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)

Wednesday, May 9, 2012

Afternoon Sitting

Volume 37, Number 5

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

WEDNESDAY, MAY 9, 2012

The House met at 1:37 p.m.

[Mr. Speaker in the chair.]

Prayers.

Routine Business

Introductions by Members

M. Farnworth: From the great city of Port Coquitlam, home to the largest marshalling yard in western Canada for CP Rail, we have a city councillor — the youngest city councillor in the province of British Columbia — who the first time out was 24 when he was re-elected. He topped the polls at the last municipal election, and someday I expect to see him taking a seat in here. Would the House please make Coun. Brad West most welcome.

From the neighbouring municipality of Coquitlam, we have a woman who has dedicated herself to protecting the environment and raising environmental issues in the Tri-Cities area. She has been president of the Burke Mountain Naturalists, one of the leading naturalist organizations in the province with an excellent reputation. That is Elaine Golds. Would the House please make her most welcome.

Hon. M. de Jong: A couple of friends of mine from Abbotsford, Barry and Monica McLean, are visiting us today. Monica works, and has for many years, as a nurse at Maple Ridge Hospital, and Barry heads up the family aggregate firm. Both of them are here visiting, and I know members will make them both feel very welcome.

C. James: I have two guests and a group to introduce today. We have with us today in the gallery Ken Kelly, who is the general manager of the Downtown Victoria Business Association and also co-chair of the Business Improvement Areas of B.C. organization. With him is Fran Hobbis, who is the newly elected chair of the Downtown Victoria Business Association and past chair of the association's Clean, Safe and Sustainable committee. Would the House please make both of those guests very welcome.

[1340]

It's also my pleasure to welcome to the House 24 grade 5 students from St. Patrick's School in Victoria. The students are here today to learn about the Legislative Assembly, how government works, and observe the proceedings this afternoon. The students are accompanied by their teacher, Mr. Zuback, and three parent chaperones. Would the House please make them very welcome.

Hon. P. Bell: A couple of introductions, first of all from the staff of the Ministry of Jobs, Tourism and Innovation. We're joined by Don White, who is the executive director with the trade initiatives branch, which is responsible for trade policy negotiations and disputes, including the softwood lumber agreement. He is joined by a number of his staff: Janel Quiring, Rebecca Ewing, Teresa Zhuang, Josh Smith, Matthew Carnaghan, Mike Nielsen, Linda Jakubowski and Erin Stead.

In addition, I saw one United Steelworker from Prince George that I know up there. I can't see all of them, so I apologize if I've missed others. Don Iwaskow joins us from Prince George as well. I'd ask that the House make all the staff and Don very welcome.

B. Routley: Today we have with us a group of United Steelworkers who are here talking to MLAs, particularly about forest issues. They certainly have a focus on the concerns they have with the rising number of raw log exports. With us today are Trena Legge, Jaswant Sanghera and Douglas Tingley. Please join me in welcoming these brothers and the sister to this House.

J. Les: I have two introductions to make today: first, two classes from St. Mary's elementary school in Chilliwack, 30 students from grade 6 and 30 students from grade 7. They are accompanied today by ten teachers and parents. I know they're in the precinct. They're not in the gallery at the moment, but I'm sure they will be joining us shortly. I'd ask the House to make them very welcome.

As well, today in the gallery we have British Columbia's Ombudsperson. She has a certain interest in an item of business that we'll be conducting a little later on. She is joined, as well, by her husband, Gordon Thompson. If the House makes the appropriate motion later on today, she will be the first Ombudsperson in the history of the province of British Columbia to be reappointed. Would you make her very welcome.

M. Elmore: It's my great pleasure, on behalf of Joe Trasolini, to thank the following people with us today in the House for attending the swearing-in ceremony this morning. We have Marcello Trasolini, Gino Trasolini, Marie Trasolini, Bill Milne, Pierina Pagliaro, Settimmio Pagliaro, Luke Laurino, Gianni Laurino, Anthony Laurino, Elaine Golds, Kevin Hagglund, Paul Harris, Yvonne Harris, Sharon Kent, Angela Shaw, Elaine Willis and, of course, Joe's wife, Cecilia Huang. Would the House please make them welcome.

G. Hogg: A number of us met this morning with representatives of the B.C. Construction Employers. One of them was so inspired by the ambience of this building and the presence of the people here that he's decided to stay through question period. Would the House please welcome Rick Wagner.
[ Page 11722 ]

N. Macdonald: I'd like to join with the member for Cowichan Valley in introducing some United Steelworkers that are here joining us: Mr. Steve Drescher, Mr. Mohinder Gidda, Mr. Don Iwaskow and Mr. Ed Kent. Would the House join me in making them welcome.

D. Black: It's my particular pleasure today to introduce Judy Darcy to the House. Judy is the nominated candidate in New Westminster for the New Democratic Party and will be running for election in the next campaign in the seat of New Westminster. I ask all members here to make her welcome.

J. Horgan: I notice in the gallery an old friend of mine, Linda Carlson, who is an expert on the Crusades. If any members want to question her on the events a thousand-odd years ago, she's right there.

[1345]

R. Fleming: I would like to introduce two guests who are here today in the gallery. The first is Max Collett, who's from Vancouver. He's a partner at Bull, Housser and Tupper, and he's a member of the B.C. Business Council's environment committee and a former high school classmate of mine. I'll be meeting with him after question period.

The other guest here that I'd like introduce is Mr. Bill Woolverton, who is with us from down the way on the Island. He is the chair of our party's standing committee on the economy and the environment. Would the House make both of these gentlemen welcome.

H. Bains: I also would like to join with my colleagues from Columbia River–Revelstoke and from Cowichan Valley in welcoming members of my old union: Mo Gidda, Steve Drescher, Jaswant Sanghera, Doug Tingley and Trena Legge. Mr. Speaker, I just want to say that these men and women have a lot to do with who I am and what I have learned as a trade unionist. Please help me welcome them to this House.

S. Simpson: I am really pleased to introduce a couple of guests and friends who are here visiting us today, Tom Dufresne and Mark Gordienko. Who they represent is the International Longshore and Warehouse Union, the Canadian area, Tom being the outgoing president and Mark the incoming president. I hope everybody will make them welcome.

S. Hammell: I rise today to introduce a number of guests who are here from the Chilliwack-Hope area. They're here to observe the swearing-in ceremony.

I would like to introduce Al Ens, who is the president of the federal constituency association; Richard Harrington, a former campaign manager; Jennifer Woodruff, who put in countless hours in the campaign; Chris Gadsen, who is a director of the Vedder River Cleanup Society; Edward Gardner, a leader in the communityand a wild salmon warrior; Heather Plett and Myron Plett, who are former coworkers of the new member; and members of the family of the new member for Chilliwack-Hope — Paden Harris, Jennifer Blanchard, Lee and Geraldine Flemming, Glen Thompson and Michelle O'Mahony. I would like the House to make them welcome.

I would also ask the House to please join me in making welcome two personal introductions of mine, Brett Barden, my amazing CA, and Sukh Johal, a member of the constituency association. Would the House also make them welcome.

J. Kwan: A little over a year ago I met a wonderful woman at the Burnaby Board of Trade. She is a small business person, and she is very involved in the community, particularly in the Korean community. She works endlessly in her church, as well, in connecting members of the community with the broader universe that she's connected with. I would like the House to please welcome Sophia Bae, and she is visiting the House today with her mother.

By-Election Results

Clerk of the House:

May 7, 2012

Hon. Bill Barisoff

Speaker of the Legislative Assembly

Dear Mr. Speaker:

On October 6, 2011, this office received your warrant advising of a vacancy in the Legislative Assembly resulting from the resignation of Iain Black, member for the electoral district of Port Moody–Coquitlam. On January 30, 2012, a second warrant was received after the resignation of Barry Penner, member for the electoral district of Chilliwack-Hope.

On direction from the Lieutenant-Governor-in-Council, I simultaneously issued writs of election for the electoral districts of Port Moody–Coquitlam and Chilliwack-Hope on March 22, 2012, ordering by-elections be held to fill the vacancies. The writs specified general voting day to be April 19, 2012.

The by-elections were held in accordance with the provisions of the Election Act, and the completed writs of election have been returned to me.

In accordance with section 147(2) of the Election Act, I hereby certify the following individuals to be elected to serve as members of the Legislative Assembly: Joe Trasolini of the B.C. NDP for the electoral district of Port Moody–Coquitlam; Gwen O'Mahony of the B.C. NDP for the electoral district of Chilliwack-Hope.

Sincerely,

Keith Archer, PhD

Chief Electoral Officer

British Columbia

[1350]

Hon. S. Bond: I move that the certificate of the Chief Electoral Officer of the result of the election of members be entered upon the Journals of this House.

Motion approved.

A. Dix: Mr. Speaker, I have the honour to present to you Gwen O'Mahony, the member for the electoral district of Chilliwack-Hope, and Joe Trasolini, the member for the electoral district of Port Moody–Coquitlam, who have taken the oath, signed the parliamentary roll and now claim their right to take their seats.

Mr. Speaker: Please proceed. [Applause.]

Now I'll ask the members to take their seats in the Legislative Assembly.

The hon. members for Chilliwack-Hope and Port Moody–Coquitlam took their seats.

Introduction and
First Reading of Bills

BILL 47 — COASTAL FERRY
AMENDMENT ACT, 2012

Hon. B. Lekstrom presented a message from His Honour the Lieutenant-Governor: a bill intituled Coastal Ferry Amendment Act, 2012.

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

Motion approved.

Hon. B. Lekstrom: Bill 47 amends the Coastal Ferry Act. The amendments are required to respond to the recommendations contained in the independent B.C. Ferry Commissioner's report presented to the province in January of this year. The report is the product of the Ferry Commissioner's public review of the current coastal ferry services–model system.

The amendments will help address concerns about the affordability of ferry services that prompted the review. The principles of the act are being amended to ensure that the primary role of the B.C. Ferry Commissioner is to balance the interests of ferry users, the interests of taxpayers and the financial sustainability of ferry operators.

The amendments will also provide the Ferry Commissioner with greater discretion when setting price caps, allowing, for example, cross-subsidization between routes. These changes will help reduce the pressure for higher fares.

The commissioner will also have enhanced regulatory oversight powers to improve the efficient delivery of ferry services. The commissioner will be able to approve major capital expenditures, conduct routine performance reviews, request ferry operators to prepare plans, review policies, conduct public consultations and make service level adjustments. The commissioner has been given additional tools to deal with the extraordinary circumstances, no longer being restricted to just increasing the price caps.

The amendments are part of a comprehensive response to the Ferry Commissioner's recommendations, a response that is based on a vision where all three parties — taxpayers, ferry users and ferry operators — contribute to ensuring that coastal communities are connected in an efficient, affordable and sustainable manner. I will provide more information on these amendments at second reading.

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

Bill 47, Coastal Ferry Amendment Act, 2012, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

[1355]

Statements
(Standing Order 25B)

BRAIN CANCER IN CHILDREN
AND HANNAH'S HEROES FOUNDATION

L. Reid: There can be no more terrifying a diagnosis than the words: "Your child has a brain tumour." Every year the parents of more than 3,500 children in North America hear those words. Brain cancer is an extremely aggressive disease that is difficult to cure and has a high mortality rate.

Brain tumours are the most common solid tumours and the second leading cause, after leukemia, of cancer-related deaths in children. The majority of children — 80 percent — with the more aggressive forms of brain tumours will not survive more than two years.

Surgery and chemotherapy are the mainstays of current treatments of brain cancer. Surgery for brain tumours is especially challenging because of the sensitive location of the tumours. Children who have undergone the brain tumour surgery often experience long-term difficulties in learning and memory.

Complete surgical recession is often impossible due to the invasive nature of the tumours. Adding to that, in certain groups of patients the tumours become resistant to the current chemotherapeutic drugs, leaving no other treatment options.

Hannah Dale Hatlen was five when she died of brain cancer. In her honour, her family created Hannah's Heroes, a foundation which is today funding pediatric
[ Page 11724 ]
brain cancer research at the Child and Family Research Institute at B.C. Children's Hospital. Their research is dedicated to all the patients and their families who struggle against pediatric brain tumours.

The pediatric brain tumour research group has new data which shows that brain tumour cells must have a protein called PLK1 to divide. PLK1 levels are higher in cancer cells than in normal cells. When this protein is blocked, cancer cells either die or their growth is suppressed.

The role of PLK1 is largely unexplored in pediatric brain cancers and could be a crucial new link in treatments. Heartfelt thanks to this team of researchers who every day bring hope to B.C. families, and to Cathy Lee, graduate student and the first Hannah's Heroes fellow.

DOWNTOWN VICTORIA BUSINESS
ASSOCIATION AND
RECYCLISTS COMPOST PROGRAM

C. James: Less than two years after it began, the reCYCLISTS program is being expanded by the Downtown Victoria Business Association. This pedal-powered zero-emission compost and recycling service has diverted more than 15,000 kilograms of organic and recyclable waste from area landfills since it began in September of 2010.

A modified pedicab-style trike, which is piloted by a member of the DVBA clean team, picks up the waste. Each trike can carry 200 kilograms of compost or recycling material at a time. Last year the program was expanded to include pickup of difficult-to-recycle items such as soft plastics, Styrofoam and CFL bulbs. It's a progressive and cost-effective alternative to waste disposal and fits perfectly with the association's exceptional commitment to sustainability.

Right now 30 Victoria downtown businesses actively participate in the program, and the association is looking for more. Along with an expanded role for the reCYCLISTS, the DVBA has also introduced its green index. It's an on-line tool to inspire businesses to incorporate more ways to help their operations be sustainable.

The DVBA, led by a very committed and forward-thinking board, is always looking at ways to do things better. They're part of a provincewide network of about 60 business improvement associations. Together, these associations represent 40,000 member businesses that are the lifeblood of their communities.

As social conditions and economic challenges evolve, these business improvement associations play an important role. The most successful ones are responding to the change by being innovative and agile.

The Downtown Victoria Business Association is certainly an example of problem-solving by thinking differently. They're leaders in our community, and I hope members of this House will join me in thanking them for their forward thinking and their leadership in pedalling for a better planet.

MINING INDUSTRY EMPLOYMENT
IN NECHAKO LAKES AREA

J. Rustad: Next week is Mining Week, and I know we're going to hear a lot of wonderful things from the ministry. I'd like to take this opportunity to highlight how mining is helping families in my riding of Nechako Lakes.

My area is host to Endako Mines, Huckleberry Mines, New Gold's Blackwater project, which they're hoping to start construction on in 2015, and servicing Mount Milligan. In addition, there are more than a dozen exploration projects driving employment opportunities.

After the tragedy at Babine Forest Products, Endako mine is now employing 36 displaced workers. Some are with Mount Milligan, and Huckleberry is also working with the community to explore opportunities.

But it's not just about the families directly supported by these operations. There are also many spinoff benefits helping to build strong communities. Brad Miller from Fort St. James experienced an incredible surge of business, thanks to construction at Mount Milligan. Brad was in the right place at the right time when someone suggested that he haul drinking water with his 1978 gravel truck.

[1400]

Up until then, he had no work. Now, he hasn't had a day off since November 6, 2010. He says it's changed his life.

With two Bobcats, an excavator, six trucks and over 30 employees, he takes care of site maintenance at the mine. Bam Bam Trucking, named after his bam-bam of a daughter, Brady Anne Miller, is a thriving, successful business, and his family has a stable future.

It's clear that mining is imperative to our province's future. All members should do everything they can to expand the success by supporting projects around the province, projects like the Prosperity mine. In preparation for Mining Week, I want to say thank you to my determined constituents who have helped build this industry and to everyone who has helped make these opportunities a reality.

VEDDER RIVER CLEANUP SOCIETY

G. O'Mahony: The Vedder River flows through my riding of Chilliwack-Hope, and each year thousands of Pacific salmon and steelhead make their way back to this river as spawning adults. The Vedder River is home to the bull trout, rainbow trout and mountain whitefish. In the lower river the native birds, such as the great blue heron and bald eagles, nest and hunt.

The Vedder River's scenic setting is within a short travel distance from Vancouver and has become known as a recreation corridor with rafters, campers, anglers,
[ Page 11725 ]
birdwatchers and hikers visiting the area all year round. While the majority of visitors are respectful of the Vedder River's sensitive habitat and picturesque beauty, unfortunately, with increased usage through the years, the area has also become a dumping zone.

From beer cans left strewn around campfire pits to abandoned vehicles, the reckless dumping has not only created an unpleasant eyesore but a dangerous environmental hazard. Fortunately, in response to the growing needs of the river, the Vedder River Cleanup Society formed in 2002. From Styrofoam cups to illegal grow-op refuse, the society has removed more than 70 tonnes of garbage. They arrange three group cleanups per year, each drawing between 100 and 250 participants.

I've had the pleasure of working with these dedicated members, and I am greatly encouraged by the work they have done and continue to do each and every day, as many of the society's volunteers keep a careful watch on the river between scheduled cleanups. While it is discouraging to witness flagrant disregard for an area that both wildlife and people depend upon, it is heartening to know that groups such as the Vedder River Cleanup Society exist.

WEST VANCOUVER
SHORELINE PRESERVATION SOCIETY

R. Sultan: West Vancouver Shoreline Preservation Society is a volunteer organization seeking to enhance our foreshore, the beach area between low tide and high tide. Children play on our beaches, and of course, marine creatures inhabit it when the shoreline is properly preserved. Unfortunately, a comparison of photographs reveals West Vancouver's foreshore is a thin remnant of what it once was.

Why? There are a variety of reasons: damming of the Capilano River, blocking the flow of sandy sediments; private bulkheads, tending to convert beaches into ocean; and rock removal, discouraging both sediment capture and marine life.

How can beach erosion be replaced with beach accretion? Shoreline Preservation Society to the rescue. Ray Richards, Jack Wood, Beryl Allen, Chuck Brawner, Kevin Webb, Hugh Hamilton and Bryan Williams, in close collaboration with the municipality and the streamkeepers, are implementing measures which provide groynes or dikes to capture the sediments flowing down many other streams; artificial reefs offshore to break the waves and encourage kelp growth and creatures of the sea; and educated landowners who appreciate the long-term futility of bulkheads.

The good news? Slowly but surely our beaches and marine life are being restored. Thank you, Shoreline Preservation Society.

[1405]

NOONS CREEK HATCHERY AND
PORT MOODY ECOLOGICAL SOCIETY

J. Trasolini: First, let me say how happy I am to stand here today representing the people of Port Moody–Coquitlam, Anmore and Belcarra in the B.C. Legislature.

The Noons Creek Hatchery is located at the mouth of Noons Creek in Port Moody. The hatchery is operated by the Port Moody Ecological Society, founded in 1991. Also located on the grounds are a water quality lab and outdoor classrooms for school children of different grades.

The Port Moody Ecological Society is an entirely non-profit volunteer organization. Although there are hundreds of volunteers, I wish to mention two key award-winning contributors here today: founding president Rick Simpson and noted environmentalist Dr. Elaine Golds.

The most popular event that takes place at the hatchery is the yearly Fingerling Festival held on the first Saturday in May. This past Saturday I was there for the 21st anniversary of this successful family event. It was delightful and inspiring to watch hundreds of children releasing the fingerlings from their buckets into the waters of Noons Creek.

This day-long event is one of the largest and fastest-growing environmental festivals in British Columbia. It showcases over 50 organizations and businesses, and it attracts over 4,000 people.

This is a celebration of renewal and hope. Our hope is that our children will learn to love the environment and grow to promote ecological health. Please join me in congratulating all of the volunteers of the Port Moody Ecological Society for their amazing contribution.

Mr. Speaker: I want to commend the new members for keeping their two-minute statements under two minutes.

Oral Questions

CHANGES TO ADULT EDUCATION COURSES
FOR HIGH SCHOOL GRADUATES

A. Dix: Many adult British Columbians, even if they've graduated high school, need to upgrade their high school credits to take advantage of post-secondary education, training and job opportunities. Last week the Ministry of Education informed school districts that a program that provides high school courses to high school graduates is being cut substantially.

My question is to the Premier. Given the importance of education and training to our economy, why is the government again cutting access to post-secondary education and training opportunities for adults?

Hon. G. Abbott: First of all, we should note that for
[ Page 11726 ]
those students who have not graduated from high school, there is absolutely no change. The courses continue to be free and continue to be available. For those who have graduated from high school and are looking at upgrading, they will continue to have free core subjects in vital areas like English, math, social studies, science, etc., and that constitutes about 60 percent of the course work.

Where one has seen a big change in terms of the dollars, because the cost of this has moved from $1.5 million five years ago to $15 million today, is in the proliferation of elective courses. For example, there will be changes with respect to things like film and television, photography, art preview, equine studies — all of which are, I'm certain, enormously interesting to the individuals who take them, but they are not consistent with the education guarantee.

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

A. Dix: Physics, calculus, financial accounting, law, digital media development, marketing and tourism are other programs in question as well. I think the minister will acknowledge that these are important programs and that students should have access to them. The government announced it with great fanfare when they did.

It's easy for the government to say the programs should be cut; harder for those students that need access to those programs to achieve what they need to achieve in the future. The government has cut apprenticeships. They've announced cuts to post-secondary education. They're cutting access….

Interjections.

A. Dix: Well, they have.

Mr. Speaker, the members opposite…

Interjections.

Mr. Speaker: Members.

A. Dix: …are simply out of touch. The members opposite are simply out of touch with their own material, with their own reports that show that 80 percent of the jobs of the future require post-secondary education. And this is the jurisdiction in Canada that's cutting post-secondary education and access to education.

[1410]

I think the minister will agree that there are some students who are going to be denied access. This is a new barrier to education for those students. Can the minister explain why the government is taking this action at this time?

Hon. G. Abbott: First of all, it's very clear that for those who are seeking to move on to university, there will be no changes that will limit their opportunity to go on to university. In some cases some of the elective courses will be free on line. In other cases…. This is a change.

I know the Leader of the Opposition smiles, because he has never had to make a difficult decision. And as long as they never form government, he never will have to make a difficult decision.

For those courses that are essential to getting a high school degree, they are free and are continuing to be free. For those who are going back to high school to retake courses so that they can upgrade their status for university, again, those will continue to be free.

What we are concerned about…. Again, I know in the realm of difficult decisions, this might be a horribly difficult decision for the Leader of the Opposition. We are seeing completion rates as low as 35 percent in some of these courses, particularly the elective courses.

It is inconsistent with the best use of the taxpayers' dollars that we see full funding for things like photography, film and theatre, etc., when we can reinvest those dollars in early childhood education and literacy programs that make a difference.

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

A. Dix: The difficult decisions aren't being faced by the government. The difficult decisions are being faced by young people, by adults who need skills, who need their skills upgraded, who need access to courses like physics, which apparently is an alternative, for the Minister of Education. That's the problem here.

My question is to the Premier, frankly. The government is cutting apprenticeships, cutting opportunities, cutting advanced education and skills training. That's their plan. That's their plan in a skills shortage — to cut off opportunities for young people. It is not the right approach.

While the minister talks about saving money, let's talk about BCeSIS. Let's talk about advertising the Premier's jobs plan. How about putting money into education for young people? How can the minister, at a time when young people need more access to education, not less…?

Interjections.

Mr. Speaker: Members.

A. Dix: How can the Premier justify these continuing cuts?

Hon. G. Abbott: It's unfortunate that, clearly, the Leader of the Opposition didn't do his homework on this before he raised the issue. Again, it is going to be free and continuing for those who are seeking graduation from high school. For those who are going back and upgrading,
[ Page 11727 ]
again, it will continue to be free.

In some cases what the school districts may do is require a deposit, which will be returned to them upon completion, or at least substantial completion, of the course.

The Leader of the Opposition always has all the answers, because he never has to make any difficult decisions. So to the Leader of the Opposition: if one had to choose between equine studies or photography or film and theatre — again, all of which are very fine things…. If he is going to pretend to one day be able to lead a government in British Columbia, surely he can make a decision between those things and early childhood education and literacy programs, which are vital for the future of this province.

[1415]

R. Austin: Upgrading high school courses is essential for many adult high school graduates who find their opportunities limited due to a lack of qualifications. Of course, many of these graduates are struggling to get by and have limited financial means to pay for courses. For a variety of reasons, on-line education is not a suitable option, often because they don't have access. The popularity of these courses is a testament to their importance, with full-time-equivalent student enrolment having risen almost tenfold in less than five years.

Again to the Minister of Education: when will he restore free access to these courses so that no British Columbians are denied access to the education they need to maximize their potential and unlock future opportunities with better higher-skilled, higher-paying jobs?

Hon. G. Abbott: Well, there is no need to restore it because it has not been lost. As I explained to the opposition leader, for those who are seeking high school graduation, it remains free and is continuing just as it has in the past. For the core courses that one requires, for example, for admission to university, it continues to be free for those who wish to do that. Where there will be a change is around some of the electives involved.

Again, I hope this is not too tough. I mean, if this is an early test, Mr. Speaker, for an opposition that pretends to someday want to be in government…. Will they really have a tough time making the decision between the core courses required for university entrance, or would they go with continued full funding of things like film and television, family studies, photography, equine studies, art preview, portfolio skills, etc.? What we have seen over the last five years is a proliferation, under the education guarantee, of these kinds of courses.

If this is too tough a decision for this government-in-waiting to adopt, they should let us know today.

Interjections.

Mr. Speaker: Members.

The member has a supplemental.

R. Austin: This comes from a government that spent $100 million on a computer system, BCeSIS, which never even worked over its ten years of trying to make it work.

This government's approach to education and training is incredibly shortsighted. Everybody knows that business and industry and our entire economy rely on our K-to-12, post-secondary, and trades and apprenticeship systems to supply well-trained, well-educated workers.

Yet at every turn, this government seems intent on putting up barriers to those who want to better themselves. It's not just the individuals who can't afford tuition who suffer, though that in itself should be cause enough to rethink these policies. It's the entire province that is affected.

When is this minister going to reverse this shortsighted, ill-considered decision, restore funding for these courses and stop denying British Columbians the chance to get the education and training that they need?

Hon. G. Abbott: Well, it is obvious from that question and the other questions we've received today that this supposed government-in-waiting is going to be waiting for a long, long time, Mr. Speaker — a long, long time.

[1420]

I think every member on this side of the House is enormously proud not only of the investments that we have made in StrongStart, in full-day kindergarten and in enhanced programs in kindergarten through grade 12 but also of the 25,000 new seats in colleges and universities across this province.

When you stack up those investments against the sorry record of this government from 1991 to 2001, you could not see a clearer contrast between a government that makes appropriate investments, that makes tough decisions and opposition members that run away from even the easiest decision that they could ever make around education, both at K-to-12 and secondary.

FUNDING FOR
POST-SECONDARY EDUCATION
AND SKILLED LABOUR SHORTAGE

M. Mungall: Yesterday Capilano University, which of course is right in the backyard for the Advanced Education Minister, passed their budget. Here's what that budget document says: "Next year in addition to seeking ways to increase revenue, we will most certainly be forced to reduce programming and/or student services, as the ministry has announced a $20 million cut in the post-secondary education system."

My question is to the minister of Advanced Education. Institutions know, economists know, industries know that cutting post-secondary education will worsen the
[ Page 11728 ]
skilled labour shortage. Why doesn't she?

Hon. N. Yamamoto: I know that our Minister of Finance has been wanting to get a question, so I'm going to, on his behalf, tell you that we have been through the worst recession in 70 years. B.C. has fared this global economic downturn better than almost any other jurisdiction in North America. Governments all around the world have to control their spending, and B.C. taxpayers expect us to do the same.

This government's strong fiscal policies are attracting investment to B.C. This government's strong fiscal policies have created the environment for growth. Because of this government's strong fiscal policies, our triple-A credit rating was just reconfirmed. [Applause.]

There was applause from this side of the House. Nobody from the opposite side of the House applauded, because they don't actually get the significance of this. I know if the NDP were in government right now, our economy wouldn't be growing, investment wouldn't be coming to this province, and instead of predicting a growth in jobs, people with skills would be leaving B.C. to find work.

Mr. Speaker: The member has a supplemental.

M. Mungall: It's a real shame. The Minister of Advanced Education is looking for a new job title, the minister of rhetoric, because that's all she just offered.

The fact is that we have a major skills labour shortage on line right now, and Capilano University is not alone in sharing their concerns about this. In February all 25 presidents of public post-secondary institutions wrote the minister, making it clear that the impending cuts that her ministry is putting forward are going to hurt students. It took six weeks for her deputy minister to write back, and she still asserted that the cuts wouldn't be felt by students.

When is the minister going to stop denying the seriousness of the situation? The seriousness of the situation is that the biggest economic woe for British Columbia is that skilled labour shortage, and she's making it worse. When is she going to recognize that those cuts to post-secondary education are going to be detrimental for B.C.'s economy?

[1425]

Hon. N. Yamamoto: Let me remind the member opposite that we have asked the college and university sector over a two-year period to reduce just 1 percent of their administration expenses — 1 percent. We invested $1.9 billion in operating funding for our institutions this year, a record investment in operating.

That's over $5 million a day, and that doesn't even include the huge investment that taxpayers have made in capital. You can't walk onto any of our campuses these days without being amazed at the investment that this government has made.

Let's put this into context. This government inherited a system that was starving for capital, starving for operating and starving for student spaces. It was well known, while the NDP were in government, that if you wanted to enter university in Canada, it was harder to get into a university in British Columbia than any other province in Canada.

RETURNING THE FAVOUR CARE HOME
AND ASSISTED-LIVING SPACES
IN PORT ALBERNI

S. Fraser: In Port Alberni, as in many places in the province, there is a shortage of assisted-living spaces for seniors. Yet despite these wait-lists, a small home-like facility known as Returning the Favour is being denied clients by VIHA, by the health authority. The facility is fully licensed and accredited. Residents and their families and health care professionals in the valley want Returning the Favour to stay open. Seniors in Port Alberni deserve that kind of service.

Will the Health Minister explain why those in need of assisted-living services are being denied these services when there is already a shortage of assisted-living spaces in the Alberni Valley?

Hon. M. de Jong: The member is describing a matter that he has brought to my attention previously, and which I have discussed with him. The challenge, of course, is this. We set standards to ensure that seniors in British Columbia, when they access assisted-living facilities and homes, will live in a dignified and proper environment. That is as it should be.

We have made great progress in expanding the range of rooms and living options that are available to seniors. It would be easy to stand here and say that we'll make exceptions, but we owe it to seniors to ensure that everywhere in communities across British Columbia we are providing them with assisted-living options that meet the standard that we would want to see in place for our parents and grandparents. That is the standard that will be in place.

Mr. Speaker: The member has a supplemental.

S. Fraser: That's an interesting answer. I mean, seniors in an acute care bed in the West Coast General waiting for assisted-living spaces is not exactly quality health care.

I raised this with the minister over a year ago, and nothing has happened. The problem is that VIHA is trying to downgrade this facility to supportive housing while there is a critical shortage of assisted-living spaces. It doesn't make any sense.

This facility isn't a supportive housing facility. Every one of its 11 spaces is registered as assisted living under
[ Page 11729 ]
the registrar, and VIHA is charging the families assisted-living rates. So VIHA, and maybe the minister here, is playing games.

The important thing is that my community needs access to these assisted-living spaces. Will the Health Minister explain why these needed spaces aren't available to seniors in the Alberni Valley?

Hon. M. de Jong: The member, in pursuit of his cause today, chooses, I think deliberately, to ignore one fundamental fact, and that is that ten years ago the wait-list for residential care and assisted-living facilities in this province extended, in communities across B.C., to over a year. Over a year seniors and their families were obliged to wait, because there simply weren't any options available. Today that has been reduced to 90 days.

[1430]

Is there more to do? Most assuredly there is. But the best guarantee we can give to seniors about our commitment to make further improvements is to look at the record of achievement that has been made over the last ten years.

MANAGEMENT OF INTERFACE FIRE RISKS

N. Macdonald: Last year we were reminded of the dangers of wildfire when a fire swept into Slave Lake in Alberta, causing $700 million in damage. The Filmon report in 2003 stated that fuel treatments in forests interfacing with communities had to be done as a priority. As the minister knows, it's essentially firebreaks.

To date, since 2003, only 2.6 percent of the work identified as needing to be done has actually been done. It's clear, I think, to anybody looking at this that the government's approach does not work. When will British Columbians see an effective interface fuel management plan from this government?

Hon. S. Thomson: We take the wildfire risk very, very seriously, and that's why I know that on both sides of the House we recognize that we have a world-class fire management team and fire management system in place with our staff and the fire management branch. I'm confident that they've planned and they're prepared for the upcoming season.

That's why we've invested over $62 million in the strategic wildfire management program, working with communities and First Nations across the province, putting those fire protection plans in place. And 285 communities have taken advantage of that program.

The program continues. There's still funding available to communities to participate in the program, new intake periods for that program. We'll continue to work with communities to make sure they're prepared for the upcoming season.

Mr. Speaker: The member has a supplemental.

N. Macdonald: So let's listen…

Interjection.

Mr. Speaker: Member.

N. Macdonald: …to the answer there, because the assertion I made was that this is ineffective. The Association of B.C. Forest Professionals reports that only 44,000 of 1.7 million hectares identified as needing treatment have actually been treated. What the minister answered was that they've spent a lot of money. So basically, it's ineffective and expensive, and that's the problem.

There needs to be a new approach. That is clear to anyone who has looked at this issue. When is the government going to put in place an effective program so that communities are protected as we head into the next wildfire season?

Hon. S. Thomson: As I said, we have a world-class wildfire management branch in this province, one that has got great professionals in the branch, one that is actively recruiting and training the people needed for the upcoming season. Again, we invest very, very significant resources in community wildfire planning.

The members opposite like to quote reports, and the Forest Practices Board report…. Maybe they should just look at what this report said. In their follow-up report in February the Forest Practices Board released their report on fire management planning. It acknowledges that not only are we acting on the recommendations; we've taken positive steps to improve fire management planning. The overall standards of quality, completeness and timeliness are very good, and 94 percent were adequate for intended purposes.

PRIVATIZATION OF
LIQUOR DISTRIBUTION

S. Simpson: We've asked the government to produce a business case to justify the Liberal warehousing privatization to prove that it's good for British Columbians and good for taxpayers. We've asked for it numerous times. It's not been provided.

Interjections.

Mr. Speaker: Members.

Member, just take your seat for a second.

Interjections.

Mr. Speaker: Members.

Continue, Member.
[ Page 11730 ]

[1435]

S. Simpson: Hon. Speaker, when they don't have an answer, they laugh. A nervous laugh it is. Today we have asked for this business case, and the government hasn't provided it. We simply believe that it does not exist and that it's never been done.

Today in Vancouver at a government briefing on this issue, numerous business interests asked question after question about pricing and cost structures, and they got no satisfactory answers from government officials. This process is unravelling as an inept B.C. Liberal exercise. It's ideologically driven and gets called further into question every time we get a little more information.

Would the minister either table in this House the business case or tell us the truth — that it does not exist?

Mr. Speaker: Before you start, I want to remind the member to just be careful of his language.

Hon. R. Coleman: I know that when the member is at the end of question period, he's trying to find a question. He feels the best way to do it is just shout it across the House, because he's got no depth in the question.

The reality is that we're out to negotiate an RFP. Part of the process in Vancouver today was an open process. The questions will go away. They'll be answered back to the people who asked them. That's the process in place. Tomorrow it will be a meeting with the proponents that are interested in bidding on the process. As I told the member before, it's about warehousing and distribution. It will be a fair process. It will be taking place.

I don't know what the member is so afraid of. The fact is that rather than go and build a multi-multimillion-dollar warehouse to modernize our own distribution system, we go to the marketplace to save taxpayers tens of millions of dollars and, at the same time, find some other revenues to offset the budget so that we can take care of health care and education and the things that are important to British Columbians, when this isn't a business we necessarily need to be in.

I don't know what the member's problem is. The reality is that the RFP is out. It will be done properly. It is being done properly. The member opposite can go and make up any story he wants, which he does from day to day with regards to this issue, and he'll still be wrong at the end of the day.

[End of question period.]

Reports from Committees

J. Les: I have the honour to present the report of the Special Committee to Appoint an Ombudsperson.

I move that the report be taken as read and received.

Motion approved.

J. Les: I ask leave of the House to move a motion to adopt the report.

Leave granted.

J. Les: Mr. Speaker, I move that the report be adopted.

Motion approved.

J. Les: I ask leave of the House to permit the moving of a further motion requesting the Lieutenant-Governor to reappoint Kim Carter as the Ombudsperson for the province of British Columbia.

Leave granted.

Motions Without Notice

APPOINTMENT OF OMBUDSPERSON

J. Les: By leave, I move:

[That this House recommend to His Honour the Lieutenant Governor the appointment of Kim Carter as a statutory officer of the Legislature, to exercise the powers and duties assigned to the Ombudsperson for the province of British Columbia pursuant to Section 2 (2) of the Ombudsperson Act (RSBC 1996 c. 340).]

In conjunction with the moving of this motion, I would like to explain briefly why the committee was pleased to make the unanimous recommendation to reappoint Ms. Carter for a second six-year term to the position of ombudsperson.

The special committee was impressed with the incumbent's dedication and accomplishments during her first term. The members believe that British Columbia will continue to be well-served by Ms. Carter's solution-oriented style and her commitment to administrative fairness.

In closing, I would extend my sincere appreciation to all members of the committee for their dedication and their contribution to this selection process.

M. Elmore: I rise and would also like to give my comments and thank the Chair of the committee and also the entire committee for a very thorough and thoughtful consideration of the reappointment. We were able to reach a unanimous decision to recommend to reappoint the Ombudsperson, Kim Carter.

[1440]

We're very impressed with her, her expertise and her innovative leadership and also her vision for the office.

Motion approved.
[ Page 11731 ]

Orders of the Day

Hon. R. Coleman: In this House this afternoon we will start committee stage of Bill 41, intituled Miscellaneous Statutes Amendment Act (No. 2), 2012. For the information of members, by agreement, section 4 of this particular piece of legislation will move over to the end of the debates or be stood down until the critic for Finance and the Minister of Finance are available, because they're both in estimates this afternoon. We have that by agreement, so if we complete that, that section would be passed, as well as the committee stage, later on.

Moving after that in committee stage, we would go to Bill 36, intituled the School Amendment Act; followed by Bill 37, intituled the Animal Health Act; and then Bill 40, intituled the Legal Profession Amendment Act.

In the Douglas Fir Committee Room this afternoon we will continue the estimates of the Ministry of Finance. Should they complete that today, early, then we would move to the Ministry of Health.

Committee of the Whole House

BILL 41 — MISCELLANEOUS STATUTES
AMENDMENT ACT (No. 2), 2012

The House in Committee of the Whole (Section B) on Bill 41; L. Reid in the chair.

The committee met at 2:45 p.m.

The Chair: Hon. members, we are considering section 74.

On section 74.

M. Farnworth: Section 74, the Health Professions Act, is the application of Labour Mobility Act to nurse practitioners. In this section, section 20.02 states:

"(2) The Labour Mobility Act does not apply in respect of the occupation of nurse practitioner. (3) Section 20 (4.1) (e) of this Act does not apply to a person applying for registration to practise as a nurse practitioner under this Act. (4) The Lieutenant Governor in Council may by regulation repeal this section, and on that repeal section 6.1 of the Labour Mobility Act is also repealed."

Can the Minister of Health explain the purpose of this section, please?

Hon. M. de Jong: I can, and that may be the best question to ask at this stage of the proceedings. Here are the circumstances that we find ourselves in with the advent of nurse practitioners in British Columbia, which I think all members agree has been a positive thing and is a positive thing. We hope to utilize even more of them in a greater variety of roles.

There continues to be discussion and debate nationally about the qualifications to become a nurse practitioner. Fair to say that in British Columbia we have set the bar the highest, particularly by requiring nurse practitioners to have successfully written something called the OSCE, the objective structured clinical examination. The OSCE is a significant examination; it's a tough examination. British Columbia requires nurse practitioners to have successfully passed it before they are qualified to practise as nurse practitioners. We believe that's appropriate. That is not the standard that has yet been adopted, although there continue to be discussions, at a national level.

The situation we are endeavouring to avoid with the introduction and, hopefully, passage of this section is where nurse practitioners arrive from other jurisdictions in Canada and demand the right to practise without having completed that particular examination. One of the features of the section that the hon. member has already highlighted is the provision that would allow the exception to be repealed by regulation. That is included in the act as an indication of our hope and belief that the negotiations will prove fruitful and we'll arrive at a national standard that includes the requirements that we have, in which case the exception would no longer be required.

M. Farnworth: I'm glad the minister spoke about the OSCE, not to be confused with the Oscar. I do think it's important that we get on the record why this section is in place and the fact that we do have this exam. It sets a very high standard, as the minister pointed out. He's dealt with some of the questions I was actually going to have in the other section.

The question that I will ask at this particular point is…. If the intent of the ability to repeal at a future date is based on or is going to be determined by the adoption of our particular level of standards or standards that are acceptable to the province and basically are equivalent to what we have today, at that point it would be repealed. Does the minister have any sense of how long it will take, or has he any indication as to the speed at which these negotiations are taking place? Also, could he let me know if there are other provinces that already have in place the same standards as we do?

[1450]

Hon. M. de Jong: In reverse order, Quebec and Alberta have a similar requirement but with respect to a much narrower scope of practice, so it would be incorrect to suggest that the OSCE requirement exists across the board, even in those jurisdictions.

The first question around timing. I am reminded that, unlike a circumstance in which I would say to the member, "Well, we're in discussions, and within the next period of months we hope to have resolution," this one, I am advised, is likely to be in the 18-to-24-month period. It involves federal officials, multijurisdictional — sufficiently long, as frustrating as that might be, to warrant the inclusion of the provision in a law, albeit with an ability to
[ Page 11732 ]
rescind that law to avoid a circumstance where we have nurse practitioners with differing qualifications.

M. Farnworth: : I appreciate the answer from the minister. Has there been resistance from other provinces to the direction that we are going to go, to the point that, perhaps, there's pressure on British Columbia — to say: "You know what? Your standard is very nice, but it's a bit high, and we would like you to lower your standard"?

Hon. M. de Jong: Oh, yes.

M. Farnworth: I raise this because this particular section…. I mean, we have invested a lot of time and effort in this province in the development of the position and the role of nurse practitioners and the scope of practice around nurse practitioners. I think it's really important that we make it clear that the level of education, the level of training that we require in this province is not something that we are going to give up. That is important to B.C, and so I see this section as sending a strong message.

The question I have relates, because this deals with labour mobility, in particular to Alberta. Has the ministry examined the consequences or the potential consequences of TILMA upon this particular section? Is there any conflict with the Labour Mobility Act, which B.C. signed with Alberta, with regards to us enacting a section like this?

Hon. M. de Jong: Just confirming that we believe, following analysis, that the sections included here are consistent with the obligations we have assumed pursuant to interjurisdictional agreements.

M. Farnworth: Has the ministry looked at…? Would it be possible for this section to be challenged by an out-of-province nurse practitioner, for example, who is licensed in other jurisdictions within the country? Is there a sense, you know, that this will stand the test?

Hon. M. de Jong: Challenges are always possible. What I would want to say to the member, though, is our larger concern was that without the section, a nurse practitioner coming from another part of Canada without similar credentials, the OSCE component, would have been in a relatively strong position to demand to be registered as a nurse practitioner. That was our larger concern.

M. Farnworth: I appreciate the minister's answer, and I understand exactly where he's coming from. I think that that's something we want to make sure is addressed within the legislation.

[1455]

Can the minister outline for me the consultation that took place around this particular section with regards to nurse practitioners?

Hon. M. de Jong: A two-part answer. I don't want to create the impression that, with respect to this section itself, there were extensive discussions with agencies outside of British Columbia. There have been and continue to be discussions around the general issue, but I don't want to suggest that we took the section and alerted agencies outside of British Columbia. We did, however, engage specifically and directly with respect to these provisions with the college of nursing and the College of Physicians and Surgeons.

Sections 74 to 79 inclusive approved.

The Chair: Hon. Members, we've concluded sections 74 through 79, and we are returning to a consideration of section 1.

On section 1.

M. Mungall: So section 1 and the following 12 sections have to do with the Engineers and Geoscientists Act. I just have a few questions that I would like to put down on the record just to make sure that the House is doing its due diligence.

On section 1, where it says, "Subject to the bylaws made under section 10 (1) (b.2), nothing in this Act or the bylaws," I'm just wondering if the minister can explain what the changes are there.

Hon. N. Yamamoto: This section inserts a reference to the new section 10(1)(b.2), which is enacted by section 4 of this bill, and to sections 2(6) and 2(7) of the act. Essentially what it is, is a cross-referencing amendment.

Section 1 approved.

On section 2.

M. Mungall: Section 2 makes some changes, saying that vice-presidents will now be elected by members. I'm guessing, then, that in the past or currently right now the vice-presidents are not elected by members. How are they chosen, and why has the government gone this route to have them elected by members?

Hon. N. Yamamoto: It has always, actually, been the practice that members do vote for the vice-president and the president. What this section refers to is the voting rights of the limited licensees, who will be considered as full members.

[1500]

M. Mungall: I just want to make sure that it's put on the record — the consultation that the ministry has done with the Association of Professional Engineers and Geoscientists, better known as APEG. I know that
[ Page 11733 ]
the minister and I often — in the estimates debate, as well as these types of debates — have a good chuckle at the amount of acronyms that can be found in the post-secondary education file.

APEG. I'm sure that the minister has done a considerable amount of consultation with them. I'm wondering if she can elaborate for this House what consultation she did do.

Hon. N. Yamamoto: Consultation by APEGBC — I guess we should probably say what it is; it's the Association of Professional Engineers and Geoscientists of B.C. — has been quite intense. It began with an examination of the legislation in 2009. Proposed amendments were identified back then and developed and reviewed by over 100 senior members and public appointees serving on various APEGBC task forces and committees.

Articles explaining and updating APEG's amendment proposals appeared in several of the publications, the association's magazines, throughout 2010. These were followed by membership surveys in October of 2010, and those results were published in December of 2010.

There have been presentations at two annual general meetings, at regional meetings, and there has been actually a task force report, which has been available on APEG's website now for several months.

M. Mungall: It does sound like…. The minister is well aware that APEG has been advocating for this for quite some time, and that's exactly what they've been telling me. I'm just wondering why the minister has, then, decided to bring this up at this time and not earlier. Was there some work that needed to be done to dot all the i's and cross all the t's, or is it just a matter of timing?

Hon. N. Yamamoto: As I just mentioned, the intensive examination of the amendments started in 2009 and concluded essentially in 2010, but it wasn't actually until 2011 that APEG did approach the ministry or approached myself for us to consider some of these amendments to their act. We examined some of their amendments, and the timing of the legislation is actually quite timely. This is the first opportunity that we've had to introduce it to the House.

Sections 2 and 3 approved.

On section 4.

M. Mungall: Section 4 establishes a council of conduct review program for members, licensees and certificate holders, it's my understanding. It also establishes the standards of practice or a code of conduct for that same group of people and requirements and procedures for reinstatement of former members.

I think this is part of the disciplinary process that they're looking to change — if the minister can just confirm that.

[1505]

Hon. N. Yamamoto: The member opposite is correct. This section actually amends the act to allow for these disciplinary measures to take place. What this section does is it just enables the bylaw-making powers so that APEG can actually do what we have intended for them to do.

Section 4 approved.

On section 5.

M. Mungall: Section 5 is giving "the holders of limited licences the same ability" as members of APEG "to apply to the court for an annual meeting to be held, to request a general meeting, to receive notice of a meeting and to request a vote by ballot." This is extending rights that exist by full members to those who have limited licences. I'm just wondering how this will impact the organization.

Hon. N. Yamamoto: The member opposite is right in summarizing the intent of this section. What it does is it allows a small number of limited licensees who have been considered members in good standing of the association to participate fully as full members. They currently pay full fees like a professional engineer but haven't, until these amendments, been able to participate as full members.

Section 5 approved.

On section 6.

M. Mungall: Section 6 allows the council — my understanding is it's the elected council of the association — to delegate its powers to the registrar. I'm just wondering if the minister could please provide an example of that type of delegation.

Hon. N. Yamamoto: Under the current legislation, all applications for membership must be submitted and approved by a registration committee of council, even the most routine of applications. What this amended provision could be used for, for instance, is to allow the registrar to process applications for admissions that are non-contentious because the applicants clearly have met all of the criteria for admission.

Section 6 approved.

On section 7.

M. Mungall: This section "allows the council to enter
[ Page 11734 ]
into an agreement with the governing body of engineers or geoscientists in another…jurisdiction." Specifically, it looks to me like they're saying that that other jurisdiction be another province. However, the wording in the explanatory note is "another province or another jurisdiction."

My first question on this section is: if it's not another province, what would be the other jurisdiction then? Is it in the United States? Is it anywhere in the world? Is there a specific idea of where this will be, or is it kind of wide open?

[1510]

Hon. N. Yamamoto: Again, this section is to facilitate national mobility. Section 14.1 is to deal with mobility within Canada. Section 14.2 — because this section 7 has two parts to it — deals with other jurisdictions. They could be other countries in other jurisdictions in the world.

M. Mungall: Then my next question would be in terms of the potential to displace British Columbia workers, and I have a concern around that. If we start bringing in professional engineers and geoscientists from other jurisdictions, that could potentially displace existing professional engineers and geoscientists here in British Columbia. I'm just wondering if the minister has addressed this issue at all with APEG and what they have said about that.

Hon. N. Yamamoto: I know as a former business person that if I can hire somebody within British Columbia or Canada to do something, it's a lot easier to do that. But APEGBC recognizes that this change will actually enable APEGBC to bring in highly qualified professional engineers whose skills, in some areas, we have a shortage of in British Columbia.

APEGBC already has a lot of these agreements with other countries to recognize credentials. What we're doing is making it easier for the mobility of workers and to ensure that we don't have projects in British Columbia being held up because we don't have that specialized skill working here in British Columbia.

[1515]

M. Mungall: The association, then, will be governing that labour mobility to ensure that no one here in British Columbia is displaced by workers from another jurisdiction?

Hon. N. Yamamoto: APEG will only enter into an agreement with another jurisdiction if it's beneficial to British Columbia. Also, I just want to add that this actually allows the freedom of mobility for our own workers to go to other jurisdictions in those areas where there are agreements to work as well.

Section 7 approved.

On section 8.

M. Mungall: Section 8 allows registrars "to channel complaints against members, licensees or certificate holders and requires a report to the investigation committee in specified circumstances." I'm just wondering if the minister can explain how this is differing from the existing process.

Hon. N. Yamamoto: Currently all the complaints that are received by the association must be referred by the registrar to a member for review, whether they're serious or whether they're minor or even unfounded.

What the new section is attempting to do is that instead of referring all the complaints to a designated member, the registrar can actually choose, instead, to refer a complaint to the practice review committee or the conduct review committee.

M. Mungall: I'm just wondering how this new complaint process…? Will it expedite the existing complaint process and allow things to be done in a more timely manner? Or does it add a few more hurdles so that there are further checks and balances? I'm not saying that if it expedites it, there wouldn't be a sufficient number of checks and balances. I just want to get a sense of how this will be felt by members in terms of the complaints process.

Hon. N. Yamamoto: What this will do is that complaints will be able to be resolved through less formal means. Overall, this should result in better outcomes with discipline that fits the seriousness of the complaint.

[1520]

We're able to actually triage the types of complaints. So if it's a minor offence, we're hoping that this new system will actually be able to deal with those minor complaints quickly and efficiently. If the complaints are more complex, then they will be directed to a practice and conduct review. If it's a very serious complaint, it will actually go to a disciplinary inquiry.

Section 8 approved.

On section 9.

M. Mungall: In section 9 what the explanatory note says is that it's repealing "an obsolete reference to section 32" in there, so it looks like it's doing some cleanup work, and "requires a person being investigated to appear before the investigation committee or subcommittee and allows the committee or subcommittee to make recommendations or to channel certain matters to the practice review or conduct review committee."
[ Page 11735 ]

My understanding here in reading this — and if the minister can just confirm if that is a correct understanding — is that this section is, first, cleaning up a little bit of the wording in the existing legislation, as well as further defining the complaint process and the disciplinary process.

Hon. N. Yamamoto: Yes, that is correct.

Section 9 approved.

On section 10.

M. Mungall: In section 10 the explanatory note here "requires a member or licensee to report disciplinary action taken against the person in another province and allows the council to refer any such matter to the discipline committee." Again, this is a change from the existing disciplinary process. That's my understanding. If the minister can just explain briefly how that change is different than the current process.

Hon. N. Yamamoto: Under the current legislation, to apply disciplinary action taken by other jurisdictions in British Columbia, the association must repeat the entire investigation and discipline process, including a hearing.

By allowing the association's discipline committee to make an equivalent order without a new hearing, this amendment will reduce the time and expense of duplicate proceedings, which will better protect the B.C. public, and it will make it harder for engineers who have acted improperly in other jurisdictions to simply relocate to British Columbia to avoid the consequences of their inappropriate conduct to occur here.

Section 10 approved.

On section 11.

M. Mungall: I beg your indulgence, Madam Chair. It just sounds like, with section 10…. We let it pass, but I think that the minister highlighted in her explanation how it basically means that if you just skip out of town, you're not off the hook, and I know that APEG really appreciates that.

For section 11, this is looking at "the personal liability protection of the council members," and it adds that "personal liability protection of employees, officers and people acting on behalf of the association."

I'm just wondering: currently, do these people not have the benefit of personal liability protection? And if the minister can explain: what is the benefit of doing this personal liability protection — of extending it to these people?

Hon. N. Yamamoto: This section protects the professional staff of the association, who in the past used to be professional engineers or geoscientists who were protected from being sued. Now the association is actually hiring staff who may not be professional engineers. They may be lawyers. What it does is it protects the employees of the association from being sued. Members already are afforded the protection.

Section 11 approved.

On section 12.

[1525]

M. Mungall: This section requires that anybody in a conduct review committee — my understanding is that that is a disciplinary process — "regardless of a claim of confidentiality" has to provide information.

I'm wondering if the minister could just please clarify exactly what that means and how it will impact members in terms of their rights to privacy and confidentiality.

Hon. N. Yamamoto: Right now if a member undergoes a review or a disciplinary action, they are obliged to provide the appropriate information for the case to be reviewed. Because we're adding different types of committees and reviews — in this case the conduct review committee — we're asking that the conduct review committee also be given that same power to request information from the member that may be under review.

M. Mungall: I'm just wondering, in discussions with APEG about this particular section, if the minister can just shed some light on any examples that they provided when they were consulting with the minister on why this type of section would be necessary.

Hon. N. Yamamoto: As I mentioned, members that are undergoing a conduct review already have to provide the relevant information. Because we've added an additional committee, a conduct review committee, we're asking that the legislation be changed so that the committee has the power to request the appropriate or relevant information with respect to the issue or the engineer that may be under review.

Some of those examples may be past complaints of the professional involved or past practice complaints. What this may do is show a pattern of conduct that may be of concern to the conduct review committee.

M. Mungall: I just want to thank the minister for bringing this legislation forward. I know that APEG has been wanting to see it for quite some time, as we already noted.

I'm really pleased to see it come forward, and I appreciate her and her staff for taking the time to just go through a few questions and put them on the record. I know that I
[ Page 11736 ]
always like to do this, because you never know when you might get an e-mail or phone call or a letter in the office. We want to be able to send it out to those APEG members to show them that, yes, we did have these conversations, we did ask these questions, and both the government side and the opposition side were satisfied with everything.

So I just want to say that and thank the minister.

Section 12 approved.

[1530]

The Chair: For the information of members, we're moving to consideration of amendments under "Community, Sport and Cultural Development," part 2.

On section 13.

M. Mungall: Just a couple of quick questions, again wanting to put a few markers down on the record so that if there are any questions from people around British Columbia, we are able to answer them. This particular section provides for membership of Tsawwassen First Nation in the greater Vancouver sewerage and drainage district. I'm wondering if the minister can just explain a bit of the consultation that she had with the Tsawwassen First Nation. We want to be sure that the consultation took place.

Hon. I. Chong: First, I would like to introduce staff I have with me. I have Gary Paget to my left, Deidre Wilson to my right and behind me Kara Woodward and Brad Cox, who are here to provide assistance.

I will say that there has been extensive consultation with the Tsawwassen First Nation. In fact, the reason why we are making this amendment is because Tsawwassen First Nation is interested in becoming a member of the greater Vancouver sewerage and drainage district. For that reason, as I say, the consultation that is required has been extensive. So it is at their request that these amendments take shape.

V. Huntington: My reading of correspondence that passes between the sewerage and drainage district, TFN and Delta is that the sewerage and drainage district and TFN appear to have come to some accommodation on their membership and on what the terms of that membership might be. I'm wondering why the government feels it has to move in this direction at this time. Could you perhaps explain what the issues are in front of TFN and the sewerage and drainage district that warrant this kind of action by the government?

Hon. I. Chong: I think the member will know, and if not, for the benefit of the House, I'll remind all that when there was treaty settlement legislation with respect to Tsawwassen First Nation, they did become a member of the greater Vancouver regional district — or Metro Vancouver as we know it — and the greater Vancouver water district.

However, the Tsawwassen First Nation final agreement did not make specific provisions for membership in the sewerage and drainage district, because membership in that was restricted to municipalities, as opposed to treaty First Nations. It did, though, provide that should the parties reach an agreement, there would be a necessity for government to bring forward the legislative amendments to accommodate the request of the parties, having come to the agreement and the arrangement, where the treaty First Nation and the Vancouver sewerage and drainage district have agreed to that. That's the purpose for this amendment.

It's not being forced on anyone. It is as a result of the conversations they have had, and they believe they are ready to become a member. This legislation is enabling, and should the conversations and discussions they have not reach the final conclusion where they wish to be a member, they may still choose not to be. But this amendment will allow them to be, in the event they are going to reach that agreement. I do believe they are very close to that.

[1535]

V. Huntington: Then do I understand from the member that the language of this section has been approved or is acceptable to the GV…? I always want to say GVSWD, but it's not the SWD. It's the SD.

Is this language, then, acceptable? Not that it has to be, I understand, but the understanding I get from the correspondence is that the GVS&DD and TFN have been in negotiations with the government on the terms of membership. I find this language very strident, and I'm just wondering if it is language that was agreed to during those discussions.

Hon. I. Chong: The short answer is yes, they are. They have been consulted, and they were permitted through confidentiality agreements, arrangements, to have a very brief, I guess, scan of this — not the legislation in particular but the contents or the intent of it — and they are in agreement with that.

I want to make it clear, as well, to the member that this is parallel to the membership that the other member municipalities currently have, so it doesn't deviate from that. The other member municipalities who are part of GVS&DD will be the same as what the Tsawwassen First Nation will be having in place.

V. Huntington: Is the minister saying that other legislation that enables other members of the GVS&DD to become members contains language that's in this, say, section 2 of 66.1? That language is the same for all members?
[ Page 11737 ]

Hon. I. Chong: I'm just trying to make sure I get the correct wording and clarification here, because the changes we are making here do provide for, I guess, essentially or virtually the same treatment as member municipalities in the GVS&DD. The provisions for requesting membership are the same as municipalities. That's what we are trying to provide here.

[1540]

The differences are because this is not a municipality. It's because it's a treaty First Nation and therein, perhaps, may appear to be some differences. But virtually, they are identical in how you become a member of the GVS&DD, and this is what we are enabling in this legislative change here, to allow Tsawwassen First Nation to become a member in GVS&DD, as current municipalities are. The current legislation for membership in GVS&DD only allows for municipalities, and not the treaty First Nation.

I hope that's been clarified. If it's something more specific, where the member feels a distinct difference that she has noted, I would be happy to try to give her that clarification.

V. Huntington: I think my concern is more with the language of the section itself. If, as the minister suggests, the sewerage and drainage district has agreed with this section — they have negotiated this with TFN and the government, and this is agreeable to the sewerage and drainage district — then did the district actually agree to the language where the Lieutenant-Governor-in-Council has absolute power and authority to settle terms and conditions?

How far along have the agreements between TFN and the sewerage and drainage district gone if it feels the government is still enabled to force terms and conditions on the sewerage and drainage district at the request of TFN? The language is very specific in that regard.

Hon. I. Chong: Perhaps to be clear, then. Currently with member municipalities of GVS&DD, there is, under subsection 66(1): "The Lieutenant-Governor in Council shall have absolute power and authority, upon the request of a municipality which is not a member of the Corporation, to order or refuse to order such municipality to be a member of the Corporation." Currently that is in place for member municipalities, and we are providing for the same with the Tsawwassen First Nation.

Again, the parties did agree to wanting the ability for Tsawwassen First Nation to be a member of the district. In the event that at the last moment there is a change, then they don't have to become a member. This legislative amendment will allow them to come to that conclusion, should they reach that conclusion.

V. Huntington: That's very helpful information on the language issue.

The issue here seems to be one where an existing member of the sewerage and drainage district, Delta, is being asked to accept TFN's use of its upgraded sewer lines. Now, I understand that there is an agreement between Delta and B.C. Ferries, Delta and TFN, to use the sewer line as it exists now. In the case of TFN, that use of the line is subject to a five-year agreement. Does this enable the sewerage and drainage district to overrule Delta's present ownership of that line if Delta doesn't wish to allow the sewerage and drainage district to take over the line?

Hon. I. Chong: What we are doing here is just enabling Tsawwassen First Nation to be a member of the greater Vancouver sewerage and drainage district. Once they become a member, it will be up to the district and all the members of the district to have the discussion that they wish with respect to what the obligations are for each of the members of the district.

[1545]

We are not dealing with one municipality's agreements with Tsawwassen First Nation. It is about Tsawwassen First Nation becoming a member of this district. Again, if there are issues that are not resolved, and if either the current members of the district are not prepared to accept Tsawwassen First Nation into their district as a member or Tsawwassen First Nation decides that they are not prepared to enter into the district as a member, they can still go their own ways.

But this legislative amendment here enables the membership to take place, should both parties agree to it. That's the extent of what our legislation is. We're not dealing with specific municipalities but with respect to the district on its own.

V. Huntington: Just to confirm my understanding of what the minister has said, Madam Chair, I understand and appreciate TFN becoming a part of the sewerage and drainage district. What you're saying, then, Minister, is that this in no way obligates the sewerage and drainage district to service TFN lands or to expropriate Delta's sewer lines and that that is still subject, once TFN becomes a member, to discussions among the members themselves. Is that what I'm to understand?

Hon. I. Chong: It is up to the district to make those determinations and decide on what the appropriate agreements are that they want to have in place. This legislative change is not about those specifics, as the member is suggesting, hon. Chair. But the district itself would certainly have the ability to have those discussions and, if there are concerns, to raise them prior to the admission of Tsawwassen First Nation as being a member.

V. Huntington: In regard to that, if you look at subparagraph (6), even if this language is the same language that exists in the act for other members, it says that the
[ Page 11738 ]
Lieutenant-Governor-in-Council can make regulations specifying the provisions of "another enactment under which the Board is empowered to make bylaws" and the bylaws "that apply to or in relation to Tsawwassen First Nation as a member."

Does that section enable the government to do anything that would obligate the sewerage and drainage district to provide services as Tsawwassen would require or request — i.e., expropriate or force Delta's system to be used to provide services to TFN?

Hon. I. Chong: I would just say this to the member: this legislation was specifically requested by the TFN and the greater Vancouver sewerage and drainage district, to enable the TFN to become a member of the district. This act was designed for municipal members. The TFN is not a municipality. Its powers and authorities are different and are protected by treaty.

[1550]

Legislative changes are required to accommodate membership of the TFN in the district. The approach being taken is consistent with the approach to adding member municipalities to the district. If there were new municipalities created, this would be the similar approach that would be taken.

Again, it has been as a result of discussions that have happened with Tsawwassen First Nation with the district. The letter that the ministry received to request this legislative amendment has come about as a result of those discussions.

I would say to the member that the concerns that she may have, I would have to expect, would have been part of this discussion over the last number of years and certainly in the last year leading up to this stage where they are now very close to becoming a member, which is one of the reasons why we have been asked, as a ministry, to put this legislative amendment forward to enable this to occur.

The concerns that the member, as I say, has raised…. Again, I'm not able to deal with specific municipalities within the district. That's not the purview of what this legislative change is. But only to say that those discussions, I would expect, would have taken place.

V. Huntington: Just let me say, so that it's clear to the minister, I'm in the position here where I represent both communities. I also know the problems both communities are having with these particular discussions. They're difficult ones. My concern in reading this legislation was to discover whether or not this legislation enabled the government to force one or the other into a commitment that they were not yet ready to make.

I believe I understand that this is strictly the language used to enable a treaty First Nation or a municipality to become a member of the GVS&DD. That's my interest here. I just hope that both parties, along with the sewerage and drainage district, can come to a conclusion that represents both's best interests.

We have a problem here where Delta is extremely concerned about the capacity of its sewer line to handle its own needs, and here we have a huge development taking place that was outside of the original regional growth strategy and a community, the Tsawwassen First Nation, asking to use the Delta sewer lines.

It's a difficult issue for both communities and one that probably needs to be resolved by the sewerage and drainage district, but resolving it on the authority of cabinet is what I was more concerned about and not in the traditional manner of a discussion and consensus reached at the regional level. So with that, I thank the minister for the answers. I think I've been satisfied.

Perhaps I'll ask one further question, and I'm not sure whether this minister is able to answer it. Why was TFN not deemed a member of the sewerage and drainage district at the time of treaty? Was it an omission, or was it because of the complicated nature of membership at that time?

[1555]

Hon. I. Chong: Again, I do want to be very clear, because I don't want the member to check Hansard and find there is any confusion.

Currently the GVS&DD is, as I say, interested in having Tsawwassen First Nation, TFN, be one of its members. The province is not able to force or require TFN to become a member. However, the province does have the ability to have GVS&DD accept TFN as a member. But it can also do that for any municipality that may come into existence. So if a new member municipality were to be in the region, the government, the province, has the ability to have GVS&DD accept them as a member.

That's what I was trying to convey to the member — that the province has the ability to include new applicants into membership, but we are not able to force or require those applicants to become members if they don't wish to. I hope that's clear enough for the member. That is the way, as I say, member municipalities are also treated.

With respect to her question regarding why this was not included at the time the treaty was negotiated, not having been a party to that at the time, I can only say that my understanding was that there were so many areas of discussion, that this was one area they were not ready yet to enter into. But again, they knew that there was the opportunity — that once the TFN had, I guess, matured to a place where they were wishing to join GVS&DD, they would then be able to do so.

G. Gentner: I want to back up on the treaty negotiations. I want the minister…. I want to fully understand here that the province has no obligations under the treaty to intervene if the TFN cannot make an agreement with the sewerage district.
[ Page 11739 ]

Hon. I. Chong: I'm not able to go into detail and depth as to the treaty agreement that was signed. That's not the purview of this legislative change.

What I can provide to the member are those relevant parts with respect to this legislative change. What was provided for in the treaty was that Tsawwassen First Nation may participate in associated entities, and that's the reason why we are here today.

The Tsawwassen First Nation has made a determination, along with GVS&DD, that they wish to participate in this associated entity and, therefore, have asked us to provide that enabling piece of legislative change.

G. Gentner: The minister had mentioned that the reason we're here and the result — this change in legislation — is at the request from another party. Can the minster tell us, the House, who requested this and if it's more than just one party?

[1600]

Hon. I. Chong: I received a copy of a letter dated last March with joint letterheads from both Metro Vancouver and Tsawwassen First Nation and with the proper signatories, therefore, requesting that this membership be provided for.

G. Gentner: So this has nothing to do with, of course, a request by…? I'll call it the sewage district. They never requested this?

Hon. I. Chong: The member will probably know that Metro Vancouver was speaking on behalf of the greater Vancouver sewerage and drainage district.

G. Gentner: Now, we're dealing with a situation that…. I find it a little unusual that this is sort of being imposed, if you will, upon negotiations between various levels of government. Can the minister explain to me: what were the points of disagreement that prevented the TFN or Metro and, particularly, the district to conclude an agreement leading to membership?

Hon. I. Chong: I think it's important to correct the member. He used the word "imposing" — that we were imposing something on to the members or the member municipalities and the regional district. I want to make it clear that this is not what government is doing.

[D. Black in the chair.]

Again, I would reiterate that this legislative amendment is being brought forward at the request of the TFN and the greater Vancouver sewerage and drainage district. I want to make it very clear that by accommodating that request, we are enabling membership to take place. So there is not an imposition that government is imposing.

Again, to be clear, this is an entity, a regional entity, that provides services to its regional area and to its members. The difficulty is that they cannot provide services if you are not a member. So the Tsawwassen First Nation would like those regional services provided to them. Therefore, they must become a member.

That is the reason why the legislative amendment is in place: to allow them to become a member and then for them to be able to participate in those regional services that are being provided by the greater Vancouver sewerage and drainage district.

G. Gentner: This imposition, if you will, means of course that the rates will be imposed on Delta, which currently has the sewage trunk line. Will this agreement or this legislation in any way determine the servicing and maintenance costs borne by the region and/or the municipality to reach the capacity necessary for Tsawwassen — the TFN?

Hon. I. Chong: Again, I would ask that the hon. member for Delta North refrain from using words that are incorrect because it will lead to misrepresentation, if not mislead the public as to what is occurring here. There is no imposition that the province is placing on the district or on the Tsawwassen First Nation. I want to make that very clear because he has now stated that twice in his request for clarification of this legislative change. It is important to say that for the record.

[1605]

What is occurring, again, is that we have been asked by the district, we have been asked by Tsawwassen First Nation, to bring forward a legislative change allowing them — if Tsawwassen First Nation does want to be included in the district as a member — to be a member.

The sewerage and drainage district is a regional entity and provides services. It can only provide services to its members. Therefore, Tsawwassen First Nation must be a member if it is able to access and make arrangements to receive those services. The district would like, as I understand it, to provide those services, which is the reason why they have come to us — the government — to make the legislative change to enable that to take place.

There is no imposition. At the end of the day, Tsawwassen First Nation, like other member municipalities who are part of the district, are able to negotiate the arrangements with respect to the services they require and the costs associated with that.

Madam Chair, I would again ask that the hon. member for Delta North, in looking at these changes to this legislation, refrain from making allegations of an imposition when, in fact, that is just not true.

G. Gentner: Well, let's just call it the authoritarian nature of government that is pushing this forward. If there is a reasoned approach to negotiations, we wouldn't have
[ Page 11740 ]
to be here. I just don't understand why, if both parties are magnanimous and willing to negotiate, they are requesting one party to become a member when they have clearly in the past been able to negotiate — my understanding is, particularly through Delta — a five-year agreement regarding sewage intake from Delta's sewage trunk lines and, of course, that with B.C. Ferries.

I almost find this is expediting something whereby we didn't really give negotiations an opportunity. I haven't quite understood what the points of disagreement were that prevented TFN or Metro from concluding agreement leading to membership.

Hon. I. Chong: I find it odd that the member is not able to comprehend exactly what is happening here. He is wondering why the two parties are not able to conclude their agreement. Well, the reason why they're not able to conclude their agreement is because they are not a member. They are wishing to conclude the negotiations and make an agreement, but they must be a member in order to do so.

I think the member for Delta North is actually providing a misleading statement, and I would ask that he not continue to do so. We are here today because we have two parties who actually do wish to conclude an arrangement, who do want to conclude with the negotiations. But in order to take that final step, they must have an arrangement where they can do so. The way to do so is to be a member of the district.

We were requested a year ago to provide for a legislative change to allow the Tsawwassen First Nation to become a member, and the district also realized that they wanted to conclude those negotiations and would like Tsawwassen First Nation to become a member. We are now proceeding with that request. Again, hon. Chair, I hope the member for Delta North is able to comprehend that.

The Chair: I'll just make members aware that there is a rule in the House about repetition, and please be aware.

G. Gentner: I'm just curious there. Is it through the treaty process that we'll capture and determine what type of capacity sewage will be provided for? Or is it strictly done with an agreement with the greater Vancouver sewerage and drainage district?

[1610]

Hon. I. Chong: The service that is required will be established by the greater Vancouver sewerage and drainage district. The district then would negotiate the price and the method by which that service would be provided.

G. Gentner: As a member of Metro Vancouver and, of course, as a member of the sewage district, will the TFN have to follow the Metro strategic plan, whether it is sewage upgrades or not? Or is it compelled strictly by the treaty it signed?

Hon. I. Chong: We are not today talking about the treaty process. We are here today talking about the Tsawwassen First Nation and its membership into the greater Vancouver sewerage and drainage district.

What I can say to the member is that when Tsawwassen First Nation join the membership of Metro Vancouver, or GVRD, they are required to abide by all the rights and responsibilities that all other member municipalities are required to follow as members of Metro Vancouver. So there's no difference or distinction with respect to that.

G. Gentner: Just to sort of wind up here and ask a question. Can the minister confirm whether or not her ministry has received any correspondence from third parties relative to this implementation — from organizations other than the TFN, the sewage district, Metro and/or Delta? I'm thinking…. In particular, have you received any correspondence relative to these changes from Port Metro Vancouver?

Hon. I. Chong: Not that we're aware of.

Section 13 approved.

On section 14.

M. Mungall: Section 14 is actually quite controversial.

Just for the people who are in the gallery and who are at home…. In fact, we should never underestimate the ratings for this program and this channel. For the people who are watching at home, I know that people in my constituency, in Nelson-Creston, are quite concerned about this section, as well as people throughout all of the Kootenays, including the constituency of Columbia River–Revelstoke. I have no doubt that the MLA for Columbia River–Revelstoke will also have something to say about this section and have several questions, as do I.

This section allows for the government to create a resort municipality without a single person living there. You can imagine that after several weeks of trying to get a meeting with ministry staff about the potential of this actually coming forward, not having our requests answered, to then see this in this miscellaneous bill was a bit shocking.

The last that we heard about this possibility — the MLA for Columbia River–Revelstoke and myself — was when we were in a briefing meeting with some of the government's senior staff in charge of dealing with Jumbo Glacier resort.

[1615]

The reason why we heard about this possibility in that meeting is because Jumbo Glacier resort was recently approved for its master development agreement
[ Page 11741 ]
by the Minister of Forests, Lands and Natural Resource Operations. That was a land disposition agreement. The next step for this resort to become a possibility is for it to deal with land use issues.

Now, there are a variety of opportunities, a variety of ways in which that could have been dealt with. One of them was to have the regional district of East Kootenay deal with the permitting process in a typical manner: dealing with the official community plan, any rezoning and so forth, having an appropriate public process, and the people who made the decision at the end of the day were accountable to those who elected them.

Another opportunity to move this forward, we were told in that briefing, was exactly what we're seeing here in section 14. That is to create a resort municipality before a living soul, other than grizzly bears and deer and other little critters and birds, were living there.

The member for Columbia River–Revelstoke and myself wanted to get more information about that possibility, and here we are now debating this particular possibility on the Legislature floor, prior to being able to learn more about it from ministry staff.

That is actually a good example of how quickly legislation is being rammed through this House right now, Madam Chair. This is of grave concern to people throughout British Columbia.

Of course, when I saw this being put on the floor, I immediately called the Union of B.C. Municipalities to ask about whether they had been consulted or not. The president, who also happens to be a regional district of East Kootenay director, had not even been briefed yet on this possibility, on exactly what was in the legislation.

I think that shows a real problem throughout this entire process. It shows, it highlights, how things are being done here in the Legislature right now. But it shows a real problem: how things are being done when it comes to Jumbo Glacier resort and trying to put forward this type of anti-democratic legislation.

I think it's important to note why this shows how this is the way this government has been treating Jumbo Glacier resort, in terms of moving it along, when for 20 years people in the Kootenays have expressed their very, very adamant opposition to Jumbo Glacier resort.

Madam Chair, I'm going to start off with my questions. I'm asking the minister straightforward: is this section about creating a resort municipality for Jumbo Glacier resort?

Hon. I. Chong: Firstly, I would like to correct for the record. When the member indicated that we had not had any, I guess, conversations with UBCM, I do want to state for the record that my staff have advised me that they did contact UBCM staff. They were certainly briefed on the legislation, so they were aware. The view was that the new legislation did not change the policy that our government brought forward with respect to the legislation in 2007.

In 2007 legislation was brought forward to allow for the incorporation of a mountain resort municipality. What we are currently doing is making an amendment that would allow for the incorporation to take place in a developing area and making it clear that, because it's in a developing area, therefore there may not be residents. Without the vote of residents….

[1620]

The legislation was not clear on that, so the amendment we're bringing forward today is to make it clear that the policy decision that was made in 2007 to allow for mountain resort municipalities can, in fact, be effected with or without residents.

M. Mungall: Yes or no: is this about creating a resort municipality for Jumbo Glacier resort?

Hon. I. Chong: Again, what I've indicated to the member is that in 2007 we brought forward legislation that allowed for the incorporation of mountain resort municipalities. This amendment, which is in place before us in this bill, is to allow for that to take place — for a mountain resort municipality to be incorporated whether or not there are residents in the area at the time of incorporation.

If there should be residents that occur, then we would be able to incorporate with those residents. If there are not, as well, we would be able to allow for an incorporation to take place.

This legislation is about making that clear — that a mountain resort municipality may be incorporated. That was a piece of legislation that we brought forward in 2007, and this clarification is with respect to the requirement for residencies.

M. Mungall: Why does the minister, then, think that that legislation from 2007 requires clarification if, apparently, it was possible for the minister to incorporate a municipality without any residents?

Hon. I. Chong: This amendment clarifies the intention of the provisions that were provided originally when we made the changes to the Local Government Act in 2007, and that was to provide for the incorporation of a specialized form of mountain resort municipality that could be incorporated in a remote, undeveloped area. That was the significance of the 2007 legislation.

However, the provisions that were provided for then stated that it authorized "the incorporation of the residents of the area." That language has been interpreted as not being clear. So we were requested to make that clear. The "residents of the area," as I say, made it unclear whether they had to be within, I guess, the undeveloped area.

The technical experts, the legal experts advised us that the existence of residents prior to incorporation
[ Page 11742 ]
was causing confusion. They have asked us to make the amendment, to keep consistent with the 2007 intent of the policy of government of the day that a mountain resort municipality may be provided for whether or not there are residents in the area. That's the reason why we're making the change today in this bill.

[1625]

M. Mungall: I just missed the minister saying about who made these recommendations. If she can just repeat that please.

Hon. I. Chong: Again, that would be on the advice of our legislative counsel and drafters, who take a look at legislation from time to time. If they realize that they are not clear, they request clarification. That's the reason why this section is before us.

M. Mungall: Why did the minister seek that opinion?

Hon. I. Chong: I just should tell the member that I did not seek clarification. What does occur from time to time is that our staff review our legislation, whether it's the Community Charter or whether it's the Local Government Act or whether it's another piece of legislation we have, to make sure that sections are clear. When it came to their attention that there could be uncertainty and that the provisions provided for were not clear, they received information from the legislative counsel that in fact, yes, we did need to make this section clear.

M. Mungall: Who brought it to the staff's attention that this needed apparent clarification?

Hon. I. Chong: I don't know if the member is suggesting that I pinpoint a specific staff person. I can say that the ministry staff, as I've indicated, look at our legislation, whether it's, as I say, the Community Charter, whether it's the Local Government Act or whether there are other pieces of legislation like the Sewerage and Drainage District Act that we just spoke about earlier. When they do so, they do so to ensure that they are updated and don't require any changes.

From time to time, if they note that there might be changes that we need to make, they will seek clarification, generally from legislative counsel, who are the ones who assist us in drafting legislation. My understanding is that this is ongoing, that staff look at our legislation brought to their attention that we should seek that clarification. Legislative counsel, therefore, suggested that we do make it clear, to be consistent with the policy that was debated in 2007.

M. Mungall: Is the minister saying that there is nobody in her ministerial staff who met with anybody from, let's say, Jumbo Glacier resort, who then brought it to the ministry staff's attention that there was some need for clarification in this legislation, in the existing legislation?

Hon. I. Chong: That's correct. I can confirm that no one in my ministerial office had any contact with respect to requiring this change.

M. Mungall: Madam Chair, I have sat down with staff in another ministry about this issue, and they explicitly said at that time — in front of the ministerial assistant for the Minister of Forests, Lands and Natural Resource Operations — that proponents for Jumbo Glacier resort were seeking for Jumbo Glacier resort to be declared a resort municipality before anybody was living there.

I will ask the minister again whether or not any proponent for Jumbo Glacier resort has spoken with ministerial staff about finding a way to create a resort municipality for that resort prior to any residents living there.

[1630]

Hon. I. Chong: If the member wishes to raise issues with other ministers and other ministerial staff, she can do so. I made a comment earlier that no ministerial staff in my office had any discussions requesting that we make this legislative change, and I want to again say that for the record.

What I can say as well, though, is that in 2007 we had made legislative amendments to respond to the Resort Task Force, as I believe it was called, a task force on resort municipalities that was chaired by a former MLA. As a result of the task force on resort municipalities, a report came out. It was determined that it was desirable to have the ability to have the incorporation of mountain resort municipalities around the province. That general intent to enable mountain resort municipalities, therefore, was put in place in 2007.

We implemented those changes by drafting that legislation and passing that. In so doing, we used language that was normally provided for in other legislation with respect to incorporation. When staff were looking at the legislation, as periodically they do, they realized that in using language that was similar to other legislation with respect to incorporation of municipalities, the clarity was not there.

When referred to, legislative counsel agreed and said that we needed to make that clarification more obvious. That is the reason why we have brought forward this amendment, as I say, to be consistent with the policy and the legislative amendment and change we made in 2007.

M. Mungall: Madam Chair, in 2007 the government did put forward legislation to allow for mountain resort municipalities. I believe one place that benefited from that is Sun Peaks. Another is Whistler.

At that time it seemed pretty clear that people had to live there first. If you look at the legislation from 2007,
[ Page 11743 ]
which I have right in front of me, it all focuses on residents. Let's take a look at this. Section 8: "The minister must not recommend the incorporation of a new municipality to the Lieutenant Governor in Council unless a vote of the persons proposed to be incorporated has been taken under this section."

Then it goes on. In section (2) it lists the circumstances where "the minister may direct that a vote be taken of persons in an area specified by the minister respecting the proposed incorporation of those persons into a new municipality." This is where the minister can tell people who are living there that a vote must be taken.

Section 8(3) says: "A vote under this section must determine the opinion of the eligible vote." So the vote has to be clear, meaning that people who live there have to know what they're voting on.

[1635]

Section (4) gives examples on what that clarity must be.

Section (5): "As an exception to the requirement that the question to be voted on be in a form that a voter may indicate assent or dissent, a question under subsection (4) (b) must be in a form that a voter may indicate a preference." Again, a rule on how the vote must take place.

Section (6): "As a limit on the authority of the minister under this section, a vote under this section must not be held in a local community under section 838 until 5 years after the later of the following: (a) the date that the local community was established; (b) the date that the latest vote under this section was taken in the local community." What we see here in this section is all about voting procedures that require residents to be there.

The section that allows for a resort municipality, section 11, refers to section 8. If people are in favour, the minister may recommend to the Lieutenant-Governor-in-Council incorporation of a municipality as a mountain resort municipality.

It's pretty clear in the 2007 legislation that people need to be living there. It's very interesting, the timing when this has come forward, for the government to specifically say that people do not need to be living there. Will the minister admit that this is awfully convenient timing for Jumbo Glacier resort?

Hon. I. Chong: The resort task force I was referencing, and my staff provided me with that…. It was in 2004 that there was a B.C. resort task force. It was as a result of the recommendation coming out of that task force that some three years later, in 2007, we brought forward legislative amendments to section 11 that would allow for the incorporation of mountain resort municipalities.

In so doing, it did provide for two models. It provided for a model under section 8, as the member has indicated, where there would be requirement of voter assent for an existing resort. Also, if the member were to take a look at that legislative change, it says, "Despite section 8…." Therein lies the other model whereby there would not be an ability to have voter assent, because there were no residents. That was to take in consideration of developing areas.

Again, the information we have received, legislative or…. The legal minds that we have spoken to have said that has not been made clear. They required us to make it very clear that those two models are in fact existing in the legislation. We did need to make that clear.

M. Mungall: The minister has said that none of her ministry staff nor herself has consulted with any proponents of Jumbo Glacier resort on this type of legislation. Has she consulted with any other minister or any other member of this House?

[1640]

Hon. I. Chong: What I said to the member is that I have not consulted with any proponent with respect to this change. Clearly, because the legislation was introduced in 2007 to allow for the incorporation of a mountain resort municipality, I can and will say that I have had discussions with members on both sides of the House with respect to what a mountain resort municipality is. But with respect to this change, I have not had those discussions, as the member suggested, with any proponent.

M. Mungall: My question was, I believe, a bit more specific. I was asking if the minister has been in discussion with any other member of cabinet or any other member of this House specifically about the change she is bringing forward in Bill 41.

Hon. I. Chong: I'm very surprised at the member's question. Cabinet confidentiality is required for all members of executive council, so I don't know why she would question what I discuss at cabinet.

M. Mungall: If she won't share what her discussions in cabinet were because of cabinet confidentiality, then could she please highlight for this House if she's been in discussion with any member of this House outside of cabinet to bring forward this type of change?

Hon. I. Chong: The change that we're talking about today originated in our ministry, with our staff having made a determination that we required…. We did this clarification. So this change was not precipitated by any member, if that is what the member is suggesting. Rather, it was precipitated by my ministry staff.

M. Mungall: The minister said that she had been in consultation or that her staff had been in consultation — or a briefing, perhaps, is what they were saying — with the Union of B.C. Municipalities. I would like to know the extent of their consultation with the Union of B.C. Municipalities prior to bringing forward this legislation.
[ Page 11744 ]

Hon. I. Chong: A requirement of the Community Charter is that prior to making any changes to the charter or to the Local Government Act, we do advise the Union of B.C. Municipalities. Generally, it's their staff, not necessarily their entire executive, because some of the changes that we make are considered minor with respect to that. So we did not, as I say, have a meeting with the executive. That's what she's making a reference to.

Staff did, as a common practice, advise UBCM staff that we were making a change to the Local Government Act to clarify the legislation, but because this did not change our policy, it did not require a consultative process. When there is major change to policy, then generally we will seek input and have a consultative process with UBCM, and that has been the practice.

M. Mungall: I think, then, we should start asking some questions to ascertain whether or not this is a major or minor change. I would argue right off the bat that trying to make a municipality where no one lives — there's not a single person living there who could possibly hold any municipal council or mayor to account — is a major policy change. But let's ascertain whether that is…. Let's ask some questions along those lines.

First, then, if this resort municipality is created and the mayor and council are appointed, will they have a seat on their regional district?

[1645]

Hon. I. Chong: I would say that in 2007 we did bring in legislation. The intent of that legislation was, in fact, to provide for two models of mountain resort municipality incorporation — one model being where there would be residents and one model where there would be no residents because it was a developing area. That was not apparently clear, and that's one of the reasons why we're making the change now.

I want to put that on the record. We are not making a major shift in policy change. That was made in 2007, but the clarity for that was apparently not. The question that the member has with respect to a membership in a regional district, I would have to say that that would be a design question that is yet to be determined with respect to what incorporation takes place.

M. Mungall: If this has yet to be determined, why would you not bring forward legislation when something like…?

The Chair: Through the Chair, Member. Through the Chair, please.

M. Mungall: My apologies, Madam Chair. Through the Chair, why would the minister not bring forward legislation that determines that important detail of whether a member from the municipal council of a resort municipality where no one lives can be on the regional district?

Hon. I. Chong: The questions that the member raises are questions that are to be dealt with, with respect to the details of the letters patent. They are not questions with respect to the legislation.

M. Mungall: Then I just want to be clear. At this stage there's no guarantee that someone from the council — mayor or council — could not sit on the regional district if there's nobody living in that resort municipality.

Hon. I. Chong: I would say to the member that what we're doing here in section 14 is dealing with an incorporation of powers. We are not an incorporation model, as I say, with respect to a model of a mountain resort municipality that has residents or one that is in a developing area that may not have residents.

[1650]

Because there is no decision with respect to incorporation and the letters patent would be the document by which customization of the incorporation would take place, I'm not able to provide the member with any of those specific details. That's what I was referring to earlier when I said those design questions are yet to be determined. The letters patent would make those details known.

I'm not here to advise what letters patent will take place, because I haven't an incorporation in place. What I am saying is that we are making clarification in the legislation to make it clear that the intent of the 2007 legislation to allow for the incorporation of a mountain resort municipality — two models that were to be provided for — is clear in the legislation.

When it was brought to our attention that it was not clear, we were advised that we needed to make that clear. That is what we're doing here today in this section.

M. Mungall: Well, I'm going to have to take away from those questions that it is possible for someone who represents no one to therefore get a seat on the local regional district.

My next question, then, is about the Municipal Finance Authority. Can this resort municipality, which has a mayor and council appointed by the government, representing no one, then borrow money from the Municipal Finance Authority?

Hon. I. Chong: Obviously, the Municipal Finance Authority is a very important entity that all municipalities rely heavily on in order to receive the benefit of the triple-A credit rating that they have for borrowing. Incorporated municipalities, as I say, benefit from that, and no one municipality should have the ability to cause harm to that credit rating.
[ Page 11745 ]

With that, should a mountain resort municipality be established, the Municipal Finance Authority would have the ability to determine whether it would allow for borrowing through its entity.

In addition, when the letters patent are designed, there can also be very specific details with respect to borrowing through, possibly, the MFA. If there are concerns that are raised, those would be the details which the letters patent can be customized to allow for. So there are a couple of avenues to ensure that the MFA, the Municipal Finance Authority, has its interests protected for the benefit of all member municipalities.

[1655]

M. Mungall: With that, I hear the response is then: yes, it would be possible for a resort municipality with an appointed mayor and council that represents no one to borrow money from the Municipal Finance Authority. If that's the case, then, if they're able to borrow money from the Municipal Finance Authority, would this then allow developers to borrow municipal funds to finance their development?

Hon. I. Chong: The member has made a conclusion which is incorrect. I'll just say that is incorrect, what she has stated. We have through the letters patent the ability to restrict that borrowing ability.

M. Mungall: What's important to note here, though, is that through this legislation we're dealing with possibilities. We're dealing with possibilities here. I'm asking if it's possible for a resort municipality….

Now, through this legislation, that resort municipality would be able to exist without anybody living there. It would have a mayor and council, appointed by this government, without anybody living there. Is it possible for that government to borrow from the Municipal Finance Authority?

The minister said that type of decision would be left up to the letters patent, so yes, it would be possible because it could be written into the letters patent that they couldn't or that they could. So yes, it is possible.

So if it is possible for this resort municipality…. Keep in mind that no one's living there; it's only a developer who needs to develop this municipality. Is it possible for that developer to, therefore, borrow money from the Municipal Finance Authority to extend their development?

Hon. I. Chong: As I've indicated, the MFA is a very important entity, which all member municipalities rely heavily on to ensure that they can borrow at the lowest possible price. The MFA has the ability to block municipalities from borrowings that they feel could cause jeopardy to that credit rating or cause financial concerns that all of the member municipalities would have.

If, in fact, MFA would not want a mountain resort municipality — as the member has suggested — without residents to exist and to be allowed to borrow through their authority, then the MFA would be permitted to block that. However, if the MFA wished that, then the MFA would then allow it.

They are an entity, and we have a relationship with them. If they made the suggestion that any mountain resort municipality should have specific restrictions in their letters patent with regard to the borrowings through MFA, we would be able to put that detail in the letters patent. So if the member is suggesting that a developer is able to use MFA, and MFA has no ability to stop that, she is incorrect.

M. Mungall: I was asking about possibilities. What I hear from the minister is that, yes, it is possible for the MFA to therefore lend money to a developer to develop their mountain resort, now that they are able to borrow money from the MFA. They could allow for that money to be released. The minister said that they could also block it. Yes, they do have the power to do that. They have the power to also let it go ahead.

So if the MFA does let such a loan go forward, and the developer fails and becomes defunct, who owes? Who is going to pick up the tab?

[1700]

Hon. I. Chong: Currently, if MFA did allow for borrowing to any municipality that came under financial, I guess, distress or hardship, then all the other member municipalities would pick up the tab. That's what happens now, which is why MFA, as I have seen in the past, has denied borrowings by municipalities because they did not have the capacity to make the required payments and to show financial sustainability. The MFA would not provide for that.

Currently municipalities can only borrow long term through the regional district — to the MFA. The regional districts, as the member has indicated, would be able currently to, as I say, restrict even now municipalities from borrowing through MFA.

MFA would not jeopardize their triple-A credit rating, and they would ask for that protection. They would request that the regional districts not allow that to take place. I have seen that happen already now.

M. Mungall: So it would be possible…. Again, in the realm of possibilities…. It's possible for a resort municipality, with not a single resident, with an appointed mayor and council, to sit on the regional district. It would then be possible for them to borrow money from the Municipal Finance Authority. It would then be possible for them to borrow money from the Municipal Finance Authority to further along their development.

All of this is possible. In asking, "If they go defunct,
[ Page 11746 ]
who picks up the tab?" the minister says: "Other municipalities." So it could be that the municipality of Invermere has to contribute to Jumbo Glacier resort going defunct. A municipality that has voted against and expressly declared their opposition to Jumbo Glacier resort might have to pick up the tab for that development going defunct.

They wouldn't be doing it alone. It would be collectively done with all municipalities. But talk about what it must be like for Invermere to know that one cent of their citizens' money, of their ratepayers' money, is going to foot the bill for a defunct Jumbo Glacier resort.

It begs the question: all of this being possible, can the minister comment if this is how Jumbo Glacier resort plans to get their financing for the project, since they're unable to get it in other ways?

Hon. I. Chong: Again, this is legislation that allows for a mountain resort municipality incorporation with or without residents. I am not referring to any specific incorporation, although I know this is what the member is trying to use as an example in her area.

With respect, I have said that the municipality can only borrow long term, which is what MFA is all about, through the regional district. The regional district makes that determination. If the member is so concerned about Invermere, Invermere would, therefore, block the ability for this to happen. From the sounds of it, the member is suggesting — she's talking about this very, very specific matter.

If she is suggesting that people who serve on the regional district don't look after their interests for their municipalities, then that's her opinion of her mayors. I happen to believe regional districts take very seriously their obligation, as do those who are members of the regional district, with regard to, especially, the Municipal Finance Authority.

The Municipal Finance Authority is top of mind, I believe, to all municipalities because of, as I say, the benefit it provides — the long-term benefit in terms of borrowing.

Again, the member is suggesting a range of possibilities, but she is ignoring the fact that those possibilities are really irrelevant when in fact the regional district, as I say, has the ability to restrict borrowing — as well as what I've indicated earlier, that as the government, we also have the ability or the power to restrict access to MFA by virtue of the letters patent.

[1705]

Again, I would trust that the member does not allude to the fact that there would be a circumstance occurring without regard to those real possibilities as well, and that is the regional district's ability to restrict access, as well as the provincial government's ability to restrict access through to MFA.

M. Mungall: I have no doubt that the minister does not own a crystal ball and she is not able to look into the future and she is not able to categorically say that regional district directors will never make a decision to allow any one of these possibilities to go forward. We do not know. We cannot read the future. That's why we have to do our due diligence now and ensure that the public is protected now. And I do not see that happening with this, Madam Chair. I do not at all.

What I do see is a wealth of possibilities for the people in the Kootenays to see a resort go through without any democratic process whatsoever, and that was set up by this government. How dare the minister talk about regional district directors in my area.

The Chair: Through the Chair, please.

M. Mungall: Through the Chair.

At the Association of Kootenay and Boundary Local Governments conference at their AGM — the minister will know; she was there — they passed several resolutions expressing their opposition to this resort. They are not in favour of the direction that this government has taken and the direction that this legislation allows to happen. She ought to know. She was there.

How can she get up right now and talk about the regional district directors in East Kootenay and Central Kootenay when she hasn't even consulted with them on this type of legislation and how it will impact them? How can she get up here and talk about this being benign when she knows the opposition that local governments in my area have towards this type of direction?

Hon. I. Chong: Firstly, the member was the one who made reference to Invermere, and I merely suggested that she regard her mayor and her council with the due regard that they should have with respect to their ability to protect the interests of their citizens. That was the only reference I wanted to make to her area.

What we are doing here is clarifying in legislation the ability to incorporate a mountain resort municipality with or without residents. The policy to allow for that, the intent of that, was done in 2007. I am not changing government intent and policy that we provided for and brought forth in 2007. I'm not making a change to that government policy. What I am doing, though, is making it clear, as it was brought to our attention that we needed to do so.

I want to also say again and reiterate and have on the record that we certainly have the ability, the power, if you will, to restrict access to MFA. Should a mountain resort municipality be incorporated anywhere in the province and should concerns be raised with respect to access to the Municipal Finance Authority, that can be considered with the design of the letters patent for the incorporation of that particular municipality.
[ Page 11747 ]

N. Macdonald: This is a bit of a walk down memory lane. I think the minister was in her current position back in 2007. There's been a lot of shifting around since then, but it's sort of ironic that we're back in the same place with basically the same piece of legislation that we had in 2007. The minister will remember that I didn't like it in 2007, and that hasn't changed.

The minister is correct in saying that this is always what was intended. The language obviously wasn't quite right. It was egregious then, and it's even more problematic now, because obviously it will appear to everyone that the government is getting ready to move ahead with a resort — basically, with a real estate development that just does not make sense for the area.

[1710]

When you look at this, it doesn't apply to anywhere else. This is a mountain resort. It has all of the specifications. There's nothing else on the go that this applies to. Clearly, the timing of it suggests that the government is getting ready. So I just want to lay out how difficult it is for residents in the area to accept this.

First, in 2007 the minister talked about…. Go tell your regional district; surely somebody will look after it. The 2007 legislation specifically gets rid of regional districts — right? This allows the province, despite the fact that regional districts are supposed to have land use planning so that locals have a say in what goes on in their backyard…. This specifically removes them from that — the original legislation in 2007.

On top of that — and I just want people to remember, because the member for Nelson-Creston just did a great job laying it out…. Basically, was UBCM consulted? No. Staff were informed, but there was no consultation. This is not something local government is pushing for. This is not something local government supports. This is not something that local government was involved in creating. It's egregious to them as much as it is to us.

UBCM was not contacted, informed or invited into the discussion as to whether this is sound legislation. I don't know if that's regular practice. I remember, when the B.C. Liberals were in opposition, all of the things they said about how important local government was. I remember Gordon Campbell — all the promises that were made. This wouldn't be consistent with — like, I guess, many things that Gordon Campbell said at the time — what we're seeing now in terms of respecting local government. But it goes further than that.

The member for Nelson-Creston asked: "Is it possible that a mayor to a municipality that has no people…?" There are no residents; there's nothing there. That you appoint a mayor and a council…. Is it possible that that person would sit on a regional district with other elected people? Is that possible? And the answer to that is yes — with this legislation, yes.

Even the member for Kootenay East said that's pretty outrageous. That's pretty ridiculous. That was his opinion. But this legislation allows it. It does not specifically say that cannot happen. It is ridiculous — how you would have a government-appointed person to a community with no residents sitting with elected officials with a vote and all of the rights that come with it. Now, that's pretty ridiculous.

Can this community with no people borrow through the MFA? Well, the minister asserts that's a pretty unreasonable thing to happen. Well, everything about this is unreasonable — right? Can it happen? Yes, it can happen. The Municipal Finance Authority can be approached and can give money to this appointed mayor and council, who represent nobody and have no support necessarily from the region and that the province just plunked down there.

The minister goes back to work that was done with a task force that the former Premier put in place. You'll remember that Gordon Campbell was going to double tourism by 2015. Where he got the number from, I don't know. It was just arbitrary. From an arbitrary suggestion — this is what we're going to do, with no plan — he started to plunk down a few committees that were going to go and accomplish this.

A lot has passed since then. We had the HST, which wiped out Tourism B.C. It was wiped out because the government didn't know, when they introduced the HST, the funding formula for Tourism B.C. So it was a mistake to get rid of it. Of course, we know the impact HST had on tourism. We know that the Olympic advantage that was supposed to come, this government bungled.

[1715]

But here we are still referencing some failed objective from all those years ago as a reason why we would create a municipality with no local say as to whether it's a good idea, with no residents and an appointed mayor and council.

So let's go to that part. Let's go to these appointed mayors and councils. Can the minister tell me what the criteria are for the mayor and council? What are the criteria? Who are the people who are open to selection?

Hon. I. Chong: To the member, I do want to begin by saying that I do appreciate the tone in which he is trying to raise some concerns. You know, he's being very courteous in so doing.

He has certainly acknowledged the fact that, when we had this debate in 2007, I happened to be the minister then. As luck would have it, I'm the minister again. We're here again, and it does feel a little bit like déjà vu. He is correct in that we had a very rigorous debate in 2007. Again, with respect, I know he disagreed at the time with that legislation.

What we are doing here today is bringing forth that legislation with the purpose of clarifying the issue of the two models of incorporation — one where there are residents, and one where there are not residents. We are
[ Page 11748 ]
not, though, changing the policy for which we had that vigorous debate in 2007, so I want to first of all say that.

With respect, in terms of the consultation that we had with UBCM, there was consultation in 2007 with UBCM. We did advise that we were bringing forth legislation, and advised that we were doing so based on the Resort Task Force report that had come out in 2004. So they had been given an opportunity to share with us their issues and concerns.

With this change we are not making a change to the policy; rather, we're making the clarification of the two models. Again, I would take exception to the member for Nelson-Creston, that we ignored their concerns. The obligation to consult with policy, I say, would have taken place in 2007. However, we did advise them that we would be making that clarification now. That's why we did provide them with the clarification we were making. They were made aware of this prior to us bringing the legislation in.

Again, with respect to the member for Nelson-Creston and now to the member for Columbia River–Revelstoke, the concerns being raised about access to borrowing through the Municipal Finance Authority, particularly when there are no residents in the area, are valid and, therefore, are able to be addressed through the details of the letters patent — which, as the member will know, is the document that allows for the existence of an incorporation.

Because we have the ability to deal with those issues and, again, the ability to restrict access to MFA…. The opposition would like to say all these possibilities. Well, if those are their concerns, then clearly, those are the concerns that would be dealt with through the letters patent. As I say, I just wanted to make those points clear.

The member is concerned, as I understand it, with how an appointment of council takes place. Again, those were debated in 2007. When a mountain resort municipality is incorporated, with respect to the two models, there would be an ability under one model, where there are residents, to have voter assent and, therefore, to go to the electorate. There was also in the other model, which we're making clarification for today, where there are no residents, to have the province — the government, the minister — therefore appoint a council. That is, and was, made clear in the legislation in 2007.

[1720]

Council appointments, therefore, would be made, again, through the letters patent and that information or be done through a minister's order, as provided in the letters patent. So that is the mechanism by which the councils can be established and, again, was debated in 2007.

N. Macdonald: Just to continue the déjà vu that we're having. But let's go through the criteria again. I mean, there are obvious criteria around residency — around residents, perhaps, in British Columbia. There are obvious things — age. There are obvious things in terms of how one would be choosing. Maybe the mayor has to be, you know, from the area. I mean, there's got to be, within the realm of possibility, people that would be acceptable.

The other part of it is in terms of the proponent or the developer. Are these people or their employees precluded from being part of the mayor and council? Then it raises all sorts of questions about conflict of interest because, of course, as the minister will remember…. I think she comes out of local government as well. That's my understanding. We remember the oath that we took about not having any financial interest in any of the things that were going on.

All of those things presumably would still apply to the people who would be appointed, I would think. So there must be criteria. It must have been contemplated before this legislation would be put in place. Can the minister just elaborate on the mayor and council for this non-existent community that would be put in place?

Hon. I. Chong: The member does raise, I think, very valid concerns. It would be very likely that people who wished to be on an appointed council would be people who are knowledgable about the area and about the region and would likely be people, residents, who live within the region of wherever that mountain resort municipality is.

But again to be clear, currently municipal elections take place around the province, and mayors and councils run for municipalities where they don't live or don't reside. That is already a possibility.

I would suggest, though, to the member again that this is about a mountain resort municipality in any part of the province. In any part of the province and other regions, I can't contemplate every possible configuration that may occur.

But it would be very likely that should a mountain resort municipality be established in the north, in the east, on the Island — wherever that may be — people who serve on that council would have some very basic criteria of being credible, of being competent, who respect their fiduciary responsibility, because they would still be a council to deal with the issues all mayors and councillors must deal with.

As I say, I think it's a valid concern that the member raises and would expect that any mountain resort municipality incorporated anywhere in the province would want to see people who are appointed, if there were no residents, who are people who understand the area where that municipality is going to be established.

N. Macdonald: The difference here, though, is the check and balance of democracy, as the minister will recognize. I mean, the fact is that this is an appointed person. We know that people can be outside of…. I mean, they can bring any history that they want to an election,
[ Page 11749 ]
but the check and the balance is that people have to select them in an election. That's not what's going to happen here. There are no people to choose these individuals.

Then they go and they sit on the regional district with people who have gone through that process. It's fundamentally different. We're not nation-building like they are in Iraq, which is what this sounds like. We have a way of doing things here in British Columbia, and this is far more what the U.S. would do in Iraq than what we would do here to ourselves. That's the fact of it. There's something about this that is ridiculous.

[1725]

I know that the minister is saying: "Trust us. We will be reasonable in all that we do." But you have to understand that if you're living in Invermere….

The Chair: Through the Chair, please.

N. Macdonald: The minister has to understand that if you're living in Invermere, there is very little about what has gone on that seems reasonable or worthy of trust. It feels like there's a tremendous amount done in backrooms and that something is being foisted upon people of that community. That's what it feels like. So when the minister says, "Trust us on these things," there's not that level of trust, nor should the minister expect there to be.

I would ask the minister to just imagine if next to Oak Bay something like this was being imposed. It would be something…. There would be a passion that she would feel and certainly those she represents would feel.

The member for Nelson-Creston laid out a number of elements of this that are just incredibly egregious. Let's go to First Nations consultation. Before this is done, what is the process?

Before the government imposes this municipality with no people and then imposes a mayor and council that could be made up of whoever the government decides, including the developers, what is the responsibility the government has to First Nations consultation? Can the minister describe exactly what First Nations consultation for this process is, as the government sees it?

Hon. I. Chong: I think it's important to put on the record that the incorporation of an area without residents is not new to the province. I believe staff have advised 13 or 14 times. Since the late '50s, there have been municipalities incorporated without the benefit of residents.

The most recent was, I think, in 1981 in Tumbler Ridge. Granted, it was not a mountain resort. But it was a resource area, and that incorporation took place without residents. There was a five-year phase-in, as I'm told as well, but within two years it was clear that the people in that area wanted to go to an election. So within a very short time frame they were able, then, to make the decision to elect people to their council. Those are possibilities when you incorporate an area without residents.

Secondly, the member raises a question with respect to First Nations consultation. Let me just say this: if there were to be an incorporation of any mountain resort municipality, it could not take place until consultations had occurred with the area First Nations.

N. Macdonald: Just a few points on that. The minister, of course, cites mines. These are mines. Different — right? So just from what the minister is saying….

Interjection.

N. Macdonald: There are other examples that the minister is going to provide about resort municipalities. We have Whistler, and we have Sun Peaks, but these were improvement areas. When the minister stands up, she can explain the communities where this has been used.

[1730]

But most of the examples that are given are mines, where it makes complete sense. The deposit is there. It is going to be developed. There is a consistency to it. If that was what we were talking about here, then we would be having a different discussion. But there is a certainty to that, likely, that is different than what is being proposed here.

So the question, then, is around what consultation looks like specifically — the language around consultation. It's just a word. The courts have interpreted it, and it's clear that First Nations are going to need a process that they find acceptable or we very quickly move into a situation where the courts are interpreting what is appropriate.

I don't come from the Kamloops area. It seems to me that even with Sun Peaks there were issues around First Nations, and they had an opinion around the incorporation of Sun Peaks. That's something the minister can comment on. She'd be more familiar than I am.

It's clear that consultation means something specifically, and while it may differ between government and First Nations, there's no question that government has a clear idea in their mind what consultation looks like. Could the minister lay out specifically: what does consultation on the imposition of a resort municipality in an area that the Ktunaxa have said is of spiritual significance to them…?

They've been very clear. They came to this House twice — the first time the Ktunaxa have ever travelled the ten, 12 hours from their traditional territories to Victoria, to this Legislature, to make a presentation.

I know that the minister was very gracious on that day. I think, regardless of what her ministry was, she acted as a representative of government in welcoming them in a very moving ceremony downstairs. I think that as recently as last year, on the first anniversary of that declaration, they were back here in the Legislature.

Clearly, consultation is going to be a very serious issue.
[ Page 11750 ]
The government has an idea of what consultation looks like, presumably. Could the minister lay out exactly what is entailed in the consultation process that would take place before anything like this was imposed?

Hon. I. Chong: Again, I would say that any decision to incorporate a mountain resort municipality would only be made after consideration of the views of area First Nations through a consultation process specific to the impacts of incorporation. The member will know that the courts have directed that incorporation is an issue that does require consultation — most recently with the Sun Peaks decision, as the member has referenced. So we would take our guidance from that decision, going forward, as to the extent and the consultative process that would be required prior to incorporation.

[L. Reid in the chair.]

N. Macdonald: Just with the expertise that sits with the minister during these processes, can the minister paraphrase in layman's terms what is contemplated for consultation with First Nations? Are we talking about a series of meetings? Are we talking about a particular time period? Are we talking about agreement-in-principle? What sorts of things are we talking about? Or is it in any way clear?

It's possible and, I think, reasonable that the government is not completely sure what the ruling means. But as far as possible, can the minister lay out in layman's terms what that consultation process would look like — in as much detail as possible?

Hon. I. Chong: Again, with respect to the member's question, there is no set guideline or rule. As I indicated, we are going to take our guidance from the decision that came from the courts as a result of the Sun Peaks recent court matter.

[1735]

With any mountain resort municipality being contemplated, each situation would have to develop an area-specific consultation plan together with the First Nations. That would entail, perhaps, the amount of items we discuss. It would possibly speak to the time frame they want. But that consultation plan would be made together with the First Nations impacted by the incorporation.

N. Macdonald: Coming back to the presumption that there will be a permanent population. At what point is it deemed that there is enough of a permanent population to have an election? And what's the definition of a permanent population?

There's a tremendous transience. There will be periods of time where, presumably, you would have residents that are there for a five- or six-month period but then would, predictably, leave. So what is the definition of permanent residents? And how many individuals need to be resident there for the government to consider an election — an elected mayor and an elected council?

Hon. I. Chong: I think perhaps the best way to provide a response to the member would be to look at the Sun Peaks model — not that that is the model we're going to follow but just as an example. When you reach a point in time when the incorporated area, or the area to be incorporated, has reached a level of maturity, for lack of a better word, it would seem or be deemed reasonable to then go to a situation where you would be able to elect your mayor and council.

The idea, of course, of an incorporation where the electors are voting for their mayor and council — and this is where the first model of a mountain resort municipality did provide for voters, then — is because the area has matured enough that you would want to see a stable tax base provided for.

You would want enough people who are providing that stable tax base, and you would want the people who are requiring services. When you reach that critical mass, that very likely will be when you would consider the model where you would have an election for mayor and council.

It's difficult to throw out a number, because each situation can be very different. You know, it may be a thousand. It could be 500. It could be 250. But I think the objectives of ensuring that we have a stable tax base and we have services that the residents require should be enough to move us to a situation where we want to look at those residents, those electors, then being able to have the mayor and council elected by those residents.

N. Macdonald: It's all pretty vague. Of course, I'm asking for possibilities, so I guess it's bound to be vague. I shouldn't complain about that, but it is pretty vague in terms of what constitutes the appropriate time to then move into elections.

[1740]

What most would assert and what I would assert is that what's being set up here doesn't have a great deal to do with, really, permanent residents. It has more to do with taking zoning and putting it in a place where the proponent will have complete control and will not be bothered by the opposition of local residents. It removes the ability for locals who actually live there to have any say in zoning.

That's what, basically, this does. It allows them to just do whatever they want. So it's not really about ever getting a stable community in these places as much as it is just a mechanism for accomplishing what cannot be accomplished through proper democratic channels.

I have a question. Who actually, for a mayor and a council…? There's no infrastructure. Nobody lives in the municipality. Presumably, they need some support. Presumably, even if all they're doing is travelling, they'd
[ Page 11751 ]
need per diems. Who pays for all of that? How does that work?

Who pays the mayor and council, the operations that would naturally come with having a mayor and council, when there is no tax base? Presumably, there's nothing there but the birds, the bees and trees, so who pays for making that happen?

Hon. I. Chong: I want to, I guess, provide some comfort to the member, if I could. I know he probably, because of the views that he is expressing, may not feel comforted about it.

It's not that I'm trying to be vague with regard to an area having an elected mayor and council, but simply, we don't know where…. As I say, each situation presents itself differently, and I don't know at what stage an area would be considered mature enough that services would be required and what tax base would be sufficient to pay for those services. So every situation is different.

Again, I'm not trying to be vague, but just providing those basic principles upon which we would move to a situation where there would be an election.

Tumbler Ridge. Again, I know it's difficult to refer to it because it was so long ago. It was 1981. It was able to move to an elected model within two years. There was a huge expectation that it would take five, but they had matured and had a tax base and had services that were desired by the people that were then there within two years. That's what they moved to. I just offer that up, as those are possibilities as well.

The other, I guess, point I would like to provide for the member is that, taking a look at the legislation…. He will know from the debate that we had in 2007 that the idea of incorporating a mountain resort municipality was not to incorporate an area that was large, vast and unknown.

The known was the fact that there would be particular types of development that would be occurring. It was a developing area, which is why the mountain resort municipality idea came about — an area that would entail things like an alpine ski lift, year-round recreational facilities, overnight accommodations that are offered within. That is also the reason why, should there be a mountain resort municipality incorporated, the objective of having a master development agreement in place would need to take place.

It is not about incorporating an area, a mountain resort. I should be very clear about that. Just like your resource communities, which have a mine, a mountain resort has a mountain, has an objective for being developed. And much of that would have been discussed through a master development agreement — and a signed master development agreement at that, not just somebody's idea or contemplation of that.

With that, I just want to share with the member that that is what would be guiding the development that would be taking place. I'm hopeful that that helps the member.

N. Macdonald: I know there's another member that has a few questions.

Obviously, there's all sorts of debate we can have on this, and we did in 2007. The member references back to…. We went a long time, so there's nothing…. It was wonderful, as it always is, but it was a long time. There's really nothing new about the position that I have, and there's nothing really new about the government's position.

[1745]

I just want to finish off by saying that I'm familiar with existing resorts. I know the structure that's there. I was mayor when we worked on Kicking Horse, and the member for Kootenay East has said correctly that that was a brownfield. He used the term "brownfield," which is not a bad term. It was built over an existing resort, which is different than when you're trying to start one.

There are certain things that you need. You need money. You need money that's going to be secure before you go ahead with it, and that's a difficult thing to secure. Secondly, you need everyone in the local area on side and to line up your ducks before you try to move ahead on this.

There is a tremendous amount about this that not only I am suspicious of, in terms of how it would be used, but residents in the area would be tremendously suspicious of and would find objectionable.

The advice I would give to the minister…. I know that while I disagree with the legislation, my experience with the minister has been one where I do have confidence in her interest in doing things properly. This is a tremendously flawed piece of legislation.

I would hope that as we go forward and create ski destinations that can be world-class, we do it properly so that we're not putting energy and time into a project such as Jumbo Glacier resort, where people who are familiar with it and have lived with it for 20 years and are pro-skiing and pro-business are not overlooked — that local expertise is not ignored — and we waste energy, instead of putting it to where we could put in place good projects that convince locals that they're good projects.

It's a flawed piece of legislation. It is our intention as an opposition to vote against it and to register our vote, as we did with the initial legislation.

I know that the member for Delta South has some questions. I think that because there's so much else that needs to be done, we need to move on. So with that, if the minister has any comments back on what I've said…. If not, then I know that the member for Delta South has some questions or comments.

Hon. I. Chong: Very quickly, I guess I would disagree with the member with regard to him suggesting that this is flawed. In fact, if anything, I will admit that the legisla-
[ Page 11752 ]
tion in 2007 was flawed, in that it was not clear that there were the two models, which is why we are bringing the amendment forward now to make it clear that the two models in fact did exist and that that was the intention of the policy that government had when it brought forward the legislation in 2007 to create the mountain resort municipality.

Again, I agree that we will disagree on this and know that he has registered his concerns back in 2007 and now in 2012.

V. Huntington: What I'm struggling with here is why we're dealing with a municipal structure for a resort municipality, presumably, that doesn't exist. You're creating something in a bubble.

I was going to ask the minister: how would this council deal with the development of the resort area? Are they expected to develop zoning regulations? Are they expected to produce bylaws? Are they expected to produce a community plan? Or is the government…?

Then I think a clue came with the minister mentioning a master development agreement. So let me ask: is the intention that the appointed municipal council and the creation of a municipality is in response to a master development agreement that will be developed with the province and the developer? Is this what the municipal council will then be dealing with and expected to administer?

[1750]

Hon. I. Chong: I want to, firstly, clarify what the member for Delta South initially began her comments on. She referred to this as a resort municipality. I want to be clear. It's not a resort municipality, but it is a mountain resort municipality. It's not that anybody can have any kind of a resort, like a golf resort or an oceanfront resort. This is specifically a mountain resort municipality. Therefore, it requires a mountain.

I just wanted to make that clear, because I don't want people watching or listening to the Hansards thinking that any undeveloped area in any other part of the province which has flat land and suddenly a golf course becomes the resort for which this legislation would apply. This is very specific. It is mountain resort municipality legislation, which was introduced in 2007.

What we are attempting to do here, again, is clarifying the two models — the two models being one where it could be established and incorporation could take place, where there are residents for which the voters would assent to that taking place; and one where there are no residents and for which, therefore, government would be able to appoint a municipal council.

The member raises issues with how that would happen. Should there be an incorporation take place where there are no residents, the council would be required to have a separate OCP. They would be required to have bylaws in place, because even though it is a mountain resort municipality, it is a municipality from the view that the councillors and the mayor are required to live up to their fiduciary responsibilities as a mayor and council.

The other aspect of this, again, goes back to the legislation that was introduced in 2007. I'll make reference to section 11(1.1). Very clearly, it says:

"The minister may not recommend incorporation of a mountain resort municipality under subsection (1)" — which is the previous subsection — "unless the minister is satisfied that (a) alpine ski lift operations, year-round recreational facilities and commercial overnight accommodation are offered within the area of the proposed municipality, or (b) a person has entered into an agreement with the government with respect to developing alpine ski lift operations, year-round recreational facilities and commercial overnight accommodation within the area of the proposed municipality."

Therefore, what we are referring to is that person would have come into an agreement with the government with respect to developing the area. That is why I made reference to the fact that a mayor and council would know their obligations because an agreement would have been made, and that agreement would be the master development agreement.

V. Huntington: I'm terribly sorry, Madam Chair. I didn't hear a great deal of that response. Perhaps it would be faster if I asked the question again.

We have an appointed municipal council that is governing nothing yet. And yet, the minister says that the council will be expected to have bylaws and a community area plan, etc., in place. Is it putting those things in place immediately after appointment? How much time will they have to develop those before the mountain resort application goes forward for accommodation or ski lifts or — what is the other? — year-round recreational facilities?

What I'm trying to get at is: is it the chicken or the egg? Do we have a set of bylaws and a community plan in place, or is what we are trying to do is to avoid what is already in place in terms of what a regional district might have as a zoning arrangement for that area? What comes first? A master development agreement between the government and a developer, and then you appoint a municipal council that responds to a development agreement that the province has decided on beforehand?

[1755]

Then the municipal council that is appointed by the government builds its bylaws and its community plan around the master development agreement? That's all the authority they would have, following a master development agreement.

So really, is that what's happening here: the municipal council is appointed to action the development agreement in a legal authority?

Hon. I. Chong: The member is asking sort of a chicken-and-egg question. I thought I had responded to her, indicating that before a mountain resort municipality incorporation possibility were to occur, there would be a requirement that
[ Page 11753 ]
there is an agreement with government and therefore a master development agreement. In short, yes, a master development agreement is a precondition, a precursor to a mountain resort municipality incorporation possibility. I want to make that clear.

The official community plan or OCP, as the member knows, is not the master development agreement. That is a separate document, and municipalities, as you know, from time to time do change their OCPs. That can be developed once a council is appointed.

In short, we need to have a master development agreement, and certainly, there's experience in doing that. The council, therefore, builds their OCP around the master development agreement, and the council looks after the broader interests as a whole, as they're required to. Those are, I guess, the parameters that need to be followed, should a mountain resort municipality be incorporated without people. But also, if there were people, those guidelines would still be required to be followed.

V. Huntington: That's very helpful, and I do apologize if you had said that to me in your previous response. I simply couldn't hear a word. That's helpful.

I'd like to go back to something that the previous speaker asked. That was about: what criteria are you establishing for the appointment of the councillors and the mayor? I think the mayor is to be appointed: "…and appoint or provide for the appointment of a mayor from among the appointed members…." So the appointed members can't even elect their own mayor.

You're appointing a mayor, and you're appointing municipal councillors, but you did not answer the question about the criteria. Are these councillors…? Are the developers, are the shareholders, are any commercial interests involved in the mountain resort master development agreement precluded from being appointed to this municipal council? Is the government aware of and willing to protect against conflict of interest in the appointment of its councillors?

Hon. I. Chong: I guess it's best to describe the experience that we've had in the past, where there were incorporations, albeit resource areas, that took place without residents. We would look to the same process that was done, and I realize it goes back 30 years.

[1800]

This incorporation of a mountain resort municipality without residents…. Again, situation by situation would be different, but generally speaking, you would want to have appointed those who are credible; obviously, those who are competent, likely from the region; and those who understand the public interest regarding the future evolution of the area. It would be very favourable to have people who have experience in local government and also governance. It would be important to have people who have no obvious conflict of interest to be appointed to that.

If the member is suggesting a person who is an owner of an area being developed for which the incorporation were to take place, that would be an obvious conflict of interest.

V. Huntington: One of the criteria that the minister suggested was an understanding of the public interest in the development of the mountain resort area, so that presumes that you will be very careful in selecting councillors who are pro the specific master development agreement. Is that true?

Hon. I. Chong: I would begin my comments with the member's question. My answer is: not necessarily, when she made reference to the kinds of persons that she thought would be appointed.

My comments with regard to the criteria, as I said, would likely include those individuals who understood the public interest, because they would need to understand that there is a master development agreement in place which would be guiding the kind of development that would take place. The public interest would still be required of those appointed individuals, as are required of all municipal councillors and mayors. The public interest must be considered.

Also an individual who understands the area and, as I say, likely from the region. I say so because those individuals who are appointed would know that what they are doing is preparing the way for a future council to be elected. They should know that they are preparing the way for new residents to come into the area. They have to regard that as an important aspect of their role and responsibility and, therefore, part of their public interest. I hope that provides some clarity for the member.

V. Huntington: I wonder if the minister could tell me whether there has been any consideration given to the manner in which these councillors will be selected for appointment. Is there going to be a public process? Can people apply to the government for appointment to the council? Is it going to be a very selective process that is strictly left to government, with no public discussion? How does the minister see this process unfolding?

[1805]

Hon. I. Chong: What I can say is that with the incorporation of a mountain resort municipality there is not contemplated to be a process, as the member is suggesting, where people would apply. Again, we are looking for credibility, we are looking for experience, we are looking for competency, and likely people from the region.

What I am made aware of is that in Tumbler Ridge they had chosen a former mayor from within the region, the area, and that appeared to have resulted in success. My understanding in Whistler is that they chose someone
[ Page 11754 ]
who acted as the administrator for the area. Those models did work in the past, and likely, going forward, we can enhance those somewhat.

I cannot say with any certainty that we would have a process where we would ask individuals from all around the province to be applying. There again, we might find ourselves in a situation where a person is highly competent, highly capable, who doesn't even live in British Columbia and is not even from the area. That would cause a stir, I'm sure.

I think it is important that where a mountain resort municipality is contemplated in any part of the province, you would like to look at people from around that region who have an understanding of the region.

V. Huntington: Well, Madam Chair, I'm sorry if I made it sound as if we would go anywhere in the province or outside the province. I had assumed, perhaps, that you would request interest from people within the region and that you might select from a shortlist of those individuals.

Just one last question and a follow-up from the member for Columbia River–Revelstoke, when he commented on this council having the opportunity to sit on the regional district. If that's the case, will there be restrictions on the participation, given that they have a budget we know not what of and no residents?

Will there be an observer status assigned to them? Will the minister discuss with the regional district what participation and what level of participation would be acceptable? As you know, some of the regional districts in the Lower Mainland will have observers from outside the regional district, but they don't participate as a full member. How do you anticipate the appointment of this municipality to the regional district actually functioning?

Hon. I. Chong: I want to begin by saying that I really do appreciate the questions the member has raised. I think she has actually raised some very good areas of concern that would allow my staff to look into. The possibility of appointing people, as she's indicated, and what process could be used to find people who are credible, competent and from the region — that kind of a call-out. I think that has a very good possibility. I want to begin by thanking her for that offer or suggestion. This is where sometimes debates like this can be very productive.

I also want, again, to clarify that there has been no decision made on any incorporation of any mountain resort municipality. That being the case, though, should a mountain resort municipality be considered for incorporation, the letters patent would be the document that would detail where and how some of those responsibilities would be — the kind of requirements that those councillors and mayor would have.

[1810]

Within that letters patent it may also determine whether the individuals have a role to play with the regional district. Again, those are details that I cannot speculate on. We don't know what those possibilities are, because there has been no decision on any incorporation.

As I indicated earlier to other questions from other members of the NDP opposition, those are matters that would be determined through the letters patent. Those are the discussions that we would have with a regional district, of the time.

We don't know, again, which regional districts would be involved. As the member can appreciate, depending on where a mountain resort municipality is contemplated, there could be several regional districts that could be interested in that.

Again, the reason why member municipalities, towns, unincorporated areas belong to regional districts is generally because the residents require regional services. There being no residents, it's unlikely there would be a desire to have any services being provided by the regional district.

That may also be one of the guiding principles under which we would determine the involvement the council would have. Once there are residents, there would be a demand or, likely, a request for regional services. That could then change the involvement with the regional district and the interaction.

The Chair: Members, please take your seats to assist in the taking of the division.

[1815]

Section 14 approved on the following division:

Hon. S. Bond: I move the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 6:20 p.m.

The House resumed; Mr. Speaker in the chair.

Committee of the Whole (Section B), having reported progress, was granted leave to sit again.

Hon. R. Coleman: We call Bill 40, intituled Legal Profession Amendment Act, 2012, for committee stage. We will take a few minutes' recess to find staff.

Committee of the Whole House

BILL 40 — LEGAL PROFESSION
AMENDMENT ACT, 2012

The House in Committee of the Whole (Section B) on Bill 40; L. Reid in the chair.

The committee met at 6:22 p.m.

The committee recessed from 6:22 p.m. to 6:25 p.m.

[L. Reid in the chair.]

On section 1.

L. Krog: I want to say at the outset, and to assist the Chair in dealing with Bill 40 today, that I've certainly had an opportunity to review this legislation. I've had an opportunity to discuss its contents with members of the Law Society. I am satisfied that this bill represents good progress.

I do have questions on a few sections. I do not intend to be too rigorous on those for obvious reasons, because I think I have a pretty good grasp of what the bill says.

Just a very basic question. Section 1, the definitions section, adds a new section, adds the definitions of "law firm" and "review board." I take it one of the intents of this act is to give the Law Society the ability now to deal with law firms as well as lawyers, which has been a difficulty in the existing legislation.

Hon. S. Bond: That's correct. This does broaden it from an individual lawyer to an actual firm.

Section 1 approved.

On section 2.

L. Krog: Section 2 repeals section 3 and talks about the new objects of the society. I just want to confirm with the minister that this was designed to ensure that the prime object and duty of the Law Society was to uphold and protect the public interest and not simply to give, if you will, an almost inferential equal importance to the society's duty to look out for the interests of the members.

Hon. S. Bond: That's correct. The amendments are to reflect that the Law Society is acting on what is in the public's interest. For example, the Canadian Bar Association would be an advocate for lawyers. The Law Society has a broader interest — that is, to look after the public interest. The focus is reflected through the amendment.

Sections 2 to 4 inclusive approved.

On section 5.

L. Krog: It's always a pleasure to rise in committee stage of any bill. Section 5, as I understand it, adds to the language "for the governing of the society, lawyers, law firms, articled students and applicants."

I come back to the opening remarks. This is the specific revision that the Law Society had sought, I take it, in order to allow them to in fact police, if you will, and regulate in an appropriate way law firms, not simply individual lawyers.

Obviously, as I think the Attorney General is well aware, there are law firms in this province with dozens and dozens of lawyers working in them, regardless of the fact that most lawyers practise as sole practitioners or in very small partnerships or small firms. That, I understand, presented some difficulty to the Law Society over many years. Therefore, in order to protect the public interest, they have in fact asked for this section. That's my understanding. It will give them more regulatory power and ensure that they have regulatory power over law firms, not simply individual lawyers.

Hon. S. Bond: That is correct, and I think that it reflects the fact that law firms no longer necessarily consist entirely of lawyers. When you think about the body that needs to be regulated, it needs to be broadened, and the list does need to include law firms. So the member has correctly described that.

[1830]

Section 5 approved.

On section 6.

L. Krog: This is where the money hits the road in this bill. Historically, and I suppose for the purposes of the conflict commissioner, I should acknowledge, of course, that as a member of the bar I still pay dues and fees. So this, although you could argue it is certainly not in my favour, will take away my right as an individual lawyer to vote on the annual practice fee. I simply want to disclose that very carefully for the record, lest I be accused of anything untoward in this chamber by any person inside or out.

The effect of section 6, as I understand it, is that it will repeal the obligation of benchers to make rules about the practising fee and allow a two-thirds vote at the general meeting to "approve the making, amendment or rescission of rules respecting specified matters." That's correct? So it's those members…. It repeals the obligation to make rules about the practising fee — correct?

Hon. S. Bond: That is correct. In fact, this paragraph is no longer necessary, because, as we move forward, an amendment in section 12 actually changes the manner in which fees are set. Previously they would have been set, as the member opposite points out, by a general meeting of the members of the society, but that will change now and will be set by the benchers.

Section 6 approved.

On section 7.

L. Krog: If the minister could simply explain the effect of section 7.

Hon. S. Bond: There are several changes. The changes allow the Law Society a greater amount of time to implement a resolution. It will be 12 months instead of six. Previously it was six, and the Law Society believed that it needed some additional time.

More significantly, perhaps, it increases the number of signatures that are required to request a referendum. I'm sure the member opposite will appreciate this. The reason we need to do that is that requiring a percentage of the membership to sign a petition is appropriate as long as that's a relatively appropriate number.

What's happening is the profession is growing. As the profession grows, the number needs to be based on a percentage, as you can imagine. Otherwise, the number may not reflect an adequate percentage of the number of lawyers.

So I'm not sure…. We may agree to disagree on the fact that it's a good thing that the number of lawyers is growing, but that's why we need to change the formula, if you will.

L. Krog: I'm reminded of a cartoon I saw in The New Yorker many, many years ago when I didn't realize it was a snob magazine. The cartoon caption showed a woman asking a fellow at a cocktail party what he did. He replied, "I'm a lawyer," and her response was: "Isn't everyone?"

Interjection.

L. Krog: The other member from Prince George is quick off the mark today. I think he got it, hon. Chair.

So to confirm: at least 5 percent of the members. As I understand it now, there are about 10,800 members of the bar in British Columbia. Is that correct?

Hon. S. Bond: There are 12,523 members of the Law Society. So using the new amount of 5 percent, it would require 626 lawyers to sign the petition, and that includes…. The member is correct that 10,596 are practising lawyers — 1,300 are non-practising and 627 are retired members. So the vast majority, 85 percent, are practising members.

Section 7 approved.

On section 8.

L. Krog: Just to confirm, this change as I understand it, "allows a non-practising lawyer to practise law to the extent permitted by the rules." So in other words, it may give you an opportunity to practise law in a limited sort of way. I'm just wondering if the Attorney General could give a possible example of that.

[1835]

Hon. S. Bond: I think a relevant example would be that a retired lawyer would be able to help a community organization or a group that had a small action, and that way it would reduce the cost for them, in particular. That's an example of how a retired lawyer could practise on a pro bono basis.

Sections 8 and 9 approved.

On section 10.

L. Krog: Following on the Attorney General's response to an earlier question, this section, as I understand it, allows the benchers to make rules just exactly as it states, respecting "the association of members of the society or law firms…with lawyers or law firms in other jurisdictions." In other words, it allows a regulation over what I would refer to as a multinational. Or is this directed only at law firms in Canada? I assume it refers to multinational firms.
[ Page 11757 ]

Hon. S. Bond: The member is correct. I just want to make sure that I explicitly provide the rationale. It's clear that not all members of a law firm are necessarily lawyers in other jurisdictions or in British Columbia, so to the member's point, yes. There are a number of different ways that law firms can be organized: partnerships, corporations, possibly even income trusts. So given the variations in how a law firm can be organized, the expanded wording reflects that.

Sections 10 and 11 approved.

On section 12.

L. Krog: As I understand the effect of this section, the Law Society loses jurisdiction in a disciplinary proceeding over someone who resigns from the Law Society, so in effect, you can't impose any kind of sanction on them. Is that the effect of this section — that it will allow the Law Society to retain jurisdiction, if you will, over an individual and ensure that appropriate punishment or sanction is in fact available and carried out by the society, should it so impose?

Hon. S. Bond: That's correct. This section would prevent a lawyer from resigning from membership in order, basically, to escape the results of a disciplinary proceeding. So it's important that the Law Society does retain that jurisdiction.

Section 12 approved.

On section 13.

L. Krog: Just to confirm, this section is the one that formally "eliminates the requirement that the practice fee must be approved by the members of the Law Society." So it will now be approved by the benchers.

I think in second reading debate…. As I suggested to the minister and she certainly confirmed in her own remarks, it's the equivalent of the citizens of British Columbia giving the authority to set the rates of taxation to the Members of the Legislative Assembly and having us set their levels of taxation, as opposed to having a referendum on taxation. That's the effect of this.

I see the Attorney General nodding, which is always of assistance in these debates.

I just want to confirm. I haven't received any concerns expressed from lawyers in the province with respect to this section. I'm just curious to know: has the Attorney General's office received any concerns from any lawyers or, indeed, anyone in the province with respect to this proposed change?

Hon. S. Bond: I appreciate the question. Not that we're aware of. The specifics of the amendment are related to the fact that New Brunswick was the last province other than B.C. to require members to approve the practice fee, and New Brunswick has also made the change recently. I'm not aware of any concerns about this.

But the other aspect that we looked at was that there are very few, if any, professional bodies in B.C. who still require membership approval to set their practice fee. Other examples would be accountants, doctors, engineers and veterinarians. All have the authority to pass fees.

[1840]

Sections 13 and 14 approved.

On section 15.

L. Krog: If the Attorney General could just explain the general effect of section 15, I'd appreciate it.

Hon. S. Bond: The rationale is that if the Law Society is going to have the ability to regulate law firms effectively, they need to be able to have a process where they can accept and investigate complaints about law firms in order to enforce those regulations. They need a process by which they can receive that complaint.

If you look at paragraph (c), the most important advantage is that it empowers the Law Society investigators to compel non-lawyers to disclose information and produce documents. In essence, it gives the Law Society the ability to compel the production of those documents in the case of a non-lawyer.

L. Krog: Just out of curiosity, I wonder if this would have any impact whatsoever on solicitor-client privilege.

Hon. S. Bond: I always like it when two lawyers agree. While we're on the topic, I want to introduce the staff that are here with me today — Doug Eastwood and Jay Chalke, who have been fantastic in helping me through a number of bills.

The duties regarding this, solicitor-client privilege, relate exactly the same way to a law firm as they would to a lawyer.

Sections 15 to 18 inclusive approved.

On section 19.

L. Krog: I wonder if the Attorney General could just explain what the effect will be of this new trust protection insurance and how it's going to be handled.

Hon. S. Bond: In essence, we're adding a reference to "trust protection insurance" so that section 30 more explicitly recognizes the existence of the insurance. It actually goes back to….

The Law Society has moved to a model where they
[ Page 11758 ]
fund a wholly owned captive insurance company through the contributions of its members. The trust protection insurance is used for the same purpose that the special compensation fund used to be used for. It's a matter of providing the Law Society the flexibility to fund the trust protection program with fees paid by some or all lawyers.

L. Krog: Just so I can confirm my understanding and the Attorney General's explanation, there's no suggestion that this would provide that the Law Society goes out and purchases what I will call private insurance in order to substitute for the fund which has historically protected the public.

[1845]

Hon. S. Bond: Rather than me explain it, the member opposite is correct.

Section 19 approved.

On section 20.

L. Krog: Just to confirm, this repeals the section that requires continuance of the special compensation fund, and that just flows, I take it, from the provisions around the trust protection fund. Is that correct?

Hon. S. Bond: That's correct. The special compensation fund was set up, more or less in its current form, in the 1940s or so. I guess at that time it was leading the pack, but obviously there is a need to actually make some changes. It was cumbersome, and payment was dependent on the discretion of the body hearing the claim.

As I said, the Law Society now has a captive insurance company, wholly owned by the Law Society, which provides trust protection insurance.

Section 20 approved.

On section 21.

L. Krog: If the Attorney General will forgive me, with respect to sections 21 and 22, in sort of a general way she may be able to answer one question, and we can get through these two sections.

This establishes standards of financial responsibility for law firms and lawyers, and monitoring of those standards, etc. Then it goes on in section 22 "to regulate the trust accounting of law firms as well as of lawyers."

I take it that the effect of this will enable the Law Society to have regulatory power or authority over firms that are composed of not just lawyers but perhaps other professionals or individuals. Is that the case? In other words, this is, if you will, extending, as I read it, the protection of the public interest by ensuring that individuals who are involved in a law firm but not lawyers will be subject to the same provisions, the same monitoring standards.

Hon. S. Bond: That's correct. What this allows for is standards for law firms — to set standards for trust accounts for law firms in general, rather than lawyers in particular. I think that's what the member opposite was articulating.

For example, if a law firm has more than four or five lawyers, it's not appropriate to attempt to regulate financial practices through the individual lawyers that make up the law firm, as practices are often established collectively. In essence, individual lawyers may have little or no ability to change the practice.

Sections 20 to 26 inclusive approved.

On section 27.

L. Krog: If the minister can just explain the effect of this section and what change it is from the existing provisions.

Hon. S. Bond: Paragraph (a) is necessary due to the direct regulation of law firms and the necessity of describing actions by the entity that the Law Society may deem inappropriate while it still applies to the individual lawyer. That's paragraph (a). Paragraph (b) reflects that non-members of the B.C. Law Society, such as lawyers from other provinces and territories, may be subject to discipline if practising temporarily in B.C.

Sections 27 to 31 inclusive approved.

On section 32.

J. Horgan: That a boy, Leonard.

L. Krog: It's always good to have the appreciation of the Opposition House Leader, let alone the Attorney General and anyone else in the chamber who cares to be listening.

[1850]

With respect to 32, the explanatory note says it "clarifies the right to appear at a hearing with counsel." I frankly have to ask: was that an issue in the past?

Hon. S. Bond: I don't think we would describe it as a significant issue. I think it's a matter of clarity rather than of concern.

Sections 32 to 37 inclusive approved.

On section 38.

L. Krog: Just a quick question on 38. It "allows the
[ Page 11759 ]
Law Foundation to retain outside lawyers," the explanatory note says, "and acknowledges that law firms as well as lawyers remit money to the foundation." I'm just wondering again: was this an issue?

Hon. S. Bond: No, again, I don't think a major concern, but the rationale is that paragraph (a) is appropriate because there's no reason for us to actually limit the manner in which the Law Society organizes its human resources. In essence, we wanted to be very clear that there's no point in us limiting how they choose to organize.

Sections 38 to 45 inclusive approved.

On section 46.

L. Krog: Again, if the Attorney General could simply explain the reasons for section 46. And that will probably satisfy me, I might add, with respect to the balance of the bill as well.

Hon. S. Bond: There's no change to the wording or to the effect of subsection 88(1), other than to add a reference to "law firm," as the member opposite is aware. We're simply doing that because it makes greater logical sense if they appear before what is concurrently subsection 88(1). Basically, it's numbering difficulties.

Sections 46 to 52 inclusive approved.

Title approved.

Hon. S. Bond: Hon. Chair, I move the committee rise and report the bill complete without amendment.

Motion approved.

The committee rose at 6:53 p.m.

The House resumed; Mr. Speaker in the chair.

Report and
Third Reading of Bills

BILL 40 — LEGAL PROFESSION
AMENDMENT ACT, 2012

Bill 40, Legal Profession Amendment Act, 2012, reported complete without amendment, read a third time and passed.

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

Hon. P. Bell moved adjournment of the House.

Motion approved.

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

The House adjourned at 6:55 p.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF FINANCE

(continued)

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

The committee met at 2:50 p.m.

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

The Chair: Good afternoon, everyone. We're resuming consideration of the estimates of the Ministry of Finance.

B. Ralston: I want to begin this afternoon by asking a question about EDS Advanced Solutions. They signed a contract in 2004 to do certain aspects of government revenue management. The contract was structured in a way that the government pays a fixed fee of $30 million a year for the contractor to deliver what are referred to as in-scope services. There are additional variable payments under the contract, but processing PST remittances from B.C. businesses was the lion's share of the work to be done under this fixed-price contract.

The information available through the public accounts shows that the expected cost of this privatized contract has not gone down since the HST was brought in, and had actually gone up.

Can the minister explain why HP Advanced Solutions, as it's now known, would still be paid the same base amount even though the company has not been processing PST payments? Perhaps a subsequent question would be: is it intended that they re-enter that field if and when the legislation is introduced?

[1455]

Hon. K. Falcon: HP Advanced Solutions. The majority of the collection work, I'm advised, that they do is actually MSP fees — the collection of MSP fees and student loans. The portion of PST work they did was actually a very small portion of the allocation.

However, when the decision was made to move to HST, the ministry reviewed the contract with HP Advanced
[ Page 11760 ]
Solutions and negotiated down $700,000 a year as a result of the amount that they were actually providing in terms of remittance processing for the PST. It was adjusted to reflect the fact they were no longer doing that work.

B. Ralston: Well, the information that I have is that the work that was done by this company on the PST side was that they had employees who did payment processing only — about 70 employees. That would be, obviously, a fairly substantial cost on an annual basis.

Is the minister saying that the $700,000 reflects the fact that those 70 employees were no longer processing PST payments, or was there some other reason taken into consideration?

[1500]

Hon. K. Falcon: The payment processing. All they did was the payment processing. They did no registrations or collecting outstanding collection amounts or any of that kind of work.

The 70 people that the member refers to are the people that do all of the collections for MSP volumes, all of the collections for student loans, including this very small portion of work that they did with respect to PST remittances. But I'm advised that that was a very small portion of the work they actually did. That's why the reduction of $700,000 a year was made.

B. Ralston: Well, perhaps this was a negotiation that was made without full knowledge of how the work was assigned internally. I'm told that, at least back in 2007, about 60 to 70 of 134 employees were responsible for PST payment processing, and the rest did MSP processing and collection. It was a substantial part of the work that was done under this contract.

So can the minister explain how the negotiation process worked, and what independent verification of the representations of the company was done?

[1505]

Hon. K. Falcon: I apologize for taking a while on this, Member. It's a pretty obscure area of the ministry that I haven't been very involved in.

I'm advised that what staff did is that they looked at the volume of activity that's being undertaken by these folks. Of course, as I've said earlier, the vast majority of the volumes they're dealing with are MSP and student loans. So for the small proportion that was actually PST remittances — which is essentially just stuffing envelopes, I'm advised — they looked at what percentage of the work that involved and came to the conclusion that represented about $700,000 a year.

I understand that there is an independent financial monitor from KPMG that they consult with, in terms of a sort of independent check back to see that they've got it basically right. That's how they came up with the negotiated amount of $700,000.

B. Ralston: Well, perhaps the difference that the minister and I have is a factual one. Maybe the information that I have is inaccurate, but what I am told about this issue of payment processing was that these were merchants' PST remittances. So it wasn't a question of….

I suppose what the minister means is just opening envelopes and recording it and depositing it, although there are some calculations that are required as to whether it's overdue or not, and it goes off in a different channel.

I'm led to believe that that was about half the work that was being done. This is based on sources that have provided information to me. I suppose if that's the case, then it seems that the $700,000 reduction is far too generous to the other side of the contract.

So what specific contractual provisions were there in this agreement, when the scope of work or the nature of the work changes, that would permit renegotiation, and on what basis did that go forward?

[1510]

Hon. K. Falcon: We don't have the actual contract here. I'm advised that there are typically contract provisions that allow for this kind of thing to take place, that foresee that there may be changes. We may want to on-board new activities or off-board existing activities, etc.

I'm advised by staff that we can arrange to have…. The contract, as I understand, is almost half the size of my body. It's a big contract. But we can certainly arrange to have a detailed briefing by the manager responsible, who's not with us here today, if you wish.

I think it's also important to recognize that the company, HP Advanced Solutions, will also be reinvolved as we go back to PST. I'm also advised that the work didn't just come to an end, even when we stopped collecting PST and moved over to HST. They're, of course, still handling payments and other things that are coming in under the old PST that continue even to this day, obviously at a much reduced amount, a much stepped-down amount.

What took place under a clause which I understand is fairly typical for these kinds of contracts…. They're able to negotiate a reduction that reflects the reduction in work that's being done. They've got an independent monitor from KPMG that they can consult with to look at making sure they've mostly got it right. The adjustment was made, and now, presumably, it will be adjusted as we go back to PST and they start recollecting PST. That amount will probably now increase going forward.

B. Ralston: Two questions. Will the minister, not today but at some point in the future — say, within 21 business days — table the report of the independent financial monitor who oversaw these negotiations?

Secondly, can I take it, without binding the govern-
[ Page 11761 ]
ment, that the starting point for this company for resuming the services will be a payment of an increased $700,000? Given that they were doing such a small part of the activity and, for all the reasons the minister has given, if they were to resume that, it would be a relatively minor imposition on the contract, and given that the baseline of $700,000 has been set, the renegotiated increased price will be somewhere in that neighbourhood?

Hon. K. Falcon: On the first point, I'm happy to provide whatever information is available with respect to the independent KPMG monitor. Frankly, I don't know whether a monitor does a written report every time they're asked to provide advice on something. It could be oral. Whatever it is, I'll make sure that's made available for the member.

In terms of the second part, while not being entirely specific about amount…. Obviously, I can't be — certainly not responsibly — but I can say with, I think, a fairly high degree of confidence that it will be returning in that same quantum that we talked about. In fact, it could be less, given some improvements being made to the PST. That obviously remains to be seen, and there will be some negotiations, but I can say on the record that I feel comfortable that it will be within the gambit of the negotiated amount that was taken out when they got out of the business of processing PST.

B. Ralston: I appreciate the member referring to the contract. Obviously, a lot of lawyer time went into that. I don't know whether people would consider that a good thing or a bad thing. Is it possible to extract from that contract the provisions relating to changes in the scope of the contract on the negotiation that would ensue? Or would the minister simply provide myself or someone in my staff, which is not extensive, access to the contract? We could ferret it out ourselves.

[1515]

Hon. K. Falcon: I think the short answer is yes, we should be able to extract whatever that provision is. I'm making the assumption there are no commerciality issues that would say we absolutely can't do that. I would think this is of a generic enough nature that it shouldn't be a problem. We'll make sure that we provide whatever we can provide to the member and not have to have the member comb through the contract.

B. Ralston: I want to turn now to another topic. The minister, in the budget that was tabled in February, set out some goals as to what was called in the budget, on page 51, "Release of Surplus Corporate Assets for Economic Generation." Indeed, in the three-year fiscal plan, not in this budget year but in the plan for 2013-14, is a projected revenue of $475 million, and in 2014-15, $231 million — fairly precise numbers.

The minister also said when we were debating the recent budget document, particularly relating to the contingency, that $5 million had been set aside in this budget year for preparation for sale, presumably, of these properties that are being referred to. There is some reference in the documents to…. On page 51 surplus properties are spoken of, and there does appear to be, at least, a number. I'm not entirely clear, but it says: "With over 100 properties and assets being identified as surplus through its initial review."

Is the minister prepared to table a list of those properties or give a general indication? I mean, the best would be to table a specific list. I can understand that perhaps the minister may not wish to do that, but is the minister then prepared to give a sense of what kind of properties we are talking about and where they might be located in the province?

Obviously, there's a great range of properties held by government, whether it's in general government or health authorities or Crown agencies like Crown corporations. I know here, locally, in Victoria, people have been concerned about the Capital Commission and whether their assets, some of them, might form part of this list. So there is, I think, intense curiosity about the list itself. What light would the minister like to shed on that?

Hon. K. Falcon: There's no question that there is intense interest, particularly in the real estate development industry. One of the reasons why we don't just produce an itemized list is because we want to maximize value for taxpayers.

We want to make sure that as we bring these properties into the marketplace, we're doing so in a very measured manner so that we are maximizing the impact and the benefits to the province of British Columbia. That's why the member will know that we are not even going to begin realizing the marketing and receiving receipts out of these projects until the '13-14, '14-15 fiscal years. So we are doing a lot of work up front to make sure we do this in a very thoughtful manner.

It will be no surprise to the member that government — and just for the listening audience — sells surplus assets every year. The difference is what we did this time is we put together a team to take a strategic look across government at assets that we identified as surplus. That means the assets had to fall into three criteria: they're not currently in use, they were not earmarked for future use, and they have no strategic benefit for government to maintain continuance of ownership.

Those were the three criteria that the team went out and had a look at. As the member correctly pointed out, over 100 properties were identified that have the potential to provide gains based on, essentially, assessed values of the property. These are very conservative, as the member will well know, because typically, when you take a property into the marketplace they will do better than
[ Page 11762 ]
assessed value. We used very conservative assumptions here. The surplus properties identified represent less than 2 percent of the value of overall property holdings of the province, so it's very small.

[1520]

But it's strategic in two senses. One is that it will generate some revenues, obviously, for the province, which is always a good thing. Secondly, these are properties which in many, if not most, cases have a further potential to instigate private sector investment in economic activity so that we can achieve a dual benefit of taking properties that are sitting on the government's books, producing no revenues and sometimes incurring costs, and transferring that into a product that generates a revenue for government and spurs further economic activity.

Budget 2012, as the member knows, included $475 million of potential return in 2013-14 and $231 million in revenue generated in the following year. As I say, we consider those to be very modest.

We don't want to release the list primarily because — not to be cute, not because there's any supersecret things that people…. It's because we don't want to tip off the development community and the real estate community as to which properties we're talking about. We want to introduce them into the marketplace in a very measured manner to make sure we maximize value.

If you put the list all out there, then what'll happen is the developers will look at all the lists and say: "Oh, okay. Well, I definitely won't bid on that one, then. I'm going to go for that one." They'll start making trade-offs that could end up impairing the potential value you would receive.

We want to maximize the value and the benefit. To do that, we need to be strategic. We are consulting with some of the top experts in the field to make sure that we get it right so that we maximize the benefit to taxpayers.

B. Ralston: Then given what the minister said about not wanting to release the identity, if I can put it that way, of specific properties, why then, in the note on page 51, were there three specific examples which are readily identifiable?

"The inventory of surplus corporate assets includes, for example, a parking lot near the legislative buildings in Victoria" — I think it's well known where that is — "six hectares of vacant land in Surrey zoned for commercial and multifamily use" — there's certainly extensive speculation that that's the land at 152nd and 100th acquired for hospital purposes in the 1990s by a forward-looking government — "and a seven-hectare site north of Kelowna that was being tentatively held for the new correctional facility that will now be built near Oliver."

If what the minister says is accurate, why were these details provided and released publicly?

Hon. K. Falcon: I did that on purpose to demonstrate a representative sample so that people could understand what we talk about when we mean surplus properties.

Just to use the one, the farsighted example that the member refers to that the government in the 1990s purchased, the only challenge with the farsighted example is it assumed that it made sense to build a separate hospital away from an existing hospital. We did a very fulsome business case analysis of expansion, and that site was clearly one of the options for expanding the Surrey Memorial Hospital.

What the evidence showed us is that the last thing you want to do is actually distribute and spread out all your costs over two sites so that you've got your professionals having to move back and forth to two sites. You've diluted the impact of having everyone working together at a single site.

The result of the business case analysis was that the investment of almost $600 million would take place at the existing Surrey Memorial Hospital site. Of course, the members here know that that construction is already underway and is going to be — in fact is — the largest health investment in the history of the province.

As a result of that decision, that property now becomes surplus. Rather than have that property remaining there — right now it's a fascinating collection of weeds that are about waist deep, surrounded by residential and commercial development — there's an opportunity now for the government to take that non-strategic surplus property which we need longer need, because the hospital is already being expanded, sell that into the private sector and generate potentially tens of millions of dollars of new investment that will employ a lot of people and create new benefits for the residents of Surrey.

We put those three examples in. The parking lot was another example, just because it was so close. We all know it. Reasonable people would make the argument that you've got this rather strategic piece of land there that we use for a parking lot, and there's no reason why you can't have a significant development there with a parking lot underground. That's an opportunity to say: "You can probably still have a parking lot, but you might be able to build a pretty significant real estate asset above it."

[1525]

Frankly, just from selfish reasons for us members, you could maybe have a really neat coffee shop or something close by that I can dart across the street to get to, etc. Not that the coffee is bad downstairs in the basement. I want to state that for the record.

Choice is always a good thing, at least according to this government. We believe that the more choices people have, the better it is. That's why I put those in there. They were representative examples to let people understand what we meant when we talked about surplus non-strategic.

The third example the member pointed out is quite correct. That was the potential site for a prison. Ultimately, as
[ Page 11763 ]
a result of the competitive procurement process that went out there, a different site was selected on First Nation land that offered incredible opportunity for First Nations to be involved in constructing and building a facility. So that's a great opportunity.

Now that the site that we had put aside, thinking that that's where the prison was going to be built…. It's no longer going to be built there. It's now surplus land, and of course we can now release that into the marketplace, potentially.

B. Ralston: I'm sure the advice that the minister is getting…. Certainly, knowledgable people in real estate will tell you that in order to realize substantial gains in real estate, it's sometimes important to take a long view. The government is in a position, as an owner of land, where it can take the long view. So what is maybe deemed surplus today may be essential for and vital for public purposes down the road and could only be reacquired or acquired in a similar location at a substantially increased cost.

The minister said in his remarks in the Legislature not too long ago when we were discussing this that $5 million had been set aside to undertake studies. Is the minister prepared to explain or table the instructions to the group of advisers that's been assembled, and name them? Can I further ask when that study period is expected to be completed?

Hon. K. Falcon: The government put together a team, as I mentioned, that is going to be responsible for overseeing this effort. They sought third-party advice from Deloitte, Colliers International and Carmichael Wilson Property Consultants — which is a major real estate consulting firm, as the member probably knows.

[1530]

Deloitte has also conducted an independent review of the project's objectives and project management process which endorsed the process that was put in place and also validated the pricing. As I pointed out to the member, I come from a real estate background, and I feel quite comfortable that the pricing is very conservative.

By the way, all the rating agencies were also provided detailed briefings and were all satisfied with the work that had been done — the rigour, the process and the assumptions.

We also had significant reinforcement that there would be strong demand for the properties, that the property sites would involve significant development interest and that competition would be strong. I think "fierce" is actually the word they used. So there would be, certainly, good activity in the marketplace in terms of….

To pre-empt the next question…. I thought to myself: "Well, then he may want to say: 'Can I see all those reports?'" I understand, because I checked…. I would love to release them if I could. The issue is that it gets into the whole list and talks about the properties, and there's commerciality associated with them. I just want to tell the member right up front that unfortunately I wouldn't be able to do that. But I do want the member to know that very prestigious, reputable firms were advising during this process.

B. Ralston: I'd like to know first whether the rating agencies were provided with the list. Or were they provided simply with the process? Secondly, I want to turn to the Crown property at No. 10 and 152nd. The minister will know that that occasioned a story in the local newspaper about First Nations becoming interested in it. Given that there's relatively little substantial urban Crown land available for treaty negotiations, the First Nations Summit spokesperson, Dan Smith, said that they're interested in this.

This has been raised as an issue by Metro Vancouver and particularly…. "The Katzie Nation, based in Pitt Meadows, has signalled its interest" — I'm quoting from the story — "in the Surrey property, which had once been considered as a possible hospital site. 'We have written a letter requesting consultation, but there has been no formal consultation.'"

Obviously, this property…. I'd just note parenthetically that the decision not to use it as a hospital came only a few years ago. Certainly, it was good enough for the Premier to stand there in the third week of the election campaign in 2005 and announce that he was going to build a hospital on that site. That's ancient history now, I suppose, although it is a decade after the 1990s.

Can the minister, then, answer those two questions? Were the rating agencies provided with the list? Secondly, given aboriginal interest in these urban properties…. I'm not sure because I don't know the list. It hasn't been divulged. I don't know the composition of the list, but presumably the properties with the greatest value are likely those in Metro Vancouver, certainly, and perhaps in the Okanagan.

Can the minister advise what steps have been taken to deal with that issue? And what impact will that have on these numbers that have been included in the budget, which seem to presume sales, completed sales — the first ones within 18 months?

Hon. K. Falcon: Just to make sure I correct the record on the announcement the former Premier made. I was at the site with the Premier — quite an exciting day. He committed to building a new hospital, but a business case would be done as to whether it was at the site that we were standing on or at some other site. Ultimately, the business case suggested building at the existing site, which we're excited to say is well under construction today, to much great enthusiasm in Surrey.

In terms of the First Nations piece, the province — I believe I even said this, certainly in the interview or at some point — respects the need to do all the appropri-
[ Page 11764 ]
ate consultations with First Nations on disposition of any Crown lands. We will certainly continue to adhere to that.

Land that's being offered in treaty talks has not been included in the inventory of surplus assets that we're talking about today. The Ministry of Justice legal services branch and the Ministry of Aboriginal Relations and Reconciliation executive and senior staff were all consulted and have provided advice on the initiative.

[1535]

That consultation will be carried out in the appropriate manner. I certainly want to assure the member that that will be the case.

In terms of rating agencies, the rating agencies were provided with a list on a confidential basis — not to take away with them but were provided a list of the properties — so that they could review the list. They were provided with the other evidentiary information — the independent reviews, the support for the process, the evaluations, etc. That was all confirmed to their satisfaction, I should note.

I do think it's important to recognize that…. I know that sometimes people like to think that the sale of surplus assets is somehow a new, big thing. But since we made a reference to a piece of surplus land in the 1990s, it's worth pointing out that almost 300 pieces of surplus land were sold by the NDP government during the 1990s, representing almost $200 million worth of asset sales.

I'm not critical of that. I'm actually quite supportive. I know a number of those sales resulted in significant residential developments. I'm thinking of the old B.C. Pen site, for example, that spurred literally hundreds of millions of dollars worth of real estate development.

What we're doing is exactly the same. We want to make sure we do it in a manner that maximizes value to the province of British Columbia and do it in a manner that respects all of our constitutional obligations to consult, where appropriate, with First Nations. We will, of course, do that.

The timeline that the member talked about is, I think, eminently reasonable. You can see this isn't going to be just like we're shovelling out projects and selling them immediately. This is quite a long lead time. The member's right. The reason it's a long lead time is that we are going to do our homework, maximize the benefits and introduce these in a manner that will ensure that we maximize value.

All of that will take place. That's why it takes up to 18 months lead time before you actually start to see the benefits of some of these transactions taking place. But we think that that upfront work is important to ensure that we maximize the return to the taxpayers and the government of British Columbia.

B. Ralston: The minister made reference to land that may be set aside for treaty purposes. I think there may be a misapprehension here. Certainly, the obligation on the Crown is broader than that, as I understand it, and that's why the aboriginal groups have expressed interest. The obligation is to consult whenever Crown assets are being disposed of, regardless of whether or not they're formally part of an individual treaty process.

Now, the Minister of Aboriginal Relations and Reconciliation, in Hansard on Monday, February 27, said — and this was in question period:

"I'll repeat for the member. He well knows that we as a Crown have a duty to consult with respect to the disposition of Crown assets. We take that responsibility very seriously. Once the properties have been identified, then of course we will engage in the appropriate consultation. But I would suggest to the member that it's quite illogical to suggest that we could consult on specific lands when we don't know what they might be yet."

That was at the end of February.

Have the Minister of Aboriginal Relations and Reconciliation and her staff been advised of the list and the plan to dispose of it? What has been the reaction from that ministry, and what is the plan for them to meet their obligations with respect to individual pieces of land — particularly given the example, again, of one of the three that we're told about, this land at No. 10 Highway and 152nd in Surrey?

[1540]

Hon. K. Falcon: I again do want to underscore the fact we will be following and maintaining….

[Interruption.]

Somebody's in trouble. I won't mention names — House Leader of the NDP. [Laughter.]

Interjection.

Hon. K. Falcon: I know the Chair rules this room with a steady hand, so there's going to be a penalty imposed. I am certain.

We will fulfil all of our treaty and constitutional obligations in the course of undertaking this. The member should know that the aboriginal law group within the Ministry of Justice was involved in the consultations, provided with a list of the properties.

That land was all categorized both by the potential level of interest and strength-of-claim issues. Some were actually taken off the list as a result of those consultations. So this has gone through a pretty thorough vetting.

Of course, going forward the ministries will be alive to making sure that they fulfil their obligations to consult and, where appropriate, accommodate.

B. Ralston: Perhaps, then, the minister can confirm that the consultation that's taken place with the ministry took place since the minister said, at the end of February, that she — and this was a couple of weeks after the budget was tabled — wasn't aware of the list, of specific proper-
[ Page 11765 ]
ties on the list. So I'm assuming that that's taken place since the end of February. That's the first thing.

Second thing. Can the minister, then, advise what impact he expects this might have on the process to sell these assets, given that…? I'm thinking of the federal case.

There was a case where there was an agreement by the federal government to dispose of a number of significant properties in downtown Vancouver. I'm thinking of the former post office on Hastings. A lawsuit was brought by one of the bands in the Lower Mainland, I believe the Musqueam. An injunction was granted, and the sale was brought to a halt.

There are remedies that are available to aboriginal groups if they're not satisfied with the consultation process. Can the minister, I suppose by way of explanation or reassurance or just in defence of the fiscal plan that shows substantial revenue flowing from this process, explain what steps have been taken?

Hon. K. Falcon: Not to belabour the point, but I think it's important to recognize, Member…. I think the essence of your question is: have you done your homework to ensure there are not going to be future legal problems? The short answer is yes.

That's why we had consultation with the aboriginal law group from the Ministry of Justice. That's why, as a result of that consultation, some properties were actually removed from the list.

Of course, we will go through the full process, ensuring that we honour our constitutional obligation to consult and, where appropriate, accommodate First Nations. These properties are being sold, because they're surplus, non-strategic properties, to generate revenues, no differently than the properties that were sold under the NDP government to generate revenues and increase economic activity. That's the beauty of these kinds of investments.

[1545]

It's something I feel very confident…. It happens across the country. In fact, I was interested in noting…. The Manitoba NDP government came out with a budget recently. Just putting aside all the tax increases, which we certainly probably don't want to highlight, I noted that they were including $75 million worth of surplus asset sales. That's in addition to the barrage of tax increases that they were including in that budget — rather shocking, actually. But that's okay.

Apparently, even the NDP government in Manitoba recognizes and in fact highlighted, as we did, the fact that they were going to be selling surplus properties. I believe the amount was $75 million of surplus properties by the NDP government in Manitoba. You know, that would be consistent with the size of their province and economy, but it's still a big amount in Manitoba.

This is, obviously, a very small amount in terms of the property holdings of the province — less than 2 percent. But as I say, we will fully ensure that we adhere to all of our constitutional obligations. It is, I think, worth noting that in the climate governments face today in Canada and around the world, many governments are now being directed to actually look at these opportunities, because they haven't been.

If you look at the Drummond report…. It was issued by Don Drummond, a former chief economist from one of the big five banks — certainly a well-respected former Deputy Minister of Finance in the federal government. When they came out with that report on Ontario's financial situation, they pointed out that their debt level was, frankly, way too high, that their deficits — $16 billion a year, this year alone — were way too high and that they were not demonstrating a credible path to get back to balanced budgets.

That's not a position any government wants to find themselves in, but it is not hard to get into that position if you're not showing fiscal discipline. One of the recommendations, as I recall, in the Drummond report was saying to the Ontario government: "You ought to be selling surplus assets that you have, that are non-strategic, that you can be generating revenues for. That is, you know, a responsibility you have as a government to be doing that." And boy, I'll tell you, they absolutely should be looking at that.

I can tell you that in British Columbia, though, we have one of the lowest debt-to-GDP ratios in the entire country, as was pointed out by the credit-rating agencies that the member and I were talking about yesterday. It was highlighting, in fact, the fact that British Columbia has one of the lowest debt-to-GDP ratios in the country. And of course, we're one of the few jurisdictions to have a triple-A credit rating in Canada. It is still important for us to be smart about those kinds of things too.

I want to achieve exactly what was achieved when the NDP government sold the Oaklands land in Burnaby for residential real estate development. It created a wonderful development, by the way. I'm being complimentary here, not critical. Or the former highways yard in Abbotsford that was sold off for office development — redevelopment that created a wonderful office complex that's now being utilized. And on and on we could go.

Those were, I believe, the right decisions that were made at that time, recognizing that those were likely surplus lands, surplus properties. The government of the day said: "Let's put those to good use, put them into the private sector and create some investment and jobs while, at the same time, generating revenues for government." We're trying to achieve the same thing.

B. Ralston: It's refreshing to hear from the minister compliments about the economic stewardship of the government in the 1990s. He doesn't often give himself that opportunity. I would note parenthetically that the legal environment as concerns unresolved aboriginal claims in Manitoba is quite different than it is here.
[ Page 11766 ]

Can the minister…? Given that one of the three examples we have is this property at No. 10 and 152nd, the article locally confirms that there is substantial aboriginal interest in this property. Is it still on the list, or has it been taken off?

Hon. K. Falcon: Member, of course not. I mean, just because there's interest…. There's nothing wrong with aboriginal groups having interest. They can bring forward, they can register their interest, and of course, it will go through the appropriate legal vetting to determine the level of interest, to determine the strength of the claim.

[1550]

All of that will go into the discussion, for sure, and then a determination will be made, after appropriate consultation, whether accommodation is required and, if accommodation is required, what level of accommodation is required. All of that will be absolutely strictly adhered to — there's no question about it — as it is, by the way, every day in the province of British Columbia as we're involved in the process of selling surplus assets.

All we are doing here is…. Just to make sure everyone understands, because I think I maybe need to remind everyone that the government of British Columbia sells assets every single year.

What we have done is said, "Let's do an across-government scan and be very strategic about identifying, after much consultation to ensure that we understand, what parcels would be inappropriate for selling, given First Nations' not just interest but the likelihood of interest or strength of claim." Some were removed, as I said, from the list as a result of consultation with the aboriginal law group within the Ministry of Justice.

No, you don't take properties off the list because a First Nation expresses interest. What you do is engage in the appropriate consultation with the First Nation or group of First Nations, or whoever is expressing interest, to ensure that you undertake your constitutional obligations to consult and then, where appropriate, accommodate. That will all take place in this process.

B. Ralston: I wonder if, in the advice that the minister has received about how this process will proceed, the following has been considered. Looking at what the vice-chair of what's described as the Metro Vancouver aboriginal affairs committee, Ralph Drew — he's also the mayor of Belcarra — predicts: "If the province does proceed, the Katzie might have an option to buy the Crown land in Surrey at market value ahead of anyone else. 'It's a prime economic development opportunity, I would think, given its location,' said Drew, the mayor of Belcarra."

Does the minister have any comment on that, or is that too premature to take a position on? Certainly, there is public interest in that kind of approach.

Hon. K. Falcon: The goal of this exercise is to maximize commercial return to the taxpayers and the government of British Columbia, so that means through a competitive process. This is not an effort to provide accommodation through dealing with just a single First Nation. Certainly, as I've said before, all of our constitutional obligations will be fully employed, and we will make sure that the appropriate consultation with interested First Nations takes place and, where appropriate, accommodation.

B. Ralston: Mr. Drew, the mayor of Belcarra, goes on to say:

"'If the Katzie bought it,' Drew said, 'the band could, even without a treaty, convert it into an Indian reserve with tax-free status and exploit new federal rules that provide much more scope for commercial and industrial development of reserves.

"Surrey would have no control over what is built there because it would no longer be part of the city and the official community plan would not apply. Nor would the city receive property tax on the development.'"

He also goes on to say further in the article:

"Drew said: 'The Tsleil-Waututh band, for example, has made it clear it intends to convert any land it buys in North Vancouver to reserve status.'"

Again, is that part of the consideration that Deloitte and the other people that the minister referenced are taking into consideration in preparing these sales?

Hon. K. Falcon: I don't know this Mr. Drew, and I'm not sure why he's speculating on a piece of property that's far outside his community, though I suppose he has the right to speculate. I consider that speculation to be…. Well, it's just extremely speculative for no apparent reason. I'm not sure what his rationale is.

I want to assure the member opposite and the public that we intend to go through a competitive procurement process to maximize the return to the taxpayers in the province of British Columbia. In the course of that competitive process we will, of course, have engaged in the appropriate levels of consultation with any interested First Nations and will ensure that we fulfil our constitutional obligations to consult and, as I've said, where appropriate, dependent on strength of claim, etc.

[1555]

I'm not aware the claim issues around that area. The member knows it well. There are private sector residential homes and commercial shopping centres surrounding the entire site bordered on Highway 10 on the south of it, and on every side of it there are private sector homes.

I'm not aware of the issues he's talking about, but I can tell you that as we go forward, we will certainly be consulting with the appropriate parties — whether that's municipalities with respect to zoning, whether that's First Nations with respect to perceived or real constitutional or historical aboriginal interest.

All of that will be complied with and done in accordance with the consultations we've had with the aboriginal law group from the Ministry of Justice.
[ Page 11767 ]

B. Ralston: I'm not advocating for Mr. Drew, but he is the mayor of Belcarra, and he's the Metro Vancouver aboriginal affairs committee vice-chair. They do meet, I think, monthly. I'm familiar with some councillors who sit on that committee. It's an active committee. I suppose he's speaking, in that capacity, with some knowledge.

I suppose my question is: given where this process is at and the consultation that the minister is engaged in so far, is he able to say with any kind of certainty whether he will achieve the revenue target that's set out in next year's budget?

My sense is that this was put together relatively quickly before the budget. Given the fuller knowledge that's now available — the scrutiny of properties and the process and some of the potential inhibitions to this going forward on, at least, individual properties — can he provide some sense of whether he is now confident that he can meet that budget target or not?

Hon. K. Falcon: To answer directly to the member, I have a high degree of confidence. First of all, the member should know that it was not something that was rushed together. We actually put a team together six months prior to the budget to begin the strategic review of looking at properties across government. It seemed like an eminently sensible thing to do at a time of great economic uncertainty in the world.

We were well ahead of the Drummond report recommendation, certainly, in Ontario telling the government: "Get your act together. You guys should be looking at this." We were already, of course, well along to doing this.

[D. Horne in the chair.]

What I can tell the member is that having the third-party validation…. Having some background myself in real estate investment and development, certainly, as I look at the list of the potential project sites, there's no question that the dollar amounts that were utilized I think are very much on the conservative side.

[1600]

That certainly was reinforced by the advisers, whether it was Colliers or Carmichael Wilson Property Consultants that took a look. Essentially, to paraphrase what they said, the demand for those kinds of development sites is going to be very high. Competition will be fierce. There will be strong interest in the real estate community.

This was also, as I mentioned earlier, something the credit-rating agencies all had a look at — not only those reports that I've just referred to but also the aboriginal law group opinion, in terms of the review that they did of the sites and the fact that these sites have gone through a review. Obviously, we will be entirely fulfilling our legal obligations around First Nations with respect to appropriate consultation and, where appropriate, accommodation.

I feel extremely comfortable that the amounts in Budget 2012 — effectively just over $700 million over two years — are entirely achievable, especially given the work that's been done over the last six months and the work that will be done over the next 18 months in terms of preparing and undertaking all of the consultations to ensure that we maximize return for taxpayers.

I am very, very confident that we will likely exceed the, again, very conservative numbers that we've utilized and the credit-rating agencies have reviewed — and also share our opinion that the assumptions that we're making are reasonable.

B. Ralston: Given that this is a program that's now been announced and is in the budget, I'm assuming…. We spoke earlier of the cooperative gains mechanism in negotiations. None of these properties, even if they're not identified publicly, would be available for that purpose.

Certainly, in the health authorities there are substantial real estate holdings that a proposal…. I expect some of the properties are indeed health authority properties. I just wanted to confirm that…. What I think is the intent of the cooperative gains policy is that none of these properties would be available for that purpose.

Hon. K. Falcon: The member would be correct. The cooperative gains mandate does not include an option of health authorities, school districts or anyone else selling capital and utilizing that capital to deal with operating pressures. So the member would be correct.

B. Ralston: A couple more questions before I conclude on this topic. Then I'd like to move, just by way of notice, to the Securities Commission. I don't think I'll have as much time to ask questions as I'd hoped, but I do have a couple of concluding comments, concluding questions.

Can the minister advise, based on the timetable and advice he has, when he expects the first properties to be available for public sale? In other words, when will they be disclosed publicly? Secondly, is one of the options long-term leases, which are sometimes used by governments — 60- or 99-year leases? In the case of B.C. Rail, it wasn't a sale. It was, of course, a long-term lease of 999 years. I doubt that would be the case, but is a 60- or 99-year lease being contemplated as one option?

[1605]

Hon. K. Falcon: We are not considering, as part of the strategy that's unfolding, the option of long-term lease arrangements that the member is referring to. In terms of when the sales will take place, we anticipate that the first sales will be triggered in 2013.

B. Ralston: I'd like now, if I could, to move to some questions about the B.C. Securities Commission. Mr. Bourque is here, and I apologize to him for keeping him
[ Page 11768 ]
waiting, but sometimes these things go on a little bit longer than necessary.

If I might begin, Mr. Chair?

The Chair: Proceed.

B. Ralston: I want to begin first by referring to the Securities Commission executive compensation report. As the minister will know, these are filed on line and list the salaries of the top five people at the Securities Commission. This is the one for the year ended March 31, 2011.

I'm reading from the report. The total compensation for the chair in 2011 was $499,251; for the vice-chair, $443,631; for the executive director, Mr. Bourque, $343,496; for the director of enforcement, $273,959; and for the director of corporate finance, $262,023. I understand that there are about 215 employees and an annual budget of $30 million.

For B.C. Hydro, the same comparable report, public sector executive compensation for B.C. Hydro, June 2011 — total compensation. I appreciate that this is outdated because he's left, but total compensation for Mr. Cobb, on page 5, $467,000; I'm not sure whether it's Mr. or Ms. B. Van Ruyven, $482,000; C.W. Reid, $458,199; C.K. O'Riley, $439,862; Mr. Reimer — I know that to be Greg Reimer — executive vice-president, $328,819.

Given that Hydro has an annual budget of about $3 billion and 6,000 employees, can the minister explain the apparent disparity between the budget and the number of employees supervised and the — I think what most members of the public would regard as grossly inflated — salaries for the leading staff at the B.C. Securities Commission?

[1610]

Hon. K. Falcon: First of all, I think an important distinction that is necessary for the public or those viewing to understand is that all revenues generated to fund the B.C. Securities Commission are paid for by members of the profession. It's paid for by the industry, in effect. These are not taxpayer dollars going into it.

You have to be a little bit careful in terms of making the B.C. Hydro analogy, because I think we all recognize how important the securities industry is in British Columbia. I mean, it's certainly the exempt and non-exempt markets. You look at all the spinoffs. Very easily you can get up to a $25 billion-plus annualized contribution to the economy. So it's very, very important.

Of course, every year we go over this. When I see these salaries, I keep reminding myself that I'm in the wrong profession, but we'll just put that aside for a moment here.

I do think it's important to recognize that losing staff can be a challenge, especially at the Securities Commission because they are, understandably, regularly trying to be poached by the accounting firms, the legal firms and others that are involved in the securities industry. So it is necessary, by its very nature, that they have to ensure that they are paying at least a market compensation, though I certainly acknowledge that to average people like ourselves that's certainly well compensated.

I do know that in terms of determining what those levels should be, they do an annual survey of market salary levels to ensure that what they're paying is certainly within the appropriate range.

As I look, Member, at the amounts that are being paid, I note that there have actually been slight reductions in the pay for the director of corporate finance, for the director of enforcement, for the vice-chair, and I think the chair is the same as the prior year.

It looks like several of the senior executives that the member has quoted have seen a slight reduction from what they were being paid in 2010. But nevertheless, I acknowledge that those are competitive salaries, for sure, in that highly paid industry.

B. Ralston: I think the minister is referring to the same document that I have, and I note that the comparable in 2010 is total compensation, and there are some variables in that. There's what is called incentive. There's pension. There's what is poetically called "other," and that includes a number of long-term disability premiums, CPP, parking and transit. There are a number of premiums there.

The declines for the director of enforcement and the director of corporate finance might be slight. But given that this report was for the year ended March 31, 2011, and we're now in May 2012, can the minister confirm…? Take maybe one or two — the chair and the vice-chair. Has their base salary increased?

[1615]

For Ms. Leong, her base salary was $378,000 with an incentive, it's called, of $55,578. For Mr. Aitken, the vice-chair, $324,155 with an incentive of $104,696. That's for the year ended March 31, 2011.

We're now 2012. Perhaps Mr. Bourque, since he's one of the five, could advise us whether those salaries went up. Given the compensation climate and given the government's salary policy and negotiating stance for the broad public sector, I'm sure that would be of interest to the public.

Hon. K. Falcon: For the fiscal year ending 2012 — I understand all this becomes public, I think, in July — the chair is the same as last year, and the vice-chair has gone down slightly, by several thousand dollars. The executive director — 2011 was his first full year. The member may recall that the executive director only worked part of 2010 because he was hired midyear.

B. Ralston: I now want to turn to non-compliance in the private placement market. In the service plan of 2012 to 2015, on page 13, this is identified as a risk.
[ Page 11769 ]

I want to turn to an example provided by Mr. David Baines of the Vancouver Sun — the Freedom Investment Club. In early March of this year B.C. Securities Commission enforcement staff issued a notice of hearing alleging "two key promoters, Michael Lathigee and Earle Pasquill, committed fraud by raising $21.7 million from 698 investors without telling them that the club was on the verge of insolvency." He had identified this in articles in 2007. This is in 2012. He'd identified this in articles in 2007.

In 2008 he said:

[1620]

"FIC" — that's the referred-to Freedom Investment Club — "looks and acts like a conventional mutual fund, but it has none of the usual consumer safeguards. Neither the fund nor its principals are registered with the Securities Commission, and they operate outside the purview of the Mutual Fund Dealers Association. In 2008 the B.C. Securities Commission enforcement staff issued a cease-trade order against one of the companies for alleged disclosure breaches."

This was apparently, certainly, public knowledge — at least public enough for the Securities Commission to investigate.

But it's only four years later, from 2008 to 2012, to issue the notice of hearing. The notice of hearing alleges that from February to November 2008, back when this was the subject of articles by Mr. Baines, they raised $21.7 million from 698 members for investments without telling them the companies were close to insolvency.

I know that in the plan this is identified as a risk. There are a number of affirmations about objectives, but wouldn't the minister agree that the Securities Commission has been an abject and total failure in enforcing the laws in this market?

[1625]

Hon. K. Falcon: I thank the member for the question. It is, I think, important to recognize that the exempt market generates about $11 billion worth of capital raised each year in British Columbia. So it is not an insubstantial part of the marketplace. The billions of dollars that are raised each year obviously generate a lot of economic activity.

When the northwest exemption, as it's referred to, was struck between B.C., Alberta, Manitoba, Saskatchewan — and I think the territories are there — it provided that registration exemption to certain players in the exempt market. The key challenge, I think, for the Securities Commission is: how do we protect investors who choose to invest in these kinds of venture startup businesses? Typically, that seems to be the area where there are some real challenges.

The member will know, of course, that in the fall of last year, in 2011, our government introduced amendments to the Securities Act, which now requires companies to keep records, gives the Securities Commission powers to order those companies to produce documents and allows the Security Commission to undertake targeted compliance reviews. They now have the ability to make production demands — for documents, etc. — from individuals that are participating in the exempt market.

As you know, the Securities Commission has also introduced new disclosure requirements for private placement market offerings to provide more information to investors. They've established a dedicated compliance team to monitor the private placement market, including reviewing all offering memorandums that are filed.

They also have restrictions now so that individuals that are involved in the private placement market cannot give advice to people. They cannot provide investment advice. They cannot hold client assets. If they have been previously registered under the act — in other words, if they were formerly a mutual fund salesperson, as an example — they cannot be involved in marketing these kinds of exempt products.

In fact, anyone who has provided previous investment advice to an individual, even if they were unregistered, cannot then be selling these kinds of products to those individuals, the idea being, of course, to ensure that people cannot, if they have former clients that they may have dealt with…. Let's say, for example, that they were a mutual fund salesperson and they are no longer a mutual fund salesperson, but they go back and start touching base with those clients to try and sell exempt securities. They will not have the ability to do so.

So there have been a whole series of things that have been brought in to try and deal with the unfortunate case of some bad apples that perennially seem to always be in the securities area — not just British Columbia but, sadly, around North America.

[1630]

B. Ralston: Can the minister give an indication — perhaps Mr. Bourque can assist — in terms of what steps have been taken to use the new powers? Obviously, they give new powers of enforcement, but if they're not used, then they're not really worth very much. Can he give some indication of that?

Secondly, just because my time is beginning to run down in terms of…. I have other colleagues who want to move to other topics. I want to ask another question. Perhaps you could get answers for this one at the same time.

Is the minister satisfied with the level of RCMP participation in investigation of alleged securities fraud? In the Securities Commission service plan it says that BCSC has referred 22 cases to Crown counsel since November 2006. That's over a period of six years — 22 cases. It doesn't seem excessive, by any means. Can the minister state whether, on behalf of the commission, he's satisfied with RCMP resources that are dedicated to investigating securities fraud?
[ Page 11770 ]

Hon. K. Falcon: It is important to know that the B.C. Securities Commission, in 2007, set up their own criminal investigation unit, a team that does all the investigative work. Then, once they've completed those investigations, they actually refer those directly to Crown counsel. The member will be pleased to know that since that team was formed in 2007, they have charged 22 individuals. Thus far, they've convicted 11 of those individuals. The balance they are working through, but they expect to complete the convictions on the balance.

[1635]

That has totalled 69 criminal charges in these cases, plus 257 securities charges on all of those cases that I've mentioned — the 33 cases, of which 11 have already been convicted. That seems to be working very well.

In terms of the member's…. My thoughts on RCMP participation and effectiveness in securities fraud. I will note, just from my own knowledge, that the federal government struck together a team of RCMP that were to focus on security fraud issues. That was done many years ago. I forget the exact year, but it's been in place for at least five years — since 2003, I'm advised.

I am not aware of a single successful case that they've prosecuted. Now, I could stand to be corrected. I don't want to impugn efforts or anything else, but what I can say is that the Securities Commission does not rely on the RCMP. They have their own investigative team. Their criminal investigative team does all the work, puts together the cases, hands those cases directly over to Crown counsel and then proceeds with the charges — if approved, of course, by Crown counsel.

B. Ralston: The Securities Commission service plan talks about, on page 15, "market misconduct associated with offshore secrecy jurisdictions." There's an affirmation of a will to address "risks to investors posed by traders in offshore secrecy jurisdictions." There are some, I think, performance measures which, at least to my eye, are a little bit difficult to sort out.

Can the minister explain what the Securities Commission means by moving to address those risks? How is that going to come about? What enforcement mechanisms, what investigative mechanisms and what cooperation with federal policing authorities are going to be undertaken to deal with those risks?

[1640]

Hon. K. Falcon: There's been a two-year project underway, I'm advised, at the Securities Commission. Last year what they did was surveyed the kind of due diligence that dealers who are really on the front line of this effort…. They surveyed the dealers to find out what kind of due diligence they were conducting to determine who, effectively, the beneficial owners are that are making these trades.

As a result of that, they operate under certain conditions already — the dealers — and they have obligations in terms of determining beneficial ownership. As a result of that due diligence report back, BCSC, the Securities Commission, has added more conditions for the dealers to follow. That was the work that took place last year.

This year they now have their enforcement group bringing forward cases and notices of hearings. So where the enforcement group brings forward cases or can't get appropriate information or is having difficulty determining who the beneficial owners are and where the trading activity is being generated from, they are putting forward cease-trade orders and notices of hearing so that they can bring forward these individuals and get the additional information.

That's a two-year project that's been underway that I understand is starting to reap some benefits.

B. Ralston: I do have more questions, but given the hour, I've agreed to give way to my colleague from Vancouver-Hastings, who wants to ask a series of continued questions about the Insurance Corporation of British Columbia. I understand the officials are here, so perhaps, with that, we can….

The minister is signalling that he'd like to stand down briefly, so perhaps we can do that in order to change officials, and we can then proceed.

The Chair: The committee will take a brief recess.

The committee recessed from 4:42 p.m. to 4:48 p.m.

[D. Horne in the chair.]

S. Simpson: I've got about four or five areas. We spoke the other day on a number of issues around rates and capital tests and things. I've got about four or five other areas that I want to go through that relate to ICBC.

The first issue is around the pension plan at ICBC and the state of the plan. I know that it's a jointly trusteed plan between the corporation and the union. I believe that because investment returns have been pretty good, the plan has essentially been in surplus, though I know we've spoken and the minister has spoken about the challenge related to investments over the past year or so, the challenge in that.

I'm wondering if the minister could tell us what the expectation is about the valuation for this year for the plan in terms of it continuing to remain in surplus or remain solvent. What are the expectations around the plan?

[1650]

Hon. K. Falcon: The plan evaluations are undertaken every three years, as we do for the ones that are covered under the public service. My understanding is that the last evaluation was done three years ago — the one the member refers to, which showed it in a surplus — and
[ Page 11771 ]
another is being done in the latter part of this year. It's very likely to show a deficiency, which is not uncommon, of course, in the pension world today.

Under the terms of the joint trusteeship arrangement, as the member would know, discussions will be engaged in between the joint trustee representatives to determine how to deal with whatever deficiency is identified as a result of the three-year, triennial review that's done.

S. Simpson: Thanks to the minister for that. In terms of that discussion about how to deal with the deficiency — and I'm assuming that it maybe involves something around benefit rates, but I suspect it probably has more to do with contribution rates in terms of both employer and employee contribution rates — could the minister tell us: what are the options that are available to address that deficiency, and what are the requirements under the legislation, whatever, in terms of addressing that deficiency? What are the obligations of the plan to deal with the issues of deficiency?

Hon. K. Falcon: It sounds like they've got a similar approach that's taken with the public sector pension plan. Essentially, under the joint trusteeship arrangement, there are effectively a couple of options. One is to scale back benefits. That could be things like the extended health. Or indexing, for example, could be another thing that could be looked at — or alternatively, to adjust contribution levels. In other words, the contribution levels could be required to increase, and that's typically on a 50-50 basis, employer and employees.

S. Simpson: Looking at those two, and I certainly understand the potential for scaling back some level of benefits, whether it's an interim measure or longer-term or more permanent measure, presumably that's a point of negotiation and discussion. In terms of contribution rates, am I correct…? My understanding is that the employee contribution currently is capped at 9 percent. The employer's contribution presumably is not capped at this moment. I'm assuming that's open for discussion at some table.

What is the current employee contribution? And are we then talking about — at least under the current model, though I understand it can always change in discussions…? Under the current model, would the obligation for increased contributions rest solely with the employer, with the corporation? Or is there still contribution room on the employee side?

[1655]

Hon. K. Falcon: Actually, I think it's a very important line of questioning. One thing I learned, Member, that was extremely eye-opening for me was that across North America and virtually almost everywhere else, they have these huge unfunded liabilities — like in Illinois. I was in Chicago, and the state of Illinois has an unfunded pension liability somewhere in the $83 billion range. It is shocking what has happened.

I say that only because I want those that are watching here today to understand how proud we should be in British Columbia that we have a very unique arrangement around our public sector pensions and, similarly, with ICBC, with this joint trusteeship arrangement that requires every three years to do the valuations. If there are any shortfalls identified as a result of the valuations, they must be dealt with, either through increased contributions or through scaling back the level of benefits, until such time as it gets back to a balanced position.

That is something that I just wanted to put on the record, because I think we can all be very proud of that in British Columbia — that we don't run up these huge liabilities that we're seeing virtually everywhere else — around the world, actually.

In fact, the credit-rating agencies in the investment community…. One of the first questions they would ask after you'd do the presentation is they'd say: "Yeah, that all sounds very good. But what about your unfunded pension liabilities?" They were thinking that they'd kind of got us on that one, because so many other jurisdictions have this problem, and we were able to say: "We have fully funded pensions in British Columbia in the public sector." That's something that I think we can be proud of.

Directly to the member's point, though — on the trustees who have fiduciary obligations — there's an employer representative and the employee representative that sit in the joint trusteeship arrangement. They could jointly waive the cap of 9 percent of income that is currently in place for the union members in terms of contributions, but I'm advised that to do so they would require federal Minister of Finance approval to allow that to happen. It would happen only if the employer agrees to match whatever that increase is.

It has to go up lockstep. If it goes higher for the employees, then the employer has to meet that. They would then apply to the federal Minister of Finance, and I understand that it's not typically a challenge in getting approvals, but it is a regulatory requirement. I think that addresses it.

S. Simpson: I understand that. So you have that situation where that could happen. It's my understanding, and I could be corrected, that there's been at least some preliminary discussion around that, because everybody's anticipating the pension plan to be not as solvent as it has been, because of the reality of investments these days.

[1700]

With that challenge happening, and this is the question…. I don't want to start delving into collective bargaining, because that's a separate matter. I don't want to get into that here. I know bargaining is underway.

The minister has talked about the options for creat-
[ Page 11772 ]
ing some room around cooperative gains — which I believe is the terminology the minister has used when he has talked about the public sector and the different kind of environment we're in today in terms of how to deal with that.

Would the minister envision any kind of an arrangement that was available between the union and the corporation through the pension plan, which saw movement there to address this problem? If the union, maybe by adjusting around its employee contribution rates, were prepared to do that to ease the pressure on the employer and their obligations, would the minister see that as fitting within that realm of a possible cooperative gain?

Hon. K. Falcon: In the case of any of the public sector pension plans, the answer is no. By legislation, they are not allowed to bargain pension benefits. My understanding is…. I believe that that would also apply to ICBC. I'm not sure if it's by legislation or by practice, but my very strong sense from talking to staff is that that certainly would apply to ICBC too.

S. Simpson: I'm looking here at the 2010 Executive Compensation Disclosure Statement for ICBC. I see that there were two officials who were in one position over a period of time, but roughly here we see — in terms of incentives or the bonus program, whatever terminology we want to use — that five officials received incentives of almost $600,000 over and above their base salaries.

When I read the notes to the statement, it says: "Dollar value of all amounts paid under the short-term incentive plan in recognition of performance in the fiscal year specified but paid in the following…year." Could the minister explain a little bit about what those performance measures are and how they get measured? Who does that assessment to determine the value of these incentives, which are all in excess of $100,000 annually?

[1705]

Hon. K. Falcon: I think it is worthy to point out that as of the December 31 year-end for the Insurance Corporation, the compensation paid to — I have got the top five here, I would assume — the CEO, the chief financial officer, the vice-president of claims, the chief actuary and the business transformation officer all have seen reductions in their pay packets.

For the CEO, it's gone down 6.8 percent, from $522,178 in 2010 to $486,541 in 2011. The CFO has gone down just over 11 percent, from $522,000 to $464,971. The vice-president of claims has gone down almost 11 percent, from $475,524 to $423,954. The chief actuary has gone down almost 2 percent, from $421,000 to $414,000. The business transformation officer has gone down 5.7 percent, from $435,000 to $410,799.

S. Simpson: I appreciate that. I appreciate that at the end of the day, you have a total compensation package, and it is what it is. These ones are running in the $400,000 range, or something in there, for some of those senior officials.

What I'm trying to determine here, to understand…. That package is a combination, as I understand it, of base salary, pension benefit and of some other related compensation. Those are not particularly large numbers when you're talking about this kind of package and this incentive.

What I'm trying to understand here is: is there a measurement of some sort that determines how much of an incentive an individual receives in a year, and how does that get measured? Or is it essentially part of the salary that is received, generally, in its entirety? Or is there actually some way that you measure that?

Hon. K. Falcon: For the 2011 performance year there was reduced incentive payout at all levels of the management group as a result of the financial trigger that was applied in 2011. ICBC's executive committee experienced an average year-over-year reduction in STIP, or short-term incentive plan payouts, of 52 percent. The measurement, Member, is based on individual, divisional and corporate performance metrics.

[1710]

I think it's worth reading into the record the actual incentive payouts for each of the key executive team that the member is likely interested in. For example, for the president, Jon Schubert, incentive pay in 2010 was $115,500. Incentive pay in 2011 was $83,812. The chief financial officer incentive pay in 2010 was $135,228. In 2011 it was reduced to $77,475. For the senior vice-president of claims, the incentive pay in 2010 was $129,741, and in 2011 it was $71,111.

S. Simpson: I just have one more question in relation to these bonuses or the incentive question. Then we'll move to a different area here.

My memory is…. I'm trying to recall here, so hopefully somebody will help me. I know there has been recent discussion around incentives and bonuses and such in some other government institutions, corporate Crowns and others. I'm not sure whether the minister has made public comment about it, but the Premier, I know, has made comment about concerns about how that gets structured with incentives.

The question that I have is: do those comments reflect that there is going to be some changing in the way that pay gets delivered? Does it get folded into pay, or do incentives continue?

Hon. K. Falcon: In the throne speech the government indicated that reviews of Crown corporations are underway and that compensation is going to be an integral part of these reviews. The member will know that in my
[ Page 11773 ]
budget speech I also made reference to the fact that we would be reviewing compensation levels.

This is driven by a recognition that I do think, especially given the times that we're facing, it's very important that the public understand that the position we've taken in government, including the members opposite, is we are now entering into our third and fourth year of zero wage increases as MLAs.

Every minister in government takes a minimum 10 percent pay cut every single year that we are in deficit as a government. That will be happening again this year and has happened every year that we were dragged into deficit as a result of the global economic downturn. We think that's an important measure of accountability.

I think it's also important to note that all OIC appointments and senior government executives — like our deputy ministers, our assistant deputy ministers — have had in place a 10 percent holdback for at least the last five years. I believe it goes as far out as six or seven. No one has achieved the full holdback — in other words, has gotten it back — during this time period.

[1715]

That discipline that we've been showing within government…. We want to make sure there's that same kind of discipline taking place in all of the Crowns. That's why we are, as part of these reviews, taking a close look at incentive pay, making sure that the incentives are real, that the bar is high enough — that it's not so low that everyone's jumping over it and receiving full incentive pay because, frankly, the targets are so easy to set. We want to make sure that they are high, that they are realistic and that they also reflect the environment that we find ourselves in collectively.

I just say, from a personal point of view, that I remember when we brought in the requirements for 20 percent holdbacks of ministers' salaries that have to be earned back. We never get our 10 percent of that back, of course, because we're in deficit and don't get that back until we balance the budget. We jokingly used to call that the spousal accountability act.

As it's now been in place for several years, I want to make sure that I'm seeing the same kind of thing happening throughout the Crowns across government. That's why we are taking these hard looks and making sure that it is passing the test — what I would say, the public test — of ensuring compensation levels are reasonable and the incentives are realistic.

S. Simpson: Thanks for the answer. I guess the only comment I'd make, and I'm going to move on, is that I think an important part of that work that the minister is doing is to identify the transparency of those incentives so that people who have a serious interest in that have the ability to look and, as the minister says, determine in a fairly simple way that the incentives were real and that they were achieved based against some measure. Then when they receive the incentive, you can see how they accomplished a measure to do that. People should be able to access that information at some point, for transparency, when the opportunity comes.

I wanted to ask a question about…. I've got just a couple more areas here. The first issue is in relation to the structures of insurance. We know that British Columbia has had the no-fault discussion before, and that was a challenging discussion. There are groups — I guess particularly the legal community and the disability community are the two that jump out at me — who have their concerns with no-fault.

I wonder if the minister could tell us whether ICBC is having any discussions about any restructuring of the current insurance model to look at no-fault. The devil's in the details as to what we're talking about — but generally, whether a conversation about whether some form of that, in some fashion, is on the table.

Hon. K. Falcon: If I could very quickly just tie up a knot on the last discussion. I think it's also important to note for viewers that our government has made it a requirement that anyone in the public sector earning over $75,000…. That information is publicly released annually so that there is full transparency. Frankly, I love that.

It usually engages the media, with front-page stories they write. I think that kind of transparency is absolutely spot on. It requires the individuals and government and everyone else to put all that information out there to make sure people know, and we have to defend it, if necessary. I think that's entirely appropriate. I thank the member for raising that issue.

With respect to the issue of no-fault, there are no discussions taking place, nor is there any movement in ICBC or government to go down the path of no-fault.

S. Simpson: Thanks for the clarity of that answer.

I want to move to a topic that has become a bit of a topic here in the Legislature and certainly in the community. To understand the decisions of government as to why they're going…. The minister may tell me that this is a Solicitor General matter. It's in regard to the question of DriveABLE, as the minister will know, the program for seniors.

The question I have is this, and it relates to ICBC. The biggest issues have always been around the driver testing for seniors, questions around the driving test itself, these cognitive tests, but also access and that. I'm just wondering if ICBC has had any conversations around playing a role in that.

[1720]

Obviously, ICBC has its offices around the province. It has highly skilled and trained people who do this kind of work. I'm just wondering whether there has been any conversation, as we look for a way to make the DriveABLE or some kind of DriveABLE program more
[ Page 11774 ]
successful, whether ICBC has been any part of the conversation about being a player in that — that they might, in fact, be able to take on stuff that obviously ICBC is very expert in.

Hon. K. Falcon: I am advised that the answer is no, that the superintendent of motor vehicles has responsibility for DriveABLE under the Ministry of Justice.

I will say, for the record, that this is always a very difficult area. My own father, when he was diagnosed with a degenerative illness, wanted to keep driving and did keep driving — probably beyond when he should have been driving, frankly. I went on a couple of those trips, and it was pretty frightening.

There is no more challenging area than when you have to say to someone: "You are going to have to give up your right to drive." I know that the Attorney General is well aware of that challenge and is making modifications to DriveABLE to try and strike that right balance, and it is a difficult balance.

The short answer is no. ICBC is not involved whatsoever.

S. Simpson: The next area I want to talk a little bit about and get some sense on is some of the non-insurance-related services that are provided by ICBC, and there's a range of them. The one that I am particularly interested in at the moment is…. We know, with the recent legislation, that we're looking here at how TransLink, for example, has greater authority to actually make its fines have some meaning, to be able to collect them.

Could the minister tell us: is the expectation that those fines will be…? For those people who don't pay up and need to be chased down, is ICBC going to have a role in that, as I know they have in some other areas in terms of collection, at the end of the day?

Hon. K. Falcon: There is legislation before the House right now that will deal with that issue. I do understand that it includes ICBC in what they call "refuse to issue." If someone has an outstanding fine, they don't get to renew their insurance until the fine is, in fact, paid.

I understand that some further work has been done on that in trying to determine what percentage of these individuals that net would capture. I understand it's less than 20 percent of people who are not paying some of these fines that actually have driver's licences.

I have some recollection of this issue. Back when I was Minister of Transportation, we were looking at the whole issue of fare evasion along the line. TransLink has always had a rather optimistic view, from my point of view, that they lose about 4½ percent to fare evasion when all the evidence elsewhere in the world suggests that it's much higher than that.

[1725]

I believe that absolutely to be the case, because I know so many young people, and they love telling me how they never pay TransLink and SkyTrain fares.

The reason why we moved forward….

S. Simpson: You hang out with a rough crowd.

Hon. K. Falcon: Yeah, I'm from Surrey. We've got a good mixture of great young folks. The great thing is they, I guess, don't mind sharing their confidences with me even though they know I'm an elected official and tell me about how easy it is to not pay on the system. I've always believed that to be the case.

When I was Minister of Transportation and we were looking at the issues of gates, what really struck me was that the benefit isn't just to the dramatic uplift in revenues that they will undoubtedly receive, which I predict will be much more than 4½ percent of revenues, but it's also the safety factor, especially for women that are utilizing SkyTrain stations.

What it does is keep off what I call small-time criminals — the drug pushers, the peddlers, the aggressive panhandlers, etc. — that can really make people feel unsafe on a platform. There is a very important security element there, too, which is why TransLink, with the support of the province and the federal government contributions, is moving forward with, I believe, about $120 million in investment in fare gates right across the system, which will have a dramatic improvement.

The collection of outstanding fines will always be a challenge. I think the legislation also contemplates collection agencies and other methods of going after the 80-plus percent that don't have driver's licences to try and figure out how they're going to get some of those outstanding fines back.

S. Simpson: Following a little bit on that question, and not as it specifically relates to TransLink. TransLink now will be arguably, maybe for lack of a better term, the latest non-insurance responsibility that will fall to ICBC because they have the mechanism and the ability to do some of that collection.

We know that there are also a number of other areas, obviously, where ICBC is responsible for administering a number of non-insurance programs and collecting fees and that. Does the minister know sort of what the value of revenue that is collected through these ICBC tools is? How much revenue does ICBC collect on behalf of the government?

[1730]

[P. Pimm in the chair.]

Hon. K. Falcon: I'm advised that $550 million in 2011 was generated, primarily from vehicle registration, fines and driver's licence renewals in 2011.
[ Page 11775 ]

S. Simpson: I understand that for 2012 generally — I think this number is from the service plan — about $124 million was the cost of administering that on the part of ICBC in order to collect that $500-plus million. My question to the minister is: how does ICBC get credited for that? I know all those fees and all that money goes directly to government revenue. It doesn't go to ICBC — the $500-plus million and that. What acknowledgment is there for ICBC in the fact that they expend $124 million to support the government initiative, essentially, as a Crown, for the government to generate $500-plus million of revenue?

Hon. K. Falcon: The member would probably be interested in knowing that this approach was actually started under the NDP government in the mid-1990s, and we have certainly continued with it.

[1735]

The difference is that it started with a regulation, apparently, that was originally passed that allowed ICBC to cover the costs, but that was rescinded a year later so that ratepayers were going to be responsible for bearing the costs. Since 2003, we've had it all formalized under a service agreement, with B.C. Utilities Commission oversight.

We've got a very formalized arrangement that makes very clear what exactly the responsibilities are, etc. The BCUC does allow ICBC to recover those costs through basic premiums.

S. Simpson: I think this will probably be my last question before we'll be moving on to one of my colleagues and another section. But it relates back to this. I'm particularly interested, because now we have a number, I think. It was about $124 million, I believe, for 2012.

I'm particularly interested in this now. Since the government started to take the dividend in 2010 from ICBC and identifies an amount…. Certainly, there are projected dividends and forecasted dividends moving out.

Since that is a real benefit to government — the $124 million, for example, that government realizes from ICBC in order to collect this — is there any consideration to essentially factoring that into the value of the dividend so the public sees the contribution that ICBC is making to other services — general services; health care; education; to that contribution, as other Crowns do — as a real benefit that government realizes and essentially takes from ICBC in the form of costs that are not recovered?

[1740]

Hon. K. Falcon: I think there are a couple of things that are worth noting here in terms of the benefits that are derived by the motoring public, because they are fairly significant. The motoring public benefits because drivers have a regulated system where they pay directly for the services they're receiving, instead of having that done through general taxation.

I'm led to understand that having the ability to purchase their licence, registration and insurance all together is much cheaper than other jurisdictions that have separate bureaucracies covering the different areas. That's one thing that has been pointed out — fairly, I think.

The second is that as a government, of course, we make other significant investments that have important safety benefits to the motoring public. The best example I can think of is one that I was intimately involved with.

One of the most dangerous stretches of highway in the province of British Columbia used to be the Sea to Sky Highway, where we had horrific levels of fatalities and serious injuries every year as a result of that highway being extremely unsafe, particularly with the growth of traffic along that fast-growing corridor. The $600 million investment in the Sea to Sky Highway has resulted in a dramatic reduction of fatalities. I wish I had the exact stats in front of me, because it truly is dramatic — and serious injuries.

In fact, when I was Health Minister and I was visiting the emergency department in Squamish, which we had recently expanded — we had a significant investment there, where we expanded the emergency department — the doctor said to me that the only problem was that the improvements on the Sea to Sky had been so successful from a safety point of view that they were having far less people coming into the emergency department, thankfully, in terms of dealing with the results of some pretty horrific crashes.

I just think that those two benefits are significant for drivers in the province.

D. Donaldson: While staff moves in and out, I'll give a forewarning that the question deals with the contingency funding for this upcoming budget cycle. So I'll proceed, and then perhaps the staff will come in as needed.

The $300 million is booked for contingency in this budget estimates discussion that we're having. My question relates specifically to one of the ministries that accessed contingency funding for this upcoming 2012-13 fiscal year. That was the Ministry of Forests, Lands and Natural Resource Operations.

When I questioned the minister of that ministry in budget estimates, he made the suggestion that the contingency funding questions would be best handled by the Minister of Finance. That's why I'm bringing it to these budget estimates.

It relates specifically to an announcement in the fall, in September, around $24 million being put towards addressing the backlog in permitting issues that that ministry is responsible for — specifically, mining permits, notice-of-work permits around mining, and then Land Act and Water Act permits.

At that time I believe it was the Premier that said that $12 million would be al-
[ Page 11776 ]
lotted out of that $24 million for the current fiscal year, and then $12 million would be allotted for 2012-13, as necessary.

What I learned from budget estimates with the Ministry of Forests, Lands and Natural Resource Operations was that $7.1 million was allocated from contingency for this upcoming fiscal year to address the backlog issue in his ministry. That's used, he said, for 103 temporary auxiliary resources positions — in other words, alluding to the fact that the backlog was there due to a lack of front-line resources.

We've heard from a previous Minister of Mines around the requirement for those people to get the permits out the door in the revenue-generating ministries in the government.

[1745]

My question is: if the $12 million figure for this coming fiscal year, out of that $24 million, was known in September, as was announced, and the backlog issue is the result of a lack of human resources, why was that $12 million, which turned into $7.1 million, not allocated in an operational sense to the ministry instead of being allotted to a contingency funding?

Obviously, the regional operations budget for the Ministry of Forests, Lands and Natural Resource Operations, which is responsible for the permitting, is pretty well flatlined from last year to next. So there's not room there to make these additional positions permanent.

The question is: with that lead time, why are we using contingency funds to address that backlog rather than rolling it into an operating budget?

Hon. K. Falcon: I know, actually, that the Chair takes great interest in this subject too.

This is to deal with the issue of temporary backlogs in the permits and notices of work and the other things that the member talked about. It is driven in large part by a dramatic increase — which is good news — in mining exploration activity, in particular, but by other folks that want to get access to the land and create economic opportunity.

By its very nature, of course, a backlog is indeed short term, so we don't want to provide a base budget lift and just have that continue in perpetuity. What we have said to the ministry…. And it's not just FLNR, by the way. There are two others ministries involved if my recollection serves me, and those are Environment and MARR. It's divided between the three ministries.

What we've said is that they can have access up to $24 million. They don't get the whole amount guaranteed, but it's up to, as long as they can demonstrate that the additional short-term resources they're using in hiring and retaining to deal with this backlog are actually achieving the outcomes that they have committed they would do.

We required them to make the case that, first of all, (a) they've got a backlog — we acknowledge that; (b) that they're going to be able to deal with a backlog. I've been around government long enough to know that you never want to just provide additional dollars and hope for the best. We want to actually see evidence that we get exactly the outcomes they're promising and committing to.

We are tracking that, and we are satisfied that they are achieving the kinds of outcomes we would like to see.

[1750]

The fundamental principle of how we utilize contingencies is that we expect ministries to manage within their base budgets. If they require a top-up, then they can access the contingencies to get those additional dollars so they can achieve what they wish to achieve. But we start with ensuring that they're using every last bit of their ministry budgets prior to actually tapping into the contingencies.

D. Donaldson: I see the comptroller is here. He might have an opinion on whether that is proper budgeting protocol — whether accessing a contingency like that or rolling it into the operational budget on need is the proper way of going about things.

I note there were 229 notice-of-work backlogged permits, 3,899 Water Act backlogged permits and 2,000-some-odd Land Act — close to 7,000 backlogged permits. The point is that it's going to take a lot of streamlining to address the issue of those backlogs, when those in the mining sector, in the mining industry, and a former Minister of Mines point out that additional personnel is the real crux that's needed to deal with the backlog issues and to ensure that a backlog doesn't result again in future years.

The Minister of Forests, Lands and Natural Resource Operations said the allocation of that contingency, the $12 million that's actually $7.1 million now, was based on a multisectoral plan that was put forward in terms of approval for access to contingencies. So when would that multisectoral plan be received by the minister?

Hon. K. Falcon: What happened was the ministries came forward with — what did you call it? — a multisectoral plan. That's a good term for it. A multisectoral plan was brought forward. It came to Treasury Board, which I chair, as the member knows. The Treasury Board looked at the plan, looked at the outcomes. We set up a metrics to ensure that it was going to be measurable and that we could track whether they were achieving their targets to deal with the backlog.

Then we approved notional access to contingencies up to $24 million, but it does require them to work within their own base budgets. It also requires them, by the way, to look at other things, like the member talked about, including streamlining. We want to make sure they're doing everything they can to deal with this backlog with existing resources they already have. But we accepted the argument that there is a backlog.

Again, what we don't want to do is provide a perma-
[ Page 11777 ]
nent base-budget lift to deal with the temporary backlog. We'd like them to deal with the backlog — improve their streamlining and efficiencies and interministry cooperation to ensure that they drive better outcomes on a go-forward basis.

As I say, we'll track that carefully. They do have approved notional access to contingency up to $24 million, and they are working hard to deal with that backlog with some success.

D. Donaldson: Just to clarify — and I can take a nod of the head — that for 2012-13 it's only access to $12 million, for this upcoming fiscal year. Maybe it's more than a nod of the head.

[1755]

Hon. K. Falcon: It's a notional access to contingency. What we do is we track that as a potential that may be accessed, but the ministry is required to work within their base budget to achieve the outcomes that have been set out in the metrics.

If they, after doing all that, require access…. You know, they may very well not have to ultimately require access. It's our expectation they will probably require some access to contingency. That's why we provide notional approval, but that's something we'll have to see. It very well could be that at the end of the day they may not actually have to access contingency, that they're able to drive that within current budgets, which is why we don't just transfer it over and give it to them and sort of hope for the best.

D. Donaldson: Thank you for that clarification. I'm going to switch gears into another topic that has to do with procurement policy and strategies by the provincial government. I questioned the former Finance Minister in 2010 regarding procurement strategies in other jurisdictions in Canada, in other provinces and in other jurisdictions in the world. The social criteria are also used in government procurement contracts.

Our provincial government expends approximately $4 billion a year on procurement of goods and services in order for that government to function. When I questioned the former Finance Minister two years ago around using social criteria as an added criteria on top of fairness, openness, transparency and value for money, the criteria that are used now, he answered: "In terms of social procurement, that is something that the office has explored and will continue to see if there are opportunities for government to be more engaged in that approach as well."

For instance, in Manitoba, on top of the baseline criteria for procurement, they use a criterion for a company applying for a government service contract — whether it's to supply materials or to do work in one way or another — of whether that company is owned and controlled by a segment of the population that is under-represented in the mainstream population — for instance, First Nations. In Manitoba they have a social criterion around that.

I would like to canvass the minister whether, in the last two years and in this upcoming year that we're talking about in these budget estimates, social criteria in procurement has been…. Has any further work been done on that, which was alluded to two years ago? Specifically, in the report tabled just recently by the B.C. Advisory Council on Social Entrepreneurship, which is a government-created council to make some recommendations around social entrepreneurship, their first recommendation in the short term was to "foster social innovation through our public and private procurement systems."

They went on to say: "Social benefit criteria could be included in procurement contracts" in government policy "to promote access to the social enterprises, cooperatives and social-purpose businesses" to do this. I note that from this report — which a group of people appointed by government, very good people in this field, did over the last year — the one recommendation that was acted on by government was in Bill 23, which created the community contribution companies. We just dealt with that in the Legislature. However, that was a medium-term recommendation by the committee — in fact, No. 6.

[1800]

The first recommendation in the short term was around social criteria around the procurement process. If the minister could advise: what kind of social criteria would be considered to be implemented by the government?

Hon. K. Falcon: We always start from the position, our provincial government, to make sure we're getting value for money for taxpayers. I think that's a very important consideration which we always ensure is right at the very top. We secondarily, of course, must make sure that we're in compliance with our trade laws and trade agreements that we've entered into, to ensure that we're not doing anything to find ourselves afoul of any existing trade agreements. With those sorts of provisos, what I can tell the member….

The member talked about Manitoba and some of the work they're doing to deal with the key social criteria of employing First Nations. This is an area where we have done a lot of work — to great success, I would add — and I think it is the right kind of approach.

For example, on a project that I have some familiarity with, the Sea to Sky Highway, written into the contract with the contractors were requirements for labour agreements with the local First Nations, where workers from the First Nations were hired in part of the contract. In fact, a brand-new cement company was set up with the support of the lead contractor — set up and owned and operated by the Lil'wat First Nation — which did just an outstanding job in providing a lot of the cement requirements on that particular project. It continues to operate
[ Page 11778 ]
now beyond that project and is involved in other projects, I understand, across the province.

That's really what we want to try and do. Campbell Road Interchange up on Highway 97 is another example, and the Westside interchange is a more recent interchange construction project with the local First Nation. The Westbank First Nation, I believe, is the First Nation that's involved. They developed the skill set, and working, as I recall, on the joint venture on the Campbell Road Interchange gave them some real training and understanding and competencies which they have now taken to the next major interchange, the Westside interchange. They're now involved in that project too.

We think there is a way that we can involve social criteria like the First Nations, where we want to provide them the tools and opportunity to provide themselves with the training and experience so that they can go on, on their own initiative, and continue to build successful businesses as a result of the opportunities that were provided through procurement opportunities that the province of British Columbia is involved with.

That is not just limited to transportation, by the way. That happens in other ministries and will continue to take place as we go forward.

D. Donaldson: Thanks for that, to the Minister.

I'll wrap up, I believe — depending on the answer, of course — with this final question. Again, it relates to the report that came out in November 2011 from the B.C. Advisory Council on Social Entrepreneurship. I'm sure the minister is quite familiar with it because it was part of his ministry's initiative to bring these people together, to put this report together.

The second short-term recommendation that the committee came out with was to establish a social innovation investment tax credit system. This is something that the Victoria Community Social Planning Council has called for. In fact, it's in existence in two other jurisdictions in Canada. Nova Scotia has the New Dawn Enterprises tax credit system that involves social innovation investment, and Manitoba has the community enterprise development tax credit.

Would the minister be able to advise whether he foresees bringing in legislation to enact a social innovation investment tax credit in the budget year that we're discussing today?

[1805]

Hon. K. Falcon: The member is correct. I think the recommendation was actually more expansive than even the community contribution companies. It was to include non-profits, co-ops and community contribution companies. The member will of course know that we passed enabling legislation to allow for the creation of community contribution companies.

I understand that the Social Innovation Council is still continuing to do some work and, I think, may have an upcoming report, which is still being worked on. I know there is talk about providing some kind of tax measures to incent activity in what is widely described as the social innovation sector.

Certainly, as we look to building a budget for 2013, we will be looking at a whole range of tax advice and recommendations, suggestions, etc., as we think about what we may do to try and maximize opportunities in British Columbia.

I do think, though, that one of the things we'd like to see is what kind of takeup there will be for the enabling legislation we've passed which allows for community contribution companies. We are going to watch with some interest to see what kind of community takeup there is — how many of these companies actually get formed and set up. I think that will, in some ways, inform us as to what kind of interest there is out there in the social innovation sector.

K. Conroy: In the spirit of taking advice, I think this question might fall under that guideline. What it's about is a company in our area that builds manufactured homes. What they're finding, now that the dollar is a bit higher, is that in our area people are actually going across the line or to other places to get the best bang for their buck, so to speak, to buy homes and then bring them back in.

What the company, this one in particular, is wondering is if the new homeowner's grant, which you've just announced in February…. Is there potential to apply that only to homes manufactured or actually built in B.C. so that it's not an unfair advantage to homes being built in the States or in other places? That actually there's support to homes that are manufactured in B.C.?

[1810]

It's good for the economy. It's good for the people in the community that are building the homes. It's an idea that might help people in making a decision. If there's a very small margin in the cost of the home, they might actually consider doing it in B.C., supporting the B.C. economy — if the grant could actually be only for built-in-B.C. homes.

Hon. K. Falcon: The member is referring, just for the benefit of viewers or listeners, to the first-time new-home buyers bonus provision in the bill that we've provided where, typically, young British Columbians — in most cases, not always — that are buying their first new home are entitled to up to a $10,000 contribution by the province of B.C. towards the purchase of their first home. The issue here is that this is a benefit we've put in place strictly for the benefit of the purchaser, for the British Columbian that may be purchasing a home, whether a manufactured home or otherwise.

It is not a program that is trying to say that you can only purchase if that home is manufactured in British
[ Page 11779 ]
Columbia — for a number of reasons, to be honest, Member. The first is that it may be, in fact, the materials. Many manufactured home materials may come in from outside of British Columbia but still be manufactured here. Or most of it could be brought in from outside of British Columbia and be set up here. That would be very difficult administratively to try and apply standards to.

[The bells were rung.]

Our principle is this. We want the purchaser to have the benefit. If the purchaser sees a benefit to buying a locally built home and they view that as better than one that's imported, they have the right to do that. We will make sure they have the dollars to do that under the first-time new-home buyers bonus program, but we're not going to apply standards that say where it must come from or what percentage, etc.

With that, I think we have a vote.

The Chair: We will recess until after the vote.

The committee recessed from 6:13 p.m. to 6:25 p.m.

[P. Pimm in the chair.]

R. Fleming: I just wanted to ask the minister a couple of questions about the Pacific Carbon Trust and the carbon tax review that I believe his ministry is playing some kind of lead role in coordinating.

Since the budget was tabled there was an announcement by government on April 5 that the mandatory offset payments by at least one part of the public sector now has a different set of rules than other parts of the public sector, and that's to do with the school districts.

We have a definition of carbon-neutral public sector now that has a different set of rules and operating principles for local government. We now have a different one for school districts, and we have the system that has been in place for the rest of the public sector organizations, including health authorities and universities and colleges.

I wanted to ask the minister just to explain the relatively new change that will apply to school districts. How is the money going to be bid back by school districts? Money will no longer be transferred, it's my understanding, to private sector offsetters. It will be held in a special fund and then, presumably, the school districts, perhaps through the B.C. School Trustees Association, will coordinate the recovery of that money to invest in clean energy projects in schools.

I just wonder if the minister could confirm if I'm on the right track.

Hon. K. Falcon: It's unfortunate, and certainly not the member's fault. We had the opportunity to canvass this very issue, actually, yesterday with the member for Cariboo North. I respect the member had other duties, so I'm happy to canvass this again.

The important thing to start out recognizing is that we continue to be proud of the fact that we are a carbon-neutral government, the first in North America. The fact of the matter is that the arrangement we have with the K-to-12 school districts does not in any way undermine the carbon neutrality.

What effectively takes place is that the school districts continue to make the contribution of roughly, I think, just under $5 million to the Pacific Carbon Trust, which purchases offsets, as they do for other divisions of government.

In a separate transaction we've made a conscience decision with respect to the K-to-12 — because of what we believe is the unique nature of the importance of ensuring that all dollars possible go to support our kids in the K-to-12 sector — and we are providing separately, through the capital management branch of the Ministry of Education, up to $5 million to the school districts of capital to allow them to make increased and further investments in things that can help reduce some of their costs on a permanent, ongoing basis.

So that may be window improvements or other improvements, energy-efficient-type improvements that could be made. They will have the effect of reducing their operating costs on a permanent basis, going forward.

The next part of the question would be: "Well, why K-to-12 and not the health sector?" To the health sector, the health authorities that operate under about $10.5 billion of budget, this is a very nominal cost. I don't want to be dismissive, but a rounding error would not be too far off in terms of the health authorities' budgets.

[1830]

The good news is that the $75 million that we provided up front to a lot of the public agencies out there, including the health authorities, the K-to-12 sector and others, was for them to make investments, which they did make. That has resulted in over $12.5 million of permanent, ongoing reductions in operating costs as a result of the investments that they have made to help permanently lower some of their energy costs, which is exactly one of the goals that we wish to achieve.

Although those dollars have run out, the $75 million, the ongoing effects in terms of reductions of GHG — about 35,000 tonnes, if my memory serves me correctly — and the ongoing operating expenditure reductions on the energy side, that are being realized right across the broad public sector, will continue in perpetuity, of course, as those organizations continue to operate.

R. Fleming: The minister is correct. My next question was about: well, what's good for school districts surely must be good for other parts of the public sector. As minister, I know he's received many letters from university presidents and budget submissions from organizations
[ Page 11780 ]
that represent those entities.

From his answer, it seemed to be that he was saying that because the health care sector is so large, in excess of $10 billion of expenditure, and their relative amount of mandatory carbon offsets is small by comparison, as a budget figure, then they will not be considered for review and consideration as the school districts have, which is about a $5 billion ministry.

What I'm hoping he'll agree, then, by that logic, is that colleges and universities should be next, because they're about a $2.2 billion item. Relative to their budgets, one would think they have a better case than the K-to-12 sector, which has just successfully been given relief, as per their request, by the government. I will let the minister answer that.

The question that flows from that is really the two systems we now have. There are three, but I'm going to leave local government aside. There are two systems, two operating definitions of carbon-neutral public sector.

The original intent of government was to say that for every tonne of greenhouse gas emissions, the public sector will pay a per-tonne fee — $25 a tonne at this point in time — and each tonne of their emissions activity will then source offsets somewhere else in the economy, tonne per tonne, and displace carbon emissions — hence carbon-neutral. The activities of government, the fuel they burn, are offset by fuel saved somewhere else in the economy.

Now, that operating definition is no longer being used for the K-to-12. They get charged the same amount per tonne, but it has no connection to activities elsewhere in the economy, where there is a reduction in greenhouse gas activities. It sits in a fund, which they can now bid back for energy projects. That's great, but you have such wildly divergent definitions of what the carbon-neutral public sector is now. I'm just wondering where government is going in all of this.

The only thing that's been constant since the carbon-neutral public sector has been introduced is that it is constantly under review. These issues are not going to go away. The universities and college sector will come back to the minister.

I'm just wondering if the minister sees having one operating definition and one system that exists under the legislation of the government.

[1835]

Hon. K. Falcon: First of all, it's important to just correct something. I think the member may be a little confused. Maybe I wasn't clear in my first answer. There are not two systems. There is only one definition. That definition continues to be the tonne-for-tonne that the member talked about.

The K-to-12 sector. The $5 million that we're talking about are additional dollars, capital dollars being provided by the Minister of Education to the K-to-12 sector, through school districts, to make additional investments.

I want to be clear about this. They are still purchasing the equivalent of roughly $5 million from the Pacific Carbon Trust, which is making the purchases of offsets to ensure that we remain and continue to be carbon-neutral. I just want to make sure I correct that for the record.

There are a couple of other points I'd make to the member that I think are important to distinguish K-to-12 from health and advanced ed. The first is that on April 5, when we made that announcement, a lesser part that was understood and that we also announced was that…. There is a tool called SmartTool that is used in those three sectors to measure what their carbon emissions are. We have said that we would absorb the cost of the use of SmartTool, which was about $850,000 a year. That would be absorbed by government, not by those sectors. That's going away. I wanted to point that out.

The other thing to point out that is very different is that the health sector and the post-secondary sector have seen record levels, extraordinary levels — the largest levels in history, actually — of new capital investment over the last number of years.

In health, for example, it has been in excess of $7 billion. In post-secondary it has been in excess of $2 billion. All of those capital projects are all in accordance with what we call a LEED standard.

For the benefit of the viewing public, LEED means leading environmental and energy design. It is the latest, most efficient possible standard of construction. It's typically the LEED gold standard in new construction.

[1840]

But going forward, as the member would know by just perusing the budget, the member will see that in the post-secondary world, just in the current fiscal plan over the next three years, there will be almost $2 billion of additional new capital that will be going into the sector. That's just the provincial government contribution, by the way. There will be other contributors, undoubtedly — some from private money and some from other levels of government.

In the health sector there will be, just in the current fiscal plan, again, $2.3 billion just from the province. That will be levered with other investments. Typically, local regional health districts often make a contribution of 40 percent of the total cost, so there will be other dollars that also come into play here.

All of those capital projects, the billions of dollars that will be going on just in our current three-year plan in both health care and post-secondary, will all be designed in accordance with LEED gold standards, which is a standard that is extremely high and is extremely beneficial. It will mean lower operating costs on the energy side for the health and the post-secondary sectors going forward years into the future. So that really distinguishes those
[ Page 11781 ]
sectors from the K-to-12.

The final thing I'll say is this. It is estimated that the public sector spends close to $400 million a year on energy costs. The whole point of being a carbon-neutral government and creating a focus on these kinds of things is so that we can see the kinds of investments and the kinds of decisions that are being made in government that will reduce those costs going forward.

For example, it is estimated that public sector organizations can save anywhere from 5 to 10 percent of their energy costs just through some of these changes that I've been talking about — the changes to LEED gold standard, the changes in behaviour that say: "You know what? Because we are now monitoring and tracking our emissions, we're going to change our behaviour."

We're going to stop having so many people flying all over the province to have meetings and start doing more meetings through video conferencing, for example, which can reduce expenditures and have savings but also reduce greenhouse gas emissions.

The point of being a carbon-neutral government is to show that kind of leadership, where government is paying attention to those kinds of things. We're very proud of the fact that we are the only carbon-neutral government in North America, and we think that that is worth continuing.

R. Fleming: I have a number of questions that are very basic about the carbon tax review that the government is undertaking. I think what might be best in the interest of time is to submit them to the minister in writing and ask him to respond to them in a very reasonable time frame. So I will get those questions to the minister.

The Chair: The Chair recognizes the member for Alberni–Pacific Rim. Last question.

S. Fraser: Noting the time, I'm afraid it's not enough time to ask questions in this process, so I'm disappointed with that.

KD Air, a small, very efficient airline located in Qualicum Beach, services largely the tourism industry, but certainly commuting travellers to Vancouver, Gillies Bay and Port Alberni — also Qualicum Beach, obviously. They're facing problems with the HST that's still in place. It has been a particular burden.

Prior to the implementation of the HST, KD Air had a tax levy of the 5 percent GST, of course. That 7 percent added with the HST was a big hit to their small, efficient business — also to all tourism businesses on Vancouver Island, certainly along the coast. The addition of the HST, that increase of 7 percent, has been a problem.

Now, they've tried to mitigate that for their customers. This is after substantial security costs they faced through the Olympics, too, that they never did get compensated for.

This small, efficient airline dropped their…. They basically ate half of the HST, or the 7 percent. They took a 3½ percent extra hit and passed on the other 3½ to customers. Their ridership — flyer-ship or whatever the term is — has dropped by exactly that amount, 3½ percent. Their margin is tight. It's a small, efficient airline, as I said.

[1845]

I guess the issue is…. I mean, we're seeing an extension of this HST for much longer than the public demanded through the referendum process, and companies like KD Air are facing a real problem, a real burden. Fuel costs and everything are going up. This is a problem for them. Now, I would note that other sectors…. The construction industry, a smaller sector economically compared to tourism, did get consideration.

I guess the first part of the question is: why that sector? Other sectors that affect KD Air significantly for their tight margin — why were they not given consideration? I guess for tourists and customers of airlines and people that provide tourist products all over, and services, is there…? Would the minister consider some form of reprieve for these businesses that are right on the edge now? The extension of the HST has continued to do a lot of damage.

Hon. K. Falcon: I think it's very important…. I'm not specifically familiar with KD Air, but I think the principle that I'm going to talk about will apply to the entire transportation sector.

One of the things that we've seen right across the transportation sector is a decline in traffic, if you will. We've seen that in the ferries, for example. We've seen that in Washington State Ferries. We've seen that even on free ferries. Our inland ferries, which are free, have seen a downward ridership drop. No doubt that that has happened in some of the airline sector too.

Right from the beginning when we used to have the discussion and debate, legitimate debate about whether HST was good or bad, on balance, for the economy, we always pointed out that 20 percent of consumer purchases, on average, were now going to be subject to the provincial portion of the PST in addition to the GST, because that's what happens, obviously, when you harmonize.

The other part of that equation that's really important in the business community is they also now received input tax credits, and they didn't have to go through the bureaucracy of dealing with two different tax systems, which is why, when the public referendum came out and the public made the decision to go back to a two-tax system, the overwhelming response from the business community — small, medium, large — was extreme disappointment.

Of course, you heard the cheer in Ontario by the politicians and the business community that saw that as a
[ Page 11782 ]
big plus for them, because they harmonized too, and they now see themselves as having a competitive edge over British Columbia — certainly on the investment side. It's hard to argue that they don't, although we have lower taxes and general corporate taxes and other things that, hopefully, will outweigh some of that. I think that's important to point out.

The member makes reference to the construction sector. I think he's referring to the transition rules that we introduced with respect to the purchase of homes that raised the threshold limits. The reason why we're doing that is it's a very unique part of the economy where you have to have very specific transition rules in place.

These are purchases that the public doesn't often make, but when they do make them, they are usually the single largest purchase that the public will ever make. It's important to have the appropriate transition rules in place to ensure that everybody is treated fairly through the process.

[1850]

That's why it is not analogous, I would argue, to the case of KD Air.

With that, Member, thank you for you for the questions.

Vote 24: ministry operations, $117,209,000 — approved.

Vote 25: Public Service Agency, $51,163,000 — approved.

Vote 26: benefits, $1,000 — approved.

ESTIMATES:
MANAGEMENT OF PUBLIC FUNDS AND DEBT

Vote 44: management of public funds and debt, $1,287,491,000 — approved.

ESTIMATES:
OTHER APPROPRIATIONS

Vote 45: contingencies (all ministries) and new programs, $300,000,000 — approved.

Vote 46: capital funding, $1,061,586,000 — approved.

Vote 47: commissions on collection of public funds, $1,000 — approved.

Vote 48: allowances for doubtful revenue accounts, $1,000 — approved.

Vote 49: tax transfers, $1,091,405,000 — approved.

Hon. K. Falcon: Hon. Chair, I move that the committee rise and report completion of the resolutions of the Ministry of Finance and ask leave to sit again.

Motion approved.

The committee rose at 6:53 p.m.

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