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

Afternoon Sitting

Volume 37, Number 4

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

TUESDAY, MAY 8, 2012

The House met at 1:34 p.m.

[Mr. Speaker in the chair.]

Routine Business

Introductions by Members

Hon. C. Clark: I am delighted today to make a couple of introductions. First of all — oh, they're not in the gallery; maybe I'll give them a minute to get here — I would like to introduce, from the north Island, Dan Berkshire, Nick Facey, Norm Facey, Alex Woods and Darlene Woods; from Maple Ridge, the fabulous Terry Becker; and from Delta South, David Fredrickson. I hope the House will make them all very welcome if they see them around the chamber.

In the gallery today Amy Sharma is here with her three-year-old daughter, Amiyah Sharma, and 18-month-old daughter, Elisha Sharma — gosh, you wonder what she was thinking, moving so fast on that — and her sister-in-law Harinder Jassal. Amy has the distinct pleasure of being married to Rishi Sharma, who works for us in the Legislature and does a fantastic job.

Amy and family, welcome.

Last — they haven't arrived yet — I am pleased to say that in the precinct we have 38 visitors from Queen Mary Elementary in my constituency of Vancouver–Point Grey. They're travelling with some parents and their teacher, Ms. Maria King.

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They're here to experience the history of these buildings, learn a little bit about parliamentary tradition and take some pictures and notes that they'll share with friends and family when they get home. I hope the House will please make this fine group of young students very welcome.

Hon. J. Yap: Today I have the privilege to welcome back a group I hosted in 2007, five years ago. Actually, since then these guests have talked about their visit to the Legislature. Once again I decided to bring them back, and this time a much bigger crowd has joined us.

First, we have friends from the Chinese Canadian Military Museum Society. This organization operates a unique museum, with its goal being to highlight to the general public that there was a significant contribution by Chinese Canadians in both world wars, which is largely unknown within and outside the Chinese-Canadian communities. Not only do they operate a museum; they also organize tours and talks and undertake special projects designed to promote awareness of the experience of Chinese-Canadian soldiers.

Here with us today in the gallery are Col. Howe Lee; Cdr. King Wan; Lt. Cdr. Kit Wong; George Ing, retired lieutenant colonel; Alfred Woo, retired major; Paul Lee, retired lieutenant; Tim Chu, retired sergeant; and Hank Lowe, retired master warrant officer.

We also have World War II veterans George Chow, Ed Lee, Monty Lee, Peggy Lee, James Wing, Frank Wong, Bill Wong, Thomas Wong, Chong Joe, Leonard Wong, Victor Wong, Gordie Quan, Andy Wong and Michael Chow. Also, we have veterans from Hong Kong: Paul Tsui, Edmund Wu and Kelly Kwong.

Secondly, we have a number of aboriginal veterans joining us here at the Legislature. Echoing with the Chinese veterans, the contribution of aboriginal veterans has not been fully recognized. The main work of this association is to remind all Canadians of that contribution.

We have with us in the gallery Richard Blackwolf, president of the B.C. and National Aboriginal Veterans associations, and Victor Flett, Marlene Lefever, Elmer Sinclair and Joy Ward Dockery in the gallery as well. Accompanying them are veterans Chaplain Wesley Lowe, Trevor Sam and Vincent Chan.

Would the House please provide a warm greeting to these folks for their outstanding service and dedicated commitment to protecting the freedom of our great nation and province.

Hon. M. de Jong: Multiple sclerosis is a chronic and disabling neurological disease that affects 55,000 to 75,000 Canadians, and that includes 8,000 British Columbians. In the House today are representatives from the Multiple Sclerosis Society of Canada. They are here in recognition of the fact that May has been proclaimed MS Awareness Month. I was pleased to meet with them earlier and introduce the House to them now.

They are Marilyn Lenzen, chair of the B.C. and Yukon division board of directors; Todd Abercrombie, executive director of the south Vancouver Island chapter; Sharon Farrish, director of programs, B.C. and Yukon division; and board members from the south Island chapter, Carol Pal and Ernie Stigant.

I know all members will make these representatives from MS Canada very welcome here in the precinct.

M. Stilwell: I'd like to introduce three guests in the gallery today. Sarah Hardy, Cameron Bishop and Tina Cantrell came to visit. They work for Reckitt Benckiser and were here to talk about a new drug for the treatment of opiate addiction. Will the House please make them welcome.

Hon. M. MacDiarmid: I am pleased to introduce two people who work very hard, along with their teams, on behalf of families all around British Columbia every day. Marianne Drew-Pennington, executive director of the B.C. Association of Family Resource Programs, is with us in the House today, as well as Marilee Peters, executive
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director of B.C. Council for Families. I'd like everyone to make them very welcome.

M. Dalton: In the gallery are two very special and lovely ladies: my wife, Marlene Dalton — we have been married almost 27 years, and she's been a tremendous support to me — and also my daughter Hannah. It's the first time watching these proceedings live and in colour. Hannah is a third-year university student going to SFU, taking public administration and French and political science. Bonjour, Hannah.

Would the House please make them feel welcome.

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Hon. G. Abbott: In the gallery today are two staff members from the Ministry of Education. Heather Langton is the executive administrative coordinator in the ministry, and Susan Baines is senior executive assistant. Would the House please join me in making them welcome.

Hon. P. Bell: Joining us in the gallery today is chair of the Tourism Industry Association of British Columbia, Lana Denoni. Lana is working hard to make sure we have strong representation from the tourism industry, one of B.C.'s most important sectors. Would the House please make Lana very welcome.

Tributes

DOUG ADAIR

R. Hawes: Mr. Speaker, it's with regret that I advise of the passing of Doug Adair. Doug was a longtime Mission activist. He served on the Mission city council with me for a number of years. He was father to Robin Adair and Marisa Adair, both of whom I think are well known to many members in the House here. I hope the House will send their deepest sympathies to the family.

Introductions by Members

J. Horgan: Today is the last day we can look up at the gallery and introduce Joe Trasolini and Gwen O'Mahony, because tomorrow they'll be sworn in as members for Chilliwack-Hope and Port Moody–Coquitlam. Would the House please make Joe and Gwen very welcome.

Introduction and
First Reading of Bills

BILL 53 — FAMILY DAY ACT

Hon. M. MacDiarmid presented a message from His Honour the Lieutenant-Governor: a bill intituled Family Day Act.

Hon. M. MacDiarmid: I move that Bill 53 be introduced and read a first time now.

Motion approved.

Hon. M. MacDiarmid: Supporting B.C. families is an absolute priority for our government. In 2012 families had a long stretch between New Year's Day and the Easter break without a long weekend. It was 94 days, to be exact.

Beginning in 2013 we're setting aside one day a year — Family Day, a day in February when families can spend quality time together. Of course, we strongly encourage families to get out, to be active and to spend as much quality time with each other every day. But an extra day off will be a great chance for all of us to recharge and focus on what's really most important in life — our family.

The new family holiday is just another example of how the government is helping grow stronger families and communities all across the province. By waiting to implement the holiday until 2013, we've given the business community time to plan and prepare, part of wanting to keep our economy strong and protect jobs in this province.

We recognize the timing of the new holiday itself is important. Our government is undertaking an engagement process, because we want to hear from British Columbians about which day in February they believe should become the new statutory holiday. We want families to help us select a day that works best for them. Because we recognize that a new holiday will have an impact on our economy, we also want to hear from worker groups and educators as well as tourism and the broader business sector about how the timing of the new holiday will impact them and what their preferences are.

Once this feedback has been taken into account, a final decision will be made, and the date of Family Day will be confirmed. With the passing of this bill, British Columbians will have ten statutory holidays, including Family Day, beginning in 2013.

I move that Bill 53 be placed on the orders of the day for second reading at the next sitting of the House after today.

Bill 53, Family Day Act, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Statements
(Standing Order 25B)

MULTIPLE SCLEROSIS AWARENESS

M. Mungall: May is Multiple Sclerosis Awareness Month, and today is specifically dedicated to raising awareness about MS. As the flowers bloom this month, most of us take for granted that we can bend down to
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enjoy their fragrance, maybe pick them for our moms on Mother's Day. But many with MS struggle to do this and other simple tasks. My mother-in-law is one of them.

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MS is a complex disease. It is unpredictable, affecting vision, hearing, memory, balance and mobility. Its effects are physical, emotional and financial, and last a lifetime. Everyone in a family is affected. Everyone in a community is affected. We need to ensure that those left disabled from MS can still access their community and have the supports they need to live well, because there is no cure.

Most of those diagnosed are women, and it is the most common neurological disease affecting young adults in Canada. Every day three more Canadians are diagnosed, leaving us with one of the highest rates in the world. Unfortunately, we don't know what causes multiple sclerosis.

For some, liberation therapy is making a positive difference. For others, it isn't. We need to know more about why this therapy has a wide variety of outcomes for those diagnosed with MS. So research continues, as it does for all aspects of MS.

On May 27 people living with MS, their families, friends and community will be gathering at Lakeside Park in Nelson for the annual MS Walk. With each stride they are not only raising funds for a cure; they are raising awareness that we all have something to contribute in finding that cure.

ASIAN-CANADIAN AND
ABORIGINAL WAR VETERANS

R. Lee: As we celebrate Asian Heritage Month in May, it's also a time to remember the history of Asian Canadians and recognize their contributions. Let's not forget the Komagata Maru incident in 1914, the Japanese-Canadian internment during World War II, the Chinese head tax from 1885 to 1923 and the Chinese Exclusion Act from 1923 to 1947. Chinese-Canadian veterans played a major role in the repeal of the Chinese Exclusion Act on May 17, 1947.

Visiting the House today are many of the heroes who volunteered and risked their lives for Canada. At that time they were denied the right to vote and banned from occupations that required one to be a citizen, such as dentistry, law and politics. We have Thomas Wong from Victoria, who was the first Chinese Canadian to enlist and be accepted by the RCAF. Interestingly, his father was a cook at Government House.

Frank Wong from Alert Bay was in the second landing in Normandy during World War II. His unit fought their way across France and Belgium and eventually took part in the liberation of Holland.

George Chow from Victoria also landed on Normandy Beach. His unit was the first Canadian unit to shoot down an enemy aircraft. Chong Joe joined the Canadian army and fought in India and Burma during World War II.

Special welcome to veterans Ed Lee and Monty Lee, whose father and my grandfather are cousins.

Today we also have five aboriginal veterans led by president Richard Blackwolf in this group of respected heroes.

I want to offer my thanks to the Chinese Canadian Military Museum Society for preserving this valuable part of our history. I would like to ask the House to recognize the significant contributions of the Chinese-Canadian veterans and aboriginal veterans in fighting racism and helping bring equality to British Columbia and Canada.

RICK HANSEN'S 25th ANNIVERSARY RELAY
AND STURGEON RECOVERY INITIATIVE

K. Conroy: On April 23 to 26 the Rick Hansen 25th Anniversary Relay travelled through Kootenay West, involving hundreds of participants. In addition to the relay events, we also had the pleasure of Rick himself participating in the sturgeon release event on the Columbia River. Not only is Rick an advocate for spinal injury research; he's also an advocate for sturgeon.

I participated in a number of these sturgeon releases, but that one was definitely exciting, with Rick there to talk to the hundreds of school kids and the public who came out — well over 1,000 participants in total. Approximately 4,000 baby sturgeon were released into the Columbia River, with over 2,000 of those at the event at Hugh Keenleyside dam.

You might ask: why are white sturgeon so important? It is North America's largest and longest-lived freshwater fish. It can live for over 100 years. The sturgeon family has remained largely unchanged for the last 175 million years, when dinosaurs lived here, and they can grow to be over 19 feet in length.

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All fish released had a tag on them about the size of a grain of rice carrying a unique ID number. If the fish is caught in the future, it will be scanned and the catch data entered onto the program's website. We all got the ID number of the fish we released, so we can track the sturgeon to see if they made it or not.

I wanted to thank everyone that was involved in making a really great event that my grandkids and I thoroughly enjoyed. This is the 11th release hosted by the Upper Columbia white sturgeon recovery initiative program, coordinated by Angus Glass and funded by B.C. Hydro, the fish and wildlife compensation program, Teck and FortisBC.

In addition to Rick and his relay team, including locally raised Max Voykin helping out, there were other sturgeon helpers at the information tent and down by the water where the fish were released. These included students from Stanley Humphries; the Castlegar Rotary
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Interact Club; support from Celgar, Golder, Interfor and Mountain Transport Institute; and the Freshwater Fisheries Society of B.C., who raised the very healthy baby sturgeon that we released.

I know they all made an impact, and the day was an incredible success when my five-year-old granddaughter Aiden squealed with delight as she released her sturgeon: "Oh, she is so cute, Granny." Have you seen a sturgeon? They just aren't that cute.

MULTIPLE SCLEROSIS AWARENESS

K. Krueger: Today we proclaim the month of May as Multiple Sclerosis Awareness Month. I wanted to acknowledge our colleague from Nelson-Creston across the way, who has spoken to this already, and the Minister of Health — a tremendously important issue.

MS Awareness Month calls attention to British Columbians and all Canadians living with the challenge of MS. We recognize the strength and dedication of those with MS who continue to live life to its fullest.

Multiple sclerosis is a chronic, often disabling neurological disease affecting an estimated 55,000 to 75,000 Canadians, including 8,000 British Columbians. MS symptoms vary widely and affect people differently. MS may lead to problems with numbness, coordination, vision, speech, as well as extreme fatigue and even paralysis. Unfortunately, the cause of MS is not known, and currently there is no cure.

Those with MS face an uncertain future, despite progress in treatment options. That is why the Multiple Sclerosis Society of Canada is so important. Founded in 1948, they have been leaders in funding vital research, support and services for people with MS.

We're seeing advancements in treatment for MS. Research into the cause, prevention and treatment has paid off. Accessing these supports, treatments and services means people with MS can live long, independent and fulfilling lives.

The dedication of the MS Society of Canada ensures MS research and support will continue, and our government is committed to continuing to raise awareness about MS. Raising awareness about MS ensures that those with MS are supported in their communities, and British Columbians with MS know they are not alone.

During the month of May we celebrate the strength and dedication of those British Columbians and Canadians living every day with MS. We honour their perseverance and hope, and we share their hope.

I ask all members to take a moment today to share MS awareness with your communities.

PARENTS DAY CELEBRATION
BY KOREAN COMMUNITY

J. Kwan: A child is a beautiful sight. As parents we offer unconditional love, support and guidance to nourish each of our children's growth and development.

In British Columbia it is traditional for us to celebrate Mother's Day in May and Father's Day in June. It's an opportunity for us to say thank you to the very people that brought us into this world.

In South Korea and here in British Columbia's Korean community May 8 is the Parents Day celebration. Parents Day, just like Mother's Day or Father's Day, is meant to celebrate and honour parents. It is a day to say thank you, a special thank-you to our parents for all the times that they put their children's needs ahead of their own.

It's a time to show our gratitude for the selfless sacrifices. In Korea carnations or roses are often given to parents as a symbol of thanks, but it is recognized that the most important gift of all on this day is the gift of time spent together.

Today in my constituency the Korean Senior Citizens Society is hosting a gathering in honour of Parents Day, a time to reflect and express gratitude for our parents as well as to gather and celebrate with food, music and dancing.

The Korean community has a very active senior citizens society, and they often host events so that the seniors have an opportunity to network, socialize and engage with the community. The many volunteers prepare delicious traditional Korean home-cooked foods for everyone, and beautiful performances are enjoyed by all.

I've had the pleasure of attending many of their celebrations. Each time I feel the warmth of their welcome, the joy of their spirit and the beauty of their culture.

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Let us join with the Korean community in thanking all the parents and elders for all they have done, by reflecting on how we can work together to support parents and grandparents for what they have given and still give to their families and to our communities.

SEVA FOUNDATION EYE CARE PROGRAMS

E. Foster: I rise today to recognize the great work of Seva Canada, an international multicultural eye charity. Seva is based in Vancouver and was founded in 1982 to prevent blindness and restore sight in the developing world. The organization provides funding and expertise to help local partners deliver community and clinical eye care programs in nine of the poorest countries in the world: Nepal, Tibet, India, Tanzania, Malawi, Madagascar, Cambodia, Guatemala and Egypt.

In consultation with local organizations, community leaders and governments in these areas, Seva works to determine the needs of an area and then provides support to help create eye care programs that are financially self-sustaining and culturally sensitive. Seva assists with the planning and launching of programs, funds the creation of hospitals and eye camps, trains local doctors and
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community outreach personnel, and provides technology and supplies for the programs.

To date, Seva's partner programs have restored eyesight to over three million people. Often it is a simple solution to restore sight or prevent blindness. A $10 pair of glasses will bring the world into focus. A ten-minute cataract surgery that costs $50 will restore sight. A $2.50 treatment for an eye infection will prevent years of blindness. These are simple solutions but ones that make all the difference for children who can see the chalkboard, adults who can go to work, and communities that are healthier and more productive.

"Seva" is a Sanskrit word meaning "service," and I would like to thank the organization for its compassionate service in preventing blindness and restoring sight.

Oral Questions

PRIVATIZATION OF
LIQUOR DISTRIBUTION

S. Simpson: We've raised a number of concerns about the request for proposals for liquor privatization. We've raised concerns about the lack of a business case, about the potential for increased prices for consumers, and concerns about the perception that Exel Logistics, a client of Patrick Kinsella's company Progressive Group, has orchestrated an unfair advantage in the bidding process.

Today we see a story by journalist Bob Mackin in Business in Vancouver that reinforces all of those concerns. Mr. Mackin is in possession of a strategy memo, entitled "The Last Spike," written by Exel vice-president Scott Lyons. This memo talks about Exel wanting the get the contract by direct award, and when they couldn't achieve that, they determined to use "their strong relationship with the minister to 'influence the writing of the RFP.'"

Whether it is perception or reality, many who read the RFP today will see those influences in the document. Will the minister do the right thing, pull the RFP and engage in a credible, open process with industry and the public so we can determine whether anyone other than the B.C. Liberals, Patrick Kinsella and Exel Logistics is satisfied with what's happened so far?

Hon. R. Coleman: I've been in this House for 16 years. That question I can only categorize as the most demeaning, insulting and disgusting question I've heard relative to the public service of British Columbia since I've been here — in 16 years. This is being run by professional public services. They've done the research. They've done the RFP without influence. They have been out on the street. They're doing their job, and to say otherwise is actually an insult to those professional public servants.

There's a fairness commissioner on this file. There is no influence. There is no discussion taking place by this minister whatsoever with regards to the making of the RFP by any possible proponent whatsoever.

Mr. Speaker: The member has a supplemental.

S. Simpson: This is a lucrative contract. Exel has projected they can generate $55 million to $95 million of annual revenue from this takeover. They have said that prices will go up, but they will be offset, in the public's mind, by greater selection. We know that Exel tried to get this deal under Premier Campbell, and he refused. Yet less than a year after the new Premier comes to office, after winning the leadership race with Patrick Kinsella as one of her key advisers, this has been fast-tracked to get it done before the next election.

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We have seen this government try to orchestrate bids in the past with B.C. Rail. The concern is that we are seeing it again with the Liquor Distribution Branch, especially since this is being done with no business case whatsoever.

The process is tainted, and all the bluster in the world from this minister can't change that. Will he do the right thing, pull the RFP and end this before it becomes another debacle like B.C. Rail?

Hon. R. Coleman: The work has been done by the professional public service on this. The research was also done by the Minister of Finance's staff, as well as people from within government, whose reputation, as far as I'm concerned, over the years that I've worked with these deputy ministers, is impeccable. I actually believe that they've done the work that we've asked them to do. They've done it in a professional way.

There has been no influence on this process whatsoever. I know the member opposite would like to go quote from a bunch of stuff he may have read somewhere else, but I'm telling the member opposite: absolutely no influence by the minister, absolutely no influence from outside in the writing of the RFP — none.

If the member wants to say that about professional public servants and start to demean good people, take it outside and face the consequence. This is the wrong place to actually take a shot at people that are good people, professional public servants in the province of British Columbia doing their job in a professional way without influence.

Mr. Speaker: The member has a further supplemental.

S. Simpson: This is about whether, as I said, this is perception or reality. It is about a company that has prepared a memo that has talked about trying to influence this process. And it is about a process that looks like that. This isn't about civil servants. This is about the B.C. Liberal government. This is about this cabinet.
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If the minister won't do the right thing here, my question is to the Premier. Will the Premier do the right thing, pull this request for proposals today, open this process up and show us a business case instead of bluster, or else rip the thing up entirely?

Hon. R. Coleman: Your perception; nobody else's — not reality. The reality is that the RFP has been designed by a group of professional public servants who've done the job they've been asked to do. There will be a fairness commissioner on the process. There is no influence with regard to this, because it is not going to be a decision that's going to be made…. It's going to be made arm's-length by us.

I know, hon. Member, that from time to time you like to get up and you like to really put the question of the reality of whether you really want to actually ask a question or demean somebody's personality or reputation. Today, for you, it's all about demeaning somebody's reputation and not a question about reality.

M. Karagianis: I would put to the minister that this process for privatization of this liquor distribution is tainted. One of the main proponents, Exel, wanted to use — and have said that they wanted to use — their "strong relationship" with the minister to get involved in the writing of the RFP.

Clearly, the government is desperate to get this out the door before the next election. That RFP has been drafted and has already been made public. It has been posted.

To the Premier, if not to the minister: will the Premier step up and put this process on hold? It has all kinds of taint on it. Will she put the process on hold until this can be investigated?

Hon. R. Coleman: The fact of the matter is that in the budget speech we announced that we were going to look at privatizing the distribution and warehousing of liquor in British Columbia. A process was then put in place with some professional public servants to go out and do some consultation to prepare an RFP. They did that work. Then they got the RFP ready, and they put it on the street for bids.

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There will be no influence, and there hasn't been. There has been no discussion by this minister with any possible proponent with regard to this RFP, and there will not be. This is an independent process that will take place over the next number of months. When people will come in with their bids, there will be a fairness commissioner in place, and the process will be run in a fair way.

To absolutely, in any other way, say that members of the B.C. public service are being unduly influenced in any way whatsoever, to me, shows a situation in the House today where members of the opposition actually don't believe in the honesty and the integrity of the people in the public service, which I happen to believe in.

Mr. Speaker: The member has a supplemental.

M. Karagianis: This has absolutely nothing to do with the public service in any way, shape or form.

Exel Logistics makes it clear that they want the contract for liquor distribution. Together with lobbyist and good friend of the Premier Patrick Kinsella, they want to have a say in how the proposal is being drafted as well — the request for proposals. They were optimistic that they might just have some say in that matter because they had a special relationship with the minister.

I think it's pretty clear. There is a clear perception of conflict of interest here. I would say that for the minister to clear this up, the Premier needs to remove him from this process, call for an investigation into this and clear the air.

Otherwise, what have you got to hide? What have you got to hide?

Hon. R. Coleman: I think the members opposite still don't get it. The fact of the matter is there's a fair process in place. It's arm's-length from government. There's a fairness commissioner in place. There will be bids, and in actual fact, those bids will be measured on their merit.

I know the members want to actually say: "Oh no, it's not about the public service," but when you start to demean a process that is being completely run by the B.C. public servants — people that I have trust in and I have faith in — go ahead and say it any other way, Member.

You actually live in the Victoria region, Member. You go out and you tell the people in the B.C. public service that you don't trust them. I do.

J. Horgan: The memo from Exel vice-president Scott Lyons notes that the liquor privatization scheme that the minister referred to was shelved by the previous Premier in 2010. I assume then that the government — not just the Premier but the government — was supportive of putting that to one side and moving on.

A week before the last budget, all of a sudden, that changes. Can the Premier tell me, aside from the $70,000 in political contributions from Exel and their lobbyists, what changed?

Hon. R. Coleman: I know that the member will not want to hear this, but he's going to hear it anyway.

At the end of the 1990s you considered selling the Liquor Distribution Branch, B.C. Hydro and ICBC because you wanted to find some cash. Yet you now want to be purist on the fact about privatization of something.

In the year 2001 and into 2003 when I had the liquor file for the first time, there was discussion about actually selling the liquor stores and the distribution. To the member opposite, that discussion took place, and for the
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member opposite's information, as part of a labour negotiation, it wasn't done.

Over the years, during negotiations with labour with regard to the liquor distribution and the storage, there have been a number of discussions. In this particular case, we got to where we thought we might be able to do something with liquor distribution and warehousing. We decided to put it out in RFP.

The reality is the same answer as before. The people that have done the work are professionals. I trust them; you should too. They are people who are senior members of the public service. They have great reputations, and I believe in them.

The process will be independent. The process will not be influenced. It will be a bid like any other bid, in fairness, and there will be a fairness commissioner on the file.

I know you don't like that. I know you don't like that, but the fact of the matter is: this decision has been made. The work has been done. It has been done by professionals. I know the member from Vancouver, particularly, wants to demean their reputations in his questions today. I am not buying into that. I am going to stand behind the public servants of British Columbia.

Mr. Speaker: The member has a supplemental.

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J. Horgan: It's always a delight to go down memory lane with the minister, but let's try some recent history. Let's try the time period which we're focusing on today.

The privatization of the Liquor Distribution Branch was a dead issue, according to a senior vice-president of a company that wanted to purchase the operation. It was a dead issue until the arrival of a new Premier and a new handler, a guy named Patrick Kinsella.

So my question to the Premier is this: what changed your mind? Was it just the political contributions, or was it pressure from the guy that delivered the Premier's chair to your office? What was it?

Hon. R. Coleman: It's about Finance doing a job as they go into an annual budget, identifying opportunities where there might be possibilities to get some funds into the fiscal plan that will help balance the budget. It's about that work being done by Finance — most of it, usually, in confidence, with Treasury Board. Nobody else actually is involved. Then they come back, and they come out with the budget speech, and the work is done to do with an RFP.

That work got done. It's out for bid. It's going to be a fair bid. It will be a bid that's monitored by a fairness commissioner, and it has actually been written by professional public servants.

I know the member opposite doesn't want to go down memory lane, and maybe I shouldn't do that to him today. But Mr. Speaker, I'm going to tell you one thing about memory lane. As I stand here as a member of this Legislature, I actually believe in the professional public service of British Columbia. I trust their integrity. This bid will be run — you may not like it, Members — by people with integrity that I trust in the public service of British Columbia.

REPORT ON OIL AND GAS INDUSTRY
HEALTH AND SAFETY ISSUES

V. Huntington: Following a series of sour gas leaks in the northeast oil and gas fields, the member for Cariboo North and I joined demands for an inquiry into the health impacts of intensive oil and gas exploration.

Demands for an inquiry were coming from organizations — and I hope the Minister of Finance doesn't fall asleep on us — as diverse as the Northern Health Authority, the Peace River regional district, First Nations, and the Peace Environment and Safety Trustees Society. The list was a very long one.

The government finally agreed not to the inquiry under the Public Health Act requested by the public but to a contract with the Fraser Basin Council for phase 1 of a human health risk assessment.

Phase 1 was an initial consultation to identify health concerns, and the report was received by the Minister of Health on March 31. I wonder if the minister would advise this House when that phase 1 report will be made public.

Hon. M. de Jong: Thanks to the member for what I think, by and large, was an accurate chronology of what has taken place. The report has been finalized. I look forward to it being presented to the public soon — and also to getting on with phase 2.

I'm not certain that will involve the Fraser Basin in the same way. It may. But I'm looking forward to taking the results of the report, the consultations that took place, having that in the public domain and then moving ahead with phase 2 of the study.

Mr. Speaker: The member has a supplemental.

V. Huntington: Phase 1 was to advise the ministry of the terms of reference for phase 2. I wonder if the Minister of Health would tell us when he anticipates those terms of reference to be available, whether the stakeholders will have input into those terms of reference and when we can expect the phase 2 report to be available.

Hon. M. de Jong: I think, in reverse order, we are in the process of finalizing the terms of reference for phase 2. But I should say to the member this: that the terms of reference will be guided in large measure by the work in phase 1.

[1415]

The member will know from what she has read and from some of the contacts that she has that there were suggestions that involve examining the health risks associated with various aspects of the oil and gas sector — air quality, water quality. There were also suggestions around some of the socioeconomic impacts associated.

So that's finalizing the terms of reference to move ahead with phase 2, but that is very much a product of what we heard in the consultations that took place with people, largely in the northeast of the province.

PRIVATIZATION OF
LIQUOR DISTRIBUTION

M. Farnworth: Let's go back to liquor distribution. The minister said that he….

Interjections.

Mr. Speaker: Continue, Member.

M. Farnworth: Thank you, hon. Speaker.

Interjection.

Mr. Speaker: Continue.

M. Farnworth: Thank you. It's just that they seem to be a little nervous on this subject, hon. Speaker.

The minister said that he will protect the pricing and that the privatization scheme will save us thousands of dollars for consumers of British Columbia. Yet the memo from the Exel vice-president and client of Patrick Kinsella acknowledges they can generate $55 million to $95 million in annual revenue from this takeover and that this will increase prices. Some consumer protection that is.

It's not the public service we don't trust. It's this government that we don't trust, and neither does the public of British Columbia.

My question to the minister is this: will he table, in this House, the business plan and the work that he says has been done that shows that the public consumer interest will be protected?

Hon. R. Coleman: Maybe the member would like to do just a little bit of research about this. The warehousing and distribution side, which is subject to the RFP, has nothing do with liquor pricing in British Columbia. In actual fact, all the pricing and the taxation and the markup of liquor are being retained by the existing Liquor Distribution Branch.

Mr. Speaker: The member has a supplemental.

Interjections.

Mr. Speaker: Continue, Member.

M. Farnworth: Thank you, hon. Speaker.

The memo from Exel speaks for itself, and this government has not denied that memo once in this question period. So that gives us cause for concern right there.

The memo from Exel speaks for itself, and this government has not denied that memo once in this question period. So that gives us cause for concern right there.

Hon. R. Coleman: To the member opposite: I know when the bluster goes up that the first answer actually caught you off guard and you didn't realize you hadn't done your research.

We're talking about the warehousing and distribution of liquor going out with successorship in a bid so the union members have actually…. It's successorship in this deal. The proponents have to make a bid based on warehousing and distribution. The retention of the pricing and the management of liquor sales in British Columbia are going to stay with the Liquor Distribution Branch within government.

J. Kwan: A recent report from the chair of the commission on the reform of Ontario's public services, Don Drummond, recently pointed to the vital importance of entities like the B.C. Liquor Distribution Branch to the government's bottom line. He said specifically that this should not be sold off: "The net, long-term benefit to…the province is considerable and can be clearly demonstrated through comprehensive analysis."

The minister said in this House over and over again that there was tons of research done before the RFP was put together and that his people had done that work.

[1420]

My question to the minister is this: where is that work, and why won't he table this information in this House for the public so that we can see for ourselves the analysis of that?

Hon. R. Coleman: Again, maybe the members would like to do some research. The Drummond report actually spoke about a whole different type of sale, a whole different type of distribution and store system that was up for sale.

I do find it really rich that they're quoting the Drummond report of Ontario, a province that recently had a credit downgrade — compared to British Columbia that has a triple-A credit rating — a province that is desperate because they're in such a huge deficit of operation.

I know you want to go measure yourselves against that
[ Page 11663 ]
kind of success. We're not going to do that. We're going to have a fair process with warehousing and distribution in British Columbia. That's what we decided to do in B.C. The Drummond report has nothing to do with British Columbia, hon. Member.

Mr. Speaker: The member has a supplemental.

J. Kwan: The minister said he's done his homework. Well then, where is it? Except maybe the dog ate it, because he won't table it in this House.

What have we got? We've got the privatization of the B.C. liquor distribution system. We have a lucrative contract with a projection of some $55 million to $95 million in revenue generation annually. There is no business plan that the government could table for the public to see and the main proponent who wants to use their strong relationship to influence the writing of the RFP.

Whether the minister likes it or not, the fact is that there is a perception of a tainted process here — Exel Logistics, a company that has been lobbying the government through Liberal insiders Patrick Kinsella and Mark Jiles since 2005 to have access to this contract.

Based on these facts, how can anyone have confidence on….

Interjections.

Mr. Speaker: Continue, Member.

J. Kwan: Based on these facts, how could anyone trust the integrity of this RFP process or the credibility of this government?

Hon. R. Coleman: You know, this member actually calls speculation "facts," which is really astounding to me. In actual fact.…

Interjections.

Mr. Speaker: Continue, Minister. Continue.

Hon. R. Coleman: I'm encouraging them to get it out of their system, because then I'll get to my answer.

Mr. Speaker: Continue.

Hon. R. Coleman: To the members opposite: "Do your research" is what I said to you, Member, and you haven't done that. You've decided to go along and speculate a bunch of things, throw a bunch of people under the bus — good public servants and other people — because you've got a…..

I will tell you this, hon. Member. No company has helped our professional public service write this RFP.

PAYMENT OF LEGAL FEES
IN B.C. RAIL COURT CASE

L. Krog: Yesterday in this House the Minister of Justice gave us her government's "story" — her word — about the Liberal government waiving $6 million in legal fees for political insiders Basi and Virk. In this version of events, the Deputy Attorney General and Deputy Minister of Finance were the only two people in all of government who were involved in the decision to waive $6 million in legal fees.

Following from that, within days of the decision being made and with no knowledge of this decision, Basi and Virk switched their plea to guilty.

We are meant to believe that these two events happened in complete isolation from one another. My question to the minister: does she expect the public to believe that these two events were completely unrelated and there was no communication between the party arranging the guilty plea and the party dismissing the $6 million in legal fees?

[1425]

Hon. S. Bond: To the member opposite, we've canvassed this continuously. I think one of the things that's absolutely essential for the member opposite to be aware of — and I'm certain he would be — is that any discussions regarding a guilty plea would have been dealt with by a special prosecutor that in fact we put in place. That special prosecutor worked independently of the Deputy Attorney General, as is appropriate.

Mr. Speaker: The member has a supplemental.

L. Krog: The minister has said that the Auditor General is now reviewing the situation — that's been her answer — and will in due course outline his view of the events. Well, unlike a matter that is before the courts, the Attorney General has a responsibility to answer questions. It's the Auditor General examining this. It's not the courts.

Again to the minister: in your government's version of events the guilty plea plan was put together by the special prosecutor, was done in isolation of the decision to relieve the Liberal insiders of their $6 million in legal fees. So can the minister tell this House whether there was anyone in government or anyone acting on behalf of government who communicated the decision to pay the legal fees to anyone involved in putting together the guilty plea plan?

Hon. S. Bond: We started this question period with the members opposite impugning the reputation of the public service. We continue the discussion by impugning…

Interjections.
[ Page 11664 ]

Mr. Speaker: Members.

Hon. S. Bond: …or making accusations about the role of a special prosecutor, and we continue that by impugning the reputation of the Deputy Attorney General.

The facts are clear. It was an independent process. It's been publicly stated. It's been clearly outlined. It's time to stop throwing mud and hoping it sticks.

[End of question period.]

Orders of the Day

Hon. R. Coleman: In this House this afternoon we will start with second reading of Bill 52, intituled the Motor Vehicle Amendment Act (No. 2). Should that complete, we would then move to second reading of Bill 44, intituled the Civil Resolution Tribunal Act. Should that complete, we go to second reading of Bill 51, intituled the South Coast British Columbia Transportation Authority Amendment Act, 2012.

In the small House, in Section A, we will continue the estimates of the Ministry of Finance. Should those conclude today, we would be moving to the Ministry of Health.

Second Reading of Bills

BILL 52 — MOTOR VEHICLE
AMENDMENT ACT (No. 2), 2012

Hon. S. Bond: I'm very pleased to speak today about the amendments to the Motor Vehicle Act in Bill 52.

[L. Reid in the chair.]

This bill will create a new, streamlined process to resolve disputes related to traffic contraventions. The amendments will create justice sector efficiencies by shifting most driving-related disputes to an administrative process under the superintendent of motor vehicles and an independent board.

This is innovative. It certainly will free up court resources for high-priority cases. It will also provide more efficient, effective and timely access to dispute resolution for our ticketed drivers.

These amendments will also result in savings for taxpayers. The changes will free up police from most traffic court appearances. As well, electronic ticketing will reduce administration costs related to existing duplicative, paper-based processes.

Most disputes will be resolved by phone so that drivers who challenge tickets no longer face the cost and inconvenience of attending court. The new process will cut resolution time to an estimated 90 days from the current seven to 18 months that it takes.

[1430]

The new dispute process will also include easy on-line payment options for drivers. Electronic ticketing will allow the police to efficiently and accurately create and issue new administrative notices and will reduce errors and allow information to be shared rapidly and accurately between justice sector partners.

The new administrative system is closely linked to the superintendent's authority over licensing and driving behaviour. The superintendent does not have authority over out-of-province drivers. Therefore, only B.C. drivers will be included in the administrative model at this time.

The new administrative model is fundamentally different in nature from the present court-based regime and is grounded in the enhancement of road safety and deterrence of poor driving behaviours that pose a risk to the public.

We believe that this is an innovative process. It gives us the opportunity to free up important resources. We've heard consistently from communities about the need for police officers — that they spend a lot of time sitting and waiting outside traffic court. We believe there are significant savings.

In fact, this will allow us, once again in British Columbia, to lead the country in looking at how we can do things differently. It's an important component of justice reform, and we certainly look forward to hearing the comments of other members in the House regarding an opportunity for us to do something incredibly innovative and forward-thinking here in British Columbia.

I now move second reading.

K. Corrigan: I rise to speak on Bill 52, the Motor Vehicle Amendment Act (No. 2), 2012. I suspect that we will be supporting this bill. There is some innovation, and there are some changes. But the changes are fairly significant.

I think that it is disappointing that yet again we have a bill that was introduced yesterday afternoon, a bill that represents significant changes to the driving regulatory scheme in this province, to the Motor Vehicle Amendment Act — it sets up new processes; it sets up a new board; it represents a fairly significant change — and yet we have had less than 24 hours in order to scrutinize the bill.

I've not really had an opportunity to contact stakeholders who might have an interest in this bill, which does make fairly significant changes. Committee stage, which is what will come next…. After we have a chance to speak about the bill as a whole, committee stage comes next. Committee stage gives us an opportunity to go clause by clause through the bill, asking the minister questions about the bill, on that basis.

I am very concerned about whether or not we are going to have the opportunity in the next stage, let alone this stage, to go through the bill and scrutinize the bill
[ Page 11665 ]
clause by clause — which, of course, is the job that we have here in the House as MLAs representing our constituents, acting in opposition, seeking clarification information and making sure that there has been full debate on the bill. I am looking forward to the committee stage, and I'm assuming that we will have a full opportunity to discuss this bill in committee stage.

I do point out that this is not a small bill. This is a bill that consists of 22 pages and has many sections in it. It deals with changing a lot of the present content of the Motor Vehicle Act. We do need to have full time to debate this and the other bills.

I would also point out that it seems to me that this bill was rushed. It makes me concerned when we have legislation come to this House which was put together in a rushed manner. I'm not referencing the possibility of whether work was done in the background and so on, but the bill itself, to me, seems to be rushed. I'd be happy to provide a couple of examples.

[1435]

For example, it is typical when bills are brought to this House that on the page facing the actual amendments, the changes to the act, there are explanatory notes to help us and to help members of the public read bills, which are often complicated. Bills are complicated, particularly when you have bills that are amending other acts.

You have an amendment that refers back to the original act, and unless somebody has that original act and has the ability to read that original act — read legal language, read the statutes — it's difficult to interpret what is going on. This is one of these types of acts. Much of the act refers back to the other act and says that this definition has changed or something has been added to it or some other change that can be significant. In terms of the number of words, it is not lengthy, but it could have a significant impact.

Yet with this bill, of the total 22 pages in the bill, from pages 3 through to 21 — almost all of the bill — we have no explanatory notes. There's just a little bit on page 3: three bullets that explain, essentially, the rest of the bill. I think that is an indication that this bill was hastily put together.

It's not very helpful when the full explanatory notes for all of those almost 20 pages are that it "adds new parts to establish driving notices under the act in place of violation tickets," that it adds new parts to establish "the ability of the superintendent of motor vehicles to conduct resolution conferences in relation to driving notices" and that it adds new parts to establish the driving notice review board.

That, the establishment of a new board, is to cover all the provisions that provide for the establishment of a resolution process, a hearing process. I mean, to me it's quite astounding and would indicate to me that this bill has in fact come to this House in a rushed manner and in a manner that is not very helpful to the members of the public who might want to take a good look it and try to understand and discern exactly what these changes mean.

They will mean significant changes to the people of British Columbia in dealing with tickets they get, and I'll talk more about exactly what those offences are, because it's not clear from the bill.

I also want to say that another indicator to me that this bill was rushed in…. For some reason, there's this great desire to bring everything in. We have, I think, around 19 or 20 bills that have been brought in and have not made it to committee stage yet or even second reading.

Here's another example of why I think this bill was rushed. On page 6 is a typo saying, under section 275(1)(a), "anotice of dispute." It's a simple little typo. Two words have been run together. But to me this is concerning — that we have a government bringing a bill to this House that has typos in it. Another typo. In section 276 two words are run together, "admittedthat," with no space between the two of them.

To me, sloppiness is a concern. I don't blame anybody, because my suspicion is that what has happened is that somebody in the ministry has been told to get this piece of legislation ready in a hurry. It has been brought in, in a hurry — you know, poor House management by this government or some reason. Some of my colleagues, I believe, have found some other typos as well. They will probably bring those to light so that the minister can ensure that the changes are made in order to tighten and tidy up this piece of legislation.

To me, it's not the typos. It is the fact that it's come to this House in this form, and I think that is a concern. When I was growing up, I was always taught to be a real stickler about grammar, about the form that you present a piece of writing to somebody. I think many of my teachers said that if you provide something in a sloppy form, then it will be seen to be sloppily thought out and not properly thought out. So that is a concern I have as well.

[1440]

When you combine it with the fact that we received this piece of legislation yesterday afternoon and we're expected to debate it today, I think it's a concern. It's a concern that we have had with a number of bills. I think we had an example just last week of a bill that was brought in, and then discussion happened the next day. Government forced the discussion to have….

Deputy Speaker: Member.

K. Corrigan: Yes.

Deputy Speaker: Bill 52.

K. Corrigan: Thank you, Madam Speaker.

Well, I do hope that the comments that I have made about this, the concerns that I have…. Typos, I think, are perfectly legitimately mentioned, because it's something
[ Page 11666 ]
that I assume will need to be cleared up. If it takes the opposition to mention that we need to clean up typos in the bill, then I'm happy to provide that service to government. But I do think it is indicative of the process that has happened.

The bill itself provides for the replacement of violation tickets with driving notices — what are called driving notices — in some cases. In addition, the bill partially transfers over — certainly provides for — the ability to use electronic tickets and electronic notices in a far wider range of cases. So that's one part of the bill that seems significant.

It also provides for dispute resolution conferences with regard to driving notices. It seems from the bill — and I'm looking forward to having a deeper discussion about this and questions of the minister during committee stage — that it also provides that you're going to…. It's going to make it possible to have dispute resolution conferences in order to, presumably, resolve some of the driving notices — what we would previously call tickets, I guess — in a more informal way and, hopefully, get rid of some of the backlog. I think the minister talked about a backlog of something like 50,000 tickets.

This is a significant change as well, but also very significantly, this bill creates a driving notice review board appointed by the treasury. My understanding is that this board is going to conduct hearings relating to driving notices. It is not clear exactly what driving notices will be covered or new types of offences, but it's going to cover a variety of offences.

One of the concerns that I have is that the legislation does not provide exactly what those kinds of driving offences are going to be. I am going to turn to one of the sections of the act. This brings up another concern, and perhaps I'll deal with my other concern first.

We have a large number of areas in terms of putting the structure together. The administration of these very significant changes is going to be determined by regulation. In other words, they will be determined after we are forced to vote on this bill. Then regulations will be decided by government behind closed doors by the Lieutenant-Governor-in-Council, or cabinet, on a number of pieces of this bill.

It's very difficult for us to evaluate or make comment on or provide critique of a bill when there is so much that we don't know what it's going to look like. Some of it I understand. Section 278 says: "Without limiting any provision of this Act, the Lieutenant Governor in Council" — i.e., the cabinet — "may make regulations for the purposes of this Part as follows."

The first one makes perfect sense, prescribing the form and content of driving notices issued under this act. That I understand. But I do get a little more concerned when under subsection (f) it says that the Lieutenant-Governor-in-Council — cabinet, behind closed doors again — can make regulations for the purposes of this part as follows: "designating a person or class of persons as a driving enforcement officer and prescribing the driving enactments in respect of which a designated person or class of persons may issue a driving notice under section 272 (1)."

[1445]

In other words, we don't even know with this act which of the laws of British Columbia are going to be covered by the act. There are a large number of laws that are under the Motor Vehicle Act and other acts, and we don't know exactly what those driving enactments are. So we have this very general term of driving enactments that are going to be covered by this act, and we will not know until after the bill has been completed and debated exactly what it's going to cover.

I think the people of British Columbia will want to know what types of offences, what acts are being referred to when they're saying they're going to be covered by this new regulatory scheme. That does concern me.

I've mentioned earlier that in addition to having more use of electronic notices…. I think that in committee stage I'll certainly be raising questions about privacy issues, ensuring that we have privacy every time we add one more piece of electronic…. We digitalize our information, and at the same time we have to safeguard people's privacy rights.

I think, as well, I'll certainly want to be asking questions about whether or not…. How much of this information is going to be stored? If somebody gets stopped for a ticket and there's an electronic version of that ticket and it goes first to a resolution conference and then maybe it goes to the review board afterwards, if it's not resolved at the resolution conference….

Let's say the board clears the individual of culpability for whatever that driving enactment or offence is. Will that information, for example, be stored in Crime B.C., which is the criminal database for the province of British Columbia and which includes those cases where there has been "negative contact" with law enforcement? I'll be interested in that.

I'm not saying that we shouldn't leap into the 21st century and further use and widen the use of electronic notices and storage. Absolutely, I agree with that. But I do think we want to at the same time…. As I have said before, we need to absolutely protect privacy and make sure that the appropriate protections are in place to protect people who will be covered by these changes.

I want to make another more general comment about this bill which is similar to comments that we have made about other bills that have come before this House in the past couple of years. There is definitely a move by this government to shift things from the courts to administrative processes. We've had it in a variety of areas.

I'm not saying that this is not appropriate, but I do think that when we are doing that, we lose the protections of the courts, the process of the courts, the oversight
[ Page 11667 ]
of the courts and the court system and all the protections, evidentiary protections and so on, that are built into the court system.

There are times that that is appropriate, and this may be one of those times. But we are, in a number of ways — civil forfeiture and in this act and another act that's going to be dealt with today, Bill 44, which is going to deal with strata and small claims moving to more of an administrative process — shifting matters away from the court system to more administrative processes or tribunals.

I will be asking questions about that as well when we get to committee stage. I do think that we need to be aware of that, because as we do it, it can raise concerns about making sure that individuals' rights are protected.

Of course, we have that in the context of what has generally been very clearly seen to be a court system which is in crisis, which has been underfunded, where there are delays which are leading to stays of proceedings with very serious cases that are in the court system for so long that the judges of our province are letting people off, sometimes in very serious cases — drug cases, the puppy killer case and so on.

[1450]

I understand that there is definitely an impetus. There is certainly a good reason to want to move things away from the court system in order to relieve some of that pressure.

When there is that impetus there, I can certainly understand that government will want to do that, but that's all the more reason to say: "Are you doing it in order to take pressure off the court system, or are you doing it because you want to have a better process that is more effective?"

I think we always have to look at things through the lens: "Are people's rights being protected, and is the motivation to make sure that we have a more effective system?" If it is, that's fine. But I think we also have to always be making sure of what exactly the motivation is.

I also think it's strange that we are getting this bill, Bill 52, that sets up these processes, at the same time preceding the conclusions of what was supposed to be a very wide-ranging review of the justice system.

It seems odd to me that we would be presupposing the recommendations that are being made by the justice reform review process that is going on in this province, which has been going on for some time and will be going on for the next several months, and doing this before we get the results of that system. It seems odd to me that that would happen.

I don't believe that in this and other bills that are coming up — for example, Bill 44 — that the Law Society was consulted. I'm not sure. I haven't had a chance to talk to many other organizations about what the impact is going to be and whether or not there was consultation, but I am concerned about whether or not the right consultation happened.

As I've said earlier, I do believe that we will for the most part support this bill. I will have more specific questions about how it's going to be administered.

When we talk about that we're going to have the driving notice review board appointed by the treasury, it gives one the sense and the feeling that there is going to be a tribunal, essentially, that is going to have some safeguards built into it. I've expressed some concerns about whether or not there are the appropriate safeguards and justice will be done.

It sounds like when you have a review board, you will have perhaps two or three people sitting there. But in fact, the act provides that when you have a hearing, "the board" means one person. So yes, there will be more than one person appointed, but in any hearing there is only going to be one person.

One might get the wrong impression when they read the word "board." There is more than one person who is going to be appointed, but it very specifically provides that only one person is going to hear a case when it goes to the driving notice review board.

In conclusion and in summary, we will probably support this bill. It has been very difficult to effectively scrutinize the bill and evaluate it. It has been impossible to contact stakeholders who might have an interest in it, particularly given that there are some fairly significant changes represented by this bill. That concerns me.

I'm concerned somewhat by the sloppiness that is represented by typos and so on, the lack of explanatory notes and what that means and why that has happened and why there was such a rush, particularly given that we know that we're in the middle of a justice reform process. Overall, I suspect that we will support this with vigorous questions during the committee stage.

With that, I will retake my seat.

L. Krog: Always a pleasure to speak to a bill produced by the busiest ministry in government of late. More legislation flowing out of the Ministry of Attorney General than you can shake a stick at.

[1455]

I must say that there's clearly very good news for ICBC in this legislation, because there is no question — with the continuing added responsibilities given to ICBC, the prospect of ICBC being privatized is obviously completely off the government's agenda. That's a good thing.

That's a very good thing, because as I think of my old friend Dave Barrett, it would be a great, sad day in British Columbia to see ICBC disappear into privatization. But it's pretty clear, hon. Speaker, when you look at this bill, with the new responsibilities being given to ICBC — allowing them to cancel a driver's licence if you owe government money, allowing them to issue short-term licences, if you will, on conditions, if you've made an arrangement — all of those things obviously indicate that ICBC is going to be integral part, certainly, of the re-
[ Page 11668 ]
mainder of this government's mandate when it comes to handling motor vehicle offences in the province.

This is, however, a fairly significant piece of legislation to be dropped so close to the end of this session, and I'm not going to go on at great length about that. I appreciate what the purposes of second reading of any bill are, but I would be remiss if I didn't second the comments of our critic the member from Burnaby who pointed out so ably a number of the problems and issues that arise from this legislation.

I appreciate that there was not exactly a warm response to her criticism around the misspelling in a couple of sections. But candidly, in all the legislation that I have reviewed in this House in my time in this chamber, both back in the '90s — as we refer to them on this side; the dismal decade, as they refer to it on the other side — and in this new century, I have never come across an error. It's quite unusual, because the Queen's Printer, I think, has done an incredible job historically. To see any kind of error here is, really, actually quite surprising.

I think, with great respect to the Attorney General and the members opposite who take a differing view, it does indicate a certain speedy passage or approval of this legislation before it hit the House, perhaps without the kind of scrutiny that it deserves. I think we all know that we are here in this House and will be amending other legislation that was passed with closure in previous sessions, again, because there wasn't the kind of public scrutiny that's important.

Now, the minister describes it as innovative, and she is correct. It is innovative. It is a significant change to our existing system. Part of that, no doubt, reflects the fact that the government has found itself in great difficulty with the court system generally. Latest information would indicate that we're back down to 128.25 Provincial Court judges, full-time equivalents, from 143.65, where we were in 2005.

Hon. Speaker, what that tells you is that all of those judicial appointments that were made that were supposed to help solve this problem, in fact, did nothing, really, more than replace the members of the Provincial Court bench who were retiring.

I appreciate the government's drive to cut costs, and that's important. But again, the member from Burnaby pointed out quite well that things that take this out of a judicial process, out of our justice system, and into an administrative process, which is what this bill is all about, may or may not be good public policy. I think we always have to weigh off that balance between easy access to justice and fairly early disposition of matters against rights. This bill may strike that balance; I'm not sure.

We recognize that a great deal of police time can be consumed with traffic violations. We appreciate, on this side, that a great deal of time can be consumed by courts dealing with traffic violations.

I think we are all conscious of the fact — we've all heard the stories, and let's not pretend to be naive in this chamber — that many people dispute their traffic violations in the fond hope that if they show up on the day appointed, in fact, there'll be a police officer who won't show up on the day appointed and there won't be a case to be prosecuted, so to speak.

I mean, that's a pretty standard defence tactic and not unreasonable. It's one of the few ways that people that can't afford counsel understand how to try and combat any violations they may be presented with.

So I appreciate that this system is designed to deal with some of those issues, but I also appreciate that it's designed to deal with what the minister, to her credit, acknowledged was a significant problem that has grown up under this government, and that is that the current court-based system for traffic ticket disputes is overburdened with an estimated backlog of 50,000 ticket disputes.

[1500]

Currently it takes seven to 18 months to resolve a dispute. That's a traffic ticket. You can only begin to imagine what it says about the other aspects of our justice system — if you have a serious family law issue or you're involved in a criminal matter.

Now, I'm not suggesting that we try and engage in the speedy justice of some nations that don't treat their justice systems with the esteem and respect that we do in British Columbia. I'm not suggesting that we go to a process where you're hung, drawn and quartered within a week of the violation, or whatever the case may be.

Nevertheless, it is very clear that underfunding of the justice system has contributed to this horrendous backlog. Processes that are in place are not functioning in the way they should, and we are, therefore, at this juncture where we have Bill 52, which is a hoped-for remedy.

It does, as I said, though, give a great deal of authority to ICBC. It is clearly an administrative process. It's not a process that enjoys the benefit of court supervision of it, if you will. It does, as the minister well pointed out, however, free up police. As I mentioned, there's no question that police spend a great deal of time on traffic violation.

I know that there has been discussion in the past around the possibility of the sheriff services providing traffic supervision. I know that has been met on most occasions by concerns from the police. They express over and over again that a great deal of police work dealing with other very serious crimes is dealt with…. They have an option or opportunity through traffic investigation or stopping some vehicle for another purpose that, in fact, leads to convictions for much more serious offences. I appreciate that argument.

But it is certainly an issue that I think has to be considered. I don't think any government should close its mind to possibilities of change. I use the term "change" without necessarily saying "reform," because you never know whether it's really a reform or not until you see what the change actually impacts in the system.
[ Page 11669 ]

The promise here is that this will be quick. This new administrative model will in fact be quick. That is a good thing. If there is anything that is certain in the justice system…. The distance between the act and the consequence should be as short as is reasonably possible, consistent with our beliefs in freedom and the right to plead your case versus the power of the state.

After all — let's be blunt about this — even though it's a traffic violation, the power of the state is enormous in comparison to the power of the citizen. So it's important that the system actually be fair and be seen to be fair.

There is some concern, though, that the solution here isn't driven necessarily by a desire to reform; that it's driven by the fact that the government's overall funding problems with the court system have led us to this juncture. We have an enormous backlog, as I said earlier, that needs to be dealt with.

It's also of concern to the opposition. It's not clear yet — I'm sure the Attorney General in committee stage will be able to advise the House — whether or not the Office of the Information and Privacy Commissioner has had a chance to review this legislation in the way that would be appropriate.

Certainly, in two previous bills before the House we know we've had some very critical letters from the Office of the Information and Privacy Commissioner — quite striking, actually, in terms of the language and the serious concerns that have been raised.

Now, I don't know what sort of consultation was undertaken. But allowing ICBC to refuse to issue a driver's licence if there are unpaid tickets and to refuse insurance, I'm not sure that's had the kind of public debate and scrutiny…. You may have to ask yourself, in a particular case where genuine poverty can be involved….

These are always difficult cases. You can't afford to pay the fine, but if you can't pay the fine, you can't drive a vehicle, and you lose your job. I'm not sure that that's good public policy. I'm not sure how the minister will address that and how we're going to deal with that issue. That is a significant concern.

[1505]

The statistics are all there. We have a growing underclass in our province, a shrinking middle class and a very wealthy upper class, if you will. For many people the opportunity to obtain or retain a driver's licence — and in this particular case, I'm really talking about retaining or renewing — is absolutely crucial to their economic well-being and their family's economic well-being.

Those cases may be few and far between, but I think it is a consideration that we have to really worry about. I am hopeful that with the ease of this dispute system — and hopefully that's what it will be — people who might otherwise just roll over and admit or acknowledge guilt will be prepared now to go through the system and go through it quickly rather than just give up.

There are the significant changes around the establishment of the driving notice review board — a great deal of change from what we have. You've got the opportunity to dispute, under the proposed section 275, all contained within section 9.

It's interesting. You have to be so careful when you're looking at legislation like this. Section 9 of the bill refers to page after page of sections that are, in fact, added. Sometimes you can get yourself lost in this. I'll try not to do that.

The concept of getting this reviewed fairly quickly, I think, is important. But one of the concerns I have is: in setting up this process, is the government going to have the money or commit the resources necessary to deal with it? If you've got 50,000 tickets in the system…. I haven't raised the issue — nor can I comment, because I haven't had an opportunity to read the bill because, as the member pointed out, we've had it for a little over 24 hours now — of whether or not the new process will apply to a number of those outstanding tickets.

If that's the case, it might generate enough government revenue from those people who actually pay their fines that you might be able to pay for the folks who are going to run the new system. If there's no money to run the new system, all we're really going to be doing is creating another system that will be underfunded, that won't produce any better results and that won't resolve the issues of the public. That is a very serious concern.

Section 279 sets out that: "After filing a notice of dispute under section 275, the disputant must participate" — must participate — "in a resolution conference with the superintendent in accordance with the notice sent under section 275 (5) and with this Part."

Now, it does provide — and this is, I think, some of the guts of the bill — in 279(2) as proposed: "A resolution conference may, in accordance with the request of the disputant, or in the absence of a request, in the discretion of the superintendent, be conducted in writing or by telephone or by a combination of those methods."

That's probably a pretty good thing. I do have some concerns about verifying that the parties are, in fact, the parties to the dispute. If it's conducted by telephone, it might be the violator on the other end of the line, or it might not be.

I think we can safely trust that if you call the government, you're going to get the right side at that end of the telephone conversation, but I'm not convinced how you're going to confirm that the party at the other end is the party who has been charged with a violation under the Motor Vehicle Act.

Section 279 goes on to give a number of options at the resolution conference. The superintendent can cancel the driving notice, accept from the disputant the disputant's admission that he or she has contravened the driving enactment indicated that was served on the disputant, offer to reduce the amount of monetary penalty that is indicated, or offer to provide the disputant with time to pay
[ Page 11670 ]
a monetary penalty.

Some of the more conservative elements of the B.C. Liberal Party historically haven't been too happy with the concept of plea bargaining. Essentially, what this is, at a very crass monetary level, is plea bargaining. "Are we going to have a sale on traffic violations today?" You've got a little bit of a defence but not a really big defence, so the superintendent can say: "Well, the prescribed fine is 179 bucks. How about 75 bucks today, and we'll let you go."

[1510]

That is exactly what the legislation provides. There are no ifs, ands or buts. I will be interested to hear what the Attorney General has to say when we come to this section in committee stage, but that's really what we're saying.

You can offer to reduce…. Indeed, I think if you read…. The common and plain reading of this language is that the superintendent may offer. So the superintendent gets to make the first offer, and the disputant gets to accept it. The superintendent is being authorized quite literally to do bargaining.

Now, I appreciate that this does happen — the plea bargaining process in our criminal justice process — and it isn't always the prettiest thing to watch or see. I'm aware of one case in Nanaimo where a person who — I think, on good evidence — admitted to molesting their child, in fact, got off with a peace bond. So it isn't always a pretty process. I appreciate there are evidentiary issues and costs and time and delay and the prospect of children on the stand and all of those things. It isn't always a pretty process.

This has the image of, frankly, the kind of bargaining that we associate with Third World countries — that kind of unpleasant driving down of the price — and I'm just not sure it's consistent with the dignity of Her Majesty's government that we're going to engage in haggling over traffic tickets and how much you're going to pay.

That aside, if you're not happy with the result of the resolution conference…. So the superintendent has decided against you — thumbs down, so to speak — then the superintendent may, under sub 279(5)(c), "advise the disputant (i) of the procedure for an application to the board for a determination by the board of whether the disputant contravened the driving enactment indicated on the driving notice, and (ii) that the disputant must apply for the determination within 30 days after the resolution conference."

Then we jump on to another fairly substantial section, again a proposed section, all contained within section 9 — 291(1). "Within 30 days after the date of a resolution conference held in accordance with section 279, the disputant may apply to the board in the form established by the board for a determination of whether the disputant contravened the driving enactment indicated on the driving notice that was served on him or her."

Interesting that there's a provision in 292 that says: "The board must dismiss an application if the disputant has paid all or part of a monetary penalty or has agreed with the superintendent at a resolution conference to pay the monetary penalty or a reduced monetary penalty."

I'm just a tiny bit concerned that this seems to remove the right of an individual who says: "Look, if I don't pay the penalty, I'm going to lose my licence. So I pay it, but I dispute, in fact, the decision that says I did breach the Motor Vehicle Act." I'm a bit concerned that this section seems to foreclose one of those opportunities.

Often in legal matters one will pay a sum of money as security so that an action can continue. You will make a without-prejudice payment on the basis that there may be liability found against you, but it's not, in fact, to affect the outcome of the proceeding. This seems to contemplate that if you've paid part of it, then you can't have the board adjudicate in your favour, because the board "must dismiss an application if the disputant has paid all or part of a monetary penalty."

Now, it says: "…or has agreed with the superintendent at a resolution conference to pay the monetary penalty or a reduced monetary penalty." That's different. But it says if you paid all or part.

Again, in a situation where someone is forced by circumstances to pay it for whatever reason but says, "Look, I really want to dispute it," then the board has no jurisdiction, it appears to me, to do anything other than what the bill directs, which is to dismiss the application. So that is a matter of some concern as well.

There are a number of saving provisions that allow one, if you miss a board or hearing and you had a valid reason under section 297 for failing to participate…. All those kinds of things — fairly positive. It says that a hearing must be open to the public.

The one thing I can't determine…. I know the Attorney General is going to help me with this when the time comes. I don't see that there's any appeal process beyond the board. In other words, if you get to the board hearing, once you're done, you're done — unless, of course, there's still a right for judicial review.

[1515]

When you look across at the Attorney General, you sometimes actually, notwithstanding what she does in question period, get an answer, and I appreciate that.

Having said that, I think it's fair to say the opposition has a number of questions. I don't want to be repetitive when I say that. Anytime we lose the protection of our court system, by instinct and training and experience, I have concerns about that. But I recognize the reality of modern, complex societies and the time that people have to spend on certain matters.

Overall, this legislation appears to address a problem, admittedly — in fairness, I think — created by this government and its practice and funding. But I do have to ask the question with respect to the legislation generally: what is Geoff Cowper doing?

This is just one of many bills before the House that are
[ Page 11671 ]
making fairly significant changes to our justice system or things related to our justice system while Mr. Cowper is still busily beavering away on his project, as designated by the Minister of Justice and Attorney General. So I'm a bit concerned that we may be entering into a number of things sort of helter-skelter.

To me, it's not the same kind of principle involved in entering into interim agreements with First Nations, many of whom are struggling either inside or outside the treaty process, who are waiting for some kind of justice. One can see the very good argument in those circumstances for entering into interim agreements that allow First Nations to move forward — to recover, if you will, from the long racist history of this province.

But in this case I am a bit concerned that we are doing piecemeal reform to the justice system in the broad sense — taking things out of the courts, putting them in administrative tribunals — without necessarily having an overall scheme or plan in place or having heard from Mr. Cowper.

Mr. Cowper, I appreciate, isn't being paid very much for what he's doing, notwithstanding what some people may think. He doesn't appear to have piles of staff, although I understand he can rely on the Attorney General's ministry.

Nevertheless, if we're going engage in a significant reform of the justice system, I'd like to think it was part of a holistic process. At this stage I'm not convinced that that's the case. Although I suppose, from the opposition's perspective, one should always be grateful for anything that is seen as an improvement or change or reform.

With that, I'm going to take my place. I appreciate that there are some other members who wish to raise issues with respect to this. However, frankly, I am concerned, obviously, that as the closing date of the session appears on the horizon very quickly, we will not have the opportunity to scrutinize this bill, or any other, in the way that it deserves.

We do, after all, have a fall sitting. It's part of the legislative calendar. With great respect to a man I've criticized often in this chamber, that was one of Gordon Campbell's great reforms, a great improvement in this chamber.

Ah, one member over there points out that he's gone. Yes, we're all aware he's gone, hon. Member. He's gone off to a better place. He's gone off to one of the peak jobs you can get in the British Commonwealth. What could be better than being high commissioner to the Court of St. James? I just love to roll it off my tongue. It sounds so sweet.

An Hon. Member: You're next.

L. Krog: One member suggests I'm next. I'm not old nor powerful enough to secure that position, but it's a lovely thought.

Having said that, it was a great reform. We do have a fall session scheduled. We do have an opportunity to give all of these bills — and this one, for example, because it is a significant change to practice in our province — a full and proper scrutiny. I suggest, with great respect to the Attorney General, that she have a discussion with the House Leader and they talk about that.

D. Routley: As has been indicated by several members of the opposition, it appears that this bill, Bill 52, will secure the support of the opposition, although I think a lot of detail needs to be examined in the third reading before commitments can be made. Certainly, it may be open to amendment.

[1520]

As has also been said, we're nearing the end of the session, and we've seen bill after bill introduced every day. We've had several months in order for the government to bring these pieces of legislation forward and provide adequate opportunity for scrutiny and debate, but as has been the case in the past, the government has chosen to rush legislation at the last minute and at the end of the session.

It isn't only at the end of the session that legislation is rushed upon this House. Earlier in this now extended session from this past fall, I was involved in the debate on a bill which amended the Freedom of Information and Protection of Privacy Act.

The indication of a rushed and hasty nature there was that I was asked to do second reading debate on that bill at the very same moment I was scheduled for a ministerial briefing. The government refused to separate those two obligations, so it really affected the ability of this side of the House to scrutinize that bill.

Here again, with Bill 52, we find the same haste which could make waste of the democratic process. It's an important consideration, particularly given that two of the other bills that we're debating in this House at this time are bills that were brought forward to correct previous bills that were rushed through with closure in previous sessions.

The Attorney General might consider that the apparently worthy aspirations of this legislation — addressing a problem of backlog in the courts which has, in large, part been created by B.C. Liberal underfunding of the court system — would benefit from greater consultation with stakeholders and more opportunity for scrutiny in this House.

When it comes to consultation, I wonder, given that this bill has some privacy implications, whether the Office of the Information and Privacy Commissioner had been consulted before this legislation was introduced.

We've had the unusual circumstance in past weeks of the Office of the Information and Privacy Commissioner writing letters to the government criticizing the government's recent legislation and its impacts on privacy protections. It only would beg the question of whether or not
[ Page 11672 ]
the commissioner has been consulted around the privacy concerns when it comes to data-sharing across ministries that this bill will provide.

Currently there are 750 pages of legislation yet to be debated in this House with only ten days left, and we have yet to see the HST bill, presuming it's coming, added to that total. That is obviously an impossible situation where the ability for stakeholders to have input into this debate, for the opposition to adequately scrutinize the legislation that's before the House, just won't be provided.

This Bill 52, which makes significant changes to the way that traffic violations are adjudicated and the way fines are collected, falls into the same category of being rushed and not providing adequate opportunity to be scrutinized. It is unclear as to which laws and which offences will fall under the scope of this legislation, which makes it an important consideration.

We have, apparently, a 50,000-ticket-dispute backlog, which is an obvious problem. This bill may go some way to addressing that situation, but only if adequate resources are directed towards supporting the mechanisms created by this legislation.

At the same time, Mr. Cowper is doing a review of the justice system, and yet bits and pieces of the justice system are being addressed through various pieces of legislation, including this one.

What will the government do if the justice system review recommends a different policy when it comes to traffic violations and traffic court issues? Will the government then be forced to bring further legislation to again correct legislation that was rushed and brought forward without due consideration?

[1525]

The legislation provides for a telephone resolution conference with the superintendent of motor vehicles. As the critic has pointed out, it will be very difficult, at least in my imagination, to verify that the correct person is on the end of the telephone line in such a conversation.

The dispute resolution conference also provides for, essentially, a deal-making exercise, a haggling over the value of a ticket, which obviously has the potential to undermine the intent of traffic control.

Will the legislation before us balance the rights of a person — their access to justice or their rights to an adequate defence? It may. One of the more contentious issues, I believe, with this legislation will be the power granted to deny a driver's licence or insurance through ICBC for those people who have not paid their traffic fines.

This province has very high rates of poverty. People who find themselves unable to pay their bills, unable to meet the demands of a traffic violation, may find themselves then disqualified from work. How that equates to good public policy, how that equates to a fair and judicious treatment of people who are already struggling, escapes me.

I'm looking forward to third reading debate where we can delve into the details of that aspect of this bill, because people who find themselves in a situation unable to meet their obligations generally, specifically a traffic violation, and then find themselves without a driver's licence may in fact find themselves without work. That would hardly be the result that I would expect the Attorney General to be seeking, so I hope that there's some sort of test or option to be offered to those people who will not be able to meet their obligations.

The privacy concerns that I have, as critic, will have to be scrutinized in further readings. The data sharing across ministries, the requirement of ICBC to provide driving contraventions in providing an extract of a person's driving record — these are aspects of the bill which do present some challenges from the protection-of-privacy perspective.

I would hope that the Attorney General, in formulating this legislation, has had extensive consultations with the Office of the Information and Privacy Commissioner. It's only in this past week that the Privacy Commissioner has written to the government three times, on three separate pieces of legislation, with concerns, asking legislation to be removed from debate because of concerns around privacy issues.

With that, Madam Speaker, I will take my seat and take my place in the debate.

M. Sather: It's my pleasure to join the debate on Bill 52, the Motor Vehicle Amendment Act (No. 2), 2012. As one of my colleagues already mentioned, we have had a lot of legislation around the Attorney General and Justice Minister's ministry, and it just keeps on rolling. We are striving gallantly on our side to keep up, best we can. In first reading of the….

Interjections.

M. Sather: I missed the comments by the minister — not the current minister; the Minister of Environment.

[1530]

Anyway, in first reading the minister mentioned that these changes support the government's justice reform agenda and are based on a commitment from the October 3, 2011, throne speech.

Well, we have heard a fair bit — it's true — about the justice reform agenda of this government. We of course have been back in this House to reboot one of those pieces. That was on the law that dealt with folks who were drinking and driving and then taking a breathalyzer or one of those roadside screening devices, etc. So we've dealt with that.

But there are other aspects, of course, of the justice reform agenda. It's not entirely clear to me what this government's justice reform agenda is, in some regards. For example, as the House will know, there have been lots
[ Page 11673 ]
of moves by the federal government, the Harper government as it's known, to also come up with a transforming — I suppose you could say — justice agenda. This bill, Bill 52, is of course not part of that. In respect of the minister's comments, I'm left kind of wondering how it all fits in.

When we have had occasion to question the minister, for example, about how we're going to pay for all this, she has responded by saying: "Well, you're against child molesters." I've got to say, Madam Speaker, that is pretty offensive, but there we have it. We're certainly not…. We are asking the government that claims a lot of financial acumen…. It's not proven in the record. Nonetheless, they persist in that fantasy.

We'd like to know who's going to pay for it all and how much it's going to cost British Columbians for these justice reform agendas, be they provincial or federal. There are aspects of this bill that have some monetary consequences that I'm going to be touching on a little bit as I go through this bill.

Referring to some of the other comments by the minister in her opening statement, she talked about how this legislation will help to free police from most traffic appearances. Certainly on the face of it, that has to be a good thing. As my colleague mentioned, it's a crapshoot as it is now, if you decide to go to court on a traffic violation. If you've been accused of a violation, it's a crapshoot as to whether or not the police will show up. If the police don't show up, of course….

Deputy Speaker: Member, I would draw your attention to the use of parliamentary language.

M. Sather: Thank you, Madam Speaker.

If the police don't show up at the court appearance, then, of course, the case is thrown out. So the minister is quite correct in saying that freeing police from traffic appearances is beneficial in terms of opening up space in our criminal justice system. There are a number of factors that affect, however, the ability of police officers to attend court as requested to do so. One of those is proximity to a courthouse.

[1535]

I know it has made a difference in my community of Maple Ridge when some number of years ago now this government closed down the courthouse in Maple Ridge, causing police — the RCMP in our case — to have to go to Coquitlam or Port Coquitlam, which isn't that far for those that know the terrain. But driving it can take a period of time, altogether too long.

I'm sure and I've heard that it has contributed also to police at times missing their appearances. If this bill is going to help — and it appears that it will — to reduce the necessity for police to show up in court, then that sounds like a good thing. And it probably is a good thing.

However, you know, there's always that niggling that one has to have in the back of the mind, I think, about due process. Again, we saw a lack of due process with the drinking-and-driving legislation. I'm hoping that this isn't in any way going to get snared by some similar considerations whereby administrative processes may not be seen to be adequate. But I'm trusting that that's not the case and that this will be a positive thing for British Columbians, not only the police but those that have been accused of a crime.

The minister mentioned also that this legislation is applicable only to B.C. drivers because the superintendent of motor vehicles has no jurisdiction over drivers outside the province. Of course, a lot of these administrative processes under this bill will be overseen by the same superintendent of motor vehicles.

And you know, the Alberta drivers are terrible to start with. They're using the Golden Ears Bridge, getting away without paying for it, and now we're going to allow them to drive at will, however they wish, apparently, around the province without being prosecuted. That's how it sounds to me. And that's not a good thing, because there are a lot of visitors to our province. I'm from Alberta, and I certainly welcome those from my native homeland, but we expect them to behave. If there are no sanctions against their driving behaviour….

I would sure wish that we would get the opportunity to debate this in committee stage, wherein the minister could clarify issues such as that. But I don't think…. I will be surprised if we do get to committee stage with this bill or a whole lot of others, because when I looked at the list yesterday, there were nearly 20 bills that had yet to go through second reading. We have now less than 10½ days remaining to cover all this ground.

It was so slow to begin in this session, Madam Speaker. There were some bills that came in, but it was a very leisurely pace — very leisurely. Now, it's whoof! All kinds of bills are coming at us — right, left and centre. Is that just happenstance? Is that kind of ill planning, or is it intentional? Is it a strategy that this government has — to limit debate on bills by bringing them in late?

Of course, they would only be able to do that if they didn't adhere to the legislative calendar that this government brought into place. The one thing I have always said to people that I agree entirely with the B.C. Liberals about, and that's having a fixed legislative calendar. Unfortunately, as we know, this government hasn't lived up to the requirements of that in the Legislature.

Rather than bring in closure, which I'm afraid we're going to see, why not bring this legislation that we're not going to have enough time for in this session back to the fall session? That may happen. I hope it happens. I believe some of the legislation that we had last fall was brought forward to this spring.

Deputy Speaker: Member, can I bring you back to consideration of the bill.
[ Page 11674 ]

M. Sather: Yes, Madam Speaker.

[1540]

We look forward to a progressive agenda by the government. I would think that that is the intention, so we will assume that that's the case.

I wanted to talk for a minute about section 3 of the bill, which, in the explanatory notes…. There are explanatory notes in this bill, for which I guess we are grateful — at least on page 1. I remember debating the Animal Health Act recently. I don't think there were any explanatory notes for that bill, so that's a step backwards.

Here we have some. In the explanatory note it says, under section 3, that this section "allows the Insurance Corporation of British Columbia" — otherwise known as ICBC — "to cancel the driver's licence of a person who owes the government a monetary penalty." We're hearing more of this, of licences being cancelled if you're not good. For example, in my constituency on the Golden Ears Bridge, which we share with Langley, if you don't pay your toll, you don't get your licence renewed.

I mean, it sounds fair enough on the face of it, and I suppose it is. The problem is that the administration of the toll at the Golden Ears Bridge has been fraught with problems. Folks are finding themselves billed when they shouldn't be. The timing is wrong. There's been a whole myriad of problems. I know of constituents who have lost work, actually, as a result of finding at the eleventh hour that: "Guess what. I can't renew my driver's licence because apparently I didn't pay a fine."

That's a problem — to lose a day's work. That costs you serious money. Cancellation of a driver's licence is a significant thing. We want to be sure that it's done correctly and there's not undue harm for residents.

Section 4 says that it "allows the Insurance Corporation of British Columbia to issue a short-term driver's licence to a person who owes the government a monetary penalty but who has made an arrangement for payment of the penalty." Maybe therein is an out. I guess if you make the case or whatever successfully, you can get a short-term driver's licence even though you owe the government money.

It's kind of an interesting bill in that respect. The member for Nanaimo, my colleague, was mentioning some of the sort of trading provisions that appear to be in this bill. I want to refer to one of those in a moment.

I wanted to make note of a comment by the opposition critic for this bill. It is with regard to the driving notice review board. She said that it's not clear what offences will be included under that review board. There again is a real huge need to have committee stage debate on a bill.

The government may have all the answers. We hope they do. But you know, we're not on the governing side. We aren't privy to all the information that the government has. We very much need that opportunity to learn the details of the bill so that we can advise our constituents accordingly. I remain hopeful, but as I said earlier, I'm doubtful that we're actually going to get to committee stage on very many of these bills. But perhaps this will be one of the lucky ones.

I wanted to turn to sections 12 and 13 of the bill, which are way at the back because most of the bill is about amendments to the Motor Vehicle Act. That's the big chunk of it.

[1545]

At the back of the bill, though, you come to sections 12 and 13. Section 12 talks about driver assessment points, and it defines driver assessment points. It means "points that may be recorded against the driving record of a driver under the Motor Vehicle Act or under this Part and the regulations under this Part."

Then section 13 says that it "allows the Insurance Corporation of British Columbia to use driver assessment points to assess and levy a driver premium for basic or additional insurance and to establish or adopt a method to use driver assessment points in addition to, or instead of, penalty points." It's confusing to me. We've got driver assessment points on the one hand, and then on the other hand, we've got penalty points.

The greater concern is that they are adopting or establishing, as the section says in 13(d.2), "a method by which point penalties may be converted or compared to driver assessment points for the purposes of assessing and levying basic or additional premiums under the plan" — that would be, I guess, the ICBC plan; I'm not sure of that — "against drivers at the times and under the terms and conditions the corporation considers appropriate."

We're talking here about levying additional premiums — insurance premiums, I take it; they can be significant — against drivers at the times and under the terms and conditions ICBC considers appropriate. Well, that sounds like a loosey-goosey deal to me. How much do drivers stand to be soaked by this mechanism? Again, it's just not clear at all.

You know, it's funny. Sometimes you have a piece of legislation, and it goes through this and that. Later on you find out there were actually some serious or considerable consequences to this bill that nobody really figured out during the time, especially when bills are flying through like this. Interest groups don't have time to study them or to give their feedback, and sometimes they've not even been consulted.

I heard with one bill, the Trial Lawyers Association wasn't assaulted…. That was a Freudian slip there, Madam Speaker. I meant to say they weren't consulted on a bill which was very germane to their area of expertise.

Great haste is what we're seeing. I guess we're not left with a lot of choice but to trust the government. But as the Health critic said earlier in the day, there sometimes is that lack of trust that's going on these days. Therefore, it kind of bogs down the system a little bit.

I wanted to turn to section 13. This is the Insurance (Vehicle) Act. This is the same one that I was talking
[ Page 11675 ]
about before with the driver assessment points and penalty points. It goes on to say:

"(b) by repealing paragraph (e) and substituting the following: (e) according to any system of classifying drivers adopted under paragraph (c), a point penalty system adopted or established under paragraph (d) or a driver assessment point system adopted or established under paragraph (d.1), assess and levy basic or additional premiums under the plan against drivers at the times and under the terms and conditions the corporation considers appropriate."

[1550]

Well, I'd have to consult my colleague from Nanaimo. He can make it clear to me just what capacities ICBC has at this time. I wasn't aware that ICBC had that kind of power. It's a continual learning experience.

That pretty much sums it up for me on Bill 52. Again, I think it's probably a good bill, and I expect we're going to support it. But it's just so frustrating to have to try to debate a bill without due consideration and without common courtesy, quite frankly, being afforded by the government side.

With those comments, Madam Speaker, I'll take my seat and allow for my colleague to continue the debate.

N. Macdonald: This is an opportunity to speak on a bill with implications, in particular, I think, for rural areas. Bill 52 was, as members have said, introduced yesterday, among other things, and it's a fairly lengthy bill. It talks about the ability to take away licences. Obviously, in rural areas in particular, that can be a profound sanction on an individual.

In Golden, for instance, over half of the people that are resident in the area live outside of the boundaries of the community and depend on transportation, and it's going to be a personal vehicle. We don't have transit anymore. Even when we did have it for a short period of time, it was pretty limited.

What we have, then, is a bill. If you look in the short comments that we had from the minister, we see that they're laying out something that sounds pretty straightforward. The minister talks about 50,000 tickets that are in dispute, that are currently in a backlog. Doesn't it make sense to try to deal with that backlog? Doesn't it make sense to set up a system that is going to be cheaper and more efficient?

All of those things sound completely reasonable, just as it seemed reasonable with DriveABLE to have a system in place that would fairly judge whether a senior was able to keep their licence or not.

The devil with all of these things is in the detail. I mean, we would all agree with the sweeping assertions that the government makes. But to actually pull it off and to do something that is fair and actually accomplishes what the government says it is going to accomplish is something that is completely different. That seems, in recent time especially, to be beyond the capacity of this government to actually produce.

Now, I'll just come back to DriveABLE. DriveABLE is a mess. Nobody would put in place a piece of legislation like that.

Deputy Speaker: Member, I will draw you back to consideration of Bill 52.

Interjections.

N. Macdonald: I mean, it's a sensitive place for them, but this is exactly the same thing.

Deputy Speaker: Member, I trust you're taking the advice of the Chair.

N. Macdonald: I always take the advice of the Chair. I always listen to the advice of the Chair. I would not drift from the advice.

What I would point out is that this is a bill where all can agree on the general sentiments that are expressed around efficiency, around the fact that there's going to be less cost. All of those are motherhood statements. But whether the government actually accomplishes them or not is another question.

We have a history here where the government puts forward something that they say is straightforward, and then as we go through the detail, or the courts go through the detail, or it's applied on the ground, it becomes a complete mess. The comparison to DriveABLE is a fair comparison — a mess. It's a mess.

Hon. S. Bond: Actually, it's not.

N. Macdonald: Well, ask a senior, Minister. Ask a senior.

This is a sensitive spot for the minister.

Deputy Speaker: Member, please direct your comments through the Chair.

N. Macdonald: Let's come back to this bill. This bill was put in place yesterday, like I say — filled with detail, filled with new terms, filled with implications for people that are profound.

[1555]

It is the responsibility of this government to have thought through this legislation, to have done the work before they present it to us, and it's the responsibility of the opposition to try to dig in to what is actually going on in this bill.

Let's look at the genesis of this bill, as far as I can see. We had this as supposedly part of a justice reform agenda. That's what the government is talking about. Let's think back to when that justice reform agenda was first talked about. It was when there was a crisis in the courts. I think it was evident about a year ago that we had a crisis in the courts. This government had decided to save money and
[ Page 11676 ]
not appoint judges that, in retrospect, were needed.

We had cases being thrown out. We had a government under pressure on a file that they thought they owned, which was on justice. They tell themselves, amongst many other myths, that they can manage justice, and clearly they weren't…. There was the bungled Riot TV initiative. Then there was a need to deal with another bungling, which was the fact that they had not managed the court system so that there were judges to actually deal with cases. Very serious cases were thrown out, case after case.

Under pressure, the government said: "Don't worry. We have a justice agenda, a reform agenda. You don't have to worry about judges. We're going to move to administrative law. We're going to do something different that's radical, that's well-thought-through."

Here we are. This is the piece of legislation that we have in front of us. It attempts, apparently, to streamline traffic violations. Some other members talked about this, but I'm going to take a bit more time, because the Minister of Justice referred to something that I said in the debate yesterday.

For the Speaker's benefit, because I know she'll be interested in this point, yesterday, to give context, we talked about a bill that was in place to fix previous B.C. Liberal legislation that courts had found unconstitutional. The minister objected to the fact that I pointed out that this was about the third bill we were dealing with that dealt with B.C. Liberal legislation that courts had thrown back to this Legislature to fix.

The courts had said that the base level of being constitutional…. I would think that is a pretty low bar — right? — to actually produce legislation in this Legislature that's constitutional. That would be a pretty low bar, but apparently, we couldn't do that. The minister took exception to me pointing that out, saying that it was an insult to those that produced this legislation.

I have no doubt there are people working very, very hard, and I also don't doubt that if there are errors made, the responsibility sits nowhere else but in this House. It is always a weak defence, as we saw in question period, to say that the blame sits somewhere else. It always sits with the minister responsible.

We all understand that we have people working for us that produce work for us — that we don't do all of these things and that we're not responsible. There are few here that are more capable than this minister. I mean, I say that. I know, genuinely, there are few. Nevertheless, the mistakes that are made are mistakes that sit with that ministry. The minister knows this; they all do.

I want to point out four places…. This is something that I haven't seen before, and the critic pointed it out. Go to page 6. I would invite government members to go to page 6. It's a first that I've seen here. It's not a spelling mistake, but it's a printing error.

You have "anotice." Well, there is no such word as "anotice." There is now, I suppose. It's there on page 6. Now, many will say: "Well, that's a small thing. Who cares?" Well, this is a piece of legislation we're making. You get the small things wrong, and it puts into question the big things.

[1600]

Turn to page 7. I'd invite members to do that. Turn to page 7 — "admittedthat." Well, "admittedthat" — when I say it, in your mind you divide it. You know that it's two words, "admitted that," but in this legislation, Bill 52, page 7, "admittedthat" is one word. I'd like the Speaker to look at it, page 7. It's in section 276, "Failure to respond to driving notice."

It goes beyond that. It goes to page 11 — "date,apply" all fused together into something different. Go to page 14 — "performanceof" — again, one word.

There you have a piece of legislation where the real basics of putting in front of this House a document…. Well, the minister is shaking his head as if that's a trivial thing.

Interjection.

N. Macdonald: With a record of legislation that the courts have found unconstitutional, where the fact that the government cannot even produce a document without printing errors and put it in front of this House….

It seems to me that it speaks to a sloppiness. Well, it does more than speak to a sloppiness. It is sloppy, and the government can either accept that that's the new standard….

Okay, the Minister of Environment thinks it's no big deal. That's the new standard — right? It doesn't matter. We don't have to worry about these things — this word, that word. You can figure it out, except that we have people within the House who've served as lawyers.

My experience is as a teacher's president. We did work where we had disputes, where we had to look at contract language — I know that the minister had to look at contract language — where one word means something. You go into that dispute, and you look at what the word says. It can go one way or another. In this bill we have words that aren't even words.

Deputy Speaker: Member, if I might draw you back to the contents of Bill 52.

N. Macdonald: Well, I'll point to the contents. It's a word called "anotice." What does that mean?

So we have a law being put forward where there's not even proper language.

Hon. S. Bond: It was a formatting error.

N. Macdonald: A formatting error. So there is a sloppiness. The minister says it's ridiculous. The minister says that's the new standard for the day. These are the things
[ Page 11677 ]
that can be put in front of the House, and it's all okay. It's just a waste of time — right.

At the same time, the minister will say….

Interjections.

Deputy Speaker: Members, Members.

Member, please take your seat.

Continue.

N. Macdonald: You have disputes, then, that are decided by language. You have within this bill, laid out in detail, how a new system is going to work. The government is saying…. Okay, I'm sure at the end they'll stand up and say how picky, how churlish to point out that there are mistakes. Okay. Fine. That's the standard that the government has. Fine. It's churlish.

Then, let's look at the content of the bill. The content of the bill is extensive. It introduces new language. It talks about new systems. Is it faster? Is it more fair? What are driving notices, exactly? How are they created? How does this new administrative review work?

Well, where could I go and get that information? I suppose I would look at the notes, but the government, showing a tremendous capacity, doesn't have the ability, for 20 pages, to put explanatory notes on any of the new terms.

So where else do I listen? Do I listen to all the ministers who are willing to participate in the debate from their seats, or will they stand up, explain how the new system works?

I looked at the minister's speech — concise, short, no detail at all. So what we're left with in second reading debate is the opportunity to go through it — to take a day and have a look at a completely new system.

Basically, the government asks us to just trust them. It asks us to just trust them. Why on earth…? First, that's not our job to trust. That's not what we're getting paid to do — to just trust. They're supposed to make the case and convince us. They supposed to make the case and convince us — all right?

[1605]

Secondly, we're supposed to see a standard of work that we have confidence in. There are not supposed to be mistakes.

I can tell you that I know people that work on environmental reviews. They will go through three layers of editing because they know that all of the work they do in the environmental review is undermined with printing errors. So you don't trust work if they have not done the small stuff, and that's true of almost any operation, whether you're running maintenance for an airplane or running a school. You better get the little stuff right, or you'll get the big stuff wrong.

So a lot of questions, a lot of explanations, will come in committee stage, and a lot of time, going forward, to see whether what the government has laid out here actually makes any sense, whether it's actually a system that works. I can tell you that from my experience, I am seeing one mistake after another from the government. That is the pattern. That's the pattern of this session. It is one mistake after another, and this bill this is same.

I know it's frustrating. I know it's not anyone's personal responsibility here, but it is a political responsibility for putting in front of this House legislation that's thought through, that's actually going to work for people, because there are implications on the ground.

I know the minister doesn't like the comparison to DriveABLE, but it's a perfect comparison. You can have all the right things that you say about it, but if you can't produce competence on the ground, then you do a tremendous disservice. That'll be the test of this legislation. Does it work competently on the ground? And where I'm standing, I've got lots of reasons why I just question whether we're actually going to see this work on the ground. But that's something that'll be tested in the committee stage.

Interjection.

N. Macdonald: The minister says: "If I read it." Well, I found the spelling mistakes, so I think I've done more than the minister has.

Interjections.

Deputy Speaker: Member. Member, please direct your comments through the Chair.

N. Macdonald: Oh, I've upset the minister? I've upset the member? I apologize. I apologize for that.

Bill 52. We look forward to the committee stage debate. We have, I know, an urgency on the part of the government to get all of these bills through. We have a fall session, if the government so chooses to have a fall session.

With that, I take my seat and look forward to the members that wanted to debate a few minutes ago maybe standing and participating in the debate.

J. Brar: I am very pleased to stand up in this House and make my contribution towards Bill 52, Motor Vehicle Amendment Act (No. 2), 2012. I will try my best to limit, of course, my comments to the contents of the bill, but this bill is wide enough to make some comments which may not be deemed to be directly related with the bill.

The minister states that these changes support the justice reform agenda and are based on a commitment from the October 3, 2011, throne speech. He further states that this bill streamlines the traffic violation system by allowing people to pay and dispute their traffic tickets on line and would allow electronic ticketing. That's what this bill says, and there are many more things in this bill
[ Page 11678 ]
that will change.

But I want to comment on the broad situation where the minister claimed that this is a part of the justice reform agenda of the government.

[1610]

The people of B.C. — there is no doubt that they want the justice system to be reformed. At this point in time, because of the failure of this government to fix the backlog in the justice system, the people want the court system to function effectively, efficiently and in a timely manner. Therefore, people want reforms in the justice system. There is no doubt about that.

[D. Black in the chair.]

We read in the newspaper from time to time that criminals with very serious crimes go free in the court system because their trial did not take place in a timely manner. We hear that and we read those stories on a very regular basis. Therefore, I agree with the minister on one thing. There is a need for the justice system to be reformed. The people of British Columbia want the justice system to be reformed. There's no question about that.

Reforming the justice system is a serious matter.

Interjection.

J. Brar: I hear comments from the Minister of Environment on the other side. I think I will suggest to the minister to stand up and speak on the bill rather than commenting on the opposition members when they stand up.

Interjections.

J. Brar: Every member in this House has the opportunity to stand up and speak to any bill for half an hour. What I hear from the other side, making comments on the member speaking on this side…. I would challenge them to stand in this House and speak to the bill.

Deputy Speaker: Member, could you please make your comments to the bill on the floor.

J. Brar: I will, Madam Speaker.

This bill talks about reforming the justice system, and it's a serious matter. There is no doubt about that. Reforming the justice system is a very serious matter. It needs proper planning. It needs enough public consultation. People want to be consulted on this very important matter. The people of British Columbia want to be part of it, because it's a huge change, and it's going to change big-time the way people interact with the justice system. People want to be part of this because of that.

That did not happen here. What the government has chosen is basically a piecemeal approach to reform the justice system. That's not how the justice system is reformed — by a band-aid approach, the kinds of steps the government is taking. That's my concern. People need to know about these things.

There are serious gaps in the justice system. The minister herself indicates that there is a backlog of 50,000 — if I read it correctly — ticket disputes in the province of British Columbia. It takes seven to 12 months now to resolve those disputes. We need to understand why we are in that situation. We are there because of the failure of this government to take timely actions to fix the gaps in the justice system.

Bill 52 was introduced yesterday, and today we are having second reading on this bill. There's a process in the House to debate each bill. The bill is introduced by a minister, and then the second reading…. I just want to say, for the benefit of the public, that there is a second reading after that where each member of this House has the opportunity to stand up and speak for 30 minutes, making his or her comments on that particular bill.

[1615]

Then we move to what we call third reading, where a member of the opposition, particularly the critic of that ministry, has the opportunity to ask questions for clarification on each section and subsection of the bill to make sure we are passing a bill that meets the test of proper and full scrutiny. That's the purpose of this whole process, but that is not happening here in this session.

We have two sessions. We have the spring session, where we debate the budget, and then we have the fall session, which is specifically to have meaningful debate on the legislation, the bills, introduced by the government. As of today we have 700 pages of legislation that need to be debated in this House, and we have less than ten days.

Coming back to Bill 52….

Interjections.

Deputy Speaker: Member, take your seat for a moment, please.

I'm having difficulty hearing the speaker. I'd appreciate it if all hon. members would keep their comments to themselves while the member is speaking.

J. Brar: Thanks, Madam Speaker. I will, as I said at the very beginning, keep my comments focused on the content of the bill. Bill 52 was introduced yesterday, and that was my comment. We are debating second reading today, and that was my concern.

My concern was — and it remains — that the purpose of these three different stages of Bill 52 is to make sure that all members get the opportunity to make their contribution, make sure we have full opportunity to ask all the questions and clarifications on the bill. That's what I was saying, and that's what the concern remains when I talk about this.
[ Page 11679 ]

We don't have time to do the job, keeping in mind the number of legislations introduced by the government and keeping in mind the number of days left in the session. That's my point.

The rationale given by the minister for this bill is a backlog of 50,000 ticket disputes in the system at this point in time. That takes, as per the minister's own saying, seven to 12 months to resolve it. The minister says that the change under this bill will actually make it better. That's what the claim is, but I want to say this. We have a 50,000-ticket dispute backlog because of the inaction of this government.

As of today we have 128 judges in the system, whereas in 2005 we had 143. We have a severe shortage of judges in the system, and that's why we are facing the backlog in every category of the justice system. The government is trying to make these changes to give the appearance to the people of British Columbia that they are doing something better. That is not the case.

I would also would like to say, as the comments made by other members, that there is no doubt that these bills are prepared in a rush. We see a lot of mistakes on different pages of the bill, and that is something unheard of.

I come from a country…. English is my second language, and even so, it is surprising for me to see that we have mistakes in the bills introduced in this House. That's very surprising.

[1620]

I would like to conclude my comments. I do agree with the concept of the bill, but I don't understand that this is the right approach to do the justice reform…

Interjections.

Deputy Speaker: Members.

J. Brar: …in the province of British Columbia. The people of British Columbia would want proper planning, proper consultation with the people of British Columbia to do the right kinds of reforms in the justice system.

With that, I will take my seat. Thanks for the opportunity to speak on this bill.

N. Simons: It's my privilege, my right and my responsibility to stand up in this House and speak on legislation that has an impact on my constituents, as it does on my fellow colleagues' constituents. The kind of heckling that seems to subvert the process from other side…

Interjections.

Deputy Speaker: Member.

N. Simons: …seems to suggest that they don't have the same concern for their constituents as we do for ours on this side of the House. So I would say….

Deputy Speaker: Member, take your seat for a moment, would you, please.

The comments that are coming from both sides of the House are unacceptable. I ask all hon. members to give the courtesy to the person who has the floor.

Would you continue with your remarks, please.

N. Simons: Thank you, Madam Speaker.

As I was saying, it is my privilege and my right and my responsibility to speak on legislation in this House tabled before us lo these many hours ago, a bill of 23 pages, changing quite significantly, I might say — if the minister cares to dispute that — the way in which people, my constituents and hers, will be dealt with if they happen to offend against Motor Vehicle Act legislation — traffic offences, driving offences.

The changes, I think, are significant. The minister herself referred to them as innovative. They are being implemented in order to reduce a backlog of some 50,000 disputed tickets, to try and reduce a backlog of 18 months in appeal. This is not insignificant legislation, and I think it does deserve due consideration by those elected to provide that consideration — that is, legislators in this chamber.

I appreciate the opportunity to speak on it. It does raise questions. It raises questions for which I do not have the answers. However, perhaps at a future point we'll be able to get those answers — when we get to the next stage of this debate, which is also to be conducted, according to tradition and legislative rules, in this chamber.

Questions could be asked by every single member of this House, including backbench members of the Liberal caucus, about Bill 52. I don't think that denigrating the responsibility of opposition MLAs is necessary.

Deputy Speaker: Would you please, Member, address your comments to the bill that's on the floor for debate.

N. Simons: Thank you. I am pleased to do that in deference to you, Madam Speaker. I am pleased to speak to the bill at hand.

One of the issues that is raised, first of all, is that this legislation was tabled but yesterday. We see similar types of legislation introduced in other chambers where relevant information is provided in the statement introducing the bill. Unfortunately, this minister believes that it is not necessary for us to know the details of the purpose of the changes. Most of the sections have absolutely no explanatory note.

Six bills were introduced yesterday, Madam Speaker, as you know. Some of them had more information, and some of them.…

[1625]

Deputy Speaker: It is Bill 52 that we are debating now. Bill 52.
[ Page 11680 ]

N. Simons: Yes, okay.

If the minister would like to hear my specific concerns, let's start with section 1.

You know, I hope that if this legislation passes — and it likely will — it will not result in the same kind of acrimony that other decisions made by this government have caused.

So there's a change now. We'll no longer be getting tickets. We'll be getting notices. We'll no longer be offenders; we'll be disputants. So far, I have simply described….

Interjection.

N. Simons: Disputants. We will be disputants. If we decide to dispute our traffic notice, we will dispute it. See? Not everybody in this House understands the legislation even as well as I do. I wonder if being a disputant would be considered…

Interjection.

N. Simons: …an unlawful act. Now, welcome to the chamber to the House Leader.

Deputy Speaker: Member, it's not in order to speak of who is or who is not in the chamber at any time.

N. Simons: His presence is noticed. Something happened to the air in the chamber, Madam Speaker, and I just couldn't help but note it.

Interjection.

N. Simons: If the minister wants to engage in discussions around denigrating people, I can bring out all the people who came to me during the DriveABLE sessions, and I don't think she'll want to go there.

Bill 52 is the second bill amending the Motor Vehicle Act.

Interjections.

N. Simons: I'm sorry. Should I listen to their comments? I'd be pleased to engage with the minister. She seems so anxious to.

Interjections.

Deputy Speaker: Members. Members.

N. Simons: It wasn't in the bill. It was passed underhandedly, to the despair of many seniors.

This is the second bill amending the Motor Vehicle Act in this session. My first question would be: what happened that they couldn't put two amendments into one act when they've got a flurry of acts? The first one, of course, did not deal with electronic ticketing.

Now, there are many questions about this act — so many questions that it's even difficult to know where to start. That could explain, perhaps, their frustration at my inability to get to the gist of it.

Besides the absolute sloppiness with which this legislation was introduced, besides the ridiculousness of introducing a bill of this significance a day before going into second reading, besides the fact that there are spelling errors and grammatical errors, what else is in this bill that is going to be snuck up upon the people of British Columbia without us going through it with a fine-tooth comb?

My first question would be about the….

Interjections.

N. Simons: Now the minister wants to talk about the '90s. He might know that maybe I wasn't here in the '90s, and maybe he's been here too long. Maybe that's just a signal that he's been here too long.

Deputy Speaker: Member, the bill that is on the floor for debate is Bill 52. Will you please direct your comments to the bill?

N. Simons: Absolutely, Madam Speaker. It's my pleasure to address my comments to the bill, Bill 52, the Motor Vehicle Amendment Act.

As many of my colleagues have said prior to my opportunity to stand here, our responsibility is to look through legislation and to ascertain what it is in that legislation that may cause problems, that may raise questions and may cause problems to people affected by the legislation itself. The legislation put before us is 21 pages and has about four paragraphs of explanatory notes, and nothing to explain section 8 to the end.

[1630]

I think that just reflects the sloppiness or the lack of respect that that side of the House has for the legislative process. Perhaps I'm simply meeting that level of respect with my ability to talk about this bill.

Deputy Speaker: Member, please confine your remarks to Bill 52.

N. Simons: Bill 52, Madam Speaker, as you may know, provides for the replacement of violation tickets with driving notices. I mean, I would have liked to have that happen as a child, to come home: "I didn't get a ticket, Mom. No, I didn't get a ticket. I got a driving notice." "Oh, good for you. Well, we'll have to find out exactly what a driving notice is."

Interjection.
[ Page 11681 ]

N. Simons: And they spelled it right.

It also provides for dispute resolution conferences with regard to driving notices. What we see is a gradual and continual and progressive move from the court system, the duly appointed court system, to a tribunal, a system that is undefined and likely to be created by some order-in-council or regulation that we won't have any ability to discuss and, consequently, have no oversight over. This is our opportunity to bring up the fact that the structure of the bill has potentially built into it a number of provisions over which we have no control, even though we're the legislators.

Now, Geoff Cowper is reviewing the justice system, and he has not yet had an opportunity to report. My question would be to the minister. Why would the minister start implementing a bunch of changes before having had the opportunity to find the results of that report? Why would they jump the gun? What's the rush? Is it that they have six bills they want to pass in the last eight days of the legislative sitting? I don't know. But my question, I think, is a relevant one.

Part 10, "Driving Notices." We're going to have the new creation of driving notice review boards. We don't know what those review boards are going to look like. They're going to be set up under some provision of another act that we have no ability to determine.

"Driving enactment," section 271: "Without limiting any provision of this Act, the Lieutenant Governor in Council may make regulations designating…." Once again it's the Lieutenant-Governor-in-Council. That is the cabinet. We are not privy to the information that's contained in this bill. It's 21 pages long but very, very lacking in content — a lot of words but not a lot of meaning.

My concern is about that. I think legislation should be clear to the public. I mean, even the people who are affected, even the people they call the stakeholders weren't adequately consulted. They jump the gun and decide not to wait for a review of the justice system. They jump the gun, and they do so without even talking to the people who know most about it. They have such little respect for the legislative process that it just shocks me.

"Disputing a driving notice," section 275:

"A person on whom a driving notice has been served may, within 30 days after being served, (a) deliver or cause to be delivered to the superintendent at or in care of the address set out in the driving notice or to an address set out in the instructions prescribed under section 278 (1) (b), anotice" — "a notice" is two words, Madam Speaker — "of dispute in the prescribed form."

Note to editor: "a notice" is spelled: a, space, notice.

"(b) cause a notice" — they got it right that time — "of dispute to be delivered to the superintendent at or in care of an electronic address set out in the instructions prescribed under section 278 (1) (b)."

We have no information in this bill, absolutely no information in this bill, to suggest where this electronic data is going to be stored, who's going to have access to this electronic data, who's going to share this electronic data.

There are a number of privacy issues. There's no explanation. I would have liked an explanation. I'm not saying, "Give me all the answers now," but if you're going to table a bill with 11 days left in a sitting, at least give us a hint at what the purpose is besides a 20-second speech in the Legislature saying it's going to be 50,000 tickets backlogged.

You can give me all the excuses for having a backlog of 50,000 and no solutions, and you don't even wait for the justice review. We have fewer judges in the provincial court system now than we had in 2005, by about 15. Maybe if you look at the systems you're mismanaging now to find solutions instead of creating new ones to start with, you'd be getting somewhere.

[1635]

The power to make regulations, the resolution conferences…. There are rules about rules and rules. These blank pages — that's where the explanations should be. Those pages should have explanations on them, and none of them do. Every other bill tabled before us, as legislators in this chamber, has had explanatory notes. What is wrong with some explanatory notes?

They make a mockery of the system, and I'm disappointed. But you know what? That disappointment comes from somewhere real. We've seen other legislation that has caused great harm in this province. This is perhaps not going to be like that, but it gives us an opportunity and a right, and in fact, a responsibility to ask questions about it.

To see the comments of the government side, when my colleagues were speaking eloquently about the substance of the bill, and mocking him and her because they don't want to hear it — that's not the point of us being here.

Deputy Speaker: Member. Member, I'm cautioning you. The bill under debate is Bill 52, and I ask you to keep your remarks on the bill.

N. Simons: Sure, Madam Speaker. Thank you for that reminder.

Clearly, it's something that generates emotion behind it. Not that the bill's substance does, but the fact that it's being put forward as.…

Interjection.

N. Simons: Yeah. Well, if we knew the substance of the bill, as the minister wants to say…. Maybe if there were some explanatory notes, we'd know more about the substance of the bill — dismissive to the end.

"Part 11, Resolution Conference." I'll speak specifically to the point about the resolution conferences, because — you know what? — due process in this province is not something to be played with. It's not something to be written on a little piece of paper and thrown away.
[ Page 11682 ]
Madam Speaker, I'm sure you've had an opportunity to read this bill as well. You will note that the resolution conferences are taking the dispute resolution from a court setting to another setting about which we have very little information.

We're talking about penalties that have an impact on families, about sanctions that have an impact on abilities to drive that could potentially be removed, if we were providing the oversight. So the resolution conference:

"279 (1) After filing a notice of dispute under section 275, the disputant" — that would be the person who got the ticket or the notice — "must participate in a resolution conference with the superintendent in accordance with the notice sent under section 275 (5) and with this Part."

This is about due process.

"(2) A resolution conference may, in accordance with the request of the disputant, or in the absence of a request, in the discretion of the superintendent" — and we know what that means — "be conducted in writing or by telephone or by a combination of those methods.

"(3) In conducting a resolution conference, the superintendent must consider the following"

There are two: (a) and (b).

"(a) the information provided by the disputant under section 275 (2) and further information that the disputant provides to the superintendent before or during the resolution conference; (b) the information provided to the superintendent by (i) the driving enforcement officer" — which brings me to another point — "who issued the driving notice under section 272, or (ii) another driving enforcement officer."

Now, we've never had people called driving enforcement officers before. We've had police officers, and we've had traffic cops, as we've called them. But a driving enforcement officer — maybe we'll find out. As I mentioned, there is no explanatory note on who a driving enforcement officer is.

"(4) Before the date of the resolution conference scheduled under section 275 (5), the superintendent must forward to the disputant the information obtained by the superintendent under subsection (3) (b)."

I'm presuming that's electronically transferred. Who is in possession of that information, and who is going to be transferring it and to whom?

[1640]

There are a number of questions, and I don't think that the minister wants me to read the whole act. I would read it, word for word, spelling mistakes and all. I think my point has been made that this legislation, introduced yesterday for second reading today, and possibly committee stage when we get the opportunity, although we have a number of other bills that we're supposed to debate….

This is my opportunity to point out and to express my concern on behalf of my constituents not about the specifics of the bill, because we don't know them, but about the process with which the government has chosen to undertake dramatic systemic changes to the way in which we monitor and sanction drivers on our streets. We've seen bad examples of how that has not worked in the past or good examples of how it has not worked, and I just don't think we should be willing to accept the kind of mistake that this government has made with respect to drivers.

I'm actually looking forward to committee stage, as my colleagues have mentioned earlier. That is the opportunity for us to evaluate on a clause-by-clause basis, to find out exactly what it's about.

The 2½ paragraphs that we can read in Hansard that say that it's about effectiveness and efficiencies and streamlining — those are buzzwords, Madam Speaker. How can you be against it? How can you be against things that appear to make things faster and smoother and more fun? The part that I liked was that it provides drivers with…. Where is that quote? "This bill reduces the administrative burdens experienced by members of the public."

Well, maybe paying on line would have been a good start. Pay your tickets on line.

Hon. S. Bond: That's exactly what it does.

N. Simons: We've got 21 pages to say you can pay your tickets on line, apparently. Well, good for us. But you know what? To say "pay your tickets on line…." It's called justice sector efficiencies, streamlining processes. If the minister wants to pay attention, I don't think those 50,000 disputed tickets are about inability to figure out where to find a stamp. It's not 18 months of finding out: "Can I put this in the mail, or do I have to bring it to the post office?" This is not just about paying on line, but paying on line would have been a good way of talking about it.

I'm pleased to be able to point out that there are definite questions with respect to the legislative drafting abilities of this government, the purpose behind them and, really, the openness and transparency they pretend to have in this House.

With that, Madam Speaker, I'm sure you're as pleased as I am to pass the floor to a colleague of mine.

Deputy Speaker: Before we proceed, I just want to remind all hon. members that second reading is about the general principles of the bill and nothing more. I ask all members — all members — entering this debate to address the general principles of Bill 52.

C. Trevena: Madam Speaker, I'm very happy to address the general principles of Bill 52, Motor Vehicle Amendment Act (No. 2), 2012.

Before I start on the principles of this bill, I really have to acknowledge…. It's very strange. Yesterday I was standing up and talking about Bill 46, and I know I'm speaking about Bill 52 today. Yesterday it was a motor vehicle amendment act, and it seems….

It is symptomatic, I think, of what has been discussed on this side of the House through this debate that has caused such concern from the government side of the
[ Page 11683 ]
House. You can tell just by, really, the response, the heckling and the lack of engagement from government members in participating in the debate. Debate is supposed to be two ways. We listen to what the government is saying, and we take a response.

[1645]

I think it is symptomatic, the fact that we had yesterday a discussion on an amendment to the Motor Vehicle Act. We have today another amendment. If the government was working in any really logical and coherent manner, those two amendments would have been rolled into one bill. Then we could be standing here and talking about the pros and cons of both bills. It's not a big thing. It's not a hill to die on. It's not something that we're going to really rage and rant about, but it is symptomatic of so many problems we are seeing from this government.

I know that the House Leader refers back to a time — about the time I was just coming to Canada, 20 years ago — and what happened then and how bills may have been back-loaded then. We're living in 2012, with the government of 2012, and we're dealing with the bills of 2012. What we're seeing is a rush for….

Point of Order

Hon. R. Coleman: Point of order, Madam Speaker.

This is getting tedious and repetitious. The members are not addressing the bill before the House. They've decided to have a discussion which is unrelated to the bill.

Hon. Speaker, it brings into question…. Actually, it makes a very good argument why there is time allocation on certain aspects of this Legislature, but I would ask the Speaker to rule accordingly with regards to the tedious repetition and bring the members back to actually debating the content of the bill.

Deputy Speaker: Members, the point of order is well-taken.

I have asked all members to pay attention to the contents of the bill. We know that second reading is on the general principles of the bill. I would ask all members on both sides of the House to keep their comments to the general principles of Bill 52, which is the Motor Vehicle Amendment Act.

Would you continue, please, Member.

Debate Continued

C. Trevena: As I was saying, the Motor Vehicle Amendment Act, one of 15 bills that have been brought in in the last two weeks — well, actually the last eight days, I think, from last Monday. Bill 52, as I say, really indicates the government's disorganization. We don't have one bill but two bills.

One of my concerns about this bill is that it's got some major changes. What it is doing is changing the way that fines are imposed and paid by people who have traffic violations. That is the essence of this bill, and I know my colleagues have been very concerned about various parts of it.

What troubles me, and the reason why I refer to the greater context of the legislation that is going through this House — I think that is very important, this other legislation — is that in yesterday's debate I was standing here talking about something that was challenged in the Supreme Court, hence the amendment.

Here we have quite a large bill which is making quite a significant change to the way that traffic violations are dealt with in British Columbia. It's something which the minister says is streamlining it. This may well be.

What is of real concern is that this is being brought in…. There are a lot of different ways of doing things, a lot of different terminologies. My colleague from Powell River–Sunshine Coast very succinctly went through some of the different terminology in the bill. We no longer have the offender; we have the disputant. Whether it's buzzwords…. We have just different terms within this bill.

What is of interest and what is of relevance, when we're talking about both the back-loading of legislation in this House and also the weight of these bills being dealt with in a comparatively short time, is: what scrutiny did the government itself put on this bill before it tabled it in the Legislature?

[1650]

Maybe the government went out and consulted widely. Maybe the government has found through various forums — various focus groups, various meetings with stakeholders, going out very broadly, having this discussion — that this is the best way forward.

Yesterday we were dealing with an amendment because the government hadn't really done wide enough consultation. It was found in violation. The Supreme Court had said: "You've got to change it." What I'm hoping…. This is the sad thing. It comes in so late in the legislative session, and I was hoping that this is something that we'll be dealing with in our fall session, which we have scheduled in our calendars.

I hope it's something we are doing in our fall session when we can have gone out, talked to people and found out whether this new way of dealing with traffic violations — this on-line billing, the on-line payments — is going to be the best way forward for British Columbia, if it's something that is going to be embraced. More importantly, is it going to be something that's going to be challenged?

Is this piece of legislation going to be challenged when we get one person or a number of people coming forward and saying that in some way this violates their rights? We saw that in the previous bill. We don't know whether we're going to see this in this bill. One of the problems is that it is being pushed through in the back-end-loading
[ Page 11684 ]
of this legislative session.

I hope that during the summer we are all able to go and talk to people within our communities about this legislation, about whether it is going to benefit — talk to police officers, RCMP detachments, traffic cops, and so on, ask if this is going to work, talk to individuals, talk to civil liberties organizations, talk to people.

I represent many communities that are still struggling with Internet connections, so to be paying on line is not as easy as many people think. It's not just like you turn on your computer and — bang — you've got it. I've been dealing with quite significant problems with the Internet in certain communities on the north Island.

I think that it's really very important that we do have the opportunity to have a proper examination of this bill and have a proper debate about this bill. I've raised this several times in this session. What we are supposed to be doing here is having an engagement of ideas.

I'm hoping that in Bill 52…. I have heard comments from both cabinet ministers and backbenchers from the government's side as well as from our own side. I think the opposition side has been wanting to get engaged in this bill and have a discussion about this bill, trying to find out what the bill really means to them and to their communities, because we are here speaking on behalf of our communities. What is it going to mean to individuals and their communities? I'm hoping that we're going to get some questions raised by the government side, as well, in this debate.

We've had some concerns raised on our side of the House about what the different parts of the bill mean — whether, for instance, a resolution conference is going to be a fair way of going forward. I'm hoping that we have some of that dialogue.

I'm also hoping that we get some greater understanding on how this fits in with the government's justice reform agenda. I know we have another bill that we're going to be debating — maybe later today, maybe tomorrow — Bill 44, which again is looking at justice issues and the way that disputes are resolved in British Columbia.

These are very, very important pieces of legislation. They change the fundamental ways that we have been operating. They deserve debate. They deserve reasoned consideration. They deserve close examination when we get to the committee stage. Other members of the opposition have talked about this and are hoping to get answers in the committee stage.

That is really very valuable when you're talking about something such as this, which is dealing with how to reduce the backlog of driving violation tickets and ensuring that the government gets its revenue on this, that people get dealt with fairly and that the process is smooth and fair and transparent.

[1655]

I'm hoping that through our committee stage we can have some of the debate about how fair and how transparent it's going to be and how it's actually going to work. Bill 52 is supposed to deal with the fact that there are 50,000 ticket disputes and that it takes up to a year to resolve these disputes.

The other question is not just the time, but there is a financial aspect of this. How much money is the government losing through this? How much money is the government going to make by changing this?

Switching to an on-line system — will it be easy? Will it be more cost-effective? What sort of privacy concerns are going to be dealt with, and how are they going to be dealt with?

There is a whole raft of issues that we really need to be examining. I'm looking forward to the government debating it.

[Mr. Speaker in the chair.]

We're wanting to see, really, how this…. I mean, the fact that we're going to change that approach…. Just by having the move to, as the minister says, "Oh, that's exactly what it is. It is just pay on line" — how is that really going to impact the greater system?

We know that Bill 52 gives the government the power to refuse to issue a driver's licence or a permit or plates or to cancel it if somebody owes the government money, if they've not paid their fine. That is going to have a significant impact on many people, but how is that going to be translated? Is that going to be very much an open process? Is it going to be something that somebody just has to deal with — check the boxes on line?

The government has been moving in many aspects, and not just in dealing with the public by moving on line and dealing with new forms of technology. Earlier this session we were talking about changes to education and how we're looking at broader aspects of education by having more e-learning, more classes on line.

We have government ministries moving wholesale information about individuals who relate to the government on line through the integrated case management for two of the main ministries.

Is this going to be a new database? Is this going to be another form of…? Is this going to be a unique software system that is only dealing with traffic violations? Or will it be playing into a bigger government agenda of dealing more with people through on-line communications, through on-line access and just through on-line availability?

That brings extra concern to me, because as I was just mentioning, it's very difficult for some of my constituents to get on line. Whether it's paying a traffic violation or dealing with other parts of the ministries, there is that problem.

The bill gives ICBC the power to refuse insurance because of failure to pay a penalty. It requires ICBC to provide driving contraventions in providing an abstract of
[ Page 11685 ]
a person's record. These are issues that could have clear implications for personal privacy and freedom of information.

I think that we really have to have a very serious debate about this bill. Again, I look forward to hearing…. I know that the minister gets to close the debate, but I am hoping that other members of the government side will participate in this to maybe broaden out the debate a bit.

Give us a little bit more information about just how it's going to work, because we don't want to…. It is irresponsible of us as legislators — opposition and government — to stand here and first debate, then analyze in the limited way that our committee system, as established, allows us to analyze and then pass…. The government has a majority. Whether we agree with the government's analysis through debate and then into committee stage and support the bill, or whether we oppose the bill, it is likely to pass.

It is irresponsible of us to allow it to go through if it is going to be like the previous Motor Vehicle Act that we were dealing with before. Then it's going to be challenged.

That concern I think is a real concern. It's why I think we should have a really very healthy debate on this. We've got to make sure that we are doing this properly.

[1700]

I'll take my place in the debate and look forward to hearing from other members on why Bill 52, the Motor Vehicle Amendment Act, will be a better situation for people in B.C.

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

Hon. S. Bond: First of all, I want to just reflect on some of the comments and the activity in the chamber this afternoon. I got up and made my introductory comments, or my comments in second reading, brief, and I gave an overlay of the content of the bill. I did that intentionally, because I respect and value the time that members opposite have to have meaningful commentary on a bill that's been placed on the Legislature floor.

I've spent the last several hours being reprimanded, and a number of other phrases from the members on the opposite side, including criticism of the fact that I chose to make brief opening comments to allow the members to concentrate on the content of this bill. There's been a lot of latitude in the Legislature this afternoon, and respect is a two-way street.

This bill brings to the Legislature floor transformational changes. Absolutely, they need to be debated and discussed here in the Legislature. But they're not a surprise.

This bill was foreshadowed in the throne speech months ago. This bill clearly said that the government needed to, and wanted to, look at ways to transform how we do things in the justice system. Differentiating ourselves from the members opposite, we don't actually believe it's about writing a cheque and just fixing the problems by paying, using taxpayer dollars. We actually think….

Interjection.

Hon. S. Bond: This is precisely about the bill, to the member opposite — who didn't know the bill contained on-line ticketing.

In fact, what this is about is making sure that in the justice system, we take advantage of the expertise that the police have. We don't believe, on this side, that the police should spend their time sitting outside traffic court for hours, often at double time, using taxpayer dollars, when they could be used more effectively doing other things in our communities, keeping our communities safe.

On this side of the House we actually believe that if you are going to be bold and innovative and challenge the status quo, it does mean taking risks. It means taking the chance. It means doing the best you can to make sure that you find that balance between making sure we have a fair opportunity for people to dispute their ticket and their…. That is exactly what we want to do.

But we're not going to sit here and just hope things get better. We're actually going to be aggressive and progressive. And you're right. Those things need to be debated in this Legislature, and that's why the bill is on the floor.

That is respect for the process. I can assure you, Mr. Speaker, that we have — and there are — a team of men and women who have consulted. They have worked tirelessly for months on the concept of doing something differently. You know, we're going to continue to look at progressive ways of trying to support….

Interjection.

Hon. S. Bond: Mr. Speaker….

We're going to continue to look at innovation in the justice system, and I was very pleased during the course of this debate to actually hear the support we have for the work that Geoffrey Cowper is doing. I heard just continuously on the other side of the House how much they're looking forward to the reform agenda that will be built on these foundational pieces of legislation. I'm very pleased to see that there is an appetite for reform.

[1705]

But this government will continue to look for ways to serve British Columbians better, to find a way to make sure that we're not tying up a courtroom and a court clerk and the police, and that the person who has to dispute the ticket, a traffic ticket….

Yes, we need to have a fair process, but that person has probably taken time off work and gone to the traffic court and sat outside that courtroom. You know, Mr. Speaker, they might never get inside the courtroom because there
[ Page 11686 ]
will be delays.

We're simply saying this. Let's look at a new way of doing business. Let's make sure it's fair. Yes, there will be challenges moving forward. If we look at the bill, it actually will take several years to make sure that the implementation of this bill and the principles behind it…. The principles in the bill — fairness, accessibility, best utilization of resources in the justice system — all of those things matter. That's what we should be concentrating our conversation on.

Mr. Speaker, I resist the temptation to use more of the House's time. We will have the opportunity to continue to discuss this. It's been very much appreciated by members of the public. There is a place for discussion about specifics, and we look forward to that.

This is about change. We're excited about looking at new ways of doing things in British Columbia. That's why we're going to continue to bring bills to this Legislature that challenge the status quo, and yes, they put us on the leading edge in Canada. We will lead Canada with innovation like this. We're not going to sit here like the members opposite and assume that we can just do the same things over and over again and hope for a better outcome. We're going to actually make a difference. Bills like this will do just that.

With that, I move second reading of Bill 52.

Motion approved.

Hon. S. Bond: 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 52, Motor Vehicle Amendment Act (No. 2), 2012, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. P. Bell: I call second reading of Bill 44.

BILL 44 — CIVIL RESOLUTION
TRIBUNAL ACT

Hon. S. Bond: I move that Bill 44, the Civil Resolution Tribunal Act, now be read a second time.

Mr. Speaker: Proceed.

Hon. S. Bond: I'll warn the members opposite. I intend to make my remarks brief and to the point, outlining the framework of this bill — again, extremely innovative. I know it's been well received already from the commentary we got yesterday.

The bill before us today does set out the authority to establish a new civil resolution tribunal. The tribunal's job will be to resolve strata property disputes and small claims, but more than that, the tribunal represents a new way for British Columbians to gain access to justice.

Delays. The expense of our court system both for users of the system and for taxpayers is a concern of our government. The civil resolution tribunal will assist us in implementing our strategy to develop cost-effective alternatives.

[D. Black in the chair.]

As we laid out in our Green Paper called Modernizing British Columbia's Justice System, we know that we need to find new ways to replace traditional adversarial processes and replace the traditional adversarial processes with economical and, more importantly, collaborative processes. In fact, that is why we looked at family law in this House, where we said that it's important to take those cases where there's an emotional and difficult circumstance for families and move those out of courtrooms where possible and appropriate. This principle is reflected in this bill as well.

For many matters, the choice to use the tribunal or the Provincial Court will be up to the parties in the dispute. So perhaps that's one of the critical principles that we need to highlight in my brief comments — the fact that this is voluntary. This is a voluntary tribunal. It will give people the opportunity to make a choice about how they pursue resolution to an issue.

We are working collaboratively with the office of the chief judge. I'm very pleased to have the opportunity to work constructively with the members of the judiciary as we look at this process so that we don't have duplication and so that we ensure we have a streamlined procedure.

[1710]

The civil resolution tribunal builds on the lessons that we've learned from pilot projects. In fact, we had a number of them that have been tested in our province. Our objective is for families and businesses to be able to access the tribunal services 24 hours a day, seven days a week, whether they live in rural or urban parts of our province. We certainly know this. People have extremely busy lives. The opportunity for them to access a system where they can find a way to bring resolution to a problem and not be restricted by the typical hours in the traditional system is an important advantage.

The bill also states that the tribunal will provide dispute resolution services that are accessible but also informal. We certainly hear enough in this chamber about the need to make sure that issues are understandable, clear and easy to understand. This is about an informal process, and we all know how intimidating the court process is in and of itself.

To achieve this objective, most of the services offered by the tribunal will be delivered remotely through Internet, telephone and e-mail. British Columbians who live, for example, in the part of the province where I live
[ Page 11687 ]
will no longer need to drive great distances through what can often be very difficult winter circumstances to reach the nearest courthouse in time for a small claims hearing. They will be able to address their small claims issue from a computer connected to the Internet.

If the parties cannot resolve their dispute on their own, using the tribunal's on-line self-help tools, they can ask for the tribunal to provide more direct help. Through active case management, telephone mediations and other forms of facilitated dispute resolution, the tribunal will work with parties to achieve early resolutions by agreement.

Where agreement is not possible — and we recognize that will be the case in some circumstances — the tribunal will prepare the parties for a speedy adjudicative hearing and resolve the dispute by the decision of an adjudicator.

These hearings could be held in person through a traditional face-to-face hearing. However, the tribunal services are much more likely to be delivered in the form of telephone mediations or video hearings. This new approach will be essential to providing speedy service.

Some strata disputes will, for legal reasons, continue to be heard in the Supreme Court of British Columbia. However, more minor disputes clearly need a more accessible solution, and the new tribunal offers the strata sector new ways to access the justice system and speedy new services. Indeed, the new tribunal will be a focus for innovation and learning in the administrative justice system.

Our vision for the future of the civil resolution tribunal is that if it proves to be cost-effective, other types of disputes…. We will have the potential to bring them into this jurisdiction.

In conclusion, the establishment of the civil resolution tribunal represents one step in a series of steps, including the one that we discussed previously, which will lead us to a justice system that provides greater access to justice for all British Columbians. The civil resolution tribunal will apply traditional principles of fairness in resolving disputes.

However, it will also be built on the principle that early resolutions — the Justice critic mentioned this previously — are usually better resolutions for all concerned. The closer you are to the circumstance in terms of time to be able to provide that resolution is a critical principle, and that is what's reflected in the use of the tribunal here.

We believe that, again, this is part of a broad-based look at how we can do things more effectively, more efficiently, and certainly maintain the principle of fairness that is so critical as we look at these issues.

With that, I will take my seat and allow the other members to have time for their comments.

L. Krog: This is a significant change, and the minister has emphasized something that I think people do need to understand. This is a voluntary process. You do not have to engage in this. What it means, of course, is that both parties have to agree to it.

[1715]

That may, I think, not produce all the results that some would like. Certainly, in Provincial Court now, small claims division, there are two processes in place. After you've filed your claim and a response is filed, you're going to be sent to mandatory mediation or a judicial case conference.

In fairness, I think some judges use the judicial case conferences or the settlement conferences, properly speaking, more effectively than others in terms of trying to knock the parties around, so to speak — I think knocking heads is the expression that you'd normally use — and trying to get them to a resolution rather than take the next step, which is to send it for a trial or a hearing.

But that process is a mandatory one in the sense that if you file a claim and the other party doesn't dispute, then they'll have judgment taken against them in some form or another. That, of course, means that people do tend to respond. This means that both parties have to be agreeable to the process.

I will look on with interest to see exactly what the statistics show, as I'm sure the Attorney General's ministry will be keeping those statistics. I think there's a prediction now, I believe, that it's 11,000 cases in the province, and they're hopeful that something in the range of 1,000 to 2,000 will in fact use this process. That would provide a fairly significant reduction.

I don't wish to be cheeky, but if it was a 10 percent reduction, that would be roughly the number of judges that we're actually short in the province of British Columbia — down from 143, where we were in 2005, to 128 today.

I think there's an interesting balance here when we talk about those statistics. The Attorney General and the government may be somewhat optimistic on this, but optimism is — what shall I say? — the lifeblood of politics. If we weren't optimistic, none of us would engage in this process.

The bill itself — and I'm not going to let this pass without comment — is 50 pages long. It has 112 sections and a significant schedule. We are in the dying days of this session, arguably. It is a significant change — or opportunity, I suppose, is one way you could look at it for British Columbians — but it is the kind of act that requires a fair bit of scrutiny and comment. So I am somewhat disappointed that we are proceeding in the way we are — so quickly.

This bill was introduced just yesterday. Indeed, I appreciate the offer from the Attorney General to have a briefing on this today, but I couldn't attend a briefing on this today because I was too busy dealing with the bills in the House that the Attorney General has otherwise presented. Notwithstanding that I pride myself on a certain ability and energy, I can't be two places at the same time.
[ Page 11688 ]

So I've missed that opportunity to sit down with the Attorney General's ministry people, who are, by and large, I think I can safely say, first-class public servants always willing to answer questions. If you prod them too far in areas that might fall into the political realm, they are very discreet about telling you politely that you can't push on those issues.

Having said that, it might have been helpful to have that opportunity. But I have taken the time to review the bill as best I can, marking up those sections which I think are of importance. The same question, I think, can be asked of this as was asked of a previous bill today. What's it going to cost? We will require significant input in order to make this work.

I was pleased to hear in the minister's opening remarks that this process, if you will, will be available 24-7. I appreciate that the dispute you get at 2 a.m. in the morning might not be the kind of dispute that you wish to have.

It's like my early days as a lawyer when, as the junior person in the firm, you got the calls from all of the drunks. If a senior partner got a call, they gave the drunk your home phone number instead.

I appreciate that what they may be dealing with in the middle of the night may not be entirely useful in terms of resolving issues and disputes between the parties, but the concept that's there is very helpful.

My general experience is that there are a lot of things in life that end up in our justice system, which could otherwise be avoided if other processes were in place. Notwithstanding my criticism that I don't think the government has an overall scheme in this area, I think this is a very useful — I won't call it experiment because that might appear to be dismissive — step forward. It's a trial, if you will — no pun intended — of a process that might in fact be fairly effective in taking some issues out of the courtroom.

It will, however, take a certain amount of public education to get people acquainted with this kind of process. There are a lot of folks out there, in my experience, who just trot off to a lawyer right away without ever considering mediation. There are a number of private mediators available. There are a number of dispute resolution processes in various communities. There are all kinds of things available.

[1720]

We are creatures of habit, and many people are going to continue to walk down the old path without considering the new and whether it might not be effective. But we must also acknowledge that this is taking processes out of what has traditionally been the realm of our court system and placing it in another administrative tribunal, if you will.

I know there were great rumours a year or two or three ago about placing various tribunals under one body, which created a great deal of concern — labour and other issues, human rights.

Interjection.

L. Krog: The supertribunal, as the member for Surrey-Newton points out.

That raised some concerns. For those of you who are fans of Rumpole of the Bailey, of course, some of the last novels written by Mr. Mortimer emphasized the growth of the use of tribunals in Britain that have criminal sanctions attached to them and how he thought that was a great assault on the rights and freedoms of people.

I share in some degree some small concern around that. We have come to expect a high quality in our judiciary in this province generally — the people who have historically decided our disputes — and administrative tribunals are not all that they're cracked up to be every time.

I think I would be less than candid if I didn't say that notwithstanding that my office does not have the ability to handle WorkSafe B.C. disputes and claims, it is clear that you can build up administrative tribunals that develop a very significant case law associated with them, which really creates a system that may or may not be effective and responsive and/or fair. I think you have to be very conscious of that.

I appreciate that this is a voluntary system. But I suspect that over time — whatever government is in power — if this system is working and a number of cases are working their way through, there may be a mandatory aspect attached to it — in other words, forcing people to engage in the process, keeping it out of the court system, which I think will now be seen as a bit more of a Cadillac process, if you will. Basically, the government is offering up the Chev — no disrespect to General Motors.

Around the issue of the strata changes in particular, I want to applaud the government, because this represents a response to very significant issues that arise out of strata ownership in British Columbia. As those who advocate on behalf of strata owners across the province keep pointing out — and I think politicians have turned a somewhat deaf ear to this on occasion — hundreds of thousands of British Columbians live in strata units. Tens of thousands of British Columbians have invested in them and then rented them out.

It is a common form of ownership, and it is the last thing we want to discourage in a society where we value our wild spaces, where we accept that people are going to continue to live in urban areas and require accommodation. I don't wish to appear flippant, but I hear great concerns expressed by people from the city of Vancouver about the cost of housing over there and what the government or the city of Vancouver is going to do about it.

I think there are times that you have to turn to the marketplace, and the marketplace is providing the answer. It is in the construction of condominium-style dwellings. It is inevitable. People in the great metropolitan areas of the world accepted a long time ago
[ Page 11689 ]
that if you wish to live in the Big Smoke, as we refer to Vancouver in my town, you have to expect that you're not going to have a suburban backyard unless you're very, very wealthy. That is the reality of our society.

Given that I don't think anyone wants to approach dictatorial Chinese communism in terms of the distribution of wealth in our society, that's going to be the way it is in the future. So laws relating to condominiums that allow for reasonable dispute resolution processes are a very necessary and appropriate step. Something that enables strata councils to deal with difficult owners and/or owners to deal with difficult strata councils in a forum that is not outrageously expensive is a very positive step.

How that will work out, I think, is of some interest. I listened carefully to the remarks of the Attorney General. I think there is some indication that the process will be fairly specialized, just as WorkSafe deals with a specialized area, just as the Labour Relations Board deals with a specialized area. I suspect this is going to be structured — if not initially, certainly over time — along those lines.

[1725]

In terms of the costs, the Attorney General commented about the cost of the present system, and she's quite right. It is costly, and it is difficult. But I'd be less than candid if I didn't point out that part of the cost of the system that has been imposed on British Columbians in the small claims area relates to the closure of courthouses around the province. I appreciate that it is cheaper for the government and in that sense cheaper for the taxpayer, potentially, in the broad sense. But the further you live from the place where you're expecting to have a matter adjudicated is an expense to you.

The Attorney General in her opening remarks today pointed out some of the difficulties of folks coming into court in Prince George from outlying areas, and I can assure her the same situation applies in Nanaimo. Even a person living on Gabriola Island, literally within sight of the courthouse, is going to have to hop on a ferry and pay for it just to travel a couple of miles to get access to justice, if you will. So I'm conscious of that.

I think we have to be responsive in terms of being able to assist people in settling their disputes, and this bill offers some opportunities for that. As I understand it, the on-line resolutions process is going to have four stages. There's an interactive dispute resolution guide that will help parties solve the problems themselves.

I can't resist saying this cheekily, hon. Speaker. I really hope it's a great deal better than the process that involves employment standards now, where the employee in the weak position has a complaint about their employer and basically gets told to go back and try and work it out. Guess what, hon. Speaker. No employee goes back to an employer in an economy with our unemployment rate and thinks they have any bargaining power. Obviously, I would hope and think that given this is a dispute resolution process, that will in fact be of somewhat more assistance than employment standards are today.

The next step is party-party negotiations using the on-line tools, where the tribunal will monitor and intervene if necessary. I'll be interested to hear the Attorney General explain to me exactly how that's going to work, being the Luddite that I am. Then a case manager can intervene in order to facilitate a settlement and finally, if all else fails, at a final stage a tribunal hearing where a tribunal member will make a binding decision. Then they can be filed in Provincial or Supreme Court and be enforced accordingly.

All logical and sensible, but it is a significant change. I think it will take some time for people to get used to this. Echoing the concerns of the member for Powell River–Sunshine Coast on the bill we discussed earlier this afternoon — pretty short in the explanatory note with respect to this bill. We have about half a page by my estimate versus a total of 50 pages in the bill.

I'm not going to suggest for a moment that this bill is the easiest thing in the world for the average person to read. We have a definition section that runs to 2½ full pages. I appreciate it's necessary when you're setting up something important like this, but then when it talks about what the jurisdiction will be, this is going to present some issues.

The mandate of this civil resolution tribunal is established. That mandate is:

"…to provide dispute resolution services in relation to matters that are within its authority, in a manner that (a) is accessible, speedy, economical, informal and flexible, (b) applies principles of law and fairness, and recognizes any relationships between parties to a dispute that will likely continue after the tribunal proceeding is concluded, (c) uses electronic communication tools to facilitate resolution of disputes brought to the tribunal, and (d) accommodates, so far as the tribunal considers reasonably practicable, the diversity of circumstances of the persons using the services of the tribunal."

It's a pretty broad mandate. I must say as a lawyer that I do have some concern about that, because courts didn't evolve the rules by which they operate into what is regarded by some as this hidebound dinosaur approach for no good reason. They evolved in order to ensure fairness and consistency so that people would understand that if they had a given set of circumstances, a court would in all likelihood decide this way with respect to their dispute because that is what had happened in the past. There was a process around evidence and rules and how you got there and procedure so that people could all play the game, if you will, fairly.

[1730]

You can imagine a baseball game, hon. Speaker, if there were no rules. We'd all be running around with bats trying to scoop the ball out of one another's hands, and I don't think anyone would ever find what a home run was all about. Rules are important.

The mandate here, I think, is extremely broad, and it will be interesting to see how this develops over time. I
[ Page 11690 ]
am interested in the very specific portion that says: "…recognizes any relationships between parties to a dispute that will likely continue after the tribunal proceeding is concluded." I'm going to safely assume we're talking about strata councils and strata members when we review that section.

Section 3 says: "Unless otherwise provided under this Act, (a) the claims that may be resolved by the tribunal, and (b) the tribunal's specific powers in relation those claims are those for which the tribunal is provided jurisdiction under the Schedule."

I think it's "schedule," hon. Speaker. I know some people say "skedule," but I think we're "schedule" in this country, as far as I'm concerned. I know the member for North Island will point out if I'm incorrect in this, being such a stickler for grammar.

It talks about the things that are covered by it. Section 1, the small claims matters, says: "(1) The Lieutenant Governor in Council may make regulations prescribing classes of disputes respecting the following as being within the jurisdiction of the tribunal: (a) debt or damages; (b) recovery of personal property; (c) specific performance of an agreement relating to personal property or services; (d) relief from opposing claims to personal property."

It restricts it somewhat in sub (3): "A person may not make a request for tribunal resolution of a claim unless (a) the amount claimed or the value of the personal property or services, excluding interest, expenses and charges, is equal to or less than the amount prescribed by regulation, and (b) the claim could be dealt with by a claim in Provincial Court under the Small Claims Act."

This will be dependent on what the Small Claims Act says. Obviously, if there is an amendment to the Small Claims Act that boosts it from $25,000 to $50,000, then presumably this act would follow in lockstep, or this process and this tribunal process would follow in lockstep as well. I'm interested to see exactly how that's going to be resolved. I'll be interested to see whether there's any ministerial direction to the board of ICBC and, therefore, the staff to see if they're directed to try and resolve motor vehicle small claims under this process.

The other part of jurisdiction here revolves around part 2, which is the strata property matters and makes reference to the issues that may be resolved: "(a) a strata corporation may make a request for tribunal resolution of a claim against an owner…and (b) an owner or tenant may make a request for tribunal resolution of a claim against the strata corporation or against another owner or tenant."

I think that's important because it involves tenants, as well, in strata units and buildings. As I indicated, it's a pretty common thing nowadays to see people investing in strata units and then renting them out, in fact. So I'm pleased to see that the legislation, as proposed, deals not simply with owners and the strata corporation but tenants as well. That may save some issues, and it will perhaps deal with some jurisdictional issues that now exist with respect to the residential tenancy branch as well.

But it does specifically say that matters that may not be dealt with…. A claim concerning one or more of the following: "(a) the interpretation or application of the Strata Property Act or a regulation, bylaw or rule under that Act; (b) the common property or common assets of the strata corporation; (c) the use or enjoyment of a strata lot; (d) money owing, including money owing as a fine, under the Strata Property Act…."

Yes, subject to section 8, a claim concerning "one or more of the following" may be the subject of a request. In other words, pardon me, all those things are covered. Then section 8 talks about the things that can't be covered, and they're fairly extensive.

To come back to section 3, that's the jurisdiction: "(2) The tribunal does not have jurisdiction over (a) a constitutional question, or (b) a question of whether there is a conflict between the Human Rights Code and another enactment." So it tries to narrow it down, but the legislation, as proposed, does offer the opportunity for the government to expand the role over time. That is probably a good thing, dependent on the success of this.

[1735]

I note with interest that the government may not be a party to a tribunal proceeding, section 9. I'm not quite sure what the reason for that is, but nevertheless, I suppose we will final out. In addition, in section 10:

"(1) The tribunal must refuse to resolve a claim that it considers is not within the jurisdiction of the tribunal. (2) A claim that involves (a) one or more issues that are within the tribunal's jurisdiction, and (b) one or more issues that are not within the tribunal's jurisdiction may be amended to remove the issues that are not within the tribunal's jurisdiction, in which case the tribunal may resolve the dispute if the party against whom the claim is made agrees to removal of the issues or is a party whose participation is required…."

My concern here is this. There is a general principle in the law that if you have claims against a party, you are expected to…. Unless for some very good reason they have to be separated, they should be pursued at once. What this may lead to, I think, is potential conflict. I'm sure the minister's staff, in time, will be able to advise me of this.

It may lead to a conflict in a situation where people quite legitimately want to take advantage of the tribunal process on one issue, as between them, which may be involved in some other larger set of circumstances, but are forced to use the court process in another. And the court process says: "Sorry, you can't resolve it over there." I think it raises some interesting legal issues, and I look forward to the Attorney General's comments on that.

I also note that the Limitation Act does apply to these claims, but it is postponed "until the date any of the following occurs: (a) the tribunal notifies the parties of its refusal to resolve the claim; (b) the parties withdraw from the tribunal proceeding under section 21." You can withdraw from the process if you agree. So there are some limitations that I think will be of interest in terms
[ Page 11691 ]
of discussion.

I think this is an intriguing provision — section 20: "(1) Unless otherwise provided under this Act, the parties are to represent themselves in a tribunal proceeding. (2) A party may be represented by a lawyer or another individual with authority to bind the party in relation to the dispute if (a) the party is a child or a person with impaired capacity, (b) the rules permit the party to be represented, or (c) the tribunal, in the interests of justice and fairness, permits the party to be represented."

It has always been sort of understood that Provincial Court judges, historically, didn't welcome lawyers in their courtroom — not to say that they were rude or unkind. But there was a general presumption or hope that Provincial Court small claims division would be used by individuals to resolve their claims. Of course, over time that has tended to disappear. Motor vehicle claims, smaller amounts, lawyers involved. Lots of people — when you're talking about $25,000 in smaller communities where legal access is somewhat cheaper — have often used lawyers.

[L. Reid in the chair.]

So it's interesting to me that this process is designed quite specifically to essentially keep lawyers out of the process. I would, on one hand, hope that it gives a certain leeway to the tribunal to deal with these matters in a broad and fair way — not being hidebound. But at the same time, one wants to be satisfied that there will be consistency around resolution and decision.

The case management phase, I think, is a very important process. It gives an opportunity for the parties to hear from someone who is presumably knowledgable and a bit of an expert. Again, we'll have to wait and see who is going to be hired, but this offers an opportunity to settle the claims.

I do note, however, that the party to a dispute may prepare and serve a summons under section 33 in a form authorized by the rules. In some ways, this process has the aspects of a court, which I presume the legislation was designed to draw people away from. So that will be somewhat interesting.

Of course, at any time a case manager, if he thinks the case is frivolous or vexatious, etc. — much like the court process — can do certain things. There appears to be a great deal of modelling going on with this bill and the existing court processes.

Section 39 is important because that is the section that says: "(1) In resolving a dispute, the tribunal may conduct a hearing in writing, by telephone, videoconferencing or email, or through use of other electronic communication tools, or by any combination of those means." So it will create some of the access that the Attorney General talked about and will obviously solve some of those difficult problems that people who live in isolated areas face.

[1740]

At the same time, however, the evidence that is allowed in the tribunal hearing is pretty broad. Subsection 42(1) says: "In conducting a hearing, the tribunal may do any or all of the following: (a) receive, and accept as evidence, information that it considers relevant, necessary and appropriate, whether or not the information would be admissible in a court of law; (b) ask questions of the parties and witnesses; (c) inform itself in any other way it considers appropriate."

In other words, the tribunal will have the authority to inform itself in other ways that may not have been suggested by the disputants or the parties to it. Pardon me, not disputants. The term actually is the "initiating party" or any party.

I do have a bit of a concern about the rules of evidence, which grew up for very good reason, being essentially set aside by this legislation. People may be, if they're playing by what they think are the rules of evidence, at significant disadvantage, because they're going to go into a hearing and the other parties are going to use hearsay until the cows come home, and they may in fact not be able to successfully argue their case appropriately.

That is a concern, and I would hope that the people who are appointed will take that responsibility very carefully. I do note, also, the Court Order Interest Act applies — again, much like a court process. We're really getting — I won't call it second rate — a mini-version of the small claims system, if you will.

Presumably, the Attorney General will be able to advise what the cost of this process may be, as opposed to using the court process. There is some suggestion, I think, that the fees charged and expected to be charged will in fact be lower.

Now the process, practice and procedure, etc., is all going to be determined by the tribunal. Given that this is a new process, I would be interested to see if the government will provide any direction by way of regulation. I note, also, under section 62(4): "Rules for the tribunal may be different for different classes of disputes, claims, issues and circumstances, as established by the rules."

I would hope that the broad powers given to the tribunal will not in fact be used in such a way that they create a procedural monster that becomes more intimidating and less accessible than our small claims court system is already. I think it is a concern, assuming it passes — I think it's obvious from my comments that the opposition does not oppose the legislation itself — that the folks who try to implement this will have some difficulty, I think, determining exactly how they're going to do this.

All in all, as much as I'm disappointed, as always, by the amount of power given to cabinet to make regulation…. I see the Minister of Education smiled when I made my remark, because he's heard it so often in this chamber over the last seven years, I suppose. Someday, maybe, he'll be on the opposite side, and he'll be able to
[ Page 11692 ]
cast my words back at me. One never knows.

Having said that, I do look forward to committee stage of this bill. I sincerely hope the government is not throwing this out as a trial balloon to show some interest in justice reform that isn't sincere.

By that I simply mean that I expect the government has to put its money where its mouth is when it comes to this legislation, because if you're not going to hire the people, you're not going to provide the staff, and you're not going to in fact provide the resources, then we're going to end up with exactly what we have in the small claims system already, which is not very effective in terms of delivering justice, which is seen as complex by many individuals.

[1745]

The average person thinks that when the court says, "George is to pay Sam $3,000," they should actually get paid. Of course, when you have to try and explain to people that there's a process — they have to be served, the court doesn't actually enforce the judgment and all of those things — they may be somewhat disappointed by this new innovation.

Having said that, I look forward to the other members of this chamber who may wish to make a few comments on the bill, and I look forward to committee stage.

C. Trevena: I take my place here to add my contribution to Bill 44, the Civil Resolution Tribunal Act. My remarks will not be based in the legal background that my colleague from Nanaimo has presented. My remarks are, I think, a little broader in some respects and looking at it from concerns that I've heard from constituents about access to justice over the last while.

I find that this is a bill that is fascinating. It's interesting. When she was wrapping up her remarks on the previous bill, on the second Motor Vehicle Amendment Act that we've debated in this Legislature in the past two days, the minister talked about transformation and the transformational changes that were being brought about by that bill, and I think it's fair to say that this, too, is transformative.

This is going to be a very major change to the system, the system of having…. I'm looking particularly at the small claims court, not so much at the strata side of it — I know I have other colleagues who are going to be speaking more specifically about the strata side of it — but at the fact that we are going to be moving away from a system where you go to a small claims court and resolve through the court system to a tribunal system. The two are very different approaches. They're very different approaches to justice.

The fact that we have this in front of us is significant. It is a significant piece of public policy, and I hope that there is a lot of debate through the summer before we actually finalize this in committee stage in the fall, in our fall session. I hope there's a lot of public debate about this, because it could, if properly resourced and properly effected, transform our justice system, and I don't think that's too small a thing to say. We are looking at a very different way of approaching justice.

I know we have some forms of restorative justice in different areas and different forms of mediation, but this is taking a whole sector out. While the minister says that initially it's going to be voluntary…. I think that's very good. Let people have the option of whether they still want to go through the court system or try this new approach. If it is adopted, if it does become more accepted, if the government does use its powers through this act and through its powers of cabinet and its other powers to push this further, it could have, really, a major impact on our judicial system.

I'm very hopeful that…. Because we do have so much legislation in front of us at the moment, it's quite clear that we're going to be coming back and debating these in the fall and going through committee stage in the fall session. I hope that through the summer we do get a very good dialogue going from many, many parts.

I noticed the minister saying she and the Ministry of Attorney General have worked with the chief judge on this, which I'm very pleased to hear is the case, because I understand that there wasn't actually any consultation with some of the lawyers associations, the Trial Lawyers Association and others.

I think because it is a shift from a court system to a tribunal system, it's something that lawyers and people involved in the court system will very much want to get engaged in and will very much want to have that input. So I look forward to that debate in the public sphere on what is going to be, as I say, a significant part of public policy.

[1750]

I noticed that the minister, in her introductory remarks, talked about this reform agenda and that it's going to be built on this legislation — both this legislation that we have here and the previous legislation we were discussing earlier on this afternoon, the Motor Vehicle Amendment Act (No. 2).

There is clearly a move to change the way that we do justice in B.C. Again, I very much anticipate a very healthy debate. I know that we have Geoffrey Cowper doing his examination of the justice system. The minister has broadcast that, and it has been talked about quite a lot.

There have obviously been the concerns about the government and the judiciary being kept quite separate. I'm hopeful that this will remain. It's fundamental for our democratic system that we have a completely independent judiciary.

I'm very intrigued to hear the government and the minister talk about the fact that the reform agenda is going to be built on this legislation before we actually get the report back from Mr. Cowper, when he reports back. I hope there isn't sort of a prejudging of which way he's going to go.

We on this side of the House have been raising justice
[ Page 11693 ]
issues for many months now because of the shortage of judges. We have now the equivalent of 128 judges across B.C. We did a few years ago have 143 judges. I know we talk about a decrease in the crime rate and different approaches and so on, but I think it's significant in whether this is simply a government response to that and an attempt to move the justice system, in a way, away from judges.

I think that there is…. If it's a matter of looking at cost saving…. We don't know. We'll find out the cost of establishing this as we go through, as we have the debate through the summer and into committee stage in our fall session.

We are very aware that there is a backlog of cases, a significant backlog of cases, throughout the justice system, and that impacts, obviously, small claims as well as major, major issues, crime issues. In my own constituency it's very well reported. The very sad case where a child who was recovering from cancer…. His puppy was shot. The alleged perpetrators went without a trial because the charges were stayed because there wasn't the capacity in the justice system, in the court system, to deal with it.

Whether this is going to be a matter of taking pressure off that system by establishing a new system is all well and good, but it is a tribunal system. I think it is something that we do need to be having a good debate about, because it is the first tribunal system in Canada. So it is significant.

I'm looking forward to hearing from other members of the government side talk about this, too, to participate in this and explain their views on the tribunal system. I think it's also very valuable, where possible, to ensure that people aren't having to go to the courts for small claims. I mean, move the small claims system into a different system to get an alternate way of approach, alternate dispute resolution. It's called many different things — mediation.

It's very important to be able to do that where possible. It's not just a matter of time and of cost and everything. It's a matter of stress. It's a matter of people's lives. It's a matter of people getting caught up in the never-ending process; a matter of often having to pay very expensively for lawyers; of having to spend a lot of time in the system to resolve what is, in the end, for them a comparatively minor claim — or rather, for them it's quite major, but in the greater scheme of things, it's going to be quite minor.

So I think that's very, very good. I'm very heartened that this is voluntary. I hope that it remains voluntary for awhile — at least until it's established and up and running, and we see how it works.

[1755]

But I have to say that I have one or two caveats about this. One is the ability for people to represent themselves sometimes and to argue their case, to put their arguments forward in the best way possible and to navigate the system. Oftentimes it really is difficult for people to express themselves in the way that is going to best advance their case. If there is the need to be putting forward a lot of written submissions on the Internet, or however it's going to be done, that can be a bit daunting for people. Many people are not very comfortable writing long explanations and so on.

So I have a concern about whether people will be able to represent themselves. That really does play into the fact of: who is going to be there to mediate? Who's going to help people navigate the system? I think that is also very important.

The bill talks about how we're going to have the opportunity to access this through Internet, by telephone and all the different ways to save, as the minister says, long drives to courts. But there is the ability of just navigating the system.

We know just from talking to individuals how hard people find it sometimes to work out how the government works — where they should go, what they should do next — so I hope that there is a guiding hand for people and not just to sort of say: "Go to your computer, and turn it on. It'll all be easy."

I have to also raise the point…. I raised it in my comments on the previous bill, the second iteration of the amendment to the Motor Vehicle Act, in the last 24 hours. It is that not everybody has easy access to the Internet. Not everybody is comfortable with the Internet. The minister herself represents a semi-rural community.

The access to the Internet may be a barrier, so I hope that there are — you know, the phone approach — accommodations made for that. As I mentioned earlier, in my constituency we have many areas of it where we don't have easy access to Internet, so I hope that there is accommodation for that as this tribunal resolves.

I also notice — and my colleague from Nanaimo brought this up — that self-representation doesn't always work well. People are not necessarily articulate. They don't know how to best put their arguments forward. There is the possibility here that….

Under "Tribunal proceedings generally," part 3, "General rule that parties to represent themselves," 20:

"(1) Unless otherwise provided under this Act, the parties are to represent themselves in a tribunal proceeding. (2) A party may be represented by a lawyer or another individual with authority to bind the party in relation to the dispute..."

It goes into:

"...if (a) the party is a child or a person with impaired capacity, (b) the rules permit the party to be represented, or (c) the tribunal, in the interests of justice and fairness, permits the party to be represented."

Well, it's great having the justice and fairness. I mean, this is all very, very important, but it brings the lawyers back into the situation. We have one side, as I say, lawyered up. You're going to get the other side lawyered up, and you start spinning into another court iteration.

So I'd be very interested to hear from the minister as we go through this and in the dialogue through the summer from people commenting on this bill before we come
[ Page 11694 ]
back to our fall session — to really hear how that's going to work and how to ensure that we don't get to the stage where we are fully back into just relying on the lawyers.

There is also the question of how these tribunals are going to be resourced — where the funding's going to be and the costs. While the minister is obviously very hopeful that this is going to ensure that it takes pressure off the court system, it can't be done just as a way of saving money.

It is still justice for people. It's still resolution for people. It can't be done just as a way of saying: "All right. Well, we're not paying judges. We're not getting people to courtrooms. It's all going to be cheaper."

We've got to make sure that it works for people — that people have the access to it, they understand how it works, they're educated on it, we have the mediators in place, and it's not cheapening the justice system. It is a significant change — moving to the tribunals.

[1800]

I have to say that I am a little concerned. My colleague from Nanaimo, the Attorney General critic, raised this and made a comment that it's something he raises very often. It's worth raising — that in this we have so much authority being given to the cabinet under the regulations.

The tribunal members are going to be appointed by cabinet. It does say "merit-based," so I assume there's going to be some hiring process there that is open and transparent. Then the appointments will most likely…. I assume we'll get this in detail this fall when we go into committee stage with the minister — that the members will be appointed on recommendation after a transparent and open hiring process.

There are going to be subject experts for the different disputes they hear. Again, it's going to be interesting whether there is going to be a pool of experts, how this is going to work and whether they are going to, again, be appointed by cabinet, how they're going to be in place and how they're going to make sure they're always going to be free when needed — some of the mechanics of this.

But as I mentioned, I would like to underline my colleague from Nanaimo's concern on the power vested in the cabinet for this act. I turn to division 3: "Regulations" and "Power to make regulations." In 93(1): "The Lieutenant Governor in Council may make regulations referred to in section 41 of the Interpretation Act." Then it goes on: "…the Lieutenant Governor in Council may make regulations as follows: (a) prescribing rules of practice and procedure for the tribunal."

That's pretty broad. Rules and practices of proceedings of the tribunal is really how the whole system is going to work. That that should then, in the end, after having debated this and having had a debate across the province and maybe across the country…. People are interested in changing to a tribunal system. Maybe across the country we are going to hear this summer that people are really engaged in this debate.

We find that in the end it's up to cabinet to prescribe the rules of practice and procedure and that they also have the right to repeal or amend any rules made by the tribunal. This is very troubling.

I hope that other members from the government side — and maybe the Attorney General herself — will explain a little more about what this means, to assure that what we are doing here isn't really just a facade almost and that we're having this whole debate and, in the end, it is all going to be up to cabinet anyway. I think that that really undermines our role as legislators, of representing the interests of our communities and the voices of our communities if it is all just handed straight to cabinet.

We have the branches of government. We have the judiciary, we have the Legislature, and we have the executive. Executive is just one aspect. When we're talking about switching from the judiciary to a tribunal system, what control the executive will have over that is something that we really do need to debate and really do need to have assurances from the government that they are going to be giving the judiciary, giving the legal system, whether tribunal or the courts, independence.

That is fundamental for our rule of law, and it's fundamental for our democratic system. I know that the government isn't too concerned about that at the moment, but it is something that really does trouble me, and I will stand here and defend it wherever I possibly can.

As I bring my remarks to a close to let others speak on this…. I know that there are people on both sides of the House who are very interested in participating in this debate. I know that it is very significant that we are moving to a tribunal system. We've seen there's been a government Green Paper on modernizing B.C.'s justice system, which referred to tribunals.

[1805]

That Green Paper hasn't yet gone into the wider world and hasn't had the debate. We haven't had the White Paper. We've gone straight from that internal document to this bill.

I'm hopeful that within this Legislature, through the second reading of this bill, and when we take the bill out, when we go into communities to talk about it, when we take our summer recess before we come back in the fall, we have the opportunity to think about it and talk to people in our communities about it and that we can hear very broadly from the legal community, from the judicial community, from people who are dealing with small claims.

I have colleagues who are going to be dealing with stratas in a moment. We can have the full debate and come back in the fall, before the committee stage, well versed in it and can have a very informed discussion. This is, I would say, a very significant piece of legislation that could have an impact for many years to come.

With that, Madam Speaker, I'll take my place, and I
[ Page 11695 ]
thank you for giving me the opportunity to speak about this bill.

C. James: I'm pleased to rise, as well as my colleagues, to speak to Bill 44, the Civil Resolution Tribunal Act. As others have said in this debate, this is the first tribunal in Canada for an on-line process, for small civil claims and strata claims.

In listening to the minister talk and introduce this bill, there was a discussion about the fact that this is a way to move cases out of the adversarial system and get an earlier resolution. Certainly, that is a direction that I would support and that members on this side of the House would support. Anytime we can look for resolution, anytime we can look at moving out of the court system, out of the more difficult, costly, timely system, I think that's a positive.

But I think there are a number of questions, and I'd just like to address a few of those as we go through the bill. The first question that it raises for me, in looking at this bill, is the comment by the minister that this is part of the government's court reform agenda. As others have stated, the government has embarked on what they are calling a critical review of the justice system to look for improvements and make efficiencies.

I think it's puzzling to the public, I would certainly expect, why this bill would come forward now when the government is embarking on this review process, when the government is in the middle of a review process or really near the start of the review process.

It was February when that process was announced. So we're still in the early stages of that review. I certainly would expect that something that is the first tribunal in Canada would be part of that consultation process.

If it is the intent of the minister — and we haven't heard this — and the intent of the government to table this piece of legislation and then go out to do a full consultation process and allow this to be part of the review of the justice system, then I think people would understand that. They would understand the need to bring a piece of legislation forward to allow a fulsome consultation process, to send it out, to give people a chance to be able to comment on it, to include it as part of that bigger discussion of the justice system.

I think that would make sense, but we haven't seen from the other side, from this government, many opportunities where they've tabled legislation and then given a chance for that discussion to occur. That's pretty rare from this government. It certainly was the intent, when the fixed calendar was put in place, that you often would see legislation tabled in the spring for discussion, for consultation, and then would come back in the fall to have an opportunity for people to be able to give their feedback — those people who are going to be impacted.

I certainly would think that people who use small claims or who have used small claims, including people in the legal system themselves, would have some feedback to give, would like to offer some ideas around the strengths of small claims court and the weaknesses. That certainly, you would think, would inform this act and would inform the work that's going to happen in an alternative process to that.

[1810]

There's still an opportunity for the government to do that. There is still an opportunity for the government to say that this has now been tabled for discussion, that it will now become part of the larger justice discussion that the government is having. I certainly hope that that is going to occur with this bill. I think that it would at least be a step in the right direction, to have a more thorough discussion on a very important issue.

It's an issue, as I said, that I agree with, which is to look at alternatives. I'm a big believer in restorative justice. I think it is a very positive direction, that it is another alternative process to the court system. I think that this is a positive. To give opportunities for things to be resolved; for solutions to be found; for disputes to be resolved quickly, efficiently, affordably, successfully for the individuals that are coming together I think is a plus. But I think that remains to be seen.

I'll get to speaking a little bit about the Strata Act in a moment, but the lack of thorough consultation I think raises questions. It certainly raises questions, given what we've seen in the justice system itself over the last number of years.

It would not be surprising that the public would take a look and say: "Is this simply a way of saving money? Is this simply done as a way of trying to reduce resources?" I would want to see — nor would the public, nor, hopefully, would the minister or the other side — that this is truly an alternative process, not a way of saving resources.

We have all seen the real challenges that have occurred in the justice system, whether it is court delays, whether it is stays, whether it is cuts to legal aid. We have individuals who have been forced to go to court without any representation.

I certainly saw it in the work that I did in the area of child welfare, where we had women, mainly, who were going to court around custody disputes and children that were in care, who were trying to return their children to their families, who were not able to get legal aid, who were not able to get support.

I saw the real difficulty that that created for the individual, trying to represent themselves without that kind of support, and I don't want to see this become that kind of process. I want to make sure that we do what we can to make it a successful process.

I certainly was pleased to hear the minister say that the parties have to agree, that this is voluntary. I think it's a good step in the right direction.

If you look at the steps that are outlined in the bill, it talks about a series of steps for people to undertake when
[ Page 11696 ]
they want to use this process, when they want to solve the process and undertake a civil resolution on line.

The first step talks about using a guide. There will be an interactive dispute resolution guide that will help people solve the problems themselves. I think that is an interesting approach.

I think there are lots of questions that remain about languages, about literacy, about on-line access. If the intent really is to give the widest opportunity for the most people to be able to access this, then I think that raises questions about what kinds of resources are going to be put into providing that interactive guide to help people solve the problems themselves.

The second step talks about party-to-party negotiations — again using on-line tools, with the tribunal monitoring and intervening, if necessary. I think lots of questions remain around how on-line tools are going to facilitate that. How do you determine when the tribunal monitors? How do you determine when they are going to intervene? I think those are all details that still remain, that will need to be answered.

It then talks about a case manager facilitating a settlement. There are a couple of different roles that are identified in this bill. There is a discussion around a case manager, and there is a discussion around tribunal members.

I think a large question for me that I hope the minister will speak to as we get into committee stage or, hopefully, as we go out to a consultation and have an opportunity for a broader discussion will be: what kinds of skills and abilities is the government going to put together for those individuals?

I think anyone who has worked in the area of dispute resolution or has done negotiations or has been involved in any of those processes knows that that is key to success. Having the individuals come to the table hoping to resolve is important, but the individual who is providing that support is key to success — or, sadly, failure.

[1815]

I think it is going to need very skilled individuals to be able to take on this role, to be able to address it. I think it's a big piece that remains, that I hope, as I said, the minister will speak to, because I think it is critical to the intent of this entire piece of legislation.

Specifically, just to spend a couple of minutes on the Strata Act itself, this is a piece where the bill has done some consultation — where Bill 44, as the minister has said and as it says within the bill, has done some consultation with the strata owners, with people involved — and there is a positive direction to be able to take this on.

I have to say, living in a riding that has a large number of strata properties and a large number of strata owners here in Victoria–Beacon Hill…. I'm certain I'm not the only one, but we get a large number of complaints and concerns coming forward around the Strata Act from owners in our constituency office. I see heads nodding around the gallery. I'm sure there are other people in this chamber who have had the same kinds of concerns come forward.

There are huge challenges when it comes to the Strata Act. While I appreciate that the minister and the government are looking at Bill 44 as providing an opportunity for strata owners to take some of their disputes to this process, I think the larger question still remains around the Strata Act itself and a proper, thorough consultation and changes that need to be done.

Certainly, the people that I have talked to have not felt that those changes have been done or that the act has been upgraded enough to be able to address all of the difficulties that are there. We've heard lots of concerns in our office about individual owners being left with huge bills because the strata property wasn't managed. The individuals on the strata association weren't taking care of putting money aside for big repairs that needed to come up.

We've had, unfortunately, strata members who have raised concerns about being bullied by other members in the strata, where they raised concerns and were told that those concerns were not to be worried about, not to be bothered. Then the individuals themselves started to be harassed by other members in the strata. I think there are some huge questions around the Strata Act itself.

I certainly think it's a positive that we see the bill coming forward to give a different kind of opportunity for people to be able to bring their concerns forward, rather than the court system. That is costly to people who, in many cases, have already faced huge costs and now are faced with even more costs by trying to take their dispute forward to court. I would hope that this bill will give an opportunity for those owners to be able to come forward and to be able to resolve their disputes, but I think the bigger issue around the Strata Act itself still remains and still has to be resolved.

In principle I think that the bill is going in the right direction. It certainly has the right intent of looking for opportunities to resolve disputes, looking for opportunities to provide a time-efficient as well as money-efficient process for individuals who have concerns. I would certainly hope that the government still has the opportunity to do the right thing, to table this bill and now give an opportunity for a more fulsome consultation, either through the justice consultation or through leaving this until the fall for further discussion so that we have an opportunity for debate.

With that, I'll pass it on to my colleague.

J. Brar: I'm pleased to stand up in this House and contribute to the debate towards Bill 44, the Civil Resolution Tribunal Act. Bill 44, a 50-page bill, proposes to create a special civil resolution tribunal for an on-line process for strata and small civil claims. It's a unique approach. I think this is the first one in the country. From that point of view I appreciate the minister introducing such a bill,
[ Page 11697 ]
but time will tell the success of the bill as we introduce the bill in the future.

[1820]

The Justice Minister claims that this bill is a part of their court reform agenda and will move these cases out of the court system to get earlier resolution. That is the key for strata disputes. So basically, if passed, this bill will move strata cases and small civil claims out of the court system, and the civil resolution tribunal will look after those cases.

It's a unique bill, in its own way, but at the same time I would like to probably ask a question: is this a good public policy? We don't know. We don't have any such precedent in the country, to the best of my understanding. This is a unique thing in itself, but at the same time we need to ask the question: is this a good public policy?

Are we making a good public policy by shifting the justice issues from the court system to the administrative system as designed under this bill? Or will this new system compromise the sound principles of the delivery of justice to the people of British Columbia that is now available under the court system? That's the other question I would like to know the answer for.

Probably we can get some of these answers at the committee stage, but those are important questions. The people of British Columbia deserve to know the answers.

As this is a complete new system, I think it would have been better to consult the people of British Columbia about this change before introducing this bill in the House. I think that would probably be the right approach for the minister to take.

Coming back to the issue that this bill is a part of the justice reform system. This government made the commitment at the time of the throne speech. I don't think that we have any dispute that reforming the justice system is a serious matter. We all agree on that. I think the people of British Columbia want us to reform the system to make it more effective, more timely and efficient to deliver justice to the people of British Columbia.

But in order to reform the system, we need, of course, proper planning. We need full public consultation on bills such as this one, and people must be part of that process.

We need to prepare a full package for the reforms to take place in the province of British Columbia, not this piecemeal approach as we have under Bill 44. It will address one issue, but it will certainly not address the number of serious issues we have in the justice system.

[Mr. Speaker in the chair.]

We need to look, when we talk about the reforms in the justice system, at the backlog we have in our system, the problems being caused by the backlog in the justice system. We see, almost on a regular basis, the criminals with serious crimes getting freed because we don't have enough judges to deal with these cases in a timely manner.

Today we have 128 judges in the province. In 2005 we had 143. So we have 15 less judges than we had seven years ago. Those are the issues that are causing the backlog in our justice system. We need to look at those issues when we talk about reforming the justice system.

[1825]

The other piece I want to speak about, about this Bill 44, is that this is a volunteer process. It's a unique approach, again. The people will have the choice — that's my understanding — to benefit from this tribunal or go to the traditional court system. That's my understanding. Time will tell as to how many people will participate or benefit from this system. It's hard to say at this point in time about the participation level of the people of British Columbia in the process.

I want to make a comment about a particular clause in the bill, and that is about the on-line process. The new on-line civil resolution process will have four stages. That's what the bill states. The first one is an interactive dispute resolution guide that helps parties solve the problems themselves. That will be basically some sort of guidelines which people can use to resolve the dispute. That is understandable.

The second one is party-to-party negotiations using on-line tools, where the tribunal will monitor and intervene if necessary. There will be on-line support available to the people of British Columbia.

I just want to make my last comment. We have a culturally diverse population in the province of British Columbia. A lot of people don't have the ability to use the on-line system, and a lot of people need the translation services to resolve their issues. When only the on-line system is available to the people of British Columbia, I don't know how the people who have those issues are going to benefit from the system — the people, particularly, who have language challenges and who don't have access to or don't have the skills to use the on-line system.

Having said that, Mr. Speaker, I will take my seat. Thanks for the opportunity to allow me to make my comment on this bill.

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

Hon. S. Bond: I will simply point out, particularly to the member opposite, that this is an optional process. It is about looking at a new way of providing opportunities for people in British Columbia to access a process that will be less costly, more accessible and maintain the principle of fairness that we would expect there to be.

With that, Mr. Speaker, I move second reading of Bill 44.

Motion approved.
[ Page 11698 ]

Hon. S. Bond: I move that Bill 44 be referred to a Committee of the Whole House to be considered at next sitting after today.

Bill 44, Civil Resolution Tribunal 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. I. Chong moved adjournment of the House.

Motion approved.

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

The House adjourned at 6:29 p.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF FINANCE

(continued)

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

The committee met at 2:35 p.m.

On Vote 24: ministry operations, $117,209,000 (continued).

B. Ralston: When we concluded today at the end of the morning session, the minister had given an answer about the natural gas price. The conclusion he asked us to draw was that the price was volatile. I'm wondering if the minister is prepared to venture further than that and give some indication based on, at least, contemporary views in the industry which direction the price is heading.

Certainly, all indications are, given a lot of shale gas on the North American market, that the price seems to be heading downward. Given that a dollar per unit will reduce the budget revenue by $350 million to $390 million, this question is of some consequence.

I appreciate that the minister doesn't want to be drawn into an answer that may turn out to be wrong. Perhaps is he at least prepared to acknowledge that the risk is more on the downside than the upside at this point?

Hon. K. Falcon: I actually think this is a really important question, and I'm going to spend a bit of time on it. I'll share something, as I always do, in all candour with the critic just with respect to my role as Finance Minister and one of the things that I've learned in becoming Finance Minister.

As I was putting together the budget, I remember sitting down with staff. We were having a discussion. One of the things I'd pointed out and circled myself was the issue of natural gas prices. I have no particular expertise in this area, but if I were to be asked where I thought natural gas prices were going, it would be in a different direction than is reflected in the budget.

So I asked that question, as I often ask these kinds of questions of my staff. What I discovered was that there's a long tradition in building budgets in British Columbia where, probably thankfully, we don't allow ministers to get involved in that level of detail.

Establishing what the forecasts are for mining prices, for minerals, for metals, for natural gas is done in a manner that is quite prescribed, and probably for good reason. But I would say to the member opposite that I certainly registered my own personal, uninformed opinion that I would be much more bearish in terms of my own belief of what natural gas prices will do.

What I can say to the member, though, is that I do think that I have some perhaps slightly better comfort today in certainly accepting that there is a lot of volatility, particularly in natural gas. One of the things that I would encourage the member to take a look at….

Now, we talked about, on page 137 of the budget, how we've got all of the forecasts, recommendations that have been made and how the ministry's professional staff sort of take an average of that and establish what we think the likely natural gas prices are. I talked about the fact that in Budget 2012 we discounted fairly significantly from what the estimates were in Budget 2011.

The other area I would say to the members to look at is what's happening in the futures market. I think that is, in some ways, a really important indicator of what the market believes is going to be happening in terms of future pricing.

If you look at the NYMEX, the New York Mercantile Exchange, forward pricing — and I've got a chart in front of me as of May 7, 2012 — you'll see that one year out from now…. What the investors are saying — where the dollars are going in terms of the bets on natural gas prices — is that they'll be a dollar higher than they are today. They're showing…. In fact, even from last week the dollar amount has gone from $3.31 to $3.38. That's the forward pricing on NYMEX.

Now, there's also a reference here that I'll read into the record, because I think it's somewhat germane to what we're talking about in terms of natural gas futures. I'll just read it right into the record.

[1440]

"The June natural gas futures were up by three cents to U.S. $2.32 MMBtu versus U.S. $2.29 MMBtu last Monday trading. Natural
[ Page 11699 ]
gas futures prices rose 23 percent from a decade low of $1.907 MMBtu. Last week U.S. gas inventories posted a smaller build than normal for this time of year, signalling higher demand and slowing gas production. Prices have risen in seven of the last ten sessions."

The sort of experts that put their money on the line — that are betting on futures, that are buying puts and calls with respect to natural gas prices — are of the view that we are going to see increased natural gas prices starting in later this year and continuing into 2013. I hope, obviously, as the Minister of Finance that the markets are accurate in this regard. Certainly, that's consistent with what, as I believe, the 18 independent forecasters that are experts in the area believe is likely to happen.

I would say to the member that certainly, it's volatile. There are swings. We are seeing a depression now that has in some ways been fairly widely predicted, given the warm winter that took place. But as they're pointing out here — with shrinking inventories; higher demand; with the switchover effect that I talked about earlier, given the differential between oil and diesel prices and natural gas prices — we do think there is at least some narrative to support what the futures market is indicating in terms of pricing.

B. Ralston: I thank the minister for a comprehensive answer. That helps.

I want to now look at another component of this industry and its revenue side. It's the bonus bids side. The minister will know that pursuant to a directive from the Auditor General, these are aggregated in a deferral account and taken into revenue over a period of eight years. That's a smoothing technique that reduces the volatility of the bonus bid process. I appreciate that they are more stable than the revenue we just spoke of.

Can the minister confirm that the estimate of the contribution to the budget of the bonus bids for this coming fiscal year will be roughly the same as predicted in the budget?

[1445]

Hon. K. Falcon: The recommendation by the Auditor General to spread the bonus bid amounts over a nine-year period — it's actually nine years — was, I think, in that case a very positive suggestion. What it has done is allowed the province to smooth out some of the highs and lows that you typically will see in the bonus bids.

Particularly, you would make a reasonable assumption that bonus bids are going to be lower today. But we get the benefit of smoothing out on previous years, which were much higher, amortized over a nine-year period, coupled with, presumably, what may be lower bids in this particular time in the cycle that will also be smoothed out over nine years. We create a plane that minimizes quite dramatically the impact on the fiscal plan.

B. Ralston: Can the minister explain? There are, as he's aware, a number of LNG proposals. There is the Pacific Trail pipeline, supported by the official opposition and by the government, which proposes to take liquefied natural gas to Kitimat and then to ship it overseas. The prices that are talked about are much higher than the domestic or the North American price. Assuming these projects go forward and the LNG is delivered to the terminal at Kitimat, what impact would that have upon government revenue?

Hon. K. Falcon: With respect to the liquefied natural gas proposals, there are really two potential benefits for the province. There's the volume increase. Then, of course, there's the potential for significant price appreciation, given that natural gas prices in, say, Japan, the last time I checked — this is going back a couple of months — were roughly four times what they are in North America.

But it is difficult to quantify very specifically for the member, because we're still in the process of discussions with the industry around two key areas. One is the royalty regime that will factor into a new export market potential. The second is the power needs — to, obviously, provide the power necessary for the successful operation of the LNG line.

What I can say at a high level, though, is that there is the potential for billions of dollars' worth of benefit, collectively between the private sector and the province, by achieving that opportunity. It is something that the provincial government, with the support, in this case, of the opposition, is pursuing very aggressively.

We do want to make sure that British Columbians can receive the potential benefit of diversifying our natural gas market off of the current North American market and are able to achieve the higher levels of pricing that are available in world markets, particularly Asia and China and Japan.

B. Ralston: I suppose my question was more basic, really, than the minister's answer. I think he's probably flattering me by giving that answer.

[1450]

If the price that can be obtained, and this would be typically negotiated in a long-term 20-year or 25-year contract, is significantly higher — that is, say, four or five times higher — would the royalty be calculated on that price, thus leading to an increase in government revenue? Or are the negotiations such that there'd be some kind of averaging down of the revenue?

I think that has huge implications for government revenue in the long run. That's why I'm pursuing the very basic question. What price is the royalty calculated on?

Hon. K. Falcon: I guess one of the very clear realities is that we can't just apply the domestic policy automatically onto the LNG exports. In fact, it's going to be much more complicated than that. That is what the basis of the negotiation will be all about.
[ Page 11700 ]

We've got a deputy ministers committee with representatives from the key ministries in government that are involved in this process. Plus the Ministry of Energy and Mines, I understand, has brought in some external expertise in royalties and taxation issues, with an eye to sort of understanding how things work in other jurisdictions to make sure that whatever model we bring forward strikes the right balance between looking after the interests of British Columbians and encouraging the investment and the construction, obviously, of the LNG pipeline.

That process is underway right now. I don't and won't have a definitive answer until some more work is undertaken.

B. Ralston: He may not be able to answer this question, but I want to advance it at this time. Can the minister advise what other regimes he's looking at? Obviously, there are places like Qatar, which are huge resources of LNG, but is there something more comparable to the present regime in British Columbia that would serve as a good benchmark for negotiations on behalf of the province?

Hon. K. Falcon: My understanding is that the more direct comparators that we look at are Australia and portions of the U.S. seaboard. The reason that we don't typically look at Qatar as an example, since the member raised it, is that they typically don't have much of a domestic market at all. It's virtually all export-driven, so it's not a great comparator.

But the real truth is that that sort of expertise is really with the Energy and Mines Ministry, not so much with the Ministry of Finance. Of course, we're going to take a very keen interest — and my deputy sits on the committee — to ensure that whatever regime we ultimately come up with strikes the right balance of encouraging the production and successful delivery of LNG exports to new markets in Asia at the same time as looking after the interests of British Columbians.

[1455]

B. Ralston: I have a similar question related to the same type of question I just asked about natural gas. Looking over the page, at page 135, on the projections on revenue from forests, there is some impact, given market price, on government revenue. There are some projections for SPF for this budget year. A change in that of $50 equals $25 million to $50 million in revenue, and similarly for pulp as well.

Could the minister just provide a brief update as to whether those projections of price are still operative, in the sense that the government is going forward and planning its revenue on the basis of those prices?

Hon. K. Falcon: I'm advised that you can see in the 2012-13 budget estimate that we were estimating a lumber price of $260 for the SPF 2-by-4s. Lumber is actually trending up and right now, today, is at $290.

In the pulp one, right down below, I'm advised that that's also been on an upward trend. It looks like it's, I understand, pretty much bang on to what we've got there in budget. Of course, these things change by the week. This can change every week, basically, but so far, the trends are good.

B. Ralston: I want to switch topics. The minister, perhaps, will enjoy this next section, in the sense that I'm going to talk about the rating agencies and some of the comments that they've made.

I propose to begin with the DBRS report. I want to thank the Legislative Library for purchasing these. These are very expensive to buy. I didn't realize just how expensive they could be. But the library has footed the bill, and perhaps they'll, through me, come back to the minister asking to be reimbursed to their budget. We'll leave that aside for the moment.

The DBRS rating, as the minister will know, is double-A high. There are a number of strengths that the minister has mentioned in his remarks, but they do speak of some challenges. I want to get the minister's comment on the challenges to the plan.

[1500]

In "Outlook," on page 4 of the report, the writers note: "However, DBRS notes that the absence of any incremental funding for wage increases related to collective agreements expiring in 2012 and beyond presents a key risk to the plan."

Now, I believe the minister met with the rating agencies — and, I believe, with this one in Toronto. Can he explain what the concern was there and what his response is to addressing that concern?

Hon. K. Falcon: One of the things that was very interesting, as I met with all three rating agencies, is that credit-rating agencies, by their very nature, obviously have to look at risks. They should do that, in fact.

One of the reasons why DBRS, Moody's and Standard and Poor's not only have provided the ratings they've provided, which are amongst the best in the world, but have also said there's a stable economic outlook is…. They could say something different. In other words, if they felt that these risks were too significant — that we were not being serious enough about those risks, etc. — then they could have a negative outlook, as there are in many other provinces and jurisdictions.

When I spoke to the rating agencies, all three of them, about this issue of the wages, the reason why there's a high level of certainty — the only reason they have any sense of risk associated with it, that they point out — is the risk of whether the government wavers in its commitment to actually do what we say we're going to do.

The reason why we enjoy such a strong and high level of rates, though, I would argue, is in large part — they
[ Page 11701 ]
tell me this; it's not that I just believe it — because we have a demonstrated record of doing exactly what we say we're going to do.

Net zero is a good example. We said at the time that we went into the global economic downturn that we were going to hold all public sector increases across the board to a net zero — meaning, for the benefit of the viewing public, that there would be no overall increase in compensation costs to government.

That does not mean there might not be an increase to actual groups of civil servants. But those increases would have to be found through savings that are realized, typically, through mining the benefits plans or what have you that will liberate dollars that could be applied to very modest wage increases.

We have seen, as the member well knows, very successful takeup on that. In the one unfortunate example where we were unable to get that takeup — the teachers union — we were, unfortunately, required to legislate that agreement in place, with mediation taking place on the non-wage portions of outstanding issues.

So that is a very different result than the rating agency in other countries and, frankly, other provinces, where they have talked in the past about trying to hold the line on public sector wages, but they've ended up in a very different place.

It may be because they've simply backed down in the face of pressure, which is often the case. It may be because they went to arbitration, which is the death-knell of any kind of commitment to try and hold the line on costs, because you then subcontract that out to an independent party, who often just says: "Well, gee, there are two different positions. I'll pick something in the middle." It can end up costing government hundreds and hundreds of millions of dollars.

All three rating agencies have given our government very strong kudos for the fact that we have delivered on exactly what we said we would do.

[1505]

I won't preclude the discussion, but going forward, we of course are now into gainsharing as an opportunity. We'll have more time to talk about that with the member, I'm sure. It is something that is very, very important to the rating agencies, because every 1 percent increase provided in public sector pay packages is about $230 million of cost to government.

That is cumulative. There are people — I won't get into who they are — that talk about providing some kind of increase. Some kind of increase means if you decided to do say 2 percent. If, instead of net zero, we just decided: "We don't want to deal with the pain, the pressure, the people that are yelling and screaming, saying, in spite of the fact we're in a global economic meltdown, 'You should give us a raise….'" If we just went ahead and did that at 2 percent, today we would have about $2 billion of additional debt in our current fiscal plan.

These numbers add up very, very quickly because 50 percent of our expenses are, of course, wages and benefits. It is something that the rating agencies obviously pay a lot of attention to, and it is something that we pay a lot of attention to. I am really very proud of the fact that we've been able to work with our public service so that during good years — and the member will recall, back in 2006, which I qualify as very good years — we were able to provide significant bonuses — on average, $3,700 per employee right across the broad public sector.

We were able to provide wage increases at a time when the government could afford to do so. The teachers are a good example. We know just over 16 percent over five years plus $3,700 signing bonuses was the kind of thing we were able to do because we could afford to do. But when we're in very difficult economic circumstances, where the international economic situation is very dire, very worrisome, where any additional wage increases would have to be through borrowing more money, we'd have to go deeper into debt to provide wage increases for people today and then, literally, be sending the bill to our kids tomorrow. That is not the policy of this government.

It is a shared-benefit, shared-sacrifice approach we take. We think that that is the responsible approach. That, I would argue, has put B.C. in the position where we enjoy triple-A credit ratings by Standard and Poor's, triple-A credit ratings by Moody's, double-A-high by DBRS, with stable outlooks. We've got to demonstrate a record of managing things responsibly and well.

That puts us in a very different position from other provinces that are struggling with different challenges: Quebec, with a 50 percent debt-to-GDP ratio, or Ontario, with 40 percent debt-to-GDP ratio and climbing. I don't even need to talk about Italy and Greece, which are well over 100 percent. Or Spain or France, at over 80 percent, even the U.K., at close to 80 percent.

British Columbia will peak at 18 percent — 18.3 — and start on a downward trend again. That, I believe, is why we enjoy the ratings we do. We're proud of that, and we want to make sure we continue that. They clearly point out the fact that obviously that is a key risk. If government decided that things are just getting too tough or we decided to weaken in our resolve, that would have huge financial impact.

We will not be weakening in our resolve, of course. We will get back to a balanced budget, as we've committed to do in '13-14 by law. Ensuring that we have a responsible wage program will be a part of that.

B. Ralston: I just want to go back to this quotation from DBRS. Perhaps I'll add the preceding sentence — just because I think that captures the flavour of some of what the minister has said. But it also places it in context: "Furthermore, given the province's strong fiscal resolve, there is a potential to outperform targets." Then I'll repeat: "However, DBRS notes that the absence of any in-
[ Page 11702 ]
cremental funding for wage increases related to collective agreements expiring in 2012 and beyond presents a key risk to the plan."

Just so I understand. The minister's interpretation of that is that although resolve is acknowledged, there's some sense that it's still a risk because that resolve might dissipate or disappear or break down? Am I interpreting the minister's comments on the quotation accurately? I just want to be sure.

[1510]

Hon. K. Falcon: I think what DBRS is pointing out is the reality that in so many other jurisdictions there has not been that resolve. There have been governments that talk the talk. But when it comes down to dealing with the real difficulties of implementing that decision — meaning that you're going to have protesters, you're going to have people on the front lawn, as we've had, you're going to have bullhorns and yelling and screaming that in spite of what's happening everywhere else in the world, the government should not be doing and sticking to that commitment….

They are simply, I think, pointing out that if government's resolve weakened in that area, that is a risk to the plan. No question about it. As I said at the budget…. I don't think I could have been more clear. I pointed out to everyone very clearly. Up on the screen was all the budget information. I said: "I want to be really clear and underscore this. There is no new money for wage increases in this current fiscal plan. There is no new additional money." I could not have been more clear about that.

I think that the earlier part of what the member read into the record is also true in that there is the potential to outperform. One of the things that we get a lot of credit for by the credit-rating agencies is the fact that in ten out of 11 fiscal years we have outperformed our targets consistently.

Now, I have been criticized, and there is nothing wrong with that, but I remember very clearly in the summer of 2010 when we outperformed our deficit target by $1.4 billion. So instead of a $1.7 billion — or $1.8 billion actually, I think it was targeted…. I'm going by memory here. My staff will check here. We ended up with a $307 million deficit. We outperformed to the good by $1.4 billion, positively.

I was criticized at the time, perhaps even by the member opposite, I recall, saying that it was because we were being too cautious in some of our economic assumptions in the plan. But I said at the time that I was willing to accept that criticism. I had two very major concerns that were worrying me. One was the European financial economic situation, and the second was the situation in the United States debt negotiations.

Unfortunately both of those turned out to be prophetic in the sense that the U.S. debt negotiations went off the rails. That created a situation where the U.S. debt was downgraded by S&P, put on negative watch by Moody's, created turmoil in the markets. Of course, that has been silent somewhat, because the U.S. treasuries are still considered the safe harbour when the world is fearful of what's going on.

Interjection.

Hon. K. Falcon: And I was correct. The budget deficit was supposed to be…. A $1.7 billion deficit was in the budget. We ended up with a $309 million actual deficit. A $1.4 billion improvement. My memory served me correct.

I think what's really important is that when they talk about the potential to outperform, what they mean is that the assumptions we build this budget on…. They are satisfied that we use conservative enough assumptions. For example, we project GDP growth in 2012 of 1.8. The consensus forecast average is 2.2. I just saw that Sherry Cooper of BMO Capital came out the other day, Bank of Montreal, saying they're forecasting real GDP growth in B.C. in 2012 at 2.3. I hope she's correct. I hope the Forecast Council average is correct and that I'm wrong and that we're wrong.

We specifically try to be conservative to ensure that if we're going to miss targets that we miss them on the upside not on the downside. We're in a very, very uncertain world, and I can only manage what I can manage.

I can tell you on the wage issue that the markets have nothing to fear in terms of our resolve of making sure we stick to exactly what we said we were going to do. There is no question in my mind that this Premier, this Finance Minister, this cabinet, this government and this caucus are 100 percent committed to what we've said, which is net zero and gainsharing going forward, which is another version of net zero with a different emphasis but the same result — no overall increase in compensation costs to government.

[1515]

B. Ralston: I want to now move to the Standard and Poor's analysis. They list some strengths, and I'll read them, "Wealthy economy with diversifying export markets, very positive financial management, strong budgetary flexibility, very positive liquidity," and weaknesses. "Weak but improving budgetary performance, high and moderately growing debt burden."

I have a couple of questions. One is about how they refer to the liquidity, and on page 9 they talk about access to external liquidity as "exceptional."

"Under the Bank of Canada Act, the bank may provide loans of up to a quarter of a province's estimated revenue in a given fiscal year, so long as it repays it before the end of the first quarter of the following fiscal year. This enables the bank to theoretically give B.C. financial assistance — estimated at about $11 billion Canadian in fiscal 2013 — during an extended blackout in the capital markets."

They seem to suggest that this is…. They go onto say:

"However, we note this provision is largely untested."
[ Page 11703 ]

What's the minister's view of the reality of access to that? I know a part of the warehouse borrowing program was designed to create some access to liquidity in terms of if there were political difficulties internally in Canada. I think at around the time of some of the Quebec referendums there was generated the warehouse borrowing program, just to give the province access to some liquidity if the Canadian capital markets tightened up. So is this, as they say, theoretical, or is it actual?

Hon. K. Falcon: To the member: a very important question. There are two parts of it. First, the member asked: is this real? Well, it's real, certainly in the sense that it's part of the Bank of Canada Act, and it is certainly the absolute last-resort method of provinces accessing capital in the event of a liquidity crisis. I'm advised that there's only one province that ever did. That was during the Depression. It wasn't British Columbia; it was another province.

I think the member does raise something that is really important: that British Columbia is in a very unique position. I realize this isn't sort of the most exciting topic for a lot of British Columbians, but it's actually very important for taxpayers. Our record of receiving seven successive credit rating upgrades, to the point where we now enjoy, by the two rating agencies that matter most internationally….

[1520]

DBRS, as the member well knows, is a domestic rating agency, and they've got sort of a domestic clientele. But of the rating industries that are most paid attention to outside of Canada, there are two. Moody's and S&P are the big ones in terms of sovereign ratings. We enjoy triple-A on both accounts. What that means is that B.C. is one of the few provinces that can borrow internationally cheaper than our domestic cost of funds.

This can be very significant for British Columbia. For example, to give the member a comparison, in ten-year borrowings in U.S. dollars, British Columbia can borrow at 7 basis points cheaper than the domestic cost of borrowing. Ontario, in ten-year U.S. dollar borrowings, will be paying 21 basis points more than the domestic cost of borrowing. So that's where these savings can add up into very big dollars in a very, very short period of time.

What the financial markets tell me, whether I'm in Europe, New York, Toronto, Montreal or Chicago…. I jokingly say in speeches that these are not, you know, the most exciting people you'll meet in your life, because all they care about is numbers and performance. But what they like about British Columbia is that we have a record of outperforming, certainly meeting or beating targets.

The one year that we got it wrong — we must acknowledge that — was 2009. We've been appropriately criticized for that, and I don't take any issue with that. But what the rating agencies will say and what the international investment community says is: "Well, we give B.C. a pass for that, because everyone, virtually everyone on the planet, didn't hit targets in 2009." We were in the midst of an economic meltdown triggered by the collapse of Lehman Brothers that had a knockoff effect on capital markets right around the world. So that was obviously an extraordinary situation.

The member's question is very, very important, because we still are not out of the woods in terms of the capital markets and the potential for a liquidity crisis. In Europe today there have just been elections in Greece and France. Those elections have created a new round of uncertainty in the financial markets.

I am now following carefully something that provides me with some worry again. I guess I'm paid to worry, but nevertheless. The inter-bank lending that is a normal facet of lending that normally takes place — overnight lending between banks — is dramatically being reduced. Banks are parking their dollars with central banks, which is one of the early forewarnings of a potential liquidity crisis.

It's something we have to watch very carefully. Thankfully, whatever happens — and again, we'll just have to monitor this very carefully — I want to underscore something that I'm very proud of. Every British Columbian — including the members of the opposition, because I know that they would share with me in this — can be very proud of the fact that we are part of a very small club of sovereigns and subsovereigns that enjoy the highest-possible credit rating in a very uncertain world.

When you've got countries like France being downgraded, the United Kingdom, Spain, Germany — well, not Germany; Germany is still triple-A — the United States, provinces, etc., British Columbians can be very proud of that.

I would just conclude my remarks by saying this. It doesn't happen because we hope it will happen. It happens as a result of making very conscious decisions and sticking to those decisions even in the face of public resistance — even in the face, understandably, of public sector unions that may wish to pretend that we don't live in a very uncertain economic world, where government should still be giving out increases regardless of what's happening everywhere else on the planet.

I just believe, going forward, it is very important for us to maintain our discipline on what we can control, because if we can do that, that will help us manage the events that we cannot control.

B. Ralston: Continuing with the same report, I just want to quote so that it's accurate. There is under the section headed "Contingent liabilities: B.C. Hydro."

[1525]

"In our opinion, B.C.'s primary contingent risk relates to its local energy provider, British Columbia Hydro and Power Authority, B.C. Hydro, which is a wholly owned Crown corporation. The utility is a monopoly supplier of electricity in the province, except for part of southern central British Columbia. Its considerable
[ Page 11704 ]
generation capacity is predominantly, 95 percent, hydrological.

"B.C. Hydro's integrated structure, diversified customer base and dominance in the provincial electricity market, together with a supportive regulatory regime, provide cash flow stability, in our view. The utility's strong business risk profile reflects our opinion of supportive regulation and strong ownership support. We believe exposure to significant hydrological risk, a lack of fuel diversification and a highly leveraged financial risk portfolio, compared to that of global peers, partially offset the company's strengths.

"B.C. Hydro's low-cost hydroelectric generation and meaningful water storage capability that allows arbitrage of on- and off-peak electricity prices in neighbouring markets partly offsets risk exposure to energy-trading activities in competitive energy wholesale markets that its unrated trading subsidiary, Powerex Corp., undertakes."

That's all directly quoted from the report. I would just be interested in the minister's comments on that, given that they identify this as a risk and do refer to a highly leveraged financial risk portfolio compared to its global peers.

I'm wondering: does the minister accept this judgment of the rating agency? What remedial steps does he think are necessary to take, given the concern that's expressed by the rating agency?

Hon. K. Falcon: I appreciate the member reading that into the record. I think it points out that what they're saying is that it's a good picture. But they point out that Hydro is leveraged. No question about it. Hydro has been making significant investments in their heritage assets and in the expansion of generational capacity. So we view that as a good thing.

[1530]

The reason we undertook the rather extensive review of Hydro was to make sure that we, as we go forward, can have the comfort of knowing that they've got their operating costs managed very effectively. Obviously, the review pointed out some improvements that could be made there, to make sure that they're managing their capital plan using the best possible practices to ensure that we maximize the benefit for both Hydro and the public.

What I can say is that if the rating agencies and the investment community, interestingly, ever talk about Hydro — which, frankly, isn't very often — it's largely in the context of what a huge asset it is for British Columbia. We have access to this incredible resource of hydroelectricity at a price point that is amongst the lowest in North America. Most of the investment community sees that as a very positive thing.

If the member could allow me…. As I was looking at that, I also was looking at another section of the report, and I just want to read it in the record because I do think it's important. It's an independent look at what the rating agency is saying about British Columbia and its budget and financial management. I think it's an important point. If the member could be good enough to allow me to just read it, it's only two paragraphs.

It says this:

"In our judgment, the province displays very positive financial management practices. We find its financial disclosures transparent, comprehensive and timely. B.C.'s Budget Transparency and Accountability Act requires the province to, among other things, publish fiscal and economic forecasts for three years, disclose all material assumptions underlying its forecasts and highlight major areas of risk to the fiscal plan.

"From a political standpoint, we think the province has demonstrated an ability and willingness to enact fiscal reforms to correct for external fiscal shocks. Most recently it reaffirmed its target to re-establish a balanced operating budget by fiscal '13-14, despite facing unbudgeted HST transition funding repayments and weaker economic prospects."

I think that summarizes — really, probably in a very independent manner — what I have been saying, which is that we want to ensure that we can control what we can control so we can better manage the events and issues we cannot control.

B. Ralston: Just to return to B.C. Hydro, then. Would the minister agree with me that, given the comments of the rating agency on B.C. Hydro to the extent that the average acquisition price of new electricity is kept low, that's an advantage to the province, and to the degree it goes up, it's not?

Secondly, they do speak of the ability to arbitrage through Powerex. The minister will know that some of his colleagues have attacked that very process. Certainly, the legal definition of "self-sufficiency," although it's changed in the bill that's before the House right now, sought to attack that by using language such as "importing dirty power." In other words, power that was generated by other than hydrology — say, by coal — was to be shunned, and it was better to pay a higher price domestically than to use the capability that the rating agency describes with some admiration.

So two of the policy directions that the government has taken in recent years appear to be very contrary to the virtues that the rating agency sees in B.C. Hydro. Would the minister care to comment on that?

[1535]

Hon. K. Falcon: I'm advised that we, under the Clean Energy Act, have a 93 percent clean energy requirement, which I think is entirely consistent with what British Columbians want to see: hydroelectric, wind, run of the river — a combination of all of those together ensuring that we have at least 93 percent of power utilized being from clean energy sources.

The member is correct to point out that, obviously, Powerex engages in arbitrage opportunities, which we have a unique opportunity to engage in, given the fact that we can store power. We have the ability to sell that power at night and buy power on the spot market when it's advantageous to do so for Powerex.

I think the issue of clean and dirty power is a discussion that sometimes you will hear out there. I don't engage in that, frankly, myself. I think some of the purist environmentalists would probably like to see British
[ Page 11705 ]
Columbia never buy any power that's not sourced from a clean energy source. I don't know. I think that Powerex does a very good job of trading in the spot market to the benefit of ratepayers in British Columbia. But you do not want to completely rely on that spot market. I think this maybe gets to the essence of the point the member is making.

That can work when there's generally a good position in the power market, but if you arrive at a position where everybody needs power at the same time, for whatever reason — a crisis or something else — and you're held reliant on that spot market, that can be very, very expensive power.

That is why the idea of being self-sufficient is such an attractive idea for British Columbia, to ensure that we do everything we can to ensure that we have the ability to be non-reliant — reliant when it benefits us on arbitrage and trading through Powerex but not wholly reliant on the spot market in the event that circumstances change.

Obviously, this is probably something that gets canvassed fairly extensively in the Ministry of Energy and Mines, or it will be. I don't believe they've done their estimates. That would be the extent of my understanding and appreciation of what takes place in Powerex and Hydro.

B. Ralston: I would say that I don't think was just members of what the minister has called extreme environmentalists. I think it was also the previous Minister of Environment, now a lawyer in the private sector, Mr. Penner, who used to use that language, suggesting that any attempt to arbitrage power from coal-fired generators….

They, of course, are very difficult to shut down, so they generate power, and they have to sell it. There were certain advantages there that were pointed out by members of the opposition. That was the debate that took place. I'm glad to hear that the minister has distanced himself from that debate.

I want to move on now to the cooperative gains mandate, as it's been called. The Public Sector Employers Council has set out on their website a definition and principles. I want to explore that. Perhaps I can just begin by quoting somewhat from the document. I'm reading from the "Principles of Cooperative Gains Mandate."

[1540]

"The province will not provide additional funding for increases to compensation negotiated in collective bargaining.

"Employers are directed to work with responsible ministries and employer bargaining agents to develop savings plans to free up funding from within existing budgets to provide modest compensation increases.

"Employers must not reduce service levels to the public in order to fund compensation increases.

"Employers must not transfer costs of existing services to the public to pay for the compensation increases.

"Savings plans can include savings resulting from operational cost reductions, increased efficiency, service redesign, business gains and other initiatives. Savings plans can, therefore, propose savings that are much broader than under the previous net zero mandate.

"Identified savings are to be used to fund compensation increases that will facilitate negotiated settlements with unions through collective bargaining.

"Identified savings must be real, measurable and incremental to savings identified by employers to meet provincial budget and deficit reduction targets" — for 2013 and 2014.

"Employers and unions may also negotiate other savings at the bargaining table to supplement savings plans.

"Employers are not required to negotiate a target wage increase. However, increases are expected to be modest, and employers must have an approved bargaining plan from government.

"Employers must seek agreements that are at least two years in length. There is no maximum term for collective agreements under the cooperative gains mandate."

That's the mandate.

First of all, there are questions that arise as to how this is to come about. As the minister might well expect, most of the knowledge and expertise, in the sense of access to data and government operations and potential savings, usually resides with management in government operations, although employees do, from time to time, have suggestions about how things might be done better.

Given that this is a mandate that is going to be negotiated at the bargaining table, can the minister advise what opportunities there are or what direction there is for the exchange of information that would assist those negotiating on behalf of their members? Is there access to information that would help them devise programs or measures in the way that's been described — cost reductions, increased efficiency, service redesign, business gains?

It's impossible to do that in a vacuum. What steps are being taken to provide unions with access to that information that would enable them to help realize this mandate that's set out in the words that I've just read?

[1545]

Hon. K. Falcon: This is an area of great interest. It involves probably a new level of cooperation and interaction between employer and employees, of a nature that is rather extraordinary, to get to a common end, which is to try and improve the efficiency of delivering service and monetize whatever those efficiencies are in a way that can provide modest — and I underscore "modest" — wage increases to workers in our workforce.

As one example how that might happen, in the past we had nurses that used to, very legitimately, complain about the fact that they needed more bed lifts. My mom is a former nurse, so I know about this. She still has a sore back today because in those days they didn't have bed lifts.

So these nurses — who in my mom's day were primarily women; it's a little more mixed now — would be required to try and move these patients. It often involved bending over and lifting, putting quite a bit of strain on the back.

The nurses would make the argument to us — successfully, as it turned out — that obviously a significant in-
[ Page 11706 ]
vestment in lifts could reduce long-term disability claims by ensuring that nurses weren't put in a position where they were having to inappropriately use their back. We made a massive investment across the health authorities in lifts. You see those now in hospitals everywhere we go.

That's one prior example, but it speaks to what we're talking about.

Obviously, there are travel budget reductions that could be made by finding ways to eliminate unnecessary travel — video conferencing and all these other things that can be done that will reduce travel requirements.

There are operational savings that can be realized through implementing new processes — lean, for example, which is a process that has been used with real success in some of our health authorities. I know Vancouver Coastal attributes some $18 million in savings as a result of introducing lean technologies.

I remember one example when I was Minister of Health. I was being toured through St. Paul's Hospital. They have a pharmacy dispensary there. They were initially putting forward a requirement for a significant investment in capital to expand and hire additional staff to deal with increased demands they were facing.

What they were able to do, over much initial skepticism, I might add…. The employees I spoke to actually told me they were very, very skeptical about this whole crazy lean idea that was being promoted to them. The end result was they ended up embracing it and really enjoying it because it resulted in a dramatic improvement, eliminating unnecessary processes that we just sort of get used to doing. Sometimes there's no discernible rationale or reason as to why we do things. We've just always done them that way.

The ability of employees to drive those improvements through recommendations coming from the front-line employees — how things could be done differently — is one of the underpinnings of the lean program, which was originally implemented at the Toyota Motor Corp. It can have real, demonstrable improvements in productivity and outcomes. It also, in a very positive way, has the side benefit of having operational savings.

Those are the kinds of things that we're looking at. Anything that can improve absenteeism or long-term disability. Those are areas where, at the bargaining table, the employers and the unions will be really spending time. If we can be convinced that there are savings that can be realized by doing things differently which can result in real savings that we can, as I say, monetize or certainly be able to confirm those savings are real, then we will apply those savings to modest wage increases.

[1550]

I'll give one other example: absenteeism. Absenteeism can be very expensive, especially in the health care system. One of the health authorities, by just undertaking a very simple change — when someone called in sick for work, they received a phone call from the employer as a result of the call-in — saw a dramatic reduction in absenteeism.

Those kinds of improvements can be very significant in terms of savings that can be realized. If we can work cooperatively with the unions at the bargaining table…. These are tough negotiations, and there's a lot of back-and-forth. I certainly don't want to preclude any of those discussions taking place today. We believe that we can arrive at successful agreements that can potentially provide modest wage increases in addition to providing some benefits.

Finally, I'll just conclude maybe even in a simpler way. If, working with the unions, we can find a way to use the same employees we have today to do increased work as a result of changing the way we do things — in other words, increasing productivity — so that we don't have to hire future employees to deal with future demand the government may have in an economy where the population grows, that would also be an example of savings.

Utilizing productivity improvements to generate the ability to provide services without having to hire additional employees is another example.

B. Ralston: I understand what the minister is saying about the possible benefits of this. But the mandate is a little more precisely worded than that. The example that the minister gave of the lean initiative. If that's, according to this as I read it — and perhaps the minister can correct me if I'm wrong — initiated by an employer, then that doesn't count. Identified savings must be real, measurable and incremental to savings identified by employers to meet provincial budget and deficit reduction targets for 2012-13 and beyond.

If the employer comes to the bargaining table and says, "Here is something we've identified. This is a cost saving. What do you think about it?" and even if the union says, "Okay, we agree," according to the mandate that's here — the wording of the mandate — that wouldn't count as savings that would be available for a wage increase.

I think everybody would wish to do things better for the same cost, if it's possible. But even if that were the case, that doesn't count, according to this policy, as something that's available for a wage increase.

Hon. K. Falcon: The key word there is "incremental." Incrementality is key to this. If it's something existing that was already underway, the member is quite correct in saying that would not apply.

But if a group of employees or a union had not undertaken a process, such as lean, and were willing to entertain that as one way of potentially deriving savings that were quantifiable by the employer, then those savings certainly could be utilized as part of the gainsharing opportunity. But the savings need to be incremental to current initiatives that may already be in place.

In the health sector, for example, when I was there,
[ Page 11707 ]
where they were doing back-office consolidation, you wouldn't be able to say: "Let's make that apply now because there will be some savings." Those savings have already been factored into budget initiatives.

These have got to be new, incremental initiatives. There are lots of opportunities, and one of the things that we don't want to do is be too prescriptive about what exactly they must be.

Some of the best ideas may actually come from the employees. We don't preclude that opportunity. We want to make sure that we give a full airing of those ideas and then look at them very carefully to ensure that they are indeed incremental and are going to generate discernible savings or cost avoidance that we can monetize and apply to potential modest wage increases.

[1555]

B. Ralston: Thanks to the minister for confirming that it would have to be a new initiative and initiated by the union and its members. I suppose the difficulty, then, comes if there is a willingness on the part of the union to seek out those opportunities but no disclosure of the necessary material to do that. How can the union and its members bring that about?

For example, the minister has mentioned opportunities in reorganization. In order to create an initiative to do an effective reorganization, you would need some access to the payroll and the organizational charts and some of the budgetary material that would go into generating and calculating the savings.

If a union applies for disclosure of that with a view to undertaking that kind of initiative, would that be forthcoming? I'm told that that is not the case. Now, that may be an attempt at the lower level to frustrate the broad and generous ambit of the minister's direction. Perhaps he could clarify that.

Hon. K. Falcon: First of all, it's so important to understand that for a successful cooperative gains mandate to be achieved, it's going to require the cooperation of both parties. There's just no question about that. Both parties must cooperate. It can't just be one side expecting the other side to bring forward the solution to all of the problems. It is likely going to take both sides looking at that information, sharing that information and then determining together whether they can achieve the metrics that we put forward.

But I'm advised by staff that all compensation data is public. That information is absolutely made available to the union bargaining team should they require it. That information is all public anyhow — the number of FTEs, what they get paid.

The only restriction may be personal and privacy issues. Like, if someone…. I wouldn't use the member opposite as an example, because we're public figures. All our information is public anyhow. But if you said, "I want to know John Doe's specific information," then there are protection of personal privacy issues that obviously have to be respected.

I am advised that there is no withholding of that kind of information. At the end of the day…. First of all, it's all public. Secondly, we want to be working together to try and find those opportunities for savings. That's exactly what they're doing at the bargaining tables.

[1600]

B. Ralston: If there were a request for that kind of data and it were withheld, then that would be a violation of the policy. Is that…? I'm talking about data that would relate to what's set out here on page 1, with a view to generating "savings resulting from operational cost reductions, increased efficiency, service redesign, business gains and other initiatives."

I mean, the minister can well imagine that that might require some substantial cooperation from employers as to how they do business, and if they're sincere about wanting the scrutiny of employees in fashioning some cooperative gains, much of that would have to be disclosed.

I just want to be clear, because there will be those who will read this exchange and may want to comment upon it or it may have some impact on bargaining. I don't know. That's why I'm choosing my words very carefully, and I'm sure the minister is choosing his carefully as well. But it is a real issue, and I want to be clear what the minister intends by this policy.

Hon. K. Falcon: Again, if the proposals being brought forward by either side or both sides are germane to actually getting to a deal and they are respectful of the obvious privacy issues associated with the privacy of individuals or commerciality issues, then absolutely, there will be — and there would need to be — full cooperation by both parties so that they can get to a deal.

I can tell you that from the employer's side, we certainly are of the interest…. We would like to be able to get to cooperative deals. We think that that would be in the best interests of all concerned. I expect that to be reflected at the bargaining table.

Subject to the provisos I set out — that these are legitimate attempts to require information necessary to get to a deal that is being proposed by one of the sides — then I expect full information-sharing — as necessary and legal, obviously — to allow that to happen.

B. Ralston: If the employer, for example, has a proposal that they say would create some gains and they're looking for a response from the union, would they be required to disclose the detail of that pro-
[ Page 11708 ]
posal, beyond simply a dollar figure, in saying: "Well, we're going to save…." I don't know, whatever — $50 million or $5 million. Would they be required to disclose the detail of that proposal in order that the other side could properly assess it?

[1605]

Hon. K. Falcon: I think that there is, frankly, a really healthy, good tension there between the employer and the employee groups in this negotiation process, because ultimately, it's going to be in both their best interests to bring information necessary to be able to actually get to a deal.

Obviously, both sides will be wanting to validate the information of the other to ensure that it's real, measurable and incremental. This will happen on a case-by-case basis, so I can't speculate on individual circumstances because they will all be different, and they will all have different rationales.

At the end of the day both groups are going to have to be satisfied that the proposal they are looking at accepting has information that satisfies both of them enough that the gainsharing is real, that the incremental modest increase in wage will be real to them — and measurable, obviously. The employers will also, at the same time, have to know that they can manage that within their budget. That has to be real. That is a real tension between the two groups but, I think, an appropriate tension, necessary in order to garner good deals.

B. Ralston: Isn't it a bit unrealistic to paint that kind of picture, given that on the management side, just by virtue of the job that they do and the access to information they have, management has a disproportionate amount of knowledge of the finances of the operation? Who, ultimately, would make the decision as to whether this was an effective gainshare or not? Surely it's only management, unless there is a substantial disclosure that enables the other side to go out and make some effort to get the proposal independently costed.

Without disclosure in a way that I've said should be forthcoming, would the minister not agree that it becomes purely theoretical and really winds up with the management saying: "Well, we don't agree that it would make any savings, and we know because we know, because we've done the costing, and you don't have access to that"? That doesn't seem to me to be the intent of this policy yet this may be the way it's being implemented by those at the bargaining table.

[1610]

Hon. K. Falcon: I guess, first of all, we start with an assumption. We start with an assumption that both sides come to the table negotiating in good faith, which I believe they are doing. We've had a good track record in the past.

Thankfully, we've had, I think, the longest string of labour peace in decades, perhaps, over the last decade. That doesn't mean that there haven't been individualized issues, but it has been actually quite calm and quite good over the last decade, with obvious isolated issues, the teachers being the most recent example.

We have what we've identified as a savings officer in the ministry, Doug Foster, who is responsible for validating any proposed agreements to ensure that they meet the test of incrementality that we've already talked about, because it has to be incremental.

Also, another two tests are important: that it result in no reduction in services to the public — because we want to make sure that they're not finding savings by just, frankly, reducing services to the public; so that has to be confirmed — and that there's no offloading of costs to consumers or to taxpayers. Those are going to be key principles that Doug Foster, as the savings officer, is responsible for ensuring are represented in every agreement.

What I will say to the member and the critic is that we're in early stages, obviously. There is going to be a lot of public posturing. There will be some private discussions that go on. There will be people whispering in my ear from both sides whenever I happen to see them about how unfair the other party is, etc. In my view, that's very normal in a broad, wide-ranging, difficult negotiation process.

I think that what we have to do at this point is to understand that that will take place and to not respond to the isolated things that will come up, as they already have. I've already dealt with that. I get media sticking microphones in my face on a relatively regular occasion, asking me about someone who said something in this particular negotiation, and what do we think about that?

I stay away from that, because that's a very normal thing to have take place. There's a normal amount of posturing that needs to take place on both sides, and we have to allow that process to work out.

I think that what gainsharing is, is very innovative. It is innovative, and it's something that I think can be successful potentially, but it will require both parties working together. I hope that they're able to do that, because both parties should be united by a common understanding of the circumstances that we are engaging in. We are not engaged in these negotiations in a vacuum.

[1615]

We are engaged in these negotiations while we can watch on TV where, around the world, unfortunately, governments that have gotten themselves into financial situations, that are very poor, are having to make awful decisions in terms of just across-the-board cuts to civil service, to teachers, to unionized members. That is causing, in some jurisdictions, riots and huge social disruption, I would argue, because those politicians in the past have not had the wherewithal and the discipline to learn to sometimes say no or to say "No, not that much."

That is a difficult thing to do, but I think it's an important thing to do. I think that British Columbia benefits today from the fact that we have tried to be responsible in
[ Page 11709 ]
the past, and not just in negotiating labour agreements. We've negotiated some very generous labour agreements.

I can tell you that I've never been more proud of the fact that the biggest increases nurses ever received have come from this government. Doctors, too, have done extremely well under this government, even, actually, when we couldn't afford to but there was a huge market challenge that we were facing in that nurses and doctors were being poached to other jurisdictions. You don't hear about that much anymore because we did respond to that.

We have always tried to be responsible employers. I'm proud of the fact that the B.C. Public Service is regularly in the top 50 employers in the country, even with some of the challenges we will occasionally face. I think there has been real leadership.

I won't take any credit for this. At the political level I think that the professional civil service have done an amazing job — granted, with buy-in and support from cabinet, because it did come to cabinet — to really try to create a different culture and a different relationship between the employer, the public service, and the public service employees. That has, I think, resulted in some just phenomenal people that we have working in the public service.

I hope and remain hopeful that in our gainsharing discussions and negotiations, that even with the occasional things that will come out…. The member is correctly pointing out some of the challenges that he's hearing. I hear variations of that from both sides, candidly, because I meet with the unions and I meet with the employers. I think that it's very much the normal part of the process.

B. Ralston: No, I understand the bargaining relationship and that there's push and pull in the bargaining relationship, but I think what I'm interested in hearing is just the pathway to making this policy a reality. How does one go about identifying and quantifying the savings that could come from the areas that have been identified in the policy?

Mr. Doug Foster is not mentioned in the mandate, and there's no mention…. He's called the savings officer by the minister. Can the minister just explain a bit more about his role? Does any proposal from any bargaining table have to go through Mr. Foster? Is that how the process is going to work? I don't get the sense that there's real clarity about this out there.

[1620]

Hon. K. Falcon: Doug Foster, though not prominently mentioned…. He's much too modest an individual. I'm sure at some appropriate time he will be recognized for the great work he does in the ministry. I mean that sincerely, actually.

What happens is he is going to take a hard look at any of the bargaining plans to ensure that they meet the principles that I talked about earlier with the member, the incrementality, making sure that there is no off-loading to the public and making sure that the savings that have been identified are real. Obviously, both sides are going to have to ultimately ratify whatever agreement they come to.

Really, what we're talking about are the kinds of things that…. I'll use one way, perhaps by example, of explaining what I'm trying to say. You could make changes in shifting, for example, that could dramatically reduce overtime costs. Overtime costs are typically something that are very expensive. You're paying a premium, obviously, and whatever you can do to reduce overtime costs could result in pretty significant savings.

The only way you're going to be able to achieve any shifting changes is through the cooperation of the union. That is going to be something that both sides will have to negotiate and have a discussion about.

I am sure that those would be very interesting discussions. But at the end of the day, whatever they come up with is going to have to be looked at to ensure that it is consistent with meeting and identifying the savings that they said they would produce. That would be confirmed by Doug Foster. He will review every one of those completed agreements to ensure that they were consistent with what was identified going in.

B. Ralston: I just wanted to further understand the role of Mr. Foster, then. Let's take a hypothetical example. I'll just think of something.

[1625]

Let's say that we look at a health authority and that we decide, as they did at TransLink, that there are too many senior executives, that you could consolidate the number of executives. It wouldn't reduce service to the public, wouldn't increase fees, would meet all the criteria, and maybe you could save three or four executive salaries — $1 million a year. Then if that's raised by the union and put forward, is it then…? What is the mechanism for getting…? If the employer says, "No, we don't want to do that," what is the mechanism for resolving that dispute?

Does it then go to Mr. Foster to say: "Well, in fact, it meets all the criteria. You can save $1 million. I'm going to chock it up as a savings"? Or do both sides have to agree, and the employer then has the right to veto the proposal, or not agree with it, and then it never gets to Mr. Foster?

I was involved personally many years ago, decades ago, in a very similar process where Larry Bell, who was a former Deputy Minister of Finance, was brought in. The union was being asked to find savings to fund a wage increase, and Mr. Bell was the kind of arbitrator. That's probably too formal a term, but he was the person who decided whether there was any reality to the proposals or not.

I'm sure that there's interest on both sides as to how these proposals would be initiated, agreed upon, calcu-
[ Page 11710 ]
lated and chocked up to savings that would provide the basis for a potential wage increase. I think these are real questions. They're important questions, and I think that if the minister can give an answer, it would be helpful to everyone.

Hon. K. Falcon: I want to make sure I clarify that Doug Foster's role is not as an arbitrator. He is not involved in the collective bargaining process.

[P. Pimm in the chair.]

His role, as a key member of the Ministry of Finance, is to ensure that whatever negotiated deal comes forward meets the tests I talked about earlier in that they are truly incremental, they involve no downloading to the taxpayer, and they don't involve service cuts. Those are the key metrics that Doug will be looking at once the parties have come to an agreement.

[1630]

There are going to be a lot of tos-and-fros that take place in this negotiation process. I don't want to…. I mean, I'm being respectful. The member's quite right to ask questions and inquire about this area — what could be in, what could be out, what if something happened here or there. All of those things are at play right now.

I've been very careful, not just in the discussion I've had here but in the meetings that I have with the unions and with the employers, to listen with great interest to what's going on in the toing and froing but not to get into a situation where I find myself unwittingly, or even wittingly, being used as part of the negotiation process. I don't want to have that happen.

All I will say to the member is that it is in the interest of both parties to get to a deal. We certainly wish to see that happen. The deal must meet certain criteria. We've gone over that a number of times. Doug Foster is there to make sure that criteria are adhered to, once they have come to an agreement.

As long as he can confirm and signs off that it is not, in fact, a mirage — that they are real savings, they're incremental, and they will not impose additional costs that are not in the plan — then we'll be happy. He'll be happy, and I'll be happy.

B. Ralston: I think that's fairly clear, then. In the event of a disagreement between the two bargaining agents, the employer and the union, about a given proposal — the union may say this really constitutes a real savings, and the employer may say no — then it would never get to Mr. Foster.

I see the minister nodding his head, so I'll take that as agreeing with me. So only in the event that both sides agree that the proposal initiated by the union meets all the criteria would it then go to Mr. Foster for a sign-off.

I think that helps. I suppose the concern would arise…. I'll give you another example. The minister may choose not to comment on this, and I would understand that.

There was a proposal put forward by the BCGEU about Sunday openings of liquor stores. They did a cost calculation and said that they thought it might generate an extra $120 million to $150 million in revenue. They did an analysis of store openings on busy days and average return. There was a fair bit of work that went into the proposal, yet that was rejected by the government.

I suppose a member of the public might wonder: "Well, if there is this mandate of cooperative gains…. It seems to be a good idea, extra revenue is being generated, yet the government chooses not to accept that. How is the policy working?"

Now, I can appreciate that the minister may not wish to comment upon that particular example, because that's a live example.

I suppose the dilemma I see here is that the employer has the control of the information. The employer can say whether or not it's something they haven't thought of already. Given what's happened since 2009, managers have been grinding down pretty hard on their budgets in order to meet targets over a number of years. I know there's not a lot of easy expenses left to eliminate.

How does the other side actually realize the rhetorical force of this policy? Or what's the written policy? How is this to be realized if there are those kinds of potential barriers in the way of a genuine agreement?

The Chair: Minister of Finance.

[1635]

Hon. K. Falcon: Thank you, Mr. Chair, and welcome to the conversation. I hope you enjoy it. We've been covering a lot of very interesting territory.

Interjection.

Hon. K. Falcon: Yes, scintillating is right.

The member is right in pointing out that, obviously, I am very averse to getting into…. You know, again, this was a good example of what I would call legitimate public posturing, where a union, in this case the BCGEU, is putting out a position to advance an argument, and there's nothing wrong with that at all. I want to be clear that I'm not critical that they would do that.

Without speaking specifically to that, I think that any proposal being put forward would have to still meet the test that we talked about in terms of savings. What would the benefits be? Are they truly incremental? Are they going to drive the revenues that are being asserted?

That would have to be laid out, because of course, when you do that business case work, you're going to have to say: "Okay, if we're open an additional day, then presumably the market is going to respond by additional incremental sales that are going to be of such an amount that
[ Page 11711 ]
that is going to generate such sufficient revenues that it will overcome other costs that will increase, like overtime costs, for example." We all know that in the operation of any business, if you have to pay significant overtime costs, your wage costs can truly be an expensive part of operating your business.

Any proposal, whether it's a proposal like that or other proposals that are brought forward and suggested to government that there are significant benefits to be realized, absolutely, will be the subject of great discussion and interest at the negotiating table. But — and here's the big "but" — they will have to really bear out that those savings are as they say they are. I'm not speaking to that specific case, but what I find, generally, by both employers and employees is that often there is a belief that things will be something they would like to see but when you start drilling down into quantifying that, it gets a little tougher.

We are not taking off the table any ideas. All ideas should be available to be discussed by both parties, but both parties will have a responsibility to be able to defend their assertions that they will result in significant revenue benefits or significant savings, however that may come about.

All I would say to the critic is that on closer examination it turns out that sometimes that is not always the case, without speaking specifically to that example. I will just say generally that further due diligence and drilling-down finds that, you know, once you start to have to pay overtime costs and once you start to look at, "Well, what is the real incremental…? How many more widgets are you going to sell by being open that extra day?" sometimes it does not result in the savings that are suggested. Of course, that is the discussion that will take place.

The union will have to make their case. The employer will have to look at that case. They will both have to have a discussion about it. Ultimately, if there are to be savings, those savings will have to be verified by Doug Foster, and then maybe there's the potential of a deal. Those are discussions that are taking place now on a whole range of issues.

B. Ralston: Before leaving this topic, the minister mentioned increases to the nurses and to the BCMA. I appreciate that the BCMA doesn't fall strictly within the Public Service Commission, but will a form of cooperative gains be in place for negotiations with the BCMA?

[1640]

Hon. K. Falcon: With respect to the BCMA negotiations, obviously, it's a fair bit different than at the unionized public sector. As the member would know, they're a contracted service provider. We're in negotiations with the doctors right now. I want to be careful of what I say, because the member opposite can imagine that they're very sensitive negotiations. But I can assure the member that in the course of those negotiations we are being very clear that we negotiate, in an environment that is one of great fiscal uncertainty and global uncertainty, that any agreement has to be reflective of the reality of the world we're in.

That, of course, makes it a difficult negotiation, as it is wont to be. But I think what I can say is that we have over the years…. I can speak with some knowledge of this as a former Health Minister who really values our relationship with the workers — whether they're LPNs, nurses, custodial staff or doctors — in the health care system. We've worked very, very hard to improve that relationship. I think I can say that over the years we have really had some success in doing so.

Though it will always be difficult because you're talking about money, I am hopeful that the good working relationship we've established with the BCMA and doctors over the years will continue going forward. I probably can't say too much more about it, because the negotiations are, as I say, currently underway in a very real way right now.

B. Ralston: I want to move on to another topic now. We have discussed this, and the minister has made extensive public comment on this. But I do have one issue that I want to touch upon. This is the conversion from the HST to the PST-GST system.

The minister made it very clear in the House the other day that the commitment of the Premier will be honoured in the sense that we will be moving back to the set of exemptions that were in existence prior to July 1, 2010. But the minister has recently used in some of his statements the expression "permanent exemptions." It seems as though the minister is drawing a distinction between permanent exemptions and something else.

What does the minister mean by permanent exemptions?

[1645]

Hon. K. Falcon: What I'm referring to by permanent exemptions…. The reason I'm making that distinction is that there were some exemptions provided on a temporary basis, which were set to expire and did expire and which we're not bringing back. That would be things like the Energy Star appliances. We used to have a program that provided PST exemption for Energy Star appliances. Those all expired a number of years ago now, I believe, and those won't be brought back.

But all the permanent PST exemptions that everyone typically thinks about, like restaurant meals or most services or bicycles, etc. — all of those are returning as they were in the PST world.

B. Ralston: The minister will be aware that the member for, I think, Kamloops–North Thompson and I both made, perhaps unusually, representations, publicly asking the minister to consider having the Canada Revenue
[ Page 11712 ]
Agency continue to collect the tax after it transitions back to PST and GST. I gather that despite our combined effort — or combined heft, if I could put it that way — the minister is not able to agree with that. I think that's largely because the federal government is unwilling to undertake collecting the new tax.

I just wanted to confirm that on the record. I know there are some advocacy groups that have supported that. It would make the administration of the new tax perhaps a little bit easier than it would otherwise be. It has some obvious benefits because it's in place, and the federal government's Canada Revenue Agency does collect taxes. They collect the provincial corporate tax, for example, so that wouldn't be unusual for them. I just want to confirm that that's not going to happen.

Hon. K. Falcon: The member is correct in pointing out that this is an area that I think it's safe to say…. We did propose this, by the way, as part of our early discussions with the federal government. Perhaps not altogether surprisingly, they had really no interest at all. I think that's probably the safe way to say it.

From the federal government's position, first of all, they would have to administer a provincial statute that has very different rules from their own federal tax, the GST. That didn't make a lot of sense, from their point of view.

They also didn't view that as something that would save money at all. And because we're dealing with, under the two-tax system, a totally different tax base, in their view, business would still have to comply with two different tax systems and all of the joy, if you will, that goes with trying to administer two different tax systems.

I mean, this was one of the whole points of the harmonized tax — that you get away from business having to deal with two different tax systems that are operated by two different levels of government.

For those reasons — and I'm sure they had others — they had no interest at all in that approach.

B. Ralston: I should just correct the record. It was the member from Kamloops–South Thompson, not the member from Kamloops–North Thompson, that I was referring to.

[1650]

The minister may be aware of this. There was a submission by the Business Council of B.C. to the Select Standing Committee on Finance and Government Services back in the fall, where they had some recommendations on the administrative side of the PST and improving it.

They recommended that the province — and I'll maybe go through a couple and get the minister to comment — "clarify the rules for scope of application of the PST and eligibility for exemptions, with a view to minimizing future disputes over interpretation; revise the statute of limitations for assessments for prior tax years from four years to three." Perhaps I could get the minister to comment on those.

I know that these are not likely to be included in the legislation. I'm not sure. But they are suggestions for administrative improvement that seem to be reasonable, and I'd appreciate the minister's comments on them.

Hon. K. Falcon: We have heard from the business community — the small business community, the large business community, all of the business community. The common theme has certainly been trying to…. While they almost universally, generally, are upset over the fact that they're moving away from the system that they viewed as the most administratively simple and straightforward, which is the harmonized sales tax, they are certainly pleading with us that if, as we are going to do, we're going back to the two-tax system, we try to do everything we can to make it far less onerous and complex than it was in the past.

That is something that has been a guiding principle for us. We are going to make the new act and regulations as plain-language as possible so that it's easier to follow, so that will reduce a lot of the disputes that went on. You can imagine — and this is what I have said to the member in the past — why it is complex, in going back.

It's understandable, because some of the people that have talked about how this should happen quickly were doing so, obviously, not fully informed. When you actually look at the old PST, if you will, parts of it date back to 1948. We're talking about an extremely old piece of legislation that created huge amounts of problems. You actually have the private sector having to navigate between several acts, trying to figure out what applies and why it applies and trying to understand language that in some cases is very archaic because it goes back so many decades.

There was a real demand to government to, "Please, for God's sake, if you're having to go back to this tax" — which the business community, as I say, by and large, universally opposed…. They said: "For goodness' sake, make sure you don't bring back the old one in exactly the same form, because it was disastrous." Well, obviously we can't. First of all, our lawyers have told us very clearly: "Not only can you not, but we won't let you, because there are far too many problems under the old act."

What's happened over the years, and the member…. Perhaps not this member, but I'm sure that other members of his party will remember, from their years in power and then even going back further in the '80s under the Socreds and probably in the '70s again under the previous NDP government, that they almost certainly would have had Ministry of Finance officials coming forward, asking them to rewrite the act to bring it up to modern standards.

[1655]

For whatever reasons happen over decades — not
[ Page 11713 ]
enough legislative time, it's too big a change, or nobody wants to get themselves into this mess because it's a bit of a morass once you get into it — it never took place.

This, obviously, now has to happen. We are ensuring that as we bring back the PST, we do so with the permanent exemptions that were in place under the old PST but also, to the member's point, responding to what we heard from the business community to try and make it as simplified and plain-language as possible so it is easier for business — and small business, in particular — to navigate the actual act.

In terms of specifics, Member — like what is going to be in it — with the greatest of respect, I would say that it's better to have that discussion once we have it introduced into the House. As I say, that will happen — and I can say this with real candour — the moment they have completed the drafting so that we can get that into the House as soon as responsibly possible so that we can start that debate immediately.

B. Ralston: There are another couple of points. I'm not sure that they would bear upon the drafting of the legislation. They're advocating a risk-based approach to audits, "using sampling techniques, in order to improve returns on investment in terms of incremental revenue potential versus costs, and to encourage negotiation in audits, as is done federally and in other provinces, to lessen the need for litigation."

I appreciate that the minister is somewhat restricted by the fact that legislation is pending, but the issue of audits may be something that he is able to comment on.

[1700]

Hon. K. Falcon: With respect to the suggestions put forward by the business community, we certainly have tried to listen to all of the good suggestions that have come in. We, in principle, are certainly supportive of the idea of a risk-based approach to auditing. I think we'll have opportunities to discuss this some more in the future.

What I have always said, though, is that we have a balancing act. We have to remain faithful to the direction of the referendum, which we're going do, which is to return to the PST-GST system with the permanent exemptions in place. We have said that we may do some minor streamlining to improve clarity, simplicity, etc. Frankly, that's really all we have the ability to do, to be perfectly candid, Member.

Any change that is beyond a simple change — in other words, anything beyond just trying to improve clarity, simplicity, etc. — would actually work against us in terms of getting it back in the timeline that we're driven to get it back by. As the member well knows, it's not just the timeline for the introduction of the legislation — that's just one of the timelines — but the timeline to actually have it switch over by April 1, 2013.

I know that people have criticized the timeline, saying we somehow should be able to do it quicker. I absolutely say that that timeline is a pressed timeline. We are working to make sure we meet that timeline. The ability to stray from or to make any significant change to the PST would actually delay the timeline significantly. Any change beyond fine-tuning or clarity or amalgamation to provide clarity is going to be…. It would absolutely affect our timeline, and we wouldn't be able to do it.

In some ways, that probably should give the critic some comfort if anyone out there is concerned that something is going to be so dramatically different. The good news is that we have no ability to actually do that in the time frame. We're bringing back the old PST, as we said we would do, as we've committed to do, as the referendum directs us to do, with the permanent exemptions in place and with some improvement.

I'll just quote into the record very quickly, Member — because I know you have another question — August 26, 2011, the news release I put out in the wake of the referendum decision. We said here in the press release: "The PST will be reinstated at 7 percent with all permanent PST exemptions. The province may make some commonsense administrative improvements to streamline the PST." That's exactly what we're doing.

Any feedback we've had — frankly, any feedback that involves systemic change — we've said to people that we can't even consider it. It would absolutely, first of all, betray the direction of the referendum but also take way too much time. We haven't got the time because we're, as I say, just struggling to make sure we that we get the current timeline enacted.

B. Ralston: I'm going now to give way to the member for Vancouver-Hastings, who will ask some questions about ICBC. The member for Cariboo North is scheduled to come in at about 5:45. He'll take it to adjournment at 6:15. That's the schedule for this afternoon. Those are the questions that I have at the moment.

S. Simpson: Thank you to the minister and to his staff. Just so we know, we're going to start on the ICBC. Because of the kind of a bit scattered way that timing is going, we'll start. We'll so some do ICBC today. I suspect we will have to finish ICBC tomorrow, with a bit of time tomorrow, because I don't think we'll get it done in 45 minutes here. We'll see how far we can get.

[1705]

What I would like to do just to start is to talk a little bit about rates and get some clarity around some of the rate questions. It's my understanding that the application to the BCUC was for an increase of 11.2 percent on the basic account and a reduction of about 6 percent on the optional account. I understand that if you accounted for only the basic account in that, with the 11.2 percent, the average increase would be something like about $83 —
[ Page 11714 ]
if you just considered the basic account. When you put the two of them together, the average becomes about $30 — when you combine the basic and the optional. Would that be correct?

Hon. K. Falcon: I'm advised that the numbers would actually be about $68 for the basic if you just purchased the basic insurance, and it would be $27 for the net. The vast majority of ICBC drivers purchase both their basic and their optional with ICBC, and in that case you'd be looking at about a $27 net increase.

S. Simpson: The minister responded a bit to this, and I understand that about 80 percent of ICBC customers buy both basic and optional, and about 20 percent simply buy the basic. Is that number accurate, or what would the number be?

Hon. K. Falcon: That's close enough. That would be accurate.

I should, for the benefit of the member opposite, let him know that I'm joined by some ICBC staff here: the president and CEO, Jon Schubert; Donnie Wing, who's a senior vice-president of corporate affairs; and Anwar Chaudhry, corporate controller. My associate deputy minister, Sheila Taylor, who specializes in ICBC, is also with us.

S. Simpson: I'm wondering if the minister could tell us whether ICBC has done any assessment. I'm going to make an assumption here, and I'm certainly happy to have it cleared up for me by the minister, about that 20 percent of people — and I'd be interested to know kind of what that number is in a raw number, how many people that would be — who buy simply the basic.

Is that mostly people who are purchasing that because they're looking to buy the minimum amount of insurance that they're obliged to legally so that they can get their car on the road, or is it people who are buying the basic there and then going out and buying their optional from somebody else? I'm trying to get a sense here of how many people buy basic only.

Hon. K. Falcon: I'm advised that about half of those would go to the private optional market and purchase their insurance, and the other half — typically, it's made up of much-older vehicles — don't bother buying the optional coverage.

S. Simpson: So that 10 percent, or so, of the overall purchasers are only buying the basic and not buying optional from another source, from a private source there. Just this is all they're buying. Has ICBC looked at that, just in terms of a little information on that demographic? I'm thinking here, hon. Speaker: how many of those are folks who buy the minimum that they require to keep their car on the road because maybe they have modest incomes and they would fall into that category of people?

I'm trying to determine whether they in fact are being…. Because of the way that the structures are in place between basic insurance and optional insurance — and the increases tend to lean onto the basic side at this time, this increase — who's being affected mostly by that? I'm trying to get it down to that core group of people who, you know, have modest incomes and how they're affected.

[1710]

Hon. K. Falcon: They don't have a specific amount. It's perhaps unknowable. What I do know is that ICBC provides a financing option that is particularly attractive for low-income folks that allows them to make their payments over 12 months at a very low financing cost of 2.5 percent. That is something that is, obviously, a pretty significant benefit that I would expect many of those individuals that the member is talking about would probably take advantage of.

S. Simpson: In terms of that rate increase, the 11.2 percent, I believe I recall — that might have been in February — that ICBC at that time acknowledged in a financial update that if they were to advance a rate increase that they would require, to meet what they believed to be their needs at that time…. They were looking at something maybe in the 14.5 percent range, though they weren't going back to BCUC to ask for an amendment here. They were going to proceed with the 11.2 percent.

Could the minister tell us: is that accurate in terms of ICBC meeting its objectives — that they would have ideally been looking for another 3.3 percent? If so, how are they going to deal with that shortfall?

Hon. K. Falcon: When ICBC originally filed — I think it was in mid-December — they filed at 11.2 percent. BCUC asked for an additional update, and the indices could be, of course, that that could even go as high as 14.5 percent. The problem is that that can change every month.

What's happening right now at ICBC is that there are two events that are really squeezing ICBC and resulting in the increase in the basic rates. The first is that investment income is dramatically down, and that's no surprise, given the interest rate world that we find ourselves in. This is something that is hitting virtually everybody — pension plan holders, members, etc. Not surprisingly, it's also hitting ICBC's investment returns.

The second is the number and the cost of claims, particularly bodily injury claims. That is sort of a pincer movement that, together, is resulting in the increase that the member talks about.

I should say that I do think it's important to have some perspective in the matter. I know that whenever we talk about rate increases, that's obviously never going to be
[ Page 11715 ]
something that's popular. I think that it is very important to point out that the rates for basic insurance have not actually increased since 2007 and that, in fact, in 2010 they deceased by 2.4 percent.

So I think, whether it's the low-income driver or any driver, we have seen a situation over the past number of years, the last five years, that has been quite good in terms of rates — as I say, frozen, with a reduction in 2010.

[1715]

S. Simpson: I appreciate that, and I appreciate the comments of the minister that we haven't seen increases in the last number of years.

The effect of this, though, the 11.2 percent, which is the application — the suggestion that 14.5 percent may have been more appropriate…. The minister says that fluctuates. In terms of how that affects the revenues at ICBC, my understanding is that we're talking here about around a $90 million drop in investment income and about a $145 million increase in costs, largely around claims. Are those numbers accurate?

Hon. K. Falcon: Overall claims costs in the 2011 outlook…. So 2011 compared to a year previous, 2010, were $114 million higher. The investment income…. The member is correct in that it is down $89 million from the same period last year.

S. Simpson: If my numbers are correct, that says that what we've seen is a decrease in net income for ICBC from about $370 million in 2010 to about $140 million in 2011 for net income.

Hon. K. Falcon: The member is correct that the 2010 net income was $372 million and 2011, $140 million. Of course, that includes the loss in basic insurance of some $190 million but also outweighed by the profits in the optional side.

[1720]

S. Simpson: That income level…. I note the expectations are that the net income will increase. I think it's projected to go up only by about $6 million in 2012-2013. Then it jumps pretty healthily to $230 million in '13-14 and $$229 million in '14-15. Could the minister tell us what the expectations are, the projections are as to what explains that significant increase?

Hon. K. Falcon: The member is correct. The $230 million forecast in 2013 and the $229 million in 2014 take into account the implementation of the 11.2 percent. It takes 24 months for it to be fully realized in terms of all of the renewals that have taken place in licence holders across the province.

S. Simpson: I'll get back to that in a bit, because I want to talk about it in terms of the dividend that comes to government.

Just to understand a little bit better, maybe, what happened in terms of the revenue drop. It was explained, certainly, by the drop in investment income and some of these increased costs. But I know that that revenue gets broken out by basic and optional accounts. As I understand, they're separated. They're kept separate, and there's a firewall there so that you can't have crossover. I understand why that's important.

My understanding is that while both sides of the business lost some money — it lost revenue, had a reduction in revenue from '09 to '10 — it was quite a bit more significant, that drop, in terms of the basic account versus the optional account. The numbers that I have say that the optional account dropped from a profit of about $387 million or so to about $312 million, whereas the basic account dropped from about $175 million to about $49 million in terms of income on both sides.

Could the minister explain why the basic account seems to have taken, certainly as a percentage, quite a bit bigger hit than the optional account?

Hon. K. Falcon: The reason is that basic was reduced by 2.4 percent in 2010. As the member knows, ICBC is different than B.C. Hydro. They don't have a mechanism, deferral accounts, to smooth out increases.

[1725]

So if they've got excess capital in their basic account and their revenues are exceeding their expenditures by some sum, then the BCUC will order a reduction, which of course takes about 24 months to be fully implemented.

That took place. Then the second thing that happened was their bodily injury claims were increasing at a much higher and faster rate than were property damage claims, which are over on the optional side. That's why I say those two events alone explain the discrepancy of why basic is going up at a much different differential than is the optional side.

S. Simpson: Just bouncing around a little bit here on that question. One of the issues that I've heard, of course, is that…. I understand that in non-insurance services provided through ICBC, whether it be driver licence and testing, collection of fines, registrations, road safety programs — all of those things that are provided through ICBC or ICBC is administering that don't have revenue streams, that have costs…. People pay fees, but those fees, I understand, go to government. Essentially, ICBC pays that out of the basic account revenues in order to cover those costs.

My understanding was that the forecast, I think, in the service plan expensed these at about $124 million for 2012. It would have been slightly less than that, $122 million or so, in '09 to '10.

Could the minister explain how much of an impact
[ Page 11716 ]
that sort of non-insurance services…? Those services are provided by ICBC and covered by revenues in the basic account but deliver other related services. What's the rationale for having all of that happen without the government sort of expensing that or using the fees that are collected from any of those things to offset those costs? Is this just deemed as part of the dividend being covered in a different way? What's the thinking of government on that?

Hon. K. Falcon: The costs that the member is referring to represent about three cents of every revenue dollar generated at ICBC. Obviously, it's a pretty modest amount. The reason it's on the basic side is that most of the benefits accrue on the basic side.

Road safety, for example, is something that has potentially pretty significant savings, particularly on the bodily injury avoidance side, in terms of accidents. When ICBC works with the police and communities to identify high-impact intersections, etc., and makes investments to defray the potential to avoid future accidents at those intersections, that obviously is going to have some pretty significant savings on the bodily injury side, which obviously accrue on the basic side.

[1730]

S. Simpson: We may come back a little bit to this, but I'm wanting to move a bit, as I understand the financing of the corporation a little bit better, and get a sense about the minimum capital tests and the requirements around that in terms of what, in fact, is the expectation around percentages on that.

[D. Horne in the chair.]

Now, my understanding is that the management target is 130 percent. The regulatory requirement is 100 percent for the minimum capital test. But, the target is about 175 percent, or something like that, as the test.

If I'm correct, could the minister tell us what those dollars look like in terms of total dollars to meet those standards of the 100, 130 and 175 percent, which is the target test?

Hon. K. Falcon: The member has got it partly right. The 130 percent is the BCUC-approved minimum capital test. The 100 percent is the government minimum requirement that was set out in legislation, I think, some time back, and that is covering the basic side of the business. The combined minimum capital standard is 175 percent for both basic and optional.

But as part of the rate application that ICBC went forward to BCUC with, the B.C. government has stated that the ratio be relaxed to the 100 percent government standard that we have set out over the next three years to help ICBC manage the rate increase.

S. Simpson: Could the minister tell us what the projections are between those numbers — the 100 percent now, which the government has directed, versus the 130 or the 175 percent that had been the original target, I guess, the corporate target, before the changes were put forward? Yeah, for the combined.

[1735]

Hon. K. Falcon: For basic, ICBC is projecting that they will end the year 2012 at 107 percent, and the corporate combined projection is 180 percent. I think the key thing to underscore, though, is that there is a lot of volatility. BI, bodily injury, claims can swing fairly dramatically. Unfortunately, certainly in the last 12 months they have been swinging up, which is not necessarily a good thing. It is volatile.

It is important to point out — especially on ICBC's investment returns, which obviously are fairly heavily weighted on the bond side — that we are in a very difficult international economic circumstance. As I mentioned earlier, investment returns are being hammered everywhere. ICBC is obviously included in that.

It is certainly the belief that this is not going to be a permanent situation and that interest rates are going to start to return to more historical norms. It may take months, if not years, before that happens. Therefore, we think they're still being very prudent in the assumptions set out here.

S. Simpson: I'm still trying to get my head around what we're talking in terms of real dollars here.

To go back to…. The minister made reference to this. As I understand, back in November of last year by OIC the government directed ICBC to use more up-to-date data for its calculations and said to use, until 2015, any available basic capital above the regulatory minimum, the 100 percent, to offset increases in basic insurance rates. That's what the OIC in November of last year directed ICBC to do.

Now, it seems that around this…. I know that ICBC, in one of its responses to the BCUC, made the following statement:

"The government directive of May 18, 2010, with respect to basic excess capital approved by Order-in-Council 287/10, May 27, 2010, and government directive of November 25, 2011, with respect to basic rate stability and capitalization approved by order-in-council…November 30, 2011, were put in place as a way to use capital to enhance basic insurance rate stability."

They went on, though, to say:

"But these directives have limited ability to smooth through large basic insurance rate changes. Therefore, a redesign of the capital management framework would be required to improve on the stability and predictability of basic insurance rates."

[1740]

I wonder if the minister could tell us what the thinking of ICBC was around what that redesign might look like of the capital management framework and what would be required there in order to increase that stability and
[ Page 11717 ]
predictability that was talked about in the submission around BCUC.

Hon. K. Falcon: You know, we recognize that over the last decade we've seen real stability in rates in British Columbia — about 1.9 percent on average on the basic side. But combined basic and optional, it's averaged about 0.8 percent, which is a pretty good record over the last decade, certainly.

The prior decade, for example, the combined was about 4 percent a year on average in terms of increase. In Ontario, I'm advised, it has averaged about 8 percent a year. I think that has been, obviously, one of the good-news stories.

One of the challenges now in an environment where we've got historically low interest rates and thus investment returns, combined with a pretty dramatic run-up in bodily injury claims…. Those two events have had the combined effect of resulting in a pretty dramatic increase in the basic rates and, as we've discussed, the 11.2 percent request that went to the BCUC.

What ICBC is saying there is that in order for them to be able to smooth out rates beyond…. The only approach we have right now is essentially an annualized look at: "Here are our costs. Here are our investment returns." There is no flexibility for them to do much. There is obviously a minimum capital test that has to be adhered to. There is not a lot of ability for ICBC to actually smooth out rates.

Part of the review that we're doing on ICBC — led by the associate deputy minister, Sheila Taylor — is to look at and work with ICBC and do some more work in that regard to see whether there is a way we can look at having the ability to smooth out the rates so that you don't get a situation, as ICBC is facing now, where in 2010 they're being ordered by the BCUC to reduce rates on the basic side, which they did by 2.4 percent, and then the following year, as a result of a run-up in BI claims and a reduction in investment returns, now having to go back and look for an increase on the basic side of 11.2.

[1745]

That doesn't seem on its surface to make a lot of sense because it introduces a level of volatility that is probably not entirely helpful. That's what they're referring to when they talk about looking at a bigger picture. That would require government direction. It's not something ICBC can do on its own. It is part of the overall review we're doing as we work through the Crown review of ICBC.

S. Simpson: The minister made a comment about this earlier, and I'm going to ask a couple more questions about this. Then I'll turn it over to my friend from Cariboo North.

When we had talked a little bit earlier about the basic account, the minister made reference to the fact that ICBC doesn't have a structure like B.C Hydro — the ability to have deferral accounts that were initially established as a tool to smooth rates for B.C. Hydro.

When ICBC talks about this capital management framework and changing the framework and makes these references in their submission to BCUC, the question I have is: is ICBC contemplating the establishment of a deferral account structure here in order to create that situation — maybe not exactly, but to start to replicate that deferral account structure in order to accomplish these objectives?

Hon. K. Falcon: One thing we know — certainly, ICBC knows for sure — is that what customers really like is rate stability. They didn't like any surprises. They don't like any swings.

One of the things that ICBC is doing, working with Sheila, is to look at: are there options that they could consider which might have the ability to smooth out rates? It's very, very early in that look, I should tell the member, but it is certainly worth having a look at so you don't get into a situation where one year you're having a rate reduction and the next year you're having a rate increase — you know, 2.4 percent one year and then 11.2 percent the next year.

There are some similarities to B.C. Hydro. They're not perfect. B.C. Hydro has high-water years; they have low-water years. The ability to smooth out rates is a benefit, obviously, to the customers across the province who are not going to want to see wild swings in their hydro rates.

So, too, on the ICBC side. Many customers want to see some rate stability, so ICBC will be looking at some options they can discuss with government so that we can see whether there are ideas out there that are worth pursuing. How it would look I couldn't define to the member right now.

S. Simpson: I'll just note for the minister and the staff that I'm going to ask one more question, and then I will turn over the floor to the member for Cariboo North. But I will come back tomorrow, and I apologize for keeping ICBC folks around for tomorrow. But just schedules of members and things…. It works that way, and I do apologize ahead of time for that.

The question I have follows up on this. It's another response that ICBC made in relation to the policy decisions of the order-in-council that was made in November. One of the comments was this. "In effect, by not enabling a capital build provision until January 31, 2015, the 2011 government directive is delaying the rebuilding of the capital levels, and capital levels will be depleted for a period of time until the full impact of the policy year 2002 rates flow-through."

[1750]

Could the minister tell us what the expectation is? What are the implications of that to have these capital levels down? What are the implications for the corpora-
[ Page 11718 ]
tion? What are the implications, if any, around dividends? I'm trying to get a sense of how this impacts ICBC's ability to do its job.

Hon. K. Falcon: No impact on dividends, and as we pointed out in one of the earlier answers, for basic — the minimum capital test that they're looking at — the projection is 107 percent by the end of 2012. So we're entirely comfortable.

What that means, by the way, for the benefit of listeners, is that if everything had to wrap up tomorrow, they would be able to meet 100 percent of their obligations on the basic side. That's effectively what we're talking about. So ICBC is in a very solid condition. It continues to be in a solid condition.

What we're doing by providing the relief from 130 — which is a level that the management likes to keep so that they've got some latitude for swings — is providing some relief from that to the minimum level that we established back in, I think, 2003, of 100 percent. That's so ICBC has the ability to allow this extraordinary situation where we have extremely low interest rates and a spike in bodily injury claims to ride out over the next few years, until we're back into a more normal climate that we would expect, particularly with respect to interest rates and investment returns.

B. Simpson: I'm going to change the subject.

A Voice: Would you mind if we took just a five-minute break?

B. Simpson: As long as the Chair is going to give us a little latitude on adjournment.

The Chair: The committee will recess for five minutes.

The committee recessed from 5:53 p.m. to 5:58 p.m.

[D. Horne in the chair.]

B. Simpson: Just in terms of the time frame here, I am going to ask some questions about a pet subject of mine, the Pacific Carbon Trust. Given that we are time-constrained and will have to adjourn here, I ask the minister's assistance in trying to get through some of these questions. Then, if necessary, maybe what we'll do is a briefing. My preference is to get it on the public record.

I'm just going to cut to the chase without a lot of preamble. My first question has to do with the adjustment made to the structure of the Pacific Carbon Trust relative to the school districts. I canvassed it with the Education Minister, but I need to know how the money flows through the Pacific Carbon Trust and back to government.

So confirm with the Education Minister. All the school districts still calculate what their GHG emissions are, net of zero, and pay for the offsets individually to the Pacific Carbon Trust. The Pacific Carbon Trust then, through some mechanism, flows that explicit amount — this year it's rounded up to $5 million, but I guess the intention is to do it as an equivalency — back to government to go into a special fund for them. I'm not clear on what the mechanism is for that flowback.

[1800]

Hon. K. Falcon: The schools still count their emissions. They still pay for the offsets — about $4.4 million last year, as I understand, as I'm advised. For every dollar they pay, they get an equivalent dollar that goes to the K-to-12 sector for energy improvements that will reduce their costs, whether it's better windows or whatever other investments are deemed appropriate. That is managed through the capital branch of the Ministry of Education, in cooperation with the school districts.

B. Simpson: Maybe I didn't clarify. So the intent of the Pacific Carbon Trust and the carbon offset regime and the declaration of carbon-neutral government is that you charge a tonnage to the public sector. Unfortunately, it's out of their operating budgets, which they're supposed to be delivering a public service with. That's clawed back and goes back to the Pacific Carbon Trust on a per-tonnage basis, $25 a tonne.

Pacific Carbon Trust then is supposed to use that money to leverage greenhouse gas reductions equivalent to the total produced by the public sector — last year about 700,000 tonnes. This year a change was made where school districts, which get their carbon tax rebated to them….

My understanding is that their money coming into the trust will now be rebated to them as well, through what I believe will be a shareholder dividend or some kind of transfer from the Pacific Carbon Trust back to government.

Yes, it goes into capital fund, and there's that transfer from operating into capital and all of that stuff. What I'm trying to understand is that no longer will the school district's money buy GHG reductions in the private sector, and there is no way that the $5 million, or short of $5 million, is going to buy enough carbon reduction in the school district system to declare schools carbon-neutral.

[1805]

So how is the carbon neutrality…? It's not just the money. Last year the school districts paid for 176,000 tonnes, basically buying carbon forgiveness at $25 a tonne. Now that their money is going to be flowed back to them, what I'm curious about is how does the Pacific Carbon Trust then say that schools are declared carbon-neutral anymore, given that their money is returned to them and they'll never reduce 176,000 tonnes in the school system?
[ Page 11719 ]

Hon. K. Falcon: First of all, as the member knows — I think the funding ran out last year — we provided $75 million to the public sector so that the broad public sector could undertake investments that would help reduce their annual energy costs. My understanding is the annual energy cost savings are now approaching $13 million and annual GHG reductions of some 35,000 tonnes, which is obviously some progress.

With respect to the school districts, the easiest way it's been explained to me is that the school districts are still making a $5 million contribution to Pacific Carbon Trust which purchases carbon credits, and government, in a separate transaction out of our capital program, is providing the school districts an equivalent amount of $5 million so that they can engage in making additional investments to reduce further their energy costs. The result of all this is that we still have our entire public sector in a position of being carbon-neutral across government.

B. Simpson: Let's just clarify. A very specific question: is the minister of an understanding that the money — that $5 million that's going to be directed to the school districts — is not coming from the Pacific Carbon Trust? Is that correct?

Hon. K. Falcon: That is correct. It comes out of the capital program of government.

B. Simpson: I'll move on to something else. There is different information out there, and I'll track it down. It's my understanding that that money will come from the Pacific Carbon Trust. I'll track that down and give that to the minister.

The second question. I'm going to have to truncate this, and I may follow up with the minister's office and ask for a more comprehensive briefing.

[1810]

The school districts are going to get a bit of a quid pro quo. It's still a transfer from operating funds to capital. As the Education Minister indicated, not all the districts cutting cheques to the Pacific Carbon Trust will actually see that capital. They're going to have to do a structure to try and figure that out.

My districts weren't able to take advantage of PSECA, because PSECA actually was a contribution towards projects. If they didn't have the capital or maintenance budgets to do the projects, they didn't get the contribution. That issue will still be out there.

Let me ask this question. The health authorities, who don't get a carbon tax rebate for the fuel, will now be paying, as of this summer, $30 a tonne on fuel. They will then have to pay for the offset. I know that Health has had a lift in its budget and all that stuff. I'm actually just getting to the principle of the issue. The principle here is that you've got all the other sectors except school districts — but in particular, let's focus on Health as an example — that will start paying $30 a tonne on fuel and then pay $25 a tonne on the emissions from that fuel.

Is there any other jurisdiction that double-taxes that way under the name of carbon neutrality or greenhouse gas emission reductions, where you're taxed on the front end on the fuel and you're taxed on the emissions from the fuel? Does any other jurisdiction have a situation like that?

Hon. K. Falcon: First of all, one of the principles is that we recognize the K-to-12 sector as a sector where certainly we want to make sure every possible dollar is going towards the education of our children. We all understand the pressures they have to deal with. It is not that those pressures are absent in the health authorities, but the health authorities are managing budgets of about $10½ billion. I don't want to say it's a rounding error, but in Health terms it's pretty much a rounding error.

The question is: what other jurisdictions are following that? Well, actually, nobody, because we're the only jurisdiction in the world that is carbon-neutral, the only other government that has successfully achieved carbon neutrality.

The member for Cariboo North will know, because we had discussions early on when I was first becoming acquainted with this, that there is probably no greater skeptic on these issues than the individual standing before you today. But I am satisfied, as I've gotten deeper into this, first of all, that I do think the positional leadership that British Columbia has taken in both the carbon tax and in becoming a carbon-neutral government is actually of value and is being recognized internationally.

I know I saw a recent Ipsos-Reid survey that suggested 80 percent of British Columbians support B.C.'s leadership in reducing emissions, and I think it was like 3 percent that opposed. I mean, there was a very strong element of support for this.

That does not mean we have a perfect model. That was perhaps no better exemplified than in the concerns the member appropriately raised with respect to the K-to-12 sector. The response to that was exactly what we talked about previously — government recognizing that we still want them to make their contribution. Those credits will still be purchased through Pacific Carbon Trust.

[1815]

We will still be able to achieve carbon neutrality, but government, in a separate program, is providing an additional matching equivalent of $5 million of capital for the Ministry of Education to work with the K-to-12 sector and the school districts to make additional investments to help offset the costs.

I do think it's worth noting that the public sector, it's estimated, spends close to $400 million per year on their energy costs. By having a focus on energy reductions, we have an opportunity to have the public sector significantly reduce future operating costs. If public sector organiza-
[ Page 11720 ]
tions can simply save 5 to 10 percent of that annualized $400 million cost, you're looking at a potential of $20 million to $40 million a year in savings.

That's what we're striving to achieve through carbon neutrality: to put a spotlight on these costs so that decisions could be made in an effort to try and reduce those costs and show the kind of global leadership that we're trying to show in British Columbia.

I do want to say, though, Member, that with respect to your previous question, my deputy actually has an answer. He'll talk to you right after this, given that we're challenged for time. I'm happy to canvass this more tomorrow, if you wish.

Interjection.

Hon. K. Falcon: Oh, okay. So I'll hold off on this.

B. Simpson: Thank you for the Chair's forbearance — and the minister. I'm at an event tomorrow, so I can't ask the question. I wouldn't mind a conversation with the minister about this. This isn't about actually energy savings in the public sector. It's about money from the public sector going to the private sector to do that, and there's an attempt to do some sort of a fix on the public sector side.

I have asked the Auditor General to look at this. I will be going back to him again. I'm not convinced that any of the projects that were purchased last year were actually incremental GHG reductions. I think what we have is a derivative scheme writ large that will be proved to be so very shortly here.

Let me ask this straight-up question to close off this debate. I asked it last time. There is still not an answer forthcoming.

Out to 2014-2015, the trust will be accruing, according to their service plan, $37.8 million in retained earnings. I think that money could be better used elsewhere. That's after everything is netted out — costs, purchases, etc. Will the government do something to claw that back and potentially get the energy savings that the minister wants to see by directing that and refreshing PSECA? The $37.8 million is not chump change.

Hon. K. Falcon: I thank the member for the question. We'll have a brief discussion after this too. I think, from government's point of view, the Pacific Carbon Trust is within the GRE. It's within the entity, so the fact that they have retained earnings…. All drop to the bottom line and consolidate, so it actually makes no difference from a Finance Minister point of view. All of it is consolidated within the entity. I'll make that comment.

[1820]

The second thing I'll say is that they're purchasing carbon credits. You know, I think it's fair for people to raise doubts and ask questions, as the member for Cariboo North is quite rightly doing, because we are leading the world here. Just by its very nature, that means we ought to be asking questions.

The one thing I am advised by is that to ensure these reductions and the credits are real, all the projects must be validated and verified to international standards by qualified independent third-party auditors, which is required by the B.C. emission offsets regulation.

That is ensuring that the accredited auditors — I think they represent two of the major accounting firms in the world, certainly in British Columbia and Canada — have to be qualified to perform their audits in accordance to an ISO standard, the International Standards Organization. Not that that may solve every concern or question the member may have, but it is something that at least provides a measure of independent validation.

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

Motion approved.

The committee rose at 6:22 p.m.

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