we were very critical of the 35 percent price cap at the time. In September of that year the Minister of Health, I think, admitted then that the deal had fallen short of its anticipated savings targets. The ministry officials believe that they had lost $46 million. I think that was per annum. Hopefully, the minister can correct me, and we'll get some of those details.

There was a failure of the old approach. Therefore, here we are today. The bill presents the opposition with the opportunity to look at that failed record. Any analysis is a comparative analysis, so we can look at what's happened before and where we are today.

Ontario was the lead in 2010. We believe that if we are going to save, looking at that model, $157 million per year…. This is going to be implemented, I believe, curiously enough, just before the next election. So be it. If you do the math, I think we would have saved close to half a billion dollars had we implemented this much earlier, rather than the charade that was called the Premier's conversation on health and all that other stuff that we were involved in.

Now, the government has yet to achieve the same savings as Ontario has. The minister has said that the government will aim for a reduction of 25 percent by April 2013. I have to put parentheses or quotations around "aim."

That's the goal, but I don't know how driven the ministry and the province will be when we've heard a similar promise relative to a need for a seniors advocate, which was going to be done before the next election. We're still waiting for that. We'll see if they will comply and drive home the view about fulfilling the reduction of 25 percent — more than just being an aim of the government.

[1550]

Ontario recently has lowered the price again for the top ten generic drugs by 20 percent of their brand-name equivalents. I think it goes on to say that this will be, hopefully, a gradual approach by the government and that the government will go further than what it has today and find further cost savings. We'll find out whether or not those are real dedications.

The minister, really, has failed, I believe, to commit to banning the practice of drug companies offering pharmacies rebates to carry their products, which is a significant cost driver. From a consumer perspective, I think that's wrong. It's a kind of form of bribing, where you push our product before the next and there's something there for the pharmacy. I think that's not being genuine. I think it lacks integrity.

I think the cost should be a one-time cost. It should be on the shelf. I don't think that people should be somewhat bribed to carry a certain product, particularly when that product is there to save somebody's life. I think that's ethically and morally wrong. Ontario is on its way. I ask the minister to re-examine that. Maybe, perhaps, we can do better.

Also, on the privacy situation. I will be looking, like all of us, to see where we're going to go with that one in committee stage. It has some implications. Hopefully, it'll be spelled out to us. We know that with e-health and where we're going, there are obviously some concerns.

The bill looks at…. Let's look at two studies that showed…. I think the recent study done by Statistics Canada regarding the 2010 survey of household spending shows that B.C. residents had the highest average health care spending, at $2,680 per year — 22 percent above the Canadian average.

When we talk about pocketbook issues in this province, it resonates. We know what happened with the HST — the implementation and how wrong it was. We know that MSP, for many families, is going through the roof. We know hydro rates are going up. People are probably resonating more today with what is happening to their pocketbook than probably any other issue, and for good reason.

It costs money to live here. When we see we have one of the highest household expenses when it comes down to mortgage, your rent, your shelter, the food and now, of course, the cost of drugs…. People are very concerned.

Again, going back to my social democratic perspective, I look at the good work of people like Tommy Douglas. He brought it home to all of us that there is a difference between equality and equity. Equity or the lack of it can make sure that you lose that opportunity. Everybody who is ill should be treated the same way whether they have the same income or not.

I think that this is a telling tale, where we have the highest cost of drugs. Those who cannot afford them should still be given the opportunity. This bill will weigh the importance of good generic drugs that will cost quite a bit less than the expensive pharmaceutical brand drugs. We have a form within this bill that will allow the ministry to do the right thing and ferret out what is an effective drug for those who need it.

Also, in January the CMA Journal published a study that showed that 17 percent of British Columbians cannot comply with prescription drug treatments because they are too expensive, and that is way beyond the national average.

Those two studies are clearly showing British Columbians and all of Canada that we lag far behind. Hopefully, now with this new commitment by the government and also, perhaps, with some changes to legislation that may be forthcoming, we could together make this a better place to live in British Columbia.

[1555]

Briefly, what was talked about was CETA today. The bill looks at…. I think it's another example of how this government is lacking the fortitude it should muster relative to dealing with Canada and the provisions of CETA.

I know the minister during question period said that there's a confidentiality agreement, and specifically that
[ Page 11274 ]
we're dealing with the federal government. The federal government is the one that provides, through the Canada Health Act, these types of changes, and the outcomes will be forthcoming. But you know what? The province should be standing up. I think the guy should be standing up, and I think it should be transparent what the potential result of CETA could be on the cost of generic drugs.

I think, too, that there are more implications here than just one trade agreement. I mean, have we flushed out what the consequences are to TILMA — the sort of even playing field between buying generic drugs or pharmaceuticals in one province versus another? I'd like to know, hopefully through the committee stage, what the implications are for all trade agreements — not just what CETA is about; the new agreement with Saskatchewan, for example.

How's that going to affect us when we're looking for a lower cost from generic drugs from within the pharmaceutical industry?

Finally, I just want to end by talking about what the minister said earlier. I want to go back to the problem we're having or had with the previous policy — of, shall we say, not the legislating framework but that of policy and basically make it up as you go type of approach.

The minister said: "We negotiated an agreement on the basis of a certain set of expectations, savings to be sure, to PharmaCare and to the purchasers of drugs in B.C., and they have not been realized."

It took a lot of pounding the desk over the years for the government to realize that it had gone the wrong way. The government's expected to save $70 million over two years. I think, with proper negotiation, that could be realized way beyond that. The minister said: "We're about $46 million short. That can't continue, and it won't continue."

There is a problem with politics and politicians. We get stubborn. We never want to admit that we made a mistake. That's not part of the game. But this is what this bill does, and kudos to the government for turning it around.

We're looking at prescription drugs as a major expense for British Columbia. B.C. spent close to a billion dollars on drugs in the fiscal year of 2010-2011, and some $325 million of that was for generics. That tells you how important this legislation can be, because it may be very effective in realizing not only cost savings but better and hopefully more transparent access through the whistle-blowing part of the legislation — a better approach.

I'm not a purveyor of good news on the government very often, but I do believe we're moving in the right direction. Mistakes have been made. I'm hopeful that for all British Columbians, we will realize a PharmaCare system that goes beyond just ignoring people's incomes and having that at play but realizing that we need a PharmaCare system that looks after the general population, regardless of income.

C. Trevena: I'm very happy to stand here and to talk to Bill 35, the Pharmaceutical Services Act.

[D. Black in the chair.]

I think among my colleagues that there are going to be a number of us from this side of the House who want to speak about this important piece of legislation — important because we all care very much about our health care system. We're all concerned about how it's operating and all very well aware of the impact of the cost of drugs on that health care system. It's a phenomenal amount. Approximately a billion dollars are spent on drugs for the health care system, which is quite an extraordinary amount of money.

[1600]

What this bill does is really provide a legal framework to be put around PharmaCare. I think it was actually recognized by the minister and talked about by other members from this side of the House that PharmaCare, brought in almost 40 years ago now by the then Barrett NDP government, is something that has had a huge impact on B.C. I think it's something — really is something — to be extraordinarily proud of. In fact, the Minister of Health described it himself in his opening remarks in second reading as an exceptional public drug plan. I think we'd agree that it is an exceptional plan, and exceptional plans can only be improved upon.

One of the ways that it can be improved upon is looking at how people can actually have access to the drugs at an affordable price. There are different ways that people do get access in different parts of the system, with rebates and so on. But it's to ensure that they are getting the drugs at a fair price.

The bill that we're discussing at the moment — all the bills have the explanatory note — talks about the collection of personal information, which we've talked about a little; changing some of the acts to make this streamlined; ensuring that there is support for the provincial drug program; and authorizing a legislative framework to govern the provincial drug program, commonly known as PharmaCare.

While it's doing that, there are also a number of places where it defers to the cabinet to make decisions. In fact, there are many pages of this. That is a little troubling, because when you defer it to cabinet, we are then having debate on a bill where we don't actually get to see all the impacts because we have deferred to cabinet. I'll talk about that in a moment.

The reason we're discussing this bill is…. To be quite frank, we think that PharmaCare is great. We all want to make sure it works better. We want to keep the cost of drugs down. But it's the B.C. Liberal government's failed policy that brings us to this point here in 2012 to be discussing this plan. Ontario went down this route two years ago and has had massive savings. It's doing so well that it's looking at how it can improve on the plan and make
[ Page 11275 ]
the generic drugs even cheaper for the people of Ontario.

Two years ago we had that opportunity to start looking at how we could have a cap on generic drugs, but the then Minister of Health, now our Finance Minister, said that we're going to negotiate something better, that there'd be additional savings. Well, it's a bit like the HST — this big, better thing that really ends up hurting a lot of people.

Instead of bringing savings to the people of B.C., the then Minister of Health, who's now our Minister of Finance — and clearly has such a good grasp on finance — has ended up costing a lot more for the people of B.C. In fact, it's been estimated that it has cost approximately $157 million more a year than we could have done if we'd had those negotiations. That's the sort of good financial acumen that you need from a Minister of Health who becomes the Minister of Finance.

I think it once again shows that the present government really doesn't care too much about what is happening on the balance sheet, and it really just wants to make political gains wherever it can. If two years ago we had followed the way of Ontario, we might have saved the people of B.C. $157 million.

Now, what we're talking about here is a cap on the cost of generic drugs. What Ontario did and what we're looking at here in B.C. — although in B.C. there is, as my colleague the member for Port Coquitlam mentioned…. It's not completely clear. We'll be looking in the committee stage for a bit more clarity about this. It's not completely clear what level cap it is or how much we want to keep the generic drugs down. Ontario brought in a cap at 25 percent, which means that if a drug cost $10, a non-brand cost $10, Ontario would be paying 25 percent of that. As I say, that is a significant cost savings.

[1605]

Ontario has been doing it so well that they are now looking at reducing that 25 percent to 20 percent on the top ten drugs. For two years they've been making great savings. They're going to make even better savings.

This is something that if, to be honest, the then Minister of Health, now Minister of Finance hadn't been so stubborn…. The people of B.C. could have been benefiting from this for a long time previously. We wouldn't be standing in this House now saying, "Look, we're likely to be supporting the bill, and we want to find more details," because we would have been able to have access to more reasonably priced drugs a lot quicker.

While we have the PharmaCare program, and we think that it is an excellent system, we have to recognize that the cost of health care in B.C. is high.

It's not just the cost of MSP, which keeps getting jacked up, pushed up, pushed up every year by this government — so much so that a family is now paying over $100 more than it was in 2001 for its MSP; that's the premium for health care. But Statistics Canada released this month a survey from 2010 — so it's within this government's era — which found that across Canada, B.C. residents had the highest average health care spending at $2,680 a year.

That's 22 percent above the Canadian average. So any break that we can get on generic drugs is going to help people. Anything that we can do to make our PharmaCare system more accessible is going to help people. I think we've got to bear that in mind. That was this month.

Back in January the Canadian Medical Association Journal published a study that showed 17 percent of British Columbians cannot comply with prescription drug treatments because they're too expensive — nearly double the national rate of 9.6 percent.

Now that is, I think, really quite a frightening statistic, that 17 percent of B.C.'ers can't comply with prescription drug treatments because they're too expensive. I don't know about you, but I'm always shocked when I go and have to pick up, get a prescription. I'm shocked about the cost of it.

If we can find ways of reducing cost for people, it's going to improve their health care. If people can't afford their prescriptions, they don't take their prescriptions. They're not going to get better. They're going to become…. You know, you have an infection, and it gets worse, whatever it is. I'm not a doctor, but I know that if you don't follow the course of your antibiotics, whatever, you're not going to get better. You're going to end up getting worse, and that is a cost to the health care system. Worst case is that you end up in hospital, and that's a cost to the health care system. That is simply because you can't afford your drugs.

I don't know about you, but I have had a number of people come to my office — a very telling number of people come to my office — my constituency office, both in Campbell River and in Port Hardy, who say simply…. They tell me they can't afford the drugs. They tell me that even though there are the various breaks that are there, the various rebates that are there, they can't afford the drugs — particularly when we start talking about the more expensive ones, the cancer drugs and others.

It's heartbreaking, and it shouldn't be happening. So any way that we can make sure that the drug cost is lowered, the drug cost is more accessible, is something we should be working on, and we should be working with the government to make sure that they are serious about this.

There is a Better Pharmacare Coalition. They naturally said that this is a good thing. The Better Pharmacare Coalition has said that they're very happy to see the reduction. It means savings for people in the province and, hopefully, savings to the Health Ministry as well, which is quite true. I mean, this is one of the things that we want to see. We want to see savings both for the Ministry of Health…. We keep hearing that it is the most expensive part of government. It is one of the most expensive services, so we need to make sure that there are savings there. But we also need to make sure that there are savings so
[ Page 11276 ]
that people can actually afford their medicare.

While we aren't going to go quite the way of Ontario and get all the way down to 20 percent for the top ten drugs, we are going to, hopefully, start working on something that we could have been doing two years ago. Now, as I say, there's some uncertainty about whether it's going to be 25 percent, whether that is a goal, what the minister is meaning. I know that that is going to be questioned.

[1610]

There is also some question about what drug companies can offer pharmacies and whether they can offer them incentives to carry their drugs. The drug companies — I think we're all very well aware — are very large, very influential, very profitable conglomerates. Big pharma is how they're talked about. The pharmaceutical industry is an extraordinarily powerful industry. It has an extraordinary hold and has extraordinary suasion. This is something that can have a big impact.

Drug companies have been offering pharmacies rebates to carry their products, and that often pushes the pharmacies to carry those rather than the generics. We've got to be looking at these issues too. These are some of the things that we will be examining in the committee stage to try and get some clarity of just what it is. We want to make sure that it's fair, that we are working on a level playing field here and that when we are talking about getting the cap on drugs, it is fair.

We have to be aware when we pass this that this isn't going to take effect until April next year, which means that we still have got basically another year of high costs for people and high costs for government and high costs in the health sector. Ontario's move has saved them millions of dollars. Its most recent move, its 20 percent move, is going to save it another $55 million.

It is a bill that we'd like to support, but there are other areas which are of concern. I mentioned in my opening remarks the idea that we're looking at this bill…. We can examine this bill, but there are pages — from page 31 all the way through — that are talking basically about regulation. Each one starts, "The Lieutenant Governor in Council may make regulations" regarding, in respect to….

While it's very good to ensure that things are done and there's consultation, this is the bit that we don't see what it is that will be done. Although there are various sections laid out…. When we're talking about the Lieutenant-Governor-in-Council, we're talking about cabinet decision-making, and we don't get to see what it is. We don't get to debate what it is. We can't see records of it because of cabinet confidentiality.

If there are going to be changes, it would be better, I think, to have it more transparent. We're going to put this system, which has been governed in other ways in the past, into legislation to have it transparent so that everybody knows what is being talked about, we all understand all the parameters of it and so that we all know, truly, what the benefit is going to be.

The other issue I just wanted to touch on is that…. We were talking, actually, in question period about the trade agreement with the European Union and the impacts that might have on various aspects of our province — the economic impact and what sort of control we as Canadians and we as B.C.'ers are going to cede through this agreement.

While we're here talking about trying to bring down the cost of generic drugs and trying to make sure that people can have more access to their drugs so that people who are suffering cancer can afford them and others can afford their drugs, there is a concern that the provisions within CETA which protect intellectual property for the pharmaceutical industry could end up costing B.C. $249 million a year, and it could delay access to some of the generic drugs by more than three years.

On one hand we're talking about improving the situation for people, improving the level of cost and improving access to generic drugs. On the other hand, if the federal government goes ahead with CETA and the provincial government doesn't stand up for our rights as B.C.'ers on this, we could end up both having a delay in access to those drugs and having it cost, again, $249 million.

[1615]

We bandy around these numbers — $157 million, $249 million, $57 million. All money lost to B.C. When you look at it, that is almost half a billion dollars. Think what could be done for our health care system with that half a billion dollars — an extraordinary amount.

We're not even talking about the big machines — the MRIs, the CAT scans, all of the new equipment we all talk about — but just provision of good-quality health care, of getting the nurse practitioners into rural communities, ensuring we have doctors who are there working all the time, ensuring that we have emergency rooms that can stay open.

Instead of wasting that almost half a billion dollars, instead of losing it because of delays and arrogance — essentially saying, "I know best; I know the way that I want to approach things" — instead of just saying, "Okay, let's try and negotiate, and let's try and bring down the costs," we've lost a lot of money and continue to lose a lot of money.

But this is primarily about fairness. It's primarily about, I would hope, ensuring that people have access, ensuring that the drugs are at a cost that people can afford, that people don't have to choose, as I say, between their food and their medicine. It's ensuring that the PharmaCare system, which we on this side of the House have been very proud and pleased to see that the other side of the House is now also proud of, can play its real role and make sure that people have good access to their health care system, because drugs are an essential part of the health care system. We need to make sure that that can happen.
[ Page 11277 ]

With that, I'll take my place in debate and let others participate.

S. Hammell: I am pleased to rise and take my place in the debate around this bill, Bill 35, the Pharmaceutical Services Act. One of the great things I think this bill does is to centralize and bring into one legislative framework the PharmaCare act, which has, up to this point, been largely a hodgepodge of regulations and legislation found in different places.

It's centralized by creating this act, and it has created order and clarity, which are always welcome, as it allows people who look into this and who are examining this area and have an interest in it to be able to look in one place and to get an overview of what we're doing in the province from that place, and therefore get a better understanding of what's going on.

It helps people who are not familiar with the system of legislation and government, but it certainly would help many of us in the House, too, as you often try to follow tendrils around different acts and different pieces of legislation. That is very good and something that I'm sure all of us are pleased to see happen and pleased to see take place.

I think whenever we get into a debate around pharmaceuticals, it probably does us well to pause a moment and to think about the system that we as British Columbians have created over the last 40 years around drugs that people need when they're facing some kind of illness.

When you think about the amount of money that British Columbians are spending through their PharmaCare system on drugs and you translate that into the number of people that are in British Columbia and the cost that it may cost individuals, the sort of blessing we have to say we've created by cooperatively coming together and creating a system that covers one another in times of need and in times of sickness is something that I think we can all be proud of. We've said that, as a collective, we'll bear this cost.

[1620]

Nothing is free, which we know. We'll pay it through our taxes, and collectively we will then contribute so that when we are in need, either as an individual or as part of a family, we can draw down on this program that we have created as a collective.

I think it's also really wise at times to stop and think about the whole notion of drugs. Many of us can think of times and places when drugs have been very important to either us as an individual or to someone in our family. I always think one of the most remarkable stories is the story around insulin, when insulin first came on, where people were actually in comas and, when they received insulin, woke and were able to function and go back as regular people in society and contribute because of this ability to get this drug.

I can speak personally. I have a stepson who has a very aggressive form of prostate cancer, and I can tell you that he is alive today because of many of the miracle drugs that have been discovered and are being brought onto the market. He's also been able to function as a human being in our society because he does not have to pay the cost of these drugs that are exceptionally expensive, particularly those in the experimental form or those that are just new on the market. So I speak very personally when I say that as a community member I'm very, very grateful for the PharmaCare system that we as a society in British Columbia have created for each other.

It is really important to me that we have a system that contains excessive cost in terms of that PharmaCare system. Clearly, the government chose a direction to go in terms of trying to contain that cost. You know, I'm sorry that system didn't work, that that path wasn't successful, that the government has, in turn, had to come back to the House and say, "We did not realize the savings that we were expecting, and we are now going to abandon that method of trying to save money and move to another method," which is the one that they are bringing into the House.

But if I do understand — and I did pay close attention to the original discussion and press conference around the announcement of abandoning the agreement that they had created with the pharmaceutical association and the local drug stores, when they abandoned that — what the heart of the matter seemed to be is that there were too many exceptions in terms of the generics, too many exceptions to the cap on the price, and that the exceptions are what has driven the cost of the pharmaceuticals up beyond what the negotiated agreement was.

It does beg the question of who allowed the exceptions and how those exceptions were agreed upon within the negotiated framework. It seems to me that we need, in further discussion, the answer to that question, because whatever path we take, we want to ensure that the path is in the best interest of British Columbians in the long run.

We do know that this new direction appears to want to achieve the same kind of savings that have been achieved in Ontario. Of course, Ontario's agreement was not without controversy, but it has, in the long run, provided the government with an important source of revenue in terms of containing and maintaining costs around generics and the PharmaCare system.

[1625]

We have a PharmaCare system that is there to serve all of us. It was initiated in the early '70s. It has been with us for a number of years. It's had a number of tweaks. I think one of the biggest tweaks — which I have to note that, when in opposition, this government was adamantly against — was the reference-based pricing, which not only were the pharmaceuticals against and took it to court, but the opposition at that time was also radically opposed to.

However, things change when you get into govern-
[ Page 11278 ]
ment. I understand that. What was bad is now good. We have things that impact on the bottom line, so we keep things that work for us as a community and are good public policy.

We have had this PharmaCare system continually worked over. We had the Therapeutics Initiative — another thing that was an overseer of government, of this system — that has gone by the wayside.

I imagine that the PharmaCare system will always gather attention and we will always be trying to tweak it or meet the needs of the people in terms of some of the external forces that tend to be applied to any system over time.

I'm pleased to see that we are here debating it. I'm pleased that the government has…. Well, I'm not pleased that they were unsuccessful, but given they were, I'm pleased to see they are trying another method at which to contain the prices in terms of our PharmaCare system.

There are a couple of other things in the bill that I think we need to be very careful about. One of them is the whole issue around the freedom of information and the data collection that can be used. I think we've had the member from Quilchena, the former Health Minister, talk a lot recently around the data collection in terms of the power that it may have in serving us in the future. While we do have access to an amazing amount of data that could be used in many positive ways, I think we have to be sure that with that data there is oversight of that and that there is some public accountability in terms of using that data in future endeavours.

The other issue that's been raised a number of times is the issue of CETA, where we do see, in another area of jurisdiction, the negotiating of a free trade agreement that could impact on our ability to deliver affordable health care through PharmaCare here in British Columbia.

Again, I think that is something that we as legislators need to be aware of. Hopefully, we will be able to end up with a situation where that will not negatively impact on the PharmaCare system that we have, and the gains that hopefully will be secured through this new initiative would not be lost through the CETA agreement.

I guess that in terms of standing up in the House today, I'm pleased to support the intent of the bill, the general direction. I think, as many people have said many times, the devil is in the detail. I look forward to committee stage, where we will have a more detailed discussion of the bill at that time.

With that, I'll take my seat.

K. Conroy: I, too, am pleased to take my place to debate this bill, Bill 35. Before I get into it, I want to ask the members of the House to just think about some questions I want to pose.

[1630]

I want to ask how many long-term care beds could $157 million pay for? Or how many hours of home support and home care could $157 million pay for? Well, if you figured it out, $157 million could provide over 13,000 long-term care beds; home support, over three million hours. Three million hours of home support.

How much would a seniors advocate cost? Definitely not $157 million. That's certainly something that could have been financed with these kinds of savings.

So $157 million — that's how much Ontario has saved by implementing controls on the price of generic drugs, and that's an independent study. That's research done from UBC — not from the government or the opposition or even pharmaceutical companies, but from an independent body.

It's great that the legislation is coming in now. However, it's unfortunate that the government chose not to implement these guidelines sooner, bring in this legislation sooner so that we could have had these cost savings. Potentially, that money could have been spent on seniors in this province, on children. You could think of many, many different things that this kind of savings could have been spent on.

It's interesting. Two years ago, when the Leader of the Opposition was actually the Health critic at the time, he expressed concern that the province wasn't bringing this in. Now I think that there's some kudos to the Leader of the Opposition, who recognized two years ago how beneficial this would be to our province, how much savings it would have been to this province.

Isn't it when they say your acts are copied that that's the best way….

Interjection.

K. Conroy: Imitation is the sincerest form of flattery. Thank you. Yes.

He certainly knew what he was talking about two years ago.

An area of concern that we learn with this bill is it will aim for a reduction of 25 percent by April 2013 — not an actual reduction, but they will aim for it. That is a concern that I'm sure our critic will be addressing in committee stage.

At the same time, while this bill is being introduced, we've learned that Ontario is going to further reduce the prices it will pay for the top ten generic drugs to 20 percent of their brand-name equivalents, which brings a further savings of $55 million a year — $55 million a year that could be invested in children, again, in seniors, in the so many different things that we need in this province.

I regularly have seniors expressing their concerns about the cost of drugs. They tell me they go through this dilemma where they look and they say: "Am I going to pay for my housing cost, my rental charges, or am I going to buy my drugs? Am I going to buy groceries, or am I going to get the prescription that I need?" Or they'll tell
[ Page 11279 ]
me how they have to take their prescriptions every other day instead of taking them every day, as they should, because they just can't afford it.

Now, I hear these concerns from seniors, and I've been hearing them ever since we were first elected. I was elected in 2005. It begs the question: what's taken so long for the minister to take this seriously? I'm glad the minister has recognized that what they put in place two years ago isn't working, that it hasn't brought forward the savings that they thought it would.

You know, this month Stats Canada released their 2010 survey of household spending. What I'm hearing from seniors is reiterated with these stats. It shows British Columbians had the highest average health care spending in Canada, at $2,680 a year, 22 percent above the Canadian average. That's 22 percent higher than the majority of Canadians are paying.

This past January the Canadian Medical Association Journal published a study that showed that 17 percent of British Columbians can't comply with their prescription drug treatments because they're too expensive, nearly double the national rate of over 9 percent. So it reiterates again what seniors are saying to me, that they can't afford their drugs. This is a real concern, and I just hope that Bill 35 will alleviate some of these concerns.

[1635]

The member for Kelowna–Lake Country talked about this historic legislation. I would somewhat disagree in that I believe that PharmaCare, when it was implemented by Dave Barrett in the early 1970s…. Now, that was historic legislation. That was courageous legislation. That showed true leadership. Although I agree that this is great legislation whose time has come, I'm just saying that it's unfortunate it wasn't brought in sooner. It's overdue, and it's needed by the citizens of this province.

Hopefully, we will see in committee stage that the government will actually commit to a cap, a real cap on generic drugs — not an aim but an actual cap. It will benefit those people who don't actually have drug plans through their jobs, for instance, or don't qualify for the subsidy for the low-income mark — aren't at the $30,000 cut-off mark the minister referenced in his opening remarks. I really hope that through the committee stage we'll learn more, but I think that we need to look at those people that don't benefit from drug plans through their jobs.

I know that there are some concerns with this bill when it comes to issues of privacy — privacy of individuals. Hopefully, the minister has taken these concerns into consideration and we'll also learn more about that at committee stage. I know that pharmacists have expressed some concerns as well. I recognize that sometimes people will agree to disagree, but hopefully those issues will be taken into consideration. I know that they were issues that were dealt with in Ontario and other parts of the country. Hopefully, those are things that will get worked out.

I know that in the 20 years that our family has been on our health journey, we've certainly seen an evolution of drugs. I know when Ed was first taking his anti-rejection drugs back in the 1990s, he had a basketful of drugs he had to take two or three times a day. Now it's down to a very small number of drugs, comparatively speaking, twice a day.

I also was always grateful that the drugs that weren't covered by provincial plans, by different organizations…. He actually had a good job. He had a good, unionized job in a union that negotiated a really great plan that covered those drugs that weren't covered. I've talked to people who struggle with trying to cover the drugs. When they're anti-rejection drugs, they're quite expensive.

I'm always grateful that I do live in Canada, that we live in Canada. I know people that live in the United States that couldn't afford the drugs down there and can't afford to get a transplant because of the cost of drugs. I know I'm very grateful for that. I hope that this legislation will ensure that for some of those drugs, it will now be easier for people to save the money so that they can afford to take them. I know that definitely is an issue for people. Again, as one of my colleagues had said earlier, the devil is in the details, but hopefully we will get those when we get to committee stage.

I'm glad that the ministry has seen their way clear to bring this legislation forward. Its time is due, and hopefully we will see the savings eventually. I think that even more importantly, we'll see the savings in the health care costs of people who will be able to afford the drugs — because they'll be cheaper — and be able to take them appropriately, be able to take them as their doctors have prescribed them and not have to make those difficult decisions of groceries and rent or their prescriptions.

I am glad that this legislation is here and that we'll hear more of the details as we get to committee stage. I will take my place and allow one of my other colleagues to carry on this debate.

C. Hansen: It's with pleasure that I join this debate today. Our PharmaCare system in British Columbia is something that I think we can be rightfully be proud of. Other jurisdictions across Canada have looked at the way that our PharmaCare system is structured and have tried, in many cases, to emulate the system that we have.

[1640]

One of the things that I was particularly proud of during the time that I served as Minister of Health Services was the introduction of the Fair PharmaCare program. Some of the changes that we introduced at that time really addressed some of the real inequities in the way the system had previously been structured. We had low-income families who were facing very high deductibles relative to their particular income, and at the same time, we had very wealthy families and very wealthy individuals in British Columbia who were getting far greater
[ Page 11280 ]
benefits out of the PharmaCare program than some low-income families around the province.

The changes that we made at that time were to make sure that we continued with the universal coverage. At that time we were the only province that could claim that the PharmaCare program applied to every citizen in the province. Other provinces have since emulated that.

The other change that we made with Fair PharmaCare was to make sure that the deductible was based on a percentage of income. For example, I think, as we learned earlier today — in fact, we knew, but it was reiterated earlier today in question period — individuals on social assistance don't pay any deductible at all. They're able to access their medications. Low-income families will pay a very small deductible compared to higher-income families.

You wind up with no family, regardless of their income, ever faced with catastrophic drug costs under the Fair PharmaCare system. In fact, I think the maximum that any family would pay, even at very high-income levels, would be 4 percent of their income going into a deductible.

Again, that is something that is being looked at by other provinces. Most recently we saw the report that was done by Don Drummond on the economic and budget challenges in the province of Ontario. One of the very specific recommendations in the Drummond report was that Ontario actually look at copying elements of the Fair PharmaCare program, as we have in British Columbia.

I think we have a tremendous foundation for the PharmaCare needs of British Columbians and something that we can be rightfully proud of.

I want to focus the balance of my remarks on some specific sections in the bill that's before us today, and that is around the issue of PharmaNet data. This is a subject that is of considerable interest to me. Back in October — actually, I think it was October 19 — when we were debating second reading on Bill 3 of this current session, which is, of course, continuing…. We were debating Bill 3, and that was specifically talking about the use of data and privacy issues in British Columbia. The legislation that was brought in by the Minister of Labour and Citizens' Services was to really modernize and update some of the privacy provisions in how government data gets used.

At that time I spoke a bit about how data is used in the health sector or, I think probably more significantly, how data is not used in the health sector to the extent that I believe it should be. Since October I've done a lot more reading and research. I've talked to dozens of people in the research community in British Columbia. I've attended conferences on this subject and really tried to inform myself as best I can about the opportunities that exist by the proper and appropriate use of health data in British Columbia.

At the time, you know, I made reference to the fact that we had some of the best health data sets anywhere in the world. I know when I've said that to people, they sort of say: "Here's a British Columbia politician using a little bit of hyperbole about claiming that we have the best health data in the world." I think the more I dig into this and the more that I learn about this subject, the more I am convinced that that is an absolute statement of fact. Not that I wasn't convinced in October, but I am even more so convinced of that today.

Just as a case in point, the PharmaNet data is a good example of that. The PharmaNet system was brought in, in about 1995 or 1996 by the NDP government of the day. It is something that I will give the NDP government credit for. I think the PharmaNet initiative was one that was sound, and I think it has served the province well.

What it is, is really the digitization of every prescription that has ever been filled since by a British Columbia pharmacist. There is no jurisdiction in North America that can claim that. So you think about the….

[1645]

Basically, it was brought in so that it was easier to track the PharmaCare reimbursement system, easier to administer and also allowed for, for example, hospital emergency rooms and other pharmacists to actually see what medications a particular patient may be on so that they can readily identify where there may be conflicting medications, or somebody arriving in the emergency room in a hospital can immediately see what a particular patient had been prescribed.

I think that over time the accumulation of that data is something that is a very, very valuable resource, not just for British Columbia, not just for Canada but for the world and for the kind of research that can be done to unlock some of the secrets about the health care challenges that we have globally, really, in health care systems around the world. When you wind up combining that with the fact that we have data from MSP billings that go back into the 1960s…. I think that some of the really excellent data that we have that is very usable goes back, certainly, to the 1980s in this province.

We also have things like hospital admission records. We have things like ambulance records. We have hospital discharge records. We also have in British Columbia, going back about ten years now, digitized blood test data that was done through the PathNet system, which is now, I think, often referred to as the Provincial Lab Information System, I believe it is — PLIS.

If you start taking the opportunity to link these data sets together and to analyze that data in a way that will really unlock some of the secrets that are there today…. I know when I say that, a lot of people think about the privacy concerns that people have about their health data being used, but we have a very good system in place today to make sure that that privacy is protected.

What researchers get access to is anonymized data. They might get a data set of maybe a thousand or maybe
[ Page 11281 ]
10,000 records, but there's absolutely no patient information in there that would allow those researchers to track that data back to who that data originated with. All of those identifiers get removed from it before the data is made available to the researchers.

There is some phenomenal research that can be done if we use that data properly and proactively. One of the reports that I read that I came across was from Australia. This was from a couple years back, where the Australia government was looking at how they could use their Australian national health system, which is very comparable to Canada's health system, how they could actually build data sets based on their health system and then analyze it to encourage research and to find the efficiencies in the system and to find answers, the kind of answers that would save people's lives and let people lead a better quality of life.

It's interesting. In that report they actually point to three examples around the world of jurisdictions that have got the best systems for collecting health data. One is Oxford in the U.K., out of the University of Oxford. The other is the province of Manitoba in Canada. The third — and I would argue, the best — is the province of British Columbia in Canada.

Today I would say that there are other jurisdictions that have health data that is far inferior to the quality of data that we have, and yet other jurisdictions are doing more with it, more in terms of proactively trying to use that data to find those health secrets.

There was a report that was done by McKinsey Global Institute out of the United States that was looking at the opportunities for analyzing data globally. They looked at the U.S. health care system. Their conclusion was that in the United States alone the proper use of health data could actually save the American health care system $300 billion a year. That's a phenomenal amount of money.

They also argued that the first thing they would have to do in the U.S. is spend about nine years to systematically build the data sets in the United States because they don't exist in the way that we have data sets right here in British Columbia. We already have those data sets. We're just not using them as fully as we probably should be in British Columbia.

[1650]

You think about that cost saving. Now, they actually point to the fact that about two-thirds of that $300 billion would be in direct savings to the delivery of health care itself.

Now translate that to British Columbia. We've got about 1/100 of the size of the U.S. population, the U.S. economy. If you think today that we have about an $18-billion-a-year health care budget in British Columbia…. If we could save 1/100 of that $200 billion, that two-thirds of the $300 billion, that translates into about $2 billion a year.

We actually have the tools, we have the resources, we have the data that, if properly analyzed, would start to find the efficiencies in our health care system — not just save lives, which is, obviously, of paramount importance, but find the kind of therapies and treatments that we do in our health care system today that perhaps aren't cost-effective.

You know, we've often talked about evidence-based medicine, but in Canada a lot of what we practise in the common practice of medicine today has never really gone through the kind of rigorous, evidence-based process that a new therapy would require. Many of these therapies and treatments go back decades and decades and probably never went through the kind of evaluation at the time that would be required today. Again, by unlocking the data and subjecting it to responsible research that ensures that privacy is protected, we could find some of those savings.

Even things like adverse drug reactions. Today, you know, if there are two medications that, if a patient takes them, will have a serious health consequence for the individual taking them…. Well, those two medications have gone through rigorous analysis by the drug manufacturers, but in very sterile clinical trials. So, typically, you wouldn't wind up identifying a conflict between two medications until it got out in the real world.

Typically, that's a pharmacist or a doctor who sort of says: "You know, I've had five patients come through my office or through the pharmacy in the last number of months who were both on these two medications, and they're both having these symptoms" or "They're having these symptoms. Now, maybe somebody should look in to see whether there's a reaction happening between these two medications if taken at the same time." Well, that's the kind of analysis that we actually have the data to find if we took a systematic approach to using the health data that we have today.

I'm pleased with Bill 35. I think it's going to be a big improvement. I'm particularly pleased with those sections in the bill that actually provide even an improved framework for how the PharmaNet data can be used in the future to ensure that that data — when linked with others and anonymized to protect people's privacy — can really help us to unlock many of the secrets in the health care system that will not only save lives but save taxpayer dollars in the future.

N. Simons: It's a pleasure to listen to the member for Vancouver-Quilchena and the very interesting words that he had. For those listening to his dulcet tones, we're talking about Bill 35, the Pharmaceutical Services Act, which essentially takes the system that we have and puts it into legislation — among other things, obviously. For the most part, I think that there's a lot of support, in large part because it will lead to reduced costs for the province and for individual payers for the cost of pharmaceuticals in this province.
[ Page 11282 ]

Now, essentially, the control of generic drug prices is something that Ontario did a few years ago. And at the time, I will remember that members from the opposition were somewhat critical that it didn't go as far as we thought it should. Now, the government was taking a step in the right direction, but it was a step that was, perhaps, at the time more timid than it should have been.

As a result, in retrospect, we can look back and see the significant amount of savings that British Columbians could have accrued had the government gone a little bit further. At the same time, I mean, we are on the opposition. We point out the drawbacks, but we also will propose. And we did propose back then, but our proposals were not met with success.

[1655]

That being said, now there's another step, and it's a step that we can support and see the benefits of, in that those who are having to pay for pharmaceuticals — and the government, which pays for pharmaceuticals — will obviously have slightly less of a burden.

We're talking about generic drugs, which come on the market some years after the original patent expires, which means that the generic drugs are produced at a lower cost because the research-and-development costs have not been part of those generic drug companies' costs.

The current cap on pharmaceutical generic costs is…. I believe it's 25 percent. Only a 35 percent cap on generic drug prices was implemented back then. We were calling for 20 percent, and now Ontario has gone one step further and has actually capped some drugs at 20 percent of the cost.

The public stands to save a considerable amount of money over — well, from now on. Unfortunately, the government had projected that the savings would be more than they ended up being. In fact, I think the government estimates were something close to $50 million short of what they expected, which either accounts for people using more drugs or their math wasn't quite on.

This bill also speaks to issues around the sharing of data, as we've heard the member for Vancouver-Quilchena talk about. It's very interesting. We get a chance after this part of the debate to get into the specifics, section by section, to find out where those savings might be found and how they would be explained to, and understood by, the public. I'm looking forward to that opportunity.

So I'm pleased to say that the opposition is in support of this bill. Not everyone is, but other people may have a vested interest in the issue and may have other reasons for being somewhat critical. That being said, we have an opportunity for people to be heard, and I think the more we have that, the better the legislation is going to be.

Now, in British Columbia we often talk about what a beautiful place this is and what a beautiful province and what wonderful people live here. We do have a problem in the amount of poverty that exists in this province. Having been a social worker and in charge of a health program for a number of years, I've seen the impacts of poverty, and I can tell you that that poverty is expensive. Because of that, I think that any step towards reducing the costs on families is going to be one that we can all support.

Statistics Canada, the agency that some governments like to discount or underfund, has provided us with some information, some interesting statistics on household spending, which shows that British Columbia residents spend more on their health care than the average Canadian. That means that while we are a healthy population overall, our costs associated with our health care are 22 percent above the Canadian average.

What that tells us is that families are spending a larger proportion of their earned income on drugs that are geared to making them healthier, making them live better-quality lives. For that reason, I think we have to do what we can to ensure that they have access to these drugs.

In the medical association journal the CMA study showed that 17 percent of British Columbians cannot comply with the prescription drug treatments they have been prescribed by their doctors. Not only is it almost double the national rate; it's concerning to me that there are people whose health cannot be managed due to financial difficulty.

[1700]

That probably is seen differently, in different ways, for different people. I think in many cases there are seniors who may actually purchase their pharmaceuticals, their drugs, but take them in a lower dose than they've been prescribed. Those are the kinds of things that can lead to decrease in health and may result, in fact, in other health problems.

There are families that make choices that are not always in the best interest of their family, but due to financial pressures, they find themselves unable to make better choices.

When we see studies from the Canadian Medical Association saying that 17 percent of British Columbians don't comply with prescription drug treatments because they are too expensive, if that had not prompted government to take action, then it would have probably reinforced some of the stereotypes that we have about government. But in this particular case, I'm hoping that that likely was part of the reason the government decided to act.

I think there are other ways that government can act to alleviate some of the problems people are facing in this province, but this is a step in the right direction, and I'm pleased to see this tabled today, Bill 35, or debated today at least.

Now, some concerns about the bill have to do with the protection of privacy. We hear about anonymizing information, which is just a spray you put on the paper and
[ Page 11283 ]
it takes all the necessary data out of it — the anonymizer. The data that gets sent to various research companies or to people collecting it at universities, I think, will obviously not have identifying information in it. As the member from Quilchena mentioned recently, just a few minutes ago, that information would not be traceable back to the patient, which is a good thing.

Once again, when we have an opportunity to speak more about this bill on a clause-by-clause basis, we'll be able to flush out the kind of information that will assuage the concern that people have, hopefully. Or it will, in fact, do nothing of the sort. But that is the purpose of the third stage — committee stage.

Some, in fact, say that putting a cap on generic drugs is an arbitrary thing. You see Ontario capping it at 25 percent — and, actually, 20 percent on some drugs. British Columbia is going to 35 percent, and that number is really arbitrary. How do they figure out that we're just going to pay 35 percent of the asking price? I think we need to consider what other options exist and how we can take some of the arbitrary nature out of it.

I don't see it as a problem, specifically, because the result is good. But we do know that generic drugs are available from more than one manufacturer now, and it's possible that with competition between those generic drug manufacturers, we'll actually see a lower price on some drugs.

It's something that I'm sure those with all the resources and research abilities can look into further. Perhaps we'll see another improvement in this legislation, as that is a sign that some of the things people have been bringing to the attention of government are being listened to, and that's a good thing.

I'd like to just point out that our society…. As my friend from Delta North did point out, there are reasons why we ensure that those who are of low income have access to drugs. We know the costs of managing chronic conditions are growing as our population ages, but we need to take into account the fact that we do rely heavily on pharmaceuticals and that pharmaceutical drugs are often the only option available to people.

[1705]

I would point out, without necessarily getting into great detail, that many have called for the decriminalization or legalization of other drugs, specifically cannabis, that have a positive impact on many patients suffering from everything from multiple sclerosis to cancer to HIV. There are hundreds of doctors in this province who actually tell their patients that cannabis will be helpful in alleviating pain, in improving appetite, in managing symptoms.

I think that clearly, from what we hear in the press and from the seeming wave of discussion now, it is simply inevitable that eventually we'll have a more mature approach to drugs that are currently illegal. When we look at the cost of the enforcement and the cost of violence in our community, we can arrive at no other conclusion.

It's a question of how we get there with a discussion that's based on good common sense, good research, good science. Maybe we can even alleviate the stress on the pharmaceutical companies to provide all the substances that they distribute legally.

So I think that, for the purposes of this bill, reducing the cost of pharmaceuticals to the province and actually identifying savings in the millions of dollars is a good thing, because we do have, obviously, a deficit in terms of programs to meet the needs of families. We see such a massive use of food banks, an increase in the number of children using food banks with their families. We know that when we can find revenue sources or sources for savings, we need to take full advantage of those.

In this particular case, sure, there are going to be those who argue that some profits will be hurt. Maybe the large drug manufacturers will not particularly support this kind of legislation. I think that when we put the public interest first, we end up having better legislation.

The story that my friend and colleague from Delta North so eloquently put earlier. His family was personally impacted by the high cost of the medical system. I just want to say that when you share stories like that, you can understand why people choose to fight for the underdog and for those who are marginalized or who are voiceless.

I'm proud to have him as a colleague, and I think his story illustrates some of the things that remind us why we're in this Legislature, why we have a responsibility to put forward good legislation and legislation that is in the public interest, based on good discussions, on solid scientific research and unbeholden to any particular financial interest.

This is perhaps some evidence of that, in Bill 35, and I'm happy to say that it can be supported by our side of the House after a careful review, which is our responsibility in this parliamentary system. I'm looking forward to that.

With that, I'm pleased to allow others from either side to have their say on this bill.

J. Kwan: I rise to debate Bill 35, the Pharmaceutical Services Act. I've been listening to the debate from all sides of the House in the Legislature. I wish to actually make three points, essentially, around this bill.

Many of my colleagues have already spoken to the issue around the cost savings of this legislation, and it is indeed significant. If you think about it, we're talking about savings to the tune of $157 million a year into the provincial coffers.

That is to say, provincial taxpayers' savings of dollars could be reallocated into health care services, into other areas such as education and supports for students in our classrooms, or into the forestry sector, which is in deep trouble at the moment, in terms of action that needs to be taken. These are just a couple of examples of where
[ Page 11284 ]
that money could go.

[1710]

To think about it cumulatively, what that amount really means…. This change could have been brought in had the government at the time, almost ten years ago, taken the advice of the opposition to forge ahead, to basically do what other provinces were already doing — namely, Ontario. That would have been a savings over ten years to the tune of $1.5 billion.

When I think about the number of $157 million a year, to me that is already a huge amount of money. I can hardly fathom it, really, in some respects. But if you think about it over a ten-year period, that's almost $1½ billion, and that is significant, especially at a time when we are starved for money in so many areas, in so many programs that are so desperately needed in the province of British Columbia.

By the time that this bill kicks in, it would have added another $314 million to that total number of about $1½ billion — so it's close to $2 billion. Imagine that. What kind of services could be bought with $2 billion, in effecting positive change in the lives of British Columbians, in providing the programs that are so desperately needed by so many British Columbians?

Imagine the savings that could have been had for the taxpayers, the ratepayers, the people who pay for these services each and every day. That's on a big global-number basis. When you bring it down to the smaller scale, then we're thinking about those individuals who also pay at the counter for their individual drugs, where they don't have the kind of insurance coverage that some people might otherwise have access to, in terms of extended health care, etc. The impact of that would have been significant.

Now, that said, better late than never. I'm glad that this bill is here today, ten years later, and it would come into force in 2013. But I do wish — and I have to say this — that the government would have heard the message from the opposition way earlier and brought about this piece of legislation.

It was interesting for me to hear the member for Vancouver-Quilchena speak on this bill, because at that time back in 2010 he was the Minister of Health, and he could have actually done something then around this, not only on the cost aspect of it but, of course, also on the research aspect.

I think the member for Vancouver-Quilchena makes a good point around the research component, because in the bill it does actually talk about information management technology and about disclosure of information for other research purposes — not for marketing research but particularly for health research, to advance health initiatives, to advance perhaps technology, perhaps an approach that would actually improve health outcomes. I think that is a welcome approach to undertake, to see how we can improve health outcomes for everyone.

We all know that there are a number of diseases that are out there today. And certainly with research…. We need research to be taking place so that we can learn about these diseases and how to advance life-saving drugs or treatment options for the patients and their families. I think that is welcome.

Now, it is noted by the Information and Privacy Commissioner folks around the concerns on privacy…. First and foremost, of course we have to protect privacy. We would not want to jeopardize any individual's personal information in any way, shape or form, but if there is a way to do this, to compile the data in such a way that it does not compromise an individual's privacy, then it's worthwhile for us to look at, because I think the larger outcome of improved health options in the research arena is worth our effort to do exactly that.

Now, I note also the member for Vancouver-Quilchena has said that compared to other jurisdictions — for example, in the United States — B.C.'s data is far more valuable. It is valuable. Why? Because it is in the public system, it is actually collected through one system, funnelled through one system where all that data is in one place. Therefore, you can actually look at that data from a population health perspective with all the people involved in our province. That is, indeed, valuable information.

[1715]

Other jurisdictions don't have that, where they don't have a public PharmaCare system, where their system is actually splintered and fractured. It is through different aspects of different private companies and so on. Through that system, any set of data collected is only limited to those people that are involved with that particular company in accessing their drugs — right? — whereas in British Columbia we have a completely different system.

That's why it is so much more valuable. That's why the information and data collected is so much more comprehensive. In that way, for the purposes of research and particularly in the area of health research, it could potentially have significant impacts. It is indeed significant in terms of the data that's collected and how it is utilized to advance the question of improving health outcomes.

I trust that in committee stage our critic, who's leading on this file, will be canvassing with the minister in detail how to ensure that protection is in place to ensure that we're not compromising people's privacy with respect to this — and of course, at the same time, consult with the independent officer, the Privacy Commissioner, to make sure that we have that right.

It is incumbent on all of us in this House that we put in our best effort to make sure this kind of law is put in place that will give the people the kind of assurance that I think they're looking for from their legislators.

I also want to touch on another related issue in terms of pharmaceutical costs. On the one hand here, we're in the Legislature talking about Bill 35, the Pharmaceutical
[ Page 11285 ]
Services Act, that's bringing in an approach that would save taxpayers to the tune of $157 million a year in drug costs. There's another arena that's having an effect on this. It is, in fact, the CETA agreement. We talked about that, and we've heard some colleagues in this Legislature speak to that as well.

The CETA agreement is very significant in terms of the implications for drug costs. That's because, under CETA, the call is for an extension of generic drug patents. When you allow for that to happen, the ripple effect for British Columbia is huge — and not just for British Columbia but across the country.

Specifically for British Columbia, we're looking at to the tune of $250 million a year by way of increases in drug costs. That's why it is so important for the Minister of Health, for the government side, to actually speak up and say no to CETA, to say that this must be exempt from the CETA negotiations. We must not allow for this to creep in and to increase our costs.

If that happens, all that would do is simply erase what this bill is trying to achieve. This bill is only going to be able to yield somewhere in the neighbourhood of $157 million in drug costs. If we allow CETA to proceed with the patent extension that's being argued for, we stand to lose significantly. That would inflate our health care costs in such a significant way that I'm not quite sure where we would get those moneys from, especially at a time where dollars are scarce, ratepayers are already flat out in having to pay for the services that they need, that we need to support them in the province of British Columbia.

I would certainly hope and urge that the Minister of Health would convey that message in the strongest way to the Premier, to the Minister of Jobs, Tourism and Innovation — to say that no way, no how, could British Columbia sign on to CETA if the generic drug cost extension is allowed in that agreement.

I would urge the minister to please convey that message on behalf of all British Columbians and to say this openly, publicly, so that we all know what is being negotiated at the table and what the government's position is on that.

I would further urge the Minister of Health to convey that message to the Prime Minister as well — because the federal government is negotiating at that table — and to convey that message to his counterpart, the federal Minister of Health, in the strongest way.

[1720]

It wouldn't actually hurt British Columbia at all if we joined hands with the other provinces that have expressed concerns around that. Why I say this is because in Manitoba, the Premier, Premier Selinger, has already put on the public record his concerns on the increase in generic drug costs, patent extensions, to the province of Manitoba.

We should join hands with the other provinces to say no to that. I think, effectively, if we're able to do that, we would add to what this bill is trying to pursue, and that is cost savings in the drug-cost arena as it impacts all of us in British Columbia.

I would urge all members of the House to look at this bill in detail, engage in the debate in second reading, but third reading, as well, to canvass this thoroughly, to make sure that we do have the best legislation in place on behalf of all British Columbians.

I think that's how the Legislature could work and should work, Madam Speaker. With that, I want to thank you for the opportunity to speak to Bill 35, the Pharmaceutical Services Act. I urge the ministers to convey our message to our federal government as it relates to CETA on that and also, as we forge forward on the provisions of this bill, to make sure we do our consultation properly, to make sure that the Privacy Commissioner is involved and to make sure that the sharing of data is not compromised in any way — personal and private information.

H. Bains: It is indeed a pleasure to again stand up in this House and speak on one more issue that is very important to the population that we represent. Bill 35, the Pharmaceutical Services Act, deals with an issue that is a part of a social program that we have in this country and this province, which actually defines us all across the world.

The kind of society we are…. How we take care of our sick, who could be working as an hourly wage, minimum-wage employee or could be a CEO of a large corporation — when it comes to health care of their loved ones or themselves, health care is available to them without having to sell their farm and their house. I think that is one thing that Canada is known for and British Columbia is known for — and British Columbians and Canadians — that makes this country admired all around the world.

When we are talking about how important this bill is…. When you put it in the context of our health care delivery and health care services in Canada, and British Columbia in particular, we go back to 1972 when this PharmaCare bill was brought in by then Premier Dave Barrett. How many things that we cherish today and enjoy today can we actually go back and give credit to that great Premier that we had from '72 to '75? This was another piece that he brought in and that we all should be proud of. Many British Columbians benefited from it.

Yes, when we are talking about health care costs going up every year, and services are being cut, I think it is always admirable to have a government initiative to find cost savings wherever it can. This bill will help control the price of generic drugs in B.C., and prescription drugs.

As we know, prescription drugs is one of the major expenses in our health care. About a billion dollars is spent every year by the government and by the people of this province. Out of that, about $325 million is spent
[ Page 11286 ]
on generic drugs.

So on the one hand, yes, there is a cost savings. It will control the price of generic drugs in B.C., starting in 2013. But it also reminds us of failure, of this government's failed policies, when they failed to act when they should have acted.

[1725]

In 2010, when they signed an agreement with the B.C. Pharmacy Association and created association drug stores, at that time they were saying that they would realize about a $70 million saving in two years. Well, at that time many people, including the opposition, reminded them that you can do better, that that doesn't go far enough, that they should follow the lead of Ontario, where they capped generic prescription drug prices at 25 percent. It was capped.

Had they listened, and had this government followed the lead of Ontario, you would be looking at $157 million cost savings. But by the government's own account, they said that the agreement they signed in 2010 would save them $70 million over two years. Now they are admitting that that is $46 million short — $46 million the government is short, in savings, from the $70 million total they thought they would be saving.

On the one hand, I do give credit to the minister and the government, that they realized their mistake and are correcting it. But at what cost? That $157 million has cost us more now, because the government failed to act at the time when they should have acted.

Even today the government is not committing to capping it at 25 percent. They are saying they are aiming for a reduction of 25 percent by April 2013. I don't know what that means. Again, like many people have said here — many speakers on our side have said — the devil is in the details.

At the next stage of debate we will find out exactly how serious this government is in realizing those savings that are there. It is not that they have to reinvent the wheel. Ontario has already done that, but they are going a step forward. They are going a step ahead by saying that they are going to further cap the top ten generic drugs at 20 percent. So there's another saving they are realizing.

But this government is again falling behind at a time when we are saying that the dollars are scarce, that we don't have resources to continue to pay. As the government would argue, they don't have enough resources to continue to pay for the health care services that our constituents deserve, especially our seniors.

I think the other part that they haven't done…. I think if you listen to the people who are independent…. They are not working for one party or another. They're not partisan in any sense. When you look at the study conducted by Asst. Prof. Michael Law at the Centre for Health Services and Policy Research at UBC, you need to pay attention to that kind of study.

The study shows that the price on a percentage of brand-name price is completely arbitrary. So I think there is another area to explore. Perhaps there is another cost saving that can be realized. Mr. Law has given some examples of how the money can be saved by going in a different direction than going by percentage of the name-brand drugs. But the government, again, is not taking up the suggestions that are coming from many people.

I also want to talk about, in the bill, section 32, the whistle-blower protection. I think that is another step in the right direction. I think I would….

[1730]

Again, we need to see what's in the bill in detail. But from the surface, it looks like the bill has enough material in it that we could say we have enough in here to support the bill.

I just want to say that the government, if they want to work for the benefit of British Columbians, especially our sick, those who can least afford…. Many of them are on fixed income — our elderly and those who are aging very quickly. I think we could have acted a lot faster. This is the area that we need to work on and that the government didn't work on.

I would suggest that the government should be doing everything that they can to make sure that whatever savings are available…. They should be moving in that direction. The multinational pharmaceutical companies should not be the ones the government should be looking at protecting. Rather, they should be working for the people that they are supposed to be representing.

I think that those are some of my concerns. I would hope that the minister has paid attention to many of the suggestions that have come from, especially, our Health critic, and others who have spoken before me from our side. Hopefully, they could answer some of those kinds of questions during the next stage of the debate.

With that, I will now take my place and allow other members to make some suggestions on this bill.

C. James: I rise to speak to second reading of Bill 35, which is, as others have said in this debate, a critical piece of legislation dealing with a critical part of our society, a critical cost to families and to government. That's health care and, specifically, PharmaCare.

[L. Reid in the chair.]

I'm certainly pleased to see this bill come forward. I'm glad to see that the government has acted on it. I think it's a little too late, and I'll talk a little bit about that as I go through my comments. I certainly think it's important not only that we recognize the strength of PharmaCare but that we do what we can, through this bill, to be able to strengthen PharmaCare.

Again, as others have said, PharmaCare is one of those amazing lasting legacies that was brought forward by the Dave Barrett government in the 1970s. I think it's quite
[ Page 11287 ]
remarkable, in these days when you see things changing so quickly, that there are lasting legacies that have been in place.

I think it certainly does Dave proud to know that we are here in the Legislature in 2012 talking about PharmaCare, something that happened in the 1970s — talking about how we strengthen it and build on it for British Columbia. I'm very pleased to be able to recognize that.

It was brought forward in the 1970s as a way of looking at saving families money, a way of dealing with affordability. That is still, in 2012, a worthy direction. It's something that we are still looking at more than 30 years later since PharmaCare began — at how we can address the costs for families, the pressures that government is facing when it comes to drugs and pharmaceuticals.

This is obviously today a much bigger issue than I'm sure anyone, including Dave, would have probably recognized back in the 1970s. The pressure that the health care system is facing, the pressure that families are facing, the pressure that governments are facing when it comes to the medical system and new drugs, new illnesses, new pressures and new kind of interventions, makes this bill, I think, even more important.

[1735]

It makes the direction in this bill — to keep costs affordable for families and to keep health care costs for governments affordable — even more important than it's ever been. We know that there are subsequent regulations that will still come forward, and I'll talk a little bit about that as well. But the direction to control the price of generic drugs and to bring in cost savings for the government and for families in British Columbia is certainly a positive direction.

I also think that in this bill, Bill 35, something that brings forward a legislative framework for Pharmacare is also a positive. As I mentioned, I think this is part of our society and our province that people believe in very deeply, and so I think something that reflects the changes that have occurred and that comes forward to strengthen Pharmacare is a plus.

As I said earlier — and I know others have spoken to this — but the changes in demographics alone means that we need to address the issue of pharmaceuticals. The issue of drugs and costs are a big part of that. I'll be focusing in my next few minutes around the generic drugs piece of this bill, because I think that it is the largest piece and the most important piece that we have.

We know — and we've seen the studies, not unique to British Columbia but across this country — that one of the fastest-growing costs, one of the biggest cost pressures that we face in our health care system are pharmaceuticals, that that is one of the biggest pressures that we're facing.

There are a number of directions that can be taken when it comes to the rising costs of pharmaceuticals. This legislation and the issue of negotiations around generic drugs is one of those, but I want to talk about a couple of others first before I get to those specifics.

The first area that could be looked at to look at controlling the costs of drugs and pharmaceuticals in our health care system is the issue of reference-based pricing. It's certainly something that I would hope that the government is looking more seriously at and looking at addressing.

When you look at reference-based pricing…. For those who are listening, looking at an effective drug that is also cost-effective. If you take something like blood pressure medication, for example, there are drugs that have the same properties, the same therapeutic benefits to the patients, but there are some drugs that are more cost-effective than others.

If you use reference-based pricing, you have an opportunity as government to say that we will cover the cost for this drug that is effective, that has the same kind of benefit as other drugs but is more cost-effective for government. I certainly think that reference-based pricing is an important part of looking at controlling those rising pharmaceutical costs and something that certainly should be looked at.

Another area that was brought into place in the 1990s is the whole area of Therapeutics Initiative. I want to talk just for a minute, because it's something that I have to say that I've been very proud of in our province and something that, unfortunately, over the last couple of years by the Liberal government has really been undermined and changed from its original intent.

When the Therapeutics Initiative was begun in 1994, started by a past New Democrat government, the intent was to make sure that it was separate and apart from government, that this would be an independent initiative, that it would bring together independent people to be able to assess separate and apart from government and also separate and apart from the pharmaceutical industry, and that it would bring people together to give an independent assessment on drug therapy.

With the number of drugs and with the amount of information and with the advertising that goes on and with the work that the pharmaceutical industry does with doctors and others, this was a balance.

It wasn't taking away the ability for pharmaceutical industry to be able to talk about new drugs and to be able to recognize the strength of those new drugs and the research work that they do. That's all important. But this was an opportunity through UBC and others to come together and to be able to give government a very independent assessment of those new drugs that were coming in and the strengths of them and the weaknesses and the areas that government needed to take a look at.

It was also an initiative that really was looked at not just across our country but across the world as a real strength when it came to health care. We had people
[ Page 11288 ]
visiting British Columbia to be able to take a look at Therapeutics Initiative as something that could be taken on by other governments, to be able to show real strength in health care, to show innovation.

[1740]

We hear a lot from the other side around innovation and cost savings. Well, here was an example that was, as this bill is attempting to do through generic drugs, that was an opportunity, a proven opportunity to actually be able to save resources — to save resources in our health care system, to save money on drug costs, to give good independent advice to government.

I think it's very unfortunate that this is an initiative that really has been undermined and watered down by government over the last number of years, when it was a shining example of innovation.

I certainly hope that that's an area of government's — looking at other areas, not that they're going to listen to this side for suggestions. But I think if they look for other areas that they would want to explore to be able to save resources in our health care system and save money in the rising cost of drugs, Therapeutics Initiative is certainly something that could go back to being strengthened and being independent — truly independent, as it was.

The third area that could be looked at for cost savings — which, again, isn't right now recognized and is something that I would hope to see our Health Minister take as a clear initiative from British Columbia with colleagues across this country — is the issue of a national drug plan. It's something where we could save huge resources in this country, where we could actually pool the resources of province after province after province across our country and come together.

In purchasing power alone, we could find huge savings when it would come to drug costs in British Columbia and, therefore, costs in our health care system. This could be a huge opportunity to be able to save resources. Although the federal government has not moved on this, I think there is no reason why provinces can't take a lead and start talking about how they can pool their purchasing power to be able to look at a national drug plan.

In fact, we hear often from the government about the need for other groups and organizations to pool their resources, the need for other groups and organizations to join together to be able to save resources. Well, there's no reason that the government could not look at that in the area of health care and in the area of purchasing drugs as well.

Then the fourth area, of course, is the issue of generic drugs, which is here as part of this bill, Bill 35, which is to contain costs through negotiations. I'm pleased, as I said earlier, to see this bill come to the table.

But I do have to speak for a moment on the fact that this government is late to the table. If government had followed — it was Ontario that took the lead across this country — the lead of Ontario in 2010, we could have saved more than $157 million in our province — $157 million, if this government had acted when Ontario had moved.

This was an opportunity to find dollars. Think of what they could have been used for. Think of the resources that $157 million could have helped in our province: health care costs alone, seniors care, the cost to seniors, seniors beds. I mean, that's a large amount of money that was lost to us because the government was too late coming to the table on this issue.

That number, the $157 million, doesn't come from thin air. That comes from UBC researchers who looked at, if we'd moved to the Ontario model, the kind of dollars that we actually could have found right here in British Columbia.

What did Ontario do? Well, they decided to legislate an agreement that capped prices for generic drugs at 25 percent, and that means 25 percent of the alternative, the brand-name alternative that's there.

We as the opposition, as well as many others who are involved in health care, raised the concern to the other side, to the Liberals, at the time to say we should be moving in this direction. It was very clear, from Ontario, that they were looking at large savings.

What did we hear back from the other side? "Oh, it's not a worry. We're going to go for 35 percent." Here you have a government that's moving for 25 percent to look at savings, and our government says: "Great." Do they say they'll match that to find savings for people here in British Columbia? No.

[1745]

They, in fact, go above that and say they're going to look at 35 percent when it comes to a cap, which meant the gap, which meant $157 million lost to the taxpayers of British Columbia — which could have been used to improve health care or the many other areas that need extra supports and extra resources that this government hasn't been funding and hasn't been providing support for.

We now see Ontario going even further. They're looking to actually moving to 20 percent for the top ten drugs that are used in their province, so they're doing even one better than our government, than we're seeing from the B.C. Liberals.

I think all of us have to ask why this government dragged their feet. Why, when there was a very clear opportunity here to find large savings, would the government only go partway and not look at trying to save even more resources?

As I mentioned earlier, there are regulations that have to be adapted still for this bill, but now we hear that the government is saying: "Well, maybe that 25 percent isn't firm. Maybe it's not really 25 percent that we're looking at. Maybe it's just a goal. Maybe it's just a direction we want to work towards." Well, we know what happens when this government says: "It's a goal, and we're going to work towards it." It'll be words, not action. Once again
[ Page 11289 ]
we'll be seeing British Columbia lose out on the kinds of resources that should be here and that should be savings.

Drug costs are huge costs to families and to seniors in our province. I remember a trip I did to Kamloops where I met with a seniors group and a health care group coalition in the community. They talked to me about seniors who are making choices between medication and food.

Among the largest groups that are using food banks — the increase in the usage of food banks — are families with children and seniors. Well, a lot of those pressures that we hear about are pressures from the costs of drugs.

So we see families having to make those choices. We see people having to decide what costs they can afford. Many people don't follow the kind of direction they're given from their doctors for the medication they're given, because they can't afford it. The cost is too high. They don't have the ability to be able to make that choice.

There were a couple of studies that came in that showed just that. The Canadian Medical Association Journal showed in this last year that 17 percent of British Columbians can't comply with the drug treatment that they're given because of cost.

Well, that's huge. That's not only people who can't comply with their drug treatment. It often means that their medical condition gets worse, which causes more cost to our health care system. It's not cost-effective to not give people the kind of treatment and not have people following the kind of treatment they need, because that, then, again is going to add additional pressures.

We also saw in this past year that StatsCan came out with their report around cost of living and showed that B.C. had the highest rate of household spending on health care — 22 percent above the Canadian average.

So do I believe that this bill is important? Yes, I do. I'm pleased to see this bill coming forward. I'm pleased to see that the government is finally recognizing the importance of addressing costs for generic drugs and that the government has finally decided to act. I wish it had happened sooner. I'm glad we're here, but $157 million is a huge amount of money that's lost to the taxpayers of this province.

Now, there are some questions that remain outstanding on this bill. I know that as we move from second reading into committee stage we'll have opportunities to ask some specifics.

One of those specifics, as I think others have spoken about, is the issue of privacy and the data collected. We certainly want to make sure that specific questions are asked as we go through committee stage on that issue. We've had a couple of other areas in government where the government has moved to combine data systems.

[1750]

The example in the ministry that I'm a critic of, of course, is the ICM, the integrated case management system that's been put in place with the Ministry of Children and Families and the Ministry of Social Development. We're hearing some concerns, as the system gets up and running, about people being able to access information that they don't need for their particular area.

Just an example I heard on Friday. A group that's doing employment training was able to access personal information around child custody, around MCFD files, which they shouldn't be able to. We'll certainly be raising those issues and bringing them forward with the ministries.

Those kinds of examples are alerts for us to be able to pay attention to the privacy issues as we go forward through this bill. I think those are very important issues to pay attention to.

Then others, again, have spoken about the whole issue of CETA and what could happen through those negotiations. We still haven't had a clear answer and response from the minister responsible on those negotiations — on whether the government has taken a clear stand in those negotiations against the risk of the loss of provincial control or access to generic drugs that we could lose through those negotiations. That could impact this legislation.

This could have a huge impact on an intent of government to move in a certain direction and then find out, through these negotiations, that in fact that ability has been taken away from us as a province. I can't imagine, when we finally get the government to go to the table and to start to looking at an Ontario model to save resources, that we actually find out that through the federal negotiations, we've lost our ability. So I think there are some very clear questions that still remain around the issue of CETA and what's happening through those negotiations.

With that, I will listen very closely to committee stage and the specifics, as I mentioned, that are important for us to raise. But the direction to negotiate a better cost for generic drugs on behalf of British Columbians — on behalf of taxpayers, on behalf of families who have to pay those drug costs — is the right direction. I wish we hadn't wasted $157 million by the government dragging its feet to get to the table, but I'm pleased we're finally here.

With that, I'll take my place.

R. Fleming: I'm grateful for the opportunity this afternoon to speak to Bill 35, the Pharmaceutical Services Act. I think we've been having a good debate about the contents of the bill as well as the context of the bill and what led government to design this legislation and cancel previous agreements that it had sworn to the public were in their best interests.

It's now returning here to the Legislature this afternoon with a bill that does many of the things that, in 2010, the government was criticized for not pursuing but that were, of course, the cornerstone of Ontario's legislation around the prices paid — the cap that was put in place for generic drugs in that province, which has saved that province's health care system hundreds of millions of dollars.
[ Page 11290 ]

The fact that we're debating this legislation here this afternoon is the recognition that we have overpaid, by perhaps hundreds of millions of dollars, in British Columbia over the last several years for drugs and that component of our health care system.

Now, I think members in this chamber are well aware, because they have looked at some of the drivers of increasing health care costs in British Columbia, that one of the areas where the price increase is most significant and has been difficult to contain is around drugs. If the cost of providing health care services goes up by 4 to 6 percent a year, as has been typical in Canada in recent years, the price of the drug component within the health care system has risen by more like 9 to 11 percent per year.

This is one of the things that Roy Romanow, when he was tasked by former Prime Minister Jean Chrétien to look at the future sustainability and the contours and services that Canadians should expect of medicare in the 21st century…. This is one of the areas he touched upon in his key recommendations in the Romanow report — deemed runaway drug costs to be one of the greatest threats to Canada's health care system and the ability of provinces, in partnership with the federal level of government, to continue to fund that and to meet the expectations that Canadians have around health care.

[1755]

That has been a flashpoint in debate for the better part of two decades. It was the reason why, as we've heard from previous speakers, a previous government in British Columbia pursued a number of initiatives.

One of them was the Therapeutics Initiative that was a way to get at the prices and the drugs that were used in the health care system and control costs. It was one that was very successful in reducing waste. It was one that not all of the drug companies liked, but it was one that contained costs for the taxpayer and for the health care user in our system. And it is one that has been second-guessed, I think it's fair to say, by this government during its decade in power.

Again, in British Columbia we are talking about drug prices and pharmaceutical drug policy because it's a serious and real issue for British Columbians. It is a fact that among Canadians, a higher proportion of British Columbians report having trouble affording prescription drugs than Canadians that live in any other province. That's research done by the Canadian Medical Association that is published in their journal.

It's disturbing because what it means is that many British Columbians who cannot afford drugs — in that higher proportion than exists in the rest of Canada — are, of course, going without.

Where they are confronting illnesses and need to heal and get better on the advice of their doctor, they are taking prescriptions from their physician or from their specialist, and they are not filling them. They are getting sicker, and they are coming back into the health care system at other points along the service continuum of health care that is provided in our province, and it will require and does require more expensive interventions down the road.

I mentioned that one in six British Columbians in this Canadian Medical Association report reported difficulty affording drugs. I think that number was alarming news when it was first published. It compares to a Canadian statistic of one in ten.

So that's not good in Canada, but there's a big difference between one in ten people in Canada reporting that they have difficulty affording drugs than one in six people, or 17 percent — a full 17 percent of British Columbians who report the same thing here.

It's hard to understand why it has taken the government so long and a complete change in a position that they advanced in the Legislature just a couple of years ago to recognize that this is a serious issue.

There are a couple of things in this act, by the way, that I think are missed that are part of the problem of high prescription drug prices in British Columbia — around the high deductibles we have and the dispensing fees, which are not capped in this bill, but that is a feature of the way other provinces administer their drug plans.

There are also provinces that control markup fees on drug prices, and that's a way, at the point of sale, to help the consumer be able to afford the prescription which their doctor has advised them to secure.

But we're debating this, this afternoon, a well-known problem. It has taken the government some time to recognize it, and that's in spite of the evidence that was always before them. British Columbians have paid something like 40 percent more for generic drugs than Ontarians and Quebeckers for the last several years. That's just a fact.

I appreciate that government, through Bill 35, is trying to address some of the evidence that has been presented to them, some of the medical expertise and advice that various committees that inform government health policy has been urging of them.

I suppose, as the previous speaker said, there is such a thing as better late than never, but I think we need to talk about the context here at second reading stage of debate, about all of the events that led to government writing some of the clauses in this bill here.

[1800]

The impetus was, of course, as has been mentioned, the failure to achieve expected savings that were widely published by the government in budget speeches past, in advertisements, in service plans of the ministry. All of those so-called savings failed to materialize when government chose a different path than Ontario and other provinces, including British Columbia once upon a time, to have an agreement on generic drug pricing.

They instead decided to sign an agreement with the B.C. Pharmacy Association and the Canadian Association of
[ Page 11291 ]
Drug Stores. That was in July 2010. The Health Minister at the time vigorously defended the deal, saying it was the best one that British Columbians could get, that it had superior features to the one that Ontario had negotiated — which, of course, chose a different mechanism to contain drug costs in that province. They chose a regulated cap over drug prices that was limited at 25 percent.

We have research from researchers right here in British Columbia — just a couple of years after the fact, after that agreement was pursued and trumpeted by government — that shows that perhaps British Columbians lost, in a sense, or overpaid $157 million for drugs.

Now, we talk quite a lot during a regular legislative session about all sorts of monetary issues and suffering that families in British Columbia have over various programs that government has claimed are simply unsustainable or unaffordable. You have to put $157 million in that context — costs that could have been avoided; could have helped the province, for example, address its deficit problem; could have helped offer tax relief for low-income British Columbians; could have helped restore services and programs that are valuable that the government said could no longer be afforded.

But we didn't do that. Instead, we were locked into a deal that the government swore was the best one it could get, and the results, I think, are validated by the fact that we have a new legislative approach before us this afternoon here in the Legislature.

Let's say that this bill passes. I think we can expect that it will, and it will have the chance to be scrutinized clause by clause in the next stage of debate in the chamber. When can British Columbians expect that the savings that may result from this bill and pursuing "the Ontario model" will begin to accrue to British Columbians?

The answer, according to the Health Minister, who has been quoted in this regard and I assume quoted accurately, is that "realistically" — his word — British Columbians will begin to see their drug prices come down and to come in line with that which is paid by consumers and patients in other provinces by April 2013 — in other words, a full three years after the drug cap policy was implemented in Ontario.

That's when British Columbians can, at the earliest, expect to see this legislation take effect and to see a reversal in how British Columbia has managed the purchase of generic drugs and the pricing of generic drugs in our province.

I think there are some legitimate questions, when we talk about drug affordability, that government still needs to answer in the context of discussion around Bill 35. The minister will have a chance at some point, when he closes debate. There were options, actually, to make drugs much more affordable than just what is in the contents of this legislation.

[1805]

We could have looked at dispensing fees in B.C., which are quite high and which range incredibly from pharmacy to pharmacy. There are few rules around them. There are some in terms of what private insurers are willing to pay, but generally speaking, when the private plans put in place a cap on dispenser fees, their plan member has to cover the balance. We could have, as a government and in this Bill 35, looked at the means by which we could cap dispensing fees.

I don't understand why government wouldn't do that, considering that they have been told by the Canadian Medical Association that British Columbians overpay for drugs more than any other Canadians that live in different provinces. So they're aware of this. And there were other mechanisms and legislative fixes that could have been included in this bill but weren't.

There's also, I'm told, the legislative means to address price markups at the point of sale amongst retail pharmacies, and there are ways that this can be done in law that other provinces have pursued. In reviewing Bill 35, there is no content or inclusion of a way for government to review and, in some ways, to oversee what are allowed and defined as markups on drug prices.

That's something that I think could have been captured in Bill 35 before it was introduced by government this session. But it's a missed opportunity, I suspect, that we are going to have to bear with for some time, unless the government has a plan to review that within the debate of this bill and introduce amendments, as we've seen them do with other bills. They've amended their own legislation before it has passed. I look forward to hearing from the Health Minister on that issue.

The price components of drugs. If we view it as government's job to ensure that their affordability catches up with, at least, what other Canadians expect to pay out of pocket and the percentage of Canadians in other provinces that report being able to afford drugs…. We needed some of those bold measures around capping dispensing fees and controlling drug markup prices. We didn't get it in this bill.

There are some recent studies that also inform the debate that we're having on this bill and show why government not only has to take action, but they have to take the right action. One of them is a study which shows that British Columbians are struggling overall with the cost of health care.

It's released by Statistics Canada. It was a survey of household spending which found that B.C. residents had the highest average health care spending per year and that it was some 22 percent above the Canadian average.

This is really part of the same problem that we've been discussing, specifically around the findings in another study by the Canadian Medical Association around drug affordability. This means, basically, that British Columbians are being hit at both ends.

Overall, because of the premium system that B.C. has, not quite uniquely but almost uniquely amongst prov-
[ Page 11292 ]
inces, there is a huge outlay for families and individuals in British Columbia to be able to afford medicare. There are user fees, essentially, that other provinces don't have that lead to this discrepancy in out-of-pocket costs with other Canadians.

But they're also being hit at the other end when they seek to purchase drugs as part of their treatments after the health care system has seen them. That really is a remarkable thing, a dubious distinction that British Columbia has.

On expenses that come out of pocket of something like $2,680 per year, which is the average health care spending per B.C. resident…. If you look at what 22 percent recognizes, that is significant cash money that British Columbians pay over and above the Canadian average. It is almost $750 that the average British Columbian takes off of their net income and pays for health services, which does not occur in other parts of Canada. That's another reason why I think that government could have gone further in this bill.

[1810]

Now, it's one thing to be playing catch-up with Ontario and to validate the path that Ontario has taken to achieve savings on drug costs to their health care system by imitating them a couple years ago, when they were only very recently denounced in their approach, but the problem is that they're actually not catching up with Ontario.

Ontario has moved past the cap on generics that they introduced a few years ago at 25 percent. They are now looking at the largest-prescribed drugs within the system — I believe the ten largest, perhaps the 20 largest pharmaceutical products that are prescribed in their province — and they are seeking to drive the cap down even further to 20 percent. They're going to exact even more savings in Ontario, which can be put to other areas of improvement in the health care system.

We are barely just catching up here in British Columbia. The minister himself says that if this legislation does pass, it will be another year before we see any savings. I mean, that is a lot of water under the bridge. Even if most of the elements of this bill are right, it's a lot for us to swallow because it means that government has really made a mistake. This legislation is an admission of that mistake in previous years, when they could have joined with the province of Ontario, which was taking a different approach.

Listen, I know there will be some people — and we will listen to all sides of this debate — that won't be entirely happy with this approach. There are going to be some people that are making money in the current arrangement that will have their ability to make money limited, and their billing status. I'm sure the Minister of Health has heard that, and it was certainly something that played out in Ontario a few years ago, when the cap model was introduced.

We need to hear those voices and listen to what they're saying, but they also need to explain how they might help government achieve savings and cost containment on drugs, especially generic drug prices. That is something that is a feature and part of the backdrop of discussion on this bill.

There are also critics who have raised a different concern, which is around B.C.'s FOI and protection-of-privacy laws. There are some personal privacy issues that the freedom-of-information and protection-of-privacy association has raised.

I think we will hear more from the minister about those sections of the bill where the privacy concerns are focused in on. But it really is about access to highly sensitive information.

I think it's incumbent upon government to explain very clearly to stakeholders with those concerns. In fact, it's all of us who value our personal privacy information. Whether they think that is not the case, they need to convince those who have concerns that there are going to be certain exposures in law that won't adequately protect people's privacy information.

We have heard around the tabling and debate of this bill that those concerns are there and that they're real. I think it's up to government to more fully explain why that is not the case, because that is the position that they have said in the public realm.

I want to conclude in a few moments but just go over some of the main concerns around this bill that is before us here this afternoon.

Government could probably take some comfort that there are stakeholder organizations that have been watching government carefully around the drug cost issue and have said that, for the most part, government has got this bill right. One of those is the CEO of Pacific Blue Cross, Ken Martin.

I know that they set some expectations with government. They had a voice with government. They represent hundreds of thousands of British Columbians who are members of their plan.

[1815]

They are a very large stakeholder in how drugs are dispensed, paid for and claimed in the province of British Columbia. That drug plan economy — obviously, Pacific Blue Cross is a major voice there.

They're also urging the government to go further. I've commented on that this afternoon because these opportunities only come up once in a while in the chamber of this House to debate legislation. But they're also holding out hope that government will regulate the dispensing fees charged by pharmacies.

When it's the CEO of Pacific Blue Cross, who has examined drug policy in British Columbia for a number of years, asking that that be looked at…. That's typically not a cost that they actually pay for, or if they co-pay, their share is constant. It's their plan members' share that is out of pocket. I think that is something that government….
[ Page 11293 ]
It's disappointing that they did not look at the dispensing-fee caps that patients have in other parts of Canada.

They were also one of the voices that echoed a point that I was trying to make earlier around markups that are included in drug prices. That is a hidden cost centre that is a concern around drug prices. It's one of the reasons why drug prices grow and elevate more quickly than other areas, other cost centres, of the health care system. It's one that government was urged to look closely at.

It's one that other provinces have zeroed in on in their effort to contain drug prices. They have looked at where the markups are and how government can get around that, what accountabilities they can put into drug-pricing systems. They've found a way to write that into law and into legislation and have their various ministries of health and agencies involved in overseeing that.

It's not something that, unfortunately, we're discussing in Bill 35, but it is something that is a common feature now in other provinces.

I think it's good this afternoon to see government getting back on track, admitting that some of the things that they so confidently proclaimed were wrong, just a couple years ago, like when the opposition loudly called upon B.C. to join with Ontario and pursue capping drug prices.

[Mr. Speaker in the chair.]

While it's good to see a government come full circle in just a couple short years and admit the error of its ways, it's unfortunate, as other members have said this afternoon, that it comes after probably hundreds of millions of dollars have been overpaid for drugs by the taxpayer and by health care users in the province of B.C.

There's not a lot we can do about that here this afternoon, but I think it's probably what is of greatest interest to the people following this debate at home this afternoon — exactly what the government waste component is of previous drug policies and the agreements that they signed with the B.C. Pharmacy Association and the Canadian Association of Drug Stores in 2010, when they took a misguided approach and rejected the one that Ontario had taken.

I think that's something government has to be held accountable for. They did choose the wrong path. They did overpay for drugs. It's money that can't be recovered at this late date.

But I suppose, in support of Bill 35 this afternoon on this score, we can at least say that government is now going to go down the path that it rejected before. It's going to look very carefully at how it can, at least beginning in April 2013, begin to achieve drug cost savings for the health care system that will make it a stronger health care system for all British Columbians.

With that, I thank you for the opportunity to speak this afternoon.

Mr. Speaker: Seeing no further speakers, the Minister of Health closes debate.

[1820]

Hon. M. de Jong: As always, I am obliged to all of the members that participated in the debate this afternoon on what most people have correctly described as an important issue regarding an aspect of health care in British Columbia that touches many and involves $1 billion plus of taxpayers' money.

In thanking members, I will say this. I do not intend at this juncture to take the time to go through all of the thoughtful submissions that were made, except to say this. Much of what was said was accurate; some of what was said was not. We will have an opportunity to canvass some of those specific details later.

A couple things that I want to make clear on the record very quickly. In casting my mind back to my introductory remarks, I want to be sure that I correctly identified the agencies with whom the agreement in 2010 that has been referenced in these debates…. They were the B.C. Pharmacy Association and the Canadian Association of Chain Drug Stores, to make it clear that that's who the agreement was with.

A couple of other issues have come up during the course of the debate this afternoon, not surprisingly. Much has been made of the comparison between British Columbia and Ontario. I think I invited that comparison myself in my initial remarks.

I will, however, say this as I make this general comment in assessing the overall approach to fiscal matters and economic matters. I suspect that the government of Ontario would love to be in the position that British Columbia finds itself in today, where we are looking at the introduction of, realistically, a balanced budget. That is not the situation that Ontario finds itself in.

So whilst on this particular matter I have invited — and members are entitled to ask — questions based on two different approaches that were taken, I think members know the answer to my question. Ontario would love to find itself in the position that British Columbia is in thanks to responsible fiscal management.

I've heard comments about privacy. We'll have a chance to canvass that in discussion. I'm obliged to the former Health Minister, and there are several in the chamber, including the opposition critic. The member for Vancouver-Quilchena has shown, as other members have commented, a particular interest in this.

The general distinction that I hope members will keep in mind is between the value of data and collections of data assessed anonymously versus the imperative of protecting an individual's privacy and information.

The collective data can have real value, and what the member for Vancouver-Quilchena, I think, properly points out is that finding ways to utilize the collective value of that data in health promotion and disease pre-
[ Page 11294 ]
vention is something that I hope all members agree upon, as long as the appropriate safeguards are in place.

There were questions raised. They were somewhat peripheral to the bill and the discussion, although I think I understood the linkage that was made between generic drug pricing and discussions that are taking place between the federal government and the European Union.

I will simply say that members…. Members heard from the Jobs Minister earlier, but I have made similar submissions to the federal government that whilst it is their constitutional responsibility to negotiate on behalf of Canada and Canadians in international trade matters, British Columbia expects that it take account of the costs that may accrue to the provinces as a result of those negotiations.

If those costs accrue in a negative fashion, they should expect provinces like British Columbia — and British Columbia will be one of them — to seek compensation.

[1825]

Now, that all presupposes a particular outcome which it is premature to presuppose. But since members asked, I want to assure them that those submissions have been made by myself, the Jobs Minister and others to the federal government.

I don't have time to respond to comments about the national strategy that has developed around the purchase of drugs, except to say that it is there. It is working, and there are examples — not necessarily of generic drugs — of drug purchases that have occurred at a significant savings to all Canadians because of the national initiatives that have taken place.

They are led, depending on the drugs, by various provinces. Ontario has led. British Columbia has led.

I do not in any way, shape or form dispute…. In fact, I am a strong advocate of the proposition that together as Canadians we wield far more leverage in negotiations with drug manufacturers than we would as individual provinces.

Many questions relating to the regulations — the implementation, the manner and the mechanism by which generic drug prices will be lowered beyond the 35 percent they are at today. We will discuss those in detail as we move through the various sections of the act in committee stage.

Again, thanks to all members for their participation.

I move second reading.

Motion approved.

Hon. M. de Jong: I move that the bill be referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Bill 35, Pharmaceutical Services 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.

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

Hon. M. Polak moved adjournment of the House.

Motion approved.

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

The House adjourned at 6:27 p.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF
FORESTS, LANDS AND
NATURAL RESOURCE OPERATIONS

The House in Committee of Supply (Section A); P. Pimm in the chair.

The committee met at 2:50 p.m.

On Vote 27: ministry operations, $380,079,000.

The Chair: We're beginning consideration of estimates for the Ministry of Forests, Lands and Natural Resource Operations.

Do you have any opening remarks, Minister?

Hon. S. Thomson: Mr. Chair, I look forward to the opening of the consideration of our estimates. We've had the chance to have many discussions with the members opposite on many of the issues that I know will be raised during the discussion. I look forward to the engagement that we've had, which we've always tried to do in a respectful process.

I know that with the broad range of the ministry that we cover, there will be a wide range of areas to look at. I appreciate the cooperation in providing us some schedule for that. I know the consideration day has advanced a little quicker than what we may have thought, so we may have to be a little bit flexible in that as we get the availability of the key staff we would need for various aspects of the ministry operations.

B. Simpson: Just wing it.

Hon. S. Thomson: Yeah. We'll try and do that, too, if we have to.

Again, we appreciate that. With that, we look forward to the discussion.
[ Page 11295 ]

N. Macdonald: I look forward to the opportunity here to go through the estimates of the Ministry of Forests, Lands and Natural Resource Operations.

Before we get started, and I can talk to the minister in more detail later, WoodEx near Edgewater needs the minister's attention. We have very little time for WoodEx. I guess the first question is: will the minister speak or have senior staff speak to WoodEx management today or tomorrow?

If that is the case, then we'll leave this problem for this afternoon and move on to forest health issues.

Hon. S. Thomson: Yes, we have had discussions with the company. We're certainly aware of the issue and the concern. We had discussions with the company through the deputy minister late last week. We're expecting them to get back to us today or tomorrow. That was the understanding we had.

We have had those recent discussions. We've also had previous discussions with them, as well, around the fibre supply needs, and those discussions are ongoing.

My understanding, based on the discussions I've had with both parties, is we're hopeful that an agreement will be reached. I know there are some time considerations and some urgency to this. That's why the discussions happened last week, and we expect them to happen further either today or tomorrow.

N. Macdonald: Thank you, Minister, and I thank the staff who have been working on this. The minister will know, and he mentioned in question period, the very good news about Canfor's investments and the restarting of the Radium mill. That's been a long time. We do have, of course, the employment that we need with WoodEx near Edgewater, and I look forward to hearing from the minister what he or his staff has been able to work out on that issue.

With that, I'll move to the first part that we'd like to deal with, which is forest health.

[1455]

As the minister will know, the sound management of B.C.'s forests is a matter of utmost public importance. Its management, moving forward, will be even more so, given the known challenges around forest inventory, our vitally important water resources and escalating competing demands on our forest land base, most notably in the energy sector.

Historically and for understandable reasons, much of the focus during sessions such as these is on the financial side of the equation — how much revenue is coming in and how great the expenditures are. Often the focus on the financial side is not as precise as it might be, such as getting information on which regions the revenues are generated in, which regions the funds are spent in, how they relate to the programs that receive funding increases and which of those do not. Finally, are the projected expenditures up to providing the public with the essential services that it deserves?

It's on this last point…. We all know about the enormous challenges posed by the mountain pine beetle and climate change. We hear routinely about the number of trees killed on over 17-million-plus hectares of land and about the tremendous reforestation challenges that such tree mortality poses.

What we rarely hear about is, of course, the implications of such tree mortality — the implication that poses for our province's vitally important shared public water resources. Yet it is this ministry that bears stewardship responsibilities for both our publicly owned forests and fresh water resources, a responsibility given added weight by this government only last year when responsibilities for allocating publicly owned water resources was actually transferred to the Ministry of Forests, Lands and Natural Resource Operations from the Ministry of Environment.

It strikes me, then, as key that we have a full understanding of both revenue streams, moving forward, and how investments in forests will benefit both the land and water.

I want to emphasize in the approach that I'll take in the estimates before us that British Columbia's Crown land base is immense and that it is a public asset of the first order. British Columbia owns 94 percent of the land and all of the province's freshwater resources.

This year marks, as the minister knows, the centenary of the provincial Forest Service, which was entrusted to manage these precious resources on the public's behalf.

The challenges ahead are enormous, given the rate of climate change. But while today's management challenges may differ from those a century ago, the key responsibilities to protect the public interest remain.

What the Minister of Lands, William Ross, said nearly 100 years ago to the day, remains so to this day. The government on behalf of the people has a responsibility to hand down to future generations their vast heritage of forest wealth, unexhausted and unimpaired.

When viewed from this perspective, the health and well-being of our communities are tied very closely to the health of our forests. If our forests are healthy, then the air we breathe and the water we drink are clean and safe, and the communities we live in are safer and more resilient because the lands surrounding them are resilient as well.

Realizing this vision is not easy, however, and it is made far, far more difficult if a government persists in old and, frankly, dangerous ways of thinking within very short electoral cycles. If our forest-dependent rural communities in particular are to have a future, the province needs to embrace longer-term visions, goals and strategies in keeping with a healthy rotation cycle for our forests. These visions, goals and strategies should be embodied in a clear and transparent provincial plan that sets out how key objectives relating to our forest land
[ Page 11296 ]
and water resources will be met.

My concern with the estimates documents before us is that, as our Auditor General recently pointed out, there is no long-term plan and no long-term objectives against which to assess government's planned expenditures in the key areas of our timber and water resources.

Beyond that there seems to be no coherent long-term plan that lays out a framework for where we as a province obviously need to go, which is to a future in which we extract far fewer raw resources but ensure that the fewer resources we do extract provide optimum benefits to the people of British Columbia.

The first questions that I have, then, relate to the government's projected revenue for forest and water resources.

[1500]

The first question is: can the minister confirm that the revenue projection for this coming fiscal year is $533 million and that the updated revenue forecast for 2011-2012 is $457 million?

Hon. S. Thomson: The reason we're just taking a bit of time here was because the numbers were a little different than what the member opposite listed. The revenue derived from forests and land resources…. For 2011-12 total forest revenue is $445 million, with total ministry revenue of $903 million; for 2012-13, $529 million forecasted revenue, and total ministry revenue of $1,000,030,000.

N. Macdonald: Thank you, Minister. I've made those changes.

I know the minister had touched on this. Maybe just repeating those numbers, can the minister…? When I looked, I saw the 2013-2014 projected revenue for forestry was $557 million; and then in the following year, 2014-15, it's $606 million. Are those accurate numbers? I know the minister touched on those. If not, what are the accurate numbers?

[1505]

Hon. S. Thomson: I think there is a little bit of difference in terms of the timing, in terms of the numbers from the fiscal plan and the blue book for the numbers the member listed, the updated forecast. It may not include all of the numbers there. Forecast for 2012-13, $529 million from forest revenue; $547 million in 2013-14; and $606 million for 2014-15. That is made up of timber revenues, B.C. Timber Sales revenues, SLA border tax, and lands and other forest revenues.

N. Macdonald: Well, the minister's answers, then, appear to suggest that over a three-year period we will witness a 33 percent increase in revenues, which will come almost…. The minister mentioned a number of things, but it is almost entirely stumpage fees.

My question for the minister is: what are the underlying assumptions for that healthy revenue growth? Does the minister foresee stumpage revenues increasing on average, does the minister assume a faster rate of cut, or does the minister assume both?

Hon. S. Thomson: There are a number of assumptions built into the forecasts. They relate to prices, and they relate to harvest volumes. For example, in the projections looking at SPF 2-by-4, U.S. per-thousand-board-feet prices, each $50 U.S. change equals $25 million to $50 million in additional revenue. So that is part of it.

[1510]

The Crown harvest volumes, based on the overall assumptions, are relatively level. Each 10 percent change, for example, in coastal harvest volume equals $3 million to $6 million. Each 10 percent change in the interior harvest volume equals $10 million to $15 million. The material assumptions around revenue are in the appendix in the Budget and Fiscal Plan on page 135.

N. Macdonald: I mean, the minister will realize that there's a political objective in terms of 2013. The government has said that they were going to present a balanced budget. The minister has touched on a few possibilities for getting this additional revenue, but it seems that there are elements of this that are more of a wish than actually good guesses.

Can the minister point to evidence that he can provide to this committee that would suggest that this is more than just wishful thinking — that there is strong evidence that the increases in the prices are something that are real rather than just something we're hoping for? The minister has said that he does not assume a faster rate of cut, so basically, the minister is looking for more stumpage based on higher prices, as I understand it.

Hon. S. Thomson: As I've indicated with the assumptions that are built into the plan, I think they're reasonably conservative. In fact, when you look at the assumptions that are built into lumber price increases in the updated forecast — for 2011-12, $255 million; projected through in terms of the plan, 2013-14, at $288 million; and planned, in 2014-15, at $300 million — I think those are very reasonable and conservative assumptions. We work with the Ministry of Finance when these projections are built.

All the indication is showing there's general expectation that we'll start and that we'll continue to see improvement in the market, particularly as the U.S. housing market recovers. We also know that that is going to be slow and not drastic, so the assumptions that we built in I think are built on reasonable and conservative assumptions.

N. Macdonald: Just a question then. As stumpage goes
[ Page 11297 ]
up or the price of the product goes up, the revenues from the border tariff go down. Can the minister explain how that plays into projections on the increased revenue that the ministry projects here as we go forward?

[1515]

Hon. S. Thomson: Built into the assumptions is exactly that point that the member opposite made, with the projections in the plan here showing $140 million in the updated '11-12, $128 million in 2012-13, $88 million planned in '13-14 and $86 million in the plan for '14-15.

N. Macdonald: We'll just do one more question on this specifically. I mean, the contention I have is that it's convenient for the Minister of Finance, who has a political objective in having a certain amount of revenue to talk about prior to the election.

Can the minister responsible for this file, though, point to the studies that would give him confidence that what is projected in this budget are actually accurate projections that are not only possible to happen but likely to happen, since there is an assumption here of a market recovery? If the minister could point specifically to the studies that have been done on that particular topic.

Hon. S. Thomson: Our Forests revenues branch works very closely with Finance in reviewing all the economic factors and all the information projections around exchange rates. All of those kinds of things go into this. Again, as I said, we believe we've been very conservative in the revenue projections. We've had recent reports out from people like Russ Taylor. His reports predict a supercycle to come, which is actually projecting much, much higher prices than we've currently projected here.

Those are our projections, not ones we built into our assumptions. As I said, we've kept very conservative assumptions. Again, it's close work between our Forests revenues branch and staff and Ministry of Finance in doing all of the forecasts. We believe that the assumptions we have here, and the revenue projections, are reasonable and conservative.

N. Macdonald: Maybe just one more question on this. The minister cites Russ Taylor's work and then says: "But that was not the basis for any of these projections." I realize there's internal work done, but are there any studies that are external to the inner workings of government that the minister can point to which would lead us to such an optimistic picture of what the future holds for markets in the near term?

[1520]

I mean, the minister is talking about getting 33 percent more from, essentially, stumpage. When the stumpage goes up, the border tariff goes down. It seems rather politically convenient more than, perhaps, an accurate reflection of what we're going to see. Can the minister point to actual third-party studies that have been done that would be the basis for the ministry's projections on its revenue going forward?

Hon. S. Thomson: Just to restate, we're working closely with the Ministry of Finance and our Forests revenues branch. They look at all the economic forecasting and assumptions and build that into building those projections for us.

We do see work by very qualified economists and experts in the field, particularly somebody like the International Wood Markets Group, that do project — based on increases in available timber supply, and lumber supply and demand, coupled with the demand growth in global markets, and not all markets projecting — that we may see returns that are significantly higher than what we have built into the forecast assumptions here.

We've kept the assumptions reasonable and conservative. We've kept them very reasonable, particularly on the overall harvest levels in the assumptions. This is much more built on the basis of improving markets than it is on significant increases in harvest levels when you look through the assumptions and the sensitivities that are built into it. Again, we feel that the assumptions that we built here, or the forecasts, are reasonable and conservative.

N. Macdonald: Just to stop here for a second, we talked about Russ Taylor. We said that that wasn't something that was the basis for any of this work. Then the minister again cited, as I understand it, the business or the company that Russ Taylor represents — right?

It's just a simple question. If it's not Russ Taylor and his group, if that's not the basis for what the minister is presuming will happen in the markets going forward, then what are the names of the studies? Who are the independent people that are doing the work that have given the ministry such assurance that markets are going to pick up and that we're going to get more revenue?

Could the minister explain how we get that 33 percent more revenue, or is it, as I suspect it is, just a wish so that we can have a politician stand up and say that somehow we're going to achieve a balanced budget by a politically opportune pre-election period?

If the minister can point to studies that the ministry has actually based their work on, we could then see whether they have credibility or not.

[1525]

Hon. S. Thomson: Referencing the study that I just quoted, it is one study that has a lot higher projections than what we've built in here. It certainly wasn't the basis for making these assumptions that are built into the fiscal plan.

Again, our staff work very closely with the Ministry of Finance in assessing all of the economic forecasts and
[ Page 11298 ]
conditions. The record is good in that respect. You may wish to canvass some of those specific assumptions with the Ministry of Finance as to the things they're looking at — exchange rates, market projections.

I just state that I think we have built into this plan, based on projections in markets, a very conservative level on the harvest assumptions. We believe these forecasts are realistic and achievable.

N. Macdonald: We'll move on. Just to be clear, the minister has not pointed to a study, other than the one that he said he didn't base any of these projections on. The minister is also, in his estimates, asking me to go to the Ministry of Finance to explain how they arrived at projections for the Ministry of Forests' revenue. All right. That's fine.

Let's move on a little bit in terms of where we go with this. It relates to work that Russ Taylor did. There is, as the minister knows, a great deal of concern at present over the availability of sufficient volumes of timber to sustain today's sawmilling capacity, particularly in the interior, because there's insufficient timber near enough to the mills to warrant the costs of, presumably, building a new mill. That's what the minister is hearing.

There is a looming timber supply crunch in the interior that we're seeing playing out. Does the minister agree with that? Does the minister think that with the market going to improve, we're now going to get into areas that it previously didn't make sense for a company to go into? We have seen studies. Does the minister contest that we have a huge problem here with timber supply and an insufficient timber supply in the Interior?

Hon. S. Thomson: Yes, I think we all know that we have a very challenging circumstance through that region as a result of the mountain pine beetle impact in that area. We have done the timber supply analysis.

[1530]

That information is out now and available and posted as to the potential downturn in annual allowable cut in the region as a result of the impact. That's why we're continuing to look at options to mitigate that impact.

We do know that based on the information and the analysis that's been done, there will be very significant challenges through the region in addressing midterm supply availability.

I think it will be important, as we assess those options, to recognize that when we do those, we do them on the basis of our existing market projections and not make assumptions that there are going to suddenly be significant increases in market return that may allow you to get into some of those other areas.

Again, through that approach we have to be reasonable and conservative in our projections as we assess those options.

N. Macdonald: To come back, in order for stumpage revenues to increase, one of three things has to happen, and I think the minister would agree. The markets have to improve, and therefore, stumpage rates increase, and the minister is presuming that that's going to take place; or logging rates must increase, and the minister is presuming that won't happen; or the overall quality of the trees selected for logging must go up.

To better understand these revenue projections before us, could the minister provide us with a breakdown of revenues from the interior of the province and from the coast for this coming fiscal year, for 2013 and 2014 as well as for the fiscal year 2014-2015?

Hon. S. Thomson: If you look at the information that we have here, we can show the breakdown, based on the assumptions, of the harvest volumes that are projected for interior versus coast. In terms of breaking out all of the revenue projections based on price and the other factors, it's not information that I have specifically at my fingertips right now. We'll certainly undertake to provide that in response to the member's questions.

If you look at the harvest projections that are built into the sensitivities, again, not projecting significant increases in volumes of harvest overall from the current projection levels in the updated forecast for both the interior and coast — 50.3 in the interior, moving to 51.8 in the fiscal plan for 2014; coast from 13.7 to 14.2.

In terms of providing the specific breakdowns in the revenue forecast, coast versus interior, that's information we'll undertake to provide to the member opposite.

N. Macdonald: I appreciate that. We'll look forward to that information.

Now, the minister will remember that the opposition received a document that was characterized as something that was an early document. We did share that with the Minister of Jobs, Tourism and Innovation.

[1535]

We also followed up with a letter to the minister on Friday — I think it would have been last week or the week before — asking just exactly what was meant by the Premier when she said we were going to participate. We asked for information.

These questions — there are just a couple of them — are just to get a sense of where the government is going, because the ministry's estimates on revenue growth appear to be predicated on some assumptions about maintaining and perhaps even potentially increasing logging rates.

As we know, the ministry has already told us that it is predicting a falldown in available timber supply for the Interior. For forest companies licensed to log public forest lands, I'm sure they are telling the ministry that they are having a hard time finding enough economically viable timber to keep mills operating. In that document there
[ Page 11299 ]
were suggestions of relaxing rules that provide a modicum of protection to other resources, including water resources and wildlife.

Can the minister confirm that in order to meet its provincewide revenue projections, there is some serious consideration about lifting constraints, or is that something that's completely off the table? Can the minister just comment on where we are in the process, and is he willing to share, as the letter asked, all of the things that the minister is currently considering with regard to looking for fibre?

Hon. S. Thomson: Again, I want to step back just a little bit to look at the plan. The numbers that we're talking about here and the harvest projections are part of the fiscal plan, 2012, 2013 and 2014. The work in that area has informed this plan. This is not anything to say that there isn't the significant issue to address going forward as we work through all the analysis and the options.

[1540]

We know that in certain parts of the region the impact may start earlier than in other areas — Quesnel and the Lakes — but in terms of the overall projections for harvest levels that are built into this fiscal plan, we believe those analyses have been taken into account in forming this. That doesn't mean…. We have a significant issue to address going forward into three to five to a number of years out. That's why we need to do the analysis. That's why we need to look at all the options that may be available to us to mitigate the impacts.

N. Macdonald: Just to stop at that point, in question period the Premier indicated that the opposition had a responsibility. In the letter that we sent we said: "Can we have just a list of the things that the ministry is considering?"

Is it the intention of the ministry to provide a list of things that are being considered? Or is it the intention of the ministry — and this is legitimate too — to wait until it has narrowed it down to a list of options that are more seriously being considered and then sharing the information?

It's not to suggest that one would be better than the other. What is the ministry thinking in terms of sharing information with the opposition on this issue?

Hon. S. Thomson: I appreciate the question. We've indicated and have committed to a public process around the range of options that may be available or may not be available. Many of those options are known, in a sense, with the technical analysis that was undertaken — some of the information that became available in terms of the options.

To restate the form and the way to look at all those options, we're still working through that, in terms of how best that would be undertaken. But I think the offer, the approach and the commitment were sincere. In terms of looking at those options, we know it needs to be in an engagement process.

I think it's important that we take a bit of time — and, given the urgency of the issue, not too much time — to ensure that the process is one that will work and that will involve the appropriate stakeholders in the process.

That work is underway. We hope to be able to indicate that in reasonably short order. I think the main options are known there. I expect that as we go through that process, there may be other options that develop. There may be some options that were previously considered, that are not in the information that's there but that we may want to come back into the consideration.

[1545]

That process will allow all of those options to be considered, and I think it's fair, in the process, to not discount any option right off the top.

You may put some options aside fairly quickly, but I think in terms of addressing the impact, knowing the situation we're dealing with, knowing the potential job losses for the communities that are outlined in the technical report, we'll want to make sure that all appropriate options are considered.

B. Simpson: I just want to canvass a little bit around timing on this. The options that the minister is referring to are what have been dubbed in the public domain as logging in the reserves or looking at areas that are constrained under other land use values. That's certainly one of the options.

The minister is aware that the UBCM 2010 was the resolution that is being pegged as the timing and as the incident that caused the government to begin to look at this. In the June 2011 report from the chief forester to the Association of B.C. Forest Professionals in their "Viewpoints" in their magazine, it says that the analysis for that is underway and expected to be complete during the summer of 2011 — so last summer. When is it that the minister actually got the technical analysis reports for the four timber supply areas in question?

Hon. S. Thomson: I think the member opposite is probably aware that there is ongoing technical work being done by individual timber supply area. Some of that information in various forms of drafts was starting being made available last fall. In terms of being able to pull it altogether in a rollup document, which is the one that has got all the areas included in that report, it was at the end of February of 2012.

It's also important to note that the work is continuing. One of the key areas in terms of analysis that's not addressed in here is the analysis of potential options around the impact on some of the constraints in the wildlife areas. That work continues and is not directly part of these analyses.
[ Page 11300 ]

So it's been kind of, I guess, what you call an iterative process as the individual reports have been completed in draft forms, and then there's continuing work. I think the timelines, it would be fair to say, are some individual reports last fall pulled together, rolled together, with the final report that is out at this point in terms of the end of February.

[1550]

B. Simpson: I appreciate the minister's struggle with this because he and I have struggled with this since…. I think last June was the first time we sat down together with the chief forester and some others. My concern in all of this, and I said it at that time…. We were going to get to know before we even asked the question.

As the minister is well aware, the B.C. Wildlife Federation has weighed in, Wilderness Tourism, ABCFP. ABCFP now has flipped a switch. They have made an incredible decision, quite frankly, given the nature of that organization, to go into full lobby mode on this issue. Canadian Institute of Forestry have weighed in. The Council of Forest Industries' John Allan has indicated we are running out of time, and in fact, the Winnipeg Free Press is reported as saying that we might have to go to full land use planning exercises, which was anathema to him when I first started talking to him about this.

So what I'm trying to understand, though…. The minister is talking about these iterative reports and the reports ongoing. Four timber supply areas in the core of the mountain pine beetle were being looked at — the Lakes TSA, Prince George TSA, Quesnel TSA and Williams Lake TSA. In three cases the timber supply reviews had just been completed and the annual allowable cuts just reset. By law, the chief forester should not have reset annual allowable cuts without sufficient information to make a determination, which means he needs to be confident that he has the inventory required, that he has all of the data required for that.

In addition to that — and Williams Lake is in process — because of this, staff were asked to look at where there may be some incremental timber available if land use constraints were relaxed in some fashion. Those reports were not draft. They were completed in Quesnel in August and in Williams Lake, Prince George and the Lakes in November. All the February report is, is a summary of those reports and, I presume, the beginning of advice to government.

What I'm struggling with, and I know what the opposition and what the people out there are struggling with, is: what's wrong here? Is it a lack of staffing? Is it a lack of understanding? Is it that the Auditor General is right, and the minister and his staff simply do not have enough information to go to the communities? I'm being told by people that we're going to get out there, and what we're going to be asking for is forgiveness, not permission, and that many of these areas have already been encroached upon in salvage operations.

So what the struggle is, is: why is it taking so long? In particular, in the summary document provided to the minister, I'm assuming, on page 12…. This is the February document that the minister references. It says that based on a canvass of the licensees, if current economics persist, there is a likelihood of timber supply shortages occurring in mid- to late 2013.

It says: "Licensees…caution that if one considers the planning, authorization and predevelopment lead time necessary for operations to occur, any legislative and/or policy change would have to be 'implementable' by mid- to late summer 2012."

Again, my question to the minister is this: why has this taken so long? The documents were there last year. The timber supply analysis was done. We have got this sort of gap until the February document that's still in process. Yet we have got the Lakes, because of the mill burning down…. But in Quesnel the documents clearly indicate that a decision had to have been made already. That's the government's own documents that are saying a decision had to be made already.

What is happening here? Is it a lack of resources? Is it a lack of will? Is it a lack of concerted understanding in cabinet? Would the minister please help us understand why these communities have not already been consulted with?

[1555]

Hon. S. Thomson: As the member opposite knows…. With respect to the chief forester and this determination — a very, very important role — I know that when he undertook the determinations, which he did in January 2011, and took the information into consideration, did lower the AACs in those regions, did the sensitivity analysis…. We stand by the decisions that he made at that time. The analytical work continues in terms of the timber supply analyses that were undertaken.

I'm advised by the authors of the report that the information that the member opposite references that is in the report, talking about decisions that need to be made late summer 2012, would have to be implementable by mid- to late summer of 2012 if anticipated economically viable supply shortage for some mills is to be avoided. There was a technical working group that was there. I think this was put in, certainly, to send the stimulus and the message that these were critical issues that needed to be addressed quickly and with priority.

Obviously, as we were working through that, the situation in Burns Lake, with the events there, accelerated all of this. But that work was well underway, and options were under consideration. We were, again, working through how it would be best to engage in that process. And the member opposite and I have had those discussions. But again, the situation accelerated — needed to look at a range of options, in potentially short order.
[ Page 11301 ]

As we've gone through some of those options, we've also realized that those options need to be considered for the broader region and not specific to one timber supply area. Again, go back to the point that we've committed to. We need to make sure that we move forward in short order in consideration of those options and in a process that engages the public and the appropriate parties in an appropriate way. That work is underway to determine how best to do that.

We've certainly heard the concerns from the range of stakeholders, including professional associations, the industry, communities, the union and worker representatives, and said that we do need to look at those options, that we should have the range of options available. But that work is obviously a high priority and needs to be addressed in as quick a timeline as possible.

[1600]

B. Simpson: Just very quickly, because my time is restricted here. Again, I feel the minister's pain on this, but the reality is that day over day, we get closer and closer to no before the options get out there. When I was home for the Easter break, I had confirmation from industry and from professional foresters on the ground that we are looking at this timeline now, and it's a difference between available timber in the annual allowable cut review process and commercially available timber as is pointed out by wood markets and others.

But under the current constraints, we are looking at a brief timeline. I wonder if the minister is free to say, on the public record, what that timeline is. When will consultations with the communities begin?

[D. Horne in the chair.]

Hon. S. Thomson: Just to reiterate again for the member opposite, we understand the urgency of it. We understand the need to engage as quickly as possible.

The response in the House from the Minister of Jobs, Tourism and Innovation at the time…. I'll be careful not to quote directly here. I think, in initial response, it was said "within a couple of months." I think since that time we've clarified that and said that it needs to be sooner if possible.

I also want to go back to my earlier point where I said that as we go out to do that, we need to make sure we have all of the information to be able to do it in a clear way, as well, so that the technical information and some of the analysis work is part of that consultation process.

Some of it, I think, we'll have. In my own view, it may be that some of that may have to happen a bit concurrently, as you consider some of the options and get information added into that. But I think that given the timelines and things, we'll need to be in that engagement process in the way that is felt best to do that as quickly as we can.

We're certainly hearing from industry and others that the timelines outlined in some of the technical analysis are of concern and are real and that we need to make sure that we get those recommendations considered and at least see the potential for it. There's an understanding, I think, very clearly, that even though some of those options will take time to implement once you've determined what to do, you at least need to be able to see where you may be going so that people can make the appropriate plans and appropriate decisions and investments that they may or may not need to make in consideration of those options.

N. Macdonald: We'll just continue along with this theme. This is a problem 11 years or more in the making. There's an urgency to it, but this is nothing that wasn't fairly predictable.

Regardless of whether any constraints on logging rights are lifted, logic tells us that the impacts of the mountain pine beetle attack and a growing supply shortfall in available trees of a commercially desirable quantity and quality near to sawmilling facilities will lead to declines in future logging rights and therefore have an impact on future revenues.

Really it's just a question of when that is going to happen. Can the minister tell us how soon, in the ministry's opinion, we will begin to see logging rates reduced by his ministry in order to bring economic activity more in keeping with the available timber supply in the 12 timber supply areas most hard hit by the beetle infestation?

[1605]

Hon. S. Thomson: Three points, I think, to the members opposite. One is that we've already seen some initial response to this in terms of the decisions of the chief forester in reducing AACs earlier in January, in 2011.

The other part is that a lot of the decisions, obviously, will be dictated by economics. Price will play a big part in this in terms of the options that you may have in being able to continue to harvest the stands that at this point may be uneconomical to harvest, if there was an upturn in the market. Again, I think, as we pointed out in the discussion around the revenue, that we need to take a very conservative approach to that in considering the options.

The third point is, really, what we've just been talking about. We do need to engage, and we do need to undertake this work and look at the options and the policy levers we may be able to utilize as quickly as possible so that the decisions can be made by the chief forester around the AAC and things.

Really, from my perspective, I understand the urgency here in terms of getting that process underway, looking at those options, getting all the analytical work done on those options. We need to do that as quickly as we can.

Given the complexity of this, as the members opposite know, this may be a process where there are initial steps and continued work that has to be done. You can't pre-
[ Page 11302 ]
judge what may come out of it. There may be initial analytical work that has to take place.

Again, we're going to have to put some concentrated time and effort into this as quickly as we can and in the appropriate way.

N. Macdonald: The ministry is involved in reviewing timber supplies in all of the timber supply areas in the province. For obvious reasons, those reviews pertaining to the dozen timber supply areas — people here use the term TSA; that's what we're talking about, timber supply areas — where there has been substantial beetle attack…. That work is crucial.

Can the minister tell us how many of those 12 TSAs have been resurveyed to the present VRI standard? VRI standard, as the minister knows, is vegetation resources inventory standard.

[1610]

Hon. S. Thomson: I'm advised that 68 percent of the timber-harvesting land base is surveyed to the VRI standards. In terms of the specific 12 as mentioned, we'll undertake to get that information directly for you. We don't have it handy quickly, in terms of responding to the question, but we'll make sure we get that information for you.

Also, one other important point to make is that every year we do a complete annual overview survey, overlay survey, over the total timber-harvesting land base. Adjustments are made based on that annual complete overview. We're confident at this point that we have the data that we need, but as part of the ongoing analysis, the options, additional inventory work will clearly need to be part of that.

We will undertake to provide the specific numbers for those percentages for those 12 areas that the member opposite requested.

N. Macdonald: It's not just me that questions the accuracy of the data. I mean, this is something that the Auditor General and forestry professionals, the Forest Practices Board, all have been very, very clear about. My understanding is…. The minister can correct me, once his staff get to him, about the TSAs that have been impacted by the pine beetle epidemic that currently do not have surveying up to the present vegetation resources inventory standard, which is of course the appropriate standard for making decisions about what to do on the land base.

My understanding is the TSAs that do not have the VRI inventory include Merritt, Lillooet, major portions of Williams Lake TSA, significantly the Lakes TSA, the Revelstoke TSA, 100 Mile House TSA, the Kamloops TSA and the western half of the Quesnel TSA.

I'm wondering if the minister would agree that the veracity of revenue estimates may be in doubt when we have no up-to-date inventories to the VRI standards for all of these TSAs — significantly Merritt, Lillooet, Lakes, Revelstoke, 100 Mile House and Kamloops TSAs — and only partially complete inventories in the VRI standards for sizeable portions of the Williams Lake and Quesnel TSAs.

All this backlog of inventories, it bears repeating, involves TSAs where the pine beetle attack was, in many cases, severe.

[1615]

Does the minister agree with that — that it puts into question the revenue estimates that we see here in these documents?

Hon. S. Thomson: Again, I just want to go back to the inventory work that's underway. The VRI approach is a process about enhancing the inventory information we have. In many respects it adds additional elements to the inventory that weren't maybe necessarily there previously under the direct timber inventory.

But in all of these areas, I think, we do have the timber inventory analysis that allows a consideration of the decisions and the options. The VRI work is underway, and there may be additional information that is useful in doing that. That work continues in all of the areas mentioned by the member opposite. There is inventory work underway to enhance the information or to get the additional information that will be helpful in those areas.

But again, I think that the state of inventory in the areas, particularly in consideration of the immediate options…. While we don't have the full VRI analysis or inventory completed, we do have ongoing inventory information that is available and has been part of the timber supply analysis and will help us consider those options.

Again, we will provide the specific information that was requested in terms of the state of the VRI analysis in each of those areas.

N. Macdonald: Just to be clear. The minister has inherited this mess — right? Inventory is something that the Auditor General has been clear about, and I think anybody who is interested can go back and read exactly what was said by the Auditor General. The Forest Practices Board has been clear, and professional foresters have been clear. We are in a place where the minister, presumably, wants accurate information, and the government simply doesn't have it. They simply are not up to date.

[1620]

This is a conscious decision. Back in the 1990s, which this government likes to talk about, the average for inventory was about $20 million, $21 million. This year, in this budget, it's $6 million — in that area, $6 million.

The professional foresters, who are pretty careful about what they say publicly, said it has to be at least $15 million. So let's be clear. The government is in a place where it does not have information to make decisions, and it
[ Page 11303 ]
was a conscious decision not to collect that information. It was a conscious decision, so here we are.

As the minister knows, the annual allowable cut, the AAC, is determined by a management unit — typically timber supply areas and tree farm licences. Specifically, it is determined on Crown or public land outside of provincial and national parklands and also excluding federal and private lands.

Let's deal, just for a moment, with the Lakes TSA. It's an important TSA, as the minister knows, because the mountain pine beetle was extensive in the area, and of course, because of the tragedy in Burns Lake, it is also front and centre for all of us.

Can the minister tell us when the Lakes TSA was surveyed? This is, just to be clear, the survey date. Is the survey to the VRI standards? Here I'm talking about the survey date, not dates for inventory updates — the survey date.

Hon. S. Thomson: Just to confirm, we'll undertake to provide that. I don't have that specific date. Hans will undertake to provide that.

I want to step back again just to reiterate that, based on the work of the chief forester — and the previous work, the indications that the former chief forester provided to us — we're confident that had the inventory information been available in order to inform the discussion around the options in those areas….

We do and I do recognize the importance of the inventory work. That's why this year we've increased the inventory budget by an additional $2 million — adding $2 million to inventory work for this current year — recognizing that as we go forward in the consideration of the options, having confidence in that inventory information is going to be important.

[1625]

N. Macdonald: Confidence in that inventory work — I mean, it's simply not there. It's not just me saying that. That is from any independent voices — the Auditor General, the Forest Practices Board, forestry professionals. I mean, they are all saying this, so there is a crisis there. It makes it difficult for the ministry to make informed decisions because they don't know.

Now, my understanding is that the survey date for the Lakes TSA is 1990. That is the base for going forward — a 1990 survey date. The minister can check on that and see if his staff can confirm that, but of course we are talking about mountain pine beetle–impacted areas, so to go back to 1990 as your base…. Of course, my understanding, and the minister can check with this, is that the Lakes district is not up to a VRI standard.

For Crown land in the Lakes TSA, and this excludes provincial and national parks, can the minister please tell me, or tell the House, how large an area of the TSA was affected by the mountain pine beetle and the volume of pine affected?

Hon. S. Thomson: I just want to go back, again, to the member opposite's point. Again, I appreciate the information in terms of his information when the last…. He talked about the survey being done in the 1990s.

[1630]

I think what we need to recognize here is…. My understanding is that the mountain pine beetle infestation started to hit that area in the late 1990s and into the 2000s. At that point it would not have been an economic or an efficient use of inventory dollars to go back in and undertake that level of survey because the impact was happening. It was continuing to change and move. So that work…. The inventories had been adjusted by the annual overviews, where there are significant disturbances.

Then adjustments are made in the inventory levels. So those inventory levels have been kept up during that process, but to go back in and do a full resurvey would not have been an efficient use of the dollars at that point. In terms of the specific….

As the member opposite knows, pine comprises about 70 percent of the total mature volume in the TSA. It's estimated that in that TSA, about 90 percent of that has been killed by mountain pine beetle.

N. Macdonald: It just seems to me that when something as dramatic as this is happening, that is exactly the time the minister would want to know what's going on and the ministry would want to know what's going on. That is the time when you would invest. But the specific question was: how large an area in hectares of the TSA was affected by the mountain pine beetle and the volume in cubic metres of pine affected?

Hon. S. Thomson: I'm advised that the TSA area is about 600,000 hectares, and 54 million cubic metres of pine has been impacted.

N. Macdonald: As the minister knows, all annual allowable calculations, including that in the Lakes TSA, depend on sound knowledge of the timber-harvesting land base. Can the minister tell the House…? I'll give three questions, just in case it's something the minister needs to get back to us on later or maybe has this available to him.

The first question would be: what is the area of the timber-harvesting land base for the Lakes TSA? Secondly, what is the area of timber affected by the mountain pine beetle within the timber-harvesting land base? Third, what is the volume of pine affected within the timber-harvesting land base?

[1635]

Hon. S. Thomson: We're just trying to get the information. We may not have it all totally available, and we'll
[ Page 11304 ]
certainly undertake to provide it. But just in terms of the timber-harvesting land base, 524,000 hectares. The total volume — I think that's the information we provided earlier: 54 million cubic metres. In terms of the total mountain pine beetle–impacted area — I think that was your middle question, if I've got it correct — that specific information we'll have to provide for you.

My understanding of the area we've got — the total area is 1.1 million hectares. Knowing that region and things, I think it's fair to say it's all impacted. You know, pine is spread throughout the region. It's all impacted, to varying degrees and percentages in some areas, but in terms of trying to break it down into a specific mountain pine beetle–impacted area, we'll do some additional analysis or work and see if we can provide that more specific answer to that question.

N. Macdonald: Just one more question — or perhaps it's closer to an assertion, almost — and then I'll turn it over to the member for Cariboo North for a couple of questions on this.

I do understand that the minister may need to get back to the House with answers to some of these questions, but I'd just like to suggest that the inability to arrive at answers, not only to questions as they apply to the Lakes TSA but to all TSAs affected by the mountain pine beetle raises significant concerns about the projected revenue figures that are here before us.

Would the minister not agree that if staff is unable to return in a timely manner with answers to such questions, it casts a further doubt on the veracity of the ministry's revenue projections?

Hon. S. Thomson: The short answer — no. In terms of providing a timely response…. We'll provide a timely response. The information is there. We just don't have it handy. I think, in terms of having all the reports and information here today, as I said earlier in my opening comments, we're sort of advanced in terms of the timing. And having all the reports and staff directly available would do that.

[1640]

But again, I disagree with the assertion. We'll certainly provide you the information, and we'll do it in a timely manner because the information is available.

The Chair: I will remind members that in this place talking about terminological inexactitudes is against the rules.

B. Simpson: I am now confounded. I'm not quite sure if that is an exact term or not, but certainly "confounded" fits. So I will try to be terminologically exact.

In the June 2011 B.C. Forest Professional Magazine the chief forester, now retired, stated: "Initial projections indicated that 80 percent of pine within the timber-harvesting land base, or 1.35 billion cubic metres, would ultimately be killed when the infestation was over. This has been revised to 67 percent, or 900 million cubic metres, of pine mortality, about 175 million cubic metres less than originally projected."

That same chief forester, at the Western Silviculture Contractors meeting, was quoted in the Kamloops Daily News as saying that it is good news — and actually took the 63 percent down, I think, to just below 61 percent or whatever.

Can the minister confirm that that is the government's understanding — that that 80 percent mortality that was projected wasn't there, that there is good news, that there is more timber available because there was less mortality?

Hon. S. Thomson: I can confirm those numbers. The current analysis is a projected total at 58 percent and continuing to be added to slightly. So the pine units total — 60, 61 percent, as the member opposite indicated.

B. Simpson: So communities that are worried about this…. It's all a wash. We've got an attempt by the government to figure out how to lift the cut while annual allowable cuts in the mountain pine beetle zones are being brought down. We have this good news from the chief forester. The Minister of Jobs was also out there referencing this.

Yet — and it gets to the heart of the issue — the document, the provincial-level projection of current mountain pine beetle outbreak, has an explicit disclaimer in the document that the modelling cannot be trusted. It says in it that overestimation, underestimation of the amount of red attack will affect the cumulative percentages of pine volume killed, both provincially and within certain management units.

It gives an example. The B.C. mountain pine beetle modelling currently estimates that the Prince George forest district "has lost approximately 63 percent of its mature merchantable pines to the mountain pine beetle. However, ministry staff in the Prince George district estimated the current losses to be between 85 and 90 percent."

So you have the chief forester out saying that there is good news here, that less is dead, and you have the report that actually gives the chief forester the right to say that — that has a very heavy disclaimer. In bold italics it says: "It is for this reason that I strongly recommend not relying on this model for accurate spatial or management unit–level estimates of pine loss due to the mountain pine beetle. Detailed surveys should be conducted for accurate estimates of cumulative pine loss within those management units nearing the end of infestation."

The final bullet in the report reiterates that — that detailed surveys are required.

My question to the minister is this: before the chief forester and ministers of the Crown went out and said, "Don't worry. Be happy. There is only 50-odd percent
[ Page 11305 ]
dead, not 80," did they actually do those ground surveys to verify that the model was correct and that there wasn't more dead on the ground?

[1645]

Hon. S. Thomson: Just having a discussion here on the modelling. I think, as the member opposite knows, this is a model that has been used for a significant period of time. It continues to be refined as experience is gained with it and as you get additional information into the model.

It is modelling that is projecting the numbers that are indicated. I think those are, as was pointed out, encouraging numbers. But again, it will be important to continue to do the inventory work. I would advise the members opposite that full inventory work is underway in the Lakes, although inventory work has continued to be done.

Kamloops was referenced. Full inventory work is underway in Kamloops. So with the available resources that we have, the detailed inventory work continues — $7.5 million invested in inventory work in this current year. But again, as we consider those options, particularly for this region and these timber supply areas, we'll need to make sure that all of the data, the information work that has gone into the analyses and the technical work is available to all as we engage in assessing the decisions and the options that we may have in terms of mitigating that midterm timber supply impact.

[1650]

B. Simpson: We are well beyond midterm timber supply impact. We are talking about the information that government has available to it to understand what it's doing on the forest land base — period. Mountain pine beetle in the Kootenay area and on the coast — that's what we're talking about.

When the chief forester, in a one-page "Viewpoints" to the professional foresters, does not put in a disclaimer that the model he is referencing says that all of this has to be ground surveyed…. We have a significant gap, an almost 30 percent gap in what the model says is dead and what some foresters on the ground in Prince George in one timber supply area are saying is dead. I think that's unconscionable, and it speaks to the heart of the issue that we've got.

The issue that we've got is that no one has confidence that this government has what it needs to be able to answer even basic questions about what is happening on our land base.

The Forest Practices Board report in November of 2011, before the Auditor General came out, is the report on the results of forestry activities. While the board didn't investigate how the changes have affected the quality of the reporting, this is what the board said: "The current state of reporting gives us cause for concern." Here's the important part. "We do not have confidence that the Forests Ministry can adequately describe the current condition of the managed forest or track changes in its condition into the future."

What is astounding is that the model has been turned into a good-news story when it's not a good-news story. What it is, is a call for more work to be done on all of the land base in the forest. That's really what it is. It says that we have such a difference between what is being reported on the ground and what our model says that we need to get out and survey it.

That model is a mature pine model. It does not take into consideration immature stand impact, which we know in many of these areas is very significant. It does not take into consideration other pests and disease, which we know in growing areas around the province is very significant. It does not take into consideration cumulative implications of fire and other disturbances on the land base, which are increasingly significant.

The model is only looking at what happens if most of the mature pine gets killed off, 60 or 80 years old, depending on the area it is looking at. Yet the government turns this into a good-news story. Now, I really struggle with that.

Everywhere we turn now, Mr. Chair, we have everybody who has anything to say about forestry saying that at the root level this government no longer knows what is happening on the land base.

The BCGEU went around and did community consultations, and the second major outcome of the community consultations…. It says: "A central issue for dialogue participants was the lack of up-to-date forest inventory information." It says: "A number of participants said government is irresponsibly risking one of our most valuable resources, since without a proper inventory, important forest management decisions are being made without good information about the state of our forests."

The Association of B.C. Forest Professionals have not only weighed in on the midterm timber supply, but twice they have indicated to the government that the government's inventory is insufficient to manage our forests.

Now we have a situation where you have such lack of confidence in this government's inventory of our number one public asset that you have the Bulkley-Nechako regional district passing a unanimous resolution to hire their own forestry expertise because they simply do not trust that the government knows what is happening in the area around them.

I know that this minister has inherited this. It's been an ongoing issue. I have raised this question year over year in these very estimates, when it used to be forestry as well.

My question to the minister is this. He was, I believe, advised politically to say that the Auditor General was wrong. That was his public statement. When the Auditor General came forward with his report on the state of inventory and understanding of the land base, the minister
[ Page 11306 ]
said the Auditor General was wrong.

I asked the minister if he would reconsider that public statement and commit that what we need to see going forward is a comprehensive workplan — not a couple of dollars thrown at inventory but a comprehensive workplan — that takes the Auditor General's workplan, the ABCFP's report and the Forest Practices Board report and turns it into a workplan.

[1655]

Put the workplan in front of the House, fully costed, and let's address the issue of what is happening on our land base.

Hon. S. Thomson: I just want to step back again in discussions. This situation…. The impact of the mountain pine beetle has been massive, as the members will know.

[1700]

We have worked hard under difficult fiscal challenges in order to utilize the resources that we've had most efficiently and strategically in continuing the inventory work.

We're confident that we have the data and the information available to be able to inform the public process and the public discussion on the options here. I think the important point to recognize is that that will need to be done in a transparent manner as we go forward in looking at the options. We've got additional resources for inventory work. We're committed to initiating the specific inventory work. We mentioned the Lakes. Kamloops inventory work will be underway, and in Prince George.

In terms of the overall percentage of impact, I think it's important to recognize that when you're talking about an average — it's 60 percent — there will be specific areas that would fall out of that average. So there may be particular spots where those numbers, as the member opposite referenced, would be different than what the overall average is.

But again, under the fiscal challenges that we have faced across in ensuring that we can meet those challenges, I'm confident in discussions with staff that we have the inventory data that will be able to inform the discussion and inform the engagement process and the decisions that will need to be made.

B. Simpson: Again, I've appreciated the conversations I've had ongoing with the minister, and I know that the minister understands fully the implications of a lot of this. I guess I would feed off of what the minister indicated — that he is confident. That's his public statement, but the critical factor is that the public is not confident.

The Association of B.C. Forest Professionalsis not confident. The Forest Practices Board is not confident. The good people that are elected to serve the regional district of the Bulkley Valley area are not confident, not to the point where they're going to put their own taxpayers' money on the table to buy their own independent forest professional advice.

There's a disconnect between the public's perception and the government's confidence that I think is going to have to be addressed. I think it's going to hit us square in the face with whatever consultation process we're going to do in these timber supply areas. This all stems from 2003.

I'm not sure if the minister has got a briefing on that, but it stems from the Forest Act in 2003, when inventory was taken out, tried to pass it on to licensees. We had defined forest area management zones. We had all kinds of things. It moved around different ministries, and it has never really been recaptured, owned and directed since then. And now we're beginning to eat that.

As an example and the final question, and then I'll give the minister a break from me…. The Our Natural Advantage forest sector document that was just released recently is a classic example. It says in here that one of the things that government is going to do is to plant faster-growing trees. Using select seed and "ensuring planting success and controlling competing vegetation will increase overall timber volume and decrease the time for trees to reach an appropriate size for harvest."

Yet I'm told on the ground by foresters that in the main mountain pine beetle zone what we have is natural regeneration as the way to go. The natural regenerating sites are the ones that are coming back healthier. Select tree and intensive silviculture — we're getting diseased plantations and, in many cases, root weevil and various other things that cause those trees to fall over.

Here's a fundamental disconnect with the mountain pine beetle between what people are telling me on the ground, who get dirt under their fingernails, and what the government's propaganda is about how they're going to resolve this issue. It's got to be reconciled.

My final question to the minister is this, and it's embedded in this quote. We are still defoliating in areas where we have significantly large openings, huge openings where we have hydrological problems and soil retention problems. We have all kinds of issues. We have fire issues, with the amount of waste.

[1705]

Everybody is rightly saying: "Why the heck are we spraying defoliators out there when those hardwoods can come back and help us with a lot of those forest management issues?" It gets to the heart of the issue on this. Not only do we not have timber inventory, but when are we actually going to start getting to the forest as a whole forest? That's the visionary change that has to occur.

My question to the minister is this. Is work being done within the Ministry of Forests, as we get into the waning years of the timber industry, to begin to get the kind of inventory and understanding of forest ecosystems where we're going to manage our forests more holistically through a fibre lens or through a forest ecology lens, as we move away from this timber lens that seems to be waning now?
[ Page 11307 ]

Hon. S. Thomson: To respond, firstly, just to say that the timber side of it is always going to be critically important as we look towards the future.

The kind of work, and the kind of suggestions that the member opposite is making, is work that is underway. That's partly what VRI does in terms of bringing in those additional values. It's partly what…. Bringing this ministry together, across the natural resource sector and the landscape, leads to that.

I'm certainly interested in continuing that work. There are projects and work underway. I think the points that are made there are ones that we need to continue to work on and continue to advance.

We've changed stocking standards, for example, and VRI work, as I mentioned. Part of it is finding the capacity and the work, and the challenge is to be able to do that in this critical period where we're trying to address all the options around the mountain pine beetle impact, to work through that area.

Again, these are the kinds of suggestions and the kinds of discussions that we need to continue to have as we work. I expect that those kinds of discussions will be part of the approach when we engage the organizations and the public, particularly through that region, in an open, transparent process around addressing those options in that region. I expect many of those discussions that we have coming out of there will be ones that lead to the broader discussion that you may look at more broadly across the total industry. The priority, and the initial discussion around that, will be led by addressing the situation through that heavily impacted region.

[1710]

N. Macdonald: The minister has talked again about the need to engage with people who are going to be directly impacted by the falldown in the Cariboo. Earlier on in the estimates the minister has talked about the opposition's participation. But I would just say that in the discussion on revenue, we look out into years around an election, and we see an awfully optimistic revenue picture that's presented. And the minister really has not provided any substantive argument for why that would be.

It certainly appears like it's sort of a convenient guess to a government that has a political agenda to say it has balanced the budget — right? That's what it looks like. Now, on top of that, the member for Cariboo North talked about the recommendations that were made to staff around the likelihood that we're talking about pine beetle mortality of, I think, 85 percent, and that put all sorts of caveats in what a minister should publicly say and what a chief forester should say. Yet the government, for political reasons, chooses this very optimistic scenario.

As you go into discussions with communities, there's surely an onus on government to lay out the realities that are there. Certainly, there's an onus in dealing with the opposition, if we're going to be engaged in a constructive way, to have not a rosy-eyed view of what's going on but real, concrete information so that we can move forward.

This doesn't really fit with the theme I'm going to go on with later on, but I'll just draw attention to something that was fairly recent, which, again, is a bit troubling. It was the interview with Daybreak South that the minister did a little while ago. He reused a number that was first used by the hon. member for Prince George–Mackenzie, who's a former Forests Minister. And when he was, he publicly reported 240,000 hectares of NSR attributable to wildfire and mountain pine beetle infestation. That was on June 12, 2010, in the Times Colonist.

Since that time the pine beetle has likely killed over one million more hectares of pine, and wildfire has burned additional forest cover. But the minister is essentially using the same figure that was likely inaccurate back when it was first used in that Times Colonist article. I mean, the suggestion that there has been no additional NSR over that period, even if the original number was accurate, is just preposterous.

Wouldn't it be useful for this debate, if it's to be a meaningful debate, that we not just put out best-case scenarios and that we start to put out accurate information? I mean, the Forest Practices Board said it could be between one million and two million hectares. The fact that they don't know accurately and the fact that the minister is using numbers that just seem preposterous…. Doesn't that sort of make the point and emphasize the point that members on this side have been making about the inventory being completely outdated? Doesn't that just make the point?

Two things. Shouldn't we be trying to get accurate information? And isn't it clear that we simply do not have accurate information? That's a huge problem as we try to grapple with the pine beetle infestation and its impacts.

[1715]

Hon. S. Thomson: Just to reaffirm, again, because the member opposite continues to question, at least for the fiscal plan that's there, the revenue projections…. I again want to state that the financial predictions are prudent, based on staff work and analysis and work between our Forests revenues branch and the Ministry of Finance.

The member opposite talks about the need to be transparent in the process and the information and the data. What I've said clearly in response here is that I agree with that. As we go into the process, the information, the data, the inventory work will all need to be part of that process. When you look at, in terms of the transparency, given the example in relation to the modelling…. I think this is one where we have been transparent. We've indicated the numbers. The model is there. It continues to be refined, but some of the uncertainties are indicated there in those modelling projections.

We need to make sure that as we go through the process and look at all the options with the public and the stakeholder organizations in that process, we will need to
[ Page 11308 ]
make sure that we carefully look at all the data and analyze it. We also need to make sure that we take the input and direction of those stakeholders as we go through the process.

I'm confident at this point in the data and the information we have from staff, the work that has been done. I'm confident that we will undertake this process in a transparent manner as part of the engagement process that's to come, because clearly, people have come forward in terms of the specific interests. We need to make sure as we look at those options that the data, the analytical work that has been done, is there and that people agree as they're making the decisions around those options that they're making it based on fully informed work.

We do know that we need additional inventory work as part of that. We've put additional resources into inventory this year and targeted specific areas — Lakes, Kamloops, Prince George — for that inventory work. That work will continue.

N. Macdonald: Let's just look at some of the reports. We had the previous member talk about the work done by the B.C. Government Employees Union. Their consultation process was an excellent one. I think it concluded almost a year ago. It was part of last year's estimates.

I want to go and just talk about some of the more current work that's been done. Let's reflect on the ministry's response to recommendation No. 4 in the recent Auditor General's Audit of the Ministry of Forests, Lands and Natural Resource Operations' Management of Timber. In that audit, the Auditor General says that a key responsibility of the ministry is to "ensure that its information systems reflect actual forest conditions in priority management areas."

[1720]

In November 2009 the Forest Practices Board, in a special investigation report on the Forests Ministry's compliance with legislation and reporting of activities, stated: "We do not have confidence that the Forests Ministry can adequately describe the current condition of the managed forest or track changes in its condition into the future."

Again, in the recently released — and this was February 2012 it was released — update to its 2006 Assessment of the Status of Forest Inventories, the Association of B.C. Forest Professionals noted: "Approximately 41.9 percent of the province is represented by inventories that were completed prior to 1990 and 29.9 percent prior to 1980."

In response to recommendation No. 4 of the Auditor General's report, the ministry says that it is "committed to ensuring that the accuracy of forest inventory and yield projection is adequate for strategic decision-making."

In the absence of completed reinventory to the VRI standard for the Lakes TSA, can the minister first tell the House how, in his opinion, the inventory of the Lakes timber supply area is adequate?

[1725]

Hon. S. Thomson: We're going back over a little bit of some of the same ground. But just to acknowledge, the base inventory, as was pointed out…. Even though we didn't have the current information, I don't dispute the timing in terms of the base inventory in the Lakes area that the member opposite mentioned. So it is starting from an older base.

Just to be clear, this is an area that was undergoing significant impact and change, and to have gone back in and spent a lot of resources in terms of a full reinventory at that time would not have been an effective use of those dollars. I think we would be standing here in a position of having the members opposite say: "Why did you do that when you knew things were changing so drastically and quickly through the area?"

There's an annual overview that is flown. That's updated annually. We have gone into the area and done ground surveying in 2006 and 2007, I'm advised. The harvest information is put into the update. We're confident that we have the adequate level of information, as I said, in order to engage in the process and to make informed decisions. As indicated, we're indicating that we're going to continue to put additional resources into the area for specific inventory work.

N. Macdonald: Just to restate, I think it likely makes more sense when you're going through such dramatic change to invest to get a better idea of what's happening. It seems to me that that's sensible. Certainly, if we go back, the minister has talked about the amount of money that is currently being spent — and just to remind that it's well below what the professional foresters have said was a minimum.

The figure that they used is $15 million. If you go back to the '90s, in 1990 dollars it was on average around $20 million, and we hover around the $6 million mark. It's no wonder, really, that we don't have accurate information to make really important decisions. But it's beyond just timber data that seems to be a problem. There's also the question of the adequacy of data as it applies to the broad range of other critically important resource management issues that the ministry is tasked with addressing.

[J. Thornthwaite in the chair.]

For example, again using the Lakes TSA, can the minister tell us…? I'll just give three questions, and the minister can respond to those. The first is: what is the wildlife habitat area that has been affected by the beetle? Secondly, what fisheries riparian habitat has been so affected in the Lakes TSA? Third, what are the key hydrological issues in the Lakes TSA?

[1730]

Hon. S. Thomson: So just going into some of the work on the Lakes timber supply area…. As the member opposite knows, much of the…. We started out with total timber supply area. Then a number of areas were taken out of that. The riparian area, protected areas, wildlife mineral zones, old-growth management areas, sites with low productivity were all taken out.

I'm not quite sure what the member opposite is asking. In terms of those areas that are outside the timber supply area that are in those riparian and wildlife zones and protected area zones, whether those have been impacted by the mountain pine beetle impact to the degree that there is pine in those areas, they certainly have been.

Part of the work that is underway, as we talked about earlier, in terms of being able to fully assess the options…. The modelling work that is underway in terms of any potential adjustments to those constraints, as was pointed out in earlier comments here, in terms of relaxing constraints or any of those kinds of options in that area — that work is underway.

But if the member opposite was looking for: what's the specific area of wildlife habitat impacted by the mountain pine beetle…? If you take the total of wildlife area that was set aside, you can assume that some of that was impacted. Whether we have the specific numbers, that's some additional information that we have to work on to be able to provide. It goes to the broader point overall, I guess, that when you're dealing with the forest land base, all of it in a sense has….

[1735]

Even within the timber-harvesting land base, it had some wildlife values and contribution to those, but those were areas that were in the timber land base, obviously impacted significantly by the mountain pine beetle.

I'm not quite sure exactly what the genesis of the question is or, in terms of being able to want to know exactly within the wildlife habitat area, how much it has been impacted. That modelling work is underway in terms of being able to address the options going forward.

N. Macdonald: The minister talked about the VRI standard as being one that dealt not only with timber but that also looked at other values. As the minister would know, decisions that are made by the minister…. This is an area where the government has said that decisions need to be made.

Pretty clearly, part of the minister's responsibility is not only the timber supply, but it extends to wildlife habitat, to fisheries, to riparian habitat, to hydrology in general. All of those things are going to be impacted by any decision, and it only makes sense that there would be good, accurate data to make informed decisions.

I presume that there is not the VRI standard, and therefore, I guess, it is just further confirmation that the government's decision not to properly collect data over the last decade puts the government in a position where there are important decisions to be made that have impact for wildlife, for our fisheries and for hydrology in general. Those decisions, if they are made without adequate data, will be made blind, basically.

That's the genesis of the question. We don't seem to know what's going on in the land base. Here, if you look at the Lakes TSA, that seems to be confirmed.

I'll move to an additional question, which is that you have the current AAC of the Lakes TSA, and it is about two million cubic metres, effective July 2011. Will the minister confirm, then, that the chief forester determined this AAC based on an inventory survey that was done in 1990 and updated for cutblocks and large disturbances for the timber supply review?

Hon. S. Thomson: In the chief forester making his determination, he makes that determination based on the best available information. That's a process with discussion papers, with technical review.

[1740]

The AAC was reduced from 3.2 million down to the two million, based on that information. The chief forester was confident in his decision, based on the information that he had that was open for public review and discussion and technical input.

While I'm up, Madam Chair, I wonder if I can get a two-minute recess just to…

The Chair: …regroup?

Hon. S. Thomson: No, it's not regrouping.

The Chair: Sure. We'll have a two-minute recess.

The committee recessed from 5:41 p.m. to 5:45 p.m.

[J. Thornthwaite in the chair.]

The Chair: Were we in the middle of a response here, Minister? Were you finished with your response?

Interjection.

The Chair: All right. Why don't we let the member for Columbia River–Revelstoke continue on.

N. Macdonald: Well, we'll go back to see if we had a response. Now you've put me on the spot. I'm the one who's supposed to remember, and I do apologize if it was a good answer and I forgot. We'll move along, and like I say, if we've passed it, we have staff that will remind us and get that answer to us.

The next area that we'll go to is that I'd just like to obtain confirmation from the minister of my understanding of the adequacy of the inventory information used to set
[ Page 11310 ]
the AAC at four million cubic metres, effective January 2011, for the Quesnel TSA. I ask this because one must have some confidence in the inventory data in order, as the estimates before us suggest, to provide revenue increases or revenue decline.

Would the minister please confirm the following points about the forest inventory for the Quesnel TSA? I think, as well, that the minister was going to give me an answer from the previous question. That's my memory, so I'll just see if staff can confirm that or not or if there's a different case. In any case, I'll just give you a series of questions, and the minister can answer these.

This is on the Quesnel TSA, related to the forest inventory. The first question is: in the spring of 2010 the ministry reinventoried the eastern half of the Quesnel TSA to the vegetation resources inventory standard, the VRI standard. That's the term we've been using.

Secondly, for that VRI upgrade of the eastern half of the Quesnel TSA, the ministry used aerial photographs dated 2005 and 2006. Given that 90 percent of an inventory is photo-interpreted, these dates of photography effectively made the upgrade to VRI standards some four to five years out of date before the upgrade was started.

The third point or question is that for the western half of the Quesnel TSA, the inventory was not reinventoried to VRI standards and the date of survey remains 15 or more years old.

[1750]

Hon. S. Thomson: In the event that I didn't answer the previous question, which we've got some question…. I thought I had before I asked for the recess, but I'm not sure 100 percent.

I think we were talking about the Lakes TSA and whether the impacts of the mountain pine beetle to wildlife management areas and other areas were taken into account. I think if you look through the technical working report in the Lakes timber supply area, it includes all of the references to the non-timber values and things that were a significant part of the timber supply analysis work that was done in that area.

I think that's why we're saying the further work on the modelling to assess those impacts as we consider the options is being done and will need to be an important part of the consideration of any of the options in the public engagement process as we continue the process of the work in that area. Hopefully, that addresses the question. If in review it doesn't, certainly direct the question again.

For the Quesnel area, as the member pointed out with respect to the eastern half of the inventory work that was done, you referenced the 2005-2006 photos. That's correct. That was involved, and that was the process when we went from a licensee-led process to a ministry-led process. That was utilized in terms of getting the inventory work there. But again, to point out that there is the annual overview, annual process, annual adjustments to that base.

On the western side it was not done. It hasn't been done at this point to the VRI standard. We've used a process on the west called LVI, which is a satellite process, to be able to do that. We view that as a mid-step to doing the full VRI work, but again, it provides a very adequate, high level of information to be able to make those decisions. I think when you're looking at the west side that has a higher percentage of other species, it was an appropriate technology for that western side of the Quesnel TSA.

[1755]

N. Macdonald: That was the Quesnel TSA. Just coming back, I think the other question that was there was on the Lakes TSA. I had said that the inventory survey was done in 1990 and then updated for cutblocks and large…. I think I basically asked the minister to confirm that. Is that accurate? So it was the 1990 survey, updated for cutblocks and large disturbances for the timber supply review. Is that an accurate statement?

Hon. S. Thomson: Just to advise…. I would like the opportunity to provide confirmation on this, and we'll check this. But looking at the rationale from the chief forester's rationale, I'm advised that VRI analysis was done in the Lakes. There was ground sampling in 2006-2007 to update that information.

The member's assertion that it was simply done from a base with a cutblock and large disturbances added to it is incorrect. What I will do is undertake to ensure that I provide the comprehensive response or the accurate response to his question, because I want to make sure I've got all the information correct rather than having to correct it further.

[1800]

N. Macdonald: I appreciate that. So just to be clear, is the whole area to a VRI standard? Sometimes there's nuance to the language, and one would be just talking about a small portion or something like that. I think the minister understands the question that I have. Is the whole area up to that standard?

Just completely off track, but I have been curious for a while. The chief forester's position is vacant. Does the minister have a timeline for when there will be an announcement about a new chief forester? Or am I incorrect? My understanding was that the chief forester had stepped away from his duties. Maybe the minister could lay out what exactly is going on there and if there is a timeline for a new chief forester.

Hon. S. Thomson: The member opposite is correct.
[ Page 11311 ]
The former chief forester retired. There is an acting chief forester in place who is very experienced. We're in a recruitment process currently to confirm or to put back in place a chief forester. We're undertaking to do that as quickly as we can through that recruitment process. In the meantime, I have lots of confidence in the acting chief forester.

N. Macdonald: I would like to turn now to a question about protected revenues related to water usage. When the present ministry was constituted as the Ministry of Forests, Lands and Natural Resource Operations, the ministry assumed responsibility for reviewing applications for water licences and temporary water permits, with the exception of the provincial Oil and Gas Commission, which has authority for issuing temporary rights of access to provincial water resources to energy companies.

All water applications are now reviewed and approved by this ministry. Could the minister please provide us with an estimate of the revenues collected from entities' assigned rights of access to large volumes of Crown water resources?

Hon. S. Thomson: Again, in the assumptions with respect to the fiscal plan revenue, water rental and licences projections, the estimate for 2012-13, $411 million; for fiscal plan '13-14, $427 million; and for fiscal plan '14-15, $440 million.

N. Macdonald: Would the minister please tell us whether his ministry has considered, in preparing the estimates before us, whether there are likely to be increased applications by industries to access and use significant volumes of the province's publicly owned water resources in various industrial applications?

I'll just give an example. The ministry last year approved two long-term water licences allowing two natural gas companies to pull up to 10,000 cubic metres of water per day out of the Williston reservoir. Could the minister tell us what such increases may mean in terms of increased revenues in the years ahead?

[1805]

Hon. S. Thomson: We're looking to access the specific information. We don't have it readily available. We can undertake one of two things — to provide it in written form to the member opposite in response to his question or undertake to answer that at a subsequent point in the estimates when we resume again tomorrow, whichever the member opposite would like. But we would need a bit of time just to pull that specific information together. We don't have it handy with us here currently.

N. Macdonald: Okay, just to thank the minister for that. That's fine. It's possible that we'll be in the same place with this question, but could the minister please tell the committee what the current fees are for water withdrawals under water licences that it approves to oil and gas companies, just as an example?

Hon. S. Thomson: Yes, we're in the same current place in response to that question. We'll take that under direction to provide the response either in written response to the question or at a subsequent point in the estimates process.

N. Macdonald: That will be useful. This is anecdotal, so this is what I'd be looking for confirmation from. It's my understanding from some people that at present the ministry collects only a nominal amount of funds from companies that withdraw significant volumes of water from public waterways — for example, the money collected from oil and gas companies withdrawing 2,500 cubic metres of water from a provincial lake, river or stream. Just to give the public a sense of that, that's about enough water to fill one Olympic swimming pool. The amount I saw on line was that it was in the order of $2.50.

Can the minister tell us whether his government is considering…? Is that an accurate figure? Is the minister happy with that fee as a means of encouraging best industry practices and increased water conservation? Or is it something that the ministry is looking at? Just to give an example, different jurisdictions manage this differently. The province of Quebec, with a corresponding amount of water, 2,500 cubic metres — the payment they look for is in the vicinity of $175.

[1810]

Hon. S. Thomson: Again, without our water staff here currently, I'll undertake to provide the response to that specific question, in response to the previous two questions that the member opposite posed.

N. Macdonald: Could the minister, then, also share with us whether the current estimates reflect any budgetary increases for what might broadly be described as integrated resource management and where such increases are to be found?

I ask just because with the ministry assuming responsibility for critical decisions around water allocations as well as being responsible for land-based decisions that can negatively as well as positively impact hydrological cycles, the current estimates should reflect increased funding to ensure heightened protection of provincial water and forestry resources. What I don't see is where it is reflected in the current estimates that are before us.

[1815]

Hon. S. Thomson: In terms of response, the estimates level…. The overall management and integration of resources within the ministries is primarily in the resource stewardship branch, where you will see the resources. That's dealing with the realignment of staff responsibilities to focus on a more integrated basis across the ministries in dealing with the management of the land base.

When you look at the overall, that was the genesis and the focus of this overall ministry — to realign the work that's being done, for example, in additional wildlife inventory work, additional dam safety work, additional analysis, all integrated within the overall resource stewardship branch.

Noting the hour, I move that the committee rise and report progress and ask leave to sit again.

Motion approved.

The committee rose at 6:16 p.m.

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