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)

Tuesday, May 8, 2012

Morning Sitting

Volume 37, Number 3

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

TUESDAY, MAY 8, 2012

The House met at 10:02 a.m.

[Mr. Speaker in the chair.]

Prayers.

Orders of the Day

Hon. D. McRae: I move continued debate of second reading of Bill 43, intituled FNCIDA Implementation Act, followed by second reading of Bill 48, Bill 44, Bill 52, Bill 51. In Committee A it will be estimates of the Ministry of Finance, followed by the Ministry of Justice and Attorney General.

Second Reading of Bills

BILL 43 — FNCIDA
IMPLEMENTATION ACT

Hon. M. Polak: It is my great honour to rise in this House today to move second reading of Bill 43, the First Nations Commercial and Industrial Development Act Implementation Act. Through the FNCIDA Implementation Act we have a historic opportunity to bring consistency to the rules that apply to developments that take place on federal Indian reserve land. Development is happening throughout British Columbia in rural areas, in urban areas, and some of it is happening on First Nations reserve land.

[D. Black in the chair.]

Currently development on reserve land faces its own distinct set of challenges. Off-reserve commercial and industrial activities are governed by comprehensive provincial statutes and regulations. However, Indian reserve land is legally owned by the federal government, which holds it in trust for First Nations. For that reason, provincial and local government land use regulations and zoning generally do not apply on reserves.

At this moment First Nations on reserve can undertake development without being subject to the same rigorous provincial regulations that apply to off-reserve developments. The local zoning doesn't apply; the provincial regulations don't apply. This situation has created challenges.

[1005]

For First Nations who are eager to move forward with development projects, there is reduced investor confidence because of the regulatory gap. Over the years we have also seen surrounding local communities express concern about on-reserve development, again because of the regulatory gap, because the same standards don't apply.

Seven years ago the federal government took the first step to begin to address that situation. In 2005 Canada passed the First Nations Commercial and Industrial Development Act, FNCIDA. The federal FNCIDA act takes provincial regulations and statutes and incorporates them into federal regulation through which those statutes and regulations are then put into effect on reserve land.

B.C.'s legislation, the FNCIDA Implementation Act, empowers the province to sign agreements under the federal FNCIDA framework. Through those agreements, individual First Nations accept B.C. government statutes and regulations such as environmental laws on commercial and industrial projects developed within reserves.

B.C.'s proposed FNCIDA Implementation Act also creates the authority for provincial officials and bodies, such as the Land Title and Survey Authority, to enforce the regulations on reserve lands. It will allow provincial officials to monitor and enforce provincial standards for specific projects. These might include laws such as the Environmental Management Act, the Integrated Pest Management Act, the Commercial Tenancy Act, the Residential Tenancy Act, the Homeowner Protection Act, the Family Law Act and the Land Title Act.

They may include regulations such as the contaminated sites regulation, the drinking water protection regulation, the hazardous waste regulation and the municipal wastewater regulation. Both federal and provincial legislation are necessary to allow the more rigorous provincial rules to apply on reserve land for the first time.

B.C.'s FNCIDA Implementation Act is a tool that will help First Nations to develop their economies on reserve and give the provincial government a role in developments on reserve that it wouldn't otherwise have. The act will benefit First Nations and their neighbours by helping them to attract major capital investment to their projects and to British Columbia. For large developments, First Nations need to attract capital, and applying provincial statutes and regulations to projects on reserve land will increase investor confidence.

The act will immediately support two major projects. The first project, on Squamish Nation reserve lands, is a proposed commercial-residential development. The second project is a proposed liquefied natural gas export facility on Haisla Nation reserve lands. In addition to those two specific projects, the act could in future be applied to other on-reserve projects with other First Nations if they approach Canada and the province to work with them on this basis.

To give the context of how this provincial legislation supports the federal FNCIDA act, I'd like to give some background on how the Squamish Nation's project fits into this picture. Four years ago, at the request of the federal government and the Squamish Nation, the B.C. government began to work on applying the federal FNCIDA framework to a development that the Squamish wanted
[ Page 11628 ]
to pursue on their reserve land.

Then in 2010 the federal government amended FNCIDA to specifically accommodate the Squamish First Nation's development proposals, including the creation of a separate FNCIDA land title registry. The federal government's FNCIDA legislation set the stage for the B.C. government to reach an agreement with the Squamish Nation and Canada, and with the Haisla Nation and Canada, that will allow the more rigorous provincial rules to apply.

The provincial act authorizes B.C. to enter into those agreements with Canada and the two First Nations, as well as a separate agreement with Canada, Squamish, and the Land Title and Survey Authority.

In addition to the certainty that comes through applying provincial statutes and regulations on reserve land, there are other benefits. Squamish and other First Nations who negotiate FNCIDA agreements must either negotiate service agreements with local governments to pay their fair share of water, sewer, fire protection, police service and other municipal and regional government services delivered to the Indian reserves or make alternate arrangements satisfactory to the Minister of Aboriginal Relations and Reconciliation.

In the case of the Squamish Nation, they have also agreed to make a financial contribution to help defray regional transportation and school costs. It is important to note that, with or without FNCIDA, the Squamish Nation or any other First Nation can proceed with developments on reserve. However, it is also clear that First Nations such as the Squamish want to maintain cordial and respectful relationships with their neighbours, and we believe that adjoining municipalities feel the same way.

[1010]

Another important aspect of our work with FNCIDA is the creation of a modern land title system administered by the Land Title and Survey Authority on behalf of the federal government, which will allow leases on Squamish land to be registered. In this context, the Squamish Nation has agreed to seek to negotiate service agreements with municipalities, which pay for the cost of local services delivered to the Indian reserve.

For the Haisla First Nation and the LNG facility, FNCIDA creates investor and operational certainty by ensuring provincial standards and regulations will be applied on Haisla land — a commitment made in the province's natural gas strategy. A key benefit is that the agreement establishes the B.C. Oil and Gas Commission as the primary provincial regulator for the LNG plant.

The Haisla Nation is confident in the standards and regulations that the B.C. Oil and Gas Commission will apply. The Haisla want to have a level playing field, with the LNG facility on Haisla reserve land subject to the same standards that would apply off reserve.

These are the first two examples of how FNCIDA works to close the regulatory gaps that have existed around development on reserve, that have created challenges for First Nations and concerns for neighbouring communities. Through the foresight of the government of Canada, in cooperation with the province of British Columbia, developments on reserve will, for the first time, contribute to transportation and school capital costs, and will adhere to provincial laws with respect to construction and protecting the environment within the security of a modern land title registry system.

These are tangible advances in our relations with First Nations in British Columbia. Some have asked how FNCIDA relates to the work we are doing to reach treaties with First Nations in B.C. The work we are doing through FNCIDA, and other non-treaty agreements with First Nations, is designed to bring benefits more quickly to communities whether or not they are part of B.C.'s treaty process.

For First Nations that want enhanced self-governance powers and settlement lands and financial benefits, a treaty is still the ultimate solution for them. However, non-treaty agreements — including FNCIDA agreements — build the elements that can, one day, help to construct a treaty. They can help to build the momentum that moves the treaty process along. Treaty agreements and non-treaty agreements complement one another. They are part of a larger picture, bringing forward a brighter future for First Nation communities across British Columbia and giving First Nations the tools to build a meaningful place in the mainstream economy.

Neither the federal FNCIDA act nor the provincial FNCIDA Implementation Act can solve every issue surrounding what remains a deeply flawed system — the Indian reserves of British Columbia, imposed upon First Nations many decades ago. But this act is a significant step forward in terms of how First Nations interact with local communities and local governments and how they become part of the mainstream economy through their developments on reserve.

It will increase certainty for investors. It will help First Nations build more amicable and workable relationships with surrounding communities. It will help to create a level playing field, where the rigorous provincial standards that apply to off-reserve development can now apply to development on reserve land. This is a significant and positive step forward for First Nations, for their neighbours and for all British Columbians.

S. Fraser: I'll take my part in the second reading debate of Bill 43, the FNCIDA Implementation Act. I hate acronyms, so for those that are watching, that's the Commercial and Industrial Development Act. That is the federal act that the minister rightly points out. What we're dealing with, Bill 43, is the implementation of that at the provincial level.

I must say that this was a bit of a surprise. We got notice of this at the end of last week in the flurry of bills
[ Page 11629 ]
that have been coming forward in the last weeks of this session. So it was helpful, I must say, that the minister allowed for a briefing from her staff yesterday. I very much appreciated that.

I was surprised to learn that this has been in the works for four years in the province because it has not come up in any discussions before. So I was trying to be as quick a study as I could on the issues here. A fairly innocuous act, as far as controversy goes. I think that everyone can agree that harmonizing provincial regulations and laws, and even local regulations and statutes, on reserve is a step in the right direction.

[1015]

The minister did touch on that the reserve system is a problem in the country anyway. I think it's arguable that the Indian Act itself is a race-based piece of legislation — I think the only race-based piece of legislation left in the world. It's in Canada, and that's the basis for the reserve system.

So in my optimistic self, I would like to see us move beyond the Indian Act and the reserve system at some point in time. I certainly recognize that this is a small step to try to deal with an act, the Indian Act, and a reserve system that is deeply flawed, in my opinion.

With that in mind, the Commercial and Industrial Development Act and the implications that it could have being applied in British Columbia, I'm not entirely clear on, even from the briefing. I'm hoping that we'll be able to get some clarification on questions as we probe that deeper, if we get to committee stage — indeed, if we do get to committee stage on this bill, because the time is running out at the end of this session, so that may or may not be possible.

I'm curious. In the briefing that I had on Bill 43 it was indicated that there would be full cost recovery regarding the implementation of provincial statutes and regulations and local government involvement too. I'm still not clear on how that would work.

The application of provincial laws, environmental laws, the land title and survey issues — all of these things — even building codes at the local level…. I think that's a great thing on reserve, and I can see where it would bring more certainty — I don't know about absolute certainty — for investors. How the machinery of that will be affected, how local governments will be able to get cost recovery back for doing inspections and that sort of thing, is unclear to me yet.

I think I would have liked to have seen more open discussion on this bill as it was being developed. Certainly, that's a role that the…. We have a committee, the Standing Committee on Aboriginal Affairs, in this House. It would have been nice to see that committee brought into empowerment to actually look at this issue, because there may be unforeseen implications to First Nations or local governments that we're not quite aware of.

I'm not sure what level — I will ask about this more in the committee stage — of consultation happened with, maybe, the UBCM for local governments. That's the Union of B.C. Municipalities, which represents all of the local governments, city governments and regional districts, in the province. I'm not sure if there was substantial consultation with these groups at the time, but I would hope that there was. I'll be asking about that.

At the high level of First Nations governance in this province — that would be the leadership council that includes the Union of B.C. Indian Chiefs, the B.C. Summit and the Assembly of First Nations…. Certainly, I haven't had any indication from those groups that they were in any way really meaningfully consulted about this.

Again, there may be nothing of concern, but certainly, there may be unforeseen consequences, as this is a precedent for British Columbia. This is the first time, these two instances…. In considering the Haisla and the Squamish First Nations, this would be the first time that this federal Commercial and Industrial Development Act will be applied within the province of British Columbia. It is a precedent in that sense.

With that in mind, I think it's always advisable to have a much more fulsome discussion about this with all the parties involved in case there are unforeseen consequences that might arise from that or some form of downloading of costs that were not foreseen — maybe on local governments or on First Nation governments or on the province — that maybe a fuller conversation would have teased out.

[1020]

Having the application of provincial laws on reserve land is the key issue here. I've touched on the cost recovery issues. I wonder, as far as treaty goes…. Not all nations are in treaty process in British Columbia, of course, but there was a strong concern raised by the Auditor General — it was 2007, I believe — and the substantive report there around the treaty process. There was concern raised that agreements outside of the treaty process or parallel to the treaty process might actually be a problem and a hindrance to the treaty process itself. I don't like to paraphrase the Auditor General, and I don't have the report before me, but I was well versed on it.

The Auditor General rightly pointed out that there might be a disincentive to completing treaty, with side agreements occurring and that sort of thing. So I would caution that while moving one-off agreements on resource development or whatever for First Nations may on the surface look like a good idea, I do heed the warnings by the Auditor General that such developments in such agreements may actually slow down a treaty process which is already, arguably, glacial in speed. We're not moving very fast in that process. The minister and I have had discussions about that, and I'm sure that we will continue to. So I don't think it's a foregone conclusion that this will help the treaty process.

That being said, the Squamish First Nations are, of
[ Page 11630 ]
course, in basically a bilateral governance agreement, so it may not have an impact. But I do question, you know, maybe one of the unforeseen things of this bill. If an agreement…. If a nation that's in the treaty process were to apply for such status under Bill 43 and the implementation of the Commercial and Industrial Development Act, so that provincial regulations, local regulations on reserve…. If that were to happen with a nation that's in the treaty process, now with the implementation, with that agreement, there would be a requirement to meet the standards of the province and/or local government. If that nation were to try to proceed to finalize treaty, I question whether or not this would be another wrinkle in that process, and I'll explain that.

After treaty, the status of the land changes completely. After treaty, the nation will come out from under the yoke of the Indian Act and the reserve system in Canada. This specific act would implement local and provincial regulations on federal reserve land. That status of land would change with the completion of treaty, so it is unclear how one would affect the other and if, indeed, the implementation of Bill 43 on existing treaty land might actually create more complications towards finalizing treaty. There's no evidence of that, but there was no real discussion about that, either, so I am concerned that it is a possibility.

I would suggest, on another side, that looking at it another way, there might be unforeseen consequences of applying Bill 43 in certain First Nations in the province that might be of benefit — a benefit that might have been unforeseen also.

It's a federal responsibility, and I don't like to just separate it out or silo it as a federal responsibility, but many reserves in the province of British Columbia — indeed, across Canada — are Third World. There's actually a surprising level of poverty. A reserve system seems to have created that in many communities. I believe it is a federal responsibility to make sure that housing, for instance, on reserve is safe, is proper for a community to thrive.

[1025]

Many, many of the housing units on reserve are atrocious and unsafe, and the federal government seems to move very slowly at fixing that situation.

I wonder if a First Nation were to successfully receive the implementation of the Commercial and Industrial Development Act on reserve, which would mean that standards like building codes would then apply…. Maybe that would allow for a First Nation that was not getting adequate housing needs met by the federal government…. Maybe then they could push the envelope, as it were, and maybe they could be citing provincial standards, building codes and that sort of thing to push the federal government to do their fiduciary duty and actually provide for proper housing on reserves. Maybe there's an option that wasn't foreseen, which would be a side benefit to Bill 43.

On this side of the House, pending further information from the committee stage, I believe we will be supporting the bill. I would note that the request four years ago for this, the implementation of the federal act in the province of British Columbia, came from First Nations. Squamish First Nation and also Haisla will be the beneficiaries of this. As far as I can see, it's not a simple process for a First Nation to…. It's a fairly complex process to actually, I think, be a designated First Nation that gets this consideration. It's not a simple thing. It's a fairly complex issue to bring it forward. I do wonder who exactly makes the decision.

We've had a four-year process with the Squamish, which I believe was the beginning of this. It took four years for the Squamish to get this far and then this bill being implemented. It may well be faster with the bill implemented and in place in British Columbia. But at the end of the day, I wonder: is it a tripartite decision-making process that would lead to this? The minister is nodding, which is helpful. It was unclear from the bill if there is a body that makes the decision, if it's done in a cooperative manner and what the requirements are for First Nations and adjoining First Nations to be involved.

There could be implications if a First Nation applies for the Commercial and Industrial Development Act to be implemented under Bill 43 for a project on reserve on federal land. It may well have implications for adjoining First Nations, so it is unclear how that process would happen or what form of consultation is required. That could also follow for adjoining non–First Nation communities.

I know there are works and services agreements. I think they're required prior to an application being successful. But again, it's not clear what level of agreement has to be reached before a First Nation is actually able to successfully get through the process and be a recipient of this bill, this piece of legislation.

So questions — more questions than answers. We have a process. This is second reading, so it's relatively early. At third reading we will go to committee stage, and I look forward to getting clarification on these and other issues as we get to the committee stage of Bill 43. With that, Madam Speaker, I shall take my chair.

[1030]

J. McIntyre: It is with great pleasure that I rise to take my place here in the debate in second reading of Bill 43. Let me start by thanking a number of people that have been working on this for a long time.

I wanted to thank the federal government for the work they've done with the nations and the Squamish Nation in particular; the Ministry of Aboriginal Relations and Reconciliation; the minister, who I thought was very articulate in her introduction here at second reading on exactly what this bill will entail.

I want to thank the council and chiefs in the Squamish Nation case, Chief Gibby Jacob in particular, and all the
[ Page 11631 ]
negotiators. I really want to thank them for their vision and for their leadership in advancing this legislation that will allow provincial laws and regulations to apply to major commercial-industrial projects on federal Indian reserve land for the very first time in our history.

Bill 43, as has been said before, is the First Nations Commercial and Industrial Development Act — FNCIDA, a bit of a mouthful. This implementation act — and the operational word here is "implementation" — allows us to implement the federal government's FNCIDA initiative. It does seek to regularize development on Indian reserves and, as the minister pointed out, to deal with this regulatory gap, which is very important.

The legislation will allow B.C. to enter into agreements with Canada and First Nations to administer provincial laws — so, to the member before me, a tripartite organization — that will work on very specific project lands. The two projects the minister mentioned that have been brought forward at this time with this act are the liquefied natural gas facility on the Haisla Nation reserve and the proposed commercial and residential development on the Squamish Nation reserve lands in the Lower Mainland, most specifically in West Vancouver, which is, of course, of interest to the MLAs from the West Vancouver region.

This act is implementing federal legislation that is intended to close the gaps in regulation on reserve, essentially to help facilitate economic development, to make sure that First Nations are able to extract economic development from their lands at a comparative rate in a level playing field with other economic developments that would be going on in the community.

The act was introduced in the House of Commons, again as the minister said, some years ago, in 2005. It came to force in 2006 and was then amended again in 2010 to support, specifically, the Squamish project in West Vancouver.

Without FNCIDA, any First Nation can proceed with development on reserve. We know that now. They can do whatever they would like essentially unfettered, not under provincial jurisdiction and not even subject to municipal rezoning. Through this federal FNCIDA and now our implementation act, the agreements, regulations and everything else that is negotiated will be put in place to fill, as I mentioned, these gaps.

We get to apply provincial legislation to specified reserves while creating that certainty for economic development and government regulation. That's very important.

You may wonder how this is all going to work. I appreciate that the member still has some questions. I'm very confident that those questions will be answered for you at third reading committee stage.

The act itself will allow a First Nation that has decided to pursue a particular commercial or industrial reserve project to ask the government of Canada to help harmonize those regulations that apply to that project. It essentially incorporates some or all of the provincial acts and regulations that apply to similar off reserves.

So you've got a development or an apartment building development right beside other buildings, and we will be able to harmonize those things. Those regulations that would apply off reserve will now apply on reserve.

It certainly creates certainty for investors. Anybody wanting to build or develop a project for First Nations or in partnership with First Nations will have the same reliability when they come to market that development or sell those lands. There's this certainty and consistency between the regulations and between the laws.

I think there are a lot of benefits, obviously, to British Columbians. The provincial government and B.C. benefit from the consistency of these regulations. FNCIDA allows the government — in conjunction, again, with the federal and First Nations in a tripartite arrangement — to play a positive role in the developments by helping to develop the legal certainty in these regulatory regimes that will apply to these particular projects.

The First Nations, of course, get a level playing field. It's very unfortunate and sad to say, but in the real world of economic development there is a discount to building on reserves or to be able to get economic development from these lands. That's not fair. That's not fair at all. There's no level playing field. They are at a disadvantage.

Not to jump ahead too far, but in my studying and learning about this, I didn't realize that, for instance, the lands in the Musqueam reserve in the city of Vancouver…. Those people are not allowed now to register their leases with the land title office.

[1035]

This act creates a whole separate land title registry ability for these lands. It makes a very big difference for certainty for buyers and for those who are developing these projects.

This kind of level playing field has been a request of local government for many years. Not only are we talking about the First Nations, our role and buyers, but also local governments. They have, of course, a strong interest in knowing that building standards, health and safety standards, and environmental protections are all consistent across lands, including these adjacent reserve lands. They want to know that they're comparable.

You look at West Vancouver, for instance. They want to make sure that the development in the Park Royal area is the same. There are towers. There's economic development going on right in that vicinity. You want to make sure that there's a level playing field, and this gives buyers confidence to know that environmental regulations have been adhered to, that the residential tenancy laws will apply. There will be a building code, building inspectors. All of these things will apply in these situations.

It also gives, of course, the provincial government a participating role in economic development projects,
[ Page 11632 ]
where they can assist the First Nations.

As I said, there will be these tripartite agreements. They'll be case by case, and there'll be an opportunity for provincial officials to be involved in administering, assisting and helping local governments as they move forward, because they will all necessitate a service agreement with the municipalities. That may not be clear immediately, but I think that's one of the most important parts about this.

Certainly, in the specific case of the Squamish Nation in West Vancouver, they're planning a residential-commercial development in the Capilano reserve area there at Park Royal. This will include their agreement, as the minister said, to make a financial contribution to help defray the costs of infrastructure such as transportation and schools. This is the first time a commitment like this has ever, ever been made, and they've agreed to negotiate local service agreements, to pay the costs of local services on reserve.

There had been in this case an interim agreement that was made many years ago, as the Squamish in West Van have been very good neighbours for many years. But this is an opportunity to renegotiate, to relook at that agreement and make it in a modern-day format that's satisfactory to both parties.

Again, the minister alluded to this. It's very important — the importance of being good neighbours and knowing that they need each other to be able to go forward and, I guess, build communities together. They know and will learn, I think, that they truly need each other to be successful.

Through this federal regulation, this new land title system that I mentioned, the Squamish project will be created. It'll be administered by the Land Title and Survey Authority on behalf of the federal government, and this will allow these leases on the land to be registered with the provincial land office. This is huge. This is the first time this is ever going to be done. It will give, as I say, buyers comfort, and we'll know that we're on a level playing field for the first time.

I actually urge you to read a recent article that my colleague from West Vancouver–Capilano pointed out in Vancouver Magazine entitled "The Chief Executive" by Gary Mason. It really gives you an insight into Chief Gibby Jacob's vision of what he can do for his people. The nation has been very sophisticated and is becoming increasingly sophisticated, engaging in willing buyer, willing seller agreements. They deserve the opportunity to move forward on this basis. I couldn't be more proud that this government is actually facilitating this.

I look back at the work I've done with the Squamish Nation over my seven years as an MLA. It's really been one of the most rewarding aspects of my entire political career to see the opportunities over these last number of years that have been afforded to First Nations in my corridor, but I think the Squamish Nation in particular, who've been very keen and interested in economic development.

Whether it goes back to the land resource management plan in the Sea to Sky region, where the Squamish Nation had the opportunity to overlay their vision for land use — areas where they wanted to see wild spirit places that we've been able to translate into conservancies, where we've actually designated other areas for economic development…. For instance, the community forest that they've been working, in partnership with the Lil'wat Nation, and the resort municipality of Whistler. That was the first 25-year tenure in the history of community forests, after a number of pilots were run.

So we've had opportunities for the nation to actually work with us in the Sea to Sky region and down in West Van — to work in harmony to designate what areas would be conserved and what areas are appropriate for economic development. We're talking about the Capilano reserve. The First Nations have identified that as an area they'd like to extract development from.

[1040]

We've worked with the Squamish Nation, along with the other three of the Four Host First Nations, as we hosted the games. The Squamish Nation's participation in that and, again, the leadership and vision of Gibby Jacob in understanding what hosting the 2010 games would be and mean, not only for his people but for First Nations across the country and also, of course, for British Columbia as the host province….

He was absolutely integral to us being awarded the bid. Gibby Jacob was actually in Prague when Vancouver was awarded.

They played an integral role — for the first time, probably, in Olympic history — in terms of how much First Nations had a role and then had the opportunity to display their culture and heritage as an integral part of the Cultural Olympiad. There was also millions of dollars of economic opportunity for their involvement in hosting the games — things like their interest in developing the Squamish Lil'wat Cultural Centre in Whistler. That has now become a magnet for international tourism, where there's a big demand to look at first-heritage culture.

The Sea to Sky Highway. The First Nations were very involved, and there was a land use agreement and accommodation made for the Squamish Nation to allow for that highway upgrade. Again, they had land in exchange for allowing the highway to be widened through their territory. That also gave them big opportunities for economic development and opportunities for some of the First Nations youth to have apprenticeships with Kiewit as the highway was being developed.

There have been huge amounts of opportunities for First Nations. I've just spent the last year and a half or two years working with the Squamish Nation and the district of Squamish on building a framework for how they will relate with each other going forward — for the first time.
[ Page 11633 ]

They've identified land that they want to develop in partnership with each other and an agreement for how that land will be looked at, including reserve and off-reserve lands. That is now a legal agreement that everybody is so proud of. Again, it's a first in 150 years of being neighbours to actually now have a framework for how this will go forward.

I feel much the same way about this opportunity for the Squamish Nation in West Van, for this particular development. I think now that this act, as they move forward with West Van in developing a service agreement, will be another tool. I think, actually, the minister said that too.

I simply see it as another tool in the progression. It's assisting the Squamish First Nation with opportunities for economic prosperity to ensure a healthier future for their young people. Their young people are the fastest-growing cohort. The First Nations youth are the fastest-growing cohort in the province and probably across the country.

We've been working for weeks and months and actually years on a staff-to-staff basis with West Vancouver to prepare officials for the implementation of this act.

I'm pleased to say that the district of West Vancouver mayor, Michael Smith, was actually quoted in the release, when this bill was first introduced last week, as saying: "The district of West Vancouver looks forward to working with the Squamish Nation as they enter a new phase of economic development and prosperity. We will work together to develop a servicing agreement which is fair and equitable to both parties." I think that's a pretty good endorsement of where we're headed.

I just want to conclude by saying that I really believe in my heart, actually wholeheartedly, that this legislation creates new opportunities to redress the tragic inequities of the past 150 years. It provides opportunities to get out from underneath the oppressive and, as the member opposite said, race-based Indian Act that has held back First Nations advancement in education, health and economic development right across this country for far too long.

I'm proud of our provincial government's move here to facilitate and to implement this federal legislation. We're facilitating a major step for the Squamish First Nation to attract investments, create jobs and be able to extract economic development from their very own lands.

I want to thank, again, all who made this dream a reality, going back to 2005. I want to thank all the elected officials, both provincial and federal; the Ministry and Minister of Aboriginal Relations and Reconciliation and staff, including Mark Lofthouse, who I've had the pleasure of working with over these past many months; Godfrey Archbold, who I had the pleasure of meeting the other day, who's the CEO of the Land Title and Survey agency; and the Squamish First Nation chiefs in council, of course, including Gibby Jacob and Harold Calla. You've all been a part of history.

[1045]

D. Donaldson: I'm very pleased to take my place in second reading of Bill 43, the First Nations Commercial and Industrial Development Act Implementation Act. I have some perspectives on this legislation that I'd like to share here at second reading.

First of all, I would like to congratulate the Haisla First Nation and the Squamish First Nation for their work in bringing this to the government's attention and for having this act come before us at this stage. We know that the conditions on reserve in B.C. with First Nations need to be addressed, and the developments that both the Squamish and the Haisla are proposing under this legislation will go a long way to addressing some of the horrific Third World social and economic conditions we see on reserves in B.C.

From that aspect, I'm happy to discuss this bill. As my colleague from Alberni–Pacific Rim, our critic for the Ministry of Aboriginal Relations and Reconciliation, pointed out, this is the first time this kind of act has been considered in the Legislature, so there are implications that we need to consider overall. It has been touched on already in previous members' comments about, for instance, the impact this legislation might have on the treaty process.

It's important in other areas as well. Although second reading is a general overview, it's important to get into the real clauses of the legislation in committee stage in order to give a fair hearing to those kinds of concerns. I wanted to point out that at the moment we have 11 bills in the committee stage and nine in second reading, and including today, we have 11 days left in this session for discussion of those kinds of matters. It really gives a very limited time for this bill in the committee stage.

For those who might not be familiar with that, the committee stage is where we go into exceptional detail. We're able to question the minister, who has the chief bureaucrats at her side, to actually go into detailed questions about the implications of the legislation — Bill 43, in this instance. I have to say that I'm looking forward to committee stage but have concerns about whether we're going to have the time — considering what I've just laid out as what's still before the Legislature — to really thoroughly canvass this. We'll wait and see on that.

As I think about the impacts it might have in my constituency, in Stikine…. The area of Stikine covers the traditional territories of six different First Nations. In the northeast part, up along the Yukon and Northwest territories borders, are the Kaska. In the northwest corner, bordering the Alaska panhandle and the Yukon, there's the Taku River Tlingit. A little further south but in the central area is the Tahltan First Nation. Many of the development projects that are being proposed are proposed for their traditional territories.

Further south along Highway 37 is the Gitanyow First Nation, and then along Highway 16 is the Gitxsan First Nation, and then a little further to the east and south
[ Page 11634 ]
is the Wet'suwet'en First Nation. Many of these First Nations are involved in the treaty process. Some are not. Some are at various stages in the treaty process.

Before we begin committee stage on this bill, I will be contacting those First Nations to see what their thoughts are on Bill 43 so that in committee stage we can have a much more detailed discussion. That's just pointing out the importance of the committee stage for this bill. As I say, I look forward to that, and it's an essential part of the drafting of this legislation.

[1050]

I need to point out that the impetus for this legislation is not new. In 2010, almost two years ago now, in front of the Finance Committee in Terrace — and I'm Deputy Chair of the Finance Committee — we had the chief councillor of the Haisla Nation, Dolores Pollard, present to the Finance Committee.

One of the topics that she presented on was the First Nations Commercial and Industrial Development Act, the federal act, and the need for the province to introduce this kind of legislation so that we can move forward with the development that they're looking at, which is the liquid natural gas plant.

She pointed out that the Haisla had already been accepted into the federal process that relates to this bill and was asking that the province get on with this kind of legislation so that the Haisla could continue this work. She pointed out that once negotiations between the Haisla and the province and Canada take place on this kind of agreement that we're looking at under Bill 43, it could take up to two years to get to the final deal.

It's not a new issue. It's unfortunate that it's taken this long to get to the Legislature, because two more years from now will be almost six years into what this issue is trying to address and what this bill is trying to address.

The chief councillor, Dolores Pollard, also pointed out that Canada — and this was two years ago — had established a dedicated technical and legal team directed to address the issue full-time until the agreement and regulations were in place. That was in 2010.

She was imploring the Finance Committee to take word back to the government, to have the same kind of dedicated team on the province's behalf so that the agreement that is needed to facilitate the development of the liquefied natural gas plant on the reserve that the Haisla have in Kitamaat could move forward in a timely fashion.

They were imploring at that point. Here we are, two years later, and we're seeing the results of the hard work that the Haisla have put into this in lobbying the government to get on with it.

She went on to say: "We ask for the province of British Columbia to ensure that the necessary technical and legal resources are allocated to this project to ensure its timely completion." That was in regards to…. She did mention the Oil and Gas Commission.

The minister, in her introductory comments to second reading of this bill, talked about the role the Oil and Gas Commission will play once an agreement is reached between the Haisla, the federal government and the provincial government under Bill 43 around the commercial development on reserve lands, which in this case involves a liquid natural gas facility.

What we have seen is difficulties with front-line agencies of the government, like the Oil and Gas Commission, to actually take on the work that they're supposed to be doing right now under legislation and regulation, let alone additional work.

The concern there is — and the track record is — although the government has introduced Bill 43, whether the resources will be there not only for the front-line staff but to actually create the regulations that flow out of the bill. The track record has…. Well, what we've witnessed with this government is that in many cases the resources haven't been there after the bill has been introduced. So that is something we'll be keeping a close eye on.

If the Haisla and the Squamish Nation, who have been the drivers behind getting this legislation to the floor here today, want to see this legislation enacted in order to address some of those horrific social and cultural conditions on reserve, then the resources need to be put into the line ministries and agencies provincially that will help make that happen. That, in this case, from what I understand so far, is the B.C. Oil and Gas Commission.

[1055]

Unfortunately, the budget estimates for the Ministry of Aboriginal Relations and Reconciliation have passed. We were not given notice that this Bill 43 would be coming to the Legislature at this time, so we weren't able to address during those budget estimates whether there have been any additional resources allocated to the Ministry of Aboriginal Relations and Reconciliation in this coming fiscal year in order to work on the potential agreements that could flow from Bill 43 — the potential agreements with the Squamish First Nation and the Haisla First Nation specifically.

We already know that the staff at MARR, the Ministry of Aboriginal Relations and Reconciliation, are already stretched thin and have a lot of projects currently on their plate. We would hope to see additional resources put into that ministry to deal with Bill 43.

Fortunately, the budget estimates for the Ministry of Energy and Mines are yet to be brought forward. We will be able to question the minister of that ministry regarding whether there will be additional resources to the B.C. Oil and Gas Commission to really make Bill 43 a reality, not just introduced legislation that actually doesn't get acted upon — which, as I said, we have seen in the past with the government.

When those budget estimates come up, we'll be asking questions about the additional resources and the amount of the resources that are needed to actually carry out the intent of Bill 43 with the Squamish First Nation and with
[ Page 11635 ]
the Haisla First Nation — and, as Dolores Pollard, who was then chief councillor of the Haisla Nation, in 2010 pointed out, to ensure that "the necessary technical and legal resources are allocated to this project to ensure its timely completion."

She's just highlighting what she sees as a potential hiccup unless the resources are there to back up the intent of the legislation. We'll keep an eye on that for the Haisla and for the Squamish to ensure that happens.

I was also curious and wanted to note that the then Chief Councillor Dolores Pollard of the Haisla First Nation, in her presentation to the Finance Committee approximately two years ago — Ellis Ross, who was a councillor at the time, was also in attendance at that presentation — pointed out two other areas — not only the area that's addressed by Bill 43 that needed work but two other areas that she was hoping to see some action on by the provincial government.

The first was in support of what she calls "our addition-to-reserve status." Now, some people would think, "Well, if it's an addition to reserve, perhaps that's strictly a federal issue," but she pointed out at that time that the application to the federal government for an addition to reserve to the Haisla — it's called the Bees Reserve — to facilitate the potential expansion of the LNG project needed provincial support in order to succeed.

It would be perhaps in the closing comments to this second reading that the minister could enlighten us as to whether, and how, the province has supported the Haisla in their application to the federal government regarding the addition-to-reserve status, because as the then chief councillor pointed out, it was important to the success of the LNG project for that to happen. Perhaps there has been some work done that we are unaware of, but I would look forward to the minister enlightening the Legislature on that.

The other point that the then chief councillor pointed out was one of accommodations. This had a provincial authority and provincial application because it was around Crown land. As Ms. Pollard pointed out then, they were asking the province to "seriously investigate using lands to assist in accommodations to the Haisla Nation." Specifically, it was regarding the lands between Rio Tinto Alcan's private lands and the Bees Reserve.

[1100]

As she pointed out in her presentation to the Finance Committee, there were no improvements in the land in question, except for an old logging road. It is Crown land. What she was looking for was use of that land in providing, under the title, accommodations to the Haisla Nation in the whole consultation and accommodation framework. She pointed out that this could assist with additional economic development opportunities for the Haisla.

Again, if there've been any advancements made, any kind of applications or improvements or advancements made on that subject of accommodations with the Haisla, perhaps the minister could discuss that in her closing remarks to this second reading of the bill as well.

I'm referring quite a bit to the Finance Committee discussions that happened. I am because it relates directly to Bill 43. The federal act, the First Nations Commercial and Industrial Development Act, that this provincial act will be implementing was referenced by the then chief councillor, Dolores Pollard.

I wanted to also highlight a few other comments that she had at that time. I'll quote here from her testimony in front of the Finance Committee a couple of years ago. She said: "The coexistence of Crown and aboriginal title creates serious challenges for both the Haisla and the province. For the Haisla Nation, the Crown's refusal to recognize our aboriginal title and rights makes it exceptionally difficult to address the serious economic and social issues facing our people."

Bill 43. The foundation of it was touched upon by the chief councillor, but she is also pointing out that that cannot be in isolation from the Crown land and aboriginal title issues. She goes on to say: "For the province, any decision you make on Crown lands is potentially illegal and invalid if you have not adequately consulted with us and accommodated our constitutionally protected aboriginal rights and title." Finally, she says: "For B.C. and many potential proponents, investors and partners, the end result is a lot of uncertainty, which is of no benefit to any of us in the long term."

In her opening comments the minister did touch on increasing certainty and how she felt that Bill 43 addresses some of that. Yes, from what we understand, the Squamish and Haisla First Nations have talked about it. It would address some of the certainty issue on reserve.

I just wanted to point out that less than 5 percent of the land base in B.C. is actually covered by reserve. The real critical issues in the more rural areas of the province are around certainty on the land base when it comes to Crown land, not on reserve, especially around resource development. Dolores Pollard talked about a lot of uncertainty.

[L. Reid in the chair.]

I think that although the member who preceded me in this second reading of Bill 43, the member for West Vancouver–Sea to Sky, talked a lot about on reserve — and then she did talk about some of the off-reserve initiatives around the Olympics with First Nations in her area — the lack of focus on the aboriginal title and off-reserve economic development and certainty issues has actually come home to roost in a couple of recent examples we have seen.

Although Bill 43 relates to economic development specifically on reserve, it also talks about economic development in the broad sense. We just had a situation around a letter that the president of Taseko Mines wrote to the fed-
[ Page 11636 ]
eral Environment Minister advocating for — in next go-round, when the environmental assessment process will be done on the New Prosperity mine — banning prayers, reducing the scope and limiting membership on the panel. I wonder where that kind of attitude comes from.

[1105]

You have to look back on when the Premier was first elected head of her party and became Premier. She said that in her first meeting with Stephen Harper she'd tell him: "I'm interested in making sure we find a way to get that mine going in British Columbia." This was the Prosperity mine, which had been rejected by the federal EA process at the time, even though it had been passed by the B.C. EA, environmental assessment, process.

Although the minister, in her introductory remarks to Bill 43, talked about comprehensive statutes and regulations that cover off-reserve potential developments, it's obvious from the Prosperity decision — where the federal environmental assessment process was able to consider many more factors than the provincial environmental assessment review process — that the B.C. environmental assessment review process, one would have to conclude, was not comprehensive enough.

In regarding Bill 43, we are talking about certainty on reserve for economic development, but the minister, in her opening remarks, did talk about off reserve. The member for West Vancouver–Sea to Sky talked at length about off-reserve development, when addressing the second reading of Bill 43, when she talked about the Olympics.

Another example where there has been a lack of focus, I must say, by this government on the important nature of off-reserve development and certainty was with the recent announcement of the Red Chris permits to do with the Red Chris mine. In reaction to the government granting those permits under the Mines Act for that mine, the head of the Tahltan Central Council….

I referenced earlier in my presentation that the Tahltan have many development projects on their territory in Stikine. The head of the Tahltan, the president of the Tahltan Central Council, Annita McPhee, said: "We have been expressing our concerns about the impacts of this proposed mine to our communities, our traditional practices, our environment, our cultural values, our aboriginal title and rights for years."

She goes on to say: "Not everything has been done to address our concerns about the long-term pollution to our water and the damage to a landscape that our people have relied on to feed and support themselves since time immemorial. We do not accept that it can proceed without having our concerns properly addressed."

Again, here's another example of foot-dragging and lack of focus of the provincial government when it comes to development off reserve, on lands that are under aboriginal title. That lack of certainty…. Although Bill 43 addresses the certainty on reserve, that's only 5 percent of the land base. What really is the issue in B.C. is the 95 percent that's not on reserve — the rest of the province, where there is increased uncertainty that results in lack of investment due to a lack of focus on aboriginal rights and title.

There have been some suggestions around how the government could proceed in order to reduce unnecessary delays and facilitate the kind of development that Bill 43 envisions. Bill 43 envisions development on reserve and specifically has been proposed and lobbied and pushed forward by the Squamish First Nation and the Haisla First Nation. I congratulate them on the work they've done on that front in order to get the bill to the point that we have in the Legislature today.

It has taken them many years to do that, but if this bill is properly resourced for the application of the bill, as I pointed out before, then the projects that they legitimately can go ahead with without consent of this legislation can actually be, probably, put into place a lot sooner. We know that needs to happen on reserves. There have to be mechanisms for economic development and social development so people can pull themselves out of the terrible situation that is faced on reserves.

A couple of the suggestions for having this same kind approach to off-reserve development that has not been addressed by this government. One came from the mining sector itself — again, in a presentation to the Finance Committee. Byng Giraud, a vice-president of Imperial Metals, talked about a consultation framework so that industry — the responsible parts of industry that really want to do a good job about consultation before the project goes ahead — knows exactly the role it should play versus the role of government.

[1110]

We know through successive court decisions that it is a government-to-government relationship. That's what the courts have said, all the way up to the Supreme Court of Canada — that the relationship between First Nations in B.C. and the provincial government is a government-to-government relationship.

Responsible companies and industry know that they have an important role to play in that, however, so they are trying to do their best. Unfortunately, without a consultation framework that defines the roles that the government will take on and what is expected of industry, it's a bit of a crapshoot for industry.

What I'm hearing from First Nations is that they also see it as a bit of a back-and-forth. They go to industry, which wants to proceed with developments in their traditional territories, and they say: "Oh no, that's the government responsibility." And they go to this provincial government, and they're directed back to industry. One can see why that would lead to frustration and, actually, delays in getting a decision on a project, delays on whether you get a yes or a no. "We'll proceed" or "We'll proceed under these amendments," or whatever.
[ Page 11637 ]

So that's one thing we've heard from the mining sector that would be beneficial, and we've heard that over the last couple of years. That would help with the same kind of issue that Bill 43 is trying to address, which is providing additional avenues for economic development without creating too many barriers, even though things have to be done right. We trust that First Nations always have the best interests of the land that they are especially dependent upon at their core.

Another area that needs work and has seen not just a lack of focus but an actual diminishment is under the provincial environmental assessment process. There was explicit language providing for First Nations participation in that process back when it was first enacted in 1995. That language was removed by this government in 2002.

Objectives relating to First Nations were deleted. There was an elimination of the project committee that explicitly had First Nations participation. And the EA is now silent on the project report content, which had involved quite a few First Nations–related topics.

Again, these are actions that the provincial government has taken that have inhibited, I would say, the ability for us — both non–First Nations and First Nations together in the province — to proceed with valid projects on non-reserve lands in traditional territories and also to address the whole issue of certainty around the land base. We know millions and millions of dollars of investment have been lost over the last 11 years because of the issue around certainty on the land base.

Bill 43 attempts to address certainty on reserve lands, and that is good, especially because it has come forward from both the Squamish and Haisla First Nations, specifically for projects that they want to see facilitated and happen sooner on reserves — sooner than later.

I think that in addressing the comments of the minister that she made in opening this second debate of this bill, when she talked about "increased certainty…." Well, less than 5 percent of the land base in B.C. is on reserve lands. There are many, many projects that need more certainty, and Bill 43 does not address this. This government has had 11 years to tackle the issue of more certainty on the land base, and I've pointed out a couple of areas where, basically, there's been a lack of focus and foot-dragging.

With that, I will close my remarks on the second reading. As I pointed out earlier, I look forward to really getting into the committee stage of this bill. That is where I'll be able to bring comments from other First Nations — not just the six I mentioned that have traditional territories in Stikine but other First Nations — and we can really flesh out the implications of this bill not just on reserve lands but on the treaty process and throughout the province as a whole.

[1115]

R. Sultan: I would like to begin by congratulating the member for Stikine for his ability in converting what should be a day of celebration into a day of lament. However, if one listened very closely, buried in the meander was in fact a congratulation of the government for Bill 43, and that is what I intend to underline in my remarks today.

I would like to begin by congratulating the Minister of Aboriginal Relations and Reconciliation for having persevered and, with a certain firmness and tenacity and drive — which was necessary, in fact, as it turned out — has brought forward a bill that I think is fair. It will promote economic development of the First Nations and protects not only First Nations interests.

After all, it is in response to their request, perhaps uniquely — a bill being brought forward in response to their request, not as something we wanted in this Legislature. It is protecting their interests, clearly, but also provincial and municipal interests.

I think this can-do attitude that the minister has displayed should cause some reflection when juxtaposed with the story in the Vancouver Sun a couple of days ago, as I recall, saying that there were problems among aboriginal organizations in treaty-making, with the realization that they've accumulated $420 million of legal bills unpaid, which will have to come out of any final resolution.

I suppose one could multiply that by two, knowing — by the big grin on the member from Nanaimo — that employees of the government certainly aren't remiss in putting in their billable hours. We have expended close to $1 billion for probably what, at the end of the day, will not withstand the cost-benefit scrutiny of what has been accomplished with Bill 43 with a handful of negotiators working very patiently over a number of years. I think that in sheer economic terms, the minister and the ministry officials are to be congratulated.

Let me also congratulate my colleague, the member for West Vancouver–Sea to Sky, who as recently as a couple months ago had to explain to me what FNCIDA was. I was way behind the curve on this one, whereas…

H. Lali: Are you sure it was just on this one?

R. Sultan: Not uniquely, I confess.

…she has been very involved in meetings and liaison with the Squamish Nation in the Squamish Valley, particularly in the events leading up to the Olympic Games.

The engagement of the Squamish Nation and its leadership, such as Gibby Jacob, was essential to the success of the Olympic Games. There was a great deal going on behind the scenes, of which most of us are not particularly aware. Thank you to the member for West Vancouver–Sea to Sky for helping show us the way.

Thirdly, I would like to make a passing nod to the minister in charge of Jobs, Tourism and Innovation for crucial intervention in the actual drafting of the circumstances of Bill 43, which was very important. You may wonder how he got involved. Well, he was involved, in fact.
[ Page 11638 ]

Obviously, as the member for West Vancouver–Sea to Sky has already mentioned, among the officials working in all governments, but particularly for our government, Mark Lofthouse played a very important role.

Finally, and perhaps most importantly, the Squamish Nation leadership itself. There's a long cast of characters, not all of whom I know well, but Gibby Jacob certainly stands out. Harold Calla and Ian Campbell and others have represented the interests of their nation very well.

[1120]

In order to understand what's going on here, I would recommend, as the member for West Vancouver–Sea to Sky has already alluded to, Gary Mason's article in this last week's issue of Vancouver Magazine. It's an interview of Gibby Jacob, which talks about the ambitions and the vision of the Squamish Nation for their development on the North Shore, which is going to be critically important in shaping the North Shore, particularly West Vancouver. But he also talks about a little bit of the history.

Without dwelling on this sad episode, I think, to put it into context, Gibby reminds us that they weren't always all living on the North Shore. They used to live in Kitsilano. A century or so ago, almost within my living memory, somebody came along and said, "Well, we've got a better idea. We want you all to take your stuff and get on that barge. We're moving you up to the North Shore and to Squamish" — and, I gather, without much ceremony.

They did what they were ordered to do. I wouldn't be at all surprised if some gendarmes were there to back up the order. What happened to their homes? They were burned. We now have the wonderful neighbourhood of Kitsilano, and meanwhile, the Squamish were stuck over on the North Shore in different circumstances.

This is just some of the history. Darrell Mussatto told me another episode when I was talking to him a few days ago about all of this. He said that in the 1950s they wanted to widen the road through the Squamish Nation. Nobody asked them. They just showed up with the bulldozer. Some of the members of the band objected. The police arrived, and they said: "Get out of the way, or we'll arrest you." The bulldozer went right through.

So the lands that were finally given to them have been bisected by power lines, by railroads, by Marine Drive, by a sewage plant, by sewer lines. It's not clear to me how much consultation went on. Right now IR 5 is a rather chopped-up piece of real estate.

Finally, we have leadership stepping forward, saying to the provincial government: "Here's what we want so we can put what happened in the past behind us, move ahead and get some economic development and greater prosperity for our band members." That is exactly what Bill 43 will facilitate.

The bill, as has already been explained well, will enable, essentially, federal legislation worked out in conjunction with the Squamish Nation over a number of years. What the Squamish Nation has in mind is no secret. They've had it on their website for years. You can look up analyses of their plans in terms of the economic benefit — "the unlocking of the value" is the phrase used — for a number of years, if anybody cared to do a little bit of research.

Their ambitions are, it seems to me, principally residential — condominium towers marketed to persons who are not members of the Squamish Nation. Some concepts — and Gibby refers to this in his Vancouver Magazine article — suggest that ultimately, at full build-out, the population living on the reserve could equal one-third of the entire population of West Vancouver. Well, I think that at some point that is going to get the attention of the citizens of West Vancouver.

The province was asked by the federal government and the Squamish Nation to assist with this proposed development by installing a version of our own modern title system, administered by the land and survey authority of British Columbia, which would be accepted by the federal government as applicable to their land. That's what this law will achieve.

Perhaps for the first time the federal government, the government of Canada, is going to accept provincial authority over a title system applicable to federal lands. That's certainly an innovation.

[1125]

It has also been suggested this morning that as a result of FNCIDA, laws will be harmonized between those applicable on IR 5, Indian Reserve 5, and the surrounding communities. That is perhaps a bit of an inaccuracy in the sense that there's really nothing to harmonize with. It isn't as though we're taking two sets of laws and putting them together, because on the one hand there are no laws.

It's a useful reminder that in the absence of this, there's nothing to prevent the Squamish Nation from doing anything they darn well please on their lands. We may wring our hands and say: "That's not the best idea." Frankly, legally and in every other way, there's nothing that the citizens of West Vancouver, the citizens of Vancouver or anybody else can do about it.

So harmonization is, perhaps, not quite the word. But certainly, the introduction of a provincial regime which is long developed in terms of things like building codes and environment and all the rest is very significant.

Indeed, I would go so far as to say, perhaps with a smidgen of exaggeration, that this law, Bill 43, may be the most important law, in terms of the long-term future of this province, that this Legislature will deal with. It seems to me that if we take the long view of British Columbia, the big unresolved issue is in fact still our relationship with the First Nations. Bill 43 is showing the way that this can be resolved.

What difference does land title — or perhaps a more accurate phrase would be the 99-year lease title that this law facilitates — make, anyways? Well, at the expense of boring you with another economic lecture, there was an economist named de Soto — a Peruvian, as it turns out
[ Page 11639 ]
— who did a big study of why some countries prospered and some countries did not.

It's not really an original thought, but he concluded that one of the main dividing criteria between the poor and the rich is in fact a land title system and ownership of property. One only has to look at Cuba to see whether communally owned economic systems prosper or not.

This is producing a form of title for the first time on Indian reserve land, and I think it's an opening. It's a wedge. It will lead to an expansion of the title system, and I think this is all to the good in terms of the future of the First Nations communities.

Because of the sheer magnitude of what is proposed on the Squamish Nation, many questions, as has already been pointed out, are raised in terms of the services to be provided or shared between these communities.

From the perspective of the municipality of the district of West Vancouver — my constituents — it's very important, obviously, that service agreements be negotiated which pay for the cost of local service delivery to developments on the Squamish Nation. If those agreements aren't in place, it doesn't mean development couldn't occur, but it would obviously be very difficult and, frankly, in my own opinion, impractical.

So this is a precondition. Therefore, I'm encouraged that there is a clause inserted into Bill 43 making the implementation of Bill 43 conditional on the conclusion of a mutually satisfactory service agreement between the Squamish Nation and West Vancouver municipality. It will, presumably, build upon and further expand the service agreements already in effect, as the member for West Vancouver–Sea to Sky has pointed out.

I have my own private list of what might be included in that service agreement. I might just rattle through some of them: public transit, water, sewers, roads, highways, bridges, fire, ambulance, library, recreation, parks, swimming pool, schools, community-funded health care, Metro administration and all of the above. It's a long list, and I think the Squamish Nation and the officials and mayor and council of West Vancouver have some work ahead of them.

Finally, perhaps the most interesting thing to speculate about, should the dream be realized — Gibby's dream, as explained in Vancouver Magazine last week — is that we will have in the district of West Vancouver, I suppose, what you might call kind of a hybrid form of governance.

[1130]

One might just speculate privately. I don't intend to speculate here, because I haven't really tried to think it through. But you'll have a big chunk of West Vancouver that's governed by a different set of rules, politicians, leaders, and so on from the other part of West Vancouver. What will that look like? Well, I can't begin to think about it, but it's certainly something we should all start thinking about in my community.

Finally, I will pay only passing mention to the Haisla and Kitimat, where I earned enough money to continue my engineering education over half a century ago. I spent a whole summer on the Haisla Nation mud flat taking borings to figure out whether that aluminum smelter, when it was built, would sink into the channel. I don't think it worked quite like what we thought, but it didn't, as someone points out, actually go beneath the waves.

This is, again, a different sort of industrial application. I think it's very significant that private investors have decided to build on First Nations land, not on the city-owned land in the city of Kitimat. I don't know if the mayor of Kitimat is exactly pleased with that. It might be cause for a certain amount of smugness on the part of the leaders of the Haisla Nation, however, in terms of how the wheel has finally turned.

The final point I would make is the need for openness and transparency. It was a bit of a shock to have to depend on my colleague from West Vancouver–Sea to Sky to explain to me what FNCIDA was not so many weeks ago. I was really out of the loop, and I suspect many of you have been as well. Why is this? Well, on the one hand, most of these agreements and most of the heavy lifting in negotiating are not done by politicians. They're done by officials. Mark Lofthouse's name has been mentioned, a very capable civil servant who certainly has the best interests of his client — us — in mind in those negotiations. A fair man.

If every meeting was transcribed and put into Hansard and criticized and subject to the blogs — the home of what an NDP official in Ottawa recently called the morons and the haters — I don't think we would have a Bill 43 today. A certain amount of lack of transparency is regrettably a precondition, I think, to reaching these agreements.

We have today in Bill 43 an opportunity to ask the minister and, through her, the officials: what were you thinking of in this particular clause? During committee stage, that can take place.

So democracy is being played out in what, I repeat, I will claim is probably one of the most significant pieces of legislation to come before this House. I congratulate the minister and all who've helped bring it about.

H. Lali: I take my place on Bill 43, the FNCIDA Implementation Act. I want to start off by first congratulating the Squamish and Haisla First Nations, who were relentless in pursuing both the federal and the provincial governments to make sure this would become a reality. So all kudos to the Haisla and to the Squamish and other First Nations who supported this whole concept.

This bill, the Implementation Act, is actually precedent-setting. Nothing like this so far exists anywhere, so it's something that is new. We will be asking the pertinent questions during committee stage in terms of its implementation and the effect it would have on the ground level with First Nations, local government and also the provincial realm.

[1135]

I want to sort of read into the record that "in order to implement agreements that British Columbia enters into with Canada and a First Nation under the First Nations Commercial and Industrial Development Act (Canada)" — that's where you get the name FNCIDA — "this bill provides authority for British Columbia's public officers and statutory bodies to exercise powers provided and perform duties imposed under the enactments of British Columbia that are adopted by reference by a regulation under the First Nations Commercial and Industrial Development Act (Canada) for the purposes of the application of those enactments on reserve lands that are subject to the regulation."

So obviously, I'm going to talk about some of the implications here, and I won't talk for too long. I know there are other speakers that are going to be speaking. One of the implications is obviously for local government. The role of the local government under FNCIDA process is actually largely undefined. Of course, there has been a history, mostly of First Nations and local governments coexisting side by side, getting into agreements on a one-off basis in terms of development or even in terms of sharing services — whether it's water or sewers or other services that might be needed.

Most of the time it works out pretty well, but there have also been instances where animosity exists between local municipalities or regional districts and the First Nations. Obviously, we're hoping that this would resolve those difficulties. But we definitely need to make sure that the interests of local government are protected as well, so that both First Nations and local government municipalities can benefit.

Section 5(2) ensures that an agreement framework for the provision of municipal services must be reached before a project can be approved. This is a good thing to make sure that…. Sometimes when the federal and provincial governments get involved, the municipal government is sort of an afterthought, and usually, things are imposed upon them. But in this instance, an agreement framework has to be worked out between the First Nations and the local government before a project can be approved.

That is a good thing. It protects the interests of both First Nations and the local government in question. However, some costs associated with the monitoring and enforcement of provincial legislation could be incurred by local governments. As we know, already there is a lot of off-loading that goes on by federal and especially provincial governments onto municipalities. The worry here is that no additional costs ought to be put onto local government, who are already stretched in terms of their tax dollars.

There is a possible downloading on the province as well. Under FNCIDA, the province will have to enforce provincial laws and regulations on federal Indian reserve lands. This is also something of a concern, so we'll be discussing it more in detail at committee stage with the minister to find out what some of these implications are and what may be some of the costs downloaded onto the provincial government.

Each FNCIDA agreement contains provisions for the province to recover these costs, but hidden costs may be incurred by the province. Again, we want to be able to get to the bottom of this so that there are no hidden costs passed on to the provincial realm as a result of the implementation of this act.

The impact on the treaty process is something that is also a bit of a worry, because FNCIDA may complicate the transfer of reserve lands to fee simple treaty settlement lands if a nation with a FNCIDA project chose to adopt a treaty in the future. This is an area of huge concern, because we need to know what will happen. Again, at committee stage we will be able to get some of these answers, hopefully, from the minister.

[1140]

I know the minister has made a statement that I want to quote. An agreement like this "can address local concerns about on-reserve development," like the cost of transportation and schools. This is something I think we'll be asking the minister to explain — what really does that mean, and what are some of the implications? — because the minister is on record for saying that.

Also, FNCIDA may act as a deterrent for some First Nations to enter the treaty process. That's something that would be a concern as well. I know both the previous government and this government want to have as many First Nations involved in First Nation treaties in order to solve the land question that has been there for decades, well over a century before that.

In terms of consultation, even though the Union of B.C. Indian Chiefs and the summit of First Nations and other First Nation leadership groups are in support of the bill, there was minimal consultation that was actually done by the province with these folks. I just hope that doesn't turn into, in the future…. Well, the situation in Prosperity, for instance, where local First Nations were against it.

There was a process that was already in place, and the federal environmental process made a determination. The government still, with the new Premier here, wants to push forward with the Prosperity mine. That is a huge concern when it comes to First Nations. First of all, the environmental process has already spoken, and secondly, First Nations in the area are not in support of that. I would hate to see the province run roughshod over the rights of First Nations.

Of course, this Bill 43 does not address certainty. I know both First Nations and local government and businesses in the area want certainty in order for businesses to prosper, new ones to be created and jobs to be created for all people including First Nations, and non-aboriginal people as well.

I was Deputy Chair of the Select Standing Committee on Aboriginal Affairs of the Legislature that went around
[ Page 11641 ]
soliciting input from people and organizations throughout the province — we visited 31 communities — on the agreement-in-principle on the Nisga'a treaty, which was subsequently signed. I was able to see firsthand, because of the visits to First Nations reserves all across the province…. We have 27 Indian bands in my riding, and I'm very familiar with the conditions that exist there. It was interesting….

I thought some of the conditions were really bad in my riding. But to be able to see some of the First Nations on the periphery of this province, in the margins, actually living that marginal life because of the lack of proper housing, the lack of proper health care and education and all sorts of services — unemployment, in some cases, is as high as 90 percent up on some of the reserves up north — and the resultant problems that existed.

Obviously, we are very much concerned on our side of the House, and I'm sure the government is as well, that conditions ought to improve for First Nations. Hopefully, this will be a first step along that way.

I will take my seat. We will obviously ask more questions at committee stage. I know the member for Victoria–Beacon Hill is waiting to speak on this bill, as well.

I want to thank you, hon. Speaker, for allowing me this opportunity to speak.

C. James: I'm pleased to rise to speak to Bill 43, First Nations CIDA Implementation Act. As others have mentioned in this debate, the act has come forward as an opportunity to coordinate provincial laws and regulations on federal Indian reserve lands. The focus of this bill, as others have said, really is the two current projects that are underway, economic development projects with the Squamish and with the Haisla First Nations.

I want to add my voice of congratulations to both of those First Nations for the extraordinary work they are doing in looking at economic development and looking at opportunities to be able to increase economic development for their people and, also, for the entire community.

I think it's important to note that if you spend some time talking to people in the Terrace area and the Kitimat area, when they talk about the difficult economic times that they have gone through, one of the things that really has supported their communities has been the Nisga'a treaty — the opportunity to bring local economic development to their region.

[1145]

When Nisga'a people are able to create that kind of growth and that kind of economic development, it doesn't stay in Nisga'a. That kind of economic development growth happens in all of the communities, occurs across the region and provides that kind of support.

I think it's important for people to recognize that although this bill is called the First Nations CIDA Implementation Act, economic development for First Nations is about much more than First Nations. Economic development for First Nations means economic development for our province. As First Nations are successful and are able to generate their own resources, those dollars stay in British Columbia, are spent in British Columbia, are spent in small businesses and communities across our province and in communities that need that kind of growth.

I think it's important to recognize that this is a bill that's good for all British Columbians, if it moves in the intent that I hope it does. Certainly, from my perspective, any opportunity we can look at, any direction that will support economic development for First Nations, is a positive. I'll come back to some of the barriers that are there in a moment. Any direction that looks at increasing certainty for economic development that's done in partnership with First Nations, and done in a sustainable way, again is a positive.

We know that the lack of certainty is a problem both for First Nations as well as for investment in British Columbia. In fact, one of the biggest hindrances when you talk to businesses is the lack of certainty around First Nations land issues. I think, again, that if this bill moves in that direction, it's a plus. The fact that it's supported in principle by the First Nations leadership groups and also by the Squamish and Haisla again is a plus.

We'll ask some of the specific questions as we go along and get into further committee discussion, but I think this is a positive direction.

As I mentioned, I want to talk for just a minute about the economic development issue and First Nations. I often hear people who may not have as much contact with First Nations, or people in the province who question and wonder why we haven't seen more economic development by First Nations, why we haven't seen more of that move ahead in our province. I think it's important.

This bill is an opportunity for the government and, in fact, for all members of the Legislature to both inform themselves and also to provide the knowledge to the general public and to businesses and others about some of the challenges that First Nations face when it comes to economic development. There is so much more that needs to occur in our province on the issue of economic development and First Nations.

Our Aboriginal Relations critic raised this at the beginning as part of the discussion. One of the biggest issues and the biggest hindrances is that there is the Indian Act itself. The fact that it ties the hands of First Nations when it comes to economic development on reserve, I think, should be well known by most British Columbians and certainly is by First Nations themselves.

The Indian Act is outdated. It does not provide for the kind of entrepreneurship that I hear First Nations talking about. It stifles partnerships. It puts in place ridiculous rules and regulations that, again, make it very, very difficult for First Nations to move ahead. That's a big hindrance that has to be addressed. The provincial gov-
[ Page 11642 ]
ernment has a role to play in discussions with the federal government around that happening, of course, with the direction of First Nations who are tied to that Indian Act.

The second issue that gets in the way, and I think there has been no better reminder of why we see a lot of those challenges in our province, has been the history of British Columbia and how we've dealt with First Nations in our province. It's not unique to British Columbia, but if you take a look at the treaty issue, that is unique to British Columbia, when you look at the lack of settlements around treaty and the kind of history that is here in British Columbia.

Nothing has pointed that out more clearly over the last while than the residential school issue and the hearings in the inquiry that's going on currently across our country. Here in British Columbia there was a hearing in greater Victoria. I think anyone who had the opportunity either to attend in person or to go back and watch some of the testimony will have no question about why we see so many social condition challenges for First Nations in our province.

[1150]

If you take a look at the social conditions, if you take a look at that history, if you take a look at taking a people and removing them from their land, as the member from West Vancouver pointed out, removing them from their culture and removing them from their families, it is no surprise that we're seeing challenging social conditions that have to be addressed.

When you look at economic development, you have to address those poverty issues in order to be able to manage. In order to be able to address economic development, you need to have the capacity there. Much of that capacity isn't there because of those kinds of conditions that have been created by our history and how we've dealt with First Nations people in British Columbia.

[Mr. Speaker in the chair.]

The issue of education is very important to address if we're going to look at economic development. That includes the K-to-12 system and school completion rates and the challenges that First Nations face in that area, as well as the issue of post-secondary education and the whole area of apprenticeship, trades training, the lack of training. Those are areas that are all critical to be addressed by our province if we're going to look at further First Nations development on the issue of economic development.

The issue of the lack of support with industry is another piece that I believe needs to be addressed. The issue of referrals and lack of capacity that First Nations have and resources that they have is a critical piece. The issue of treaties and what this will do to treaties is critical.

I don't raise these issues to highlight the lack of First Nations interest in economic development. In fact, First Nations, I have to say, are the most determined, resilient people I know. When you look at that history and the fact that they keep coming back and they're still continuing, despite all those roadblocks and difficulties, to move ahead and make strides, I think it's remarkable.

I hope that this bill will provide support for that extraordinary resiliency we see in First Nations. I'll look forward to more discussion as we get into committee stage.

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

Hon. M. Polak: Thank you to all members for their comments, and congratulations to the two First Nations involved. A reminder to all members that this bill is specific to the two projects and doesn't take on any further role.

With that, I move second reading.

Motion approved.

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

Bill 43, FNCIDA Implementation 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 1:30 this afternoon.

The House adjourned at 11:53 a.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF FINANCE

The House in Committee of Supply (Section A); J. Thornthwaite in the chair.

The committee met at 10:09 a.m.

On Vote 24: ministry operations, $117,209,000.
[ Page 11643 ]

Hon. K. Falcon: If the critic could just be kind enough to allow me to make just a few very, very short opening comments. I generally keep these very short, but I would like to say just a couple of things.

The first is I want to start by really sincerely thanking the staff that work in the Ministry of Finance, both on the Treasury Board and on the broader Finance staff. This is a group of people that in the past 12 months in particular have been really required to do some extraordinary work with respect to not only preparing and building budgets and overseeing ministries, as they typically do, but in addition to that, having to spend an enormous amount of time — overtime, untold hours — working on implementing the decision of the public to return to a PST-GST world.

[1010]

I just want to take a moment to really recognize the extraordinary commitment and work that has gone into that. It has been something to behold as a minister. In all my years in government, I've seen a level of effort that I think would make British Columbians proud. I want to make sure I get that on the record.

I also just want to say that at a time of real global economic uncertainty around the world, British Columbia finds itself in a pretty unique and increasingly rare position. We have, as a result of the good work, in part, of our Finance staff, found ourselves in a position where for ten out of the 11 years that we've had the honour to serve in government, we have outperformed the budget targets we have set as a government at the beginning of every single fiscal year — with the one exception, of course, of 2009 in the midst of a global economic world meltdown, where the scale and the scope and the speed of the downturn took everyone by surprise. Certainly, in British Columbia we were no different.

I think it is a testament to the work that has been done over the past 11 years that we've had the three major credit-rating agencies reconfirm British Columbia's credit. In particular, Standard and Poor's and Moody's, the two largest credit-rating firms in the world, have reconfirmed British Columbia with a triple-A credit rating with a stable outlook, meaning that we enjoy the strongest credit rating possible for a subsovereign to enjoy.

That is important not just because we have the ability to say we have a triple-A credit rating, but it's important for the public to understand that it is as if you're going into the bank to ask for a mortgage and you have the best possible credit rating a consumer can have. That means that you will be able to borrow at the lowest possible rates.

It is analogous to government. We have the best possible credit rating, and therefore, we are able to borrow at some of the very best rates possible, which in turn saves taxpayers literally tens of millions of dollars that we can then utilize towards important public services or indeed in the paying down of debt.

Coupled with that is the diversification that has taken place in B.C.'s economy. It is a very different economy today in 2012 than it was when I first ran for office in 2001. The diversification of the economy, the opening up of Asia-Pacific, the increased focus on making sure that British Columbia ties part of our future, at least, in the fastest-growing part of the world, has dramatically transformed our trade profile.

When I was first elected, almost two-thirds of everything we exported went to one market, the United States. Today less than 50 percent, in fact about 42½ percent, finds its way to the U.S. market, over a third to the Asia-Pacific and the balance, of course, to the rest of the world. That is a diversification of the economy that will serve us well in the future.

The combination of strong fiscal integrity, a diversified trade pattern and some strong underlying principles, I think, positions British Columbia very well as we look forward to what is, unfortunately, going to be a continued sense of global uncertainty ahead of us.

Europe continues to be a real worry and has been now since — well, for at least — I've been the Minister of Finance. It's something we continue to watch closely. U.S. economic growth, again, continues to be uneven at best. That would probably be the most charitable description I could provide of the U.S. economy.

British Columbia, being a small, open trading province, is going to be buffeted by forces beyond our control. We can only control what we can control, and we've done our best, certainly, to make sure we do that in a responsible manner, recognizing, as we did in our budget introduced back in February, that we are going to take a very disciplined approach to spending in B.C. to ensure that we don't find ourselves in the position of so many jurisdictions around the world today that are really reaping the whirlwind, as I've said in the past, of spending decisions in the past that have not had the kind of discipline that will protect them from the challenges we now face in the world.

With those brief opening comments, I want to thank the critic in advance. We've had a discussion off line to ensure that we try to organize things in a way that will work for the opposition and for government in terms of managing staff. I just want to thank the opposition Finance critic for his cooperation in that matter. I look forward to some good discussion during estimates.

[1015]

B. Ralston: I'd just like to clarify which votes we're dealing with. Generally, we've done that at the outset. We're dealing with a number of votes and dealing with them simultaneously. Under the Ministry of Finance there are Votes 24, 25 and 26 — ministry operations, Public Service Agency and benefits.

Then, in other appropriations there are Vote 45, contingencies; Vote 46, capital funding…. I'm not sure that Votes 47 and 48 fall strictly within the Ministry of
[ Page 11644 ]
Finance — commissions on collection of public funds, and allowances for doubtful revenue accounts — and Vote 49, tax transfers.

If the minister could just confirm which votes we're dealing with, I'd prefer to have the liberty to move back and forth between the different votes rather than deal with each one, except at the end, when we do indicate our support or not of the individual votes.

Hon. K. Falcon: The votes that we will be dealing with are Votes 24, 25 and 26 and Votes 44, 45, 46, 47, 48 and 49.

B. Ralston: I thank the minister for that clarification. That's useful.

I want to begin by looking prospectively at budget-building and look at some of the issues that have arisen and would be dealt with under, I think, the Treasury Board line item, in terms of the prospects for and the environment in which the budget might be built and specific measures that have been taken that will impact future budgets.

I want to begin by talking about and asking questions about the federal health transfer. The minister was involved in a negotiation — or a meeting; strictly speaking, not a negotiation — in Victoria last December where the federal Finance Minister made an announcement about changes to the federal health transfer. Subsequently the Premier participated in a first ministers conference where again the health transfer was the subject of some discussion.

The minister will be aware that…. Naturally, some issues arose there, particularly the position taken by the federal government about the shape of the federal health transfer upon the expiration of the present agreement, which basically calls for a 6 percent increase to each province annually. Now, I believe the minister has clarified his comments as to his support or not of the position taken by the federal government.

I believe that at the conference in Victoria he was one of the few ministers, I suppose, to support the position taken by the federal government, where other provinces took a different approach. Whether that was fruitful or not, I suppose, is for the political commentators to judge, but I'm really interested in the impact on future budgets. In the meeting that the Premier held — and chaired, in fact — an issue arose about the impact of the other aspect of transfers, which was on the demographic realities of the different provinces.

[1020]

The formula is set out in a very helpful paper prepared by the Library of Parliament: The Canada Health Transfer: Changes to Provincial Allocations. The minister will know or have been advised that there were initially two components, a tax point transfer and a cash transfer, dating back to 1977. There were some changes in 2007 to what they refer to as associated equalization. There were some changes that impacted some provinces, and "to partially compensate equalization-receiving provinces for this redistribution, the federal government has provided protection payments over five years to ensure that no province experiences decline in its CHT, Canada Health Transfer, cash, relative to the amount it would have received in 2007 and '08 prior to the Budget 2007 changes."

In 2009 there were further changes. "Budget 2009 set out to correct this anomaly so that all equalization-receiving provinces, including Ontario, would receive the same level of per-capita cash. To achieve this, additional funding was allocated to Ontario for 2009-10. Because it was not part of the general CHT cash envelope, the extra funding had no impact on any other province."

Beginning in 2011-12 "the CHT amount is being adjusted so that all equalization-receiving provinces, including Ontario, received the same per-capita cash amount while ensuring the general CHT cash envelope grows at the rate of 6 percent put in place through the 2004 ten-year plan."

So that's the plan as it is. The Minister of Finance gave notice of his changes. There was a clarification that the minister issued about the difference between real GDP growth and nominal GDP growth, and the minister may wish to repeat that.

Can the minister explain the position of the government, both his position and that of the Premier? Then I'll follow up with some questions about suggestions that the Premier made about replacing equal population shares with equal age-adjusted population shares.

[1025]

Hon. K. Falcon: Back in December the Finance ministers from across Canada met here in Victoria with the federal Minister of Finance. The critic is correct. At that time the federal minister advised the provinces of what they would be doing on a go-forward basis in dealing with the issue of the Canada Health Transfer. This is the portion of federal dollars transferred to provinces to help support the delivery of health care services.

The decision of the federal government was that they would maintain a continued 6 percent increase in the Canada Health Transfer up to 2017-18, and at that point it would then revert to the rate of nominal GDP, which over the past decade, I understand, has averaged somewhere around 5.6 percent with a floor, at the time they indicated, of no less than 3 percent in terms of annual increments.

I said at the time, and it is still my belief today, that given the current economic situation the country finds itself in, I do think that although it is long considered a tradition of provinces every time they meet with the federal government to maintain the mantra of "give us more money" — "give us more money" has always sort of been the mantra at federal-provincial meetings — at the end of the day, there is only one taxpayer.
[ Page 11645 ]

It is in the interests of British Columbia to make sure we have a strong federal government. It's in the interest of British Columbia to make sure we have strong provinces. I felt that the commitment to continue with the 6 percent increases, especially given the very difficult economic circumstances that the country is in, was actually more than fair in terms of the federal government.

Now, I said that with a couple of very important provisos, of course, both in the private meetings I had with Minister Flaherty and with the other ministers but also when I spoke to reporters afterwards. I said that while I didn't have any quibble with the increment, the increase that the federal government was putting forward — which I felt, given the economic circumstances, was actually quite generous and reasonable — I did have a problem with the manner in which they plan on distributing those increments.

As the member and the critic well knows, in 2014 they're moving towards what they call equal per-capita distribution of those dollars. British Columbia registered two concerns. The primary one, of course, is that equal per capita does not recognize one of the — not the only, but one of the — drivers of health care costs, which is an aging demographic. British Columbia has an aging demographic. We are a jurisdiction, happily, where people from other provinces like to come and retire. That is typically in the years in which they will probably consume the majority of their health care expenditures.

[1030]

Having a strict equal per-capita formula, we advised Minister Flaherty — and I said so publicly — did not adequately take into account the true costs of delivering health care. It would greatly reward a province like Alberta to the tune, if my recollection serves me well, of over a billion dollars a year annually to their benefit. British Columbia would be effectively penalized under equal per capita, in the first year, somewhere in the range of $250 million. That doesn't make a lot of sense to me, and we indicated that to the federal minister.

I also made the additional point to the minister and to my colleagues that the federal government needs to look at a system that rewards jurisdictions that have actually done and demonstrated that they have done a good job in bending down the growth curve in health care expenditures.

It is my view, having been a former Health Minister, knowing what the challenges are in terms of health care expenditures, being part of a government that has seen our health care expenditures double in the 11 years that we have been in power from just over $8 billion to today over $16 billion, the truthful answer to the public is it is not just about more money. It is about doing things differently in the health care system that will drive better outcomes for patients and also for the government that is providing the service in underwriting the vast majority of the costs of delivering that service.

The second point that I made strongly to my colleagues and to the federal minister is: they ought to have, as part of their formula, something that rewards governments that have demonstrated they can do a good job in delivering health care services efficiently. That does not have to be at the cost, by the way, of outcomes.

British Columbia has gone from…. When we got elected, we had the most expensive health care costs per capita in the country. Today we've got the second-lowest health care costs per capita in the country. But we lead on almost every important indicator that the federal government measures the provinces on.

That's not just myself saying that. That is the Canadian Institute for Health Information, CIHI, and others and the federal government that measure the government on a whole range of issues. British Columbia stands very well on those issues. We're typically in the top three on virtually every measurement.

We've got some of the longest life span, certainly in Canada, right here in British Columbia, for both men and women. We have the best cancer outcomes in the country right here in British Columbia. We've got the lowest smoking rate. We've got some of the fastest times in terms of wait times for surgical procedures that are measured by the government. We think that those kinds of measurements and outcome performance are important.

The federal government has not agreed with us thus far on that point. The critic opposite is correct in pointing out that this minister and the Premier have taken that message to the federal government. Other Premiers are taking that message. Our challenge, of course, is that typically what happens in Canada is the provinces will have different ways of trying to deal with this. Without a completely unified voice to the federal government, it always makes it, I find, historically more difficult to actually bring about the change you need.

Those, I think, are two important principles that I was very upfront with the Minister of Finance and my colleagues about that I felt should be included to ensure that the formula is more fairly distributed to provinces.

B. Ralston: I take the minister's point about provincial per-capita health care spending. I believe Alberta's per-capita health care spending is 24 percent higher than British Columbia's. Maybe that's the benefit of a number of generations of oil revenue. But certainly, a big difference between Alberta and a number of other provinces, despite their claim of fiscal probity and a nominally conservative government.

I do want to ask the minister, to follow-up then, that given the formula that was announced by Mr. Flaherty at the…. I call it the first ministers conference. I think technically it's the Council of the Federation meeting. On January 17, 2012, the Premier, on behalf of the province, proposed a change in the Canada Health Transfer
[ Page 11646 ]
formula moving from, she suggested, equal population shares to an equal age-adjusted population share.

[1035]

First of all, I just want to confirm that that was the position she took on behalf of the province — I think, to address what the minister referred to as the different impact upon British Columbia, given the different demographic structure. I mean, it may be crudely put, people from Alberta tend to retire in British Columbia, but I'm sure that's not the only factor that contributes to the different demographic structure. Alberta is a relatively younger population and, therefore, for all kinds of obvious reasons, less of a fiscal strain on their health care system notwithstanding their ability to fund it at a much higher per-capita rate.

Can the minister confirm that was the position that the Premier took to the Council of the Federation? Perhaps he could give some more detail about that, and then I'll ask some follow-up questions.

Hon. K. Falcon: That is an accurate representation of the position that both I and the Premier have advanced.

B. Ralston: Can the minister advise: were the Premier's position and the position of the Finance Minister advanced at the Council of the Federation to be adopted, what would be the impact upon the annual Canada Health Transfer, going forward? And that would be the new formula, not the current one, obviously.

Hon. K. Falcon: Moving to an age-adjusted formula would provide an estimated lift in revenues to the province of anywhere between $110 million to $140 million. Staff advise me that's dependant on census data. Obviously, that would be some improvement on the formula.

To add to that, because I want to take off a little bit on what the member said about Alberta, we think it's very important that the formula also reflect — which is the point I was really pushing at the gathering of the Ministers of Finance — a system that rewards the provinces that are demonstrably making changes that are bending down the cost curve. The critic quite rightly pointed out that Alberta spends about 24 percent more per capita than does British Columbia yet gets worse outcomes in almost every one of those measurement areas that I talked about.

That is a challenge for other provinces. In the case of Alberta, because they have the benefit, obviously, of oil and gas revenues — oil revenues in particular — it provides a huge stream of dollars that allow them to push money into the health care system without the same level, I would argue, of scrutiny, oversight and discipline that we're applying in British Columbia.

We believe strongly that if the federal government has any responsibility it is certainly to make sure that Canada is going to have a sustainable health care system. And a sustainable health care system is one that requires provinces — should require provinces — to make the kind of systemic changes that can help bring about a more affordable, sustainable health care system.

[1040]

That will not happen, in my view — or it is less likely to happen — unless the provinces, through rewards and punishments, reward provinces that are actually doing and taking those kinds of steps that are bringing about sustainability.

As I said to Minister Flaherty in our meeting, you don't want to have a system of funding the health care that ends up perversely rewarding some provinces that may actually be doing a very poor job of managing their health care system and penalizing those provinces that actually have demonstrably been making changes that are improving health care outcomes for patients, which is important, but also contributing to the sustainability of the system.

B. Ralston: I gather, though, that thus far the federal Minister of Finance has not agreed to move forward on those suggestions.

I do have a more detailed question about just how that calculation came about. I know that Mr. Schreck, who follows these things very closely, did submit a freedom-of-information request to ask for the Ministry of Finance calculation that the Premier would have taken to the Council of the Federation setting out the fiscal impact of the proposed change in formula that she had.

I'm wondering if that could be shared here and explain how that calculation was made.

[1045]

Hon. K. Falcon: Staff advised me that essentially…. I understand this has been released, apparently, under an FOI. I'm not sure if it was to Mr. Schreck or not, to be honest, but apparently it's public knowledge.

Essentially, what it does is that it just goes through the population cohorts for the different age demographics, from less than one year of age right up to 90-plus years of age, and it breaks it down into a number of different cohorts and what population share of those different cohorts British Columbia enjoys. Then, essentially, it just uses what the national average is for health care spending per age cohort and applies that to British Columbia, which brings about the age-adjusted formula distribution — which, as I say, depending on the most recent census data, is anywhere from $110 million to $140 million a year additional.

B. Ralston: Can the minister explain the variation, then, of $30 million? It seems like a wide swing, given…. Presumably, this is being calculated on the latest, most recent full census, so I would think that that was a relatively fixed number. So if that could be clarified. I might
[ Page 11647 ]
say that Mr. Schreck calculated it, based on some of the data — because a number of the key data, he claims, were blanked out — at $96.3 million.

Hon. K. Falcon: The updated census data that the province has received evidently suggests that there is an increase in seniors that are migrating to British Columbia, so confirming what the critic and I both believe happens, which is that when you retire, Victoria looks a lot more attractive than Regina. That shouldn't be an altogether big surprise. Those updated census data numbers the member points to is a number that's closer to $140 million as opposed to the initial $110 million suggestion.

B. Ralston: Were this formula, then, to be adopted, the $250 million or so reduction that the new formula would result in to British Columbia…. The $250 million annually would be reduced by, I guess, $140 million, to $110 million? Is that the calculation?

A Voice: That's about right.

B. Ralston: Did the ministry also calculate the impact on Alberta and Ontario in adopting this formula? Given the very favourable demographic structure and the current transfer, Alberta would stand to lose the most. Mr. Schreck calculates it at $385 million less and Ontario $128 million less, which may speak to the likelihood, in a political sense, of this proposed revision being adopted. I wonder if the minister has any comments on that.

Hon. K. Falcon: From a negotiating point of view, I think the member is right. I think Mr. Schreck's numbers are within the ballpark. From a negotiating position point of view, we think it's important that British Columbia advance its position but also be aware, obviously, in advancing our position, that for other provinces it will not be as advantageous to move towards what we're talking about, which is an age-adjusted demographic view of how the health transfers take place. Like any approach, there will be winners and losers.

[1050]

Our goal is not to highlight the provinces that may lose under that formula but to advance the rationale behind the change in formula that we believe is much stronger than the very simple equal per-capita formula that the government has put forward, which is attractive in the sense that it has a certain appeal of saying: "Well, gee. However many people live in your jurisdiction, that's how much you should get. Divide it up. It's pretty simple."

We, of course, are pointing out that it is not quite as simple as the federal government is suggesting. Therefore, we think a couple more adjustments need to be made — reward performance and identify the age demographic as one of the other matters that need to be looked at. We think that with those modest changes, the government could have a much better formula.

Now, I think it is fair to point out what the critic said, which is that the federal government to this point is not indicating any change whatsoever. That is not altogether surprising to me. I find, typically, on these kind of things, you have to continually work away at it and chip away with your arguments until you can get to a place where they start to make some adjustments.

We've got till 2014, of course, until this kicks in — not a long time in the world of politics but enough time, I think, to continue to advance the argument and make the case.

B. Ralston: Implementing the federal Finance Minister's announcement will require an amendment to the Federal-Provincial Fiscal Arrangements Act. I'm not sure where that's at in the federal legislative calendar. Is there an opportunity, then, in the way that the minister has described, to at least advocate for some changes in the formula that might be adopted prior to legislative changes, which, given that the current government has a majority, will obviously go through relatively quickly?

Hon. K. Falcon: I'm advised that the legislative change that's required is in the current federal budget bill. So the government, as part of this current budget, will indicate, prospectively, that effective 2014 it will move to the equal per-capita distribution. That is not at all unusual for them to do that. But it is likely that that provision will be passed, subject to parliamentary approval, in this current sitting of the federal House.

B. Ralston: In the Library of Parliament background paper that I referred to earlier, the writers also make mention near the end of the paper that "negotiations among federal and provincial governments on how best to transition the CHT to an equal per-capita cash allocation have yet to commence in earnest. It is currently unknown what arrangements might be made among federal and provincial governments, if any, to mitigate the effects of this transition on funding for health care to the provinces through the CHT."

So is there any ongoing negotiation, or has there been any agreement on a transition period prior to what appears to be the new formula coming into effect in 2016?

[1055]

Hon. K. Falcon: I'm advised that the minister announced some transition issues to ensure that all provinces will not see a decline in the 2014 year-over-year, so once it moves to the new equal per-capita formula, the federal government officials have indicated that there will be no province that will see a decline. That provides some modest assistance to British Columbia, to the tune of about $37 million — meaning that there will be no overall decline for any province in terms of the transfers.
[ Page 11648 ]

B. Ralston: The minister has mentioned his efforts to persuade the federal Finance Minister of the wisdom of a formula that focused somewhat on successful health outcomes by provinces and incented better results — if that, indeed, could be directed that way.

I'm wondering. The minister will know that the new formula doesn't really impose any conditions on provinces. The previous agreement had some money tied to waiting times and to other aspects of provincial health care performance. Is his effort — to persuade the federal government to adopt that kind of a formula — one that's realistic, given that the formula that's now been adopted really places no conditions on provincial health care performance or outcomes and is simply a straight per-capita cash transfer?

Hon. K. Falcon: The federal government position with respect to the Canada Health Transfer is: "We'll provide the dollars. We'll provide annual increases. We'll do it on an equal per-capita basis. Provinces, it's over to you to figure out what you do with the dollars." That's the unconditional nature that the critic refers to.

Some part of that is, frankly, very attractive, because it is frustrating at times when you have a federal government that's trying to tell you how to manage the health care system.

[1100]

Often that advice — I find, from my experience — can be very process-driven as opposed to outcome-driven. The pitch that I am making to the federal minister and will continue to make is not to walk away from a principle that they believe, that they don't want to be telling provinces how to run their system — I understand that; they shouldn't do that — but to look at metrics that everyone can agree on are important outcomes that our health care systems ought to be driving towards and then fund those outcomes.

Not the processes. Not a prescriptive approach to dealing with how the provinces must spend the money. But simply agree on what the appropriate metrics are that we can agree on that would drive sustainability in the health care system and let the provinces figure out how they're going to get there. That's how you would encourage innovation across the land.

B.C. might have some ideas on how we can get there. I would argue that we can point to some real successes that we've had in British Columbia that are now being copied by other provinces such as Ontario, for example. Perhaps they are being driven by circumstances and heavy debt load and deficits to have to make some decisions Nevertheless, they may have done things that we can copy, in Ontario, Quebec or what have you, that would also be a success.

If the position of the government is that we're just going to divide the money up and send it to the provinces, completely unconditionally, I actually don't believe that meets — and this was my argument to Minister Flaherty — what should be an important federal objective of ensuring that Canada, Canadians, will enjoy a sustainable health care system.

They shouldn't attach strings to the money that says how we should spend it, of course. I totally support the federal government on the principle they're trying to drive by, but they ought to have, I believe, rewards for those provinces, through an agreed-upon metrics, that are demonstrating they are actually doing a job successfully of meeting outcomes that benefit the public.

I'm not there yet. I don't know whether I will ever get there in terms of convincing the federal minister, the federal government. But I hope I can, because I think that that is maybe the most important thing that should be in the national interest.

The federal government will continue to put more money into a health care system. The provinces will continue to spend anywhere from 40 to 50 percent plus of their budgets on health care delivery. It seems to me that there's a mutuality of interest here to ensure that we have a health care system that is going to be there for my daughter when she grows up and, hopefully, grandkids.

I think every member in this House would hope that that's the case, but it will never happen unless we actually have a system that starts to reward improvement and penalize those jurisdictions that are not making the kinds of decisions that are driving sustainability.

B. Ralston: I thank the minister for sharing that.

So would the formula…? I'm not sure at what stage the minister's thinking is on this, but what would be the elements of such a formula? Would they be some of the traditional metrics of wait times, for example, or emergency visits? Or would they be a broader incidence of chronic disease, incidence of cancer within the population? Is the minister thinking of a broader, long-term incidence of disease measures, or is it more a health promotion element in the formula that he's thinking about as well?

I'd be just interested in getting a sense. Certainly, this is not something that the federal government has spoken about, although the federal government is a huge provider of direct health care services to the aboriginal population. Compared to the provinces, I think it's the fourth-largest health care provider in the country when you look at its responsibilities for aboriginal health care. So it also has a direct interest in the cost of delivery of health services as well.

I'd be interested if the minister can…. I appreciate that some of these positions may be unformed, or there's maybe no detail at this point. If the minister is willing to share, I think that would be helpful.

Hon. K. Falcon: The short answer is it could be both dollar-related or incident-related in terms of the metrics that you're going to use to try and drive the performance that you want to see.
[ Page 11649 ]

[1105]

The critic points out correctly that federal government responsibility for aboriginal health care is extraordinarily expensive and gets extraordinarily poor results. This is a very good example of what I'm talking about.

We know that the incidences of chronic disease in First Nations communities are at absolutely unacceptably high levels. I would argue that a metrics that actually invests more up front on disease avoidance and encouraging healthier lifestyles, healthier eating habits, dietary support, etc., would drive dramatically improved outcomes for First Nations residents in reserves right across the country.

So that's exactly the kind of thing that we think we ought to have the discussion about. I think that reasonable Health Ministers across the country could probably identify what the appropriate matrixes are and the federal government could, in cooperation with the provinces, adopt an appropriate set of metrics that we could then utilize going forward.

I'm open to, you know, having our Health Ministers have a discussion on what those could look like. But there is no doubt in my mind that if they did that…. For example, let's pick one. Let's just pick smoking rates, as an example. British Columbia leads the country in having the lowest percentage of the population that are smokers. The further east you go, the higher the rate of smoking rises until you get to the east coast. Unfortunately, in places like Newfoundland, etc., they have very high rates of smoking. It can be 20 percent or higher.

Something that rewards governments for successfully bringing down the percentage of smokers in their communities not only will provide significant savings to the health care system but will likely induce the kind of behaviour and changes that we've done in British Columbia and make them national in scope. Everything from banning all the marketing, of course, of cigarette advertising; making sure that stores can't have the power walls of cigarettes that used to be so common and that you no longer see in British Columbia; making smoking something that is not tolerated, obviously not in offices, but not even in restaurants, not even in public gathering places, etc.

Now a lot of municipalities are even going further and outlawing it on beaches, etc. The evidence clearly shows that the more it becomes socially stigmatized, in terms of the options for people to engage in smoking, the less likely it is for young people in particular to take up the habit.

That's just one example. There could be lots of other examples. We simply are of the view that that could be an excellent way of the federal government saying: "Here are some metrics that could drive better outcomes."

Patient-focused funding. We're developing lots of data right now to demonstrate that through the use of activity-based funding you can drive improved productivity and dramatically impact wait times. You can do it in a way, by the way, that learns from the challenges in other jurisdictions around the world, because just pure activity-based funding is not going to be successful. You have to weight it in the terms of the type of clientele, the level of acuity, the different types of procedures that you're going to offer.

There are ways in British Columbia…. Certainly, we're leading the country in terms of patient-focused funding and the results that we're getting — in emergency departments, in emergency rooms, in tracking patients. I think that's a very important success that we want to see the federal government encourage and not discourage.

That's a long answer. I apologize to the critic. I think the bottom line is: let's have Health Ministers work with the federal government, develop what those metrics are and then reward the provinces that are doing the right thing.

B. Ralston: I thank the minister for that answer. I want to move to another topic.

This, again, is in the realm of budget-building and future costs. The various provinces have taken different positions, and I know that British Columbia has its own position, on the likely costs of the federal crime bill. I have an article here, provided to me, that the Minister of Correctional Services in Ontario estimates the federal crime bill will cost Ontario a billion dollars. That would come from increased prison population and increased police resources.

[1110]

Quebec has said that it will demand — and perhaps this is an approach that's not unknown to Quebec — that Ottawa repay the costs associated with the implementations of the omnibus crime bill. They estimate it will cost as much as $600 million to build new prisons and pay for other costs.

I know that the Premier was quoted in the late fall, explaining that the Solicitor General did have some concerns but that no calculations had been done. I don't think there's a clearer number that's emerged from the Solicitor General. Obviously, in budget-building, the minister will have had the Treasury Board people working on that.

The independent parliamentary budget officer has provided some estimates. He said he's somewhat hampered by not having all the data — that the federal government hasn't provided it to him.

I just want to be clear, because this has been…. When this topic is raised, unfortunately, some ministers — not this minister — have the tendency to suggest that, for some reason, the official opposition is opposed to the crime bill, is in favour of child pornography or other absurd claims. I'm not suggesting this minister has ever said that.

I just want to make it clear that we support the broad intent of the crime bill, and specifically, on Internet luring or child pornography, we — like 99.9 percent of the Canadian public — support that initiative. I feel obliged
[ Page 11650 ]
to say that, unfortunately, just so that it's clear.

This is really a discussion. Given the reality of the bill and the fact that it's been passed and that there will be increased costs, I'm wondering what efforts have been made to calculate more precisely the impact upon the British Columbia budget in the years going forward.

[1115]

Hon. K. Falcon: It's legitimate for the critic and, frankly, the public to question what impact Bill C-10 is going to have in terms of the costs of administrating the downstream effects of the introduction of the bill.

I appreciate what the member says. I accept that the members opposite share, as we do, the strong support for the provisions in the bill that are providing tougher penalties for Internet luring, child pornography, child sex offending, violent offences, etc. We certainly are extremely supportive of that.

In fact, there could potentially be some benefits to the province on that. Obviously, if people are doing federal time, two years plus, they're going to be spending time in a federal institution — keeping them off the street, probably reducing a lot of our Solicitor General criminal costs. There may be some benefits there.

The issue, of course, is how much additional cost will be driven onto cases that may find themselves in provincial facilities. A lot of concern, legitimate concern, has been raised about the marijuana penalties in particular.

From government's point of view, I think the short answer is…. One of the reasons why we undertook the justice system review and are having Bruce Cowper, a distinguished legal mind, look into the justice system and make recommendations back to government is that we are really concerned about a situation where we have seen a decline in the number of criminal cases in the province of British Columbia — a rather rapid decline, actually, in part driven by demographics, I'm sure — but we have not seen any decline in terms of the time it takes for cases to get through the criminal justice system nor in the cost of processing those cases through the system.

That, of course, is of great concern to us on a couple of levels. Obviously, there is a monetary level — all governments have responsibility to try and manage taxpayer dollars in an efficient manner — but also just in terms of confidence in the system. We believe public confidence in the system is reinforced when there's a sense that the system works for the benefit of the public.

I have said it publicly — I have been criticized for it — but I am not at all convinced that we're anywhere close to where we could be by working cooperatively with the judges and the judicial system — not undermining in any way or trying to question the judicial independence of the judiciary, which is important and constitutionally founded, but to see whether there are ways in which disparate parts and actors within the system could cooperate better to achieve better outcomes.

That reform, we believe, can potentially yield some significant savings. But I can't say exactly how that would apply and whether that would be enough to counter some of the additional costs that may result out of C-10.

What I can tell the member is that we haven't seen any of those increased costs yet. In other words, staff advise me that they've not yet — they monitor this fairly closely — at least at this point, seen those increased costs, nor do we anticipate that in the course of the current fiscal plan that we're likely to see any dramatic change in costs.

We are obviously, on our own initiative…. The member would know, being a member from Surrey, that we're engaged in a massive expansion of the Surrey Pretrial Centre. The member would know that we're building a new provincial prison facility in the Okanagan, which is going to add capacity. We think that the $237 million that we've added to the criminal justice branch, the new merged Solicitor General and Attorney General Ministry, will go a long way towards ensuring that they've got the additional resources to deal with policing, new sheriffs, new judges, new clerks, etc., to assist in the system.

At this point we think that it's difficult to quantify what that cost would be, but we are comfortable that we can manage the cost in the near term. I think that in the longer term, critic, I'm advised that there are discussions taking place, apparently, in the Attorney General's world — provincially and federally. I can't say whether those discussions are the kinds of discussions that could lead to a financial resolution. We're certainly not banking on it within our current fiscal plan.

[1120]

B. Ralston: I appreciate the answer. I must say I'm a bit skeptical about the proposition that costs will not rise. I'll give the minister an example in the recent past.

At one point, relatively not too long ago, the province had a mandatory seven-day minimum if one were convicted of driving while prohibited. What that generally tends to mean in the court system is that if people are faced with the prospect of jail they don't tend to want to plead guilty. They tend to want to go to trial and encourage their counsel to do everything they can to try and have them found not guilty.

That creates a further burden on the court system. There are the bookings for those trials. When people are under the legal aid system — people, if they're faced with a mandatory jail term, are entitled to legal aid — that's an additional cost. And when people are convicted, there's an additional cost to Corrections, even if people only serve that in a halfway house on weekends.

Ultimately, I think — and maybe this was a factor, although the government didn't acknowledge this publicly — that seven-day minimum was done away with, and those increased costs, presumably, disappeared. When you have mandatory minimums, of which C-10 does bring in a number, that effect of encouraging people to
[ Page 11651 ]
plead not guilty — to set a trial date, to go to trial, to fight to the bitter end to avoid going to jail, because it is a real deterrent for many people, obviously — has that run-on effect.

I appreciate the minister's comments about justice reform. I believe it's Geoff Cowper; I only know that because I went to law school with him many years ago. I appreciate what the effort is there, to deliver services differently and to make the courts run a little bit more effectively. I'm wondering whether that will be successful. But certainly this is a major countercurrent in the other direction.

Are those factors being considered? Are they being accounted for in at least the three-year fiscal plan, if not longer?

Hon. K. Falcon: In many ways I would defer to the member's expertise in terms of the justice system. He's got much more experience than I do in terms of working in the system as a defence lawyer handling a lot of cases.

What I will say is that the reform initiative of government undertaken by…. He's formerly known as Bruce Cowper, now apparently Geoff Cowper. I apologize to Mr. Cowper if I got his name wrong. The efforts that we're trying to make are obviously to try and realize some commonsense improvements to the administration of the system that would provide, essentially, greater productivity within the system.

You know, in virtually every other human endeavour, we've been successful in doing so, and I don't believe that we should exclude the justice system from the same kind of analysis that we put every other system of human endeavour through, certainly in government. So I'm hopeful that thoughtful minds can work together on finding a way to improve things. I believe they can.

But we're also trying to move things out of the system. As the member would know, the Family Law Act goes a long way towards doing that. The new legislation introduced recently in the House to move traffic fines, potentially, out of the criminal justice or the court system into a mediated process is another opportunity. Even with all that, I accept….

I think the premise that the member is really pointing out, particularly using the U.S. example, is that mandatory minimums in the United States, as an example, have been spectacularly unsuccessful for the most part. They've been successful in jailing people. There's no doubt about that. The U.S. has the highest percentage of population in jails, I believe, with the exception of perhaps China and maybe Russia. They have a very high proportion of their population that are currently jailed.

I think that the public policy rationale behind, you know, "Three strikes, you're out" and some of the other things that have taken place in the U.S. system have, you know, had horrible impacts in terms of the United States judicial system.

[1125]

The idea of mandatory minimums on child sex offenders, those that are involved in child pornography, Internet luring, etc…. Frankly — well, just a personal view — as a taxpayer, I'm quite prepared to pay the price to keep those people behind bars as long as necessary. I don't have any particular objection to the mandatory minimums there.

I do think, though, that you have to be very judicious in what you're applying mandatory minimums to in order to ensure you don't go too heavily in the wrong direction. You know, Member, I think with this one it's really going to come down to: what is the impact of Bill C-10 going to be? It's a bit undetermined.

What I can say is that the $237 million that Budget 2012 has added in the current fiscal plan to the Ministry of Justice, we believe, will help them manage pressures. It won't relieve them of every pressure that's out there. It will help them manage pressure at the same time that we're taking other initiatives as government to reform the system, to try and take out of the system the kind of cases that can take up a significant amount of court time at a significant amount of cost, and just try to have a better-functioning system.

Between those efforts, we think that we can manage whatever pressures may result in the near term as a result of Bill C-10.

B. Ralston: I appreciate the minister's comments. The minister mentioned American examples. I believe the cost of prisons in California, the budget, exceeds that which they pay for universities, which might appear, to many, to be a wrong sort of priority. The incremental result in public safety is probably, I think, in the view of many, not worth the additional cost.

I want to move now to another topic. In note 25 in the Public Accounts, there's an item called "Protection of persons and property." These are under "Contingencies and contractual obligations." In the expanded versions, the supplementary detail — it relates to the Ministry of Public Safety and Solicitor General — it says that provincial policing contracts for 2012 is $284 million, and then for 2013, 2014, 2015, 2016 and 2017 and beyond it's blank. Obviously, that's not going to be the case going forward.

I'm wondering if the minister could explain what those numbers are, given that a new agreement has been concluded.

[1130]

Hon. K. Falcon: The Public Accounts, of course, just will be pointing out only the existing contractual obligations that we know of at the time. Of course, at that time the RCMP budget had not yet been signed. Going forward, of course, we weren't aware, because we didn't have a signed obligation there to include it. But it is, of course,
[ Page 11652 ]
included as part of the budget.

The member can see that, certainly, in the vote description. Vote 32 under "Solicitor General operations" — there's a voted appropriation in '12-13 of $326,672,000 for policing and security programs.

Also, on page 28 of the budget we include $10 million a year, under table 1.15. I'll just allow the member to catch up to me here.

So on page 28 of the budget, table 1.15, we've got a line item there, "Supporting increased provincial RCMP policing costs." We included $10 million a year, so $30 million to cover increased provincial RCMP policing costs. Then right below it, you see, also, the $66 million to maintain the dedicated officers, the 168 police officers, that are combating organized crime in gangs.

[1135]

This refers to…. Initially we had federal contributions toward setting up that organized gang of the police. That federal funding ran out, and we are continuing to make up the difference to ensure that we keep the 168 police officers that are dedicated to combatting organized crime in place.

B. Ralston: Can the minister just clarify the number that's in the public accounts, the $284 million? I would like a directly comparable number. I appreciate that there have been some increases to service and the items that the minister mentioned. So the $326 million — is that an increase from the $284 million, or does that include the augmented services as well?

[1140]

Hon. K. Falcon: If the member has vote 32, "Solicitor General operations," in front of the member — I'll just allow him to get to page 129 there — he'll see that the voted appropriation for '11-12 is $294 million. That's about $10 million more than the $284 million that the member refers to in public accounts for the provincial policing contracts. This will include the provincial policing contracts. Plus, there will be other things that are in the voted appropriation description — things like securities program division, etc., that will make up that additional $10 million.

Then if he goes over to the next column, estimates 2012-2013, which is the $326 million, that will include things like the $32 million that I talked about — $22 million for the guns and gangs, $10 million of additional dollars for the policing contract going forward, etc.

B. Ralston: I want to turn to another topic. One of the key elements in the budget going forward has historically been determined…. Certainly, the revenue side has been determined by the price of natural gas. On page 134, in the appendices to the budget, the natural gas price. There are some assumptions in the budget, and it's noted in the "Sensitivities" column: plus or minus $1 change in natural gas prices equals, plus or minus, $350 to $390 million. Obviously, a swing in the natural gas price can have a huge impact upon provincial revenue.

The minister will know that the longer-term projections for the price of natural gas have been trending downward, given the shale gas revolution and given extra supply in North America.

I'm wondering what the current projection is for the price of natural gas over the next year. I note that for the budget estimate, it is a price of $2.52 at Plant Inlet and $3.88 at Sumas. I'm not sure what the Henry Hub price is, but I would expect it would be lower.

Can the minister confirm either that those projections for the budget are still in effect or they have been revised? And can he advise what the impact upon revenue might be and then the resulting impact upon the projected deficit or surplus?

[1145]

Hon. K. Falcon: With respect to natural gas forecasts — in fact, all forecasting, the member, critic might find…. This was of some interest to me as I was being involved in building my first budget. The professional staff in the ministry — typically what they do, in the case of natural gas, for sure…. The Ministry of Energy surveys all of the industry professionals — I think there are about 18 — to try to make a determination of an average forecast based on a whole range of indicators that you can see in the budget on page 137, which provides a sort of natural gas forecast going forward.

The nature of natural gas, of course, is defined by one word, which is "volatility." What staff advise me is that one month does not a trend make. It can be very volatile going up and down. What the staff have done, though…. If you look back at Budget 2011 and then you look at Budget 2012, you will see that there was a pretty significant downgrade in terms of the estimates on what natural gas forecasts will be, thankfully.

Even now — particularly given what's happening with shale gas, given the mild winter weather that we just had — we've seen even further reduction in natural gas prices. Again, we're forecasting over a three-year period. I guess if I could summarize what the industry experts will say to justify the data that they provide the ministry, which then forms the forecast, is that they believe a couple of things are going to have some impact.

The first is switching. The differential now between natural gas and oil has been the highest it has probably ever been. That, as I understand, is going to induce some additional behaviour-switching. So we've seen, for example, in British Columbia where we've had truck fleets that have, on their own initiative, transferred over from diesel to natural gas, given the huge price differential. There is some belief, apparently, in the sector that that will continue apace as we see the continued strength of oil prices.
[ Page 11653 ]

There will also be, as new opportunities open up for LNG exports to the burgeoning markets in Asia…. There was a recent story — I forget the financial paper I read it in — that was indicating some concern in the United States that as British Columbia and the United States are looking at this opportunity for LNG export, it could have the effect of driving up prices of natural gas domestically in North America. You know, that may very well be true. Obviously, that could be an outcome.

I think the bottom line, though, is that it is very volatile. It's something that we continue to watch and monitor very closely.

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

Motion approved.

The committee rose at 11:49 a.m.

[ Return to: Legislative Assembly Home Page ]

Hansard Services publishes transcripts both in print and on the Internet.
Chamber debates are broadcast on television and webcast on the Internet.
Question Period podcasts are available on the Internet.

TV channel guide • Broadcast schedule

Copyright © 2012: British Columbia Hansard Services, Victoria, British Columbia, Canada