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 30, 2012

Afternoon Sitting

Volume 40, Number 1

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

WEDNESDAY, MAY 30, 2012

The House met at 1:33 p.m.

[Mr. Speaker in the chair.]

Routine Business

Prayers.

Introductions by Members

J. Les: In the visitors' gallery today we're honoured to have Mr. Komgrit Varakamin, the newly appointed consul general of the Kingdom of Thailand in Vancouver. The consul general comes to our province from his recent posting at the Thai embassy in Hanoi, Vietnam.

He is joining us here in Victoria today to conduct his official courtesy meetings with provincial officials. I look forward to the opportunity to meet with him later this afternoon and discuss how our two jurisdictions can further enhance the positive relationship that already exists between Thailand and British Columbia.

Would the House please join me in making the consul general feel very welcome.

C. Trevena: I'm begging indulgence of the House to welcome two people who are in the virtual gallery. They assiduously watch this place, thanks to the Hansard webcasts, and they watch it from England. They are, no doubt, my most loyal and long-term supporters. They're the people who gave me the values that still guide me and also the belief that I could do whatever I wanted in my life.

I would hope that the House would give a very warm welcome to my parents, who regularly watch this place, Billy and Mary Trevena.

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R. Sultan: In the gallery today is Midshipman Darlene Thornhill of the Navy League of Canada, a passionate advocate for the Royal Canadian Navy and authoress of Bell Bottom Blues: Arctic Sovereignty, describing Canada's geopolitical neglect of our Arctic lands and oceans. Accompanying her is Lt. Ken Kwan, also of the Navy League, who commands a detachment of 70 naval cadets at HMCS Discovery on Deadman Island at the entrance to Stanley Park. Would you please make them welcome.

D. Routley: Can the House help me welcome an extraordinary young man from Nanaimo. Tali Campbell is a student at John Barsby high school in my constituency. He was the publisher of the school paper when I met him. Since then he's gone on to other pursuits. Currently he's organizing an effort called Youth Sticking Together. It's an effort to break the Guinness world record for a street hockey game. He'll have 40 participants going for 105 hours to support local charities.

He also hosts a current affairs program on university radio, CHLY radio in Nanaimo. He is also working in the community relations office of Nanaimo Timbermen lacrosse club. I think we should all be inspired by a young person like Tali who becomes so involved in his community and gives such great service to all of us. Thank you, Tali, and welcome to the House.

Hon. J. Yap: In the gallery today, visiting for the second time in a year, is a good friend, constituent and supporter. Would the House please join me in welcoming Peter Boddy back to the Legislature.

V. Huntington: I'm very pleased to say that both my constituency assistants and my research officers are in the gallery today. As all members know, we couldn't do the work either in our ridings or in this House without the competency and good cheer of these men and women. Would the House please join me in welcoming Bernadette Kudzin, Brad Densmore, Yvonne Parenteau and Shawn Courtney to this place.

D. Hayer: Joining us today in the House are two very special guests of mine. They are outstanding volunteers and perform excellent work at my constituency office. They look after my constituents' concerns and issues. Please welcome my constituency assistant Manuel Santos, who continues to be an exemplary and dedicated worker in my constituency office since 2007. Manuel also commits countless volunteer hours to benefit our community. I've also had the distinct pleasure of having him as my campaign manager for the 2009 election.

My other special guest is Paul Keenleyside. Paul is my part-time constituency assistant. He not only fills in for Manuel when Manuel is at a meeting; he also looks after our communications and research. Paul has been helping our office since 2000. He also has the distinction of volunteering in 62 municipal, provincial and federal elections. He also voluntarily provides emergency and public safety amateur radio communications at many events, including the Celebration of Light, the Hyack Parade, the Vancouver Marathon, Vancouver Sun Run and many other places. Would the House please make them both welcome here.

M. Sather: Joining us in the gallery today is Alexandra Morton. Alexandra is a salmon researcher and an indefatigable supporter and defender of wild salmon. She is here with some friends, watching the progress of legislation in the House. Will members please join me in welcoming her.

J. Slater: Joining us in the gallery today is Wayne Roznowsky, who's the manager of public affairs Canada
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for Weyerhaeuser. Would the House please make him very welcome.

R. Fleming: Joining us today is Andrew Stinson, who's a young man who is active in the Oak Bay–Gordon Head Constituency Association as the Young New Democrat representative. He's here to watch question period. This is his very first time in the Legislative Assembly. I would ask the House to please make Andrew feel very welcome.

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Hon. T. Lake: In the precinct today we have a constituent of mine, Lyn Arikado, and her husband, Brian. I know that the Minister of Justice will introduce all the recipients of the public safety lifeline volunteers award a little bit later, but I wanted to pay special respects to Lyn, who is the co-director of the Kamloops emergency support services and was the recipient of that award here today.

I understand that Lyn has a beautiful cat named Tess, whom she entered in the Iams most lovable pet contest. I would hope that the House will make Lyn and Brian — but, unfortunately, not Tess here today — very welcome.

Tributes

JIM UNGER

Hon. I. Chong: It is with some sadness that I rise to introduce a former constituent. Jim Unger was the offbeat mind behind the cartoon Herman and was a resident of Saanich for the past decade. Herman, with its wry observations of the world and distinctive drawing style, ran in 600 newspapers in 25 countries and continues in syndication in some U.S. newspapers. Its witty captions commented on the way we live now.

He was born in London, England, and immigrated in 1968 to Canada where his cartooning career began at the Mississauga Times. Herman became the first newspaper cartoon syndicated in communist East Germany in 1990. Mr. Unger twice won the best syndicated panel award from the U.S. National Cartoonists Society.

After 20 years of cartooning and more than 6,000 original comics to his credit, Mr. Unger retired to the Bahamas in 1992. But after five years in retirement, the Herman comics returned in syndication in 1997. Mr. Jim Unger moved to Saanich more than ten years ago in order to be close to his brother and sister, Robert and Deborah.

Sadly, though, on Monday Mr. Unger passed away in his sleep at the age of 75 in his Saanich home. I want to ask, Mr. Speaker, that all members here acknowledge this great citizen and have our thoughts go out to his friends and family at this difficult time.

Introductions by Members

M. Dalton: In the House today for the first time is a very lovely lady. It's my niece, Aubryn Howe. She's attending Camosun College, taking a Bachelor of Arts degree. She's originally from Edmonton, Alberta, and I'm glad she's moved down here to experience the Island life and to study. With her are two other lovely ladies, here for the first time in two weeks: my wife, Marlene, and my daughter Hannah. Would the House please make them feel welcome.

M. Coell: It's with a great deal of pleasure that I introduce the secretary of the Victoria chapter of the ALS Society to this House, Joan Axford. Would the House please make her welcome.

Hon. P. Bell: I rise on a very happy note today. I have joined the exclusive league that Mr. Speaker, of course, is a member of. The member for Chilliwack has been able to get up on this type of occasion, I think, 16 or 18 times now, if I'm not mistaken. And my good friend the House Leader on many occasions….

Hon. R. Coleman: Three.

Hon. P. Bell: On three occasions — we call them Coleman country occasions. My friend the member from Prince George–Valemount, and many others….

On the 19th of May my daughter Donna and her husband, Matt, had a grandchild, presented a grandchild to my wife, Brenda, and me. The baby was 7 pounds, 11 ounces, and baby, mom and dad are doing extremely well. The member for Victoria–Beacon Hill has a new constituent, and we hope that that constituent will be voting Liberal. The baby's name, of course, is Joey Matthew Hobbs.

Tributes

TOM GALIMBERTI

R. Fleming: I wanted to bring to the attention of the House the sudden passing of Tom Galimberti, who was a former civil servant and an entrepreneur. He owned a local arts club at 1410 Broad Street in downtown Victoria. It was a sudden passing. It left his family and friends and former colleagues shocked that he's no longer with us.

Members of this House will know Tom by his long and distinguished career, working for the governments of both Saskatchewan and British Columbia. It was in the 1990s, when he was at the Ministry of Environment, that Tom took on some extremely difficult assignments.

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One of them was to clean up Howe Sound and the pulp and paper industry and the effluent that was in the environment. It was something that Tom took on and accomplished. He was also one of the individuals who brought B.C. to the product stewardship system, which
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made British Columbia a North American leader on recyclables and waste diversion. Those were difficult assignments that Tom performed in an exemplary fashion. There are many other accomplishments that Tom had on behalf of citizens of British Columbia.

It's a sad occasion, and there was a wonderful ceremony in downtown Victoria just over a week ago. He's survived by his three sons and his grandchildren. I would ask the House to thank Tom and his friends and the survivors in his family for what he has done for the province.

Introduction and
First Reading of Bills

BILL M215 — COSMETIC USE OF
PESTICIDES CONTROL ACT, 2012

A. Dix presented a bill intituled Cosmetic Use of Pesticides Control Act, 2012.

A. Dix: I move that the Cosmetic Use of Pesticides Control Act, 2012, be introduced and read for a first time now.

Motion approved.

A. Dix: This bill will protect public health, safety and the environment in British Columbia by regulating, restricting and prohibiting the use and sale of pesticides for residential and cosmetic use, and by regulating the use of pesticides around children.

This is the fourth occasion that New Democrats have introduced a bill into the Legislature to ban the use of cosmetic pesticides. It's supported by numerous organizations, including the Union of B.C. Municipalities, the Canadian Cancer Society, the Canadian Association of Physicians for the Environment and Toxic Free Canada, among many others. It also follows the advice of the International Agency for Research on Cancer, an arm of the World Health Organization.

As we saw from the submissions to the special committee, this legislation is favoured by the overwhelming majority of British Columbians. The vast majority of submissions supported a ban. We've waited long enough; the time for action is surely now.

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

Bill M215, Cosmetic Use of Pesticides Control 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.

Statements
(Standing Order 25B)

AMYOTROPHIC LATERAL SCLEROSIS

M. Coell: Today I rise to speak on an important issue that affects the lives of thousands of people across the province. June is ALS Awareness Month in British Columbia, a time for us to work together to help find a cure for ALS.

Amyotrophic lateral sclerosis, or Lou Gehrig's disease, is a rapidly progressive neuromuscular disease. It impacts a person's ability to walk, to talk, to swallow and, ultimately, to breathe. ALS is a fatal disease, with no effective treatment and no cure. Unfortunately, 80 percent of the people who have ALS die within two to five years of diagnosis — some people within months.

The ALS Society of B.C. works tirelessly to raise funds and support those living with the disease. This upcoming Saturday, June 2, is the society's annual ALS Flower Day. Throughout June people can buy a cornflower, and all moneys raised will go towards finding a cause and a cure for ALS. I hope that all members of the House will join me in celebrating the hard work the ALS Society does to fight the disease in British Columbia.

I want to say a special thank you to the ALS Society for all the work they do. This June I encourage all members of the House to participate in ALS Awareness Month and help find a cure for this devastating disease.

I would like to end by quoting Lou Gehrig. On July 4, 1959, in Yankee Stadium at a ceremony in his honour, he said: "Today I consider myself the luckiest man on the face of this earth. I might have been given a bad break, but I've got an awful lot to live for."

DELTA KITE-FLYING EVENT
FOR CLEAN AIR AWARENESS

G. Gentner: Members, think back to when as a child you ran along a grassy knoll against the wind, let go and gazed with amazement at the kite that left your hands, guiding and pulling the line and staring into the sky, wondering if it might actually hit the clouds.

We live in such a beautiful part of the world, but I think we sometimes take our air for granted. Pollution, more traffic and potential incineration threatens the Lower Mainland's airshed, our environment and our health. Incidents of asthma, chronic bronchitis, lung cancer and pulmonary diseases are on the rise.

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What better way to symbolize our appreciation for good, clean air than by flying a kite? On June 3, 2012, North Delta will be celebrating Canada's Environment Week by inviting families to come fly a kite to commemorate Clean Air Day, which falls on June 6 this year, at Delview Park in North Delta from 12 o'clock noon to
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2:30 p.m. My office is sponsoring a kite-building workshop, where children can learn to design, build and then fly their own kites.

Along with a kite-building workshop there will be face-painting; bird demonstrations by Orphaned Wildlife; and interactive displays with groups that include the Burns Bog Conservation Society, B.C. Lung Association, the Delta Naturalists, the Canadian Cancer Society, the Recycling Council of B.C. and the FarmFolk/CityFolk.

This is a fun way for children and their families to learn about clean air and our environment because, as we know, our children will inherit the stewardship of the Lower Mainland's airshed. Let's capture the nation's imagination. Stand up for clean air, and come fly a kite. On June 3 kites — big kites, small kites, box kites — of all shapes and sizes will soar and dot the skies in North Delta.

As Winston Churchill once said: "Kites rise highest against the wind." In North Delta the wind will be strong in the airshed that will remain clean, resilient and pristine.

J. Rustad: I seek leave to make an introduction.

Mr. Speaker: Proceed.

Introductions by Members

J. Rustad: It's a great pleasure today to have a group from the W.L. Mcleod Elementary School in Vanderhoof that have come down to the Legislature to visit. This is a group of students that I got an opportunity to meet with. We have 24 students from grade 7, with a number of adults that have been accompanying them.

Of course, it's a long way to come down here to be able to visit, and I'm just so pleased to have had the chance to meet them. As well, I'd like to thank the organizer, Mrs. Maggie Fraser, for her efforts in bringing them down here. Would the House please make them welcome.

Statements
(Standing Order 25B)

SURREY BOARD OF TRADE
TOP 25 UNDER 25 AWARD RECIPIENTS

D. Hayer: On Tuesday, 25 young people who have excelled and may soon be our future leaders were honoured by the Surrey Board of Trade during their second annual Surrey Top 25 Under 25 Awards. The winners, all 25 years of age or less, were chosen based on very subjective analysis of their business or community achievement, their leadership abilities, community involvement and uniqueness of their business or community project.

These talented and skilled young people of Surrey — five of them still teenagers, ranging in age from just 16 years old to a maximum of 25 years — embody the entrepreneurial spirit that makes British Columbia great today and ensures that the province's success lasts long into the future. Because of their exceptional skills and contributions to the community and to the economy, I would like this House to recognize all 25 of them.

Mr. Speaker, there's Afraj Gill, Alisa Zukanovich, Andrea Danyluk, Brendan Graham, Brock Courneya, Daryl Dela Cruz, Gurkiran Mann, Ivneet Bains, Jaspreet S. Lehal, Joyce Loksum Mak, Julian DeSchutter, Kasandra Linklater, Kelsey Filion, Kunal Sharma, Megan Carey, Michael Cheng, Michelle Chen, Quinn Spicker, Ravi Muti, Saif Eshaq, Stevie Vu, Sukhi Sangha, Tyler Spence and William Luong.

I ask the House to join me in congratulating Surrey's top 25 outstanding young entrepreneurs, innovators and community-spirited individuals who one day will be our top leaders — either MLAs or Premiers or MPs or Prime Minister or councillors or mayors.

FARMERS MARKETS IN
COQUITLAM-MAILLARDVILLE AREA

D. Thorne: "Make, bake or grow" is the motto for the Coquitlam Farmers Market, which is one of my favourite places on Sunday mornings. The Poirier Street market, which is only blocks from my house, opened Mother's Day and runs through October 28. I was there on opening day buying my fresh tomatoes and cucumbers, organic fish and chicken, spring plants and, of course, kettle corn and cookies.

One of the joys of the farmers market is the fun of running into people that you've known for years. I see friends of my sons who are now pushing baby carriages, women from my book club and people from my riding — who, of course, always take the opportunity to tell me their concerns.

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I'm pleased to report that the Coquitlam Farmers Market has expanded to two other sites, the Spirit Square and SFU. The Spirit Square Farmers Market, which is across from city hall, will be on Fridays beginning June 15 and running through September 14 from 3 till 7 p.m. The SFU Pocket Farmers Market is up and running on Wednesdays, now until October 31, from 11 a.m. to 3 p.m. at the Cornerstone Square on University High Street.

As well as the vendors, volunteers are the heart of the market. They set up and tear down the market every week, they help both the vendors and visitors, they distribute the monthly newsletter, and they help with crafts and with special events.

I love the festive atmosphere at the market with local buskers performing. Of course, they are also volunteers, with their only pay coming from their donations. I've seen some wonderful young people getting their very first taste of fame at the market.

Farmers markets date back to a time before the indus-
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trial age — before grocery stores, even. It is a wonderful tradition that I am very happy to support. And, Mr. Speaker, the cinnamon buns aren't too bad either.

PARLIAMENTARY DEMOCRACY PROGRAM
FOR TEACHERS

M. Stilwell: Earlier this month I had the pleasure of meeting with students from St. Anthony of Padua School in Vancouver. Their teacher, Mr. Mayer, recently took part in the British Columbia Teachers Institute on Parliamentary Democracy. The program is offered by the Legislative Assembly as a professional development course for teachers looking to enhance their knowledge and understanding of B.C.'s political system.

The program brings teachers to the Legislature where they attend question period, meet Legislative Assembly staff and learn about the parliamentary process. The hope is that teachers who take part in the program will develop classroom activities based on their experience at the Legislature and inspire a discussion on parliamentary democracy among their students.

After the program Mr. Mayer developed lessons for his class. One assignment saw the class write bills that they would like to table in the Legislature. Among the legislation they drafted was a bill to establish a 100 percent tax on all chocolate sales, which I'm not so sure about; a bill to make it mandatory for all cars to contain electric motors by 2020; and a bill to require all children in B.C. to eat at least one serving of vegetables per meal.

This type of activity engages students and promotes an understanding and awareness of the legislative process and how the work we do in this House affects people's daily lives. The ultimate goal is to champion effective citizenship among youth. By introducing them to politics at an early age, we can encourage lifelong political participation.

ROLE OF MLAs AND PROTECTION OF
AGRICULTURAL LAND IN FRASER VALLEY

V. Huntington: Houston, Delta has a problem. In fact, agricultural land throughout the Fraser Valley has a problem.

As members of this assembly, we are chosen by the people to represent them to government. No election to this place is a public choice for a single point of view or a single set of values. The society we represent is a consortium of values, and the wisest here know that their obligation is to find balance. It is not to represent a monolithic point of view. It is not to advocate for a single value. It is not to represent only the ministerial interests one leads.

Our obligation is to understand what makes our society whole, to understand what gives our cultures their essence and to carefully weave our way through values that define who we are and what we hold dear. When those whom we represent say, "Stop, you've gone too far," our obligation is to listen. When they say, "Stop, let's find another way," our obligation is to talk. When they say, "Look, you are ignoring values that are part of our lives and our social order," our obligation is to step back and ponder the wisdom of our decisions.

How dare we decide a community can be sacrificed to business, that pavement is more important than farming the best soil in the land? How dare we decide that industry is more important than an internationally designated important bird area of hemispheric proportions? Have we the wisdom to search for that balance, to know that we cannot ignore one value to promote another, to know that we cannot balance society's values by refusing to properly weigh its values?

Mr. Speaker, I implore the members of this assembly to insist that we preserve the life-giving values of the agricultural land on the mighty Fraser River's delta.

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Oral Questions

TRAINING TAX CREDITS FOR
SEASPAN MARINE CORP.

A. Dix: Recently some doubt has been cast on the government's commitment to training tax credits to Seaspan under the federal shipbuilding contract. As we all know, $35 million in credits was trumpeted by the Premier and others as an important component of Seaspan's ability to win and, most importantly, deliver on the $8 billion contract.

My question to the Premier is fairly simple: does she stand by her commitment to the $35 million in training tax credits?

Hon. C. Clark: Yes, indeed, we do.

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

A. Dix: I'm delighted to get that answer from the Premier. Just to be clear, that means the government will be providing $35 million in training tax credits.

Hon. C. Clark: We are negotiating with them right now, and we are working through those negotiations. I'm not going to negotiate it in the public, but we are working hard with the company, just as we have from the very beginning.

Remember that the government component and the work that the government put into making sure we landed this contract for British Columbia was crucial to ensuring that those thousands of jobs, the biggest federal non-wartime procurement in history for British Columbia, actually came to our province and created
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jobs right here at home.

Mr. Speaker, 59,000 net new jobs in the last year, almost 29,000 in the month of April alone. We have a plan. It's called Canada Starts Here. We are delivering on that plan and making sure that British Columbians go to work.

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

A. Dix: Hon. Speaker, $35 million at the photo op, $35 million on the answer to the first question. Then the answer to the second question: they're negotiating. I wanted to be clear, because the Premier didn't answer the question the second time around. Will the value of the training tax credits be $35 million?

Hon. C. Clark: We intend to honour our agreement with Seaspan — full stop. We are negotiating with them about some of the details of what that's going to look like.

Remember this: there were two contracts that Seaspan was pursuing — one for very large ships and one for smaller ships. In fact, many people say that the contract for the smaller ships was the better one for British Columbia because upwards of 80 or 90 percent of the product will actually be produced right here in British Columbia.

We are very proud of the work that our government did in making sure that this contract was awarded to British Columbians, to put British Columbian workers to work at high-paying, high-skilled jobs. We remain very proud of that.

We remain committed to the commitments that we made to Seaspan. We are continuing to negotiate on some of the details of that, but we are standing by that commitment 100 percent.

INTEGRATED CASE MANAGEMENT SYSTEM

C. Trevena: The government has been phasing in a $182 million integrated case management system in the Ministries of Social Development and Children and Families. It's supposed to improve services, but feedback from social workers using it shows the opposite.

Social workers are talking about some very serious concerns. They say it's cumbersome and can result in dangerous mistakes being made. In the Ministry of Children and Families they can't get the information they need about children at risk quickly, and that often results in a crisis.

What is the Minister of Children and Family Development doing to make sure this computer system is not going to hamper the work of child protection officers?

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Hon. M. McNeil: The integrated case management system that is in its phase 2 has, as with every new technology, some challenges when it first begins. But I have to tell you that this integrated case management system for our ministry alone is replacing 64 individual technologies.

I think what it's going to be able to do is to allow our social workers and our front-line workers, once they get fully trained and fully up to speed on the actual system, to be able to communicate with each other so that communication between the various entities will ensure that children and youth in this province are well served.

Mr. Speaker: The member has a supplemental.

C. Trevena: I think that the minister's answer is very troubling. The minister is talking about when social workers are fully trained and up to speed, but this system is operating right now, and social workers are working on it. They've documented some very, very serious concerns. We're talking about child welfare. For one, they say that the after-hours notification system is "in complete disarray."

Just one example to show that we are not exaggerating the seriousness of this, and I hope that the minister isn't underplaying it. A newborn baby was not to be sent home with its parents because of safety concerns. The notification about that was not found, and the child went home.

When things go wrong in the child protection system, the results can be tragic. Social workers and staff have to have confidence in the system, and that is disappearing.

I'd like to know from this minister what she is doing to ensure that kids are kept safe.

Hon. M. McNeil: As I said early, this integrated case management system is a long-overdue technical upgrade. Some of the systems we've been using are up to 30 years old, and it is time that we modernize the information system.

This integrated case management system did not come about because we just simply thought it would be a good thing to do. This is the result of many different reports, some written by the Representative for Children and Youth, that feel we needed to ensure that our technology system keeps up with all of the thousands of people that are out there.

Each and every year Ministry of Children and Family alone deals with 127,000 children and youth. We have to make sure that our technology systems keep up so that the services we can give to these children and youth are as effective as they can be.

C. James: I heard the minister say that there are many reports and that this came after a great deal of study. Well, I would have hoped that the government and the minister would have ensured the technology was working first before it was implemented. That would have been
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important.

These are not simply a few comments. These are many comments from social workers trying to manage the system and expressing their frustration.

One says: "I'm a very experienced computer user. I've done data entry for a very long period of time. But with this new ICM system, we're not getting appropriate training. It's a nightmare. Our case managers spend far more time entering stuff into ICM than they do providing client service. It's extremely hard on them to be forced into a situation where good service is not possible."

A lack of service means chaos — more chaos for vulnerable children, their families and the workers who support them. My question is to the minister. How will she specifically address these concerns so that the work is spent on vulnerable children and not on a computer system with flaws?

Hon. M. McNeil: I want to assure the member opposite that staff are working incredibly hard to ensure that the transition is as smooth as possible. But this is a replacement system of over 64 different databases. There are workers that have used some of these systems for an awfully long time, and transitions like this are going to be challenging. They are working as hard as they can, and we appreciate all of the efforts from the staff.

I have to say that shortly after the launch of the second phase, I had the opportunity to go out in Car 86 with one of the members of the Vancouver police department and one of our workers from After Hours.

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They were talking about the transition and the challenge it was. The police officer was very correct in saying, "You know what? We had the same issues when we moved to PRIME," which is the system integrating all of the police forces. That was a challenge as well, but he said: "I couldn't do my job without it."

After we get things moving along, it's going to be the same story that we're going to hear from our own workers.

Mr. Speaker: The member has a supplemental.

C. James: I'd say to the minister that the concern is: what will happen in the meantime? What will happen in the meantime to a system that is already stressed, a system that already has social workers managing much too large caseloads, trying to cope, and now trying to cope with a new system that has flaws?

Under the old system, intake for children and youth with special needs used to take 30 minutes. Under the new supposedly improved system, it's taking two hours plus, which often means multiple appointments for families. No one knows what's happening with autism funding. Social workers are duplicating their data entry with e-mails.

I hope that this $182 million system doesn't end up like the BCeSiS system that was used in education. That was a $90 million system that was spent for a colossal failure. We heard things were just fine with the BCeSIS system as well.

Again, my question is to the minister. Will she commit to sitting down with the social workers, the people on the front line using the system, and fix this mess before it, too, gets out of hand?

Hon. M. McNeil: It's always concerning to me when members opposite try and spread some things around that aren't necessarily fully truthful. I'm concerned about that, because there is a transition to a new system. There are always challenges….

Mr. Speaker: Member. Member, just take your seat for a second.

I just want to advise members that I am paying attention to what's going on. I would advise the member to just be very careful in the choice of words that she uses.

Continue, Minister.

Hon. M. McNeil: Thank you, Mr. Speaker. I am concerned when there are things that…. We have to make sure that we are absolutely giving the full story here. Mr. Speaker, I want to read to you an e-mail that we got from one of our social workers. She said:

"I thought you'd like to hear a happy ICM story that we've had. ICM saved the day yesterday. After Hours had removed a young boy from his mother after the boy was abandoned with a stranger at a SkyTrain station. We had only the first names of the mom and child — no other identifying information except that the boy was around three."

She continues to say:

"In ICM, I was able to do a search with query assistant and find the child the same age as this boy connected to a mom with the same name that was given in the report. I couldn't have done this with MIS, which is the old system. Someone had called a number of agencies in the community to put the word out, needing to identify these two people."

But you know, Mr. Speaker, ICM was faster.

GRANTING OF INDEMNITIES
IN B.C. RAIL COURT CASE

J. van Dongen: On May 2, I asked the Attorney General which section of the Financial Administration Act legally authorized the Deputy Minister of Finance to forgive and extinguish Basi and Virk's $6 million legal fees liability, given the specific limitations imposed by section 18. The Attorney General did not answer my question.

Two days later an unattributed e-mail was sent by the Ministry of Justice to the media "on background only." Contrary to the October 2010 public statement by Deputy Attorney General Loukidelis, the Justice Ministry e-mail claimed there was no legal liability prior to the guilty pleas. The e-mail goes on to state: "Section 72 pro-
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vided the legal authority to modify the Basi and Virk indemnities by removing the repayment conditions."

My question is to the Attorney General. Can the Attorney General confirm to this House that section 72 of the Financial Administration Act did in fact provide the legal authority to remove the repayment obligations that were originally agreed to in the Basi-Virk indemnity agreements?

[1415]

Hon. S. Bond: Yes.

Mr. Speaker: The member has a supplemental.

J. van Dongen: The Justice Ministry e-mail states that section 72 of the act provides the government with the legal authority to grant indemnities. That authority includes the setting of terms and conditions. But then the e-mail advances the notion that the authority of section 72 to grant indemnities on terms and conditions also includes the authority to change or remove conditions. There is no specific authority written into section 72 to change or remove obligations from indemnity agreements.

There is a simple way for the Attorney General to earn the public trust on the issue of statutory authority. Rather than sending an anonymous e-mail, will the Attorney General release today the written legal opinion that persuaded her that section 72 legally provided the authority to remove the obligations that Basi and Virk repay their $6 million of legal fees?

Hon. S. Bond: To the member opposite, the government does have legal authority to grant indemnities under section 72 of the Financial Administration Act. The authority includes the setting of terms and conditions that could, as in the case of Basi-Virk, include a condition that you would be able to modify. So in fact the authority to grant indemnities on terms and conditions includes the authority to change or remove those conditions.

GOVERNMENT RESPONSE TO CHANGES
TO IMMIGRANT SETTLEMENT SERVICES

M. Elmore: B.C. is a major international entry point for immigrants to the nation. In April I asked this government about the B.C. Liberals' failure to stand up to the federal government's decision to centralize B.C.'s immigration settlement services in Calgary. The response from the Jobs Minister was that they are working with the federal government and that this issue might end up being a good-news story.

Unfortunately, that isn't the case, as we learn more bad news for immigrants coming to B.C. The Victoria office of Citizenship and Immigration Canada, only a few blocks from the Legislature, is closing its doors in two days.

To the Minister of Jobs, Tourism and Innovation: can he explain how this is good news?

Hon. P. Bell: We continue to work with the federal government on the immigration and settlement services. In fact, the agreement that we have with the federal government provides for a 24-month notice period of any changes. That continues to be a point of discussion between this government and the federal government.

Mr. Speaker: The member has a supplemental.

M. Elmore: Offices in Victoria, Nanaimo, Prince George and Kelowna will close their doors to people applying for temporary and permanent residency, landed immigrant status and permanent residency cards. There were five offices, and now there will be one — none on Vancouver Island and none in rural B.C.

Again to minister: how exactly does he see this as a good-news story?

Hon. P. Bell: The federal government is making changes not just to settlement services, which is what I responded to, to the member opposite's question, when I originally said that there was, I think, an opportunity for B.C. to find itself in a better position, as we make changes and as the federal government makes changes to its settlement services.

The member opposite should know, actually, that B.C. is overrepresented in terms of its total settlement. The federal government has indicated they intend to fund settlement services on the basis of a proportion of settlement services provided across the country. That, therefore, provides us with an opportunity, I think, to negotiate a good agreement.

The member opposite is actually referring to something completely different that was announced recently by the federal government. I'd suggest that the member opposite actually refer to her federal members to ask that question in that House.

[1420]

I'd also be interested, while the member opposite is standing, to ask if they support federal NDP leader Mulcair in his endeavour to start splitting and creating wedges in this country and not allowing western Canada to fully achieve its economic objectives. We haven't yet heard from the Leader of the Opposition what his position is on Mulcair's comments, and I'd be very interested in knowing that.

PROCESS FOR TRANSPORT OF
DISEASED SALMON TO PORT ALBERNI

S. Fraser: Let's see if we can bring question period back down to earth, hon. Speaker. Atlantic salmon in
[ Page 12513 ]
open-net fish farms in B.C. waters have been testing positive for the IHN virus. And 600,000 diseased fish from the Dixon Bay farm in Clayoquot Sound were brought to Port Alberni docks without any warning, without any consultation with the Tseshaht First Nation, with the Hupacasath First Nation nor with the city of Port Alberni — no advising them of the quarantine procedures that would be followed to ensure that infected materials would not be contaminating the waters.

Can the Agriculture Minister please tell us why the Liberal government didn't work with all parties to ensure that there was acceptable biosecurity procedures in place before bringing infected salmon to the Port Alberni dock?

Hon. D. McRae: The member is talking about IHN, otherwise known as infectious hematopoeitic necrosis, a word I've practised a couple of times because I was waiting for this question. The member opposite is correct. It is a federally reportable disease. When it is a federally reportable disease, it falls under the authority of CFIA, otherwise known as the Canadian Food Inspection Agency.

Now, some things I'd like to clarify, if I may, for the general public who watches on TV. First of all, IHN is not a risk to human health. Also, IHN has existed in nature, as far as we know, for hundreds of years. Pacific salmon, herring and trout, both freshwater and salt, actually carry the disease. Because of that, they've built up a natural immunity over generations of salmon.

If these salmon transfer the disease to wild salmon, there is a problem. Atlantic salmon do not have the actual natural immunities. We have seen IHN break out on the coast before. We saw IHN break out in 1992, 1995 and 2001. Now, there are some differences between what happened then as compared to this outbreak.

Mr. Speaker: Thank you, Minister.

Interjections.

Mr. Speaker: Members. Members.

The member has a supplemental.

S. Fraser: We're seeing a government that just abdicates its responsibility to protect the public interest. That's for sure.

Andy Olsen, a biologist and fisheries manager for the Tseshaht First Nation, was at the dock when the diseased fish were being unloaded, as were Tseshaht First Nations councillor Les Sam;chief councillor for the Hupacasath, Steven Tatoosh; and the mayor of Port Alberni, John Douglas. Fortunately, independent observers were there to alert them.

All were very concerned about what appears to be lax standards for the disposal of the fish at the Port Alberni dock. There were no booms in place. Infected blood was seen dripping at the site. There was no oversight from government.

Can the minister explain why the Nuu-chah-nulth Nations, who have relied on the Alberni Inlet for millennia, and the city of Port Alberni were not consulted before diseased fish were brought to the Port Alberni dock?

Hon. D. McRae: Mr. Speaker, if I may continue, as well, which helps to answer this question. Like I stated earlier in my first answer, this is a federally reportable disease. CFIA takes the lead on this particular instance.

[1425]

However, the answer to my question, which I posed before I was asked to sit down earlier, was: what's the difference between 1992, '95 and 2001 outbreaks and today? Well, the difference today is there is a viral management plan that exists between the companies and government to make sure we can actually deal with the issue very quickly and coherently.

I'm very pleased to say that in a short-term manner…. When the company found out about the disease, what did they do? They informed CFIA. Then they made sure the test was a positive. Then what did they do? They quarantined the animals. They culled the animals. They disposed of the animals through composting.

This has allowed the opportunity to make sure that we have the best possible opportunities to ensure that the disease did not spread. As we are speaking, over 50 salmon farms are currently testing for this disease, and I'm proud to say right now the latest numbers I've heard…. This was only yesterday, I'm sorry…. Thirty farms have come back with no IHN in them at all.

Interjections.

Mr. Speaker: Members.

MUSQUEAM FIRST NATION
AND MARPOLE MIDDEN SITE

S. Chandra Herbert: Nearly three weeks ago elders, chiefs and members of the Musqueam First Nation travelled to Victoria to press this government to protect the Marpole midden site known as c̍ǝsnaʔǝm. The site is recognized as a national historic site yet is threatened because this Liberal government approved permits which have led to a proposed condo development on the site.

Three weeks ago the Minister of Forests and Lands promised British Columbians that he would seek "a long-term, workable solution" to protect this site. Now we're told that the government has said to the Musqueam that they're on their own. Can the minister explain how having the government walk away from the process could possibly lead to a long-term, workable solution?
[ Page 12514 ]

Hon. M. Polak: First of all, let me say that it would be difficult to overstate the importance of this particular site to the Musqueam, and we certainly recognize this.

We are still engaged with the parties. We have had a facilitator at the table. A number of different proposals have come forward that would bring us to a resolution for the three parties. I should make it clear to the House that we are talking about currently private land, which complicates the matter further. It's not Crown land under the responsibility of the province of British Columbia.

However, since the discovery of new remains on the site I am advised that the statutory decision–maker is reviewing one of the permits. In addition to that, we will continue to be in discussion with all three parties, in the hopes of finding a resolution that works to protect the site and also to advance the interests of the city and the developer such that no one is left in a difficult position.

Mr. Speaker: The member has a supplemental.

S. Chandra Herbert: If walking away from the table and saying to the Musqueam that they were on their own is working with the Musqueam, I would hate to see what not working with the Musqueam looked like.

Despite the fact that this is a national historic site, it took the developer unearthing two intact infant skeletons to get this government's attention. The Musqueam have proposed a solution to protect this site, and the government has not responded.

The minister said on May 10 that a solution would require cooperation of all parties. Can the minister explain how having the facilitators say there's nothing more that they could do is working together with all parties?

Hon. M. Polak: First of all, the member is wrong. The province of British Columbia — working with respect to our Ministry of Aboriginal Relations and also with Forests, Lands and Natural Resource Operations — has not said that the Musqueam are on their own. We recognize the significance of the site.

The member seems to be promoting the notion that the province is responsible in areas where we are dealing with private land, a private developer and land that is within the bounds of the city of Vancouver. This is not Crown land. It is, nevertheless, a role that we proudly play to help facilitate between the three parties, and I'm quite confident that at the end of the day, we will find that resolution for all three that protects the site.

[1430]

COASTAL RESPONSE PLAN
FOR JAPANESE TSUNAMI DEBRIS

R. Fleming: B.C. communities want clarity and communication about the province's plan to deal with tsunami debris that is already washing up on our shores. The state and federal agencies in Alaska, Washington, Oregon and California have already directly communicated with coastal residents and communities with specific safe guidelines for handling tsunami debris, while B.C. has yet to complete its protocol.

B.C. is clearly behind the U.S. in response planning. I would ask the minister: can he tell this House when the government is going to activate a plan that will protect our coastline and the public while addressing the sensitive issues arising from the tragedy in Japan?

Hon. T. Lake: This problem that we face is one that we have acknowledged in this House on past occasions. We are co-chairs of a joint tsunami debris coordinating committee with the federal government. We also work collaboratively with our partners in Washington, Oregon, California and Alaska.

We had a joint cabinet meeting with our counterparts in Washington in which the Premier and the governor discussed this problem. We are working in coordination with the Department of Ecology in Washington State and working with our counterparts at the federal government too.

We are coordinating the efforts to make sure that the debris is handled in a way that is sensitive to the people of Japan, who have lost very valuable items, I'm sure. We also want to make sure that any of the material that may be considered dangerous in any way is handled in a way that keeps the residents of British Columbia safe. We will continue that work in a coordinated and collaborative fashion.

[End of question period.]

Hon. S. Bond: I seek leave to make an introduction.

Mr. Speaker: Proceed.

Tributes

PUBLIC SAFETY LIFELINE VOLUNTEER
AWARD RECIPIENTS

Hon. S. Bond: Mr. Speaker, it is our privilege as members in the House today to introduce some very special British Columbians who are exemplary at supporting our communities in their darkest hours. They are volunteers with decades of dedication as part of the 13,000-strong lifeline volunteers across our province.

Those who are with us today are this year's recipients of emergency management B.C. public safety lifeline volunteer awards. I know my colleagues would like to welcome Jim Forsyth of Prince George. He is the emergency management B.C. emergency radio communications volunteer of the year. Dan and Louise Shynuk of Cranbrook are the provincial emergency program air volunteers of
[ Page 12515 ]
the year, as a couple. Walter Bucher of Smithers is the search and rescue volunteer of the year. Lyn Arikado of Kamloops, announced earlier by my colleague, is emergency social services volunteer of the year. Reg Gustafson of Nakusp is road rescue volunteer of the year.

I'd like to acknowledge one colleague of theirs who unfortunately passed away before he received this award, and that is Joe Mandur of Terrace. He's represented today by his wife, Theresa, and his son Joe. He has been awarded the emergency management B.C. lifetime achievement award. He sadly passed away very recently from cancer.

I know that every member will join me in congratulating these exceptional public safety volunteers who are joining us in the gallery today.

B. Routley: I seek leave to make an introduction.

Mr. Speaker: Proceed.

Introductions by Members

B. Routley: Today we have a group of grade 11 students from the Shawnigan Lake School and their teacher Paul Klassen here in the precinct. I ask the members to please join me in making them all feel very welcome.

Hon. M. Polak: I rise to present a petition.

Mr. Speaker: Proceed.

Petitions

Hon. M. Polak: I present a petition on the topic of medicinal marijuana.

J. Brar: I rise to table a petition handed over to me by the B.C. Bottle Depot Association. This petition is signed by 9,070 people requesting that all milk containers should be immediately included in the British Columbia used beverage container deposit system.

[1435]

V. Huntington: I stand to present a petition. I have the rare privilege of presenting over 2,000 signatures in the first wave of a petition requesting that the government condemn the industrialization of farmland and commit to preserving the agricultural land reserve.

Standing Order 81.1

ADOPTION OF
GOVERNMENT BUSINESS SCHEDULE

Hon. R. Coleman: I move:

[Pursuant to standing order 81.1 (2), effective immediately, all remaining stages of the following Bills shall be completed and disposed of in the order prescribed and for the duration indicated:

Second reading of Bill (No. 47) intituled Coastal Ferry Amendment Act, 2012 (30 minutes);

Second reading of Bill (No. 49) intituled Protected Areas of British Columbia Amendment Act, 2012 (30 minutes);

Second reading of Bill (No. 56) intituled New Housing Transition Tax and Rebate Act (30 minutes);

Second reading of Bill (No. 50) intituled Athletic Commissioner Act (30 minutes);

Committee and Third Reading on Bill (No. 14) intituled Workers Compensation Amendment Act, 2011 (30 minutes);

Committee and Third Reading of Bill (No. 53) intituled Family Day Act (30 minutes);

Committee and Third Reading of Bill (No. 44) intituled Civil Resolution Tribunal Act (30 minutes);

Committee and Third Reading of Bill (No. 46) intituled Motor Vehicle Amendment Act, 2012 (60 minutes);

Committee and Third Reading of Bill (No. 52) intituled Motor Vehicle Amendment Act (No. 2), 2012 (30 minutes);

Committee and Third Reading of Bill (No. 30) intituled Energy and Mines Statutes Amendment Act, 2012 (30 minutes);

Committee and Third Reading of Bill (No. 38) intituled Pension Benefits Standards Act (30 minutes);

Committee and Third Reading of Bill (No. 51) intituled South Coast British Columbia Transportation Authority Amendment Act, 2012 (60 minutes);

Committee and Third Reading of Bill (No. 47) intituled Coastal Ferry Amendment Act, 2012 (45 minutes);

Committee and Third Reading of Bill (No. 49) intituled Protected Areas of British Columbia Amendment Act, 2012 (30 minutes);

Committee and Third Reading of Bill (No. 50) intituled Athletic Commissioner Act (30 minutes);

Committee and Third Reading of Bill (No. 56) intituled New Housing Transition Tax and Rebate Act (45 minutes).

And further, Committee on Bill (No. 54) intituled Provincial Sales Tax Act shall be completed and disposed of by 4:00 pm on Thursday, May 31, 2012.

At the conclusion of these times indicated, but no later than 4:00 pm on Thursday, May 31, 2012, the Speaker and any Presiding Officer will forthwith put all necessary questions for the disposal of any remaining stages of the said Bills without amendment, apart from Government amendment, or debate. Divisions called on sections of the said Bills shall be taken in accordance with Practice Recommendation No. 1. Any divisions called on second or third reading of said Bills may be taken in accordance with Standing Order 16 and all other divisions will be covered by Practice Recommendation No. 1.

Proceedings under this motion shall not be subject to the provisions of Standing Order 81, or the Standing or Sessional Orders relating to the times and days of the sitting of the House.]

[1440]

Motion approved on the following division:

Orders of the Day

Hon. R. Coleman: In this chamber this afternoon we will start with second reading of Bill 47, intituled the Coastal Ferry Amendment Act, followed by second reading of Bill 49, intituled Protected Areas of British Columbia Amendment Act, and second reading of Bill 56, intituled New Housing Transition Tax and Rebate Act, and second reading of Bill 50, intituled the Athletic Commissioner Act. By agreement with the Opposition House Leader…

Interjections.

Mr. Speaker: Members.

Continue.

Hon. R. Coleman: …we will be reversing the order for second reading of Bill 50 and 56. Bill 50 will come first and be followed by Bill 56. We will then move into the committee stages of Bills 14, 53 and 44. Until close we would follow the order.

[1445]

In Section A in the Douglas Fir Committee Room, we will continue with committee stage of Bill 54, intituled the Provincial Sales Tax Act in that House.

In Section C in the Birch Committee Room, we will continue with the estimates of the Minister of Energy and Mines and Minister Responsible for Housing. Following that we would begin the estimates of the Office of the Premier.

Second Reading of Bills

BILL 47 — COASTAL FERRY
AMENDMENT ACT, 2012

(continued)

D. Routley: I rise to speak to second reading of Bill 47.

Before I start, I should say that I've prepared for 30 minutes of speaking. Having spent a long time preparing for that 30 minutes, I now see that, given the time allocation and the number of speakers left, I'll have ten minutes or less.

[L. Reid in the chair.]

That's just the beginning of an absolute failure to defend the democratic process in this House, and it's par for the course of the B.C. Liberal government that we should have bills rammed through with this type of brutal procedure. I think it's a sad day in the province of British Columbia — another sad day in the reign of the B.C. Liberals.

We will make do with what we're granted here by the all-powerful B.C. Liberal government, which must have its way. In fact, that's what got us into the trouble we're in, in this province, be it the HST, be it Bill 29, be it the Coastal Ferry Act. It's all the same. B.C. Liberals ram through legislation that's poorly thought-out, and then have to go back and try to fix it.

That's what we're doing here, really, with Bill 47. Bill 47 is an act which will amend the Coastal Ferry Act, which will try to deal with some of the failures of the original vision that was brought to this province for a re-engineering of its ferry service.

I think it's important for us to consider what British Columbians expect from their ferry service. We expect a transportation system that puts the public interest first. We expect a transportation system that keeps costs as low as possible and, in the original vision of W.A.C. Bennett, who formed B.C. Ferries, that becomes a tool in developing the economy of this province, rather than an obstacle to that development — and that's what it has become.

The original vision was that what was a Crown corporation would operate in the public interest and take best advantage of the many splendours of this province to provide a thriving economy.

Well, the first ferry act had six principles. The first one was financial sustainability. The second was to adopt a commercial approach. The third was to seek alternative service providers to privatize some routes. The fourth to minimize expenses. The fifth to end cross-subsidization, which allowed the more profitable routes to support
[ Page 12517 ]
those that were less profitable and, therefore, guarantee service to some of our smaller communities. The sixth was to create a greater reliance on user-pay.

Well, it's been an abject failure. Ridership is down many millions of passengers per year. The financial sustainability is an absolute mess. That first principle has been a complete failure. The move to adopt a more commercial approach might be actually something that's been achieved if you consider a commercial enterprise in bankruptcy.

Seek alternative service providers to privatize some routes. Well, that wasn't doable because no one could make a profit on small routes that only were supported through the cross-subsidization and support of the major routes, which were profitable. So that was a failure.

Minimize expenses. Well, we've seen salaries and bonuses for B.C. Ferries executives skyrocket, and we've seen costs to this corporation increase beyond the inflation rate. So that has been an absolute failure.

[1450]

The end of cross-subsidization meant, essentially, that the profit-and-loss centres were split out into a flotilla of loss. The main routes remain profitable, but all the minor routes are in a loss position and are facing service decline or cancellation.

A greater reliance on user-pay. Well, that was a success. Fares have gone through the roof — 40 to 45 percent on the major routes; 80 percent on the minor routes. If you look at the multifare packages that most travellers on the minor routes use, up to 115 percent increases. In my constituency, the Nanaimo-Gabriola run, for multiple-fare purchasers, they've seen over a 100 percent increase.

This has been an abject failure, an abject failure to defend the public interest, an abject failure to take advantage of the B.C. Ferries fleet and what it offers to British Columbians as a potential tool of economic development.

What we've seen is the ramming of legislation without consultation. We've seen ideological priorities defended at the expense of public interest, and the collateral damage to that is the communities up and down the coast and the small businesses that depend on an affordable ferry service.

Although this bill fails to address those problems in general, it does take very small steps in some of the right directions, but it's far from the vision that's needed to take Ferries where it needs to go. It does nothing to address the issue of affordability. The $79.5 million that this bill will inject into the system is dwarfed simply by the interest payments that B.C. Ferries must pay, and those are increased because of its loss of Crown corporation status so that now the interest rates alone per year will be $50 million.

Over the term of this $79.5 million injection, four years, $200 million will be paid out in interest payments. That will more than eat up the injected cash and, therefore, do nothing to address the affordability of fares.

Ridership. This government was warned, and warned repeatedly, by people who use the ferries, by our excellent ferries critic and even by the Commissioner of Ferries that increased fares would lead to price elasticity. In other words, the increasing of fares would result in a lower uptake of service, lower ridership. It was estimated that a 10 percent increase in fares would result in a 7 percent decline in ridership and, indeed, those estimations have proved correct. They have been on the low side. We've seen a loss of ridership, and that loss of ridership means a loss of business in our small communities up and down the coast.

In the constituency that I represent with seven ferry terminals, only one of them a major route, the people I represent are quite deeply impacted, and it goes well beyond an economic impact. It is actually an impact on their right to participate in community. The people of Penelakut Island, who I represent, a First Nations community — those folks commonly have to collect bottles in order to travel back and forth.

When I brought stories — one particular story of an elder, a woman who had to collect bottles, couldn't come up with enough cash and handed the change she did collect to the ferry deckhand, who told her that he couldn't take the cash — the other side laughed. She cried as she told me this story of finally making it to her home on Penelakut by the gifts of people in the ferry lineup paying her fare. She made it home, but she left a good portion of her dignity in Chemainus, on the other side.

Those are the collateral outcomes of the B.C. Ferries model that the British Columbia Liberal Party has brought to this province. It's a tragedy. It's a tragedy because the people of B.C. expect that this province, and especially this House, will work for them, not against them.

[1455]

What we have seen repeatedly, and proven again with the approach to B.C. Ferries, is that, in fact, this government is prepared to allow the province and this House to work against the people of B.C. That is a tragedy. In this case, and in repeated examples in my experience in this House, it's done through these mechanisms of closure.

We expected it. Four months and almost no legislation, and then at the end of the session, bill upon bill delivered in the space of two days — ten bills. Now with only days left to debate and 23 bills left in various stages of completion, this is what we end up with. It's a disaster. It's a shame on the province.

We expect it when we see this happening. We know these bills are coming, and we know there's no time to debate them. But when you actually sit here and see the government willing to take these steps to get their way, to ram through legislation to get their ideological agenda, it's actually sickening. It's a physically jarring experience.

With that and not enough time to debate this bill and others, I'll take my seat in the debate. Thank you to the government.
[ Page 12518 ]

J. Brar: I seek leave to make an introduction.

Leave granted.

Introductions by Members

J. Brar: I'm pleased to welcome 23 students from my constituency of Surrey-Fleetwood. They come from Cornerstone Montessori, and they are accompanied by Tessa Hansen and seven other volunteers. I would ask the House to please make them feel welcome.

Debate Continued

B. Routley: I rise to debate Bill 47. I, too, prepared a full 30 minutes for this, and I'm disappointed that we're not going to have the opportunity to more thoroughly discuss an important bill that affects constituents in the Cowichan Valley. Many constituents in the Cowichan Valley have come into my office and talked about how, as a result of escalating costs, it's limited their ability to see family and friends and even do tourism events and that kind of thing, as a result of this government's incompetence.

Really, Bill 47 is kind of an escape hatch for this government to try to get out of the way of their incompetence and hand it over to a commissioner. The commissioner will deal with this political hot potato in many areas.

There's no question that when you look back at this government's original vision for the province of British Columbia…. This act talks about taking time to go around and have a vision and there was originally a vision. I'm going to talk about the original vision back in 2003 when this was introduced by the minister. But I want to give you a short version of the Liberal vision on what they were going to do with the ferry system, and you couldn't imagine a worse plan for the people of British Columbia.

Old W.A.C. Bennett had it right when he talked about the ferry system as part of our highway system. It is an outrage that this government has so mismanaged the ferry system and cost the people of B.C., our constituents. Families all over British Columbia and, for that matter, throughout the world who travel to this beautiful province have a limited experience as a result of this government's incompetence.

Their Liberal vision could essentially be boiled down to it was going to be the "less service for more money" plan. That's the plan — less service for more. So less for more cost. Less service, more cost — that is the Liberal plan. There's no question about it. That's what their decisions have led to.

Now with this bill we're going to have a lot less service with a lot more pain for communities throughout British Columbia. Island communities are going to suffer. If you were living on a small island, whether it be Saltspring, Quadra Island, Cortes — you name them — all up and down Vancouver Island in various regions, those island communities are going to be trembling with the thought that some commissioner can be ordered to shut down service and limit service and just do it.

[1500]

Sure, there'll be some kind of public process. This bill talks about a public process, but at the end of the day, that commissioner can ignore the public just as this Liberal government has done over and over again.

When I look back at the history — and I think it is worthwhile, because it led us to this day — how did we get there? The Transportation Minister at the time, Judith Reid, in second reading on March 24, 2003, said: "Firstly, this legislation sets out the terms of the corporate restructuring." This was all about selling off. If this was a wagon train they'd be selling off the wheels of the wagon.

That's how these guys think. They are thinking about selling everything off. They sold off B.C. Rail. They're now talking about selling off the liquor distribution. You name it. Anything that's not nailed down — they're going to think of a way to try to get rid of it. It's sad for the people of British Columbia that the commons, the issues that ought to be protected by the government of British Columbia for the people of British Columbia are so sadly managed in this way.

Carrying on here, it says: "This act recognizes the new company intends a conversion" — get this — "of the British Columbia Ferry Corporation from a Crown corporation to a new, regulated, independent" — independent, hon. Speaker — "commercial operating company, under an act, that will be renamed the B.C. Ferry Services. The act underpins…." Here it is, the vision. It underpins the vision, and this was from a government release, March 24, 2003. "The act underpins the vision for the new company as an integrator of services charged with planning and coordinating the delivery of services and activities of the coastal ferry system."

The plan was to head towards privatization, no doubt about it. That was the plan at the end of the day. You look in 2003, with a 77-to-2 majority. They rammed through, just like today. We are getting the government ramming it through — no democracy, ten minutes left to speak about something that's important to our communities, democracy undermined. They've rammed through this legislation.

On June 10…. Actually, I want to talk about September. In 2003 the Crown corporation was quasi-privatized, and in 2009 there was a report out, and get this. Gordon Campbell, Premier at the time, announced that they were going to cut the rates by 33 percent in an attempt to stimulate traffic. Do you know what? Let the record show that that actually worked. That actually worked. At the end of the day, the conclusion of the group that looked at what had happened after Gordon Campbell reduced rates substantially is that there was no doubt that as a result of
[ Page 12519 ]
this, more people travelled. Well, I guess so.

You think about it. If there was suddenly a $50 charge to get across the bridge outside Kelowna…. The folks from Kelowna, if they were told, "Well, it's going to be a whole yearly pass, but you're going to pay 50 bucks to get across that bridge, because you know what? You're using it every day. A lot of folks from Vancouver Island, they're not using that bridge, so maybe it should be a user pay…."

That's how these guys think. If you live on Vancouver Island, oh, well, you should have to pay through the nose time and time again to use that ferry system. Well, they wouldn't think about doing that. They wouldn't think about a $50 surcharge for the good folks in Kelowna, and nor should they. It's a part of the highway system, and the ferries are every bit part of that.

Sure, there should be some charge. I'm not suggesting it should be free. But the outrageous highway robbery that we're suffering today that has kept families apart, kept tourism opportunities away, have impacted…. Even the chamber of commerce folks have said to me: "We've got to keep these ferry systems — the Mill Bay ferry, for example." The chamber of commerce, the CVRD, all the municipal directors are unanimous in saying that we have to keep control of that ferry system and have it.

Now with this commissioner, who knows? We could have at the end of the day…. Now we've got this "less service for more cost" plan again being polished up and shined up as a new bill.

[1505]

What have we seen? We've seen the Million-Dollar Man, so they had to bring in legislation. "Oh, what do we do?" We've got the Million-Dollar Man running around spending the taxpayers' money indirectly, and so it was an embarrassment for government.

They had skyrocketing fares, declining ridership. It really equals a Liberal ferry failure fiasco, and this government had to act at the end of the day. They have now moved in a direction to try to actually consult the people of British Columbia.

Well, they should have done that in the first place — go around talking to the people of British Columbia. Now it seems a little too late, after they've already made such a mess of the situation and created a situation where you're a resort community and you've had all kinds of tourism opportunities lost, in a place like Saltspring Island. This Bill 47 will potentially cut off the dependent communities from their marine highway.

Section 43.1 suggests that the commissioner will have the right to simply shut down ferries for those kinds of island communities. They're held hostage to a government, and now they're putting it off to the commissioner. The commissioner can make those unilateral decisions. I guess he's supposed to just have thick skin and be able to take it on the chin for the government.

There's no long-term vision in this plan, and the commissioner pointed that out. This government has no long-term vision for ferries for the people of British Columbia.

The service is so important. It is critical. The people of British Columbia expect the government to run the services. If every single thing that government did was supposed to be on a profit-making basis, how is that going to work? How are you going to make profit when you have wildfire? How are you going to make profit with so many things? The health care services….

We know that the people of B.C. expect those kinds of services. We pay our general taxes, and people believe that they ought to have the right to a fair transportation system to get on and off the Island. It's only the right thing to do — to allow, particularly, families and seniors to be able to connect.

Certainly, tourists…. I believe the people of British Columbia are missing out on tourism opportunities here in British Columbia as a result of the spiralling costs. Whether you're an American visitor…. I actually ran into an American visitor who said to me that she would come here a lot more often if there was the opportunity to do it in a cost-effective way.

I guess with the time constraints, I'm going to take my place, but I do want to say that we definitely feel that this has been a disaster. Democracy is being undermined with the shortness of the time you've given us here today.

L. Krog: William Andrew Cecil Bennett, Dave Barrett, William Richards Bennett, Bill Vander Zalm, Rita Johnston, Mike Harcourt, Glen Clark, Dan Miller, Ujjal Dosanjh. Nine Premiers, the better part of four decades, builders of a ferry fleet each and every one of them, until we get to the Gordon Campbell B.C. Liberal era, which has seen the destruction of one of the prime economic tools that this government had at its disposal. The same with B.C. Rail — sold down the river.

What are we doing here today? We're dealing with second reading, in a limited way, of the Coastal Ferry Amendment Act.

Now, you may recall when this Legislature passed something that was called the Apology Act. That's where you get to apologize without it having any legal liability. We might as well entitle the Coastal Ferry Amendment Act, 2012, the B.C. apology act.

"We're sorry. We're very, very sorry for messing up the B.C. Ferry corporation. We're very sorry to the 800,000 people who live on Vancouver Island and the tens of thousands of people who live on the Gulf Islands and rely on the B.C. Ferry service in order to move their goods, to attend social events, to visit family, to visit doctors and specialists in Vancouver — to do everything that is appropriate when you live in an isolated area or you live on Vancouver Island."

[1510]

The reason we're here today debating this bill is very simple. This government, in an act of incredible ignorance, driven by its ideological bent, decided to pretend
[ Page 12520 ]
that you could create the B.C. Ferry corporation with a single shareholder, put it out at arm's length and say: "Boys and girls, you're sailing the boats on your own now. You're an independent corporation. You have nothing to do with government, and we're not responsible for you anymore."

It's not like the baby Moses being shoved into the Nile to sail down the river into some future that was somewhat more promising. They shoved this ferry fleet out there and said: "Do the best you can, and here are the strictures on your performance and how you operate."

What do we have after 11 years of B.C. Liberal government? The Coastal Ferry Amendment Act, basically acknowledging, almost as directly as this government can ever do when it comes to informing taxpayers — directly acknowledging — what a failure it has been.

After decades of building up B.C. Ferries, of recognizing its significant contribution to the economy of British Columbia, particularly here on the coast, this government has arrived at a situation where they have to acknowledge that their experiment with taxpayers' money, with British Columbians' lives has been in large measure a failure — a failure.

It's no better summarized as a failure than by what the Ferry Commissioner himself said in his report, in his recommendation 6. "The province should work collaboratively with B.C. Ferries to develop a long-term vision of coastal ferry services…. A draft discussion paper should go out for public consultation."

No vision. The Million-Dollar Man and his highly paid executive team, paid way more than the previous managers of the B.C. ferry system. What did they have after 11 years? They couldn't even turn to the Ferry Commissioner and say, "We have a long-term vision," because this government had no long-term vision for B.C. Ferries, other than tossing it out.

Now we're going to give some more power to the Ferry Commissioner. Hopefully, he'll be able to pull the rabbit out of the hat, metaphorically speaking. He'll be able to save B.C. Ferries. Oh, we're going to give him the opportunity and the power under section 43.1, as proposed.

"Without limiting the commissioner's powers under section 42 or 43 to authorize or direct a ferry operator to reduce service on a designated ferry route, the commissioner may at any time direct a ferry operator to permanently reduce service on a designated ferry route in a manner and to a level that are consistent with the applicable Coastal Ferry Services Contract."

We're going to let the Ferry Commissioner shut down routes in the province of British Columbia. Well, I'm sure that possibility and that legislative power is really, really going to encourage investment. So let's just say I'm a tourist operator on Vancouver Island, and I'm contemplating a multi-million-dollar hotel or resort. The Ferry Commissioner is there with the power to permanently reduce a route? Am I going to do it on the Gulf Islands? Am I going to take that risk? Am I going to create jobs in the province of British Columbia? Not a hope.

The fact is what this bill says to investors and to the users of the ferry system is: "You can't rely on us anymore." You will not enjoy the confidence you did in previous governments of any political stripe — both under previous Social Credit governments and previous NDP governments. You will not be able to enjoy the confidence that the B.C. Ferries will be a jewel in the crown of the province of British Columbia.

What you'll be able to rely on is this. There will be no long-term vision. There will not be a commitment to ensure that service continues for all British Columbians or for tourists or for businesses.

Those of us who live on Vancouver Island are fairly conscious of one thing. All the experts tell us we have approximately three days' supply of food on Vancouver Island. Much of that food is delivered to Vancouver Island through B.C. Ferries. We rely on it in so many ways.

We have a ferry act amendment, the Coastal Ferry Amendment Act, that will do nothing to encourage the confidence that British Columbians need in that ferry system. We are in fact seeing, for the first time in the history of B.C. Ferries, a drop in ridership. The population of the province is increasing, and the ridership on B.C. Ferries is dropping? What does that tell you, hon. Speaker? What does that tell you?

It tells you, like everything else that the Liberals have turned their hand to, they have mismanaged this. They have mismanaged it.

[1515]

They came into government promising good management, and for 11 years they have delivered anything but. We saw it earlier today — the questions around the computer system that doesn't work. We see them spilling $180 million of taxpayers' money over the dams for B.C. Hydro because they messed up the private power projects. Now we see it with B.C. Ferries — dropping ridership, dropping revenue, further losses, a lack of confidence in the system, public distrust, outrage from tourist operators, a lack of investment, a lack of security.

Hon. Speaker, this government should stand up and offer to amend the act as I suggested. We'll call it the coastal ferry apology amendment act.

[Mr. Speaker in the chair.]

We're going to apologize to the people of British Columbia, particularly those on the coast and Vancouver Island for the mess we've made of this.I just hope that the ferry corporation lasts long enough so that a decent government in this province can restore it to its former prestige, restore its former position in the economic development of this province.

I've got to tell you that as a native-born Islander…. Perhaps some of those folks on the other side who don't have to rely on B.C. Ferries don't understand its im-
[ Page 12521 ]
portance or the role it plays in the life of coastal British Columbians. There is nothing more important to us than a ferry service that is reliable, that is available, that is accessible and that is affordable — affordable.

Second reading of Bill 47 approved on division.

Hon. B. Lekstrom: At this time I would move that the bill be referred to a Committee of the Whole House to be considered in accordance with the time allocation motion passed this day.

Bill 47, Coastal Ferry Amendment Act, 2012, read a second time and referred to a Committee of the Whole House to be considered in accordance with the time allocation motion passed earlier this day.

Hon. M. Polak: I call second reading debate of Bill 49, intituled Protected Areas of British Columbia Amendment Act, 2012.

BILL 49 — PROTECTED AREAS OF
BRITISH COLUMBIA AMENDMENT ACT, 2012

Hon. T. Lake: Mr. Speaker, I move that this bill be read a second time.

R. Fleming: I rise to respond to this bill. But I think I must begin by pointing out the absurdity of the bill with elements that are certainly good news, including the 550,000 hectares of additions to lands that are protected and conserved in British Columbia, with the backdrop of a 30-minute debate allocation on Bill 49.

[L. Reid in the chair.]

There are a number of sections in this bill, there are a number of additions, deletions and removals from class A park status in British Columbia in every region of the province that deserve proper scrutiny — both at second reading and, of course, at committee stage of the bill. But the situation we're in is that debate is being limited and cut off. So I will only be able to very briefly raise a few points in debate this afternoon, given the actions of the government to constrain debate on this bill.

I will confine most of my comments to a couple of sections of the bill that amend the protected areas legislation of British Columbia. I think that the most controversial aspect of this bill — and it will be dealt with by two of my colleagues who are also on strict time limits during this debate — is around the Klinaklini River deletion from the Great Bear rain forest conservation area.

This potentially enables, through that removal of land, a significant addition of an independent power production hydroelectric facility in an area and on a river system that is unique and one deserving of protection. It's one of British Columbia's wildest rivers. It spans almost 1.5 million hectares, and it passes through some of the best remaining wilderness in southern British Columbia. Its clean waters nurture a wide range of species, including bull trout and salmon, grizzly bear and moose.

[1520]

The river itself wends its way through 14 biogeoclimatic zones. There is incredible abundance and biological diversity and ecological value to the Klinaklini River.

This is exactly why government, when it was tested previously on this issue…. The previous Minister of Environment, Barry Penner, was forced to make a recommendation or reject an application that was potentially going to be included in a B.C. Hydro Clean Power Call. He took action on behalf of the government to decline the application to remove the land that is now contemplated in Bill 49 to be removed today. That was two years ago.

Government said no. Government said the nature values of this river, the importance to the fisheries and the wildlife that are sustained by an undisturbed Klinaklini River, were more important and were deserving of protection, as was originally enabled in the Great Bear rain forest conservation agreement. Government actually upheld an agreement that it had previously signed — and did the right thing, quite frankly. This bill this afternoon undoes that.

Now, undoubtedly the government is going to say they are responding to remedies that were recommended by the Supreme Court, because this has been the subject of litigation. Having read the reasons for judgment, that is not the case. Government did have options in what the justice had written about how the dispute might be resolved. Rather than pursue those opportunities, we're back at square one and the government is contemplating something that it rejected only two years ago.

That is the most controversial aspect of what we will be debating this afternoon, and it is why Bill 49 deserves proper and fulsome debate in this Legislature. The government intended to do it in the first instance, and it was persuaded not to shortly thereafter. That is an opportunity that is being denied to the members of the Legislature and members of the public, through their representatives and through other means of having this debate over Bill 49. There is no opportunity to have debate that could persuade government to do the right thing.

That was critically important two years ago, to bring certainty to the Great Bear rain forest conservation agreement and the intact borders of that conservancy, which is being undone, potentially, today with the swift passage and use of closure on Bill 49. I can't think of a better example of why British Columbians are being failed by these last two days of this legislative sitting than that aspect of Bill 49.

The debate deserves to be informed by other things that are happening simultaneously in the House of
[ Page 12522 ]
Commons today. What government will argue it is doing is simply allowing the claims by the power corporation to go forward to an environmental assessment, an environmental review process. Well, that review process is more than likely going to happen after the federal government passes its omnibus Bill C-38.

The Canadian Environmental Assessment Act will be completely different. The Fisheries Act of Canada will be rolled back 40 years and will completely lower the bar on what fish and fish habitat standards and protections are in law in Canada today.

That means that the environmental review that potentially this power corporation will participate in, if the government has its way and has the removal from the conservancy after passage of this bill, will be different. It will be to a standard that is completely unsatisfactory to the public, and it will not respect the natural values of the Klinaklini River, which I spoke to at the outset of this debate. That's the biggest concern in this bill. There are other concerns as well.

[1525]

I think that while there are certainly merits to the removals and the additions around the Stawamus Chief project on the Sea to Sky corridor — and, again, debate will not adequately cover this — I think it's fair to say that there's some worry about proponents who wish to introduce commercial activities into provincial parks in British Columbia — and I think this is due to government cutbacks and the fact that the B.C. Parks budget is at its historic low. The proponent is now responsible for being the convener of community consultation to find out whether it's a good idea.

So the person or the company in charge of potentially introducing profit-making activity into parks is now responsible for community engagement around those kinds of activities, instead of B.C. Parks, instead of the province looking at its management plans for its own park areas.

I don't specifically have a great deal of concern around what this proponent seeks to introduce. I do have concern about the methods which B.C. Parks — the absolute hands-off approach they have taken to enabling discussions like this to happen in communities…. It sets a bad precedent. There's no question about it, and that's something that should be examined more fully in debate and won't be allowed to be.

The situation in B.C. parks is well known. That's an important backdrop to discussion around Bill 49. One can famously remember the now Premier, when she was an opposition critic, criticizing the NDP government in the '90s, when British Columbia became the first jurisdiction in North America to honour the UN commitment to set aside 12 percent of its lands. She criticized that because the budget for B.C. Parks was not being increased when the number of millions of hectares was being increased.

Well, fair point. But let's remind this government that in 2001, when they became the government, the B.C. Parks budget was $45 million. Today it is less than $30 million. Here we are this afternoon in Bill 49 adding 550,000 more hectares to protected areas. If you go through this bill, many of these are good gestures, and they are the results of community processes that have been ongoing. But the point remains the same — the one that the Premier, who was then an opposition critic, made.

You can't increase the responsibilities and the protected area status in the regions of British Columbia when you have half the park rangers, half the conservation officers and $15 million less of a budget today than you did a decade ago. Something has to give.

The problems in B.C. parks are well known. That's an important point to be making in this debate. The government needs to receive the message loud and clear that it's one thing to protect lands in various statuses of different types of park categories we have in British Columbia. It's another thing to actually do the work and make sure that the B.C. park system is vibrant, robust, enjoyable and serving British Columbians well. That is not the situation today in British Columbia as we debate Bill 49.

M. Sather: I rise to join second reading debate on Bill 49, the Protected Areas of British Columbia Amendment Act, 2012. There are some good parts of this bill which, unfortunately, due to the severe time limitation that we have, I won't be able to address. My colleague has addressed some of those.

I want to go on to the most egregious part of this bill, which is simply the altering of the boundaries of a conservancy to allow a major power project, a development which is the worst independent power project in the province in terms of environmental damage. This is on the Klinaklini River.

The Klinaklini was a significant part of the Great Bear rain forest agreement in 2006 involving First Nations, including the Da'naxda'xw-Awetlala First Nation; resource companies; and conservation groups such as Greenpeace, ForestEthics, the Sierra Club and B.C. Spaces for Nature.

The Great Bear rain forest agreement was to be based on ecosystem-based management that encourages conservation and sustainable land use practices. In 2006 Kleana Power Corp. launched its bid to develop a massive hydroelectric project on the Klinaklini River.

[D. Horne in the chair.]

The concept of conservancies as protected areas was brought into being in 2006. The test for issuing park use permits in conservancies explicitly restricts commercial logging, mining or commercial hydroelectricity. In fact, it prohibits those activities.

[1530]

The Dzawadi–Upper Klinaklini River was officially es-
[ Page 12523 ]
tablished as a conservancy under the Park Act in 2008. On April 27, 2010, then Environment Minister Barry Penner said that the conservancy boundary would not be altered to allow the Kleana Power project to proceed. That was under a lot of encouragement from the opposition. I remember the debate at the time.

In June 2010 the project was dropped from B.C. Hydro's clean power call. Kleana Power, with their First Nation partner, Da'naxda'xw–Awetlala, took the government to court over Minister Penner's decision to not allow the boundary of the Dzawadi–Upper Klinaklini conservancy to be changed. That court case was heard from December 2010 to January 2011, with a decision on May 10, 2011, last year. There was some very interesting reading in that court case, which I will unfortunately not be able to cover in my brief time.

I want to go to the remedies that the justice proclaimed under this. He said that the First Nation "seeks an order quashing the minister's decision of April 27, 2010, and declaratory relief directing the minister to recommend to cabinet that the boundaries of the Upper Klinaklini conservancy be amended." That's the important phrase in what was being asked for in this court case. "Alternatively, they seek an order directing the minister to consult in the government-to-government process."

The justice went on to say: "It's rare, however, for the court to become involved in directing a particular form of accommodation" — in this case, directing that the boundary be changed. The justice went on to say: "I do not consider this an appropriate case to direct the minister to make the recommendations sought. However, I have concluded that the First Nation are entitled to the following relief. (1) An order quashing the minister's decision of April 27, 2010." So the decision the minister made is null and void as a result of this court case.

"A declaration that the minister has a legal duty to consult the First Nation about their request for an amendment to the boundary of the Upper Klinaklini conservancy with a view to considering a reasonable accommodation." So the thing is that the government was told that they had to change the order, and they had to consult with the First Nation.

They've gone one step further. They have changed the boundary. I don't see any order in here. In fact, the justice specifically did not order that the government change the boundary, and yet they've gone ahead and done that on this most egregious of projects.

We're going to have, again, I understand, a meagre 30 minutes to question the minister in committee stage about what took place and why it took place. I hope we get some answers, but it is a most disappointing move that this government has made.

If one looks at the map of the Klinaklini, what they've done is taken out the conservancy along a narrow band on either side of the river and called that part that they're taking out of the conservancy to allow the hydroelectric power project that is not allowed under the Great Bear rain forest agreement…. They're calling that a protected area. I'd like to know just what it is that that area protects after they're done with this project, should it proceed. I hope fervently that it does not.

I want to say a few words about the Klinaklini, because we need to understand just what we're looking at here. The Klinaklini drainage encompasses some of the least fragmented habitat on the Canadian west coast. So we're looking at the heart of wilderness on the B.C. coast. We're looking at a pristine environment that is put at risk by this legislation, put at great risk by this legislation.

[1535]

The Klinaklini River, where this project is proposed, is home to all five species of Pacific salmon — coho, chum, chinook, sockeye and pink — plus, steelhead, cutthroat, Dolly Varden and oolichan.

It just boggles the mind that this project was ever allowed to get any consideration, but that speaks to the complete lack of fair process that this government has not had in place around independent power projects, and why an idea that has merit could have been good if it was done right by this government. But it's been done so wrong, and this is the most outstanding case of how wrong it's been done.

The Kleana Power project is a huge project which would produce up to 700 megawatts of power. We're not talking about a small project. This is a megaproject.

Pristine Power, who's one of the partners in the agreement — was or is, they keep switching hands — quoted annual generating capacity of 2,400 gigawatt hours. That's 50 percent of the expected power from Site C. As we know, that's a very large proposal, were it to be developed.

The river would be diverted over 16½ kilometres — put in a pipe over 16½ kilometres. Only the upper two kilometres are above an impassable barrier for fish. So 14½ kilometres, all five species of Pacific salmon, are going to be impacted if this thing ever goes ahead.

I cannot imagine how the government ever, ever let this get to first base. They have not only let it get to first base, but they've gotten themselves in a position where — and I applaud Barry Penner; I applaud him considerably for what he did in 2010 — unfortunately, they're up against the wall.

It has to be said, though, in reading the court case, that the justice noticed that the minister then, Barry Penner, never did make any petition about the negative environmental impacts of this project.

Having said that, my time is running short. I just want to add a couple more words about the project. If this ever happens, we're going to get the ramping problems. That's the up and down lowering of the river that we've seen at the Ashlu and the Mamquan that's killed fish. I just hope that the government will not proceed, because they don't have to. It has to pass an environmental as-
[ Page 12524 ]
sessment. Hopefully, that's not going to happen, if this ever comes to pass.

Sadly, there is much, much more to be said about this project, but I'll pass it over to my colleague for her comments.

C. Trevena: I was quite astounded not only when we had the time allocation giving us just 30 minutes to debate this bill, but that the Environment Minister, who is putting forward this bill…. Obviously, it's quite a complicated bill. There are a number of sections to it. There are a number of changes, some which are quite controversial, and that's what we're limiting ourselves to speak about.

The Environment Minister didn't justify any of this — did not describe the good parts; did not try to justify the controversial parts. When we have a debate, even though the time is short, the Environment Minister just stood up, moved second reading and sat down.

I think it shows the Environment Minister simply cannot justify anything that is in this bill, nor can he justify what his own government is doing in reducing our time to debate these very important issues. Because that's what we're here to do.

This isn't just an opportunity to rubber-stamp what is there for the government. It's an opportunity to have an honest debate, have an honest discussion and analyze what is good and bad for the people of B.C.

[1540]

We on this side of the House think that some of the decisions in this bill are going to be very bad for B.C. My colleagues have been referring to the decision to remove part of the conservancy for the Upper Klinaklini. The Upper Klinaklini is an important part of….

Deputy Speaker: Member.

R. Fleming: I seek leave to make an introduction.

Deputy Speaker: Proceed.

Introductions by Members

R. Fleming: We have several guests with us here today. Kim Speers, who is a professor at the Royal Military College, is here with Canadian Forces members who are part of the professional officers program. They've been watching debate in the gallery. They're joined by two policy and analysis students from the University of Victoria. I wish the House to make them welcome.

Debate Continued

C. Trevena: The policy analysts, I think, would learn a lot from how this government allows policy to be analyzed, because it really doesn't happen.

We have no opportunity to discuss or analyze anything that is here, nor get the justification for why we should be withdrawing this from a conservancy and allowing the potential — I know it's not there yet — for a massive power project to be built on the Klinaklini, a power project that is second only in size to Site C.

When the Environment Minister had the opportunity to introduce the second reading of this bill, he could have been thoughtful. He could have explained why he was going to make these decisions.

I raise this because it was during questioning in the estimates debate in May 2010 that I, as the member for North Island, was asking his predecessor, the then Environment Minister, Barry Penner, about the Upper Klinaklini and the plans for the conservancy. I was asking very specifically about whether the land conservancies would be respected in the development of independent power projects.

At that time there was a lot of thought that went into what should and shouldn't happen. His predecessor and very short erstwhile colleague said, after going through the benefits and potential impacts of the proposal, which enhances…. The script was just one paragraph. He went in and enumerated in — one, two, three, four, five — about seven paragraphs why there were many potential negative impacts in the project.

I'd like to read them into the record. The Environment Minister at the time, former B.C. Liberal Environment Minister Mr. Penner concluded that he would not remove this from the conservancy because of the increase in the water elevation of the river in the Upper Klinaklini, because of the number of fish-bearing tributaries that will be backwatered by the proposed construction of the intake structure. Fifty-seven hectares of riparian habitat "could be affected, 65 percent of which, we've been told, would be old-growth forests that would submerged or inundated…."

When we talk about "we've been told," one assumes it's the government and not just that one minister. So this present minister knows the potential damage that could happen with the potential of this power project going ahead.

This is not being done in a little back room. This was information given to the Environment Minister that he had the opportunity to justify in second reading but just decided not to bother, just to go along with his House Leader and say, "That's fine. We're going to give 30 minutes — just basically say goodbye to democracy and rubber-stamp whatever we want."

The other significant issues that the Environment Minister…. Who'd have thought. Here I am, defending the former Environment Minister, Minister Penner, here.

He said that there are a number of conservation data centre red- and blue-listed species with old-growth plant communities. A grizzly bear corridor "exists in the area, which serves an important function of connecting the coast to the Interior." There's evidence of moose in the
[ Page 12525 ]
corridor and concerns about "whether or not impacts to fish habitat could be mitigated, and there's concern that perhaps it could not be."

He concluded, having thoughtfully considered the evidence presented to him…. He thoughtfully considered that "after carefully considering all of the factors that I've enumerated, and probably some that I haven't…." The minister actually listened to advice, took in information and decided to think about the impacts that this could have, the reasons why a conservancy had been placed on this section of land.

It wasn't done lightly. It's not something where you get out a map and "where are we going to put a conservancy today?" You think about where you're going to put the conservancy.

The then Environment Minister said that "after carefully considering all of the factors that I've enumerated, and probably some that I haven't, I have decided that I will not be recommending that the boundaries of the Upper Klinaklini conservancy be amended in order to facilitate this project."

[1545]

The proponents of the project took this to court, as we heard, but the ruling of the court did not give the government carte blanche to withdraw it from the conservancy. It wasn't just: "Okay, you have no right to have this conservancy there. There is the opportunity here for the independent power project. We're going to ensure that you withdraw this from the conservancy."

What was suggested that the government do was to change the order and consult. Change the order and consult. That is extremely significant, because what this government has done is it has opened up the potential — and I know it isn't a given yet— for a massive and potentially extremely damaging power project in an area that has a huge amount of environmental sensitivity.

We don't talk about these things lightly. I mean, we have grizzlies in other parts of B.C. In B.C. we allow people to hunt grizzlies. We have moose in other areas of B.C., and we have an active moose hunt. We have things that are well utilized in our province. We have resources that are well utilized, and those include animal resources.

[Mr. Speaker in the chair.]

What we are seeing here is the opportunity for that to continue to be protected, for the government to consult — like the government could debate in this House. The government could explain its thinking when we get to committee stage.

These are issues that should not be done hurriedly. There was a lot of thought that went in. The government obviously has a lot of information about this particular area. It's part of an area that is very well known for its sensitive ecosystem.

The previous Environment Minister was very clear in his decision. He was very clear that he had that information, unlike the present Environment Minister, who sits idly by, waits and hopes that he'll get it rubber-stamped and everything will be fine and he'll never be challenged. I think that's the worst form of government and the worst form of acting as a minister.

The previous minister said that "the proponent had concluded that the project could not go ahead without an amendment to the conservancy boundary. Otherwise, the proponent's trajectory would have been through an environmental assessment process dealing with the federal government and so forth — the routine process."

What's different about this one is that the project requires, allegedly, change to make it happen — to be clear about that. That's what this government is doing. They're trying to make a legislative change to allow this to happen, something which was not allowed before, something which is really going to hurt the province and which has been done without due consideration.

I thank you very much for this and would hope that the Minister of Environment has some answers to conclude his remarks.

Mr. Speaker: Pursuant to the time allocation motion I now move second reading.

Second reading of Bill 49 approved on division.

Hon. T. Lake: I move that the bill be referred to a Committee of the Whole House, to be considered in accordance with the time allocation motion passed earlier this day.

Bill 49, Protected Areas of British Columbia Amendment Act, 2012, read a second time and referred to a Committee of the Whole House to be considered in accordance with the time allocation motion passed earlier this day.

Hon. M. Polak: I call second reading debate on Bill 50, intituled the Athletic Commissioner Act.

BILL 50 — ATHLETIC COMMISSIONER ACT

Hon. I. Chong: I move that Bill 50, intituled the Athletic Commissioner Act, be read for a second time now.

G. Gentner: I had an opportunity, I believe, to speak at great length to this bill. Unfortunately, we don't have the time. Believe or it not, Bill 50 is regarding the Athletic Commissioner Act, to bring forward an athletic commissioner. It has 24 pages, and it's a new frontier, where somehow I would have hoped we would have had more discussion on this.
[ Page 12526 ]

[D. Horne in the chair.]

The time allocation part of this…. I want to give the analogy that basically, if we look at boxing — and we're going to be talking about regulating boxing and MMA, for example — could you imagine in the middle of the Ali-Foreman fight, the Thrilla in Manila or the rope-a-dope, when you had a fighter who has had 15 rounds to figure out his strategy, and in the tenth round it's decided that that's the end of the game, that you couldn't complete the strategy?

[1550]

I find it a little ironic. Here we are talking about regulations for boxing and mixed martial arts, regulations to make it fair, and here we are in this House defying the true notion of democracy, and that's debate, throwing time allocation onto something whereby we are not allowed to discuss. I find it's quite disgusting, but nevertheless, that's how this government works.

I somewhat applaud the government for going here with this bill, simply because in many ways it's necessary. I'll give an example. Last year I went into a pub with a dear MLA friend of mine. We went there to watch the playoffs. The Vancouver Canucks were in the playoffs. We went into the bar, and it was filled with people, quite an enormous amount of people enjoying the hockey game.

To our befuddlement, if you will, there they were, almost everybody in the bar, looking at the TV screens. They weren't watching the playoff hockey game between the Canucks and the Boston Bruins. They were watching ultimate fighting.

This is a phenomenon that's been taking hold in our area of endeavour in sports for quite some time. In fact, it's now moved in the popularity of sports. It has surpassed professional hockey as a leisure sport to watch as a pastime. It's also passed, of all things, NASCAR.

It's something here that of course, without question, should be regulated. I think that perhaps we on this side of the House will be supporting it. But we won't have the opportunity, necessarily, to break it down to see exactly where some of the difficulties and problems are.

[Mr. Speaker in the chair.]

First of all, let's get it straight. Under section 83 of Canada's Criminal Code it deems prize fighting as illegal. It's illegal in this country. Many provinces have made exceptions to include mixed martial arts under the legal umbrella. Of course, there is the matter of a need to exclude professional amateur boxing cards and some forms of kickboxing. It's an important part of it that we do regulate this, because in the dark, dark days, there were many people getting into trouble.

In fact, I have to tell you that at the age of 15, Tommy Douglas had an amateur career in boxing. He actually fought at the One Big Union hall, in a gym in Winnipeg, and he won the lightweight championship of Manitoba. He was quite an incredible fighter. I think he also was a flyfighter. Of course, he became known as the Greatest Canadian.

In a way, because way back then there weren't any laws dealing with boxing, maybe it can be said that under section 83 Tommy Douglas was breaking the law. We won't put Tommy in that light.

But that is the need — to sort of legitimize the sport. It is pugilism. Particularly in the mixed martial arts it's more to do with not striking but with grappling, which is something which can be quite vicious — a need to, again, regulate.

Now, it's being endorsed primarily by most municipal governments. Municipal governments understand the difficulty of it and the need to deal with section 83, which prohibits pugilist sports.

Therefore, you can look at many provinces. In Alberta they have a competitive sports commissioner within Calgary, but it's not provincial. We could look at Edmonton, of course, within Alberta. They have their own athletics commission, a boxing and wrestling commission. In British Columbia we have one in Nanaimo. We have one in the city of Vancouver.

It's time, of course, that we bring in another provincial bylaw. I can go on to the other provinces that are in the same situation. Ontario and Quebec have taken the initiative to create a provincial commissioner, Ontario's athletics commission.

In some ways, that is what's driving this one. I think one of the reasons it's being driven isn't because of necessarily the safety and support of the sport itself, but it may actually be because of the competitiveness by promoters to facilitate sport and the economies in cities. I know that in the province of Ontario the NDP there grudgingly supported it because they understood the capacity and the economy it brought to Toronto, for example.

[1555]

We know that municipal governments are supportive. A city councillor of Vancouver has welcomed it. We don't seem to get too much push-back, nevertheless. There are some cultural issues relative to this sport that's being foisted upon us, and there are some good comments and bad comments. I'd be remiss if I didn't talk about it.

Sen. John McCain said that mixed martial arts…. He equated it to human cockfighting. I don't know if it necessarily cost his defeat in the presidency of the United States, but it stuck with him nevertheless.

I've heard many people describe it. One minute they're boxing. Then, all of a sudden, someone kicks the guy in the neck. Then you'll be rolling around on the ground. There could be different holds called the triangle hold, the guillotine, the rear naked choke. It goes on. Then, of course, there's tapping out, the ability to tap out and admit defeat.

What this bill hopefully will do is regulate those types
[ Page 12527 ]
of rules so that some of those rules are not nefarious or dangerous or harmful to those who participate.

It's not going to go away. When you look at the ratings and look at the popularity of the sport, I suppose it's far better that we do it legally as opposed to having it being performed in a back barnyard somewhere like in the good old days — in the '30s, for example — when boxing really wasn't much regulated. We had nothing but safety and health concerns.

Basically, I want to talk about the statistics. I wish I had more time to bring into exactly what we're looking at today. But I'll give you an example, hon. Speaker. On November 12, 2011, during one fight between Velasquez and dos Santos, there were 8.8 million viewers watching ultimate fighting. It was probably one of the largest participatory viewerships in any sport, particularly with pay-per-view. Perhaps the government is of the position where it may actually find that there are those fights…. They'll come to Vancouver, for example, and watch this sport.

There are about 18.1 million Americans — we don't have the statistics for Canadians — who participate in the mixed martial arts. Of that, 9.4 million are adults. Surprising and concerning is that 5.5 million are teens and 3.2 million are kids. I realize there are different rules in how you fight when you have children, relative to kickboxing. These, hopefully, are going to be addressed.

Again, I want to give the demographics. The household income that seems to enjoy this sport more than any other…. Believe it or not, it's those with an income of over $75,000. It's an interesting demographic. It's a question of whether or not this is just a fad or a fashion that's here and is going to go away. I don't think it is. On this side of the House we believe it's better to regulate some things rather than not.

The question that comes up: is this really an act of violence? It's interesting. We allow sports people — in particular, hockey players — to get into fights and actually hurt each other. Yet they're not necessarily charged, even though in many areas in our society a similar type of kerfuffle would result in a criminal charge. This is a somewhat violent sport, but it's not necessarily as violent as, shall we say, boxing. If I have a chance, I can talk about that as well.

The question comes up, of course: are we actually sanctioning violence? This is a question that we've got to ask. Many people would say that we are. Probably the majority of younger people who watch the sport and participate say we aren't.

The interesting thing about ultimate fighting is that 43 percent of those are made by decisions. TKOs, technical knockouts, are 31 percent, and 14 percent are actually true-blue knockouts. When you start talking about concussions…. We're talking about concussions. It's a question of whether or not, through the regulation, we will be able to deal with this again.

[1600]

I'm going to stop there.

I've got five more minutes, according to my ringmaster over there, who's making sure that I stay within the confines of the new rules of the House that, again, seem to have been changing quite a bit here.

Now, I know that the B.C. Medical Association has come out against this. Some people call it…. We don't want to find in the end that MMA fighters, 30 times later, will become what they're calling dribbling neuro-vegetables. But we have to ask ourselves about what combative sports are doing.

We know that there's lots of information and evidence with injury in professional mixed martial arts competitions. We've seen some deaths. There was an unregulated mixed martial arts in Kiev, Russia, years ago where a man…. His name will come to me in a minute, but he died, basically, in the ring, and that was unregulated. That was a situation where there were no rules.

It's a good case in point where, again, when it comes down to grappling sports…. And I'll give the sport this, that grappling has a lower injury rate than that of boxing. There are lots of statistics that show that it's not as violent, if you will, or as….

Interjection.

G. Gentner: Two more minutes, okay. With that, the time clock…. Yeah, the gatekeeper is watching what we're doing here.

I'll end it with this position. I want to talk about it more when we get to committee stage, and this is this. The government, in particular the member from Vancouver-Langara, came out with a private member's bill relative to the need for dealing with concussions — concussions in hockey.

What I want to understand: are we going to be able, through this regulation, to ensure not only the safety of those who are participating, the professionals and the adults, but the kids who are somehow inspired by this? The numbers are showing how popular it is. Are we going to be able to ensure not only the promotion of this sport, but above all, to ensure that the concussions and the safety of our children, not only in this sport but in all sports, are regulated and looked after? I think that's the weakness of this bill. It doesn't go far enough.

With that, I will waive my time. Maybe, hopefully, from my understanding…. I don't know how the rules are working. They seem to be changing. But I'm going to put all my time I have left onto the committee stage so that I have the opportunity to ask the hon. minister some more questions. With that, I'll sit down.

Mr. Speaker: Seeing no further speakers, I’ll call the question on second reading of Bill 50, Athletic Commissioner Act.
[ Page 12528 ]

Motion approved.

Hon. I. Chong: I move that Bill 50 be referred to a Committee of the Whole House to be considered in accordance with the time allocation motion passed this day.

Bill 50, Athletic Commissioner Act, read a second time and referred to a Committee of the Whole House to be considered in accordance with the time allocation motion passed earlier this day.

Hon. M. Polak: I call second reading of Bill 56, intituled the New Housing Transition Tax and Rebate Act.

BILL 56 — NEW HOUSING TRANSITION
TAX AND REBATE ACT

Hon. S. Bond: I move that Bill 56, the New Housing Transition Tax and Rebate Act, be read a second time now.

J. Horgan: I know that people watching at home and those in the gallery are probably wondering: what in the world is the Opposition House Leader doing standing up talking about a finance bill?

[D. Horne in the chair.]

Well, the reason that is, hon. Speaker and those in the gallery and those watching at home, is that the Finance Minister and the Finance critic are in another chamber debating another finance bill.

For those who haven't been following the machinations, my colleague from Delta North gave us a bit of a primer. We have some extraordinary rules in place today, certainly, and for the remainder of our time in this spring session. What we're doing with Bill 56 is we've been given 30 minutes — 30 minutes by motion, 81, to speak to the principles of the bill at second reading. My plan during the time I have available to address Bill 56 is to raise a host of issues about the implications of a 47-page bill, nine parts, 94 sections, multiple clauses.

[1605]

We saw this bill for the first time on Monday. For those who don't have a calendar handy, today is Wednesday. That means that we have had about 48 hours to consider the substance of a 47-page bill on tax policy, nine parts, 94 sections. I have about 28 more minutes at my disposal to elucidate, to educate and to bring up the important public policy matters being considered here today.

Had we been in the normal course of events, I rather doubt I would have spoken to this bill. In fact, I am fairly confident that I wouldn't have spoken to this bill. It would have fallen to the Finance critic to do so. He is in the Douglas Fir Room debating Bill 54, another tax bill tabled a couple of weeks ago — 160 pages of detailed and complex tax policy.

Now, I don't know how you run a business when you take your best assets and you disburse them around and make them ineffective, but that's in fact what we're doing. The people of British Columbia expect us to come here, to review legislation, to understand the complexities that are put forward. We bring forward critics who are steeped in the subject matter, who work diligently to keep on top of those issues.

I have to confess, and I am very reluctant to do so, that of the 47 pages, nine parts, 94 sections, I've not read them all. I apologize to my constituents for that. I just haven't had the time.

Why do you think that is? Well, I was doing estimates up in the attic on the third floor with my opposite member, the Minister of Energy, for the past two days. So I didn't have time, when this bill was tabled on Monday, to review it, discharge my obligations as critic for Energy as well as House Leader and inform myself and my constituents about the impact of this piece of legislation.

Today with the motion, 81, now passed by this House, we have about 20 more minutes for me to convince you that this is a bad idea — to allow the Opposition House Leader to stand for 30 minutes and complain about a lack of time to do due diligence. I am absolutely confident that if the members on that side of the House were sitting over here, they would be outraged. They would be absolutely outraged, because our job, our role and function as legislators is to come here, inform ourselves on behalf of our electors of what the heck is going on.

"What is the government doing to me today?" That's what I quite often hear when I go back to my constituency. I go for a cup of coffee down the street from my office. I sit around with a bunch of men and women in the neighbourhood, and they say: "What's up, Mr. Member? What are you doing down there at the Legislature?"

I have to tell them this week, when I go home, that I got up on their behalf and spoke to a 47-page bill, 94 sections on tax policy, because the guy that was supposed to do it is somewhere else doing the very same thing on another piece of legislation. He, thank goodness, with respect to the HST bill or the reincarnation of the PST, is very well steeped in this information. The Minister of Finance is there with him. I think I might be on delicate ground here saying that people are elsewhere doing other business, but they are most assuredly doing other business.

Today we have three chambers operating, for those upstairs. You're only in one of them. There's a sideshow going on down there and another sideshow going on, on the third floor. If you get tired of what you're seeing down here, take a walk around. Get some popcorn. Sit down and see what you can find in other places, because that's the kind of gong show we've got going today.

This is substantive information before this place for two days. Two days. I would love to see how many of the 85 of us that are sent here from all across B.C. have digested the impact and the importance of Bill 56, which
[ Page 12529 ]
we are speaking to at second reading, the principle stage of the bill.

As I understand it, thanks to the capable researchers in the opposition caucus, Bill 56 creates a new 2 percent tax that will apply to the sale of new houses when construction starts before March 31, 2013, but ownership and possession transfer afterwards.

Now, what does that mean? Well, that means that as we are transitioning away from the horrible sales tax that was brought forward by the government some years ago, defeated in referendum and now rescinded come April 1, if you purchase a home during that transition period, products that were purchased for the construction of that home would have been subject to HST; products purchased after that, subject to the PST.

The challenge is that this 2 percent transition piece, I am advised, is a good piece of public policy. Now, if it was a good piece of public policy, and it is a companion piece of legislation to Bill 54 being debated down the hallway by the Minister of Finance and the Finance critic, I would have thought that you might have wanted to bring them both forward concurrently and had a plan so that you could have a systematic and comprehensive debate of the details and substance of the legislation.

[1610]

Not so, because the government caucus, the B.C. Liberal Party, has completely and utterly botched this legislative session. Fifteen bills tabled with eight sitting days remaining.

Deputy Speaker: I remind the member that we're debating second reading of Bill 56.

J. Horgan: I understand that, hon. Speaker. I'm speaking to how we got here today to be speaking about that bill. I appreciate the reminder. I'm sure if I depart from decorum, you'll advise me quickly, and the Clerk is here to advise you on that as well.

I'm also here with a responsibility to my constituents to explain to them why it is that the Opposition House Leader and Energy critic is talking about a piece of tax policy. I think it's fairly important that they understand the circumstances with which I find myself standing here and why it is that I am doing an incomplete job on their behalf.

I'm doing an incomplete job on their behalf because I wasn't given the time. Why is that, hon. Speaker, you ask yourself rhetorically? I'll give you the answer to the question. I'm not able to do it in a comprehensive manner because it just got here less than 48 hours ago. Here we are. We've got another 18 minutes — 18 minutes for all of us, not just me. I have the floor. I'm standing. I can keep talking for the remainder of that time, but the whole House has 30 minutes to discuss 47 pages, nine parts, 94 sections.

That strikes me as bad management at a minimum. I wouldn't want to ascribe any other motivations, but at a minimum, it's bad management.

If this was the private sector, I'm fairly confident that the CEO would call in the manager or the director or whoever was responsible for putting the company in that position. I would expect, if this was the private sector — and the free enterprise champions on the other side constantly talk about their absolute admiration and respect for the free market…. If that were the case, I would expect that the individual responsible for putting the corporation or the government in a position to have to defend the indefensible would at a minimum be reprimanded for that behaviour — at a minimum.

We have a lot to do and very little time to do it. If I could get a time check from the Clerk — 21:30 left.

What we've been doing, and my colleague from Delta South led the way on this, is we've been given our half an hour, and we're deciding how to use those minutes to the best effect. If we can't use it at second reading, we're going to be able to move some of those minutes.

It's was like playing a game show on television. "What would you like to do with your remaining time, Member?" "I'd like to put it to committee stage on Thursday, if that's all right, hon. game show host. If that's okay, I'd like to do that."

Deputy Speaker: Member, right now we're debating second reading of Bill 56.

J. Horgan: Thank you very much, hon. Speaker, for bringing me back.

As I said to you, in terms of the volume I'm able to speak with some authority. As I've said in the past — I'll repeat it again — 47 pages, nine parts, 94 sections. As I've also admitted and confessed to my constituents, I'm not able to get into any more detail on that, because quite frankly, I haven't read it all.

An Hon. Member: Could you read some of those sections?

J. Horgan: I'd be delighted, hon. Member.

My colleague from Coquitlam suggested to me that at second reading…. A former House Leader himself, he knows the rules of this place, and he'd be quite happy if I would just follow along.

What good fortune. I turn to page 17, and it says: "'applicable percentage', in respect of (a) an affixed residential complex that is the subject of a taxable sale, or an affixed residential complex, a qualifying interest in which is the subject of" — this is random, by the way; this is the beauty of it — "a taxable sale, or…"

Interjection.

J. Horgan: Member, please. You'll love this.
[ Page 12530 ]

"…(b) an affixed residential complex or addition that is the subject of a taxable self-supply, means the percentage determined by the following formula."

There's a formula. How exciting could that be?

"(100% – tax point completion %) + April 1, 2013 completion % –" — minus, we can't forget that — "July 1, 2010 completion %."

I believe that we're all a little bit better off now.

An Hon. Member: You had to read that?

J. Horgan: I did. Of course, I haven't even completed the formula. That's the tragedy of it all. For those who are waiting for the end of the formula, I'll conclude by saying: "where tax point completion % = the completion percentage in respect of the complex or addition, as the case may be, at the tax point for the taxable sale or taxable self-supply, as the case may be."

Goodness me, I'm not even making this up. That is exactly what the bill says, right here on page 17 — which is, of course, only one of 47 pages. This is a subsection of 94 sections.

An Hon. Member: Was that calculus or algebra?

J. Horgan: I wouldn't want to hazard a guess, Member. I wouldn't want to hazard a guess. But heaven forbid, I've turned to page 18, and there's another formula.

Interjection.

J. Horgan: "You go, boyfriend," says the Health Minister. I'll do that.

[1615]

"April 1, 2013… = the completion percentage in respect of the complex or addition, as the case may be, immediately before April 1, 2013."

I could go on, Member.

Deputy Speaker: You have 18 more minutes.

J. Horgan: I have 18 more minutes, and that's a delight to those who have decided to stay and watch this show instead of the other two that are going on concurrently.

Interjection.

J. Horgan: "Do you need speaking help?" I don't want to open that up to a division, that's for sure. I know how some members would vote on that question.

Hon. Chair, I would love to carry on. I would love to highlight the absolute craziness of what we are now subjecting ourselves to as individuals — 85 members elected and sent here by constituents, 4.4 million of them right across this great province. We are now standing here defending the indefensible, which is debating a substantive bill…. I think I have demonstrated categorically that this is a substantive bill just from the modest portion that I read aloud to the people assembled here today.

This is a big deal. It's a big deal, and we should spend more than 30 minutes on it.

An Hon. Member: Formula-driven.

J. Horgan: Formula-driven. Well, I am very staff-driven these days, and I am advised by the staff, because I have no one else but them to depend on, that this is actually not a bad piece of policy to transition from the HST to the PST.

I know I'm getting uniform support from the members of executive council, because they may be some of the very few, the cherished few that actually understand what's in here, because I'm almost convinced that there are very few other members of this place that have had the opportunity to read it and digest it and understand just what it is we're going to be doing minutes from now when we say yea or nay to 47 pages, nine parts, 94 sections.

[Mr. Speaker in the chair.]

With that, hon. Speaker — delighted to have you back — I'll take my seat, and I'll apportion the remaining time in my 30 minutes to some other positive pursuit over the next 48 hours.

Mr. Speaker: Seeing no further speakers, I move second reading of Bill 56, New Housing Transition Tax and Rebate Act.

Motion approved.

Hon. S. Bond: I move that the bill be referred to a Committee of the Whole House for consideration in accordance with the time allocation motion passed this day.

Bill 56, New Housing Transition Tax and Rebate Act, read a second time and referred to a Committee of the Whole House to be considered in accordance with the time allocation motion passed earlier this day.

Hon. M. Polak: I call committee stage debate on Bill 14, intituled Workers Compensation Amendment Act, 2011.

Committee of the Whole House

BILL 14 — WORKERS COMPENSATION
AMENDMENT ACT, 2011

The House in Committee of the Whole (Section B) on Bill 14; D. Horne in the chair.
[ Page 12531 ]

The committee met at 4:19 p.m.

On section 1.

Hon. M. MacDiarmid: I move the amendment which is in my name on the order paper.

[SECTION 1, by deleting the text shown as struck out and adding the text shown as underlined:

1 Section 5.1 (1) (a) of the Workers Compensation Act, R.S.B.C. 1996, c. 492, is repealed and the following substituted:

(a) is a reaction to

(i) one or more traumatic events arising out of and in the course of the worker’s employment, or

(ii) a significant work-related stressor, or a cumulative series of significant work-related stressors, arising out of and in the course of the worker’s employment, .

1 Section 5.1 of the Workers Compensation Act, R.S.B.C. 1996, c. 492, is repealed and the following substituted:

Mental disorder

5.1 (1) Subject to subsection (2), a worker is entitled to compensation for a mental disorder that does not result from an injury for which the worker is otherwise entitled to compensation, only if the mental disorder

(a) either

(i) is a reaction to one or more traumatic events arising out of and in the course of the worker’s employment, or

(ii) is predominantly caused by a significant work-related stressor, including bullying or harassment, or a cumulative series of significant work-related stressors, arising out of and in the course of the worker’s employment,

(b) is diagnosed by a psychiatrist or psychologist as a mental or physical condition that is described in the most recent American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders at the time of the diagnosis, and

(c) is not caused by a decision of the worker’s employer relating to the worker’s employment, including a decision to change the work to be performed or the working conditions, to discipline the worker or to terminate the worker’s employment.

(2) The Board may require that a psychiatrist or psychologist appointed by the Board review a diagnosis made for the purposes of subsection (1) (b) and may consider that review in determining whether a worker is entitled to compensation for a mental disorder.

(3) Section 56 (1) applies to a psychiatrist or psychologist who makes a diagnosis referred to in this section.

(4) In this section:

     "psychiatrist" means a physician who is recognized by the College of Physicians and Surgeons of British Columbia, or another accredited body recognized by the Board, as being a specialist in psychiatry;

     "psychologist" means a person who is registered as a member of the College of Psychologists of British Columbia established under section 15 (1) of the Health Professions Act or a person who is entitled to practise as a psychologist under the laws of another province.]

[1620]

On the amendment.

R. Chouhan: Now, in the amendment the minister has moved…. In the original bill which was tabled last year, Bill 14, it was in section 5.1. It says "mental stress." Now it says "mental disorder." Could the minister explain why the change occurred?

Hon. M. MacDiarmid: The change in the terminology in the Workers Compensation Act from mental stress to mental disorder was made to make it clear that compensation is provided for a diagnosed mental disorder arising from traumatic events and other significant stressors in the workplace and not simply for experiencing stress in the workplace.

R. Chouhan: Then what's the difference between the original language that we have had in the original bill in how it would be applied? When somebody is experiencing mental stress at a workplace…. I'm not talking about the issues raised by the minister. I'm talking about actual mental stress. How would that be covered by changing the terminology — changing from mental stress to mental disorder?

Do the workers need to know if they experience mental stress? How would they then…? What kind of criteria would they have to meet to be eligible for compensation under mental stress that they experience at a workplace?

Hon. M. MacDiarmid: What we've done with the amendment is attempt to make things clearer as to what the impact of the legislation would be. The previous legislation, which only covered acute mental difficulties, talked about mental stress, but in fact, what compensation was for was for a mental disorder — something like a post-traumatic stress disorder. It was in the policy. What we've done is brought the wording into the legislation.

Mental disorder, when you go further in the legislation — it will be a mental or physical condition that's described in the most recent American Psychiatric Association Diagnostic and Statistical Manual, also known as the DSM. That's what we're talking about in the legislation.

R. Chouhan: In this section (a)(ii) it reads: "is predominantly caused by a significant work-related stressor." The word "predominantly" was not there before. Could the minister explain what the need was for adding that word "predominantly" into the legislation?

[1625]

Hon. M. MacDiarmid: Claims that involve significant work-related stressors and resulting mental disorders will present challenges that don't exist for many physical injuries and occupational diseases. These include the pervasive nature of stressors in everyone's work and non-work lives, uncertainties surrounding the causal factors which led to a worker's mental disorder and the subjective nature of a mental disorder claim.

The predominant clause requirement recognizes the unique characteristics and supports the objectives and financial integrity of the workers compensation system
[ Page 12532 ]
by ensuring that a mental disorder was predominantly caused by a significant work-related stressor arising out of employment.

R. Chouhan: Is there a definition outlining work-related stressors? Is there anything in the legislation which will indicate what those stressors are?

Hon. M. MacDiarmid: This is not included in the legislation, but WorkSafe will be developing policy, and they have a consultative process when they do that. They'll be developing policy that will give these definitions.

R. Chouhan: In 5.1(b) it now says: "is diagnosed by a psychiatrist or psychologist." Before there was family physician. Why is family physician replaced with psychiatrist or psychologist now?

Hon. M. MacDiarmid: This change will better ensure that the required diagnosis of a recognized mental disorder, as I mentioned before, through the DSM criteria would be made with a practitioner with the necessary training to make a psychological diagnosis.

R. Chouhan: If somebody is generally suffering mental stress at the workplace, now they have to be diagnosed by a psychiatrist or psychologist. We all know how long it will take to get that appointment. Instead of helping them, we will be increasing that mental stress for them by not having the opportunity to go see a doctor right away.

Before just seeing the family physician at least would have allowed them to seek compensation. They would have been diagnosed and later on could go to see a psychiatrist or a psychologist. Now, for not having that ability to do it immediately because they have to wait….

Why are we making a worker go through unnecessary stress, increased stress? Before the wording that we had could have helped them. Could the minister explain why we are not helping the workers and instead making it difficult for them to seek that help which they would need?

Hon. M. MacDiarmid: I hope that I can reassure him with his concern about the worker. Non-traumatic claims, we believe at least in some cases, will be more complex, and psychiatrists and psychologists have the necessary training to make a diagnosis of a recognized mental disorder. Having the psychiatrist or psychologist as the first point of contact will mean a quicker diagnosis and quicker access to assistance, which will assist the process and not hinder it.

We know that non-traumatic claims are more complex, and they will take longer to process than traumatic claims, so WorkSafe is going to create an expedited fee schedule to ensure that people with these kinds of claims are seen faster and reports are generated more quickly.

R. Chouhan: Moving along in subsection 2….

The Chair: Member, we're on the amendment. Do you have anything further on the amendment?

R. Chouhan: I'm going through the amendment, what I have in front of me.

The Chair: Okay, all right.

R. Chouhan: So 5.1(2) reads: "The Board may require that a psychiatrist or psychologist appointed by the Board review a diagnosis made for the purposes of subsection (1) (b)."

[1630]

Could the minister explain? Does this mean that when somebody is suffering mental stress or mental disorder, they can apply for compensation and then their claim will be accepted, but in the meantime the board may also appoint a psychologist? Is this what it's saying? To me it's not clear.

Hon. M. MacDiarmid: This is actually very similar to the way the legislation reads now, where something can be appealed. The only difference is that rather than it being appealed to a physician, it must be appealed to a psychiatrist or a psychologist.

R. Chouhan: Now, the next section, subsection (3), says: "Section 56 (1) applies to a psychiatrist or psychologist who makes a diagnosis referred to in this section." I don't have section 56 in front of me. Could the minister explain what the relevance of that is and how it will work?

Hon. M. MacDiarmid: Section 56(1) really just talks about the duty of every physician or qualified practitioner who's attending or consulted on a case. It talks about the timeliness with which reports have to be provided. So that's what that section is about.

Amendment approved.

Section 1 as amended approved.

On section 2.

R. Chouhan: Could the minister explain the changes when you're deleting section 2 — the impact of that? The ability of the persons claiming compensation…. What impact would that have, from the previous situation, under the new changes?

Hon. M. MacDiarmid: The reason for deleting this section is that it's no longer necessary. It would have reduced the required cohabitation period from three years to two years for a common-law spouse to qualify for sur-
[ Page 12533 ]
vivor benefits in the case where a couple has no children. The change has already been made as a consequential amendment to the new Family Law Act, and it's already in effect as of March 1, 2012.

Section 2 negatived.

On section 3.

R. Chouhan: Could the minister explain the changes in the rate? Again, is it in line with other jurisdictions? Do other provinces also have this kind of compensation, or is it just unique to British Columbia?

[1635]

Hon. M. MacDiarmid: Yes, this is similar to what exists in other jurisdictions, where it's recognized that apprentices and learners are in a different stage of their career in work than a worker who has already proceeded through the apprenticeship and learner period.

Section 3 approved.

On section 4.

Hon. M. MacDiarmid: I move the amendment to section 4 standing in my name in the orders of the day.

[SECTION 4, by deleting the text shown as struck out and adding the text shown as underlined:

4 The provisions listed in Column I of the following table are amended by striking out the dollar amount set out opposite them in Column 2 and substituting the dollar amount set out opposite them in Column 3:

Amendment approved.

Section 4 as amended approved.

On section 5.

Hon. M. MacDiarmid: I move the amendment to section 5 standing in my name in the orders of the day.

[SECTION 5, by deleting the text shown as struck out and adding the text shown as underlined:

Transition — mental stressdisorder

5 Section 5.1 of the Workers Compensation Act, as amended enacted by section 1 of this Act, applies to every decision made by the Board or the Workers' Compensation Appeal Tribunal on or after January July 1, 2012, the date section 1 of this Act comes into force, in respect of a claim made but not finally adjudicated before January July 1, 2012.]

Amendment approved.

Section 5 as amended approved.

Section 6 negatived.

On section 7.

Hon. M. MacDiarmid: I move the amendment to section 7 standing in my name in the orders of the day.

[SECTION 7, by deleting the text shown as struck out and adding the text shown as underlined:

Transition — apprentice or learner

7 Section 33.2 of the Workers Compensation Act, as amended by section 3 of this Act, applies to an injury that occurs on or after January July 1, 2012, the date section 3 of this Act comes into force.]

On the amendment.

R. Chouhan: Could the minister explain this amendment, how it would affect the employees who were able to seek compensation before under that section and now, with this amendment, how it would be easy or difficult for them to do that?

Hon. M. MacDiarmid: This is consistent with the usual approach that changes to workers compensation benefits apply to new cases that arise after the effective date. It's the approach used for changes to compensation for apprentices and learners in 2002, when the last changes were made.

If an apprentice or learner is injured before July 1, 2012, the claim will be adjudicated under the previous statutory provision — that is, compensation will be based on the starting rate of a qualified person in the trade when a
[ Page 12534 ]
temporary disability lasts beyond ten weeks. If the injury occurs on or after July 1, 2012, then the new compensation provision will apply.

R. Chouhan: As we all know, the shortage of skilled workers in British Columbia is so acute that people now in all sections of industry — business, employers, the unions, everybody — are saying how difficult it is to attract people to come to the construction industry. In the previous legislation we had, at least apprentices had the ability, when they were injured…. They were able to receive benefits on the current wage for the first ten weeks of their temporary disability, and after ten weeks that rate jumps to a starting rate of a qualified person in their trade.

At least they were able to say that when they came into this industry, they were able to help themselves, to go through that period of time when they were injured. Now with this one I don't think that we are really sending the right message to the young workers out there who are willing to be part of this industry by saying that if you're injured, you are not going to get the same compensation as you used to before.

My question to the minister is: why are we making it difficult for the young people to enter this industry when everybody is talking about the shortage that we are experiencing? There will be a shortage of 160,000 skilled workers in the next few years. I would urge the minister to reconsider that and not to move with it.

Hon. M. MacDiarmid: The section we're on now is really about the date that the changes would come into force. The member is on a section that we had already passed.

[1640]

I'm happy to go back to that, to say that the rationale for the amendment is really to support two of the key principles of the Workers Compensation Act. The first is to compensate injured workers for the loss of earnings resulting from their impairment. While the starting rate of a qualified person in the trade is an appropriate basis for permanent disability benefits, it doesn't reflect the loss of earnings for temporary disabilities for apprentice and learners. The second principle is to promote the return to work for injured workers when they are ready.

That's the rationale behind this change, and we have already passed that section.

Amendment approved.

Section 7 as amended approved.

On section 8.

Hon. M. MacDiarmid: I move the amendment to section 8 standing in my name in the orders of the day.

[SECTION 8, by deleting the text shown as struck out and adding the text shown as underlined:

Commencement

8 The provisions of this Act referred to in column 1 of the following table come into force as set out in column 2 of the table:

Amendment approved.

Section 8 as amended approved.

Title approved.

Hon. M. MacDiarmid: I move the committee rise and report the bill complete with amendments.

Motion approved.

The committee rose at 4:42 p.m.

The House resumed; Mr. Speaker in the chair.

Reporting of Bills

BILL 14 — WORKERS COMPENSATION
AMENDMENT ACT, 2011

Bill 14, Workers Compensation Amendment Act, 2011, reported complete with amendments.

Mr. Speaker: When shall the bill be considered as read, Minister?

Hon. M. MacDiarmid: Pursuant to the time allocation motion passed this day, now.

Third Reading of Bills

BILL 14 — WORKERS COMPENSATION
AMENDMENT ACT, 2011

Bill 14, Workers Compensation Amendment Act, 2011, read a third time and passed.

Hon. T. Lake: I now call committee stage of Bill 53, intituled the Family Day Act.
[ Page 12535 ]

Committee of the Whole House

BILL 53 — FAMILY DAY ACT

The House in Committee of the Whole (Section B) on Bill 53; D. Horne in the chair.

The committee met at 4:45 p.m.

On section 1.

R. Chouhan: As I said during the second reading, I support this bill. We are happy that people in British Columbia would have a day off in the month of February.

In the press release the minister issued, it said that they consulted widely with the public, and many people did that on line. I just want to ask a question about the process of that. When somebody is saying yes or no in a poll on line, the same person could do it repeatedly. How did the minister and the ministry ensure that the polling was done in an actual way reflecting people's wishes to have that day off in February?

Hon. M. MacDiarmid: The on-line consultation was set up so that each unique IP address, each computer…. A vote could only happen from each unique address once.

R. Chouhan: Could the minister also explain: was the voting open only to B.C. residents, or could anybody anywhere in the world have voted on that?

Hon. M. MacDiarmid: We did not have a way to be certain that people were from British Columbia. It was British Columbians who were aware through media and the government website and that sort of thing, but we don't know 100 percent that people were from B.C. They were identifying themselves often as from certain parts of the province, but we could not be absolutely certain that they were.

R. Chouhan: Just one last question on that. I'm concerned about the validity of that system, the process. Again, were there any steps in the system in place to ensure that people were not voting more than once and also not voting from outside the province? How do we know that that many people actually were able to check into that on line and on the system and express their wishes that they wanted to have it? I would like the public to have some assurance from the minister that all steps were taken to make sure it was a valid consultation process.

Hon. M. MacDiarmid: Certainly, we were delighted with the response to this consultation process. We had over 31,000 people who visited the website. We had over 3,000 people who commented, sometimes at length. There were about 3,500 people who said either the second or third Monday in February would be suitable. Then the voting was about 18,000 people who wanted the second Monday and about 9,400, I think, who wanted the third Monday.

As I mentioned previously, each individual IP address, each unique IP address…. You weren't allowed to vote more than one time. If you logged on again, it would refer you to the comments to participate in the comments if you wished to, but people couldn't vote more than one time.

This certainly was never put forward as something like a poll, where you reach out and scientifically ask people. This was a consultation period or a process that people voluntarily participated in. As I said previously, it is possible that people from anywhere in the world could have participated, and we don't currently have the technology to eliminate people who weren't British Columbians.

There was another part to the consultation. The Minister of Jobs, Tourism and Innovation carried out a number of round table discussions with industry and businesses in numerous regions around the province. The identity of those people was known, and they were all British Columbians — as well as with universities and school systems.

[1650]

In our ministry we received a number of letters and e-mails where people identified themselves and appeared to be British Columbians, but we didn't double-check that. They certainly had addresses that indicated they were in British Columbia.

As I said, we were very pleased with how many people…. We've not had an engagement process in government previously where as many people engaged with us.

R. Chouhan: Was there was a minimum age required to vote?

Hon. M. MacDiarmid: No, there was not.

B. Simpson: I have a series of questions here. The consultation the minister is talking about, as I understand it — the on-line one that the questions have been asked about — is about the day, specifically, what day Family Day should be on. What was the nature of the consultation with British Columbians about whether we should have a statutory holiday or not in February?

Hon. M. MacDiarmid: The consultation that we led was specifically to ask people which of the days they preferred, so it was specifically…. The throne speech had already stated very clearly that there was going to be a Family Day starting in 2013, so this consultation was to get guidance from British Columbians about which day was preferred.
[ Page 12536 ]

The Chair: Member for Burnaby North…. Sorry, Cariboo North.

B. Simpson: Just one letter of the alphabet over, Chair.

The Chair: I apologize to the member.

B. Simpson: Just so I'm clear, the minister has indicated that because the government announced it, there wasn't any consultation on whether we should have a statutory holiday or not. The reason for raising that question, of course, is that there's a question. I mean, if you say to people, "Do you want a statutory holiday?" I think the gut reaction is: "Yes, of course."

When we're going to go down that path, there are costs. I've got some questions around that. So what is the cost to government of another statutory holiday in February?

Hon. M. MacDiarmid: I'm not sure that the member opposite is looking for an answer to the first part of his question, but I will say again: there had been a throne speech commitment that there would be Family Day starting in February of 2013. This consultation was specifically about British Columbians' preference as to whether it would be the second or third Monday in February.

In terms of the cost to government, we've estimated an additional $28 million in wage and benefit costs for employers in the broader public sector.

B. Simpson: My point, for the minister's clarification, was that an executive decision was made that we were going to have a Family Day, announced in the throne speech. I guess that part of the presumption of that is that if you go out and you consult with people about a statutory holiday, there's a presumption that the automatic answer would be "of course." There wasn't that consultation.

But the minister has indicated — and CFIB and others have said — that this is a direct cost to government of $28 million per year. Just to clarify that it is $28 million per year now of incurred cost to the public sector and to the taxpayers.

Hon. M. MacDiarmid: Yes, the member opposite is correct.

B. Simpson: I guess that's my contention, as I said in second reading — that maybe if the public was told that it's going to cost them $28 million, there might be other priorities for them than a statutory holiday, putting us in the lead of statutory holidays across Canada.

Does the minister know or can the minister apprise the House of what the cost to small and medium-sized businesses are of an extra statutory holiday in February?

Hon. M. MacDiarmid: I don't have a specific answer that the member opposite is looking for. We did, though, have some discussions. It's difficult to know with certainty. It is known that when there is a statutory holiday, there are some businesses that move some of the work from the statutory holiday to another date.

[1655]

The estimation is that there would be a very small effect on gross domestic product, which would be between 0.01 percent and 0.06 percent of GDP. That's from having a new statutory holiday.

B. Simpson: Just on that point on the GDP, then. I've got some numbers. Just to clarify for the public record, that's a net negative impact on GDP. The minister just gave a number, but not whether it was plus or minus relative to GDP.

Hon. M. MacDiarmid: Yes, that would be net negative. As I previously mentioned, my understanding is that it is difficult to quantify this with certainty, but it was predicted that there would be a very small net negative effect on overall GDP for the province.

B. Simpson: I guess the minister should have a conversation with her staff, because CFIB has made it available to everybody here what their numbers are. They didn't have any trouble putting some numbers together.

They indicate that for small and medium-sized enterprises, it's $42 million additional costs, just like it's $28 million additional costs to the public sector, averaging out at about $1,100 in additional costs per business and $62 million total to the business sector. So CFIB came up with those numbers by polling their businesses and doing some calculations.

Did the minister meet with CFIB and have their presentation put in front of her?

Hon. M. MacDiarmid: I meet regularly with stakeholders, and the CFIB is an important stakeholder. I certainly have met with them, and I will meet with them again in the future.

To clarify for my own understanding, we are currently having committee stage. We're on section 1, which says that Family Day is established as a public holiday and that "The day in February prescribed under this Act is a public holiday to be observed as 'Family Day'."

B. Simpson: Exactly. Family Day has costs. So I think it's important to put on the public record for all British Columbians to understand that they can't have their cake and eat it too. There are costs.

There are costs to the taxpayer, which the minister has indicated is $28 million, and in a time of fiscal restraint, I believe the public should have been apprised of the fact that it was $28 million. There should have been consultation, not an executive decision that we're going to get an
[ Page 12537 ]
additional statutory holiday, putting us ahead of the rest of the provinces. I think it's absolutely fair to ask a line of questioning about the implications of Family Day, because that's what's being instituted by this act.

When the minister met with CFIB, did she meet specifically with CFIB about Family Day, and was she briefed by CFIB on the costs of Family Day directly from them?

Hon. M. MacDiarmid: The cost of Family Day in terms of the cost for government, the $28 million, is something that's been in the materials provided by government as well as the estimated impact on GDP. I'm not sure how many months that goes back, but quite a considerable time. It would be on the public record. It would have been available for British Columbians to be aware of.

[1700]

Certainly, we have always acknowledged that there is a cost. There's a cost to government, and there's a cost to businesses as well. In terms of the conversations I've had not only with CFIB but with other members of the business community, the fact that there are costs for businesses is a topic that we have always discussed, certainly in the context of what government has done in the past and what government could do in the future that is supportive of small, medium and large businesses and corporations. Those are conversations that I've had, as well, as the Minister of Tourism, Trade and Investment.

The Chair: Member for Cariboo North on section 1, and I have been providing some latitude on this section.

B. Simpson: Thank you.

The CFIB, specifically with relation to implementation of Family Day, which is what this bill is, the implementation of Family Day…. CFIB has done a concerted lobby with every member of this House, putting in front of them numbers. When they knew it was a fait accompli, they repolled their members to find out what they should do as a result of this becoming an act, because that was a done deal.

They've indicated that they've then approached government with a desire for mitigation strategies because of the costs. The costs that they've indicated are in the context of additional costs as a result of PST and HST switching back and forth, within the context of three lifts to minimum wage and within the context of the economic uncertainty they're facing — that you're now adding an additional burden, particularly on them, for supposedly everybody getting quality time together as families in February, which is a contestable social engineering exercise on the part of government.

My question to the minister is this. Who has the lead for government in continuing a dialogue with CFIB about mitigation around this additional cost burden to them? They are looking to see if they can negotiate with government some form of mitigation for the sum total of the costs, but in particular this. They've indicated to us that they've talked to government about the possibility of the small business tax, taking that and putting that back on the table again so that it gets reduced. They've also talked about the possibility of increasing the training tax credit.

There were a number of options they put in front of government, so I wonder if the minister could indicate on the public record who is going to continue that dialogue with CFIB about the costs of Family Day to their businesses.

Hon. M. MacDiarmid: Certainly, CFIB is an important stakeholder for the Minister of Labour, Citizens' Services and Open Government on a number of files. We will continue to meet regularly with them, as we have in the past. There are, though, a number of other ministers who I am quite confident would regularly meet with CFIB and discuss this issue as well as others. They also have the option of making a presentation to the Select Standing Committee on Finance.

I would say that while it wouldn't be every minister in government, there would be a number of ministers in government that would continue to have this ongoing dialogue with CFIB and with other stakeholders that are equally important with respect to the business community.

J. van Dongen: Just a few questions for the minister. The Premier had stated that the implementation of this bill, Family Day, was delayed due to the economy. My question to the minister is, really: what has changed?

When I talk to businesses in my community and throughout British Columbia, there certainly has not been an improvement in most of their fortunes, whether it's a high-end clothing store in Abbotsford or whether it's a building materials business in Abbotsford or whether it's a construction company that I talked to. Even in Sidney last night I talked to someone who is in the window supply business. Their businesses have not improved in the last 12 months.

What is the justification for going ahead now, given that the Premier had said that the delay was due to the economy?

[1705]

Hon. M. MacDiarmid: The new statutory holiday was originally announced in the throne speech in the fall of 2011, but at the time it was stated that the implementation would be delayed until 2013 to allow businesses time to adjust to the new statutory holiday.
[ Page 12538 ]
That was the intention. The original plan had been to begin in 2012, but acknowledging that times have been difficult for businesses, the delay was put there to allow some time for businesses to adjust to the new statutory holiday.

J. van Dongen: I don't know how time gives businesses an opportunity to adjust when general economic conditions haven't improved.

I want to just highlight one of those — the whole impact of cross-border shopping, which admittedly is triggered by a stronger Canadian dollar, generally speaking. A lot of businesses have been affected by that in cross-border shopping on both a commercial basis and also people shopping personally. I have businesses in my community that are affected by that. Now an additional long weekend in British Columbia will create increased opportunity for cross-border shopping.

There are federal provisions that facilitate the opportunity to bring a greater quantity of goods, a greater value of goods, across the international border if you're away from home more than 48 hours. A long weekend like Family Day would facilitate that. Has there been any consideration of the impact of an additional stat holiday on cross-border shopping?

Hon. M. MacDiarmid: One of the groups involved in the consultation with industry that the Minister of Tourism, Trade and Investment led was the tourism industry. They were very interested in having our holiday in February be on a different day than the United States and neighbouring province of Alberta.

It is their intention, and they've been extremely solid on this, to widely advertise this holiday, that it's a B.C. family holiday and really try to attract British Columbians to stay in British Columbia. But they will be reaching out to our neighbouring jurisdictions as well.

We will find out in time what the net result of this is, but they certainly anticipated that they would be providing attractive holiday packages for British Columbians that would actually drive tourism and pull people to stay in British Columbia for this holiday weekend.

We certainly know from the consultation and from the feedback that many MLAs have received that — while the member opposite is not supportive of this holiday, and I understand that really clearly — many British Columbians are very supportive. They really welcome the idea of a statutory holiday. They're already making plans, and they're very enthusiastic about it.

The Chair: The member for Abbotsford South on section 1. I will remind the member that I've provided considerable latitude and that we are discussing a date in February.

J. van Dongen: Thank you, hon. Chair.

I appreciate the minister's answer. I think that she's probably referring to some net benefit from tourism-based operations, such as ski hills, that may be increasing their business somewhat from Alberta.

[1710]

I suggest that there are many, many large numbers of small businesses in the Lower Mainland and the Fraser Valley that are directly impacted by cross-border shopping across the international border. I don't believe there's any net benefit in the Lower Mainland–Fraser Valley in terms of the tourism industry or virtually any other types of retail businesses that are concerned about the cross-border impacts and the greater ability for people to bring product across.

My final questions relate to…. The minister has talked about consultation. I understand that there was some consultation very late in the game. I want to refer to the Tourism Abbotsford society concern about the impact on their conference business and Tradex and very specifically the Pacific Agri Show. I understand that there was some consultation established by telephone on May 16. Could the minister describe what that consultation involved?

Hon. M. MacDiarmid: I can't speak specifically to any of the dates of the teleconferences that the Minister of Jobs, Tourism and Innovation had. I know he had several conference calls. They were regionally based. Some of them were specifically with tourism, but more often they were generally with industry and businesses in various parts of the province. But I can't speak specifically to any of the unique calls that he made.

J. van Dongen: My final question to the minister, following up on the previous one, is: really, what is the point of a consultation as late as May 16 when the decision had been very clearly made sometime before that?

When — as the minister responded in answers to my colleague — the Canadian Federation of Independent Business requests for some form of mitigation aren't being considered, I really question what the motivation of the government was to even set up consultation meetings when nothing was going to change and no mitigation was in the cards. It bothers me that we have this guise or semblance of consultation when there really was no purpose to be served by it.

Hon. M. MacDiarmid: Fortunately, the people who participated in the round-table discussions and the calls from around the province did see a point to the consultation. There were many participants, and it was made very clear to them what the point of the consultation was. It was to consult with as wide a group as possible to ask them: of the two dates that were being considered, the second Monday in February and the third Monday in February, which would be their preference?

In some cases some of the stakeholders that were contacted did not have a preference. Either date was acceptable to them. In other cases they had preferences that were sometimes very strong and sometimes not. Certainly, there were some businesses and some members of different kinds of industries that were very sup-
[ Page 12539 ]
portive of the date that was ultimately chosen.

The member opposite may have misunderstood or misheard what I said previously with respect to the CFIB. They are an important stakeholder —and the discussions we've always had with CFIB and will continue to have with them as to how we can work with them and work with their stakeholders. Ultimately, of course we want to strengthen things for small businesses in the province. We're very supportive. We have been in the past, and we will continue to in the future.

Sections 1 to 5 inclusive approved.

Title approved.

Hon. M. MacDiarmid: I move that the committee rise and report the bill complete without amendment.

Motion approved.

The committee rose at 5:15 p.m.

The House resumed; Mr. Speaker in the chair.

Report and
Third Reading of Bills

BILL 53 — FAMILY DAY ACT

Bill 53, Family Day Act, reported complete without amendment, read a third time and passed on division.

Hon. T. Lake: I now call committee stage of Bill 44, intituled the Civil Resolution Tribunal Act.

Committee of the Whole House

BILL 44 — CIVIL RESOLUTION
TRIBUNAL ACT

The House in Committee of the Whole (Section B) on Bill 44; D. Horne in the chair.

The committee met at 5:18 p.m.

On section 1.

L. Krog: I believe there's some line to the effect that you first pass through life as tragedy and it comes back as a farce, or something like that. I'm inclined to think that, really, what I am engaged in here today is a bit of a farce as far as my role in this chamber is concerned.

With the greatest respect to the government, the Attorney General announced this as a fairly major change, this bill, an opportunity for reform. On first blush that arguably may be the case, particularly given the government's commitment to reform of our justice system.

The minister herself had this to say when she released her Green Paper and justice reform review on February 8: "Government is one element of a system of interconnected and largely independent players. I know that by working together, we can ensure the justice system is more transparent, more accessible and more responsive for British Columbians."

Now, much to my chagrin, I made some assumptions about this bill in terms of consultation, particularly with those who have historically played a fairly significant role in our justice system in the province, including the B.C. branch of the Canadian Bar Association, the Trial Lawyers Association of British Columbia, even the Law Society. Much to my surprise, my assumption that they would have been consulted with respect to this legislation turned out to be incorrect. Indeed, both organizations —the Canadian Bar Association, B.C. branch, and the Trial Lawyers Association of British Columbia — have issued some fairly scathing comments with respect to this bill.

[1720]

I appreciate that in responding initially in second reading I was aware and was very pleased to see that in fact the strata community, by and large, was very pleased with the announcement of the tribunal that would allow the resolution of strata disputes in a timely and effective way, which was not the case before, when basically we were stuck with the Supreme Court as the only venue in order to pursue resolution of any difficulties or problems that might arise.

With respect to the addition — and I will call it an addition — to the existing small claims system, it appears there wasn't the kind of public consultation. So I looked forward to committee stage of this bill, and that's the farce I'm participating in today. Thirty minutes to review a major piece of legislation that runs to some 50 pages and sets up various tribunals.

It's not the most apt comparison, but in the Bible, with respect to the "Dance of the Seven Veils," Salome promised to dance in order to reveal herself. That's essentially what we do in committee stage of a bill. The veils drop one by one and, hopefully, at the end of the day, the truth is there, it's fairly clear what the bill is all about, the government understands it, the people understand it, and the legislators in this chamber can, in fact, pass judgment on it by voting yea or nay.

What we have before us today, clearly, is not going to allow the kind of scrutiny that the opposition expects to take with major change. Nevertheless, I'm going to ask the questions I can in the limited time that's allowed me. But I want to make it fairly clear to the government that this bill, which might otherwise have seen some support, is not going to get the support it might readily deserve or expect with this, because there hasn't been consultation, there hasn't been time, and there won't be time, clearly, as a result of the passage of the motion earlier today, for
[ Page 12540 ]
the opposition to do its job.

I didn't get elected to this place to come in here and participate in a farce, but I'm going to be forced to do so, so I'm going to do it.

My first question to the Attorney General is this. In the definitions section, which we're dealing with now, it talks about a tribunal. I'm curious to know: what is the Attorney General contemplating in terms of the quality of individuals, the level of experience and expertise and training that would be involved with an appointment to the tribunal?

Hon. S. Bond: The specific skill set would be expertise in the areas of consumer protection, debt, goods and services, strata. Those would be examples of the types of expertise.

L. Krog: I appreciate the Attorney General's response, and I'm curious to know: what sort of training are we contemplating with respect to this? Are we expecting that these people would have a law degree? Would they have some certificate from a college? What sort of training are we contemplating?

If the Attorney General could give me some examples of individuals, because I'm sure that in the drafting of this bill, surely the ministry would have considered the kinds of individuals that would be proposed and looked at the salary consequences. I understand from previous remarks — I'm not sure whether it was made inside or outside this House — the government contemplated saving some $8 million to $11 million a year.

If this is to save money out of our existing justice system, I'd be very curious to know what sort of salary is going to be commensurate with these positions and what sort of cost is contemplated. If it's going to save $8 million or $11 million a year, I presume there must be some contemplation of what these people are going to be paid, and that will reflect, obviously, their level of education.

[1725]

Hon. S. Bond: The members may well be lawyers — not necessarily required but may well be lawyers. The process will be a merit-based appointment process, and the process will be very similar to existing administrative tribunals. We have some exceptional examples of those in British Columbia, including the Human Rights Tribunal and the Environmental Appeal Board. There are a number of ways that administrative processes are used, and this would be a similar process.

L. Krog: If the Attorney General could advise, given that I understand that there is some suggestion this is going to save $8 million to $11 million, how does she see that savings achieved with the appointment of another body which will require, obviously, facilities, support staff, all of those kinds of things?

Hon. S. Bond: One of the ways that we intend to look at savings is moving away from the concept of everything requiring bricks and mortar. In fact, a fundamental component of the thinking and principles here is related to the use of technology. Ultimately, this is a scalable project, a scalable approach.

In fact, this is about moving issues out of the courts, into an administrative process. The savings are meant to be garnered by making a significant change to the current process. I'm cognizant of the member's comments. I recognize the shortness of time for a lot of important questions. The fact of the matter here is that these are changes where we have made contact with the Canadian Bar Association, trial lawyers, legal services.

It has not been extensive. We had that conversation with them following the discussion that the member opposite had. We have committed to working with them to implement the changes. It will take an 18-month period of time, and it won't be done without input and their consultation and their participation.

Having said that, we're making a change to a system where people are uncomfortable with the change. We're simply saying that we can't continue to do things the same way. This is one of the issues that will help us look at reforming the justice system, and savings ultimately will be garnered as we move these issues out of courtrooms to a more convenient, accessible process for individuals. And currently, other than the strata component, this is a voluntary process.

L. Krog: I do appreciate the Attorney General's comments. Ms. Matthews, however, the president of the B.C. branch, put out a press release that said: "The government's announcement of Bill 44 without discussion with key stakeholders is obviously damaging to the broader justice reform process."

After all, we do have Mr. Cowper out there working on justice reform and reporting back to the Attorney General — I believe it's the end of June or July — with a view to issuing a White Paper in the fall. Clearly, the cart seems to be somewhat ahead of the horse in this particular matter.

[1730]

Having said that — and back to the concept of the tribunal itself — can the Attorney General advise what is contemplated, in terms of the creation of the tribunal, by way of numbers?

Are we talking about one member plus two? How many tribunal members are we talking about? Are we talking about something the concept and size of the existing Labour Relations Board? What is the concept? Again, does the Attorney General have any idea of what's going to be paid to these people?

Hon. S. Bond: I am aware of Sharon Matthews' comments, and the chronology the member opposite pro-
[ Page 12541 ]
vided is correct. We made efforts to make contact before it was introduced. That did not happen, so we followed up with that. We made a commitment to work with the Law Society and with others to ensure that as we move forward, we will look at how this is implemented.

In relation to the size of the tribunal, one of the important features of the plan is that it is scalable. We have not determined the size of the tribunal. One of the reasons for that is that because it's voluntary and not mandatory, we don't have a good sense of the caseload. We believe that the numbers will be smaller at the beginning, as people explore this opportunity.

While the member opposite correctly and accurately pointed out some of the negative feedback, there has also been extremely positive feedback about this concept from people who have been looking for a way to deal with strata issues, for example, that is more appropriate to the issue that is being discussed.

So we haven't determined the final size. It will obviously be similar, as I said, in nature to the Human Rights Tribunal and others that exist but, again, scalable. We believe that because of the voluntary nature, it will potentially be smaller and grow as people understand the utility of the process.

L. Krog: With respect to the Attorney General's comments, if this thing isn't contemplated to be up and running for 18 months, and I think I understood the Attorney General correctly when she said that, then it does rather beg the question.

If it's not contemplated that it's going to be up and running for 18 months and we either have a fall session or, if not, at least a spring session coming, and given the lack of consultation and the general reaction from those most intimately involved in the justice system today, I guess the question is: why didn't we simply consult and put a White Paper out, if you will, that included this as part of that concept? I mean, what's the rush here?

With great respect to the government, we're going into a general election in the springtime. Initiating a process that involves the setting up of a tribunal that won't be set up until six months, roughly, after the next general election strikes me as not exactly the best example of public policy, particularly when it is being forced through this Legislature with a half-hour for committee stage.

Hon. S. Bond: Geoff Cowper isn't going to look at all of the issues that are ever related to reform in the province. In fact, the primary focus of his work will certainly be focused more on the criminal courts. This is a different process. We know that it would take at least 18 months as we work our way through it.

It's not something that was determined that would begin yesterday. We had an expert advisory group in place since July of 2010 on the strata piece, for example. On that advisory group we had lawyers who were specializing in strata property issues, representatives of strata organizations, property managers.

[1735]

That group was formed in 2010 and has been providing advice on this component in particular since 2010. In 2011 we consulted extensively on an alternative strata dispute resolution model. There was a discussion paper. The public consultation results demonstrated that 95 percent of respondents to the on-line survey indicated they favoured the model.

We actually believe we need to move forward with a reform agenda that looks at a number of issues. This is one of them.

As I said to the member opposite, we have now talked, at least in an initial conversation, with the CBA, trial lawyers and the Law Society. We have certainly demonstrated our interest in wanting to continue that discussion as we move this concept forward to implementation.

L. Krog: The definition section includes the reference to the tribunal officer appointed under section 76. Section 76 simply says: "Employees necessary to carry out the powers and duties of the tribunal may be appointed under the Public Service Act." Clearly, I presume, they will be OIC appointments.

[L. Reid in the chair.]

Again, what is contemplated in terms of their duties, and what duties will they perform on behalf of the tribunal?

Hon. S. Bond: The tribunal's day-to-day operations — we referenced this in section 76 — will be carried out by public service employees. The section provides us with the authority to appoint those employees. They may well be case managers, but the provision also allows for tribunal members to focus on decision-making duties rather than the administration of the tribunal.

L. Krog: Just so I'm clear. These in fact will all be OIC appointments. Is that correct?

Hon. S. Bond: The tribunal members, like other tribunals — for example, like the Human Rights Tribunal — would be appointed by OIC, but the day-to-day operations would be carried out by public service employees under the Public Service Act.

L. Krog: Just so I'm perfectly clear on that, does that mean, then, they will be — as are the members of the tribunal itself, the chair and vice-chair — appointed after a merit-based process?

Hon. S. Bond: A chair and vice-chair would be a merit-based process and by OIC. The member is correct.
[ Page 12542 ]

L. Krog: Sorry, perhaps I wasn't clear. I'm asking whether the tribunal officers will be appointed as a result of a merit-based process.

[1740]

Hon. S. Bond: The process would be the same process that's in place to hire public servants across government.

L. Krog: I'm curious to know why, given the nature of this process, and given that we are emphasizing that the chair and the vice-chairs of the tribunal are hired through a merit-based process…. Does not the merit-based process apply with respect to the hiring of public servants who would fill the position of tribunal officers?

Hon. S. Bond: Well, we don't have the guidelines for hiring through the Public Service Act in front of us, but in essence, the members of the tribunal who will be making decisions will be selected and appointed through a merit-based process through OIC. The rest of the members, the tribunal officers, would be case managers or dealing with administration and hired through a process that is the same process as the Administrative Tribunals Act, so we're not creating anything new. The same process would be applied.

Section 1 approved.

On section 2.

L. Krog: Section 2, which establishes the tribunal, talks in sub (2) about how: "The mandate of the tribunal is to provide dispute resolution services in relation to matters that are within its authority, in a manner that (a) is accessible, speedy, economical, informal and flexible." I'm just wondering: what is the government contemplating would be accessible, speedy, economical, informal and flexible?

Hon. S. Bond: Subsection (2) sets out the founding mandate of our tribunal. The mandate is to provide a more accessible justice system. The other thing that's been common in all of the work that we're doing, in looking at how we move things out of the court system, is moving away from a combative, adversarial litigation process from the very beginning.

[1745]

What we're looking at here is: how can we actively engage the parties through communication, working toward maintaining those civil relationships? Let's face it. We're talking about strata and other sorts of close relationships while recognizing that disputes arise and need to be addressed. The tribunal will apply the principle of law and fairness in its process and decisions, but it's not out of line with the other kinds of reforms that we're looking at.

We want to move family law out of courts. We want to be able to take issues like this and move them to a less adversarial situation and certainly move away from litigating. Remember — again to the member opposite — other than the strata portion, this is a voluntary process.

L. Krog: What I'm really looking for in asking these questions of the Attorney General is this. Look, most British Columbians…. Well, I shouldn't say most. A number of British Columbians have familiarity with the court system and how it works — if you're going to small claims, how you resolve your disputes there.

What I want to understand is if the mandate is "to provide dispute resolution services in relation to matters that are within its authority, in a manner that (a) is accessible, speedy, economical, informal and flexible," what does that look like? Am I going to access it all on line? Am I going to be talking to a person? Am I going to be going to an office? Are the forms going to be really, really, really simple? Are there going to be standard forms for all kinds of claims?

In other words, what is this thing going to look like on the ground? With great respect, if there's been this much consultation behind the scenes and panels looking at it, I assume the government has some concept of what this looks like in a practical way.

Right now, if I want to go to small claims, I go into the court registry. I get my form and fill it out. I slam it down. I file it. I serve it. There's a response; there's a process, etc. What does this actually look like that's going to make it accessible, speedy, economical, informal and flexible? In terms of economical, does economical mean there won't be any filing fees, for instance?

Hon. S. Bond: Yes, of course we've thought that through. Part of the access issue and maybe because of the member's background…. A lot of British Columbians have no idea how the court system works. In fact, this is about bringing those options closer to home.

Yes, it does involve on line potentially. It means that you could engage in this process from your home, using technology. It is a mix of in person and on line. Again, people who are not comfortable with looking at this model still have the option to use the court process if that is more appropriate for their particular perspective.

The Chair: Hon. Members, pursuant to the time allocation motion passed earlier today, I'm now required to put the question.

Sections 2 to 112 inclusive approved.

Schedule approved.

Title approved on division.
[ Page 12543 ]

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

Motion approved.

The committee rose at 5:49 p.m.

The House resumed; Mr. Speaker in the chair.

Report and
Third Reading of Bills

BILL 44 — CIVIL RESOLUTION
TRIBUNAL ACT

Bill 44, Civil Resolution Tribunal Act, reported complete without amendment, read a third time and passed on division.

[1750]

Hon. T. Lake: I now call committee stage of Bill 46, intituled the Motor Vehicle Amendment Act, 2012.

Committee of the Whole House

BILL 46 — MOTOR VEHICLE
AMENDMENT ACT, 2012

The House in Committee of the Whole (Section B) on Bill 46; L. Reid in the chair.

The committee met at 5:51 p.m.

On section 1.

K. Corrigan: Just wanted to confirm that section 1 is essentially just consequential amendments and that they in and of themselves do not represent any change. They're just consequential amendments?

Hon. S. Bond: Yes.

Section 1 approved.

On section 2.

K. Corrigan: Now that we're settled, I just want to briefly make a comment. This Bill 46 is seeking to address the findings of a Supreme Court of B.C. decision that some of the automatic roadside prohibitions for drinking driving infringed the rights of individuals to be free from unreasonable search and seizure.

I do find it a bit ironic that the government has just brought in a motion limiting debate, meaning that we only have one hour to ask questions about Bill 46. I think it's ironic because we had concerns about the hastiness of the original legislation.

Bringing in the drinking-driving scheme was hasty, and we did have concerns about whether the provisions would have been constitutional. So I do think it's a bit ironic that here we are, back with this bill, and it's being forced through in an hour. But I guess I should be happy because we're getting an hour for this one, as opposed to half an hour on others, like Bill 52, which is coming up and is a very significant piece of legislation.

On section 2. This is the section that is a significant change. It requires a peace officer to inform a person of his or her right to a second approved screening device analysis and stipulates that the lower of the two analysis results prevails.

My question to the minister: is this an essential part of what is seen to be the fix, essentially, for the legal decision that found parts of these sections of the Motor Vehicle Act unconstitutional?

Hon. S. Bond: That's correct.

K. Corrigan: This is one possibility. I just want to turn to the legal decision for a second and just read from it, because to me this is sort of the pith of the decision. I'd like to find out about the relationship between this section and the legal decision.

Justice Sigurdson, in the Supreme Court decision, said, and my copy is page 66:

"There is no way under the impugned law for the driver to challenge the validity of the results. As evidenced by the review process already in place under the ADP regime, it is possible to allow for a more meaningful review to be put in place without in any material way affecting the government's objective of removing impaired drivers promptly and effectively from the road.

"In my view it is not reasonable to preclude a driver a more meaningful review of the grounds for a lengthy suspension, penalty and costs in the 'fail' — i.e., over .08 — part of the ARP regime."

[1755]

Is this section seen as giving the person, first of all, the right to be told that they can have a second chance to blow and then, secondly, that the lower of the two samples will be used? Is that seen as part of the right to have more of a review?

Hon. S. Bond: It is part of the package of changes that, we believe, meets and exceeds the test that Judge Sigurdson laid out in his decision.

K. Corrigan: Well, I'm wondering if the minister…. Really, what's happening with this — the changes that are being made — is that it seems more to be widening the grounds and providing for the person a little bit more flexibility, I guess, in having the lower of the two samples taken. I'm wondering if the minister had considered instead some other options that, to me, would fall very much within what Justice Sigurdson said, saying that we need "a more meaningful review."

Did the minister consider, instead of this and the other provisions that'll come later, doing things like reducing
[ Page 12544 ]
the penalties or changing the review process, for example, to provide for cross-examination, in-person examination and things like that?

Hon. S. Bond: We did not consider reducing the penalties. We believe that having the most aggressive regime in the country is actually responsible for saving lives, so we didn't consider that. We looked at how we could put together a response to Judge Sigurdson's concerns that allows for the ability to directly challenge the device. We believe that test has been met.

The administrative process that has been in place was actually upheld in the B.C. Court of Appeal in 1997. In essence, what we are trying to do with this — and we believe we have met the test — is allow for the ability to directly challenge the device.

K. Corrigan: With regard to the mechanics of this section, why was it that originally, instead of having the lower of the two samples, it was the second sample? Was there a reason for that?

Hon. S. Bond: I'm told that originally the model followed that which was in place in Ontario. What this does now, by making this shift, is to actually provide the benefit to the driver.

K. Corrigan: Just for clarity, the other major change in this section is that the police officer is now required to inform somebody that they have the right to have a second test done with a different breathalyzer or hand-held breathalyzer.

[1800]

Hon. S. Bond: Previously it would have been assumed that it was a best practice. Now we've enshrined it in law so that, again, if that doesn't occur, then the individual has another opportunity to challenge.

K. Corrigan: I want to just go back, actually — skip back, sorry — to a question that I was asking previously. It occurred to me that I just had a little follow-up. It's on the same section.

The minister said, I believe, that the administrative processes had been found supportable or legal, lawful, by a previous decision. But because this decision said that there had to be more avenues for review — that's essentially what it says, I do believe — did the minister consider changing that administrative process and widening it, for example? As I said earlier, perhaps having the ability to cross-examine or other processes — did the minister consider that as an option to satisfy this ruling?

Hon. S. Bond: No, we didn't, because as I mentioned earlier, the administrative process itself had been upheld, and the concern was the ability to directly challenge the device. So in essence we broadened the scope of that appeal.

K. Corrigan: Well, maybe I'll just ask another question, a bit of a hypothetical. The minister has said that it's defensible. There was an earlier decision. But does the minister agree that that could have been another way to satisfy the ruling?

Hon. S. Bond: In fact, I didn't, and we didn't. Because Justice Sigurdson confirmed the process, the concern that we had a robust process, the issue was the broadening of the ability to directly challenge the device. So that is where we focused the amendments, because in fact that, we believe, meets the test that Judge Sigurdson laid out in his decision.

Section 2 approved.

On section 3.

K. Corrigan: I just want to confirm that this is essentially another section where what it is doing is making changes consequential to other changes that have been made in this act and if that's correct.

Hon. S. Bond: That's correct.

Section 3 approved.

On section 4.

K. Corrigan: And also to confirm that section 4 is another consequential change — is that correct?

Hon. S. Bond: That is correct.

Section 4 approved.

On section 5.

K. Corrigan: Section 5 essentially "requires the report sent by a peace officer to the superintendent to be sworn and requires a peace officer to send to the superintendent specified information regarding an approved screening device." This is the section that requires "information relating to the calibration of the approved screening device on the basis of which the notice of driving prohibition was served." What is the purpose of this section? I would assume it is in connection with the decision of the Supreme Court as well.

Hon. S. Bond: In fact, the issue of a sworn report was highlighted specifically in the Sivia decision by Judge Sigurdson, so we responded directly to the identification of that as an issue. Requiring sworn reports increases the
[ Page 12545 ]
reliability of the evidence that's prepared by the police and ensures that the superintendent of motor vehicles has reliable evidence from the police. This responds very directly to an issue outlined in the Sivia decision.

[1805]

Secondly, the ability to challenge the approved screening device results and documentation about the calibration and reliability of that piece of equipment, again, helps the driver. It will give the superintendent the ability to look at whether or not there are issues with the device. Again, what this does is responds to the concern about broadening and ensuring that there is an ability to directly challenge the device. Obviously, providing information about calibration and how often it's been done — those kinds of things — again, brings a new opportunity for the driver.

K. Corrigan: Previously, I believe the minister was referring to both sections 5 and 6, and I will ask questions about….We were talking about sworn statements, which I think is section 6. But with regard to section 5, previously what…. This is part of the package of information that must be sent by the peace officer to the superintendent, I believe. That was a whole bunch of things — the report and the person's…. It used to be the person's licence or permit, a copy of the notice of driving prohibition. All of these things would have been sent to the superintendent — a certificate of service and a report.

Now what we're adding is this calibration information. So could the minister just explain to me what that is? It's just a little report saying that the screening device has been checked, and that information wasn't previously sent?

Hon. S. Bond: Both the issue of a sworn statement and calibration are in section 5. They're in (d) and (e). Those are new, and in fact, what it will require now….

It is a requirement, and there was some discussion about this and about the ability for police agencies to actually provide this information. They will be provided with a form. The title of it will be "Certificate of Qualified ASD Calibrator," and it will go through and outline exactly the date that it was calibrated. It will note the serial number. It will go through the manufacturer's number.

So a form will now be required to be sent, and we believe that that's an important…. Again, it looks at the ability to directly challenge the device. If there is something on this form that demonstrates that the information is not reliable, it gives the office of the superintendent of motor vehicles another reason to look at the decision.

K. Corrigan: Previously, under the previous scheme…. That is not mentioned, particularly, under the present 215.47. Would this information that is being added, the calibration information…? Could that have been sent? Or was it sometimes sent? Or could the superintendent request it? I'm just wondering whether this is a change in a requirement, or was this done sometimes previously?

Hon. S. Bond: It will be a much more thorough collection of information about the approved screening device. There has been a minor amount of information provided before. But again, this will require certification and will be a requirement to be sent in all of these cases. So a more fulsome report, and also signed and delivered with each case.

K. Corrigan: Is this information being included now — in the requirements of the documents that need to go to the superintendent — as part of the response to the Supreme Court decision? Or is it a response to overall complaints? I think there were quite a few complaints about the issue of calibration and the documentation of that calibration. Is it a response to the complaints, the court decision, or is it a combination of both?

[1810]

Hon. S. Bond: It is a response to the judge's decision. Again, our goal is to provide as much information as possible to allow for the challenge of that particular device. I think it's important that the entire goal we have is to meet the test of the judge's decision in the Sivia case and to provide more robust opportunities and a broader range of ways for the device to be challenged.

K. Corrigan: I don't have another question about that section.

Section 5 approved.

On section 6.

K. Corrigan: The present section 215.49 is amended in this case, and 215.49 covers what the considerations are on a review by the superintendent. That is a review, when somebody has requested a review, after they've received a driving prohibition. Then it says that the superintendent must consider any relevant written statements or evidence submitted by the applicant, the report of the peace officer, a copy of the notice of driving prohibition — things, basically, that were sent to the superintendent.

It previously said: "any other relevant documents and information forwarded to the superintendent by the peace officer who served the notice of driving prohibition or any other peace officer." That's gone, and I guess essentially what's been added is: "including peace officers' reports that have not been sworn or solemnly affirmed." I'm wondering what the purpose of this change is and if the minister could explain it to me.

Hon. S. Bond: This describes what happens or what the possibility is if a document arrives that is not sworn. It
[ Page 12546 ]
means that the superintendent of motor vehicles doesn't necessarily reject the case because of the fact that it isn't sworn, but the superintendent would now be in the position of weighing that evidence, weighing that particular factor that this is not a sworn statement in any consideration that he or she were to make about that decision.

It is an administrative error when it is not sworn. The principle is that it ensures that driving prohibitions are not automatically revoked because of an administrative error, and this is consistent with existing provisions in the review process for administrative driving prohibitions.

K. Corrigan: The present iteration of this section says that "the superintendent must consider (e) in the case of an oral hearing, any relevant evidence given or representations made at the hearing." In the oral hearing, anyways, everything previously would have had to be sworn. You would be sworn, I guess, if you were at an oral hearing. What this simply adds is that documents that come to the superintendent, then, can include non-sworn materials, and previously if there were non-sworn materials and the superintendent considered those materials, the process would have been found invalid.

Hon. S. Bond: The issue of having a sworn document relates only to the police officer's report. Previously that was not the case. Judge Sigurdson went to some length to point out and had concern about the fact that the police officer's report was not sworn.

[1815]

What we have done is respond to that, so the police officer's report must now be sworn. This section, section 6, is being amended so that if an unsworn police officer's report appears, the superintendent will still look at that report but will need to weigh it in light of the fact that there has been an administrative error.

Again, it isn't inconsistent with the existing provisions in the administrative driving prohibition process. The key change is regarding police officers' reports and the need now for them to be sworn.

Section 6 approved.

On section 7.

K. Corrigan: This is the section — an important part of this bill — that adds new grounds for review of the immediate roadside prohibitions. I'm wondering if the minister could just go through those various changes and what is different.

Hon. S. Bond: Again, the major concern that was expressed in Judge Sigurdson's decision was that the current provisions didn't give the driver the ability to meaningfully challenge the results of the roadside breath test. So these amendments maintain the existing grounds for review, but they add a number of other provisions for both the fail and the warn readings.

If a police officer does not advise the driver of the right to a second ASD test or comply with the driver's request, that's an additional ground for appeal. The second approved screening device test was not conducted on a separate ASD. The IRP was not issued on the basis of the lowest ASD reading. Blood alcohol content or BAC was less than 0.08 for a 90-day IRP or less than 0.05 for a three-, seven- or 30-day IRP, and/or the approved screening device reading was not reliable.

We believe that this provides a more meaningful review and specifically an opportunity to challenge the ASD result.

K. Corrigan: It is my understanding from the case, the Sigurdson decision, that the challenge to the constitutionality of these provisions of the Motor Vehicle Act applied only to those cases where there was a fail. But government made the decision that they were going to apply these extra review opportunities to both warning and fail, and I'm wondering if the minister can explain why that was done.

Hon. S. Bond: Well, the member is correct. The court did not raise concerns. In fact, one of the reasons that we were…. While some see this as a setback — and certainly, we're here in the House making the corrections — the case was also a victory for the process itself because the court did uphold the warn range provisions and, in fact, said that government has the ability to actually use this process and that it was within our jurisdiction to do that.

We believe it's a fairness issue. We didn't want to have a separate set of appeal processes. In essence, we believe this is the key factor that means that we have not only met the test of the court but in fact exceeded it by including the warn range.

K. Corrigan: The previous section 215.5, compared with the 215.5 now…. There has been some reorganization in the way that it was put together. It's a little bit difficult to follow exactly where the changes are, but I think they make sense.

[1820]

Now, is there a difference between the changes that were in the grounds for review or the things that must be reviewed, I guess? Is there a difference between the warn sections and the fail sections, or are they identical if you go through them all?

Hon. S. Bond: The only differences are the blood-alcohol content and the penalties. In the warn range, of course, there are escalating penalties, but in essence, the processes would match, other than blood alcohol and penalty.
[ Page 12547 ]

K. Corrigan: I'm wondering if the minister can, then, just give me an overview of what — I'm not familiar with these hearings — the process would be and what that hearing would look like. If it's an oral hearing, for example, the superintendent would get all these materials and would set up an oral hearing. Is there any cross-examination? Who's present at that hearing, first of all, and is there a cross-examination? I'm trying to get a sense of what it looks like and how it's different now.

Hon. S. Bond: What happens is a phone process. The person who's involved in the incident is on the line, obviously, and an adjudicator. That person has the right to have an advocate or lawyer present for that process.

There is no right of cross-examination, but prior to the hearing taking place there will have been full disclosure. Both parties — obviously the adjudicator, but also the person who's involved — will have had full disclosure of the entire case, all of the documents that the adjudicator has received.

That process takes place within seven days. You need to indicate your intent to appeal, and the adjudicator will render a decision within 21 days. All police documents are shared as well. At the end of that process, the 21-day period…. Within that period the decision is made. Further to that, obviously, the person still has the ability to have a judicial review.

[1825]

K. Corrigan: During that process the person is entitled to have a lawyer present. Is the lawyer asking questions? Who speaks at these hearings?

Hon. S. Bond: The lawyer can certainly present their client's case and ask questions and refute. The person themselves can present the case. It's a matter of choice. Again, there may be a lawyer, there may be an advocate, but the person has the ability to have someone with them. If it is a lawyer, certainly they are permitted to present the case on behalf of their client.

K. Corrigan: Well, you're saying this representative or the person themselves — an advocate or a lawyer or the individual themselves — can ask questions, but who are they asking questions of?

Hon. S. Bond: Perhaps I left the wrong impression. There isn't a cross-examination. In essence, there is a presentation of information. There can be a direct examination, in that the lawyer can lead the person who's involved, their client, through that process. Certainly, there is the ability to "question" material that's included in it. The police report is also shared. There is the opportunity to present a case and to ask questions for clarity, but there is not a cross-examination that takes place.

The Chair: This committee stands recessed until 7 p.m. this evening.

The committee recessed from 6:27 p.m. to 7:02 p.m.

[D. Black in the chair.]

K. Corrigan: When we broke for dinner, we were talking a bit about, under section 7, the review that results from somebody having a roadside prohibition and then the review before the superintendent. In making these changes, which are intended to satisfy the finding by the Supreme Court justice that these provisions, or some of the provisions, of the drunk-driving laws were unconstitutional, did the minister consider whether or not there should be changes in terms of who it is that is conducting the hearing?

Hon. S. Bond: No, we didn't, because, again, in the actual decision itself Justice Sigurdson said that the superintendent of motor vehicles already has a good process. What you need to concentrate on — he didn't use that language, but I paraphrase — is making sure that there is the ability to challenge, that we have a broader scope of ways, routes for the ability to directly challenge.

Also, just to articulate more about the hearing itself, I should point out that many people choose to do this in writing instead of over the phone, so they don't do an oral hearing. They can do it in writing.

They also have the opportunity to provide witness evidence, for example, that is contrary. This is where they get to make their argument that says: "I wasn't really drinking. I wasn't doing this. I wasn't doing that." There is an opportunity for that driver to be able to say: "That's not what happened. Here's what's happened. I wasn't driving. Someone else was driving." Whatever their arguments are, they make them during the course of that hearing, but it can be done in writing as well as orally.

K. Corrigan: I was talking about process, so I may have missed a little bit of what the minister said. I was getting some direction from the front here.

[1905]

I'd like to go back, then, to the case that the minister mentioned earlier. I think it was in the 1990s. I'm trying to understand the basis of the decision: the framework of having, for example, somebody who was in the superintendent's office hold the hearing, the fact that cross-examination is not a necessary component or not a desirable component — those kinds of things. Maybe the minister could go back and explain. The constitutional framework for that decision seems to be significant.

Hon. S. Bond: There have been administrative driving prohibitions and a process since 1997. That process was upheld by the B.C. Court of Appeal. In fact, we believe
[ Page 12548 ]
the case was the Buhlers case. It was impaired driving, administrative driving prohibitions.

If we look at the actual decision, the Sivia decision recently with Judge Sigurdson, if you look at section 319 in the decision, Judge Sigurdson references the current process that's in place: "As evidenced by the review process already in place under the" — it's the acronym ADP, but administrative driving prohibitions — "regime, it is possible to allow for a more meaningful review to be put in place without in any material way affecting the government's objective of removing impaired drivers promptly and effectively from the road."

In fact, Judge Sigurdson refers to the process that's been in place since 1997 and that has been upheld by the B.C. Court of Appeal.

K. Corrigan: Quoting from that section again, yes, absolutely, "it is possible to allow for a more meaningful review to be put in place." My question is: how is it that the government, the minister, made the decision that this qualifies as a more meaningful review and some of those other changes that I was talking about do not or are not preferable?

Hon. S. Bond: What Judge Sigurdson says is that it is possible, as evidenced by the ADP prohibition, to actually build a more meaningful review. As our counsel said and described it to us, Judge Sigurdson was prescriptive. He actually laid out the road map for us.

[1910]

In fact, he was clearly concerned about the lack of a sworn statement by the police. There were a number of areas, and in fact, the decision was prescriptive. We believe that this meets and exceeds his expectations.

K. Corrigan: I am wondering, assuming this bill becomes law, what is going to be the process? What's going to happen next? Is this new regime going to be taken back to the court to be tested by the court?

Hon. S. Bond: The judge laid out the prescription for the amendments. The amendments, when passed and brought into law, will be put into effect on June 15.

K. Corrigan: Would the minister have the right or the ability, instead of putting the new provisions into law, to make the decision to take them back to the judge or take them back to the court and request a review and a confirmation and have a reference that would determine whether or not these provisions met the prescriptions in the decision?

Hon. S. Bond: In fact, the process that is underway is that Judge Sigurdson, who made the ruling, gave us the direction to fix it and in fact gave us a time frame in which to fix it. We have done that. We have followed his decision, analyzed it carefully. There was no expectation on his part that we would go back. He in fact gave us a period of time in which to fix this. When this passes, we will consider it fixed.

Every day that we wait, we put British Columbians' lives at risk. That's how seriously I take this piece of legislation. We believe, and my legal advice has been, that this meets and exceeds the test. We need to ensure that British Columbians are thinking very seriously about their behaviour. If they choose to drink and drive in British Columbia, we're proud of the fact that we have the most aggressive regime in the country and that we've saved lives.

It's my intent to see the bill passed and put back into practice on June 15.

K. Corrigan: The minister has been very proud of the fact, and rightly so, that the number of people who have died because of drinking-driving accidents has declined dramatically from the time that this act came into place. I assume that keeping track of those numbers continues? I'm wondering if the numbers have gone up since this decision in November, the numbers of people who have died on the roads?

Hon. S. Bond: Well, in fact, we're very pleased to be able to say that we believe that the current statistics would be that our reduction in fatalities remains at about 40 percent. So there's a lingering impact from the work that's been done. I think people recognize when there are serious consequences.

[1915]

We believe that even without the ability to use this particular tool…. Obviously, we went back to the previous regime, which includes criminal charges. It's a much lengthier process. We think that the fear of losing your vehicle and of all of the consequences that go with it is changing behaviour.

That was the original intent of this legislation. We believe that that has worked. So from my perspective, we need to pay attention to what Judge Sigurdson has said, do what he asked us to do in his decision and then reinstate the program as soon as possible.

K. Corrigan: I guess the reason I'm asking is that the numbers continue to be down in terms of drinking and driving. I think people's behaviour has changed. Just as people's smoking behaviour changed, I think people's view of what is correct or not in terms of drinking and driving has changed, partially as a result, certainly, of this legislation.

I asked that question about the numbers because it seems to me that if there is a possibility that this law is again going to be challenged, whoever decides that they want to challenge it constitutionally…. I'm not a constitutional law expert, but I have read the decision. I in-
[ Page 12549 ]
terpret it as not as black and white as is being presented here this evening.

If there is a possibility that this law is going to be challenged again in the new iteration, somebody is going to have to pay for the legal costs, as they would on any constitutional challenge. They're going to have to go through a long process. If the government would be found to be incorrect again, then there would be a number of people who would have had their driver's licences taken away, their vehicles impounded, paid thousands of dollars. That would have to be addressed. It just seems to me that taking the law back and having a reference, having it checked, would have made sense.

I asked a question earlier and the minister came back and answered, but the very specific part that I didn't hear an answer to…. Maybe I'll just home in on that piece. Could the minister or the government, if that was what was wanted, take this changed legislation, go back to the judge and say, "Does this fix it," rather than waiting to see if it's challenged again?

Hon. S. Bond: I'm advised that's not an option. Further to that, I know that we characterize this as government doing this. I'm not a constitutional lawyer either, but I know this: we've put the best legal minds in government….

We don't sit and write the legislation. I didn't. I obviously reviewed it numerous times, but we've asked the best people we have who work in the ministry to assure me that the decision has been analyzed and carefully considered. The expressed view of the legal team is that we have met the expectations and in fact, by including the warn portion, have exceeded the expectations in terms of ensuring that we bring this into line constitutionally.

It is not part of the process that we have the ability to use. We intend to see this brought into law. On the advice that I have received from the legal team, once it is law, we will put it back into practice on June 15.

K. Corrigan: I'm wondering if the minister can explain, because I haven't practised law for many, many years…. The minister has said that it's not an option. I know that there have been cases where the government has recently referenced cases to the courts. I'm just wondering if I could just get a little bit of explanation as to why that would not have been an option?

[1920]

Hon. S. Bond: I guess I'm always very careful to be correct on the record. So we want to be clear that there may well be a route that one could take to refer this from a more broader constitutional perspective. That's not what Judge Sigurdson indicated to us. In fact, he gave us six months to fix it. As our council advised us, he was very prescriptive about where he felt the weaknesses were and, in fact, the infringement existed. We have, we believe, met and exceeded that test.

As I said, our view is that it is critical to ensure that the tools are once again provided to police agencies in this province to deal with impaired driving in this way, and so the route we have chosen is to bring it to the Legislature to address the concerns that the judge provided. We believe we've done that.

K. Corrigan: I just want to read two sentences from Judge Sigurdson's decision in the Sivia case.

He says in paragraph 319, which actually the minister has quoted from as well: "In my view it is not reasonable to preclude a driver a more meaningful review of the grounds for a lengthy suspension, penalty and costs in the fail, over 0.08, part of the ARP regime."

Then later in paragraph 321 he says, "Relying on a search power derived from the criminal law that allows for a breath demand on suspicion but does not meaningfully allow the driver to challenge the suspension after the fact is not, in the entire context, reasonable. I therefore find that there is an infringement of section 8," which is unreasonable search and seizure.

Those sections, to me, indicate that what the judge is talking about is the review process later. Those to me, in these amendments, do not seem to change, other than widening the grounds of review and making them more specific. The process itself does not change.

I'm wondering, and I know I'm asking something quite specific, if the minister could tell me a paragraph in this decision or a place where it says what the justice was looking for was a change to the grounds of appeal as opposed to the process of the appeal to make it, for example, include cross-examination or some of the other processes that are in the criminal procedure.

[1925]

Hon. S. Bond: In section 8, paragraph 378, which is a reference by the judge back to the section that talks about the infringement: "I concluded earlier that the above provisions of the ARP regime infringe section 8 of the Charter because they authorize a search by a screening device on the basis of reasonable suspicion and impose lengthy prohibitions and significant costs and penalties on motorists without providing motorists with any meaningful basis to challenge the validity of the search results."

That, in a nutshell, describes the need for us to provide a motorist with a meaningful ability to challenge the search results. Each of the components that we've added, and I listed them previously — a second test on a second device; there is a list of them — we believe, meets the paragraph 378.

The Chair: Minister, according to a motion that was passed earlier today, time allocation for Bill 46 has passed.
[ Page 12550 ]

Sections 7 to 9 inclusive approved.

Title approved.

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

Motion approved.

The committee rose at 7:27 p.m.

The House resumed; Mr. Speaker in the chair.

Report and
Third Reading of Bills

BILL 46 — MOTOR VEHICLE
AMENDMENT ACT, 2012

Bill 46, Motor Vehicle Amendment Act, 2012, reported complete without amendment, read a third time and passed on division.

Hon. M. Polak: I call committee debate on Bill 52, intituled the Motor Vehicle Amendment Act (No. 2), 2012.

Committee of the Whole House

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

The House in Committee of the Whole (Section B) on Bill 52; D. Black in the chair.

The committee met at 7:29 p.m.

On section 1.

K. Corrigan: This is the Motor Vehicle Amendment Act (No. 2), Bill 52. This is a very wide-ranging act, and what it does is it essentially moves prescribed violations, under the Motor Vehicle Act.… I say "prescribed" because we don't know what provisions of the Motor Vehicle Act it's going to apply to yet because it's going to be decided by way of regulation. We don't even know what sections of the Motor Vehicle Act this is going to apply to.

What it does is it takes the traffic tickets — essentially, traffic tickets like speeding — out of the Motor Vehicle Act, takes it away from the jurisdiction of the courts and creates an administrative regime to deal with disputes.

[1930]

Given that we only have half an hour to examine a very significant act, which I believe that 99.9 percent of British Columbians have absolutely no idea is coming down the pike, I hope that the minister will give me just a second. We're not going to get through much of this act at all in half an hour. I will hope the minister will give me a little bit of leeway to just make a couple of comments that I think will cover off some of my concerns about it, because I don't think we're going to get to those. I'm just going to plough in with my concerns, and then we can maybe deal with the sections.

What would happen now is that instead of going to court to fight traffic tickets, the disputant would be required to participate in a resolution conference with the superintendent of motor vehicles, either by writing or by telephone. The superintendent would then consider that information provided by the disputant and the driving enforcement officer or another driving enforcement officer.

The superintendent then either cancels the driving notice, which is the new name for a ticket, accepts the disputant's admission that they're guilty or advises the disputant of the procedure for an application for a hearing before the driving notice review board, which is also a new tribunal, administrative board, in British Columbia.

If someone admits their guilt at this point, at this resolution conference, the superintendent has the power to reduce the monetary penalty or offer extra time to pay. If the matter goes forward to a hearing before the board, there is first a pre-hearing conference conducted by telephone to determine whether the hearing should be in person, in writing, by telephone or by video conference and to go over witness lists and so on.

If someone goes to hearing after the resolution conference and the pre-hearing, which is very cumbersome, I believe the hearing is conducted by one board member, who determines on the basis of all the information whether the disputant contravened the prescribed regulation.

We are not going to be supporting this bill, for a number of reasons. Overall, I think this has been ill-thought-out and hastily put together, and I think the typos in the bill reflect that haste.

There was very little, if any, consultation with the legal community. It undercuts the Cowper review. Why bring in very significant legislation so quickly, right in the middle of the review? I don't understand that. And probably, partially because of the haste in which this bill was put together, there are even more than the usual number of provisions that will be decided by cabinet.

It's supposed to save money, but with this multistage, cumbersome process — creating a new, parallel bureaucracy — I have concerns about whether or not that's true. I believe that there's another possibility here, in yet another piece of legislation, that the scheme would not survive a Charter challenge, as so many personal rights and freedoms are being removed under the legislation.

The driving notice review board has exclusive jurisdiction, and there's no appeal from their decision. The only way to challenge it is by judicial review in Supreme
[ Page 12551 ]
Court, which would only apply if there's a serious abuse of process.

There's no opportunity for the person who's disputing a ticket to ask questions of the police officer who issued it. I think it's a fundamental right to face one's accuser.

The Chair: Member, can I remind you that we're on section 1 of the bill.

K. Corrigan: Yes, thank you, Madam Chair. I think I've probably covered most of my concerns.

No ability to cross-examine. The burden of proof, I believe, will change from beyond a reasonable doubt to a balance of probabilities. So I have major concerns about this piece of legislation, which I wanted to bring up at the beginning.

I have a question on section 1. I'm wondering if the minister could explain section 1 and the purpose of it.

Hon. S. Bond: In fact, this is a power that ICBC already has. We are making the new process consistent with the existing authority that ICBC has.

Section 1 approved.

[1935]

On section 2.

K. Corrigan: This is an amendment of section 26. Section 26 provides that "the Insurance Corporation of B.C. may, without a hearing, refuse to issue a driver's licence to a person who," and there's a whole list of things. What it has done….

My understanding is that the first subsection of section 2 amends section 26 to add that someone, basically, will not get their driver's licence or that ICBC can refuse to issue it if someone "is indebted to the government because of his or her failure to pay a monetary penalty as defined in section 270." Is that correct, what the first subsection is about?

Hon. S. Bond: I'm advised that this is, again, an existing power that ICBC has already had. In fact, they've had it since the 1980s.

K. Corrigan: Why is this section here if we're adding it from the old to the new, if it has been there since the 1980s? Maybe I missed what the minister said.

Hon. S. Bond: It's to make this consistent for this administrative process.

K. Corrigan: Sorry, I don't understand. We are adding a section that says that the ICBC may, without a hearing, refuse to issue a driver's licence to a person who is indebted to the government. That wasn't in the previous act, so I'm wondering how it could have been there for the last 20 years or so.

Hon. S. Bond: As I said, ICBC has always had this power. What we're doing is…. As we create a new process, we have to ensure that if you were going to be indebted under the old process, you're going to be indebted under the new process. It will be called a driver's notice. We just need to ensure that ICBC has the ability to use that existing power in a new regime.

K. Corrigan: I have no more on that section.

Section 2 approved.

On section 3.

K. Corrigan: I actually was standing on section 2. This one adds…. I think this is the section I was talking about, and I apologize. I thought we were onto this section. That's what I was asking the question about.

In this section, section 26 is amended to allow the Insurance Corporation of B.C., without a hearing, to refuse to issue a driver's licence to a person who is indebted to the government because of his or her failure to pay a monetary penalty. That's a new section, is it not?

The Chair: The minister on section 3.

Hon. S. Bond: I think we passed section 2, but we're back in section 2. I understand the compressed time. I'll answer the question, wherever it's found.

There is no new power. One of the things I want to be very clear about…. We're trying to attribute all kinds of actions to this particular regime. There is no new power being added to ICBC. The power to deal with monetary penalties is being transferred to a new regime. The power exists, and we're simply taking what exists today and applying it to a new process.

Sections 3 to 6 inclusive approved.

[1940]

On section 7.

K. Corrigan: Section 7 provides that section 116 of the act is amended by adding the following subsection: "(1.01) In addition to the matters referred to in subsection (1), the Insurance Corporation of British Columbia must include in the record it provides particulars of any contravention by the person of a driving enactment." I wonder if the minister could explain this section.

Hon. S. Bond: A driver has the ability to ask for their driving record. What this means is that all of the new driving notices will need to be added to that driving re-
[ Page 12552 ]
cord.

K. Corrigan: This is if an individual wants to see their driving record, those notices will be available. I'm just confirming that I got that right.

Hon. S. Bond: That is current practice, so we continue that practice. What this does is it allows for the new contravention notices, those kinds of things, to be added to their record.

Sections 7 and 8 approved.

On section 9.

K. Corrigan: I'll have a number of questions about section 9, because section 9 includes all the information about driving notices. It's an important…. Well, it's actually most of the guts of the rest of the act.

I'm wondering if the minister could explain what the first part is about, about driving notices. Could we go over the reasons why the minister decided that this would be a positive change in legislation?

Hon. S. Bond: This section actually defines the key terms that are going to be used in the new Motor Vehicle Act that establish driving notices. A driving notice will be pretty much what it sounds like. It will be a notice that's sent to a driver and the superintendent of their alleged contraventions under our new administrative regime.

If you actually look through the section, it creates the framework for the new administrative process and clearly outlines the terms that will define this process moving forward.

K. Corrigan: I'm wondering why the new term "driving notice" was used. In the past I believe it's been "ticket." Why do we have a new term called driving notice?

Hon. S. Bond: Well, this is a fundamentally different process. I do want to just take one moment before the Chair reminds me that I shouldn't be taking a moment. There has been a lot of work here.

[1945]

This is part of a broader road safety initiative that is looking to tie driver behaviour and how we improve that to an administrative process. In fact, there is a very clear delineation that looks at contraventions, driving notices, and then attaching that to improved driver behaviour. It is a fundamentally different system, and most importantly, it is about ensuring that we move these kinds of processes out of courts and find an appropriate way to deal with this.

There has been commentary that this doesn't allow you to challenge your driving notice. That's not true. There is a process. It's administrative. There are a number of other ways. There are a number of other processes similar to this. This is part of a fundamental shift in how we will deal with driver behaviour.

K. Corrigan: This is all part of section 9, so I'm going to try to go through it chronologically, pretty well, although I guess I could skip around, it all being one section.

Looking at what is going to be the new section 271, this is about delineating what is going to be covered by this new administrative process for driving infractions. It says: "Without limiting any provision of this Act, the Lieutenant Governor in Council may make regulations designating, as a driving enactment for the purposes of this Part, Part 11 and Part 12, a provision of this Act or the regulations under this Act that creates an offence."

I'm wondering if the minister could tell me why it is that those things that are going to be covered by this act or by this new scheme…. We don't have any idea of what those provisions are going to be. I'm wondering if the minister could provide the range of provisions that are in the Motor Vehicle Act that could potentially be covered by this administrative process.

Hon. S. Bond: Obviously, it would be the same range of issues that are currently covered under the process. They would be moving violations. If you run through a red light, all of the things that we do today in terms of speeding…. All of those things will become a contravention and then subject to a driving notice.

K. Corrigan: I don't actually have the present act, or much of it, in front of me. What would the minister consider perhaps the most serious in terms of consequences? Perhaps in the view of drivers and in the view of the minister, what would be the most serious types of offences that could be covered by this new administrative scheme?

Hon. S. Bond: Certainly from my perspective, driving without due care and attention, and of particular concern to me is excessive speeding. It is a major issue in British Columbia and will remain a significant contravention.

K. Corrigan: Driving without due care and attention. That is a fairly serious provision. What are the present penalties for that?

[1950]

Hon. S. Bond: Respecting the time limitations, we'll get the information. We're not quite certain, and I don't want to give incorrect information.

K. Corrigan: That's fine. I can find that out.

I think my point is that when we're moving to an administrative process like this and we don't know in advance what types of offences can be included in that, it is
[ Page 12553 ]
of concern to me. Does the minister anticipate that driving without due care and attention would be one of the provisions that would be covered by this new administrative process?

Hon. S. Bond: Well, depending upon the circumstance, the police will continue to have discretion to proceed criminally. If not, it would be considered through the administrative process.

K. Corrigan: We don't know right now what the penalty is for driving without due care and attention, but the consequences for somebody could probably be as serious as, maybe for some people, losing their jobs, if they were professional drivers. I mean, I think there are serious consequences for some people, if they contravene the provisions of particularly the more serious sections of the Motor Vehicle Act.

I'm wondering if the minister considered that when framing this new scheme and, as well, what might be contemplated as those infractions that would be included in the administrative process.

Hon. S. Bond: We did consider that. In fact, you will still have the ability to dispute your ticket. I want that clearly on the record. Obviously, we'll do a better job of communicating that publicly.

Yes, you will be able to dispute your ticket, your contravention. In fact, what it means is that it will be done in a more speedy process, and it will relieve backlogs and the use of police time and judges to deal with traffic violations.

K. Corrigan: Well, the minister has just said that it's going to reduce the use of courts — it certainly is going to do that — and police officers. Maybe, since the minister has mentioned it, I'll just respond to that.

One of the concerns that has been brought to my attention is a real concern that what this is going to encourage is police officers…. They know that they are not going to be required to appear in person and face the person they have basically accused, the person that has been given this ticket, and therefore their level of care and their standard of care in terms of the process may go down. I have certainly heard that from several defence lawyers I've talked to who have concerns about the drinking-driving legislation that we just talked about.

Has the minister considered that at all in setting this scheme up?

Hon. S. Bond: In fact, we believe that there will be a more stringent process. They won't be relying on their memory after they are sitting outside traffic court for hours only to have that case not heard.

There will be full disclosure of their documents. There will be a rigorous process. They will need to provide written information from the time of the incident. In fact, police disclosure is not required now, and it will be.

We believe it will be rigorous, we believe police will act professionally, and we also believe that it will eliminate the incredible cost to taxpayers of having police officers sit outside courtrooms wasting their time, waiting, only to be cancelled when they could be on the roads doing other important work. So there are some important principles in this piece of reform.

[1955]

K. Corrigan: There are so many sections of this act that I would like to go through and discuss with the minister. I find it very unfortunate that we are limited to half an hour. This is going to fundamentally change the way traffic violations are dealt with in this province, and I don't believe that people are going to be happy.

I don't agree with the minister's characterization of this being better or an improvement. I think it's entirely the opposite. However, I will go on to ask questions about section 9.

Section 9 includes the new section 272, which talks about driving notices. It includes, essentially, electronic ticketing. I'm wondering if the minister could just quickly explain what the change is going to be. I've read it through, but I think people might be interested in hearing this.

Hon. S. Bond: What this does is permit the…. This is part of a greater road safety initiative. One of the key pieces is e-ticketing, which would allow officers at the roadside to be able to enter data using a piece of technology so that the data can be entered accurately and quickly at the roadside. That's an important component of this four-part road safety initiative.

K. Corrigan: I'm assuming that this will not in any way change the requirements, the procedural. It'll just simply move everything over to electronic ticketing. Is that correct?

Hon. S. Bond: Current practice is extremely manual. In fact, five to seven people currently enter data, and with this process, it will take only one using an e-ticketing device.

K. Corrigan: Because it's all in here, maybe I'll ask a few…. We've only got a couple of minutes left. One minute left. Okay.

I'm wondering if the minister has any concern about the fact, apart from the other things I've already mentioned, that there are three different processes that somebody is required to go to in order to have a hearing of their driving notice. Does that not concern the minister — that we're going to be setting up a very cumbersome parallel bureaucracy?
[ Page 12554 ]

Hon. S. Bond: Well, in fact, we actually believe that this will allow citizens to have a more accessible process, including the ability to pay their fines in a different way, to participate in this process in a more efficient way. This is certainly a fairly dramatic shift, but it will allow for access to citizens. It will give them every opportunity to dispute their concerns.

K. Corrigan: One of the concerns that I had…. I'll just jump to the resolution conference. The resolution conference is conducted by the superintendent, or I would assume somebody….

The Chair: Member, would you take your seat, please. According to the time allocation motion that was passed earlier today, the time for Bill 52 has expired.

Sections 9 to 18 inclusive approved.

Title approved.

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

Motion approved.

The committee rose at 7:59 p.m.

The House resumed; Mr. Speaker in the chair.

[2000]

Reporting of Bills

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

Bill 52, Motor Vehicle Amendment Act (No. 2), 2012, reported complete without amendment.

Mr. Speaker: When shall the bill be read a third time?

Hon. S. Bond: Pursuant to the time allocation motion passed this day, now.

An Hon. Member: Division.

Mr. Speaker: Division has been called. Pursuant to an agreement made by the two House Leaders, the division will take place at four o'clock tomorrow afternoon.

Hon. M. Polak: I call committee stage debate on Bill 51, intituled the South Coast British Columbia Transportation Authority Amendment Act, 2012.

Committee of the Whole House

BILL 51 — SOUTH COAST
BRITISH COLUMBIA TRANSPORTATION
AUTHORITY AMENDMENT ACT, 2012

The House in Committee of the Whole (Section B) on Bill 51; L. Reid in the chair.

The committee met at 8:03 p.m.

Hon. B. Lekstrom: I was just going to open with a couple of quick introductions of the staff I have with me today, if that's okay. Mr. Doug Caul, on my left, is my assistant deputy minister of partnerships. Also joining me, on my right, is Kevin Volk, the senior manager of transit projects, and behind me, with the legal services branch, is Maria D'Archangelo.

On section 1.

H. Bains: I just want to say that this Bill 51 touched on about five different elements, the way I have seen it. One, it touched on the governance structure of TransLink. Then it talked about fare collection and enforcement. Also, in the bill it covers the timeline that the board needs to submit their base plan to the Mayors Council, moving from August to November.

[2005]

It also covers the adding of one additional board member from area A, and we will talk about that as well.

I think, then, those are some of the areas that I believe are covered by this bill. We will go through it quickly, and hopefully…. The time allocation that we have is not even close to what we need in order to go through the entire bill section by section.

My question to the minister in the beginning is under definitions. It lists here: "'Electoral Area A Director' means the Director representing Electoral Area A on the Regional Board of the Greater Vancouver Regional District." Can the minister explain what electoral area A is in this particular bill?

Hon. B. Lekstrom: Electoral area A is the director that represents…. It includes the University of British Columbia; the University Endowment Lands; Bowyer, Passage and Barnston islands; the west side of Pitt Lake; the northern part of Indian Arm; and the unincorporated areas north of the municipalities of North and West Vancouver. That's the area. It's an electoral area director, is what it is, very similar to all regional districts throughout the province. But versus being a mayor or a councillor, they elect an electoral area director, as regional districts do.

H. Bains: As the other directors are appointed — we
[ Page 12555 ]
will talk about that later on — those who are mayors of those municipalities are considered to be on the Mayors Council. How is the director appointed? Is this an appointed position, or will this be…? How is this person actually chosen to be on the Mayors Council?

Hon. B. Lekstrom: The area that electoral area A represents, what I have just outlined for you — they receive service from TransLink. The people of that area elect the director for electoral area A, so they are duly elected representatives. They receive service. Therefore, at the request of the Mayors Council to add electoral area A director, we've adhered to their request in this bill and put it forward.

H. Bains: Who asked for this?

Hon. B. Lekstrom: Both the Mayors Council and the electoral area A director herself.

H. Bains: I want to move on. Still under the definitions: "'fare collection bylaw' means the bylaw referred to in section 245 (1)." Then it goes on: "'infraction' means a breach of section 244." Can the minister tell the House that 244 is a new section altogether and it wasn't part of the South Coast British Columbia Transportation Authority Act before?

Hon. B. Lekstrom: It is a new section.

H. Bains: We will be dealing with 244 later as we move to section 244.

[2010]

Then there is a definition for "ticketed amount," which means: "in relation to an infraction for which a ticket is issued under section 248, the aggregate of the following amounts." Then there are five different amounts: "the amount of the fine established in relation to the infraction by the fare collection bylaw…."

How is that fine, the amount of the fine, decided? How will they decide what the fine should be? Perhaps while we're there: are there any guidelines that they will be following? Are there some provincial guidelines that they will be looking at? What would be a guiding principle that they will be looking at before they establish a fine amount here?

Hon. B. Lekstrom: The first bylaw will be done by ourselves as government. It will be in consultation with TransLink and the Mayors Council, at which time they can implement that. We're hoping this summer sometime. Following that, any changes to that bylaw will be done by TransLink and the Mayors Council, approved by the Mayors Council. So they would be, as a duly elected body, responsible — very similar to what municipal councils do with their municipal ticketing.

H. Bains: That's interesting because I believe there is a section in the bill here that actually requires the authority to enact a bylaw. Perhaps the minister could explain why that section exists, then, because it doesn't say that the minister will create bylaws for the authority. I don't see that anywhere.

Perhaps the minister could explain: where does that say that the minister will enact the initial bylaws and then the authority may change it, based on the principles set in the bill elsewhere?

Hon. B. Lekstrom: I know you're anxious to get through the bill, Member, but that is dealt with in section 17 of the bill. It lays it out. The first is a transitional bylaw that allows this to begin, at which time then they would take full authority of them.

H. Bains: I am going through the bill. Section 17, as the minister suggests…. I have gone up to section 16, and then all the new sections are added on to the existing South Coast British Columbia Transportation Authority Act. But the bill does not have a section 17. Perhaps the minister could draw my attention to section 17 of this bill.

Hon. B. Lekstrom: Member, I'm not sure if you're looking at the proper paper. Under Bill 51, the South Coast British Columbia Transportation Authority Amendment Act, section 17 is the "Transitional — fare collection bylaw" portion.

H. Bains: I also have a copy of Bill 51, South Coast British Columbia Transportation Authority Amendment Act, 2012.

[2015]

Page 5 has section 16, and then it goes to part 12, "Fare Recovery"; division 1, "Fare Collection Bylaw"; "Definitions"; and section 243 starts there. Is that what we call section 17, then? It doesn't show section 17 here.

Hon. B. Lekstrom: No. I think what you're referring to, Member, when you look under section 16…. You've gone to 243. I think it's what you are referring to. If you carry on in the bill, section 16 is a relative lengthy part of that. You will get to the following section 17.

The Chair: Member, section 17 starts on page 14 of the bill.

H. Bains: Thank you, hon. Chair. All right.

Can the minister advise the House how the minister will decide what the ticketed amount would be? What criteria are being used? Is there a set of principles that he will be guided by when the minister drafts up these bylaws?

The Chair: Member, for my clarification, are you now
[ Page 12556 ]
debating section 16?

H. Bains: Section 1.

Hon. B. Lekstrom: The amount will be the same as what it is today. That's the transitional part. We will get it in. Then they will be able to review and make any changes that they so wish in the future. But you do need a transitional bylaw in order for them to implement this as soon as we are able to pass this bill and get on with what has to be done.

H. Bains: When the minister says the amount will be what exists today, is that $173? Can the minister confirm that?

Hon. B. Lekstrom: Yes, it will be, Member — $173.

H. Bains: It says: "(a) the amount of the fine established in relation to the infraction by the fare collection bylaw." Then it goes on to: "(b) any charges payable in conjunction with the fine amount." Can the minister explain what those charges payable in conjunction with the fine amount are?

Hon. B. Lekstrom: Member, it would be such things as late charges, for example, very similar to most ticketed offences that you see whether you're here in British Columbia or elsewhere. If you receive a ticket, there will be something…. If you pay it by this time, the amount is this. If you fail to pay it, there would be an increased charge. Those are the charges that are being referred to there.

H. Bains: There are charges payable. Then it goes on to say: "(c) any surcharges payable…." Perhaps the minister can explain what the surcharges are. Also, while we're at it, if the minister can confirm the charges and surcharges. Once the minister gives us that explanation, will they be the existing amounts? Perhaps the minister could go on record and suggest what those charges and surcharges will be.

[2020]

Hon. B. Lekstrom: You asked on both (a) and (b), charges and surcharges, Member. I'll do my best to explain it this way.

For example, we had talked about the $173. We'll use $173. That will be the charge, for example. I may have been somewhat not correct in my last answer, although it could be if you didn't have a surcharge. For example, the fine is $173. That is the charge, if you pay it then.

But this is an enabling piece. As they develop their bylaw, as well, and go in and put what they want in, it may be that if you don't pay it within a certain amount of time, a surcharge would be added, based on the length of time past the due date of payment of that.

Hopefully that helps clear that up, Member.

H. Bains: The way I read (b), it reads this way: "any charges payable in conjunction with the fine amount." The minister is saying the charge is the fine, if I listen to the minister correctly.

Then what are we saying in this here: "any charges payable in conjunction with the fine amount"?

[2025]

Hon. B. Lekstrom: Member, I'll try this again.

"Any charges payable in conjunction with the fine amount." For example, the fine amount is set by bylaw. An individual has a number of opportunities to pay that through different avenues. One may be through the Internet, for example, that they would pay. There may be no charge payable in conjunction with paying it that way.

But as this is an enabling piece, they may set something up where, say, the fine is X dollars but you come in and engage with staff. It takes some time. They may include an additional charge on that to recoup their costs as well.

Then moving on to (c), which says, "any surcharges payable," that may be the late charge, Member. So you have ten days. Your fine amount is this. If you fail to pay it within that time frame, the fine then goes up to X dollars. That would be the surcharge on top of that.

Hopefully, I'm doing that. It's quite standard language — what's used in documents. But that's the explanation I have for you, Member.

H. Bains: I understand that when you get a ticket, there is a set amount. That's the ticketed amount. I get that. Then there are charges, and then there are surcharges. So the charges…. That is related to what? Is that related to that because they failed to pay by a certain date? And surcharges are that they pay after a further certain date? Are there two different dates?

I think that's where the confusion is. The way I see it, if there is a ticket issued, you know what the amount is. Sometimes there is a discount if you pay prior to a certain date. If you don't pay by that date, there is that ticket amount. Then if you don't pay by a certain date, there are the charges on top of that.

But then the minister is suggesting that there are surcharges on top of that. Is that going to be their cost, adding onto collection? That's what I'm not getting. What is the difference between charges and surcharges?

Hon. B. Lekstrom: I will do this again. The surcharge would be a late charge, Member. I think we can get to that point. The "fine amount" is the fine amount. The "any charges payable in conjunction with" would be, for example, a service fee, a fee to collect, based on what I said — if you pay via the Internet.

I'm using this only as an example. Because that's not
[ Page 12557 ]
what this says. It's an enabling piece.

There may be a collection fee if you walk in and do it in person because it may cost the operation more dollars to actually collect it that way. It's about transparency so that people will know that if the fine amount is X and you pay it this way, that's how much it is. If the fine amount is X and you choose to walk in and deal with it in this fashion, there may be a service fee associated with that. That would be the charge in conjunction with.

H. Bains: Since the minister will be drafting up the initial bylaws, perhaps the minister can guide us and advise this House: what is the minister contemplating — if you pay on line that you pay the ticketed amount?

[2030]

Is that what the minister is suggesting here? That if you go in person, there will be extra charges, or if you pay it by cheque, there are different charges? That's what I'm trying to get the clarification on. What could be a situation…? What is the minister actually contemplating where the charges will be added?

Hon. B. Lekstrom: Member, we will not be using this in the first bylaw. This is an enabling piece. It would allow for the Mayors Council and TransLink, as they develop their bylaws, to utilize this, as I've explained in the past.

We are going to utilize what's existing today. They will then utilize that amount, but should in the future, as I said, there be an enabling piece…. If they would need to use examples such as I've explained earlier, those would be there for them in the piece of legislation as it exists here before us.

H. Bains: I'll move on to the next one. The interest payable — will the minister be determining that in the initial bylaws? Are there any guidelines? What could the interest rate be? How will they determine what the interest rate is going to be?

Hon. B. Lekstrom: Obviously, this is being worked on right now. The bylaw is being developed as part of the work that we're doing on the transition. Prime plus 3 is what some governments use, for example. That would be the interest rate.

That's being worked on right now. There are legalities. You cannot set an exorbitant interest rate, if that's what the member…. Certainly, I would concur if there's a worry that a fine amount would be set and then an exorbitant interest rate set just to collect extra revenue. That's not the intent of this. This is actually going to be set in a reasonable manner.

I know that the member and I have had many discussions over the years that we've worked together. It will be set. We are working on it right now, but again, there are certain requirements that you have to meet. Municipalities do their work as well. I know that the member is aware of that.

Sections 1 to 3 inclusive approved.

On section 4.

H. Bains: Perhaps the minister can tell us what does section 4 mean in the scheme of things as far as the South Coast British Columbia Transportation Authority Act is concerned?

[2035]

Hon. B. Lekstrom: This makes it an offence to obstruct or interfere with a performance auditor appointed under section 227.

H. Bains: The way it reads is: "Section 45.1 (1) (c) is amended by striking out 'the commissioner or any inspector' and substituting 'the commissioner, an inspector, or a performance auditor within the meaning of section 227.1.'"

Is the minister suggesting that this is an additional body that is being considered in addition to the commissioner or the inspector? Now there could be a performance auditor, as per the section further down.

Hon. B. Lekstrom: Yes, we are adding performance auditor to that.

Section 4 approved.

On section 5.

H. Bains: Section 5 is the amendment to section 170 of the existing act. It adds "appointed director," but previously in 170 it has "eligible individuals." Can the minister explain what the difference is? What was the need for changing the name or calling it appointed director versus eligible individual?

Hon. B. Lekstrom: Appointed directors are the existing nine directors on the board now, as appointed by the Mayors Council. A statutory director is the chair and the vice-chair of the Mayors Council.

H. Bains: No, my question was that if you compare the existing 170, the definition in there says, "'eligible individual' means an individual who (a) is not an employee," and it goes on to describe what the eligible individual is.

It's being amended to add "appointed director." That's what I'm looking at in section 170 here, which only talks about the eligible individual. Now we are saying "appointed director" and "statutory director." What's the difference between appointed director versus what we already have in there, called eligible individual?
[ Page 12558 ]

Hon. B. Lekstrom: Going through this again, "appointed director" was added along with "statutory director" to differentiate. I go back to the explanation. The nine directors today, for example, would be appointed directors. Then the statutory directors. As a result of this bill, we are putting two Mayors Council members onto the board, being statutory positions of the chair and the vice-chair of the Mayors Council. That is the difference in those two, and that is why the explanations are there in the definitions.

Section 5 approved.

On section 6.

[2040]

H. Bains: This section, section 171, is being amended under section 6. It goes through a number of exercises here. Can the minister explain what the intent is behind, say, for example, section 6(a)?

Hon. B. Lekstrom: What this deals with, Member, is…. When you look at it, there was the old structure. Then there was the transition to the structure that operates today, as you read the bill. What this deals with is that now we are moving it to a new structure again, which will add both the chair and the vice-chair of the Mayors Council. That's why those words are in there the way they are.

It deals with from the old to the existing today, under the act when it was changed originally, and now we're moving it again to add the chair and the vice-chair. That's why you will have those wording changes the way they are.

H. Bains: Under that scenario, you have a chair of the Mayors Council elected. And as I notice further down, the vice-chair wasn't, in the previous act, to be an elected position. Now I see in the act that it also is required to be elected.

Since this is new, and it's a change to the existing governance structure, will the mayors decide whether they want to continue on with the existing chair and vice-chair, or can they actually make that decision before the chair and vice-chair are allowed to sit as directors?

Hon. B. Lekstrom: Member, you're correct. Although it wasn't in the act before, as I think the member is aware, the Mayors Council does both elect the chair and elect the vice-chair. Because of the addition that we're adding to the board, being the chair and the vice-chair, we are now saying in the legislation that you have to elect that. It's just confirming their practice that they do today.

[2045]

You've asked: "Will that mean that the chair today and the vice-chair today would sit on the board?" Yes, they would. They will actually, each and every year — I think it's December of this year — be electing a chair and a vice-chair again, at which time the members of the Mayors Council will make their determinations on who they would like to be their chair and vice-chair.

H. Bains: As the bill actually contemplated, there will be remuneration for these two positions, chair and vice-chair, which didn't exist before. So the chair and vice-chair were elected under those premises. Is the minister saying that the Mayors Council does not have the right to re-elect a chair or vice-chair for this purpose and hold a new election?

Hon. B. Lekstrom: That would be up to the Mayors Council. They would have that full discretion to do so if they wished, or they may choose to wait until the next election, which I believe is December. They would follow the protocol that they've got in place.

J. Trasolini: I'd like to get some clarification on Bill 51, South Coast British Columbia Transportation Authority Amendment Act. Following the question that was posed, when the Mayors Council elects a chair and a vice-chair, up to now there have been certain expectations of those individuals. What I'm hearing, if I'm hearing correctly, is that it would be up to the Mayors Council to affirm or re-elect a new chair and vice-chair. Am I correct with that?

Hon. B. Lekstrom: No, Member, they wouldn't have to reaffirm the chair or the vice-chair's position. That will be up to the Mayors Council. They can do as they choose.

What the Mayors Council has done is they have elected a chair and a vice-chair. I know the member knows this very well. He sat there for many years. With the passage of this bill, it would now mean that the chair and the vice-chair will have a seat at the board of TransLink. As we go forward, they have, really, their option, and it will be up to them.

They elect their chair and vice-chair in December. They will do that. Or the Mayors Council — again, I can't speak for the Mayors Council, Member — may choose a different route, but that would be totally up to the Mayors Council themselves.

J. Trasolini: I would also like to know…. As we know, as the minister knows, the Mayors Council selects appointees for the TransLink board from a list provided to them. They don't just go out and have their own guinea pigs. They have, in fact, a list to choose from.

In preparation for this bill, were the specific councils of cities canvassed? Were their opinions sought? Were the opinions of individual Mayors Council representatives canvassed? How was this arrived at, insofar as what choices were put in front of the minister?
[ Page 12559 ]

Hon. B. Lekstrom: Member, over the last year I've had the opportunity to sit with the Mayors Council and have a number of discussions on a number of issues. What we have done is…. Through those discussions, the issue of governance was discussed numerous times. I made it very clear that I was not there to blow up the governance model of TransLink, although some mayors — and I will certainly speak to this — wanted that done. I made it very clear that I would work to refine the governance structure.

[2050]

In working at that, they felt that they didn't have a voice, or a large enough voice. They didn't have input at the board of directors, for example. As a result of those discussions, I made the determination, with the legislative window that we have before us, to move forward.

I think this is a positive step for the Mayors Council, to put both the chair and vice-chair on the board of directors. I think it will help in many ways. Both the board of directors it will help, as well as the relationship and the dialogue between the board of directors and the Mayors Council themselves.

J. Trasolini: Then I take it that the answer to my question…. Were city councils consulted in any way? And did the Mayors Council take a vote on their submissions? Or was this basically a summation by the minister based on meetings?

Hon. B. Lekstrom: This would be — Member, I'll use your words — a summation by the minister as a result of a number of hours of meeting with the Mayors Council on what I thought would help move to a better governance model and help the Mayors Council achieve what they were after.

H. Bains: Further down here 6(d) reads "by adding the following subsections: (3) An individual who is the chair or vice-chair of the mayors' council on regional transportation is a director of the authority if the individual (a) consents to act as a director of the authority, and (b) has never (i) been removed," and then it goes on to (ii), resigned.

Can the minister explain what is the intent behind here? If the chair or vice-chair do not consent to act as a director, then what choices does the Mayors Council have? Can they appoint one? What's contemplated here?

Hon. B. Lekstrom: The act is very specific. It will be the chair and the vice-chair of the Mayors Council that will have seats at the board table. Should either one of those choose that they didn't want to do it or consent to do it, then that seat would remain empty.

The Chair: Hon. Members, by agreement, I understand there is a deferred division on this section.

On section 7.

H. Bains: "Wherever it appears and substituting 'the number of appointed directors'." What does this mean under section 7? It says: "the number of appointed directors." It is basically taking out the words "the number of directors" to "the number of appointed directors." That's what it is being replaced by. How does that change?

Hon. B. Lekstrom: The difference is because we have moved to both appointed directors and statutory directors. We have added that. So at the minimum, in order for the board to operate, you would need three appointed directors in order for that board to be legally able to operate.

Hon. Chair, noting the hour, I would move that we rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 8:55 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.

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

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

Hon. M. Polak moved adjournment of the House.

Motion approved.

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

The House adjourned at 8:57 p.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of the Whole House

BILL 54 — PROVINCIAL SALES TAX ACT

(continued)

The House in Committee of the Whole (Section A) on Bill 54; D. Black in the chair.

The committee met at 2:51 p.m.

Section 54 approved.
[ Page 12560 ]

On section 55.

B. Ralston: This section is entitled "Tax if property brought into British Columbia from outside Canada." Under section 55(1) there's the procedure to be followed that the person who's bringing in the tangible personal property has to report to a customs officer. Is that required if the person enters indirectly through another province? It says "enters British Columbia" in the text there. Does that require a voluntary reporting to a customs officer if you're not at a federal port of entry?

Hon. K. Falcon: The answer is: this section is applying to those cases where resident British Columbians are coming from outside of Canada into British Columbia. So it's not the interprovincial situation that the member referenced. It's coming from outside of Canada into British Columbia, and of course, we have an agreement with the Canada Border Services Agency which allows them to collect on our behalf the PST that would be owing.

B. Ralston: Just for clarity, then. If you come from outside Canada and you're bringing tangible personal property and you land, say, at an airport in Alberta for a couple of hours, your obligation is to report there and not subsequently in British Columbia. You'd clear customs at that point and engage in the reporting that's prescribed in this subsection. Is that correct?

[1455]

Hon. K. Falcon: I'm advised by staff that at your point of entry, wherever your point of entry is, you are met by customs officials and you have the obligation to declare whatever it is you're bringing in. That's typically the point at which you have your obligation to fill out the form and remit amounts owing with respect to PST.

Now, I do know that if, for example, your point of entry is in Alberta and then you subsequently come to British Columbia, under the current HST agreement they collect the provincial portion of the HST and forward that to us.

We are having to renegotiate the old agreement that we had with the CBSA under the old PST to reflect the new PST. It would be, I think, my reasonable expectation that it would include a similar provision. I'm sure we had that same provision before. So it would, I believe, Member, cover off that circumstance.

B. Ralston: Subsection (2) refers to a postal agent. That's a defined term that we saw in the definitions section. I take it this applies to receiving, typically, a parcel through Canada Post. Maybe if you buy a book or something like that on line, it's delivered to a postal station in British Columbia. It's at that point that the tax becomes due? It seems to be self-evident, but perhaps the minister can just confirm that.

Hon. K. Falcon: The member is correct, though books wouldn't be a good example because they're PST-exempt, and they're also HST-exempt, actually. But yes, the principle of what you're saying is correct.

B. Ralston: I think it's been my experience…. Perhaps there are other customs duties that are assessed on books, then.

Subsection (4) refers to an agreement that might be enforced between the Minister of National Revenue for Canada and the Canada Post Corp. Is that an agreement of the type that the minister was referring to earlier, or is this a separate type?

Hon. K. Falcon: That is referring to the agreement that we're currently negotiating with Revenue Canada.

Section 55 approved.

On section 56.

B. Ralston: This refers to the detention of tangible personal property where there's a failure to comply with the previous section. In that case there's reference to a collection agent. That is, of course, a defined term, I believe. Yes, a collection agent. The definition includes a customs officer.

Is there any other person who would be designated? I believe that in the definition there's a possibility of designating someone else as a postal agent, as a collection agent. Can the minister explain how that section would work if it weren't a customs agent who did the detention?

Hon. K. Falcon: It would be a customs officer, or it would be Canada Post.

B. Ralston: There's a time limit on a disposition. When it says that "the tangible personal property is forfeited to the government" in (b), does that mean the provincial government or to the federal government?

[1500]

Hon. K. Falcon: That would be the provincial government.

B. Ralston: Is the method by which the forfeiture of property that's forfeited in this way and the disposition by the director to be ordinarily dealt with by regulation? Or how is it dealt with otherwise?

Hon. K. Falcon: It's exactly the same as it was in the end of the old Social Service Tax Act, though it is extremely rarely — I don't want to say if ever — invoked. But it's extremely rare. It's there, I guess, to cover off that potential eventuality.
[ Page 12561 ]

Section 56 approved.

On section 57.

B. Ralston: It would appear from reading this section that in the event of a dispute, the obligation is to pay and then attempt through a process to make the case through a designated procedure and, if a refund is due, to receive it that way rather than have the goods detained and, I suppose, pay for them later. Is that the intention of this section?

Hon. K. Falcon: That is correct. It's the same as it was before.

Sections 57 and 58 approved.

On section 59.

B. Ralston: This deals with the problems or challenges that may arise in assessing tax on conveyances used interjurisdictionally. There's a definition section here. Can the minister advise if there's any change in the definitions from the Social Service Tax Act?

Hon. K. Falcon: I'm advised that they're substantially the same.

B. Ralston: The definition of "interjurisdictional aircraft." It says in (a) used for commercial purposes and in (b) in eligible flights. Would those eligible flights…? There's also a definition of that. Does that include private flights in the sense of non-commercial flights?

Hon. K. Falcon: The best way to read those is under "eligible flights," when they are speaking in relation to interjurisdictional aircraft. You actually read that with the next one down below, "'interjurisdictional aircraft' means an aircraft used (a) interprovincially or internationally for commercial purposes," so you read those together. It's for commercial purposes.

B. Ralston: I thank the minister for that interpretation. So the "and" there is to be read conjunctively rather than disjunctively, I guess. Wouldn't it be clearer just to have inserted "in eligible flights for commercial purposes"? It seems that by mentioning it in one and not in the other, there may be a problem in interpretation. At least, that's certainly a possibility.

Hon. K. Falcon: I generally, in these kinds of things…. Legislative drafting spends a fair bit of time on them, so I take some comfort in that. But we can check back with them if the member wishes to see if they're comfortable with the use of the word "and" — whether that is necessary or not.

[1505]

D. Donaldson: I'm quite interested in this section as it pertains to the interjurisdictional railway rolling stock, which has some implications, especially in the north.

The definition here — would that apply to, for instance, CN as well as CP? Is that railway rolling stock just interprovincially? If the railway rolling stock came from another province and then was used, for instance, from the coal beds in the northeast to the Port of Prince Rupert, would that fall under this definition?

Hon. K. Falcon: As the member described in the example, if it's coal from the northeast going to Prince Rupert that's being used within the province, that's not interjurisdictionally, so that wouldn't, obviously, capture any of the tax issues.

In the next section it talks about how the tax is calculated based on what portion is interprovincial and interjurisdictional. There's a formula that sort of sets out what usage is domestic and what usage is international, etc., to determine what tax obligation would be required.

B. Ralston: Well, once again, then, to just follow on what the member for Stikine has said. Given that there is no provincial sales tax in Alberta, is there any interjurisdictional railway rolling stock that's bought in British Columbia, or is it all purchased in Alberta?

[1510]

Hon. K. Falcon: Best to use an example, I think, on some of this stuff because it gets confusing. For the sake of argument, following the member opposite's example, if you're a railway and you buy a railway car and you bring that car into British Columbia and that railway car is going to be used just within British Columbia, travelling back and forth within the provincial boundaries, then that would be subject to the PST tax. That taxing authority is provided under section 49, a previous section that we just covered.

Now, using the same example, you buy that railway car in Alberta and you bring it into the province, but it is being used not only within the province. It is hitting Alberta. It's going down to Chicago. It's kind of moving around interjurisdictionally. Then this section would apply to that railway car in terms of how you calculate the PST portion.

I think that's the easiest way to explain and understand that. It took me a few minutes of just going back and forth.

Section 59 approved.

On section 60.

D. Donaldson: I appreciate the information. I'm very
[ Page 12562 ]
interested in the rolling stock, again, from the importance of it in the province as far as the transportation system goes. Subsection 60(1)(a)(ii), for instance. Could the minister provide a little bit of context around how large an issue this is taxation-wise — what it has been, for instance, in the past? I'm just trying to get a sense of how much rolling stock is purchased in B.C.

Hon. K. Falcon: This approach that we're discussing here is the same as it was under the old Social Service Tax Act. I understand where the member is coming from, because you're trying to know how it impacts a growing and expanding port terminal that we're all very supportive of, obviously.

The only negative, really, would be the negative cost to the railways because they no longer have the input tax credit that they had under the HST. That really would be the major differential here. They now have to eat that cost under the PST. But how it is treated in terms of calculating the tax is the same as it was under the old system. It's the same under this system and is apparently, I'm advised, pretty widely accepted as the appropriate practice for apportioning it.

D. Donaldson: If the minister could supply the information he may have on a percentage of rolling stock that is purchased in B.C. — the overall kind of question — that would be helpful. If you can't supply it now, at a later date is fine.

[1515]

The question I have on subsection 60(2) is: is this the same formula as existed before under the previous act?

Hon. K. Falcon: The last point is the one we talked about, so it is the same as before.

On the first point, in terms of where the railway has purchased the rolling stock, off the top of my head, I don't recall. I'm not sure that we're…. My recollection is that we're not manufacturers of rolling stock in B.C. per se. But I know that CN made a substantial multi-million-dollar investment in Prince George, I believe, for a lot of the work that's done on maintaining railway stock.

My suspicion is that the actual manufacture of rail cars takes place in the United States, to the best of my recollection from my days in Transportation. The railways would be able to supply that information to us pretty easily, or even the Ministry of Transportation. You could probably just contact them by e-mail, and they'll probably know a lot better.

D. Donaldson: Under section 60, I'm interested in the tax applying, again, to rolling stock. I'm assuming this is rolling stock that's used interprovincially. Would that be absolutely new rolling stock? Oftentimes, I know…. In fact, I have friends who work in that sector of the industry and that replace the undercarriage, for instance — the wheels on a container. Would that, then, make this section 60 applicable?

Hon. K. Falcon: I'm advised that the act does not distinguish between new and used material, so if they're buying railway stock, parts or equipment to refurbish an existing car, then PST would still apply.

B. Ralston: Continuing on the same section, the formula talks about calculating, for aircraft, the number of hours "in the airspace over British Columbia," and presumably there's a requirement to keep a fairly accurate log of aircraft hours.

In relation to railway rolling stock, it talks about "the distance the conveyance will travel." Is that a question of self-reporting, in terms of the railway and their calculation of the tax that might be due, and is there any public access to that calculation?

Hon. K. Falcon: Again, we're following the same procedure that was in place under the old PST, so nothing has changed here. Apparently, the companies, in the case of railways, would make an estimate at the beginning of the year. Then at the end of the year they would make an adjustment based on what the actual usage was. And of course, we retain the ability to audit that information too.

Section 60 approved.

On section 61.

[1520]

D. Donaldson: This is "Tax if sale and lease-back of conveyance." Again, a question to the minister, on section 61, about how widespread this tax has been in the previous incarnation: would the minister have examples of companies that lease new rolling stock from companies such as CN or CP? Is that what this section is meant to capture?

Hon. K. Falcon: This is, I'm advised, something that the railways would have to self-assess. So if they entered into an arrangement where they purchased a whole bunch of rolling stock and then immediately leased it back, maybe for the purposes of having maintenance taken care of by the lessor so that they just get the benefit of using the rolling stock, etc., they would be required to report on that.

From the tax point of view, it applies whether…. That's all this is saying: that if you arrange a situation like that, there's still going to be tax applied if it is a situation where you're conveyancing to the lessor under a sale and immediate leaseback arrangement.

D. Donaldson: Thanks to the minister for that. As he said before, giving examples sometimes helps clarify it.
[ Page 12563 ]

Interjection.

D. Donaldson: No, that's all right. I'm going to give you an example. Suppose the Port of Prince Rupert was finding that they needed more rolling stock to handle the increased business at the port and decided to take the route of leasing that stock and bringing it in from another province in order to augment the transportation of whatever it might be — coal or potash or other products. Would that be a taxable transaction under this section 61?

Hon. K. Falcon: I thank the member and apologize for taking some time here.

What the member is referring to would actually be the next section. This is just referring to the very unique and rather rare cases of immediate sale and leaseback arrangements. The next section would actually capture what the member is talking about.

[1525]

In the case of the Port of Prince Rupert — and I just confirmed this — we're almost certain that, because they come under the federal port authority jurisdiction, they would be exempt from PST obligations in the case of them purchasing additional rail stock or leasing additional rail stock. To the best of our knowledge here, we think they would be exempt anyhow.

Generally speaking, if we weren't talking about that kind of unique circumstance, if you're buying stock that you're bringing into the province and you're using in the province, you are going to have PST applied.

B. Ralston: I'm looking at the formula that's set out in section (3) and comparing that to what I think is the previous section. Section 22, I believe, is the correct section. Oh, pardon me. It relates to a multijurisdictional vehicle. Is that the same formula? It looks as though it's expressed perhaps a bit more clearly in the sense of the single line with tax and then the equal sign, which may make it easier to understand. Other than that, it looks to be the same. Can the minister just confirm that the calculation of the formula is the same?

Hon. K. Falcon: Again, this is the same as it was under the old PST. What is slightly different that the member is picking up from the prior approach is that in this case you pay the estimated amount on your purchase or your lease but you may need to pay more — and this is what this is allowing for — if the cost is more than is estimated under the lease arrangement.

You will recall, in a previous discussion, we talked about how your costs in a lease arrangement could end up being more, so this allows for the additional top-up provision that may have to be made or could potentially be made under a lease arrangement.

Section 61 approved.

On section 62.

D. Donaldson: Again, I'm curious if the minister could provide some context here under section 62 — for instance, section (1)(b): "a lessee who (i) leases, in or outside British Columbia, any railway rolling stock, and (ii) uses, during a rental period under the lease, the railway rolling stock as interjurisdictional railway rolling stock."

Can the minister enlighten us as to the type of revenue that was generated in the previous incarnation of this PST tax so that we have a better idea of exactly how significant this arrangement is?

[1530]

Hon. K. Falcon: This section, again, replicates what was there before. In our tax revenues we don't have the ability to know what sort of amount came from a specific subsection of the revenue generation within the tax group. Certainly, we don't have that information from several years ago, so it is difficult to know what the amounts might be under this arrangement.

Again, the lessee, or the railway operators, would be self-reporting. So they would be under an obligation, as our entire tax system is based on the principle of people, obviously, voluntarily complying with our tax codes. They would be required to self-report, provide that information and make any adjustments if necessary, but they would have to pay tax. Whatever they may have paid in the past, they'll start paying again in the future.

Again, the only difference is that under the HST they would be able to get that money back through the input tax credits, so there would be no cost to them. Under the PST, they won't be able to get that back. It will be an additional cost to the railways. I can't quantify how much that cost is, though, because I just don't know.

D. Donaldson: There is a formula in section 62, so I would gather that the companies under which this section applies — and have applied in the past — would be using that formula. When it gets into the realm of reporting to government, am I taking from the minister that that's something that's not able to be tracked, as far as you know?

Hon. K. Falcon: The real challenge here…. First of all, there is the obvious one about the confidentiality requirement for companies' taxes. For any person, whether a corporation or an individual, we're not allowed to just sort of get their information and start putting it out there to people. On that basis alone, that would be a challenge.

The second thing is that any major company that is involved in the business, whether it is BNSF, CN, CP Rail…. The amount of taxes they pay is enormous — right? They wouldn't just be doing…. This would be one calculation they would do dealing with rolling stock, if by chance they were buying some rolling stock for their railway, but
[ Page 12564 ]
they will be buying computers, pens and pencils, paper, and just a whole raft of things that will attract various taxes in the province.

Even if we really wish to sort of drill down to try and figure out what part of their tax return involved the self-reporting component that took this formula and applied it to rolling stock they purchased, it would be quite a sleuthing effort in itself.

I think we just try to stay at the level of…. It's the same as it was before, so they'll be familiar with how the percentage works. In fact, under HST, I imagine there are probably some similarities in the formula, in terms of how they calculate. Hard to say. Maybe I won't say that, then.

But what I will say is that the key difference is that whatever cost they had under HST, they got that back through the input tax credits. I emphasize because I think that's the important distinction. They do not get that back under the PST, so that is an additional cost — one of the reasons why the railways were part of the groups that were arguing and hoping we wouldn't move back to the PST, for obvious reasons on their part.

B. Ralston: We're going to deal with the issue of exemptions which will be brought in by regulation later on, but can the minister say at this point whether railway rolling stock, if purchased in British Columbia or brought into British Columbia, would be subject to the PST? Would it not be considered as machinery and equipment? That's the first question.

The second question is…. Given what the minister has said about the difficulty of estimating what tax, PST, would flow from this, I'm wondering, then, how the budget estimate of over $6 billion in revenue is aggregated.

Surely, that figure is the sum of its parts, so there must be some effort — I'm not sure; maybe what the minister means is not at this specific level of detail — in order to bring forward a valid estimate. Certainly, I'm sure the Financial Administration Act and the Treasury Board rules would require some process to go through in order to arrive at estimates for revenue.

[1535]

I'm wondering if the minister could respond with a bit more detail on how this piece, as an example, would fit into the overall estimate of government revenue from this tax source — which, as he's well aware, is a huge source of revenue for the government.

Hon. K. Falcon: So to the second point first. As a government, when you're looking at tax revenues associated with specific taxes, etc., we virtually always are looking at the larger aggregate level. So we look at things like levels of consumer spending, what GDP growth estimates are, historical expenditure patterns. That is, generally, how you come up with your estimates.

If you look at a tax change specific to an industry sector, you would be able to get some numbers based on the industry sector. To the best of our knowledge, we never actually go down to an individual sort of company level and try and understand what it means to that specific individual company.

To the first point that you raised about exempting railway cars, I think it's important to recognize that it is not covered under the machinery and equipment exemption because this is not equipment that is being used in the course of manufacturing products. So it is not covered under that. Just as it wasn't under the old PST, it will not be under the new PST.

Again, it was even covered and taxable under the HST, the big difference being that they're no longer entitled to receive those dollars back through the input tax credits that existed under the old HST that do not exist under the PST.

B. Ralston: If the railcars were manufactured outside British Columbia, say in Alberta or the United States, would HST input credits be available? That would be the first question. Secondly, I wasn't asking about taking revenue estimates down to the individual company level. I was simply speaking of the sections of the bill.

Obviously, there's division 6, "Conveyances Used Interjurisdictionally." Is there a level of aggregating, estimating revenue? The minister said, as I recall, that previous records prior to the introduction of the HST weren't available or weren't going to be used. I'm wondering how those estimates are derived.

[1540]

I understand looking at the economy broadly, but when you have more specific data and given what software can do. All of these transactions are reported. So I'm just wondering what role looking at individual areas of revenue within the tax plays in generating an overall number.

Hon. K. Falcon: To the first question first. Under the HST, if a railway is purchasing cars from outside of British Columbia, whether from Alberta or the United States, they would pay HST under the federal rules, which may differ slightly from all the rules we're talking about here. I'm just not familiar with the rules in terms of what percentage based on usage and domestically, internationally, multi-jurisdictionally, etc., but the point is that they would pay it, and of course, they would get it back under the input tax credits. So whatever they pay, they would receive back.

Under the provincial application of the PST, which I am knowledgable about in terms of how we apportion those costs, they would pay the PST. They would not get it back. So that is the difference between a value-added consumption tax and a retail sales tax. So that's No. 1.

No. 2, in terms of fancy software, etc., being able to
[ Page 12565 ]
tell us what bit is coming from this particular element in a railway company, we actually don't have that ability. What happens is that the companies will….

[1545]

In this case, they're self-assessing. They're looking at what they're actually doing and what rail stock they're purchasing, etc., and how it's being used multi-jurisdictionally. They are applying the formulas, and they are making their payment. That payment comes in with all the other PST they'll be paying on their pens, pencils, computers and whatever else is captured under the PST. That as an aggregate is sent in to the province, and then the province of British Columbia knows that this railway paid that much PST, etc.

We of course have the ability to go in and audit, and in the course of an audit, they may drill down to this level if they felt that there was some red flag associated with how they were doing their self-assessments. But it is not, as I'm advised…. When they send their PST remittances to us, they're not broken up at a level that allows you to determine what, specifically, it would be for this portion.

D. Donaldson: On section 62(3) there's a formula around how the tax is calculated for a conveyance leased in British Columbia. Is this the same formula as was in the previous act?

Hon. K. Falcon: Yes, it is.

Section 62 approved.

On section 63.

D. Donaldson: I'm looking for some clarification from the minister on this section. Overall, this division is called "Conveyances Used Interjurisdictionally." This section seems to pertain to tax if a conveyance is brought into and then strictly used in British Columbia. It's not used interjurisdictionally, from what I can gather. Would the minister elaborate on that section?

Hon. K. Falcon: The answer is yes. If they bring it in interjurisdictionally under the "taxable conveyance" definition, the same formula would apply — the same formula as applied in the past.

Just a couple of pages prior, right at the top of section 60, is the definition of "taxable conveyance," which refers back to the interjurisdictional aircraft, interjurisdictional railway rolling stock, interjurisdictional conveyance, etc.

D. Donaldson: In section 63 a company has brought rolling stock. Let's use rolling stock, because it seems to be something I'm quite interested in. They buy rolling stock from outside of B.C. They bring it into B.C. They then use it in B.C. to transport goods — let's say coal. That's where section 63 applies.

In a previous section that we talked about, they buy the rolling stock, they bring it into B.C., and then they transport goods across provincial boundaries, for instance. That's what, I understand, the previous section dealt with. It's the same formula, I note, in this section 63 as in previous sections. Am I to take that as a sign that under this act the government doesn't consider any tax differentiation from those two situations I described?

[1550]

Hon. K. Falcon: To the member's second point first, it makes no difference where you acquire it, in terms of your tax obligation. So whether it's in B.C. or out of B.C., you still have the tax obligation.

In terms of the example that the member gave of bringing something in from outside of the province to be used specifically just within the province, this section is actually still applying only to goods that are used interjurisdictionally. I referred back to the "taxable conveyance" definition, which is talking about interjurisdictional use.

The section that the member is referring to would actually be section 49, which is a prior section which referred to goods brought into the province from outside of the province that are just being used within the province of B.C.

D. Donaldson: I have a question about this section that may reference a previous section, but it pertains to this section, fundamentally. I'm curious about consistency. The example I'll give is rolling stock purchased for interjurisdictional use. From the previous answers of the minister, I understand that the taxation would depend on how much use that stock is in B.C. versus how much use outside of B.C., which wouldn't be covered under the act. That's the formula, from what I can understand.

Would the same apply to transport trucks, for instance?

Hon. K. Falcon: "Taxable conveyance" — again, the definition is right above 60 — specifically does not include vehicles. That section is upcoming. So we will come to that.

B. Ralston: In the calculation of the formula the words used in connection with aircraft are "will fly." And for rolling stock it's "the distance the conveyance will travel." The tax is based on an estimate of the usage within the province that will take place or is estimated to take place over the one year — the date of entry until the expiration of that year.

It's a self-assessed prospective assessment of the percentage that will take place in British Columbia. And after that, that's paid at the point that the conveyance enters British Columbia. Is that an accurate summary of the way in which the tax is calculated?
[ Page 12566 ]

Hon. K. Falcon: We've got some sections coming up that address this. At the beginning, again, you do your estimate of how much you anticipate flying, and then at the end how much you actually flew. As part of the self-assessment, you can make an adjustment at the end of the year. But again, this wording under this section is exactly as it was under the old Social Service Tax Act.

I mean, it's totally the member opposite's time, so I'm not at all being critical. But if we want to spend a lot of time understanding how the old PST worked, I'm happy to spend that time. As I say, it is your time. I'll leave it at that.

Section 63 approved.

On section 64.

D. Donaldson: Thank you for that, Minister. I'm quite interested in these topics and delving into them.

Section 64 — I'd like to get some explanation. This is "Tax if change in use of conveyance acquired for resale." I'm going to give a scenario, and maybe the minister can tell me if that's an accurate scenario according to this section.

A business decides to purchase rolling stock outside of the province and says it's for resale, and then brings it into the province and uses it as rolling stock. Is that how this tax would apply?

[1555]

I'm curious as to why it is necessary to have a section on resale to define the situation about resale. It seems to me it might be covered already under other sections.

Hon. K. Falcon: Again, it's the same as existed under the old Social Service Tax Act. It's common in tax policy to cover situations where somebody buys something with the intention of reselling it but then decides to keep it and use it for their own use. If they were buying it to be resold, it would not be taxable.

If they're buying it and they decide to keep it, not resell it, then it is taxable. So you have to have a provision like this to cover off situations where that may have happened. Otherwise, you would be in the situation where people would buy things and say they're for resale so that they don't have to pay the tax and, then, just subsequently keep them. If we didn't have a provision like this, then we wouldn't be able to subsequently go after them to ensure they're paying the tax they should have paid.

D. Donaldson: I'm curious as to, again, the consistency of the approach. Buying for resale not taxable — this is to try to capture that situation in section 64 — and yet in vehicle sales, buying for resale is taxable. Is that not correct?

[C. Hansen in the chair.]

Hon. K. Falcon: The new Chair will take great interest in some of the subject areas we're covering, I'm certain.

It is consistent, actually, Member. The key there to understand is: for immediate resale. So you're buying it to resell it.

The best example we gave earlier, when you didn't have the benefit of being with us, is if you're a store that is buying inventory and you're reselling that inventory, you don't pay PST on it. You're bringing it in as inventory with the sole idea that you're reselling it, and the end user subsequently pays for it.

That doesn't change whether it's vehicles or aircraft or rolling stock or anything else. But if you are buying it and then using it, and then you sell it later, that's different because you're now using it. Therefore, you would be subject to the PST.

Sections 64 and 65 approved.

On section 66.

B. Ralston: This is, I believe, the section that the minister was referring to on the adjustment. The previous section required the estimate of either hours or distance the conveyance would travel, and this is the adjustment.

Can the minister explain briefly how this works in the sense that…? And at what point is the tax due? Is it paid based on the estimate and then refunded or rebated if it's due later on? Or is it paid at the end of the one year that's referred to in section 64?

[1600]

Hon. K. Falcon: What this is saying is that they make their…. Let's use rolling stock again as an example, because that's making it easier for all of us to follow.

They purchase rolling stock at some point in the year. Let's say they buy it in September. They're required to pay their tax by the end of the following month. They would make that payment based on their estimate of the PST. So this is that self-assessment portion that we talked about based on what percentage of use is in the province, multijurisdictional, etc.

At the end of that year, a year later, they would then make the adjustment based on what their actual use of the rolling stock was. So if there was a top-up required, then they would be required to make that payment at the end of the month. And if there was a refund owing, then they would be able to submit for a refund to be paid.

B. Ralston: I don't know whether the minister has available to him — or could he provide it later? — any figures or statistics on the percentage of top-ups versus the percentage of refunds applied for.

Hon. K. Falcon: The short answer is no, we don't. Again, when they submit their PST remittances, it's part
[ Page 12567 ]
of one large package. So they may have had a deduction. Say they are owed a refund. Using the example that I used before, they could net that out against the balance of whatever PST they owed. That PST would encompass all of the other things that they're purchasing as a large organization.

That's one element. The second element, of course, is just the issue of the commercial confidentiality of the privacy matters associated with tax returns.

B. Ralston: Have these adjustments ever been subject to any audit by the division of the relevant authority itself or subject to an internal audit by the comptroller general?

Hon. K. Falcon: I'm advised that railways are audited like any other companies that are paying taxes in the province of British Columbia. There are experts within the ministry that make determinations based on requirements to audit, etc. But they will be audited like anyone else.

B. Ralston: Just so I'm clear, I understand that there is jurisdiction to audit. Is the minister saying that there is actual auditing taking place, or is there just jurisdiction to audit? Then the second question was the internal audit by the comptroller general of the activities of the ministry.

[1605]

Hon. K. Falcon: We generally audit large companies on a regular basis in B.C. They kind of have a systemic approach in dealing with larger companies. we can't speak to specific companies — especially in the railway sector because there are only a few of them, so we want to be careful about that — but I think I can safely say that if you're a large company doing business in B.C., you will be audited regularly.

In terms of our audit procedures, we are audited as a ministry annually by the Auditor General, who reviews all of our revenue collection functions. My understanding is that he is satisfied with the revenue collection functions that we have in place.

Sections 66 and 67 approved.

On section 68.

D. Donaldson: I have a couple of questions in this section. Could the minister elaborate on why a trailer isn't covered under this section? Obviously, trailers can be fairly elaborate pieces of equipment. The vehicle does not include a trailer, and then I note that trailer is not included in the definitions in this section.

[1610]

[D. Black in the chair.]

Hon. K. Falcon: The definition of a vehicle under the Motor Vehicle Act includes a trailer, but we exclude it here because trailers, under the multi-jurisdictional vehicles agreement, are exempt.

D. Donaldson: Again, I'm trying to get a handle on what we're talking about in the definitions here. So a vehicle under the Motor Vehicle Act — I assume it includes all types of vehicles, whether they're passenger vehicles or commercial vehicles. If the minister could confirm that?

Then in this section — division 7, "Multijurisdictional Vehicles," section 68 — are we then addressing vehicles that are used, for instance, in B.C., in Alberta-B.C., Washington State–B.C., in the Yukon — those kinds of definitions of multi-jurisdictional?

Hon. K. Falcon: Multi-jurisdictional vehicles are commercial vehicles that are licenced under a prorating agreement under the Commercial Transport Act. Commercial vehicles are typically large trucks that you see on the roadways.

The advantage of them licensing under this prorated agreement is to simplify compliance for these vehicles that operate in more than one jurisdiction. So this is an agreement that applies right across North America. These truckers are often long-haul truckers, so they're interprovincial. They're interstate. They're right across North America.

Vehicles licensed under a prorating agreement primarily only deal with their home jurisdiction rather than having separate compliance obligations in each of the jurisdictions in which they have to operate. As you'll see there in subsection 69(1), it says: "The following persons must pay to the government tax, in accordance with this Division, for a vehicle licence period: (a) a person who licenses a vehicle in British Columbia under a licence to which a prorating agreement applies."

B. Ralston: The minister has referenced this in his response just now, but in section 68 there is a definition of the "fleet licence year." Presumably, most vehicles that are operated are required to be licensed. This would pretty well cast a net for all vehicles such as trucks that would travel to other jurisdictions.

Is the reason for that that typically the trucks would be leased, and so the purchase payment would be spread out over the lease term in the way that we described earlier in previous sections? Is that the reason for this and then the subsequent agreement under the Commercial Transportation Act?

[1615]

Hon. K. Falcon: This is again the same as it was under the old Social Service Tax Act or the old PST act. It's an annual tax that is based on the age of the vehicle and the
[ Page 12568 ]
distance travelled. So it doesn't matter how they procured it, whether it's leased or purchased. The annual tax, and it is an annual tax, is based on how old the vehicle is and how far it travels.

All this section is saying is that if you have multiple vehicles in a fleet, this allows them all to come up annually at the same time so that they don't have to have 60 different filing periods. They can all come up at the same time.

It also allows the owners of the company to calculate based on the fleet distance travelled. It's under the same approach that we've talked about earlier, where you can estimate up front the likely distance travelled by your entire fleet, and then, of course, at the end of the year you make an adjustment based on what the actual distance travelled was.

B. Ralston: Perhaps I'm not…. As a retail sales tax, I'd understood that it would be assessed on the purchase of the vehicle, or if it's a leased vehicle, the tax on the total lease is grossed up and then there's an allocation for each monthly payment.

Am I understanding correctly that…? The minister has spoken of an annual payment. So regardless of how long the vehicle is on the road — say it's on the road for ten or 15 years — you are paying a portion or a percentage of PST each year? That seems more like a licence to operate or a fee under the Commercial Transport Act. Is that integrated into this tax statute? It doesn't seem to me, at least at first blush, to fit within the broad definition of the tax itself.

Hon. K. Falcon: It's important to emphasize that the multi-jurisdictional vehicle tax is completely separate from the PST. This, again, is under an international arrangement. It allows vehicle owners to not have to pay the PST. In lieu of not having to pay the PST, you can pay this tax over the life of the vehicle.

That is the same as it was under the old PST. It's a big advantage, obviously, for the trucking sector because it allows them to pay the obligation over the life of the vehicle and be part of, as we said, this multi-jurisdictional vehicle agreement. It allows your payment to be made at your home base even though the vehicle is travelling through a whole bunch of other jurisdictions where they will not have to worry, as a result of the agreement, about being captured for tax obligations in those other jurisdictions.

[1620]

B. Ralston: I didn't understand that until that explanation was provided. So I thank the minister for that.

This may be dealt with in section 69, but under the definition of "vehicle taxable value" in section 68, is the tax, if the vehicle is purchased, the same as if it's leased? I expect it would be, but I just want to confirm that.

I suppose, it's paid over the life of the vehicle in the same way if it's purchased as if it is leased. Can the minister just confirm that in the definition of vehicle taxable value?

Hon. K. Falcon: We look at purchase price, or we look at fair market value. You can see that described below, so the member is correct. That's the basis on which the determination is made. Again, I think it is important to say that this is as it was under the old PST.

B. Ralston: This arrangement, then, is unique to multi-jurisdictional vehicles and not to other conveyances or aircraft or anything like that, simply because of the administrative convenience for the vehicles being taxed to be assessed in one jurisdiction and — by agreement, then — avoid the necessity of filing in all other jurisdictions. Is that the reason why? It does seem to be a bit of an unusual way of paying the tax relative to how it's assessed and paid in most other areas of the bill.

Hon. K. Falcon: Yes, the member is correct.

Section 68 approved.

On section 69.

B. Ralston: This is obviously an elaboration of what we've just discussed. The tax rate, then, is set out in subsection (3), and there's a formula to calculate this. This would seem to add up to, potentially — I'm looking at the calculation — if the vehicle is on the road for a number of years, greater than 7 percent. It has its origins in the PST, but it is more an annual use tax, is it not?

Hon. K. Falcon: On the surface it would look that way, but it's important to note that it is based on the travel ratio for the vehicle in B.C. So just that portion of the travel that is in B.C. would then attract these corresponding percentages based on percentage travelled within the province, and then depending on whichever year we're talking about, the percentage that would apply.

B. Ralston: I am, again, interested in the calculation, because in the formula you begin with the value of the vehicle and the rate that's set out in this section, and then there's obviously an adjustment based on which portion is in the province or not. Potentially, then, you would be paying, depending on the life of the vehicle, more than the 7 percent that one would notionally think that you would be paying. Is that not correct?

Hon. K. Falcon: It's important to recognize that in the trucking sector this is seen as a really, really positive thing, but it is voluntary. So if someone owned a truck or a trucking company and decided that they felt that this
[ Page 12569 ]
formula doesn't work to their favour, they certainly have every right to pay the provincial sales tax and proceed under the normal course of events.

[1625]

Evidently, virtually everyone in the trucking sector views this as a far better mechanism because of the fact that it relieves them of any concern about obligations and other jurisdictions. They can pay in their home jurisdiction, and because the formula is based on distance travelled within the province — that ratio of distance travelled within the province over the years that it's on the road — my understanding is they view that as much more beneficial. But again, it is voluntary, so they can choose to be part of it or not. And as I say, it is exactly as it was before.

B. Ralston: I accept what the minister says about the industry view of it. I'm looking at section 69(1). It says: "The following persons must pay to the government…." That sounds mandatory to me rather than voluntary. Is there another formulation that makes it voluntary? Or is it the issue of, in subsequent sections, where the voluntary aspect is set out in the bill?

Hon. K. Falcon: It is voluntary to join the prorate agreement. Once you agree to join the prorate agreement, then of course you have your obligations that are laid out under the agreement.

B. Ralston: This may be in subsequent sections. If you decide not to join a prorate agreement — which I gather, from what the minister has said, is unusual — how would the tax be calculated?

Hon. K. Falcon: You would just pay the PST.

B. Ralston: I'm looking, then, at which…. Is there no section? We'd just revert back to the general principles, then, of the tax being due upon purchase and being in British Columbia and all the usual sort of criteria we've spoken of in earlier sections. Is that the way in which it would be done?

Hon. K. Falcon: Yes.

B. Ralston: The tax rates set out in the formula in subsection (3). Are those the same as they were previously in the social service tax? Are these new formulas, and if so, from what are they derived?

Hon. K. Falcon: They are the same.

Section 69 approved.

On section 70.

B. Ralston: Is this the section that applies in the event that the person is not subject to a prorating agreement?

Hon. K. Falcon: No, this is when they are part of the agreement. It says: "When tax under section 69 must be paid."

Section 70 approved.

On section 71.

B. Ralston: Looking at section 71, then, this is the similar adjustment procedure to what we've spoken of in section 66 previously and looks to be pretty much the same. Can the minister just confirm that?

Hon. K. Falcon: Yes, it is.

Section 71 approved.

On section 72.

B. Ralston: This speaks of tax if the vehicle ceases to be multi-jurisdictional. Can the minister explain how that tax is calculated? Is it if you've been under a prorating agreement that terminates? It refers to 7 percent of the purchase price of the vehicle. Is that 7 percent of the original price? Is there no discount for the age of the vehicle? How does that work?

Hon. K. Falcon: That would be 7 percent of the depreciated value of the vehicle. But you can see further down that they would also receive a credit in relation to the tax paid under one or both of the sections, of 69 and 71, for their previous vehicle licence period, if they are indeed entitled to one.

[1630]

B. Ralston: The section says clearly the purchase price, not the depreciated price. I'm looking at the definition of "purchase price." I don't believe, unless I'm mistaken, that that's included in that. It might be a discount that's under section 9. Does that perhaps refer to a discount — section 9(e)? Is that what the minister is referring to?

Hon. K. Falcon: Yes, it is.

Section 72 approved.

On section 73.

B. Ralston: This refers to the liability of what are described as "other persons." Those would be natural persons and corporate persons. Can the minister explain briefly the purpose of that section?
[ Page 12570 ]

Hon. K. Falcon: The definition of "person" is the definition that's utilized under the Interpretation Act.

What this section is trying to get at is that a person may be the owner of the truck but is not the actual driver with day-to-day responsibility for the truck. What this is just saying is that they will not have the ability to shirk their responsibility by saying: "Well gee, I don't drive the truck. I just own the truck." This is making clear that there are joint and several liability obligations.

Section 73 approved.

On section 74.

B. Ralston: This section refers to the change of fleet licensing. Is that a change without a transfer of ownership, or is the transfer of ownership implied by the change of fleet licensing?

Hon. K. Falcon: This is the situation where a person has more than one fleet and vehicles may be moving back and forth between fleets but ownership itself does not change.

Sections 74 and 75 approved.

On section 76.

B. Ralston: This speaks of a refund or credit for trade-in vehicles, and this would apply to multi-jurisdictional vehicles. Can the minister explain how the refund or credit works? It would seem to be similar to what applies for vehicles simpliciter — that is, non-multi-jurisdictional vehicles. But perhaps the minister can confirm that.

Hon. K. Falcon: The member is correct. It is the same as it was under the old Social Service Tax Act, and he has described that correctly.

Section 76 approved.

On section 77.

B. Ralston: This refers to a refund for replacement vehicles. This appears to speak of a temporary replacement while another vehicle is engaged in repairs. Is that the activity that this section is intended to capture?

[1635]

Hon. K. Falcon: Yes, it is the same as it was in the old PST act.

Section 77 approved.

On section 78.

B. Ralston: The term here is referred to as "short term rental vehicles." These are non-multi-jurisdictional vehicles? Or is it specific to multi-jurisdictional vehicles that are also short-term rental vehicles? I suppose if you go to a rent-a-car agency and you travel to Washington or to Alberta, it would fall within the ambit of this section.

Hon. K. Falcon: These are multi-jurisdictional vehicles, but they're rented for short-term periods. This would be like U-Haul trucks, for example — that would be the most common one I could think of — the kinds of vehicles that are multi-jurisdictional in terms of their travel but are typically rented for short-term periods.

Section 78 approved.

On section 79.

B. Ralston: We're entering division 8, "Affixed Machinery and Improvements to Real Property." There's an exemption from tax that is set out in 79(1). Can the minister explain briefly the reason for that exemption?

Hon. K. Falcon: The default situation is that the contractor is the purchaser that would be responsible for paying the tax. But what happens is…. If you look at subsection (c) down below, it essentially is saying that where there is an agreement, though, between a contractor and a person with whom the contractor has entered into a contract that will allow that person to actually pay the PST, that is allowed.

B. Ralston: Subsection (2) appears to be a variant of the same principle but applies to tangible property that's brought into British Columbia as opposed to being purchased in British Columbia at the outset. Can the minister confirm that?

Hon. K. Falcon: Yes, that is correct. It's the same situation that we talked about under definitions.

Sections 79 and 80 approved.

On section 81.

B. Ralston: This refers to tax if there's a change in use of the property acquired for resale. Can the minister explain how the change in use of property is determined? Is that a self-assessment subject to audit, as it is in other parts of the act? Or is there any special formula that applies in this case?

Hon. K. Falcon: It is based on self-assessment, subject to audit.

Section 81 approved.
[ Page 12571 ]

On section 82.

B. Ralston: This refers to tax if property acquired for a new purpose. There is an exemption that's set out in subsection (2) that relieves a person of an obligation to conform to subsection (1). Can the minister explain the purpose of that exemption?

[1640]

Hon. K. Falcon: This is a sort of special benefit for companies that have occasion to…. It's where they are providing a property with a person to operate it — typically, some form of equipment. They've got a person to operate it, and they're renting it out for a short period of time. The intention here is to ensure that that doesn't attract PST.

If my historical memory is correct, this was one of the inane complexities of the tax that used to drive people crazy. They would be taking a piece of equipment, renting it to someone and providing the operator, and then we would be dinging them for PST, even though it was for a short-term period. This, understandably, made people crazy. It's one of the other reasons why they hated the PST. Nevertheless….

This was brought in place to try and deal with those situations so that we are not capturing situations where somebody is just renting a piece of equipment with the operator to do some work and then bringing it back to their yard. We're ensuring it doesn't engender the PST applying.

B. Ralston: I thank the minister for that explanation. It's good to know that there was a legislative solution for that problem. The operative principle, though, if we contrast it with what's to come in section 83, would appear to be where it remains "capitalized as lease inventory in the person's business accounting records." That would capture the situation that the minister is speaking of.

The subsequent section is where, obviously, the person is, according to the language, no longer capitalizing that property as lease inventory, and that would attract a different treatment. Perhaps we can deal with it now or deal with it in section 83.

Hon. K. Falcon: That is correct.

Section 82 approved.

On section 83.

B. Ralston: Then, just to recapitulate, this is a different situation from what the minister spoke of in section 82. This is where it's taken out of the lease inventory of the person, obviously, for a longer term than the short-term use that the minister referred to in his previous example under section 82. Is that correct?

[1645]

Hon. K. Falcon: I think I've almost forgotten the question now, but I am confirming, I believe, what the member said, which is, yes, in the scenario where the company is now doing this, it's not occasional use anymore. They are now providing, in the case of the last example, operators every time as part of their service. Then in that case, the company would be required to pay government tax on the purchase price of the new property.

Section 83 approved.

On section 84.

B. Ralston: This section is a reference to a change in use of tangible personal property that's processed or fabricated or manufactured into, attached to or incorporated into. There is a requirement to pay tax. Can the minister perhaps give an example of a situation under which this would attract tax in the way this section sets out?

Hon. K. Falcon: By way of example, this would be a case where you buy labels with the intention of attaching them to sellable products that you had planned on selling. You subsequently now decide you want to keep those products and not sell them, and you want to retain those products. Then it would become taxable. Those labels which you had purchased on a tax-exempt basis because they were being used to attach to tangible goods that you were selling — now that you've decided to keep those tangible goods, you would owe tax on the labels.

B. Ralston: I thank the minister for that example. Clearly, it's not intended to apply only to the question of labels because it refers to "processed, fabricated or manufactured into." There's activity in terms of transforming the initial property further than simply creating a label.

I appreciate that the minister gave the first one as an example, but I just wanted to be sure of the breadth of the application of this section.

Hon. K. Falcon: Again, this is part of the joy of a retail sales tax. You would just change up the example a little bit.

If you bought parts for something that you were going to use to fabricate or manufacture into things — tangible personal property that was going to be sold — but for whatever reason you subsequently decided to keep that tangible personal property — decided to retain them, not sell them — then you would lose your tax-exempt status on the parts that you had purchased for these things. You would then have to be subject to paying the tax on them, and that's what this section is covering off.

Section 84 approved.
[ Page 12572 ]

On section 85.

[1650]

B. Ralston: "Prototype" is a defined term in the definitions section. I'm not sure I have specific questions about it, but I think it's fairly self-evident from the description there: "the first full-scale functional form of a new type or a new construction," but does not include software. Other than for greater certainty, is there anything different about this section in its choice of prototype as opposed to the subsequent sections — in particular, section 82?

Hon. K. Falcon: There are certain exemptions available for prototypes. This is consistent with the other sections. It is just saying that if you then change the use in which that prototype is now applying, that would result in it having a different use. Then you would be required to pay the PST, of which you were originally exempted, because of its use as a prototype, as defined under the act.

B. Ralston: Looking at section 141(1)(d) and (e), is that what's being referred to as…? That section is headed "Exemptions in relation to industry and commerce," so this is one of the broad exemptions that exist in section 141. Is that correct? Therefore, it's referred to in section 85.

Hon. K. Falcon: That is correct. Subsections (d) to (f) make reference to the prototype.

Section 85 approved.

On section 86.

B. Ralston: This refers to refunds under taxation agreement. There is reference to the Nisga'a Nation taxation agreement and the treaty First Nation tax agreement. I think the ordinary principle of the provincial sales tax — and this has been litigated — is that it doesn't apply on Indian reserves.

The exception to that would be these taxation agreements. I think as part of the Nisga'a First Nation historic agreement, it was agreed that ultimately the jurisdiction of the provincial sales tax or any subsequent variation was being agreed to at a…. I think there was a delay before it came into effect. Is that what's being referred to here?

Hon. K. Falcon: This is as it was before. They have an arrangement, as the member pointed out, under the Nisga'a agreement where they assume the obligation to pay tax. This is just saying that if they change the use of the tangible personal property that then would capture the tax, they must pay it.

B. Ralston: Section 156, in the brackets, says: "refund in accordance with treaty first nation tax treatment agreement." That would be any subsequent agreements of a type similar to the Nisga'a agreement that would be in agreement to cede jurisdiction to the province to assess and collect provincial sales tax. Is that right?

[1655]

Hon. K. Falcon: Yes, there are several treaties arrangements that we have entered into.

Section 86 approved.

On section 87.

B. Ralston: This refers to what is called "recording exhibited." I believe that's a recording of a motion picture. I believe there's an initial exemption that's referred to in section 143(b)(ii), which I'm trying to quickly refresh my memory as to — exemptions for public broadcast, public exhibition or sale or lease. I believe it's only public exhibition in a movie theatre.

Can the minister then explain…? Initially, it's exempt from tax. What's the process by which it no longer enjoys the exemption?

Hon. K. Falcon: This is just saying that under subsection (1)(b) if you are…. In the case of subsection (a), under 143(b), which is the provision that provides an exemption when you're making copies of movies, if you subsequently under subsection (b), in addition to making copies, are now exhibiting the motion picture in a movie theatre or other public venue, then you would attract the tax that is payable.

B. Ralston: Is the tax then due on each exhibition of the motion picture in a movie theatre? It doesn't seem to be clear. Or you have a copy…. I mean, I think most motion pictures would be copies from the original. You pay each time the motion picture is exhibited? Is that the intention of this section?

Hon. K. Falcon: No. As it says just down below there, it's based on if you've acquired the right or authority to exhibit the picture. Once you've acquired the right, you could show it as many times as you wanted. But you're only going to pay when you've acquired the right or the authority.

B. Ralston: The value, then, of acquiring the right would be the fair market value of purchase from the distributor, I assume? Is that the way in which that would be calculated?

[1700]

Hon. K. Falcon: Fair market value. It is based on fair market value. Your right to show it is based on whatever
[ Page 12573 ]
the fair market value is that cost you to acquire that right.

Section 87 approved.

On section 88.

B. Ralston: This is entitled "Tax if leased tangible personal property becomes part of real property." Is that the case where a fixture then becomes, say, a permanent part of a building? Or is there some other more vivid or illustrative example that the minister could provide to explain what this section attempts to regulate?

Hon. K. Falcon: In this case we are talking about a case of…. Again, by way of examples, the simplest way is that if you lease a cardlock system for your hotel where you install the cardlocks into the doors and it becomes a permanent part of the real property, that's the kind of situation in which this would apply.

Again, under subsection (a) it's talking about tangible personal property. So any tangible personal property that is leased which then becomes…. However it may be or whatever circumstance, if it mimics the example I gave, where a reasonable person would deem it to have become a part of the real property, then the tax would apply.

Section 88 approved.

On section 89.

B. Ralston: This division refers to the treatment of the acquisition of tangible personal property acquired by a "small seller." That's a defined term. We did have some discussion about that earlier. I'm looking at section 89(2). That would appear to not provide to the small seller the exemptions that we were referring to earlier in section 141. Obviously, there's a policy reason for that. Can the minister explain the basis of that?

Hon. K. Falcon: Because you don't pay the PST when you're buying from small sellers, we make the small seller pay the tax.

Sections 89 and 90 approved.

On section 91.

B. Ralston: This is an exemption which is contrary to the general principle that the minister just set out for an eligible tangible personal property purchased — doesn't require the purchaser to pay tax. So can the minister explain the circumstances in which that exemption would apply?

[1705]

Hon. K. Falcon: This is just confirming what I just said before in the example where…. Because I don't pay the PST when buying from a small seller, this is just confirming that you in fact do not pay the PST on tangible personal property from a small seller.

Section 91 approved.

On section 92.

B. Ralston: This division refers to energy products. They're a defined term, as we know from our earlier discussion, which includes, in section 1, natural gas, fuel oil other than kerosene, propane and "other prescribed tangible personal property," which could presumably be other energy products in that category.

Can the minister explain the policy reason for section 92? There is a capitation of 0.4 percent of the purchase price. I believe he has referred to this earlier — that the innovative clean energy fund was reconstituted as a result of the return of the PST. But perhaps he could just confirm that and explain that.

Hon. K. Falcon: The member is correct. This is confirming that, just as it was under the old PST, under the new PST we return to the innovative clean energy fund, along with the tax on certain energy products that it applies to.

B. Ralston: This may be dealt with — I can't recall — in the transitional provisions. Was the balance of the account, prior to the introduction and adoption of the HST, dissolved and taken into general revenue? Would it be reconstituted as a new fund, or would the previous balance be restored? I believe there was — I'm trying to recall the figure — something in the neighbourhood of $25 million in the account.

Hon. K. Falcon: The fund still exists, I believe under the special account act. So the funds still exist. My understanding is it still has dollars remaining even from prior times. Once this is reinstated, it will just start replenishing the fund and allowing it to continue to be used.

B. Ralston: For a typical B.C. citizen, this would appear as a charge on their hydro bill. Is that correct?

Hon. K. Falcon: Yes, it did in the past. There is a difference in that we are excluding electricity this time.

B. Ralston: Can the minister just explain the basis for the policy choice that's made there, if it's going to apply to natural gas but not to electricity? I think those would be the two most common experiences of a B.C. residential consumer. Perhaps he could just explain briefly the rationale there.
[ Page 12574 ]

Hon. K. Falcon: In Budget 2012 on page 72 we referenced the reimplementation of certain taxes and levies under the ICE fund.

We indicated that "the innovative clean energy fund levy of 0.4 percent of the purchase price on residential and commercial energy purchases of natural gas, fuel oil and propane sold on a grid in the same manner as before harmonization. However, the reimplemented ICE fund levy will not apply to residential and commercial purchases of electricity."

That was a policy decision made primarily to ensure that we are not going to layer on additional costs, given the pressure that's already there for commercial and residential hydro customers.

Section 92 approved.

On section 93.

[1710]

B. Ralston: This sets out when the tax is assessed if the energy product is brought into British Columbia for use.

Can the minister explain at what point the tax becomes due? It refers to on delivery in British Columbia, so can the minister explain? I recall some sections where tangible personal property delivered by pipeline, for example, was assessed or charged on a monthly basis, but my memory may be faulty on some of that. I'm just interested in when the tax is due and how it's calculated.

Hon. K. Falcon: When an energy supplier invoices the customer, the tax is charged when consideration is paid. I'm advised that this ICE tax levy approach mirrors the PST tax levy approach that we use in other purchases.

B. Ralston: This section refers, at least in its heading, to energy product brought into British Columbia for use. Does the tax treatment of energy…? Obviously, there are great resources of natural gas which is distributed throughout the province for residential consumption. Is there a different mechanism for assessing the tax for natural gas that originates in British Columbia?

Hon. K. Falcon: No.

B. Ralston: The minister's brevity is perhaps a little murky in creating understanding for me. Is it, then, just the same? If it originates in British Columbia, the tax is assessed in the same way?

Hon. K. Falcon: Yes, it is assessed in the same way.

Sections 93 and 94 approved.

On section 95.

B. Ralston: Subsection 95(1)(b) refers to an exemption. For example, there is much public discussion — of which the minister is, of course, aware — of the construction of LNG facilities, particularly in the Port of Kitimat. If natural gas were to be used there for the purposes of fuelling the…. I think the jargon term is "trains"— that is, the machinery that is used to actually compress the natural gas. This is what's being referred to as being exempt from provincial sales tax. Is that correct?

[1715]

Hon. K. Falcon: It is exempted here because it has already been taxed under the Motor Fuel Tax Act. We don't want to have a situation where there's double taxation.

B. Ralston: Looking back at the definition of "energy product," just so I'm clear then. Natural gas that's delivered to a residential customer attracts the provincial sales tax, but it would not attract the other tax that the minister just mentioned, the Motor Fuel Tax Act?

Hon. K. Falcon: To your first point, natural gas for residential use will continue to be exempt from PST, as it was before. For commercial use of natural gas, it will be taxed either under the Motor Fuel Tax Act or the PST but not both.

B. Ralston: Can the minister, just for comparative purposes, advise what the comparable rate under the Motor Fuel Tax Act would be? Is it the same 7 percent, or is it higher or lower?

Hon. K. Falcon: There are multiple rates associated with the Motor Fuel Tax Act, but the default rate is 7 percent. You really don't want to go into this, I'm advised, because it gets down to questions about where the compressors are located, etc. So suffice it to say the default rate is 7 percent, but there can be multiple rates dependent upon a number of different circumstances.

B. Ralston: Just for reference, then. I'm looking at the Motor Fuel Tax Act section 9, the tax on natural gas. Is that where the tax rate is set out, then? Just for the purposes of if I should decide to pursue this further. That's correct?

Hon. K. Falcon: Yes, that's correct.

Sections 95 to 97 inclusive approved.

On section 98.

B. Ralston: This relates to liquor sold under a special occasion licence. Can the minister briefly explain how that tax is calculated? Ordinarily, if you're purchasing from a government liquor store, you pay the tax and are
[ Page 12575 ]
rebated the taxes.

[1720]

In the occasional events that I've been involved in over the years, you're rebated the dollar value of unused and unopened beverages that you return. Is there anything else that this authorizes the tax collector to do?

Hon. K. Falcon: The way it works is that if you have a special occasion licence, what happens is you go to the liquor store, you purchase the liquor, you pay your tax on the liquor. Because you have a special occasion licence…. And with the special occasion licence that means you are hosting an event where you will be subsequently selling liquor.

For the sake of argument, let's say you're having a wedding, and then you're going to sell liquor at the wedding. What this is saying is that you can prepay the tax as opposed to having to charge the tax on all the people, your wedding guests, as they're buying drinks.

You can prepay that tax to the liquor outlet at the time that you present yourself with your special occasion licence so that subsequently, when you're selling that liquor at your event, you don't need to be charging and taking care of the collection of the PST associated with it. That is something that is the same as it was before and will continue again under the PST.

Section 98 approved.

On section 99.

B. Ralston: This is one of the special circumstances that relate to the exclusive product category. I think we discussed that in terms of the definition of "exclusive product" — that that was a custom-made product for…. I think in the minister's example it was multilevel marketing. I think the gist was that it would be paid at the front end rather than by the ultimate consumer.

Can the minister just confirm that that's what's being prescribed in this section?

Hon. K. Falcon: This follows on what we were talking about before with direct sellers like Avon or Tupperware or Amway, etc., where the organizations themselves remit the PST directly to government, and then all their direct sellers out there in the field do not have the requirement to have to individually collect PST on behalf of the sales that they're engaged in with the public.

Section 99 approved.

On section 100.

B. Ralston: Should we pause to celebrate this milestone or not? What have we got? We've got a few more to go — section 255. So we're not quite halfway yet.

[1725]

The minister yesterday spoke of the unfortunate practice that has arisen recently where the gift provision — I think it would be fair to say — was being abused in the sense that a substantial number of the vehicles in particular that were being transferred were being transferred between non-related parties and being deemed as gifts, and there was some understandable leakage in the appropriate tax revenue.

I take it this section will remedy that problem. Is that not correct?

Hon. K. Falcon: The member is correct. So this now equalizes the situation whether a gift is provided from out of province or a gift is provided within province. It is going to deal with the rather remarkable situation where — as we were joking, though it's not funny, I suppose — last year we found that hundreds of high-end vehicles, Porsches, Mercedes, BMWs, were being reported as so-called gifts from so-called friends even though they were unrelated.

As I said at the time, I find myself in the most unfortunate position of not discovering any of these friends out there that are prepared to transfer their high-end Mercedes, Porsche, or BMW to me even though I don't know them. Unfortunately, last year almost a third of all private transfers of vehicles were reported as gifts as opposed to sales.

This will close that loophole, I am pleased to say, given that it is unlikely that I will find any of these friends. We will then be in a position where all friends, let's say, shall be treated fairly and equally.

B. Ralston: I certainly do recall the minister's explanation yesterday, and I was quite surprised to hear that. The minister — it's probably just as well that he doesn't have to be in a position to receive that, because it would cause him undue difficulty with the conflict commissioner, I'm sure.

Given what the minister said, and I was reflecting on what he said yesterday and has now repeated essentially today about the gifting, is there no opportunity to use the audit provisions of the act to scrutinize or disallow any of the transactions that the minister has referred to?

Hon. K. Falcon: The answer is yes, but the challenge, of course, is that to claim a high-end Porsche or Mercedes or BMW as a gift requires collusion, meaning that both of the parties to this transaction have signed an agreement saying: "I am gifting you, this person that I'm unrelated to, my high-end Porsche as a gift, out of the goodness of my heart."

[1730]

Our suspicion is that, in many cases, what will happen is that the consideration is likely being transferred in the form of cash as opposed to something a little more
[ Page 12576 ]
obvious that might be traceable — like a bank order or draft or what have you. The challenge is that even if we wanted to personally audit and get into the private banking records of the individuals, that still may create a real challenge, just putting aside for a second the cost and complexity of having to do all that. I think the member opposite…. It becomes apparent that that creates some real challenges.

What we have seen, though, is…. The real issue here is that you know you've got a problem when over one-third of all private transfers of vehicles are being reported as gifts as opposed to sales, particularly when almost half of those are people that are unrelated to each other. So that is obviously a problem. The member is correct that this will ensure that we protect against legitimate cases of gifting between family members or to registered charities, etc., as set out but that we stop the abuse that is clearly taking place.

B. Ralston: Perhaps I will continue briefly on this section. I'm suggesting to the Chair that subject to what the minister may have, we take a brief recess, but I want to finish with this particular section first.

I appreciate the complexities that the minister has referred to and the necessity to investigate. Was there not an attempt to take a test case and simply disallow the transaction as being a valid one and assess tax on the purchaser? Presumably, the purchaser has registered the vehicle with the insurance corporation and made, allegedly, a false declaration that it was a gift, and therefore no tax was due. Can the minister perhaps give a little bit more detail about what attempts may have been made to undertake that kind of investigation?

Hon. K. Falcon: This is very difficult because of the collusion that takes place when people are trying to create a situation where they're gifting a $70,000 vehicle, as an example, to their "best friend," their new best friend, and we're very suspicious about it because they have dissimilar names.

Now, we have caught people, but it's rare because of the collusion that's involved. Typically, in the cases where we've caught people, it will be because there may have been a lien on the vehicle and suddenly the lien gets paid off, which then allows the director and the tax department to say: "Oh well, that's interesting. How did this lien suddenly just disappear on the car?" Then sometimes you're able to capture them that way.

[1735]

The other way is the tax department independently contacts each of the parties to this gifting arrangement. Occasionally, because they don't really know each other and although they're in collusion to scam, when they're contacted independently, sometimes…. You know what it's like when you get a phone call from any kind of auditing person from government. In some cases they probably think….

Anyhow, they confess. Sometimes one of either party might actually confess. They feel a tremendous amount of guilt, or they feel that "government must know something I don't know." Occasionally the people will just succumb and confess happily, and the appropriate tax is collected. But it is very difficult, because the very nature of this is collusion with an effort to avoid paying a tax obligation.

B. Ralston: I'm wondering. Under the Social Service Tax Act, I think the minister is saying that that didn't arise. Did this arise as a result of the change to the provisions that were brought in accompanying the introduction of the HST? Or is this simply the rise of an independent activity that is taking advantage of legislation that has remained essentially unchanged, and people have for one reason or another discovered what I think would be fairly described as a loophole, or at least an opportunity to deceive the tax collector?

[D. Horne in the chair.]

Hon. K. Falcon: I'm advised that this has always been a problem, whether it was under the old provincial sales tax or under the tax on designated property or as we go back to the provincial sales tax now. In the past year we changed the form that is required to be filled out to make it more comprehensive in an effort to make it more difficult for people to engage in this kind of abuse. It made a minor difference but, frankly, not enough of a difference. So this change that you see here under section 100 will substantially deal with this problem.

B. Ralston: Just so that it's clear, then: upon final reading and then royal proclamation of this bill, that avenue will be closed at that point. Is that correct?

Hon. K. Falcon: It would take effect when royal assent is provided to this bill, which will then, of course, click in on April 1 of 2013.

Section 100 approved.

The Chair: The committee will take a brief recess.

The committee recessed from 5:40 p.m. to 5:50 p.m.

[D. Horne in the chair.]

On section 101.

B. Ralston: This is a tax on reusable containers. Can the minister explain the intent of this particular section? There's one exemption, subsection (4), that may have a fairly broad application. Could the minister just briefly
[ Page 12577 ]
explain the purpose of the section?

Hon. K. Falcon: I'm advised that this is typically utilized by beer breweries, bottle shops, wineries, etc., where they're going to be required to pay PST when they purchase the bottles originally or bring them into the province. Through the recycling programs that are in place, they typically will get a lot of these things back, so they'll continue to use bottles that come back. It is exempting the requirement to pay PST on the recycled bottles that are coming back through them. It is just the original purchase of the bottles or when they bring them into the province.

Section 101 approved.

On section 102.

B. Ralston: This applies to a situation that we had discussed earlier, at least in part — the provision of tangible real property with an operator. It also seems to interact with the exemptions set out in section 142. Can the minister explain — if there is anything beyond what was said in relation to a previous section — what this section refers to?

Hon. K. Falcon: Again, this is a provision that's the same as it was before under the old PST act. In this case, if a person is leasing property out with an operator, as we had a discussion before…. So the person is leasing property out with an operator for that equipment or property, and pays the tax, and it is equal to the tax payable if it is leased without an operator.

Sections 102 to 104 inclusive approved.

On section 105.

[1755]

B. Ralston: The definition of "software" is a fairly expansive one, and we've discussed that earlier. There's an exception under sections 106 and 107. We'll obviously deal with that shortly, but can the minister explain briefly what that exemption from tax on that very expansive definition of software is?

Hon. K. Falcon: Section 105(1) just lays out that a purchaser of software for use on an electronic device, etc., pays the 7 percent PST. Subsection (2) is just avoiding double taxation. So subsection (2) is saying that in the event of section 106, where you are a business carrying on and using it in B.C. only, you will not have to pay it under subsection (2).

Of course, 107 is essentially the same thing, except that where you're a multi-jurisdictional business use, as we discussed earlier in the definitions, there's a formula for determining what portion is being utilized in B.C. and your other satellite offices.

D. Donaldson: A question on section 105 for the minister. A person in their home purchases — I like examples, so I'll give you an example — a $1,000 software program on line from outside of B.C.'s boundaries, downloads it and pays by credit card. My understanding under section 105(1) is that that is a taxable item at 7 percent, and it's dependent, from conversations earlier in this committee stage, that a person would be responsible for self-reporting.

How would a person who wanted to self-report actually do that for the 7 percent owing?

[1800]

Hon. K. Falcon: The member is correct. If you're downloading that software and you're purchasing it from a collector — the collector being defined as a retailer of some sort that is responsible for collecting the PST on behalf of the province and remitting — then you would pay that tax to the collector.

If you are purchasing it from a non-collector, then you have a responsibility to self-assess, and there are forms available on the ministry website that you can download, fill in and submit your payment.

D. Donaldson: On a practical basis, then, that's on a yearly basis that people are expected to self-report on that taxation?

Hon. K. Falcon: It's actually the month following the purchase, when the actual purchase is made.

Section 105 approved.

On section 106.

B. Ralston: The minister had said that this section…. It's entitled "Tax on business use of software on device in British Columbia." If the person is paid tax in relation to section 107, they don't have to pay, but otherwise they would be obliged to pay tax on this. This is simply the reference that we discussed moments ago in subsection 105(2). Perhaps the minister could just confirm that.

Hon. K. Falcon: That is correct.

Section 106 approved.

On section 107.

D. Donaldson: Section 107, "Tax on business use of software on devices in and outside British Columbia." There's a large use of electronic software these days and pretty fluid, with a number of the people using it for
[ Page 12578 ]
businesses being inside and outside British Columbia. I mean, we all know how many transportable electronic devices there are these days, whether they're laptops or tablets or….

In subsection 107(1)(b)(ii), is the mechanism to monitor that part of the section self-reporting again?

Hon. K. Falcon: Yes, the answer is that it is self-reporting. It is based on an estimate of the calculation of how much use is utilized outside of British Columbia as opposed to within British Columbia. A calculation is made, and then the tax is remitted on that basis, self-assessed.

D. Donaldson: Thanks for that. My question would be…. I understand there were some consultations done before reintroducing this act, or creating this act, with the business community.

I'm curious as to whether the minister heard from the business community about this particular section — whether it was an onerous reporting mechanism and whether he had any advice as to how to make some changes to this reporting mechanism that might make it less onerous to businesses, given the fact that there are many people who are mobile. It's a knowledge economy. People are moving back and forth across borders frequently these days with software on their mobile devices.

I'm interested in knowing whether the minister had discussions in his consultation before creating the Provincial Sales Tax Act.

[1805]

Hon. K. Falcon: I'm advised that this is quite a significant advantage to the business community. It was allowed before, and this was one of the challenges of the old PST in particular. It was allowed administratively, but not expressly allowed. So they were making an administrative allowance for this.

But because one of the problems in the old act was that software was read in to be part of tangible personal property, it was treated as if it is a physical piece of property that you carry around with you. Therefore, the administrative interpretation of figuring out how you can assess it when it is being used outside of the province, etc., created enormous confusion and frustration.

This is going to be significantly better now, in response to the concerns raised by the business community, because it is more clearly laid out, and it will now be more easily understand by the business community in terms of their obligations and how they have to pay with respect to software.

B. Ralston: Continuing on section 107, there are references in there defined in section 108 about B.C. usage and total usage. Is that the same…? I take it that it's some kind of self-assessment about time used relative to either the time used on the device…. Maybe there is some software that tracks that, but I don't think it tracks by geolocation.

This would be an estimate that would be provided and then the tax would be paid on that basis. Is that what's intended here?

Hon. K. Falcon: In subsection (2) of 107, in the formula you'll see under B.C. usage it says: "the estimated portion of the use of the software in British Columbia, as determined in accordance with the regulations, during the prescribed period." We're going to develop through regulations some clarity around that to try and make this much simpler.

B. Ralston: I appreciate that the regulations wouldn't necessarily be drafted just yet. Can the minister give some idea of the thinking that's surrounding that? Is it simply going to be an estimation of time? That would seem relatively straightforward, but are there some other criteria by which this regulation will be devised?

[1810]

Hon. K. Falcon: One of the things that we wish to do in the regulation is to reflect what businesses had been using before while we were using a sort of administrative approach. Businesses used different approaches depending on the sector. Some used the number of employees in B.C. Some are using the time utilized in B.C. Some are using the number of software licences that they had in B.C. So it varied a little bit, and what we want to try and do is draft a regulation that will provide maximum flexibility for the business community.

B. Ralston: I thank the minister for that explanation. My sense would be that some more objective criteria, such as the number of employees or the number of software licences, might be easier to use and also, I think, more practical.

Self-declaration on time, unless you're actually keeping a log — which very few people would, if any — would be unchallengeable in terms of whether it's accurate or not. Is that factor going to be taken into account?

Hon. K. Falcon: I'm advised that there are some software programs, like QuickLog, that every time you log on will actually track your amount of time that you've spent on the particular program. So for some businesses it was easier to report time as opposed to number of employees or what have you.

What we discovered by using the administrative approach was that businesses had different approaches depending on what worked for them. So we just want to draft a regulation that will be as flexible as possible to allow it to work in whatever way is easiest for the business.
[ Page 12579 ]

Sections 107 and 108 approved.

On section 109.

D. Donaldson: Section 109, "Tax if use of software changes." This isn't a question specifically about exemptions because I see we'll be covering that in section 113.

Again, a scenario where I have a laptop with software on it that's currently exempt. I sell that laptop to a person who uses the software in a non-exempt way. Will that person, then, under this section — or perhaps the following section — be responsible for self-reporting and not just paying perhaps the PST on the sale of the laptop but, then, on the changed use of the software? Would they be responsible for paying the PST on that?

[1815]

Hon. K. Falcon: This would be an example that would apply in the case where you are using software that is acquired and is exempt from tax under the act because it is used for an exempt purpose. So let's say you're buying software that is used for some farm equipment, that maybe is integral to how you run your tractors in the field or something associated with that. So it is exempt.

Then you change the use and decide that you're now going to use it personally for non-farm purposes. Then taxation would apply because you have changed the use, and presumably your requirement to self-report would kick in.

Interjection.

Hon. K. Falcon: Okay. That is correct.

D. Donaldson: Thank you for that example.

Would that also apply in the case of…? Laptops change hands quite frequently these days. If somebody was using that software on that laptop for an exempt purpose and the new buyer is actually using the software on that laptop for a purpose that's no longer exempt, would they then have to self-report and submit the 7 percent on whatever the original price was for that software or on a portion of the price they paid for that laptop from the original user? Just working out those mechanisms.

Hon. K. Falcon: This section, 109, only applies to a single person who is owning the software. What the member is referring to is, effectively, a resale, in which case the PST would apply.

Sections 109 and 110 approved.

The Chair: Shall section 111 pass? So ordered.

Sorry, on section 111, the member for Stikine.

On section 111.

D. Donaldson: Thank you, Chair, for recognizing that I didn't launch myself up into the standing position as quickly as I wanted to.

[1820]

Section 111 makes specific reference to "refund in accordance with Nisga'a Nation Taxation Agreement" or "refund in accordance with treaty first nation tax treatment agreement." This section deals with "Tax if change in use of software for which refund received under taxation agreement."

There are a number of First Nations in the province that have First Nation GST taxation in place. Some others have further taxation in place allowed through federal taxation mechanisms. Are there any implications from this section on those First Nations?

Hon. K. Falcon: The answer is no.

D. Donaldson: Again, we might be straying a bit from this section 111. But under the authorities that First Nations have now, would the minister be able to advise whether they could charge their own form of sales tax under this kind of legislation?

Hon. K. Falcon: I'm advised there is no provincial equivalent to the GST as it applies to First Nations.

Sections 111 and 112 approved.

On section 113.

B. Ralston: Can the minister explain the exemptions? Particularly — we'll deal with the exemption sections later — the definition of "software" that's in the definition section. Are there circumstances under which that would be considered machinery and equipment and therefore eligible for the exemption from the tax itself?

Hon. K. Falcon: We'll be dealing with that when we get to the exemptions section. If it's appropriate for the member to wait till we get to the exemption section or…? I'm happy to be guided by his wishes.

B. Ralston: Well, I don't know if I can stand the anticipation of waiting that long.

Clearly, there is reference here in subsection (1)(a) to the software being transformed in some way — either processed, fabricated or manufactured. I'm reading those from the section. At least it would seem to provide in some circumstances a basis on which it would be part of a manufacturing process. Whether that's simply as an input or constitutes machinery or equipment on its own, I guess we'll have to wait.

Can the minister explain the other exemptions? Would section 113(1)(c)(i)…? Would that be typical retailer software that you would use to operate a cash register?
[ Page 12580 ]
Is that what's being referred to there?

[1825]

Hon. K. Falcon: For the sake of argument, let's say that you are buying an app off someone that you're incorporating into your own software, which is then going to be subsequently sold for retail sale. Then it would exempt that portion, those apps that you're purchasing to be a part of your software program that you're later selling.

D. Donaldson: Section 113(1)(a). I just wanted to make sure that we're not going to lose an opportunity to define exactly examples of what is meant under "the purpose of being processed, fabricated or manufactured into, attached to or incorporated into" other software or tangible personal property.

I just don't want to lose the opportunity for the minister to explain or give examples of what that exactly means, because I'm not sure if it is actually going to be covered under the exemptions section of the bill.

Hon. K. Falcon: The member is making reference to a situation where, in video game software, for example, where there may be work that's being done to create visual elements to the software that will ultimately be sold, it may include audio elements as part of the processing or fabricating or manufacturing of that product.

Those kinds of things would not be captured by PST because they're part of the processing, fabricating or manufacturing that goes into the software that's ultimately going to be sold for retail sale.

The Chair: This committee will stand in recess until 7 p.m.

The committee recessed from 6:28 p.m. to 7:08 p.m.

[L. Reid in the chair.]

B. Ralston: The minister had a correction that he wanted to articulate just after we broke, so perhaps…. I think that was in relation to section 113(1)(b) about exemptions.

Hon. K. Falcon: I had indicated that the exemption for manufacturers would come later, but I did not correctly point out that "later" meant actually in the next paragraph. I apologize for that. Under subsection (b) further on, you'll see in the description that it goes on to say: "acquired by a prescribed manufacturer or other prescribed person for a prescribed use."

So there is provision — as the member talked about — in terms of exemptions in relation to software and an ability for manufacturers to take advantage of that if they are a prescribed manufacturer.

B. Ralston: My recollection was, for example, in the manual or the note that was an interpretation guide for…. Particularly, I'm thinking of those in the lumber industry. A wide range of items that would be used in a sawmill were exempt as falling under the machinery and equipment exception.

[1910]

My recollection, and I don't have the material before me, was that the software that would be used to program the saws, for example, was…. I don't know whether that's an incidental detail, and the minister may want to confirm that or not. By the use of the language "prescribed," that refers to the prospect of regulation in relation to manufacturers or other prescribed persons for a prescribed use. That would be something that would be decided by regulation and could very well provide an exemption from tax for certain software. Is that correct?

Hon. K. Falcon: The answer is yes. In fact, the example the member used is a good one. Software that is utilized in a lumber mill that is driving the determination as to when the logs are cut or sorted or what have you would be, it seems to me, a very good example of the kind of software that is being used in manufacturing that would thus be exempt. But the member is correct that a prescribed manufacturer will be defined in the regulation.

B. Ralston: Since we've referred to the exemption, in subsection (3) the reverse applies — the case where the exemption does not apply. Can the minister briefly explain where subsection (1)(a) does not apply?

Hon. K. Falcon: This is, I'm advised, to cover off a situation where you are purchasing software on an exempt basis, but if you're purchasing that on an exempt basis where you are then going to be selling that software but retaining an ownership interest in that software, then that would not allow you to have that exempt status. So in the case of where you're selling it — not a problem. But if you are selling it but maintaining an ownership interest, then you are not entitled to the exemption.

Sections 113 to 115 inclusive approved.

On section 116.

B. Ralston: Can the minister explain what the typical transaction caught by this would be? It refers to a "contract for property conversion related to purchase." There's a timeline of 180 days for entering into a contract "before or after acquiring the tangible personal property."

Can the minister perhaps illustrate this by way of an example?

[1915]

Hon. K. Falcon: I'm advised that this actually is an
[ Page 12581 ]
anti-avoidance measure, the same as what was under the previous Social Service Tax Act or the old PST act. Essentially, what this is trying to do is deal with a situation where someone is trying to….

As an example, you want to have a boat built for you. Instead of going to the boatbuilder and them building you a $100,000 boat on which you would then pay PST, you go out and buy all the materials for the boat — maybe $30,000 of materials — and you pay the PST on that. Then you go to the boatbuilder and say: "I'll do a separate arrangement with you where you just build me this boat. I'm going to provide you the materials." That would be an example of the kind of tax avoidance that this is meant to not allow happen.

D. Donaldson: I'm going to give another scenario, and perhaps the minister can tell me if this is applicable in this situation. Section 116 applies to tangible personal property, and one of the definitions of tangible personal property is natural gas.

A potential LNG plant purchasing natural gas from a supplier: would that be applicable provincial sales tax under this act? And if they were to resell the manufactured product, would LNG qualify under 116(2)(b) as being processed or fabricated or manufactured into another product? Then, if they sold that to an interest that had an interest in the supply of that natural gas, would that then also be subject to the 7 percent tax?

Hon. K. Falcon: First of all, the member is not using a good example because LNG is just gas that has been pressurized, so it's not actually a separate product. Natural gas is natural gas, whether it's pressurized or non-pressurized. There's not a change there that would trigger anything different from a tax point of view.

Going back to the example that I used, this is to try and deal with situations where…. I didn't explain it as accurately as I should have in the boat example. It would be an arrangement where the person is going to the boatbuilder and saying: "Okay. Here are all the materials I know that you're going to use to build this boat I want to buy. I will buy those materials off you separately and pay the PST and then enter into a separate arrangement with you to then construct the boat utilizing those materials on which I've paid the PST." They then are able to effectively reduce the amount of PST they pay because they were paying it just for the materials, not on the final value of the boat.

[1920]

This presumably came about in the past because there was probably a situation where they identified people doing that and put this provision in place under the old PST act to ensure it doesn't continue. It's going to be in place in the new act.

D. Donaldson: Thank you for that answer. So processed. From what I took from the answer, when you're turning natural gas into liquid natural gas under pressure, that's not defined as processed under this part of the act.

If this isn't applicable to section 116, perhaps the minister could point out where it's going to be applicable in the act. If that natural gas that's purchased by an LNG producer is then burned to create electricity to power an LNG operation, is that taxable under this act at 7 percent?

Hon. K. Falcon: The purchase of natural gas is going to be taxable. That will continue to be the case. The difference — well, there are a couple of differences since we're talking about LNG plants.

The difference is that under the HST they would have been able to get that back through their input tax credits. Correspondingly, the investment that is required to build an LNG facility to pressurize the gas into a liquefied natural gas to allow for export — those costs would have also been returned under the HST. They will not under the PST.

I just point that out because this is an example of where the business community…. It's maybe a stark example, but a very, very common one, where the business community was largely strongly opposed to going back to this tax because of the additional costs it imposes that they are not able to get back.

D. Donaldson: I'm sure we'll be able to assess through the exemption section that's coming up in this bill the kinds of costs that businesses and industries that are attempting to build large facilities like LNG are going to be able to achieve through savings, through the exemptions later in the bill. I hope we can have a good discussion about that at that time too.

The minister rejected my example of the LNG and the purchasing of natural gas as not being processed. I would say that by definition, when you're changing a product from one state to another — from a gaseous state to a liquid state, at quite a cost involved in that — most people would consider that processed. If the minister could comment on his previous rejection of my example saying that would not fall under the definition that he defines "processed" as.

Hon. K. Falcon: I guess the best way is if you read this section 116(2)(b), and you go down to (a) within that…. I'll read it into the record. It says, "…is processed, fabricated or manufactured into, or attached to or incorporated into other tangible personal property" — "other tangible personal property" being the key words there.

[1925]

Taking natural gas — whether it's natural gas or in a pressurized form, it's still natural gas. This is referring to where you have incorporated it into other tangible personal property, which is the distinction.
[ Page 12582 ]

Section 116 approved.

On section 117.

D. Donaldson: Could the minister elaborate on the intention behind 117(3)(b) regarding the increasing scale and exactly what those sections (a) and (b) are trying to capture?

Hon. K. Falcon: This is an example which is common throughout the PST. The challenge of the PST is that it applies to some things and doesn't apply to other things. You have to define what it applies to, and then people try to figure out a way to get around that. Then you have to get rules to try to deal with that.

In this case, this is applying to situations where, in the past…. By the way, this is the same as it was in the past. It was put in place because people were purchasing a vehicle — the base model, if you will, of a vehicle — and then entering into a separate contract for all the options that they wanted to have in the vehicle — like leather seats, roofs, electric doors and windows, all that kind of thing. This just, essentially, takes away the ability to do that.

D. Donaldson: What would be the rationale, then, for a 1 percent increase? This is 117(3)(b)(ii). What's the rationale for 1 percent — from 7 to 8 percent — on a $1,000 category?

Hon. K. Falcon: This is the luxury tax, as it was commonly referred to, that applied under the old PST and that now comes back under the new PST. Again to use my example, people, in order to avoid paying the luxury tax, would say, "I will just purchase the base model," and then have a separate contract for all the options that would then take it and trigger some of the luxury tax thresholds that come into play.

This is saying that if you enter into the purchase of a base vehicle and within two days are entering into a separate contract for options, then it is all captured and becomes part of the thresholds for determining what you're going to be paying under the luxury tax.

D. Donaldson: Thank you for that answer. I understand what it's attempting to do.

I suppose, with the good heads you have over there, I was looking for a rationale as far as why was a $1,000 category chosen — $55,000 to $56,000 — for the 1 percent increase, and then it would be a 2 percent increase for another $1,000 category. Are there any models or calculations — a rationale behind those $1,000 divisions and 1 percent increases?

[1930]

Hon. K. Falcon: Well, I'm not entirely sure of the rationale. It was brought in, in 1993 under the NDP government, so you could probably talk to somebody there that might be able to explain the rationale. I don't pretend to totally understand it either. It seems to me there would have been much simpler ways to probably try and do that. That was what was in place when it was brought it in, in 1993 as part of a large suite of additions of the PST. I can't give you a particular rationale as to why it's laid out that way.

B. Ralston: Looking at section (2)(a)(ii), the minister has referred to "a separate contract entered into within 2 days before or after." Say it falls outside that four-day period, does the ability to challenge the separate contract disappear?

Hon. K. Falcon: Yes, it does.

B. Ralston: If that's the legislative intent, is it just a simple wish to reproduce the previous section and to have the same provisions as before that motivates this?

Hon. K. Falcon: The answer is yes. This is what was in the old act, and so we're bringing it back as part of the new act.

D. Donaldson: I wanted to continue. I had a line of questioning around the rationale. The minister can correct me if I'm wrong.

I believe in his consultations part of the reason for consulting was to come up with perhaps ways of improving the PST application, despite the assurances that everything would be the same as it was before from an exemptions point of view. Did the minister contemplate, since he wasn't sure of the rationale for this section, 117(3)(b), actually making some changes there?

Hon. K. Falcon: What we said is that we would try and improve some of the egregious minor streamlining efforts that we could — well, you know what my feelings are about this tax — to try and improve it as we can, but not to make changes that would affect the actual base of how the tax is applied.

Sections 117 to 119 inclusive approved.

On section 120.

B. Ralston: This is related to the companion section, section 119. Can the minister then explain the rationale for…? There is a definition of "related service" back in the definition section. I believe it was incorporated into one of the definitions. Can the minister explain the circumstance under which this would be activated, this section?

Hon. K. Falcon: This section is to apply to…. Again,
[ Page 12583 ]
it's the same as it was under the old Social Service Tax Act or the old PST act. I guess the easiest way to explain it, again, is by example. If a B.C. resident takes their vehicle, as an example, as one element of tangible personal property, drives over to Alberta and gets their vehicle serviced in Alberta and then drives back to B.C., they would still under the PST have an obligation to remit their PST on the service that the car received, even though it was in another province.

[1935]

That, of course, is a self-assessment requirement that they would be required to follow through, though. I wouldn't be optimistic that that happens a lot, but if you didn't have a provision like this in place, then, presumably, especially people in border communities would spend a lot of time driving across and getting work done somewhere else.

B. Ralston: In the minister's example, although it is a service, I think the repairs to automobiles were included in the act, the minister mentioned, a couple of decades ago. Is that correct?

Interjection.

B. Ralston: Right. And that's regardless of whether the vehicle is a new vehicle, recently purchased or not. That's simply for the provision of the service. So it is a tax on the service itself.

The other question I had is in section 121, so I'll just conclude on this section, and perhaps we can get to 121.

Section 120 approved.

On section 121.

B. Ralston: The exemption is referred to in section 121(1). Under what circumstances would this exemption be operative?

Hon. K. Falcon: Okay. This is a case where a person takes their tangible personal property out of British Columbia but primarily for the purpose of using the tangible personal property outside of British Columbia for a period of time.

To go back to our car example, in this case, you're taking your car out of the province but not specifically just to get the servicing done and then bringing it back into British Columbia where, of course, you would have your obligation to pay the PST.

In this case, it could be an example of where you're going out of the province to Alberta, but you're on vacation. While on vacation your car breaks down, and thus, you have to take it in for servicing. In the course of that servicing, you would not be obligated to remit PST for that work.

Section 121 approved.

On section 122.

D. Donaldson: Would the minister be able to remind me why the tax rate is 8 percent on purchasing accommodation versus 7 percent in other sections of the act?

Hon. K. Falcon: That's because that was the rate that existed under the old Hotel Room Tax Act. That was eliminated when we went into HST, but now that we're going back to PST, the Hotel Room Tax Act applies, and the rate was 8 percent. It will still be 8 percent. The difference now, of course, is that we've rolled it all into one piece of legislation so that people aren't having to search through the Hotel Room Tax Act and the PST Act, both statutes and regulations, trying to understand how things apply and what applies.

D. Donaldson: In this particular section, 122, the government doesn't treat that 8 percent in a manner of 7 percent plus 1 percent? It's just an 8 percent tax?

Section 122 approved.

On section 123.

B. Ralston: The designated accommodation area. Now, I seem to recall under the old hotel tax that there were designated organizations such as tourism providers which would take some of the hotel room tax and use a percentage of it for promotion of the tourist destination. Is that what's referred to here as the "designated accommodation area"? That would be the area which would have the right or the opportunity, if there's an agreement reached, to assess a further tax on the price of accommodation?

[1940]

Hon. K. Falcon: The member is correct. That's referring to the additional 2 percent tax that is available subject to certain conditions in terms of the area or the municipality that it's applying to receiving the proper level of support from hotels, etc.

D. Donaldson: Under section 123 the designated accommodation area is able to charge up to an additional 2 percent on the purchase price of accommodation, and in subsection (3) it's paid into the consolidated revenue fund. Can the minister advise how often and what kind of turnaround time there is on the, let's say, 2 percent coming back to the designated recipient?

Hon. K. Falcon: We provide the municipality or the designated accommodation area monthly payments.
[ Page 12584 ]

B. Ralston: The mechanism for creating the designated accommodation area — it's a defined entity in the definitions section, section 1 — is in section 240 of the act. I'm not sure — although we're making good progress — whether we'll actually get to this before we are obliged to end our discussion on this important bill.

So the designation process is designed to require an order-in-council by the Lieutenant-Governor-in-Council upon the request of the area. What's been referred to as the maximum taxes…. Is it intended that in the process of designating the area and making the request, the rate of tax would be a maximum 2 percent but could be less — obviously, say, 1 percent or 0.5 percent, depending on the wish of the designated accommodation area?

Hon. K. Falcon: That is correct.

B. Ralston: Subsection (3) says that the taxes will be received and paid into the consolidated revenue fund. What's the mechanism, then, for sharing that revenue back to the designated accommodation area? I'm not sure what the legislative mechanism is. Is it in section 240?

Hon. K. Falcon: It's actually just down, right below here, in section 125, "Payment to designated recipient."

Section 123 approved.

On section 124.

D. Donaldson: I'd just ask the minister to elaborate a little bit on this section. It seems to be that somebody makes a reservation…. Perhaps they've been very good about planning ahead. A busy weekend in the summer coming up and they make it two, three or six months in advance and, in the meantime, the local authority becomes a designated accommodation area and charges the extra on top of the 8 percent — the extra tax that they decided. It might be 1 percent or 2 percent. Is that the situation that is being described here, and what exactly is the refund all about?

Hon. K. Falcon: This would be a relatively rare circumstance in which the individual had made the booking. It's all laid out here — deposits, written contracts, etc. It came to the facility. This is then brought into effect.

As they're checking out, they suddenly are hit with this additional tax. In that case, they would be entitled to a refund because it was not in place at the time that they'd gone through all of those steps. They just got unlucky in that it sort of fell into place as they were checking out.

[1945]

D. Donaldson: Well, you never know. It might be a situation. I'm sure it has been a situation because it's included in the legislation — right?

For instance, they were paid in full before arriving. They go to check out. They're asked to pay an extra 2 percent, for instance, and they pay it. Does the director refund that extra 2 percent to the purchaser? How would the purchaser know about this potential refund? Would they be informed by the accommodation facility? Can you elaborate on that mechanism?

Hon. K. Falcon: I'm advised that if there is a situation where the individuals had paid in full before they had arrived, then there is no 2 percent tax that is charged. In other words, it wasn't in effect. So they booked. They paid in full. It doesn't apply, and they wouldn't have to pay it.

If they were charged in error, then they would be entitled to a refund. We have separate refund provisions that I assume we're coming up to that would deal with that situation.

Section 124 approved.

On section 125.

B. Ralston: This is the section that we referred to earlier in relation to payment from the consolidated revenue fund. Can the minister explain: under subsection (3) — I know this is mimicking the previous hotel tax — was the fee collected a percentage, a flat flee, or how was that calculated? It does give the power to deduct an administrative fee from the money, to be remitted to the designated accommodation area. That is the local tourism organization, typically, which administers its own advertising program.

Hon. K. Falcon: What would happen is that the fee that is taken off works out to $20 per operator or hotel per month. We consider operator or hotel the same thing.

[C. Hansen in the chair.]

That's deducted from the cheque that is sent out. The more hotels a designated area has, obviously, the higher the amount that is deducted. That was the amount that was there before, and that's the amount that will continue when we go back.

D. Donaldson: Under section 125(2) the moneys…. I'm not sure about the amounts that we're talking about here, how great they are. But section (2)(b) says that the designated recipient "must account to the minister for its expenditure at the time and in the manner specified by the minister."

[1950]

This is an area where it's not a change to the base rate compared to the previous PST, Social Service Tax Act,
[ Page 12585 ]
but it is in reference to processes. I'm wondering if there was…?

The minister mentioned earlier about changes he intended and hoped to make in streamlining some processes. Is this streamlining in any way, or is it the same as the other act? How onerous is it for this designated recipient to account for the expenditure versus the amount of money involved?

Hon. K. Falcon: Again, yes, it was in there before and will continue to be in there. This is just to ensure that the additional tax which has been granted to allow them to collect is actually being used for the purpose for which it was intended — in other words, tourism promotion. They have to send financial statements annually to ensure that the dollars went towards tourism promotion.

What you don't want to do is have a situation where the entity decides that it's going to spend the money on something unrelated to that. That is a very important provision, especially for the hotel operators that are collecting the remittance. They want to ensure that those dollars are going towards the purpose for which they're intended. That's how it was, and that's how it will continue to be.

D. Donaldson: Yes, I fully concur with the accountability aspect of ensuring that the money is being spent for the prescribed purpose. In some instances I believe — in some of the communities I know — this amount of money is perhaps $60,000 a year.

Sometimes, when it's small amounts of money, the reporting mechanisms required by the provincial government can become somewhat onerous compared to the amount of money. Is it simply, under 125(2)(b), a set of financial statements that the minister is looking at for that accountability mechanism?

Hon. K. Falcon: Yes, it is just a set of financial statements. Really, regardless of the size, it shouldn't be that difficult. Basic software programs should be able to just hit the print button and have that information.

That's not an issue that's been raised with me, that I can recollect. If it is, I imagine that's something we could look at. But my understanding is that it's just a set of financial statements.

B. Ralston: I recall sitting on the Finance and Government Services Committee. In Kelowna, for example, the local organization there made a very extended presentation about the value of the funds that they received.

Would the minister not agree that one of the advantages of having it remitted directly with the PST, this additional increment, is that otherwise, you'd have the hotel or accommodation provider as the collector of the separate tax? They may then choose or not to remit to the designated accommodation area.

You might have an issue of accountability or failure to remit between some of the hotels and the designated area. So it's probably simpler just to have it rolled into one, collected and then remitted in an accountable way.

[1955]

Hon. K. Falcon: The 2 percent was always remitted to the province. It was never remitted directly to the community.

The change here, and the simplification that we've provided, is that where the hotel operators used to have to file a PST return and then a hotel room sales tax return, they no longer have to do two of those. They're all now together under one form here, which is, we believe, something that will add to their simplification. It's something we heard from the business community.

B. Ralston: I'm looking at the subsection (5). It says that section 27(1)(a) of the Financial Administration Act does not apply. Looking quickly at that, it says: "The Treasury Board may do one or more of the following: (a) by directive, control or limit expenditure under any appropriation." Why was it felt necessary to include this subsection?

Hon. K. Falcon: Because the statutory appropriation is in section 125(1), for greater certainty and clarity we said that the Financial Administration Act doesn't apply, as it's already captured under 125(1). It's really a drafting measure to achieve more certainty and clarity around it.

Section 125 approved.

On section 126.

B. Ralston: This refers to the tax on legal services, and it's a fairly expansive definition of legal services done in relation to…. Then there's a long list of things. Why was it felt necessary to include that, given that the definition of "legal services" in section 1 — I think we already discussed it earlier, when we discussed the definitions section — is very broad?

Services that come within the meaning of the practice of law under the Legal Profession Act, under the Notaries Act and "legally related services prescribed as legal services." There's an opportunity to regulate under the definition in section 1. It excludes legal services provided to an employer.

Is this simply for greater certainty? Or it enumerates a list? Or is there any lack of clarity in the initial definition? It seems, perhaps, unnecessary. I don't think it's unclear, but it just seems unnecessary. Can the minister explain why it's been drafted this way?

[2000]

Hon. K. Falcon: This, I understand, is exactly as it was under the old PST. Subsection (2) is simply saying that if the purchaser does not live in British Columbia but the legal work is being done in British Columbia — it relates to British Columbia — then they must pay the 7 percent tax. As I said, that's exactly how it was before, and that's how it will continue to be.

B. Ralston: Just so I understand that, then. If it were legal work performed, say, by a multi-jurisdictional law firm in Toronto by lawyers in Toronto — all the legal work is done there — yet it concerned a real property situated in British Columbia, then the tax would be applicable. Is that what's being said? I wonder what the jurisdiction is to include that in the act.

Hon. K. Falcon: Under (2)(a) it says it would apply in the case that the member mentioned, even if the legal work is being done in Toronto, because the real property is situated in British Columbia.

B. Ralston: I appreciate that the subject of the work may be situated in British Columbia, but all the work, the service, is being provided in another jurisdiction. This seems like an attempt to take jurisdiction where none might properly be founded within the constitutional powers of the province — notionally, anyway. I'd be interested to hear a response.

Hon. K. Falcon: Well, the member would recall that this was brought in, in the early 1990s. Though the member wasn't in government with the government of the day, the NDP government brought this in. It has been, not surprising, the subject of extensive litigation as a result of lawyers always taking a great interest in these kinds of things, and it has been upheld repeatedly.

I won't pretend to explain all the policy rationale as to why it was introduced and how it was structured. My understanding is that it has been the subject of repeated litigation, and the premise underlying section 126 has been upheld.

[D. Black in the chair.]

The Chair: Member for Burnaby…. Member for Surrey-Whalley.

B. Ralston: Surrey-Whalley. No, please, not Burnaby. No, I'm a proud representative of Surrey.

I appreciate that the minister wishes by way of explanation to offer the fact that some things had taken place in the 1990s. I don't know whether that's a very satisfactory explanation in this context.

Secondly, just out of curiosity, was this point specifically litigated — the jurisdiction in the case of legal services provided elsewhere by a buyer and seller in another jurisdiction, although the subject of the property might be in British Columbia? There are conflict-of-laws provisions that resolve these issues. This would seem to be, in terms of the provision of a service, a relatively tangential connection to the jurisdiction.

Hon. K. Falcon: Look, I find myself in the position of having to explain and defend this, even though I don't like any of it. This is what the referendum result was, so this is what we're going back to.

Presumably, when it was introduced in 1993 by the previous government, they put these provisions in place. Otherwise, people could avoid paying the tax by simply hiring out-of-province lawyers. Presumably, they wanted to avoid a situation where persons were hiring out-of-province lawyers to avoid having to pay the PST. Thus, these provisions were put into place, which then, I understand, became the subject of litigation. As I understand, the result of the litigation was that these provisions were upheld.

B. Ralston: This will be my last intervention on this.

I think, though, subsection (2), in fairness, does refer to the situation where neither the purchaser nor the recipient of the legal services resides in British Columbia. So it's not a question of a British Columbian deciding to hire someone in Toronto to avoid paying the tax. It's where neither party resides in the jurisdiction. The only connection is the subject of the arrangement, which is real property in British Columbia.

[2005]

I appreciate we may not be able to resolve that question here. Given that that's been noted, perhaps we should simply move on. I believe my colleague has a question.

Hon. K. Falcon: The key is that in 126 the property is located in British Columbia, and that's the triggering mechanism. There is, as we come up to section 127, the tax if legal services are provided to a British Columbia resident. I guess we can come to that and start going through that.

Section 126 approved.

On section 127.

D. Donaldson: I've been trying to keep my comments strictly on the information in the act. Unfortunately, the minister's comments around not being happy with anything in the act and can't explain rationale because it was put in, in the early 1990s…. I'd just point out…. I appreciate he's not been Finance Minister for very long, but his government has been government for 12 years. There were opportunities to change parts of this act previous to the introduction of the HST.

I'm not going to go any further on that. I just wanted
[ Page 12587 ]
to respond. I couldn't let that slip.

Section 127. From what I can gather, this is a person who is residing in B.C. and hires a legal representative who is situated outside of B.C. who's going to work on a number of issues outlined in subsection (2) that are taxable at the rate of 7 percent. Again, I'm always interested in the mechanisms for this.

Is that self-reporting when that person…? Presumably, if this person, if this legal service they hire is outside of B.C., that 7 percent is not added to the bill. Is it, again, a self-reporting kind of scenario, where when that person gets the bill for those legal services, they calculate out another 7 percent and submit it to the government?

Hon. K. Falcon: In this case if the out-of-town lawyer is a collector required by the act, then they would collect the tax payable. If that were not the case — that they were not a collector — then there would be a requirement to self-assess.

To the first point. Look, we dealt with this by getting rid of the whole nightmarish act, regulations, multiple statutes and brought in something different. But anyhow, we're now going back to a somewhat improved version of what existed before.

D. Donaldson: Just can't leave that one alone, eh? I won't respond any more on that one.

So there are designated collectors, legal services outside of B.C. Do they remit, then, on a yearly basis to B.C. on the items that they're supposed to charge an additional 7 percent on?

Hon. K. Falcon: They would remit, generally, on a monthly basis.

B. Ralston: Looking at subsection (3), there's an exemption described there in (b). It says that in another jurisdiction there is the same tax. I think what it means is if there's a similar tax in another jurisdiction. This is to avoid double taxation.

For example, if the legal service were provided in Ontario concerning litigation in British Columbia, would the HST in Ontario qualify in terms of this definition to therefore legally create an exemption from paying the same tax in British Columbia?

[2010]

Hon. K. Falcon: I'm advised that whether they are paying tax in Ontario, from a B.C. perspective we don't particularly care about that. We just will be applying this PST onto the legal services for the portion of the work that relates to work being done in British Columbia.

Section 127 approved.

On section 128.

D. Donaldson: This section deals with exemptions in relation to legal aid, what's left of legal aid. My question to the minister is: were there exemptions for legal aid under the HST?

Hon. K. Falcon: Yes, there were.

D. Donaldson: Thank you for that, Minister.

In section 128(b) this seems to cover a situation where legal aid pays part of the legal services and the individual pays part. I just wanted to clarify that and ask for a bit of elaboration on 128(b) by the minister.

Hon. K. Falcon: The member is correct.

Sections 128 and 129 approved.

On section 130.

B. Ralston: This initiates a new division on the tax on telecommunication services. We've covered a bit of that in the discussion of the definitions section. In subsection (2) there's an exemption relating to a requirement to pay tax under section 131. Can the minister explain briefly that exemption?

There's another exemption in subsection (3) referring to a collector who sells a telecommunication service, who alleges that that person is exempt, and there's some responsibility on the part of the collector. Can the minister briefly explain that?

[2015]

Hon. K. Falcon: On the first point, subsection (2), the section does not apply…. This is effectively there to avoid double taxation. If you're already paying it under section 131, you're not required to be paying it under section 130. Subsection (3) is just to state that a collector…. You can't just have someone come in and say: "Oh, I'm exempt from the tax." They would have to provide some documentation to the collector. If there is not some adequate documentary evidence, they would be required to pay.

D. Donaldson: Section 130, "Tax on purchase of telecommunication service," subsection (2), again, deals with where the tax does not apply. I represent a rural area, and there are many rural areas where telecommunication service such as Internet isn't available through high-speed land lines.

My question is: would the situation where somebody purchases a dedicated telecommunication service such as a dish that connects to a satellite at their own home…? Is that an example of where this section does not apply?

Hon. K. Falcon: No, it would not apply in the example that you've given. A dedicated service is by its very nature…. It's a dedicated continuous service as opposed
[ Page 12588 ]
to the example that the member gave, which would not apply.

D. Donaldson: Again, remote communities, some of which I represent, have oftentimes a society-owned communication system that is a closed network that provides service to the community or members of the community. Does that fall under 130(2), where the section does not apply?

Hon. K. Falcon: Sorry for taking a bit of time here, but I'm trying to understand this myself.

What we're referring to in 130, when we talk about these dedicated lines, are quite rare situations where it would be like dedicated lines that, say, National Defence has, where they run their own lines so that only they can use them and only they can access them. That's the kind of dedicated lines we're talking about here, or maybe a business, for whatever reason, is utilizing a dedicated line that only they are able to utilize.

[2020]

It would be, I guess, a fairly exceptional situation, probably extremely rare nowadays, but something that was in place in the past and is still in place now. It would not apply to the small communities that the member is referring to.

B. Ralston: To follow up on that, and going back to the definition of "dedicated telecommunication service," because that's what is being referred to, it refers to "by using a circuit, a communications channel, a partial communications channel or…sending or receiving a telecommunication."

What the minister seems to be saying, based on the advice he's getting, is that any kind of wireless service, regardless of how it's scrambled to ensure privacy, does not fall within this definition, and it would simply be hard-wired circuits that fall within this definition.

Communications channel, to me, seems at least ambiguous, and the other open-ended definition at the end of "any other means of sending or receiving a telecommunication that is dedicated to the exclusive use of the purchaser of the service" would seem to fit that definition.

If, for example, radio signals or any other kind of wireless signals that are sufficiently encoded that they only can be received by the person that they're intended for…. That's exactly what we have in the case of modern telecommunications. Signals sent to the BlackBerry that the minister has don't come to the BlackBerry that I have unless there's an intention to do so. So it's dedicated to the exclusive use of the purchaser of the service, at least as I read it.

Is that a weakness in the definition, or am I extending it in the wrong way?

Hon. K. Falcon: This is admittedly an old…. Again, it has been transferred from the old act to the new act. It definitely does not apply to a BlackBerry. This is relatively rare cases now, as I mentioned before. Again, the key words being all of the things that the member said above are true, whether it's a circuit, communication channel, partial communication channel, etc., that is dedicated to the exclusive use of the purchaser of the service.

You can see that under 131 there is only an advantage if you've got this kind of a large system that is an interjurisdictional system. So it would be a pretty rare circumstance, I'm advised, that this would be utilized.

D. Donaldson: Thank you for the explanations. I'm trying to get my head around what the rare situation might be.

This situation perhaps isn't so rare, so it's of interest to me whether it's applicable. Let's say the Northern Health Authority were just looking towards expanding their telemedicine services. Those are dedicated services — satellite, which we'll get to in the next section. If they were purchasing a dedicated communication service that used the satellite technology that's in a direct line, would that be exempt in this section, section (2)?

Hon. K. Falcon: The answer is, under 130, if it's all within B.C., then they're going to be paying the 7 percent of the purchase price under subsection (1) of section 130 — right?

[2025]

Under 131 it is only going to come into this formula if they have some circumstance where these dedicated lines are not only within B.C. but also interjurisdictional in nature. As I say, it's a very rare situation, and it does not include an electronic device in the formula, I note there.

I think maybe this is an important point to say something. Some of these parts of the act, like this, I think are…. Probably, had we had more time…. But there is the pressure of making sure that we get back to the PST as it was, and members opposite were cheerleading in terms of saying that this should have been done way faster.

This is really an example of where probably more work could be done on trying to update and really determine how many actually would even find themselves in this situation. But that kind of work would delay, further, the requirement to have this back in place on the very, very tight time frame that we're already operating under.

We can't even think of a good example. I used the National Defence example. That was the only sort of example we could think of, although National Defence as a federal ministry would be exempt from PST anyhow. That was the closest example I could think of, of dedicated transmission lines that are interjurisdictional and of a continuous nature.

Section 130 approved.
[ Page 12589 ]

On section 131.

D. Donaldson: Section 131 is how the tax is calculated on provision of dedicated telecommunication services. Again, there's a formula, 131(2). The tax is 7 percent of the purchase price times the B.C. distance over the total distance. Is that the same formula as was in the Social Service Tax Act?

Hon. K. Falcon: This is actually a really good example of how out of date the old PST is. You can see under subsection (2)(a) it's describing "if the dedicated telecommunication system does not include an electronic device that is a satellite, the total of the distances, measured in a direct line, between electronic devices that are connected to the system, with the distance between any 2 electronic devices connected to the system…."

Yeah, exactly. This is like running the movies with the hand kind of technology. This is extremely outdated in so many ways. I think we can say with a high degree of comfort that we won't have to worry too much about this provision kicking in too often unless somebody is still utilizing 1950s-era electronic equipment that has got a measurable distance between the electronic devices, etc.

D. Donaldson: Well, I'd welcome the minister to come up and visit Stikine and the northern parts, some of the communities. The devices might qualify under this section, as described by the minister.

As far as not having enough time to make the corrections necessary that the minister alluded to, I just wanted to remind him that his leader said there was a plan B in place well before the referendum results came in. I suppose the plan B didn't include looking at the defeat of the HST and parts of the PST that could have been worked on to update them.

In 131(2)(b) the dedicated telecommunication system does include electronic services, a satellite. I appreciate that it's hard to even come up with an example, but in this case it seems to me we're talking not the bat line or whatever the minister talked about, the direct land line, but something that would be more wireless, as my colleague mentioned, in nature. Am I interpreting that 131(2)(b) correctly?

[2030]

Hon. K. Falcon: My initial thought was that when you were kids…. You may recall the tin cans with the string between them, and you would talk and listen to each other. This is probably the era that we are talking about here. This, in subsection (b), refers to "electronic devices that are connected to the system but that are not satellites, with the distance between any 2 of these electronic devices…."

The reality is that this was, given the limited time…. Remember that when you talk about plan B, naturally, in the anticipation of a potential defeat, a whole bunch, a team, was already put together, starting to undertake all the review, making sure that we were connecting with federal counterparts, etc., so that we were able to move forward. But it didn't mean that we got a chance to rewrite the entire thing.

You're starting to get perhaps a better understanding of what's actually involved in the taking of multiple statutes and hundreds of pages of regulation, trying to go through all of those, put them into a discernible, simplified and, hopefully, improved fashion as best you can given the time frame you have available, getting that into the House, getting it passed in the House, then undertaking the drafting of the regulations and having those in place by the fall to ensure that you can meet the deadline of getting back by April 1, 2013.

This would be an example of where, in the course of doing that, we would look at this and say: "Well, this is so old and outdated that we haven't got even time to waste on trying to deal with that, because we've got to get on some of the other big things we're working on. We'll put it back exactly as it was."

Then later, there may be some chance where you've got an opportunity to start to go back to say: "Okay, in addition to the" — granted, I think, pretty darn good — "improvements we've made to a very poorly written, complex, confusing PST, we could go back and start to tackle some of these kinds of things and see how we might update them to the 21st century."

B. Ralston: Then I'll just follow on what the minister said, leaving aside all the history about how we got here, the motives and all the rest of that.

Given what he's said — I know it's difficult to make a commitment to future legislation; under the rules, that may not be actually permitted — do I detect there a sense that the government might be looking or anticipating that work will be set in motion, perhaps on a less compressed time frame, to review the act as it is now, recognizing the imperfections and recognizing that continuous improvement is a value and that what is good could always be made better? In the longer term, is that part of the workplan that the minister sees for the ministry?

Hon. K. Falcon: For sure, over the longer term, when we have the opportunity to responsibly have some time to look at some of these things and update them, to introduce them into the 21st century, we certainly would do that. Again, it's one of the reasons why, at the time when we announced that we would go back and attempt to make administrative improvements, I cautioned that they were going to be modest, just given the pressure of the time frame. That, indeed, was exactly the case.

Certainly, over the long term…. Now is probably the appropriate time to really commend the staff. Obviously,
[ Page 12590 ]
I'm not up at night personally doing all this work. I know that will come as a surprise to many viewers.

I can tell you, and it's worth saying today, that the staff, the professional public servants in the province of British Columbia — who, through no fault of their own, found themselves in a position where they were having to do this — have really done an exceptional job and have been working under the most incredibly tight timelines to try to get back and restore an old PST, which we actually could not legally put back in place the way it was. It was so bad, and there were so many….

[2035]

Well, the lawyers within government just absolutely said, "Not a chance are you going back to that act," because there had been such deviation, for understandable reasons, administrative practice to try and resolve so many of the crazy elements of the PST — which, of course, was brought in, in the 1940s, and didn't particularly reflect the 21st century. It meant, by its very nature, that we couldn't go back to the way it was.

We had to do a number of improvements. The staff just did an exceptional job in doing a herculean effort to get a dramatically improved PST that we're now having the opportunity to debate here but, understandably, did not have anywhere near the time to do a more broad-based rewrite and improvement that we would love to be able to do had we had the time.

This would form part of things that I would certainly hope that in the future, without the pressure of having to get back in a very, very tight and aggressive timeline…. We would be able to look at these kinds of things, spend more time, and update and improve them.

Sections 131 and 132 approved.

On section 133.

D. Donaldson: This is another interesting section, "Tax if motion picture exhibited." It appears to apply to equipment or tax relating to recording of a motion picture, then exhibiting it. Could the minister elaborate on 133(b)? It's not clear to me what this actually applies to.

Hon. K. Falcon: Member, I'm advised that this is exactly like it was under the old section 87 except that, of course, when they were referring to tangible personal property with relation to motion pictures, they were referring to the old reel-to-reel, and telecommunication service refers to the electronic versions. Is that correct?

Interjection.

Hon. K. Falcon: Excuse me. It's section 87 in this act, not the old. I apologize. Same rule, but it means in whatever medium the motion picture is in, not just the old form of reel-to-reel or on a disk or what have you — whatever medium it's in.

B. Ralston: I think I understand what the minister is saying. Section 87, which we discussed earlier, refers to "tangible personal property that is a recording of a motion picture," and this refers to telecommunication "in respect of a recording of a motion picture." Otherwise, the section appears to be identical. Is that what the minister means by the different mediums?

Interjection.

B. Ralston: Okay, then I think that's clear.

Section 133 approved.

On section 134.

D. Donaldson: This is "Exemption if telecommunication service purchased for resale." Does this relate to the previous section regarding recording of movies for showing in public venues?

Hon. K. Falcon: No. This is any telecommunications service that is purchased for the resale. It's like the previous discussion we had about inventory. If the purpose of it is to resell it, not for your own use, then it is exempt.

Section 134 approved.

On section 135.

B. Ralston: So 135 and 136 refer to, again, the small seller, and the rules are different for the small seller. Can the minister briefly explain…? I thought we'd dealt with this in some detail in previous sections.

[2040]

I'm wondering: is this just the additional ingredient that's added as it relates to telecommunication services? There are several referred to there. I don't quite understand why it reappears and what additional ingredient it adds.

Hon. K. Falcon: This is the exact same rule that we discussed before for tangible personal property. Now it's also applying the exact same rules around taxable services.

Sections 135 and 136 approved.

On section 137.

B. Ralston: We now get to the section on exemptions, which is obviously an important section, although there are exemptions which we've dealt with along the way up to this point. This is the exemption that's granted where a taxable component is sold with a non-taxable compon-
[ Page 12591 ]
ent for a single price. Can the minister explain how this section operates?

Hon. K. Falcon: In section 137…. We had a bit of a discussion about this before. Where the taxable component is less than 10 percent of the total market value — we talked about the gift basket before, for example — and meets the conditions that are set out there, then it would be exempt from application of the PST.

Noting the hour, I move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 8:43 p.m.

PROCEEDINGS IN THE
BIRCH ROOM

Committee of Supply

ESTIMATES: MINISTRY OF
ENERGY AND MINES

(continued)

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

The committee met at 2:54 p.m.

On Vote 19: ministry operations, $50,234,000 (continued).

S. Simpson: We're going to open with and we'll have some discussion for the next short while about the Lottery Corporation and gaming. Then we will move to Housing and finish up around the dinner break.

[1455]

Could the minister tell us, in regard to the current status of the fines from FINTRAC…? I believe in July 2010 there were about $670,000 in fines imposed by FINTRAC, the federal agency that tracks transactions that are suspicious and suspected of being involved in money laundering. They served about $670,000 in fines related to activities around our casinos. In November of 2010, I believe, the Lottery Corporation appealed those fines.

Could the minister tell us what the current status of that appeal is?

Hon. R. Coleman: It's before the federal courts. B.C. Lottery Corporation has filed all of its documentation that's required. FINTRAC has not filed all of theirs as yet. We expect a resolution within about a year.

S. Simpson: I know there is at least one incident of documents being sought under freedom of information where I believe the Lottery Corporation was not prepared to provide the documents. The Office of the Information and Privacy Commissioner ruled on the matter that the documents should be provided. To my understanding, subsequently that has been appealed by the Lottery Corporation to the courts.

Could the minister tell us if that is correct and what the status of that appeal is?

Hon. R. Coleman: With regards to that, we have not released the information, and we've written back to the Office of Information and Privacy because it's before the courts and it's about information that could be a record relative to a case. At this point in time we've appealed that. The judicial review was filed on March 13, 2012, and the hearing date has been set for January 16 to 18, 2013.

S. Simpson: Could the minister tell me…? Is this the only case where the Lottery Corporation has attempted to overturn a decision of the Office of the Information and Privacy Commissioner, or are there other instances where in fact there is a dispute between the Lottery Corporation and the office?

Hon. R. Coleman: There are two others. Basically, one of them has to do with a request for disclosure of the manual that is the Casino Standards, Policies and Procedures Manual. B.C. Lottery maintains that the disclosure of this manual would be harmful to the financial and economic interests of the company and the province.

The 600-page manual contains detailed policy, standards and procedure for casino service providers regarding staffing protocols, key controls, computer systems and security and surveillance protocols. A hearing was held on April 30 and May 1, 2012. Due to a personal matter affecting the counsel for the commissioner, the proceedings were adjourned, and the continuation of the hearing is scheduled for June 26 to 27, 2012.

The other time that we've actually had an issue with a request is with regards to playnow.com lottery sales figures sorted by the first three characters of postal code. B.C. Lottery maintains that disclosing this information could be harmful to its financial interests and benefit its competitors in the grey market, which are people that are running illegal, for lack of a better description, on-line gaming projects.

[1500]

This case is being heard as an issue, and each decision is the same. So basically, we are in February 11 and 12 in 2013, as the issue in each decision is the same.

The same is that one is the competitive information and the privacy of our customers who do play on playnow.com. Some of this information would give out postal codes or information we think should be protect-
[ Page 12592 ]
ed. On the second piece, it is really about the fact that we really don't want to have to publish our security protocols — that people will know how our cameras run, how our security patrols run and those types of things that protect our customers.

We think it's very important to protect both the security of the facilities and the operations and those sorts of things for the company.

S. Simpson: I know that there have been some initiatives by the Lottery Corporation in regard to fighting fraud and dealing with those matters and that a number of practices have been contemplated or put in place.

Among those…. There's a list. I have a list of a half a dozen or so — one of them suggests monitoring play patterns as a way of discouraging fraudulent transactions. Could the minister explain what's meant by monitoring play patterns?

Hon. R. Coleman: That really has to do with, mainly, card games. We're watching for things like card counting, that sort of thing. That's something that the whole industry is very aware of and has different ways to watch it. When a new pattern comes available, we make sure our security personnel know to watch for it so that we can't have somebody defraud the operation. That piece, that description, is focused on the live table games like cards.

S. Simpson: Could the minister tell us who has responsibility for that? Obviously, it's somewhat of a labour-intensive operation for somebody who is presumably located in a casino to be able to, first of all, identify what might be a suspicious pattern and to have had some overview that would trigger them to say, "Okay, this particular game looks a bit curious to me," and then to take the time to actually observe it for a period of time to satisfy themselves either that there is a problem or there's not a problem. Who does that in order to implement this?

Hon. R. Coleman: Frankly, our staff are trained, so it would start with the dealer who would then usually, if they saw or felt something was amiss, talk to the pit boss. The pit boss would alert security who would then do the video surveillance. As well, the pit boss and the dealer would watch, and then if there was an issue, security would come and deal with the matter.

S. Simpson: So the responsibility for this monitoring and oversight and to take some kind of action rests with the casino and with their personnel, not with Lottery Corporation personnel. Is that correct?

[1505]

Hon. R. Coleman: No, not by itself. There are gaming policy and enforcement branch security personnel on site as well. They're in the security video room. They would be part of that, so they would be advised. If necessary, we would bring in B.C. Lottery Corporation investigators and also the police if it was necessary.

S. Simpson: I believe, also, one of the things that was on the list of initiatives taken by the Lottery Corporation to deal with these matters was, in fact, having BCLC investigators on site at all casinos.

Could the minister confirm: is there, in fact, a BCLC investigator on site at a casino during all of its operating hours? Are they there for part of the day? Are they there every day that the place is operating? What is the consistency of having a BCLC official there, an investigator there, during operating hours?

Hon. R. Coleman: The B.C. Lottery Corporation has investigators assigned to every casino in British Columbia. They are not there 24 hours. They're there during peak hours, and they are on call for any issues they would get called for by the security within the casino. At the same time, gaming policy and enforcement branch also has investigators that work the casinos and help with investigations when necessary. They will come in and help with any investigation that is necessary. So if there's something that's found, they would be part of the investigation.

S. Simpson: In addition to the Lottery Corporation…. Maybe the question there is: could the minister describe a little bit what the different responsibilities are for Lottery Corporation investigators who are there and what their job is versus policy enforcement branch investigators — or maybe they have another term for who they are — who are also there with responsibility?

Could the minister explain what the different responsibilities are, or is it a level of duplication between these two organizations?

Hon. R. Coleman: There has to be a slight amount of duplication, because an investigation can lead in one direction or another. Basically, the Lottery Corporation investigators are there to make sure that the compliance and enforcement piece or the operational piece of the casino itself is not being compromised in some way. If they come across something, they would obviously call in GPEB.

[1510]

At the same time, if the casino comes up with something that is not operational but has something to do with fraud, gaming control, administrative issues, that sort of thing, they would bring in GPEB, who would then become the entity that has the relationship with police. In all cases where there's an operational fraud or any other type of fraud or Gaming Control Act offence, GPEB is involved, and the police are brought in as part of the investigation.
[ Page 12593 ]

S. Simpson: One of the areas as well that the BCLC talks about when it talks about additional initiatives that were put in place is training programs for all staff as it relates to fraudulent activity and those things. Could the minister explain the breadth of who "all staff" is? Is that Lottery Corporation staff? Is it Lottery Corporation plus casino staff? And give just a bit of a quick thumbnail of what that training encompasses.

Hon. R. Coleman: It's basically all staff that have work in the facilities who are encountering the public, and in addition to that, security staff who'd be in security centres dealing with the camera monitoring and that sort of stuff. They're trained in a number of aspects to how to watch for fraud, money laundering, other activities that can take place in a casino and in an activity, in an environment, like this.

They go through a number of training exercises depending on the level within the job that they're doing — classroom training, on-site training, video classes. It is ongoing. It's ongoing training so they're kept up to date and refreshed. Pretty much anybody that would be in and around the cards or whatever are all trained in the casino.

Well, you'd get some new people coming in, but the level of training is ongoing until they reach certain levels. They're all being trained.

S. Simpson: In August 2011, I believe, there was a review of anti-money-laundering initiatives. There were a number of areas that were advanced for the Lottery Corporation to look at possible areas of improvement. I want to ask a couple of questions in regard to this matter.

One of the areas that was identified was a revision of the buy-in, cash-out policy so that funds that were not coming from gaming winnings but may have come from another source where there was an effort to use the casino to move money differently that was not legitimate game winnings was trying to be transferred or cashed out.

Could the minister tell me: has the Lottery Corporation looked at that issue about how to identify those funds? If so, what are the considerations?

[1515]

Hon. R. Coleman: When a review was done in 2011, there were a number of recommendations. Basically, I'll give you a rundown of what we've done. There are ongoing processes outside those recommendations that we're still working on to basically get to less and less cash with regards to how we do business in the casino so that it's more on verified information.

B.C. gaming facilities now, versus 2000, only issue cheques for verified wins, eliminating the opportunity for players to convert cash and other than winnings into cheques. Players are not permitted to exchange small denomination bills for larger bills and cannot pass chips on the casino floor. When players cash out, they receive cash in the same denominations originally used to purchase the casino chips. Chips can only be redeemed now at the facility where they were initially purchased.

The province has a patron gaming fund account that establishes players to transfer funds from Canadian banking institutions for gaming use in B.C. casinos — a transparent way to bring in legitimate funds. B.C. Lottery Corp reviews all large and suspicious cash transactions daily. Gaming staff receive mandatory anti-money-laundering training and must take a refresher course every two years.

S. Simpson: This is probably pretty straightforward. The minister said that now transactions would only be allowed where there were verified wins and there was a confirmation of a win. So how does that work?

If it's a significant win and somebody wins $5,000 or $10,000 — a significant amount of money — is there some kind of chit there that says that this is what they've won? So when the cashier has something from the tables — or from wherever in the organization — they have confidence. They don't have to be the one who explores that, because their job is to hand out money and take in chips, presumably.

How is a win verified in order to provide confidence that that's occurring?

Hon. R. Coleman: On all the slot wins in B.C., they're all mechanical. The slot machines are all…. There's no cash paid out. It pays out based on the cash-out of the machine, and that's all tracked mechanically and electronically.

The wins on the others are documented at the table, so they have a chit they take to the cash table that confirms a win. As they go to the cash-out and bring chips, they phone the table to verify the win and make sure the win is verified before paying out.

S. Simpson: To finalize this question, then, the story is that I come into a casino and have a significant value of chips that are from that casino but I haven't played that day and haven't won those that day. If I go up and try to cash these things out for significant thousands of dollars, I'm not going to be able to do that unless there's some confirmation here somehow that those chips came from a legitimate win and not potentially from some other activity that we don't want to see.

[1520]

Hon. R. Coleman: If they aren't redeemed that day and they would come in later with some winnings, they would be able to cash the chips, but we would go back and trace the win before we would cash them in. At the same time, because they were doing it on a different day and it would be a large cash transaction, we would automatically do a section 86 for a suspicious transaction
[ Page 12594 ]
form, which would then go to gaming policy and enforcement for follow-up, on top of the fact that we would verify the win.

S. Simpson: With the suspicious transaction report…. So John Doe comes in and cashes $10,000 of chips, and you don't know for sure, but officials fill out the form, pass that form on to gaming policy enforcement branch. Can I get some sense of how that works then? What happens then?

We have this transaction that warranted the filling out of this documentation. It goes to policy enforcement. What happens then? Does it somehow get to the RCMP, or are the law enforcement people involved? How does the investigation happen? How does this all play?

Hon. R. Coleman: First of all, I don't want to leave anybody with the thought that if somebody comes in and cashes some chips in a casino it's automatically a fraud or they've done something wrong. Basically, we have a number of customers that we know very well, who are large-transaction folks who would do this. Some of them would come in, but we still verify the win. We always have video surveillance we can go back to, to verify the win on the table they were at, at the time that they said they were in the facility.

GPEB would come in and review that information, make a decision whether they thought there was something to go further, like a fraud or whatever. Then GPEB would be the ones who would engage with the RCMP. They'd look at an investigation if we thought there was something of a criminal nature taking place.

It could be a quick, suspicious transaction review by GPEB and our staff, our investigators, simply by looking at the tape and saying: "Yeah, there he is. There's the win. Now we've confirmed it with the dealer, and that's fine." Or it could be somebody who says, "Well, there's something funny here. We'll go look a bit deeper," and that's what they'd do.

S. Simpson: The minister made the comment about how there are people who are frequent patrons of casinos and that, who play significant amounts of money. That's what they do. Obviously, the Lottery Corporation is aware of these people and that they play this way.

One of the recommendations for improvement that came out of that August 2011 review was, I believe, that all patrons and transactions be essentially treated the same regardless of whether or not they were considered to be known to the Lottery Corporation or the facility operator.

I suspect that's in regard to….Those kinds of forms would be filled out regardless, and then somebody at a higher level, GPEB or wherever, would be the ones who would make the determination that: "We have a pattern with this individual. They do this all the time. We kind of feel it's all straight-up. We're not worried about it."

Who makes that call? Does the form still get filled out if…. I believe that $3,000 is the amount on the suspicious transactions that triggers it. Will every transaction over $3000 trigger that report — even if it's somebody that the casino or the Lottery Corporation knows often plays a fair amount, plays large money — letting somebody else make the decision on that? Or is there some decision about: "Hey, we know that fella. We're going to let this one pass"?

[1525]

Hon. R. Coleman: I'll get this right. When somebody has a verified win in a casino and goes over and it's a verified win, there's no need for the suspicious transaction report. It's a verified win. It's done on any transaction that any staff — no matter what price, what number, even though there is a policy around $3,000…. If it's suspicious to someone, they actually fill out the suspicious report. They're trained. If they feel something's suspicious, they do that — if they can't confirm, let's say, with the table.

Those are done daily by shift. Then in addition to that, all cash transactions over $10,000 are automatically…. Not filed as suspicious transactions, but they're also filed with the questionnaire and the information with regards to FINTRAC's requirements.

S. Simpson: If I come into the casino and I'm a fairly regular player and I'm known to the casino….

Hon. R. Coleman: I've never seen you there.

S. Simpson: I haven't seen you there either, Minister, but maybe we hang out in different neighbourhoods.

If I come in and I buy in for $5,000 or $10,000 of chips — say something just under the $10,000. I buy in $8,000 of chips. I sit down at the table. I play. I lose $1,000, and then I go. I want to cash out my $7,000. What happens there?

This, I believe, was also one the recommendations from 2011 — encouraging a change in sort of corporate understanding or the corporate take on what constituted a potential problem.

As we know, somebody coming in and losing a relatively small amount of that money is the cost of doing business sometimes, if you're laundering. That could be the cost of doing business — to drop $1,000 or $2,000 and then walk away with the rest of it. I know one of the recommendations was that that not be viewed as sort of an issue of innocence — that somebody lost some money before they cashed out.

What happens now? If I do that — I go in and buy my $10,000 of chips, then I lose a thousand or so, and then I want to cash out the rest of them and walk away — does that become a transaction that draws attention?

[1530]

Hon. R. Coleman: Actually, when they look at money laundering, they don't think of a $1,000 piece as being much as money laundering. It would take a long time to launder the money, but it's a good example. Money laundering is when you change the instrument. If you could come into a casino and let's say change $25,000 in cash into a cheque for $25,000 calling it a win, then you've changed the instrument. That's when you've managed to launder, because you call it a win.

You can't do that in B.C. casinos. If you buy in with $20 bills or $50 bills, that's what you get back when you cash out. You can't change the instrument. At the same time, if we issue a cheque for…. The customer has the option of taking a cheque. They say: "I'll take my chips back in a cheque." If it's not a verified win, it says on the cheque that it's not a verified win.

They can't take the cheque, deposit it at the bank and say now, "I got the money from winnings," because in actual fact, we've created a paper trail that indicates that it is not a verified win. Therefore, it can't be called winnings with regards to changing the instrument of the cash. So that change was made after the recommendations of 2011.

S. Simpson: Moving just off to another topic a little bit. It's in regard to investments in different areas. Could the minister tell us how much the government has got budgeted for problem gambling programs — either through the Lottery Corporation or through the government directly; a combined number is fine — and for the promotion of responsible gambling? How much is planned to be spent in the next year?

[J. McIntyre in the chair.]

Hon. R. Coleman: In 2012-13 the province's budget for the responsible gambling strategy is $4.453 million, but I should tell the member that that is not a budget with a ceiling. If there was more need for more with regards to our programs, it is available by going straight to contingencies. So we have not…. It's a budget amount but not one that restricts the ability to deal with responsible gambling. The responsible gambling budget at the B.C. Lottery Corporation is an additional $2.7 million.

B.C. has a toll-free problem gambling help line that provides information and referrals to counselling 24 hours a day, 365 days a year. I should emphasize to the member that that's available to anyone, not just someone that may actually gamble in a B.C. gaming facility. If they had a problem with gambling as a result of gambling south of the border, in Vegas or in illegal poker clubs or whatever the case may be, there's no differentiation. The service is available to all British Columbians. Counselling services are provided at no cost for problem gamblers and affected others, such as family members, and there are no wait lists.

[1535]

S. Simpson: That's probably about a half a percent of revenues that that amount would total up to, I think, roughly. Could the minister tell us: how does that compare with other provinces that also are part of the partnership for responsible gambling?

Hon. R. Coleman: It's hard to compare because other jurisdictions attribute it to a percentage of revenue. But the challenge that they also face is they end up with surplus in those accounts because they don't have the use of the information.

We actually have people, GameSense advisors, in every B.C. casino. They provide responsible gambling information and offer support to patrons who may be experiencing distress, facilitate volunteer self-exclusion programs and refer them to services and resources.

The way we approach it in B.C. is that we set a budget every year for this particular piece — the responsible gaming strategy. That budget is not held if there is more need. We actually run the budget to need by people versus just picking a number, a percentage out of the air. In some years we use more; in some years we use less. It all depends on where we're at. For instance, like I said earlier, right now there are no wait-lists in B.C.

S. Simpson: The 2011-2014 responsible gaming strategy put forward a three-year service plan and laid out a number of issues. I think the minister spoke to some of those — a GameSense marketing campaign, the voluntary self-exclusion, responsible information being made available around responsible gambling — all of which appear, to me, to be matters that aren't overly proactive, in some ways. They are somewhat reactive.

We know that some other jurisdictions…. The one that comes, mostly, to mind is Saskatchewan — the I-care program in Saskatchewan, which is a more proactive program. It's a program that's used to try to identify potential patrons who may be at risk. By their conduct and how that conduct is observed, the Saskatchewan gaming folks will identify somebody who is potentially at risk and then look at ways that they might encourage them to see whether they want to get some support for that risk.

My question would be: is British Columbia contemplating any kind of proactive program like the I-care program out of Saskatchewan, and if not, why not?

[1540]

Hon. R. Coleman: Two out of three of our goals are prevention-based. It's actually very proactive with our GameSense advisors in every casino in B.C. Every member of our staff has had specialized training — 100 percent of our employees — with regards to recognizing issues with people that may have problems with gaming. They have a lot of interactions with staff. Our GameSense in-service areas within casinos have very good interaction with our customers as well.
[ Page 12596 ]

Saskatchewan and Manitoba are both converting to our program of GameSense in B.C., just because it is a very proactive strategy, prevention-based. It's working well, and they're actually going to take our programs and use them in their facilities.

S. Simpson: Is the minister saying that Saskatchewan is giving up their I-care program, where they have a more proactive approach in terms of how they try to identify people who may have a problem and then hopefully be able to provide them with some support? Or encouragement. It's maybe encouragement — people have to be responsible for themselves — to seek some support and assistance and, obviously, to offer that through programs that are offered around counselling or those kinds of things.

Is there such a program contemplated in British Columbia, of a more proactive nature, to identify people who have those issues?

Hon. R. Coleman: All our staff, as I said, get trained in what is called appropriate response training, which is identical training to the same other jurisdictions like Saskatchewan and Manitoba. Our GameSense goes further than theirs in some areas. That's why they're not only going to take that program and expand theirs upward to our level, but they're also going to rebrand it so it's pretty much standard across jurisdictions that GameSense is in the casinos basically in those jurisdictions and ours. People would know where to go if they needed help.

All of our people have had that training. It's very proactive how we do this. Our folks are all trained to watch for the signs and deal with the signs and basically help people get there. There were 42,000 interactions with our GameSense staff in casinos last year, so it's very proactive. It is not actually reactive. It's very prevention-based. That's why we trained everybody at that level — so that we could be very responsive to our customers' needs.

[1545]

S. Simpson: I'm not sure that I actually got the answer to the question, but I'm going to move on.

We know that in the electronic gambling, PlayNow, there are additional complications in terms of how you monitor that. It is folks playing from home or from their smartphone or wherever, and you don't have the opportunity to have Lottery Corporation, GPEB staff, GameSense folks there to observe them, because they're obviously playing from a distance.

I know that the Lottery Corporation, in talking about its responsible strategy, has suggested they will integrate responsible gaming features into electronic gaming machines at playnow.com. Could the minister tell us what those features might be?

Hon. R. Coleman: Playnow.com is actually a very good story for British Columbia, I think. It has basically given people that would normally be gaming on line in an illegal site that could be housed offshore or wherever the case may be and that has no limits or security or all of those things on it…. It has given people that would like to do this in a different format the ability to do it in a secure environment.

Of course, our customers have significant security around their information and those sorts of things, but the platform itself has all the features on line that you would find in a casino or any other place, with GameSense reminders and things you could even find out with regards to responsible gambling.

They are also regularly time-logged, so when you go on, there's a time log where it comes up and tells you how long you've been playing on a regular basis, and every 50 transactions it steps in and tells you as well.

At the same time, they establish their daily limit themselves to what they think they can afford in the gaming aspect. If they reach that limit in any period of time, then there's an automatic shutdown, which means you can't log on for another 24 hours. Basically, you can put money back into your account, but there's a cooling-off period. At the same time, there's all the messaging, GameSense, all that stuff.

It's actually very easy to monitor versus, let's say, the cash transactions at a table in a casino or whatever the case may be, because it's not cash. It's all electronically monitored, and it's a secure system.

S. Simpson: When it comes to issues around responsible gambling and the gambling strategies and potentially other areas, but specifically around this area, documents and media reports….

[1550]

There are references to the fact that the Lottery Corporation largely does its own research on responsible gambling and does its own assessments and analysis and then moves forward with programs or initiatives based on that.

I wonder if the minister could tell us what the scope of that research has been. Are we talking about research that's done where there is significant documentation? And what might the main topics or questions in that research be that have been addressed by the Lottery Corporation in order to prepare their programs?

Hon. R. Coleman: Basically, we don't do our own research. So for instance, the four-year study that was done on the self-exclusion program was actually done for us by the University of the Fraser Valley. All our evaluations are done by arm's-length or third parties.

We fund the studies, but most of them are probably done by the Responsible Gambling Council, which is what most lottery corporations across the country deal with. As well, when we do a prevalence study, it's also
[ Page 12597 ]
out to a third party.

What we do research on is our customers' needs and, also, the reaction to certain types of games, just so we can be current with the market's needs.

S. Simpson: Are those studies…? I understand some of it may be more around…. On the business side it might be a little different, but on the responsible gaming research that's either been done or been contracted by the Lottery Corporation or been picked up through its membership in the partnership — are those studies available?

Hon. R. Coleman: They are either on the GPEB website or B.C. Lottery Corporation's website.

S. Simpson: I'll note for the minister that I've got a few more questions but not very many more, and then we'll be heading to the Housing file. I'll flag that for you ahead of time so that whoever needs to know knows.

In the strategy this particular incarnation of the strategy — the '11 to '14 — it calls for a third party, that there will be a third-party review of the approach that will be made public as it gets assessed. This, I believe, is the fifth three-year strategy, going back over a number of years. The Lottery Corporation has had three-year strategies previously. I'm wondering whether there's been any independent or third-party review of any of those strategies done. If so, would they be available?

[1555]

Hon. R. Coleman: A couple of things. The responsible gaming strategy was actually submitted to a world organization and has been given a level 4 evaluation, which is the highest evaluation. There are only about ten gaming organizations in the world that have received that level. We were the second in Canada. That was a few years ago. That was announced the same time as we did something to do with the responsible gaming strategies.

We also have our program. The responsible gaming program that we have here has just had done another review with the Responsible Gaming Council, and that review will be coming out shortly, I would think.

Then the other thing is we also have, as a result of our work with the Responsible Gaming Council…. They have a thing called RG Check, which is an accreditation for casinos. It's a pretty rigorous accreditation. We're having all our casinos go through it. Seven of them are complete, and they will all achieve the accreditation — the responsible gaming programs.

S. Simpson: To be clear, I know that the world gaming council or whatever…. I remember going back and trying to get information in relation to that a year or two ago. The Lottery Corporation had received some acknowledgment.

Of course, the thing that I found when I went to their website is that you can't access very much information unless you're a member. Otherwise, you really have no access to know on what basis they made these decisions, unless you happen to be a member of the council. So it wasn't very helpful in terms of determining what it actually meant to get this recognition.

Maybe just to clarify here. Is it the expectation that this third-party review of the 2011 to 2014 gaming strategy will be something that will done again by the partnership or that? Or was the Lottery Corporation contemplating having somebody else do that assessment which will be made public sometime after 2014?

Hon. R. Coleman: Not only will it actually have that review at the end of 2014, but it has regular, third-party evaluations done during that period as well. Every jurisdiction in Canada is working together on continuous improvement for the responsible gaming objectives, and we work through the Responsible Gaming Council to achieve those objectives.

[1600]

Basically, any program that can be improved or peer-reviewed or we get information on, we work together with those to make sure we're always working on continuous improvement, not just evaluating every three years but, basically, evaluating on an annual basis.

S. Simpson: I'm going to ask two questions here. The first one is a pretty simple one. Are those reviews available? Are they on the website? Are they available to be looked at?

I want to move to just a couple of quick questions in relation to PlayNow. Could the minister tell us what has the revenue for the last year for PlayNow been?

Hon. R. Coleman: With the reviews, we make them available on the website. We'll check and make sure that that is the case. That's where they are. We're very transparent about that.

The playnow.com revenue last year was $75 million gross and $27 million net.

S. Simpson: So $27 million net. Then it's safe to say, if I'm doing my simple math here — I think I'm pretty good at this; the minister can confirm — that it cost the Lottery Corporation $48 million for the year to operate the system, all in. That would be correct?

Hon. R. Coleman: The $75 million includes wins. It's what comes in. It's everything — all the costs to do it. We're investing in the system now because, as this becomes better known, there's going to be more growth. But even at that, we're still making $27 million on a $75 million revenue base.

S. Simpson: This might be the last question around
[ Page 12598 ]
gaming, because we're a little tight on time.

Could the minister…? I know he knows this. I met recently with the horse-racing industry, and the minister, of course, knows that they are having their challenges. The two tracks, the thoroughbred and the standardbred track, are having some challenges. I know that Great Canadian is trying to work through that and looking at options and that there is a committee that has been put in place to look at some of those matters.

Could the minister maybe just take a minute and explain where he sees this going over the short term in terms of the industry, what supports the government has in place to try to keep the industry viable and what might be contemplated moving forward?

[1605]

Hon. R. Coleman: I'm sort of chuckling to myself because for anybody to describe the tos-and-fros of horse racing in the last decade or two in a couple of minutes would be absolutely brilliant, and I don't think I could get there. It is the most challenging piece of the gaming file, without question.

A couple of years ago when I was the minister responsible, we put in place the Horse Racing Industry Management Committee to go and have a look at all the contracts, all the old standing pieces where revenue moved and all those things, and the shares and what have you, between the two breeds and all that stuff. They did a ton of work and brought it to a pretty good stage.

They put in place a model that we, at that time…. Government decided that, rather than working on a percentage of the slot win at the two tracks for horse racing, we would just formalize a $10 million piece of the gaming revenue to horse racing.

What was happening was it would fluctuate up and down, and they'd never know for sure what the number was, because it would depend on how the slots did, both at Cloverdale and at Hastings. It was requested to formalize it so they'd know what their budget would be.

We did that, and right now we have a review going on with the head of the gaming policy enforcement branch, which will report out in the fall. Basically, they're going to look at everything that needs to be…. They're engaged with all the horse-racing industry, the horsemen and all the folks that are involved in it.

The work that we've done so far has seen an improvement in the handle. It has seen an improvement in crowds at Hastings and at Cloverdale, but particularly at Hastings. This is sort of the piece to come back with the next level of a business plan for the future of horse racing.

Basically, we're doing all of this with regard to horse racing, and it will continue through. With regard to it, the challenges that horse racing may face will be: do they discuss having two breeds at one track, or do they stay with a single breed? There are issues with the city of Vancouver at Hastings on the lease, the improvements they want, the cost and what the operator can bear with regard to the revenues that are actually coming out of that particular location.

There's a whole bunch of things in horse racing that need to be sorted out, and they will be by fall with the next piece of this work that has been ongoing. It's probably in a better place than it has been in a long time, with the work of the management committee and the other stuff.

S. Simpson: Maybe if I'll Have Another wins the Belmont, it'll help.

Interjection.

S. Simpson: Yeah, that might help. I know they expect a very large crowd out there, too, to watch that race at Hastings.

At this point, because of our brevity of time, I'm going to thank the Lottery Corporation staff, and we'll move to the Housing file.

The Chair: Okay, there has been a request for a brief recess, five minutes. See you shortly.

The committee recessed from 4:10 p.m. to 4:19 p.m.

[J. McIntyre in the chair.]

S. Simpson: We're back and on to Housing. I know we have a number of new officials with us.

A couple of questions. First, on the question of the housing subsidy. I see that in the financials the subsidy goes down from '11-12 to '12-13 by almost $148 million — the reduction in the housing subsidy — and then it goes down by more modest amounts in the next couple of years.

Could the minister explain where that money is coming from and what the implications of that subsidy reduction are?

[1620]

Hon. R. Coleman: It's pretty straightforward. What happens on that line in the financial statement is the multi-year funding — both federal and capital from the province, which are one-time grant initiatives. As they get spent or built, they come out, because they're used up in that particular year.

For instance, we're spending money on modernization and renovation of units but also at the same time building new housing stock. If we have a project that starts and finishes this year, that's just a one-year thing, and of course, we don't use the money next year because that was the capital part of the project, and it's only spent once.

S. Simpson: Well, if that's where the money is coming
[ Page 12599 ]
from and if we are seeing the amount of subsidy, which is the key amount that drives construction — I guess it relates to the subsidy money — going down after a couple of pretty big years — and I understand it's going back to closer to where it has been previously — what does that mean, can the minister tell us, in terms of the expectations for the next couple of years on new housing stock to be built by the government, either direct housing through B.C. Housing or housing that will be built and dealt with by the non-profit sector?

Hon. R. Coleman: We started out pretty aggressively to start building housing a few years ago for certain clients, of course — mainly people who were homeless with mental health, addictions, multiple barriers and that type of thing.

In 2010 we did over 1,800 units. In 2011 we did over 1,800 units. These are fiscal years '10-11 and '11-12. Now in '12-13 we expect to be at about 827 units, because on our three-year budget we are ahead of the game and actually deploying the capital. And in '13-14 we are projecting about another 1,200 units. We will be building fewer over the next two years.

S. Simpson: The endowment of $250 million — I think it's an endowment. I think that's what it's called. Could the minister confirm that that fund still exists and that the revenue — I believe it's the interest income off of that — gets expended on a regular basis, gets subscribed on a regular basis? Could the minister tell us if it is whole, the $250 million, and what that endowment income is being spent on?

[1625]

Hon. R. Coleman: Well, the housing endowment, in the first place, still does exist — right? It basically has been approved. More than 40 innovative housing proposals have been approved to receive more than $25 million to develop nearly 400 affordable housing units and other unique projects. A couple unique projects….

I'll give you an example. The housing endowment fund accepted an application from Honour House, which is a residence for veterans that are coming back from Afghanistan and may be suffering from post-traumatic stress, PTS, disorder — for them when they're down here, doing care and that sort of thing.

There was money put up for the Burn Fund — for their building, for some of their offices and some residential…. They were successful in a proposal to us to build some units for people who are actually visiting families who are in the hospital for treatment of burns and that sort of thing.

It's been pretty good. It also has helped us with the agreements with eight municipal governments to build 2,200 new and upgraded housing units with some of the early operating costs and the innovative things we're putting into those buildings.

S. Simpson: Could the minister confirm…? Those numbers that the minister was providing us with — were those numbers that were over the life of the endowment fund, or were they numbers for the last year?

Hon. R. Coleman: The $25.6 million was to 40 innovative housing solutions across British Columbia — ones like I described. In addition to that, there are 2,200 new and upgraded units with integrated support services for people who are homeless or at risk of homelessness that money has gone into, and that's 32 developments in total.

The fund is presently totally subscribed. So we're currently not accepting any proposals at this point in time.

S. Simpson: An area that I want to talk about a little bit here — and this is a problem that I think we're seeing coming not too far down the road, potentially — is around the expiration of non-profit housing agreements and how that will play out for a large number, I think, of non-profit groups.

I know that in discussions with the B.C. Non-Profit Housing Association they say that they have almost, just under, 1,300 of their housing societies — about 78 percent — that have operating agreements with B.C. Housing. As I understand it, 85 percent of those will expire probably by about 2035 or so.

Could the minister tell us what the implication is of more than 1,000 of those agreements expiring and that housing being able to remain viable and still provide housing to those people it currently serves, many of whom have pretty significant and deep subsidies?

[1630]

Hon. R. Coleman: First of all, for the record for the member, I don't intend to be here in 2035 when these have all expired.

S. Simpson: Neither one of us will.

Hon. R. Coleman: Over the next 25 years about $140 million in federal subsidies are going to expire in projects across British Columbia. It's the most important issue we have at the federal-provincial-territorial meetings about housing with the federal government. We are in discussions with them about this.

I'm not sure when the next meeting is. It's coming up soon. I'll be attending as the minister, and I'll go back to my old files and remember what I did at the last meeting because in between there's been another minister.

It will also, actually, prove to be an opportunity for some societies. Most of these would expire and the mortgages be paid off, so a lot of them will just be able to sustain themselves because they won't have the overheads of a mortgage, and the rents should cover. For other ones
[ Page 12600 ]
we'll probably look at the age of their buildings and the density of their buildings and look at what they want to do in the future in conjunction with us.

Also, as we come through this, a lot of these older projects that we're talking about…. I think the demographics will have shifted quite a bit by the time a number of them have expired, so the new mix of tenant might be different than the old. All of those things are dealt with on a project development basis with each one of these as we come through it with the non-profit and as we work with them to find these solutions for them.

S. Simpson: Part of the issue I see here…. In my discussions, I recognize that there are a number that if their mortgages are paid off and their buildings are in reasonable repair, they're going to be okay. Others, the situation…. Particularly if they have challenges around the age of their building and that — and we'll talk a little bit more about, kind of, how upgrades and supports are made available for those buildings — they may be in less good shape.

Has there been an assessment done as to how many of those 1,200 or so, almost 1,300 current operators who have agreements with the province and with B.C. Housing…? Has there been an assessment done of how many of those may be facing challenges that are significant that will require some kind of intervention, versus how many of them it looks like are going to be okay?

Hon. R. Coleman: You're right. There is quite a mix, but we have done a detailed assessment of all these projects. About 50 percent of them, we would suggest, will be able to carry their operating costs. The other 50 percent have different challenges. Some of them may be able to, with a little bit of reinvestment in the product. Some may need to be able to be redeveloped because of their age, and there may have to be some work done there.

We think we have a very good argument or discussion to have with the federal government, because when the subsidies actually expire on these, so does the provincial subsidy expire. Our subsidies are staying in place, so our discussion with them is: "If we're staying in on the ones that need it, you need to stay in on the ones that need it."

[1635]

S. Simpson: As part of that analysis that has been done by B.C. Housing, one of the key issues here, sort of the human questions here, are the people who are resident in these buildings who have a significant subsidy in terms of their rent costs. What will the impacts be on those folks who already have significant challenges? I'm sure most of them are extremely grateful that they found their way into social housing or non-profit housing, because it dealt with a big part of the challenge when you don't have a lot of income.

Has there been an assessment or concern that if the current model as it is does not change, if the minister is not successful in convincing the federal government to come and look at things differently than they are now, and these subsidies expire…? How many units of subsidized housing for people at the lower end…? And it may not be the people who are there now, but it may be the next folks to come along. How many of those units might be at risk?

Hon. R. Coleman: There is no one answer to all of this. I'm sure the member realizes that. Over this period of time that these will expire, over the next 25 years, some of the buildings which are seniors buildings will shift over because of demographics. But the biggest challenge we face here is, I guess…. If you take 50 percent of them, and you say, "Okay, they're going to be okay," and you have 50 percent of this product that won't. But we'll be dealing with about 3 percent of the total by 2015. That's about what we have. They come in the back part of the number of years from now — ten, 15 years from now.

The big discussion is really: are you staying in on your subsidy? On the flip side, though, is: how do you fix these things from old housing contracts as they expire to something that's going to work for the next generation or decades to come?

One of the challenges we find…. There's a building in one of the communities that had come to us. Basically, they wanted to give it back. The society wanted to give it back to government because they couldn't fix it. So we went in and did an analysis of the building, and of course everybody was being very nice. There were no income-mix changes on the rents for about ten years or more, so the revenues didn't cover the operation of the building. They were under an old contract where you could fix the rent and stay there.

Most of our social housing that we've built in the last, I'd say, 20 years anyway, has a thing where 30 percent of income is what you pay for rent — right? Then the subsidy is the difference to the economic rent. A lot of these aren't at that. As you shift this, when units would come available, you would have to, I think, over the next number of years look at changing it to where it is 30 percent of income so you can fix some of the revenue challenges these buildings would have. That would solve the problem in a lot of the other buildings in the future.

It doesn't mean you go in and affect the rent of somebody that's been there a long time. But as each new unit came up, you could do that, to go back to the formula of what is the same for all social housing, other than these old contracts.

That's going to be lot of work for, well, the next ten to 20 years. We know which building is what. We know when they're coming to us or if there's a challenge. We're working now with the ones that would expire by 2015 to make sure that we're ready to help them deal with their issues. It will just be a continuous, ongoing piece
[ Page 12601 ]
of work to do the analysis, see how we can get the economic rent to work, how we can make sure that we continue the subsidy.

[1640]

The biggest challenge or the biggest benefit to us…. If we could get the feds to stay in when their agreements expire, that would be beneficial to everybody. But if not, we'll find the solutions.

S. Simpson: This obviously is of great interest to the non-profit housing groups which own a number of those developments and are going to need to make longer-term plans themselves. They may be plans such as the minister referenced around issues like redevelopment. Any of those matters would be significant issues.

Could the minister tell us what role that sector in the Non-Profit Housing Association is playing in the discussions, presumably with B.C. Housing, to try to find the solutions longer term to provide some comfort and confidence to those organizations?

Hon. R. Coleman: I'd say out there with the non-profits we have a two-pronged attack, basically. We have a coordinated work plan and analysis with the B.C. Non-Profit Housing Association. We have an info-sharing protocol in place with them.

At the same time, a number of the groups whose contracts or agreements will expire — some of them are not members of the B.C. Non-Profit Housing Association. So we deal with their societies directly, as well, so that we can make sure they're coordinated on both levels with us as we deal with their issues. We provide the expertise to rebuild the business plans around these things and make sure that we can deal with the housing stock going forward.

S. Simpson: Currently, if you have a building, and it's paid its mortgage off. Say it maybe falls into that 50 percent that are going to be okay, by the looks of it. So they've paid off their mortgage. They own the building. The operating agreement expires. The subsidy disappears today. That could change, but the subsidy disappears.

Is that society then free to do with that building what they will, as housing? Are they free to make the decision, "We're going to change our housing mix in a significant way," maybe because they say: "This building is now 40 years old. We're going to put a lot of money into upgrades, or we're going to do a significant redevelopment for density purposes and build something different, and change in a significant way the makeup, including the residency makeup"?

Can they do that once the operating agreement expires and there's not a subsidy?

Hon. R. Coleman: There are a couple of issues, different ones, here. In some cases they have an operating agreement, and we own the land through Provincial Rental Housing Corporation. So we have the control of the future of the land. In some cases, the building has paid the mortgage. The society owns the building and the land. Their operating agreement expires, and their subsidy disappears.

If we're no longer continuing to subsidize, although we intend to stay in on our piece, yeah, they have the opportunity to do something else with the property. But it's all subject to their constitution and bylaws as a society. Some societies have a constitutional bylaw that the ongoing benefit has to continue in some form of social housing to the land. There's something on title, or there is a caveat within their constitution.

[1645]

Each one is a bit different, but there is certainly the possibility. We've actually worked with a lot of groups that have decided that their building is too old, and they decide to redevelop by putting more housing in for seniors, for instance, by going up versus staying on a one-storey thing and developing more product.

A couple of good examples of that on the North Shore. I think it's with the Kiwanis, actually. They've done that and been very successful doing that for their longer-term clients.

The other thing we have to keep in mind as we go through this sort of thing is to keep our societies fresh. If the member is familiar with some of the older projects, we not only have aging buildings; in some cases, we have aging boards. The boards have not attracted new members or whatever the case may be, and as a result, they actually need…. We need to refresh the boards, too, as we go into some of these processes so that they can understand what the future things and needs of their organization are.

S. Simpson: With that, though, I guess, essentially they will have the ability to make those changes if they want to move forward. What support…? What's the thinking here? I'm thinking that a lot of this is going to rest now, decisions….

The minister is going to be an advocate at the table with other housing ministers in the federal government to try to get the feds to continue with some level of subsidy. B.C. Housing has its agreements and will partner through those agreements and that. The reality, we know, with a number of these societies is that some of them have more capacity than others.

What support is anticipated by B.C. Housing in order to assist those organizations as they hopefully are making longer-term plans? If some of these agreements are expiring in 2015-2016, they'd better be having a plan now as to how to deal with that. It's not very many years out in terms of their association. What support does B.C. Housing provide to assist them just to develop plans that make sense and to hopefully get it right?
[ Page 12602 ]

Hon. R. Coleman: Again, it's a basket of services. You may have a group that wants to look at a redevelopment, so we would provide some funds and some expertise with regards to putting together a redevelopment plan.

One of the projects is a good example. On the North Shore, ANAVETS actually had 78 units of housing. They replaced it with 78 brand-new units of housing, and they sold the balance of the property to pay for them. So they actually ended up with a brand-new building paid for as a result of doing a redevelopment.

Basically, we examine various sets of options. So we'll go into a project. We'll do an analysis about whether an upgrade makes sense, whether a renovation or upgrade will work. In some cases we provide the financing to the group. Obviously, we can give better rates than anybody else, so we'll come in and do that with them. In some cases we'll say to them: "It's really more than an upgrade. It's actually a rebuild." In some cases it's changes.

The member is right. We're ahead of the curve here. Ten years from now is good in a place like Langley or Surrey or the Okanagan or whatever. Ten years is a bigger challenge in Vancouver because it takes so long to get something done in that particular city. If it's an older project in Vancouver, you need to be in the game a lot sooner with your redevelopment plans versus closer to market for some areas of the province, where it only takes a year to actually get in the ground with a change or a redevelopment.

[1650]

It's all changes, but we're there for these organizations. I know there are at least five organizations just in the last six months that I've referred over to B.C. Housing, and they're working with them on various options with regards to their properties, their refits and those sorts of things, depending on how old the building is and the strength of the society and those sort of things.

S. Simpson: Moving to the question of another issue, and it's potentially somewhat related.

We've seen some incidences in the media and that of non-profits that have significant repair and upgrade and maintenance issues. Whether, as the minister said, maybe they weren't increasing their rents by allowable amounts on a regular basis or maybe it's just their circumstances, now they're facing situations where they're looking at dramatic rent increases. They're making application for rent increases because they need the money to do improvements that are required maintenance and improvements.

The RRAP program that the federal government turned over, essentially, dollars to the province on…. I believe that the government structured that program in a way that kind of moved most of that money away from individuals — not entirely, but most of it — and is looking at investment now in B.C. Housing stock and B.C. Housing developments that require improvements and that will have to be funded somehow and, potentially, at other developments as well.

Could the minister tell us what's happening? How much money do we have in that RRAP program? How much of it is continuing to go towards individuals? Low-income seniors, I think, still are eligible, as are persons with disabilities. How much is going there? And how much is going either to B.C. Housing developments or to non-profits who are requiring upgrades?

Hon. R. Coleman: The RRAP money that's been sent to us by the federal government is $45 million. That's $15 million a year for three years, and $5 million of it a year will go out to housing adaptations for independent living, so that's going out to seniors and disabled to be able to adapt their residence, be able to live longer in their residence.

The balance, the $30 million, is not going to B.C. Housing units. It's actually going to non-profit units that need upgrade.

S. Simpson: Just to clarify, other than what goes to the individuals, that money then will all be going to non-profit societies to support work that they're doing? How are those decisions going to be made? I'm sure there are more organizations than there are resources for. How are those decisions to be made?

Hon. R. Coleman: What we do is work with the non-profits to prioritize repairs, and those with the highest need get the funds.

S. Simpson: The situation at B.C. Housing — also, obviously, they will require upgrades to a number of those developments. We have a number of older developments. I think of the Skeenas and the Stamps Places and the MacLean Parks, and that.

[1655]

What's the plan for those developments? Has there been an assessment done of that inventory? Are some of them looking at significant upgrades? Are others maybe looking at going the route of Little Mountain in terms of total redevelopment? Has that work been done? Could the minister give us a bit of insight on that?

Hon. R. Coleman: B.C. Housing is actually leading the country on this type of thing. Our CEO has been actually asked to speak to a major conference with regards to it because we are so far ahead.

I'll give you the example of how I know that. Basically, I know that we've done a detailed portfolio plan, and we have a facility condition index which basically tells us whether it needs to be reinvested in as far as maintenance or things we've done. Our portfolio is actually in pretty good shape. Plus, all the plans that would be around if there was a property that we needed to maintain for a
[ Page 12603 ]
period of time with the thought that we would densify it in the future.

The way I would measure the success on this one would be that in the February '12 budget of the government, Treasury Board actually allocated ten years of funding to fund the plan for the detailed portfolio plan. It is highly unusual to get anything for ten years from Treasury Board to say: "We believe in the plan strong enough, in the portfolio and the way you're going to manage the portfolio, to totally fund the plan for the ten years."

S. Simpson: The Canada–British Columbia investment in affordable housing, as I understand it, as I reading from the service plan. It talks about resulting in "an additional $90 million of federal funding from 2012-13 through 2014-15 to improve living conditions of households in need by improving access to sound, suitable and sustainable affordable housing." This could include grants for new construction or renovation of social housing as well as the home adaptations program. Could the minister tell us a little bit about what that $90 million is going to be spent on?

Hon. R. Coleman: Included in the $90 million is the $45 million we talked about a few minutes ago, which was the $30 million for renos and the $15 million for HAFI. The other $45 million is going into new builds where we can do them.

For example, one of the projects that is in it is 3030 Gordon in Coquitlam, which was one of the projects that we weren't able to fund under our previous funding when we were doing all the sites in Vancouver, particularly, but also Surrey, Victoria and Kelowna where we were doing the next builds, and also Abbotsford and a number of other communities. This one was next on the list, so it was one of the priority projects. We were able to fund it because we had this money.

S. Simpson: Just switching, and this talks a little bit about existing developments and where they stand. When I look into the budget documents and into forecast updates for 2011-12, on page 109 of the financial forecast, it talks about miscellaneous revenue.

[1700]

It talks about the delay in the completion date of the sale of Little Mountain property and then looks at that in the first quarter update. It talks about $198 million of debt related there. Then there are a couple of other numbers in the second and third quarters, but at the end of the day the total change shows about $132 million of additional debt.

Could the minister explain how that relates to the Little Mountain project and what that loss or that number is that shows in here as being a loss: miscellaneous revenue due to the delay in the completion date of Little Mountain?

Hon. R. Coleman: It's a complicated accounting treatment, and I, not being an accountant, will try and put this into plain language. Maybe you have an accounting background, and you'll say it's too plain.

Basically, when we had the opportunity to do some more sites in Vancouver and across the province, about $150 million of the Little Mountain was basically designated, for lack of a better description, to sites in Vancouver because we had already invested in some sites in Vancouver.

The accounting treatment is that the revenue will come in for the sale at the end of the year and then over time, as units on the market piece sell. That's how the deal is structured. I'm not sure, and we're not sure how they've done it, but effectively what they've done at Treasury Board….

When I went to Treasury Board a few years back, I said: "We want to do these projects, but I'd like you to advance money now so that we can do this on the strength that at the end of the day, you'll be paid back out of the proceeds of Little Mountain." Basically, you could call it interim financing; you could call it a mortgage. But it's really not. It's an internal financial arrangement between the two.

The best description I could probably give you is similar to how we were booking revenue over a couple of years in our discussions in and around the liquor file yesterday. No, actually around royalties, so that wasn't you. That was your other critic. But basically, this will close it in at year-end, the sale. There will be a significant payment made at that time, which will then go into the general revenue, but it will have an effect on how that is booked in the future relative to how it shows today.

I don't know if I helped you or not with that.

[1705]

S. Simpson: Then my sense — let's see if I got this right — is that the minister goes and gets $150 million, more or less, out of Treasury Board based on the commitment that the money from the Little Mountain sale is going to offset that and return that revenue. You're borrowing against that from Treasury Board, taking the money against the anticipated sale — to Holborn in this case — spending that money on other housing initiatives in Vancouver, here and elsewhere, I know.

That number reflects what's owed still, the deficit between what's owed and hasn't been paid back yet and will come off the books when the sale happens, presumably, and the cheque arrives from the government to go back and pay this off?

Hon. R. Coleman: I didn't quite get that right. It's an accounting treatment. We'll try again.

First of all, the whole lower-revenue forecast here. That's a revised financial forecast in the third-quarter report that refers to the Little Mountain piece. Little Mountain is a very small piece of the $366 million that's
[ Page 12604 ]
mentioned in that. I think we're on the same page here. So are we on the same page of the fiscal plan when we're referencing this?

S. Simpson: I was on page 101, I think, through the forecast update on page 109. That's where the number came from — under miscellaneous revenue, in the revenue changes on the forecast update.

[1710]

Hon. R. Coleman: Let me just go back. We were on the wrong page.

That's also caught up in some vote recoveries in the SUCH sector and other things. I'll have to get some details for the member about that line item. Maybe that's the best thing, because it's not all Little Mountain.

A portion of it will be the time frame of Little Mountain and how they booked that. The explanation I gave earlier…. Actually, we're on track, time-wise, with the Little Mountain piece as far as being able to deal with how they will book against the housing piece, as far as I can understand.

I'll agree to get the member some details on that. That would be better.

S. Simpson: I want to go quickly back to the issue of capital planning for non-profits who are having to face upgrades and that. I know, when I look at it, that there's a capital planning committee at B.C. Housing. I think the commissioners have a committee on the board that are looking at those issues, and the minister spoke about the facility condition index, which is a tool that's being used to make some assessment about these issues.

I have a couple of questions. In terms of the criteria that B.C. Housing will be using as they make judgment calls about what support they can and are able to provide, is one of the criteria going to be whether or not there is an operating agreement between B.C. Housing and the organization? We know that there are a number of organizations that don't necessarily have operating agreements but still may have the need in the non-profit sector.

The second thing is: will the length of time on the operating agreement before expiration play a role in determining or helping to determine the amount of support B.C. Housing and the government might be able to provide?

Hon. R. Coleman: We're not going to walk away from any non-profit, basically. I mean, they're our partners. They've been our partners for decades.

If somebody comes to us and doesn't have an operating agreement and they want to enter into a mortgage or an operating fund where we're going to have to do some subsidy, then we would want them to enter into an operating agreement to protect the Crown.

With regards to it, if their operating agreement is coming to the end of its life, and they want to go and do something with us to extend that — if it was going to expire — we would sit down and work out an extension agreement with them with regards to their operating agreement if it would work for them.

That's what this whole practice, what we're doing with our whole analysis that we talked about earlier, is really about. This detailed portfolio plan and the facility condition index stuff is about being able to give them the advice, to say: "If you do this, you'll have a longer-term opportunity with regards to your housing. We'll work with you. We can provide you with predevelopment costs. We can work out financing with you. We can look at how your subsidies are working or they could work better in the future." In all of those things, we work with them to make it work for any society.

[1715]

S. Simpson: Bouncing a little bit, back to the Little Mountain question, and not the financial question. We know the zoning process is ongoing in Vancouver. I understand that there are density proposals that are put forward. Maybe it's getting closer to coming to some agreement on density that will work for everybody. It won't make everybody entirely happy, but it will work and will be acceptable to the community. That may be getting closer, as I understand it.

Of course, we also now potentially face a different challenge for the owner, for Holborn, the developer. Not that the market is crashing by any means, but the market certainly is levelling out in Vancouver. The market for the product that they're likely to produce may not be quite as lucrative as they had hoped it would have been at the time when they engaged in this process, back in '08 or whenever, to do the deal and buy the land. That could create other problems for them over and above the issue of the development.

Could the minister just tell us, to the degree that he can, what the status of the Little Mountain project is now, whether there's a timeline for when he believes decisions need to be made about this as to how it goes forward? What is the thinking…? The initial thinking had been, I think, that the 234 or 244 units of housing would be built in the early phases. Not necessarily at the beginning, but they would certainly be in the early phases of the development. Does that commitment continue to be there at this time?

Hon. R. Coleman: I think we're there with the density, with the parties. The policy report is going to council shortly, and that will be the last sort of hurdle. The rezoning process will proceed this fall. The plan is to have construction start in the first or second quarter of 2013, with a significant amount of that being the social housing first, in the project.

The market is much better than it was in 2008. This is
[ Page 12605 ]
actually a long-term redevelopment, because of the size of the site and the number of the units. It won't be done with a deadline similar to what, for instance, the Olympic village had, where it was pushed up against the wall in a market. It'll have time to be able to develop and phase in over the market cycle, which was always the intent — to make sure that this thing was a stable redevelopment, not one that pushed up against the wall because of other forces. That's why we haven't pushed it and said that you have to have….

Once we get moving, there's some flexibility in the deal to allow for the redevelopment to adapt to the marketplace.

S. Simpson: It is my understanding that it's getting closer on an FSR that will be acceptable. We'll see where that goes at the end of day, if it's floor space ratio that's acceptable.

I certainly know the developer has a little anxiety over this. I've certainly heard that. But all of that aside, let's assume that if the minister is correct and the development is going forward next year. I seem to remember that we were going to have this housing built in 2010, but I'm not going to go there as to why that didn't happen. There were lots and lots of reasons and lots of responsibility to go around.

If it does start to develop next year, is it the developer under the terms of the agreement who has the obligation to build the 234 units to the government's specifications, or is the responsibility somewhere else? Who's paying for it? Who's managing that? Who's driving that piece for those 234 units?

[1720]

Hon. R. Coleman: The deal is this. There are 234 units that have to be built to our specifications. They're in the price of the land, so we're using the price of the land to build and pay for them. That comes out of the price of the land, to build to replace the 234 units. They will be built to LEED gold or equivalent standards.

Those are the requirements of the deal. I guess you could say that effectively, because it's our land, we're using some of our land to finance the 234 units, and they have to deliver them to our standards.

S. Simpson: I think I've got this now. This is an area that I've been a little confused about on this particular project.

The government gets paid X amount of dollars for this land by Holborn, by the developer — paid X amount of dollars for this. Now the government will take a portion of its profit from the land sale, and that portion will finance or pay for Holborn building, as the developer, the 234 units to the specifications of B.C. Housing, of the government.

Is that the way? We get X millions of dollars from the sale, and then we put a portion of that back in to pay for these 234 units of housing that will get built.

Hon. R. Coleman: I'll try and unconfuse. I don't think it's actually that confusing.

Let's assume there's a price of the land — right? Within the price of the land, you're going to give me cash, and you're going to give me units. So I'm going to get 234 units, free and clear, built to my specifications of LEED gold or better, that become an asset to us because we'll own them. Plus you'll pay me the difference for the value of the land for the rest of the development.

We get units plus cash, which makes the total purchase price.

S. Simpson: One last question. Those units will come back and be held by B.C. Housing and managed and administered by B.C. Housing?

Hon. R. Coleman: Yes, so they come back as an asset to us. We own them. We'll operate them. We may choose to have a society operate them, but we will own them through PRHC, which is our Provincial Rental Housing Corporation. We'll hold the title.

We'll own those 234 units still as an asset for government. We will use them for social housing. We'll either operate them within our portfolio or a non-profit portfolio.

S. Simpson: Switching topics here a little bit. Last year when the homelessness counts were done in Vancouver, I know the minister — and rightly so — was pretty pleased around the question of sheltered versus unsheltered counts. What we saw was a significant drop in the unsheltered count.

For people who might be paying attention to this at home, this is the issue not of people necessarily having housing, but it is a question of people having a shelter space within the city. There was a significant drop.

We've now seen the latest count which has been released that has shown that, I believe, the unsheltered number has about doubled in Vancouver, to something just over 300.

The question I have for the minister…. I understand, from my review of some of this, that one of the areas that's been identified as potentially contributing to this is what appears to be a real desire for people to have low-barrier shelters.

[1725]

Low-barrier shelters are those that put very few restrictions on people who are coming to stay there — will allow them to bring pets, will ensure that they can bring their goods that they own and give them certainly way more flexibility than some shelters that for often good reasons will have barriers and have limits on who can be there — whether they are intoxicated or not intoxicated,
[ Page 12606 ]
a number of those issues.

It appears the low-barrier shelters are the ones that drew people, sometimes called HEAT shelters. The others not so much, in some cases, and that seems to be part of the issue. I know he's made comment about this, but I don't know whether he's had a chance to review the information. Would the minister agree that the approach to going to the low-barrier shelters makes more sense in terms of getting people off the street into places they will go to?

Hon. R. Coleman: I would first of all start out by saying to the member that I have a real problem with the Vancouver count, mainly because their methodology is completely different than the methodology we use to count homelessness across the region. They do it only by boundaries within the city of Vancouver, while we do a regional analysis and a regional count every three years. That's where we watch our comparables on homelessness, and that was the count the member referred to earlier.

Even having said that, however, homelessness is down by 62 percent in the city of Vancouver, and in actual fact the number of people, the homeless number, with a total of homeless that have been moved into permanent housing is about the difference of the count with regard to what they're saying street homelessness has gone up by.

Some of this, quite frankly, is somewhat about politics with regards to the city of Vancouver. We'll have to deal with that in our own way at a point in time as we go through this. We always have believed that permanent housing is a better solution than shelters. It's not about whether it's a HEAT shelter or not, although we have increased dramatically our investment in shelters in Vancouver. We're the only ones that have invested in shelters in Vancouver.

Vancouver might put up space, but they don't spend any money for operating costs. We spend the operating costs. We've always had the HEAT shelters as temporary shelters, which would close down during different weather seasons and different periods of the year.

There were some significant changes made in Vancouver with regards to one particular shelter last year because there were a whole bunch of problems that were significant social and criminal activity. That was a big concern. There had to be changes there. So the numbers in that shelter are different than they were, but those changes were dramatically needed in order for the protect-the-public policy.

We changed our mix so that we would have some different shelter space for women. One of the requests of women I met in the Downtown Eastside was that they would have a women-only shelter, which we did create this last year.

[1730]

Their way of counting and what they've done is really a snapshot of a day, where our analysis is much more comprehensive than that when we do the analysis with all the region, including Vancouver, when we do our count and analysis.

I try to not get into the debate on numbers on a snapshot count like this, with the exception of some comments I made yesterday with regards to a councillor in Vancouver deciding to blame the provincial government for all the problems of Vancouver with regards to a one-day snapshot in housing. In actual fact, we've spent about $300 million there in building permanent housing and another $150 million in buying and renovating hotels to have housing for people in Vancouver.

That piece I'm not going to get into. But the reality is…. I think ours is not a snapshot. We know what the street homeless were last year. We watch our shelter count on a regular basis. We actually collect the data. We watch it. We watch the intakes — all of those things. We are actually keepers of that information as well.

I'm comfortable with the success we've had on this, and I'm not going to really enter into a debate this afternoon on the snapshot count in Vancouver, one way or the other.

S. Simpson: I think the reality of this is that housing is one of the things that's happened, not just in British Columbia, by any means, but it's happened in jurisdictions, certainly, across the country. Housing has traditional been a provincial and a federal responsibility, though the federal government has largely withdrawn from it. It's become a provincial responsibility, and we've increasingly seen bits and pieces of it pushed down to the local government level, particularly with our larger cities across the country.

Again, there's nothing unique about British Columbia. It's the same situation in Ontario, in Quebec and in Manitoba, I'm sure, where it's been pushed down to some degree onto municipalities. I think part of the reality, the challenge, is that municipalities, when they complain about their revenue streams…. Well, part of their challenge with revenue is that they've ended up doing things that they maybe shouldn't have responsibility for and should be handled by somebody else.

To that extent, I think that it is an issue, obviously, that the province has to deal with. That doesn't for a minute take away from the initiatives that the provincial government has performed around buying the SROs and a number of other housing initiatives that deal with supported housing, particularly in the Vancouver area.

We don't need to debate whether it's 300 people or 200 people or however many people, or whether it's the snapshot or something else. What we're learning from this, the thing that I think we're learning from this, is there's a certain type of shelter that makes more sense, maybe, in order to get people to actually access it and use it. They are the low-barrier shelters.

The question I have for the minister is, as he looks for-
[ Page 12607 ]
ward…. The province will have responsibilities in future years to deal with the number of people who are homeless, whether they're in Vancouver or in Burnaby or in Surrey, and will continue to provide some support to that. Is the low-barrier shelter model the right model to be supporting, or is it something else of a higher barrier that to some degree seems to be…? You've got empty beds in some of those — that's what I'm being told — because people aren't using them.

I'm looking for the minister's view on that.

Hon. R. Coleman: First of all, I want to clearly say to the member that if anybody in the city of Vancouver is saying we're downloading costs with regards to housing and shelters in that city, they're not telling you the truth. We provide $24 million annually for emergency shelters, outreach and other services for those who are homeless in the city of Vancouver.

[1735]

If the member wants to look it up, I'll give you the number of what the city of Vancouver puts in for annually operating shelters, services and those that are homeless. That would be zero. The city of Vancouver puts up some capital to renovate some of their buildings, but they own those buildings, and that's their asset.

In addition to that, the member should know that a low-barrier shelter is at a cost of about $3,000 per month. So $3,000 per month for a mat in a low-barrier shelter is hardly the long-term solution for housing, and that's why we're building. That's why we're spending more than $300 million in capital to build 1,500 additional new supportive housing units in that city alone. It's why we've spent $150 million to purchase and renovate 24 SROs in Vancouver, protecting another 1,490 units.

To the member opposite, the one thing he's right about is what we did find…. We have to have a continuum. I really, honestly, strongly believe in a continuum in housing when it comes to housing in British Columbia. The continuum is from street to stability; from addictions to help; from mental illness to assistance with medical needs; for people that are illiterate, assistance in having them meet some skills in literacy. It's so that they can get a job or they can…. It's basic.

The whole strategy around housing, starting in 2006, was: we're dealing with the individual. We're going to try and change lives one person at a time. We have shelters that are low-barrier, and we have shelters that are not low-barrier, that are run by very good organizations like the Union Gospel Mission and the Salvation Army, who might have some standards about the use of drugs or alcohol in their shelters for very good reasons because they're integrated into some addictions support programs. All of these are part of the continuum.

The one thing we found about the low-barrier shelters was that it got people off the streets to come in who would not normally come in off the streets. They've been long-term homeless folks, and we got them in there long enough to start to be able to deal with some of their issues and actually try and get them into housing with outreach workers and those sorts of things.

I agree with the member that the low-barrier piece is very helpful, and that's why we do continue to fund three low-barrier shelters in Vancouver on an annual basis and why we've continued to open some every winter.

We do know another thing that happens in relation to housing, particularly with homelessness: on the streets of some communities we find that there's usually an uptake when the weather changes, with regards to the number of people that we have to deal with and who may not come in off the street because they have different arrangements they can make because of weather.

All of these things are part of a very complex file. Continued work needs to be done, and I'm actually very proud of the work that's been done. We'll continue to do what we think is necessary to do on this file and continue to do the good work that these guys have been doing on outreach and all this stuff across B.C. — not just in Vancouver but across the entire region and across the province.

S. Simpson: I'm going to move to a couple of questions about rental housing. One of the things that the Metro Vancouver housing committee has identified — and I think it's something that will be of no surprise to anybody — is that with private sector affordable rental housing, much of that housing is in older buildings, three-storey walk-ups, not necessarily buildings that maximize density on the properties that they're on. They're older buildings, but that is the affordable housing stock that's out there — rental housing stock, in large part.

There's an increasing concern — I certainly see it in Vancouver, and I'm sure we see it in communities across the province — where that housing is potentially disappearing through redevelopment and being replaced with condominium development — or maybe higher-end rental, but at this point, probably, largely still condominium development.

Could the minister tell us: does he share the concern about the loss of that private stock as affordable rental? What's the thinking of the government as to how they play a role in trying to support either the retention or the comparable replacement of that housing in future development?

[1740]

Hon. R. Coleman: Actually, if you were to ask your former House Leader, the member for Port Coquitlam, he would tell you that when I was a critic in about 1996 or 1997, I identified to him in debates that we were headed for a rental housing crisis in British Columbia. I identified at that time…. It was the same discussion that we're having today, actually, in some ways.
[ Page 12608 ]

I have, since I became the minister, been trying unsuccessfully to get the federal government to recognize that they have to do some things in order to encourage investment in rental housing, from a tax perspective. When we had the MURBs, which was the last time we actually had the building of rental housing in B.C. — which is a long time ago now; I mean, probably 20 plus years ago — we saw the last growth of new build of rental housing. In the capital regional district, for instance, you have a number of older buildings.

Because there is a capital gain issue with the sale of the building and the renovation, and they can't get any flow-through, what's better for them to do is actually tear it down and build something else, like condos, and they don't get caught on the recapture of capital gains the same way.

We've been saying to them for a long time that the soft costs, the rollovers, the capital cost allowance things that are relative to this form of housing in Canada need to be addressed. I think — I'm just going to be an optimist here — maybe we're getting close. It's successive Finance Ministers, successive things. Every single Housing Minister in Canada — with the exception of those that are remote, like the Yukon or the Northwest Territories or Nunavut; they have different housing issues up there — brings this up on a regular basis.

Now, we all know that the availability of housing is what really brings down the price — all right? If there's more in the marketplace, the rents are competitive. There's been really good work done by Wayne Wright and the rental housing task force, and we support that work, because he's done some really good work. He's the mayor of New Westminster. I also point people to an example of how you could actually do it in suburban British Columbia — like, let's say, in Langley or Surrey. If you want to do affordable rentals, it's pretty simple.

In Vancouver it's not actually complicated either, if you were to have a mix in some of the buildings that you're having for condos and having some rental property within them, even the way they do some of their other densities. But that's an issue for each city. They do some things in Vancouver that are interesting.

I'm going to deal with Surrey, because I think in this province today the most progressive jurisdiction in B.C. with regards to actually finding ways to get affordable rental housing in their communities is the city of Surrey. I'll use an area called Clayton Heights as the example. Clayton Heights is an area off Fraser Highway at about the 193rd Street, 60th Avenue area in Surrey. There's a large subdivision in there.

What Surrey did was said: "All right. We're going to allow a legal basement suite in the homes that are built in that area." So that becomes a mortgage helper for somebody that wants to buy a house. In addition to that, a number of the houses also have coach houses above their garage.

When they first started the subdivision, the average rent for a two-bedroom basement suite was about $1,250 a month, and the average rent for the one-bedroom coach house above the garage was about $1,050 a month. Today, because of the growth and the allowing of this to happen, the average two-bedroom basement suite rents for about $850 a month, so that's $400 a month.

Nobody had to subsidize anything. The market had enough supply, yet it's still $850 a month. It's actually a good deal for the homeowner in Surrey who has a basement suite because they get that to help them with their mortgage and taxes. It encourages that type of development.

[1745]

It is an issue and a concern. I've tried many ways to try and find solutions to it and encourage municipalities to think outside the box. Some of the coach house stuff that Vancouver wants to do is part of outside of that box — to do that.

You've got some really good projects. There's one in particular — I think it's at UBC — where there's a townhouse with a lock-off suite. Mainly, it was geared originally to students or to have a loved one, a senior, live with you. They become rentals as well, and they actually affect the rental market and have some benefit.

It's innovation. It's finding ways to do it without hitting the zoning too hard with exceptional extra DCCs or costs, because you want to do something to create some rental housing.

In addition to that, the whole aspect of this whole tax issue with regards to…. We need to incent people to actually build more rental housing, but we also need to find a way for the existing product to be able to have some of those allowances so that they can continue to stay in business.

S. Simpson: I'm going to move, because we're going to…. I've got a few more minutes, and then I've got some other members who have some specific questions they want to ask. If we have any time left at the end, I'll come back.

I do want to ask a question about the rent supplement program. I know this has been probably the cornerstone initiative in terms of family housing and that of the government. Other than the stock owned by B.C. Housing, it has been the rental assistance program and putting that in place and allowing people to access that money. I see it's projected to be about $87 million, I think, in the coming year that will be expended on rental assistance.

My interest is the 2007 social housing agreement with the federal government, of which I think about $137 million falls under that category. On January 12, 2012, I know there was an amendment made to that agreement that added the rental assistance program as an eligible program under that agreement, and it was put in place.

The question that I have, because it's not entirely clear
[ Page 12609 ]
to me, is: how much of the $87 million that's projected to be used for rental assistance in the upcoming year will be a drawdown from the social housing agreement with the federal government, and the $137 million in that fund?

Hon. R. Coleman: The changes that were made were just to provide flexibility in the global operation of B.C. Housing, and not have so many agreements. RAP and SAFER, which are the two rent supplement programs, are fully funded by the province. No federal money is used for that.

There is about $1 million that has some federal rent assistance stuff. There's a specific project that's hung around. It's about $1 million a year. The rest of it's all the provincial government.

These two are fully funded. About 50 percent of it is rent assistance, and 50 percent of it is SAFER.

S. Simpson: Maybe the minister could elaborate a little bit on why the decision was made to put the program in there, especially if it's not going to be used.

Part of the reason I ask this is because we know that under the social housing agreement, CMHC retains the ability to set housing income limits on things that they are supporting, which in turn determine what are targeted households for this purpose.

[1750]

I believe that of the $137 million in funding for 2012-13, $113 million, almost $114 million, needs to be used for those targeted households. That's a requirement of the social housing agreement.

I guess what I'm trying to determine here is that if none of that money is going into the RAP program, then why was the decision made to put it under the social housing agreement? It looks like if the money was there, it potentially would put some limits on the province's ability to set income limits and those kinds of things.

Hon. R. Coleman: It's just simply that we've added several provincially run programs into the package with the federal government agreement so that we have the flexibility in the future. Should they decide to come in with funding for a particular program, then we would be able to have target discussions in and around whether they want to participate in any specific program or not. It's just giving us the flexibility.

Housing income limits are the same as core-need incomes, so that has no effect on us whatsoever. The rent scale is always still set by us.

S. Simpson: I'll just reference this. I've passed on a letter, which I'll get to in a minute. It's not immediate. But we're going to get to some individual members, and my colleague the member for Surrey-Whalley is involved, I think, in the other House on a piece of legislation. He's asked me just to bring this forward, and I'll do that in a minute, but I wanted to make the letter available to the minister so he would have it.

There are some questions that I have around the strata changes and around depreciation accounts and that. What I would like to do, if it's acceptable to the minister, is that on a couple of those matters I'm going to write a letter. I will write the minister and lay the questions out, because we don't really have time here. I'll just put them in writing.

One question related to the Strata Act, which I do want to talk about a little bit. This was under the Strata Property Amendment Act, 2009. It was Bill 8 at the time. One of the things it did was make the change to the Provincial Court for disputes, which was going to be cheaper. There were some good reasons for going there. Part of the challenge is, of course, as we know, it's hard to get court time. So that complicates things in terms of some of the delays.

A number of months ago, I believe, the minister was looking at a proposal for a tribunal system for hearing strata complaints and dealing with this through some form of tribunal, rather than through the courts at all. I wonder if the minister could tell us what the status of that work is around that tribunal.

Hon. R. Coleman: The legislation is actually Bill 44 in front of the House that will be passed by four o'clock tomorrow afternoon. It includes the dispute resolution to tribunal for strata properties.

The Chair: Just a general reminder to all members that the need for legislation or legislation in progress is outside the purview of the estimates.

S. Simpson: It could be passed. You never know.

I know there are a number of questions around that. Respecting the advice of the Chair here and not recalling entirely what's there…. In terms of the detail of that, I'm sure it will be through some regulatory regime in terms of costs and those kinds of things.

The question that I would just have here, not related to that: what is the process likely to be to roll this out after the legislation is adopted, assuming it is? What's the process for rolling out this tribunal exercise?

[1755]

Hon. R. Coleman: Honouring your caution, Madam Chair, the anticipation is that regs would be developed by fall and that within a year we would have the entire thing up and running.

Just for the member's information, it has been publicly supported by the condo association. The bill itself is actually not housed with this ministry. It's actually housed with the Minister of Justice, the Attorney General's ministry. They're the ones that brought it to the House.
[ Page 12610 ]

S. Simpson: I appreciate the answer, and I would agree. I've spoken to the strata folks, and their issue really is just some of the detail and wanting to know what that looks like. Presumably, that will be regulatory, and I'm assuming that they will be part of the discussion on that.

I'm going to move and deal with this letter that I've passed on to the minister from my colleague the member for Surrey-Whalley, who is detained in another House on other legislative business and not able to be here. This is a letter from a Mr. Walker, one of his constituents in Surrey.

It appears to me that Mr. Walker got caught in the situation of the changes around the leaky condo regulations. He appears to be in a place where he is, by his account, out about $76,000 of repairs, which of course he had clearly hoped he would be getting some assistance with through the leaky-condo fund that is now not readily available.

Mr. Walker lays out two or three suggested remedies for this: treating remaining owners of leaky condos in the same way that property owners who experience weather disasters receive compensation, reinstating interest-free loans or allowing deductibility from income on interest paid on mortgages. So he has some suggestions here.

My only question to the minister is — he's received the letter from the MLA for Surrey-Whalley — to request that he respond to the correspondence from the member for Surrey-Whalley on behalf of Mr. Walker in whatever form obviously that he deems appropriate, based on the current status of the law. I would just ask that the minister make the commitment to respond to my colleague — and to Mr. Walker, more importantly than the member for Surrey-Whalley — on this issue.

Hon. R. Coleman: We will have a response written to the member for Surrey-Whalley. I don't know, given the sunset that's taken place on this particular file a couple of years ago, that he's going to really like the answer, but we'll certainly respond to the letter.

S. Chandra Herbert: It's good to see the minister. We've been doing this now since, I guess, 2008-2009 — back and forth on a couple of issues regarding renters.

Obviously, we've talked about renovictions. We've talked about geographic area increase clauses, etc. I've made my points known; the minister has made his points known. We won't touch on those today, unless the minister wants to share that he's changed his point of view and agrees with me. We won't go there.

I did want to follow up on administrative penalties in the Residential Tenancy Act. It was, I believe, introduced in 2006. We didn't see any administrative penalties until this year, so nearly six years later.

I've heard a lot from constituents and, indeed, from renters across B.C. that they find it very difficult to see administrative penalties brought about. They have a hard time encouraging the residential tenancy branch to follow up on them, because they do not possess the information about previous cases that a landlord may have been involved in, which could prove a pattern of abuse of the Residential Tenancy Act.

[1800]

One of the suggestions made is that all residential tenancy branch decisions be posted on line with the company names when it's a big residential building so that tenants could look to see if a landlord or a management company had a track record of doing similar actions which could then be entered as evidence and potentially lead to administrative penalties to stop a few of the bad apples that exist.

I know the minister has talked many times about how we need to crack down on the bad apples. We've had one case where that happened with administrative penalties.

Would the minister consider ensuring that all cases are on line; that they're open, accountable; that you could see what landlord companies, management companies were involved so that it was easily searchable for tenants that could do their work and be able to further the cause of ensuring that we crack down on bad apples? Or are there other ways that the ministry has considered ensuring that administrative penalties can be used so that people can't just profit from trying to sneak around the act and are actually penalized in a real way to stop them from doing that?

[J. Thornthwaite in the chair.]

Hon. R. Coleman: I am advised that we can't do, like, a person, an individual. If it's a mom-and-pop type of landlord, a person versus a company, there is a possibility that we can…. I'm told we could do corporations, but we can't go back and spend tens of thousands of dollars going backward.

We can look at putting something in place going forward to list decisions in and around landlords. But it will only be landlords that would be corporations. We wouldn't be able to identify the other person in the dispute, either, because that would be an individual, and then we would be into freedom of information and privacy. We're going to do some work on it and see if we can do it.

That's the only thing you get today.

S. Chandra Herbert: That's the only thing I get today, says the minister. My colleague got nothing. Well, we'll keep pushing.

Just to thank the minister for that. Certainly, it's something I think should be pretty easy to do. I know I've done freedom-of-information requests to try to find out who the landlords were involved in disputes in my constituency, but most of my constituents live in buildings that are owned by corporations or management companies, numbered companies in some cases. So we would get
[ Page 12611 ]
back the names.

The follow-up question is: I know some decisions are shared on the residential tenancy branch website. It doesn't seem like all are. I'm not sure why that is. I'm wondering if the minister would commit to ensuring that all decisions would be shared so that British Columbians could see if there was a pattern of certain actions, so that they could better understand what's happening in the residential tenancy system.

Hon. R. Coleman: I'm advised that they're all posted.

[1805]

S. Chandra Herbert: One final question. I'm not sure if I'll get something on this one. You never know.

The minister has known for a long time, and we've talked about this before. Leaseholders are in a funny situation where they're not renters, but they're not really owners. Yet they don't have any system — or a very small system — of what to do if there are complaints with their building owner. They've had challenges with insurance, with issues around mortgages, around repairs.

I'm wondering if the minister could share what his ministry has done to better support their efforts within the legal framework that currently exists. Some of them are finding that they had to go through the small claims court to get any sort of resolution to their problems. Obviously, that's quite onerous for some people.

Hon. R. Coleman: We have worked with individuals with regards to their leases to put them in contact with people who do their insurance, and that sort of thing. But it really comes down to the fact that they have a licence to occupy or lease, and it's contract law. It takes it completely out of a whole residential component of any ability to enforce anything.

It's like if you lease a building and here you have a lease for a period of time, but it expires. There are terms in the lease. These are all, as you know, pretty much 99-year leases that were done by one individual who did a lot of them in the west end of Vancouver. He died a few years ago. I knew him. The assets still sit in the family.

They were written in such a way that even the common area was owned by them. You only had access to your doorway. If they decided to not give you access to the common area, they could stop you from access to your unit. The loophole was fixed back then, but the contracts stood the test of time. They are contract law, and there's really nothing we can do for them.

C. Trevena: I believe it's just going to be one question for the minister. It's the transfer from CMHC of RRAP from the federal government to B.C. Housing. There was some confusion when it was first transferred from the federal government to B.C. Housing, and we're still getting concerns from constituents who can't get as much coverage as they were able to when it was CMHC funding.

I wondered if the minister could say, for some things such as the grab bars for the disabled and a couple of other issues, whether there are any other programs that are going to be there to support the B.C. Housing version of RRAP or if this is all that we're going to get.

Hon. R. Coleman: The program that's for people that are disabled, for home adaptations, is actually richer than it was before we changed the program in January. The federal government came to us and basically said that they had $15 million over the next three years.

[1810]

We took $5 million and put it strictly into disabilities finance for home adaptations for safe, accessible and independent living. The other $10 million we took to put into adaptations and improvements in the housing stock for the aging people in social housing.

We put $10 million a year into our non-profit sector for those types of adaptations. I'd have to know the individual application as to why they would get less, because if they did qualify, they should have been the same, if not a little bit more.

C. Trevena: Their concern was that the new version wouldn't cover furnaces, maintenance or emergency repairs, grab bars and work previously paid for but no longer able to be covered.

Hon. R. Coleman: So I have a better understanding…. Things like roofs and stuff like that were given one transition year, and then it was discontinued.

C. Trevena: There are no plans for it to be restarted for people who have problems from now on with roofs, and so on.

Hon. R. Coleman: We took the money and put it into higher-priority needs with regards to people who are disabled or needed access within social housing and some of the things that needed to be improved for them.

There is a pay-as-you-save program for things like furnaces and upgrades and what have you that's coming with regards to Hydro bills, and things through FortisBC that have already gone through. That's an approved program that should be in place by the fall, but it's a different program. You deal with the utility, and they work out the information with regards to your energy needs. That can include things which improve insulation, roofing and stuff like that.

J. Kwan: I have a number of cases I want to bring to the minister's attention. On the first item, I've written to the minister on an issue raised by the Downtown Eastside Neighbourhood Council committee on homeless shelters. It was a letter that was written on May 3. I know the
[ Page 12612 ]
minister is rather busy in and around the House so may not have had the chance to draft a response.

Essentially, what the folks that came and met with me about is that they're concerned about the ability of shelter residents to receive clearly communicated operating polices and procedures in written form from shelter operators. They raised issues around the inability of shelter residents to have independent advocacy services while they're staying at the shelter.

To that end, I sent the information over to the minister, along with the concerns that they've highlighted and brought to my attention. I wonder if the minister can commit, noting the time challenges that we have here, to ensure that there is a response to their concerns and provide to them the clarification on B.C. Housing's policies regarding advocacy, access to shelters and written operating procedures.

Hon. R. Coleman: We met with this group, and we're working on some stuff. We have provided them with some information, but obviously, the policies of each shelter can vary depending on whether they're low barrier or whatever the case may be. But I'm feeling generous. I've been generous to the other two members here and to the one from Surrey-Whalley.

Interjection.

Hon. R. Coleman: I've been very nice to you.

I will look at the letter, and we'll endeavour to get some information and get some work done on that for the member opposite.

J. Kwan: Thank you. I would appreciate that. I do appreciate that different shelters have different policies, but I would assume that there are also provincial policies that exist — expectations of shelters in terms of how they operate, etc. I think to that end, if the minister will commit to provide that information to the groups, I'm satisfied with that, and I thank the minister for that generosity.

[1815]

Okay, then moving on to other cases. In the spirit of generosity, these are all entirely solvable cases, I think. I fully recognize that there are many, many people on the wait-list who are in desperate need of housing and who are in a priority situation. I've written a whole stack of letters to the minister about these cases. I don't know why it is, but my office seems to get a lot of people who require help. Such is the nature of Vancouver–Mount Pleasant, I think.

Generally, I categorize these issues. I have, for example, families who've come to me in need of affordable housing. They're in a homeless situation, a shelter or couch-surfing, whatever the case may be. The only thing that prevents them from getting access to their children back, the custody of their children back from the Ministry of Children and Family Development, is safe, secure, affordable housing. Without that they cannot reunite with their family.

I brought this to the attention of the Ministry of Children and Family Development in the estimates debate — to the minister's attention. She has committed that she would engage in discussion with the minister, so I would hope that we can find a way within government and policy to resolve those kinds of situations, first off.

Then with specific cases, I have a number of specific cases where these individuals are still outstanding in trying to get access to custody of their children because they don't have housing. I wonder if I could pass this along to the minister around resolution of this.

I have a consent form here from a Cheryl O'Sullivan in terms of her situation. I've written to the minister about this back in January. There was pretty well a stock response from B.C. Housing, telling me: "Yes, thank you very much. We know that they are priorities. There are many people waiting urgently. We'll get back to you as soon as we find housing."

As a mom, I've got to tell you, it just kills me. It kills me, and I don't think that's good enough. I think that the minister would likely agree with me on that.

Hon. R. Coleman: If you want to give us the cases, all of them, we'll have a look into all of them. It is difficult, and there are always different stories between cases.

I've had two or three recently where we could actually house them, but they refuse to move out of a certain area. Yet we had housing, for instance, in Aldergrove or Langley or Surrey or Maple Ridge for family housing, which is more difficult.

Family housing is the most difficult, particularly in Vancouver, because of the amount of stock you'd have for the amount of bedrooms for the children and that sort of thing. So there are sometimes those challenges. I'm not saying they're here in this case.

If the member opposite just wants to give us the information, pass it across to us, I'm sure the Clerk will get that for us and bring it along. I assume that I have to rise pretty quick, so if there are a couple of other files, you can just send them to us. We'll deal with them all.

J. Kwan: I'll quickly mention these other cases. I have another case with a James Howat — again, a homeless individual who is actually on disability in this instance. Another case, Michael Cruikshank — again, a homeless person on disability. A James Soltys, etc.

I'm putting their names on the record because I just want to have it on the record so that these cases are being brought forward. I'll pass those along, because I know that time is tight. I appreciate the minister's attention to these matters.

Hon. R. Coleman: I know I'm a regular correspondent for the member opposite, to my office, and we do try
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and deal with all your files as best we can, as you know. We're happy to do it again.

J. Kwan: I'll just close with this. There were two other cases that I brought to the minister, I guess before the week break. I'm hoping that we can get resolution in those two cases before we adjourn from this place tomorrow.

S. Simpson: I'm going to come back and tag one of the other issues that I got from the stratas. I know that particularly the Vancouver Island group…. I'm sure the minister has had correspondence with the Vancouver Island group, as have I.

One of the areas they talk about, and I know it's an area they're looking to have a conversation around, is around qualifications of management companies. I've had a fair amount of conversation. They've spoken to me on a number of occasions.

[1820]

Management companies are what they are. Some of them are very, very good, and they do a great job, and that's all fine. Some managers — maybe a little less so. I don't think the CHOA, the Condominium Home Owners Association, necessarily shares this view, but I certainly know the Island group is of the view that they would like the ability to have a conversation about some additional controls and accountabilities from strata property managers.

I know part of their concern is in fact that this is managed or administered through the Real Estate Council of B.C., and that's not their preferred avenue. I don't know that they necessarily know what their preferred avenue is, but that's certainly not it. But they're looking to have some conversation about this.

My question to the minister is — and who knows, maybe I'll get something out of this: is the government prepared to have a conversation about those issues of management accountability and the qualifications and the accountability of management groups that manage stratas? I know that's a challenge.

I have a condominium unit in a small development. We have a management company, and I'm sure they drive most of the decision-making, because it's small and there are not a lot of people to be involved. It's spread out, and we rely very, very much on the company. It's an excellent company in this case, and I certainly have no complaints about the quality of the management they provide to us, but that isn't necessarily the case, I'm sure, with everybody.

Is the minister prepared to have that conversation, or to have his officials have that conversation, with some of the strata owners about these issues of management and how management firms are held accountable and transparent?

Hon. R. Coleman: Well, we meet with them regularly now.

I remember changing this and dealing with this a number of years ago, and it hasn't come up to me again since I've been minister. But they're over with Finance, because they're licensed under the Real Estate Act. They carry errors and omissions insurance. There are certain standards of practice within that act, the sort of thing that they have to meet. It's what I would guess.

But our guys are meeting with that particular organization on Vancouver Island to see if we can find some other solutions for them or make some recommendations back to the minister. Those meetings take place about once a month, so I would assume that I'll get some feedback on that.

S. Simpson: We've got a last couple of minutes. We'll use this on some things where we're probably not going to entirely agree — a first for us.

I want to talk a little bit about residential tenancy matters. In particular, I think there are arguments about the issues of rent evictions. We just went through one in my constituency that was handled very badly by the building owner, and hopefully we'll get this sorted out. There were health and safety issues, among other things.

I'm interested in knowing the minister's view around geographic market increases and whether he thinks that this is an appropriate way to determine or to be able to determine at some point — or an appropriate argument to be taking forward — rent increases. It's the notion of a geographic increase that doesn't necessarily take into account the significant differences that might be with the physical buildings themselves. I'm curious if the minister could tell us what his thinking is about that clause.

And maybe just for an opportunity, just for the insight: what's the minister's thinking about the whole issue of the notion — at some point they might be legitimate — of rent evictions? When are they legitimate, and when aren’t they legitimate?

Hon. R. Coleman: I think it's actually pretty clear that if it's extensive renovations, it requires permits from municipalities, etc. I do know there are some that say the changing of carpets and painting. That's not enough — right? This is a significant renovation that has to be done to a building with regards to it.

I haven't really looked at the geographical rent issue for a long, long time, but one of the real challenges facing rental stock in British Columbia, one of the biggest ones, is municipalities. If you look at the rate of tax increases at the municipal level each year, annually across British Columbia and actually across the country, those are costs that are being delivered over to the landlord, who can't recover them. Eventually they will get to the point where they say: "I can't afford to run the building."

[1825]

That's when we get into the discussion that we were talking about earlier, where people say: "I'm getting out of the business. I'm going to demolish it" — or whatever the case may be — "and go build condos." They get to the point that they're just being eroded from the opportunity to actually make the building work financially over a long period of time.

I'll have a look at the geographical thing. I haven't looked at it for some time because it really hasn't come up as an issue recently in the Housing file at all. It probably hasn't been brought up to me for quite some time. I'll have a look at it and see what kinds of comments we got or any information we might have on it that might sway my thought on it any way, one way or the other.

S. Simpson: I think that we're getting pretty close. We've just got a couple of minutes here. Really, at this point I think what I just want to do is recall for the minister that I think earlier in this session we had some commitments around some information that was going to be provided, contractual information related to liquor that I think the minister talked about yesterday. I'm sure his staff will recall that for him. And then today we had some commitments around some additional information as well.

Other than that, I just want to thank the minister and the staff for this bit of an abbreviated estimates. But it is what it is, and I think I'm done.

The Chair: Hearing no further questions….

Hon. R. Coleman: I've got one closing comment.

The Chair: Sorry, Minister. Go ahead.

Hon. R. Coleman: I'd like to thank the members opposite, too, for their interventions.

Also, we did have the one contract here last night, but then it was found that we had to actually run it through the process of information and privacy, so it should get to you fairly quickly. All the other information that we've advised you…. People have been taking notes. I can assure the member that we'll be following through with that.

You can pass off our thanks to the other interveners. The critic for Energy and Mines also spent a few hours with me in the last couple of days. It's interesting when you wear a number of hats, which you do.

At this point I'd like to move vote 19.

Vote 19: ministry operations, $50,234,000 — approved.

Vote 20: housing, $346,242,000 — approved.

Vote 21: liquor and gaming administration, $18,146,000 — approved.

Hon. R. Coleman: Madam Chair, I guess we're going to recess now until seven.

The Chair: Correct. We're going to recess until seven.

The committee recessed from 6:29 p.m. to 7 p.m.

[D. Horne in the chair.]

ESTIMATES: OFFICE OF THE PREMIER

On Vote 10: Office of the Premier, $9,008,000.

The Chair: Premier, do you have an opening statement?

Hon. C. Clark: I do indeed. To start with, to say it is great to be back here after 12 months. I enjoyed the process thoroughly last time, my first as Premier, and I'm hoping to enjoy it just as much this time, particularly because it's been a good year for British Columbians.

We have seen the number of jobs created in British Columbia reach, even from my perspective, unexpectedly good levels — almost 59,000 net new jobs created in the last year, 20,000 of them in April alone. That's a statistic of which I think our government can be very legitimately and justifiably proud.

My task that I set out in the jobs plan last year was to try and protect and create jobs all across British Columbia, in every corner of the province, and make sure that every sector of the province, to the extent that we could, was absolutely thriving. We're getting there. We're really making progress on this plan. The thing about it is that we're managing to do this in some of the toughest economic times in North America's history.

Only ten years ago, when British Columbia's economy was shrinking, North America was undergoing one of the biggest economic expansions in its history. It's tough to do so badly in good times, but equally tough to do so well in bad times, and we are doing really well in British Columbia. That's why I'm delighted to be back here to talk about the estimates of my office, some of the work that we've done over this past year and what we've accomplished.

I often talk about why this jobs plan is important to me personally. It speaks to the reason that I got back involved in politics. That is because I want to make British Columbia better for families. I want to leave this province a little bit better for families than it was when I found it.

For me, job creation, enabling job creation and protecting the jobs that are there in tough economic times is all about making sure that families have the best possible chance to be able to raise their kids in great homes where they feel safe, where they always know they'll be fed and where their family doesn't always have to worry about whether or not they're going to have a paycheque
[ Page 12615 ]
to be able to look after them.

For me, looking after families and enabling the creation of jobs are inextricably linked. From both perspectives, from both a jobs perspective and a families perspective — those are two of the central priorities of my government — we've been, I think, a big success, although we still have much to do. For me, making sure that we are enabling the creation of jobs, recognizing that government doesn't create jobs; the private sector creates jobs. But government sure can impair or enable their creation.

My focus as Premier has been to do whatever we can to enable the creation of jobs. That means enable a strong and thriving private sector in British Columbia. That means getting out of the way of the private sector as much as we can so that we have a strong and competitive economy. That means making sure that we have low taxes, and we do have some of the lowest personal and corporate taxes you'll find anywhere in North America here in British Columbia.

It means making sure that we're balancing the books so that people who want to invest in our province know that they'll get a return on their investment. It means making sure that we show the same kind of discipline in looking after the public's money that the public, that every citizen, would have when they want to look after their own money. It's what people expect of their governments, and it's what we intend to deliver to them with a balanced budget in this coming year.

It all starts with good, family-supporting jobs. It starts with union and non-union jobs in the private sector. That's why we launched the B.C. jobs plan, Canada Starts Here, last fall. We chose that name for the jobs plan because Canada really does start right here in British Columbia. When you look across the Pacific Ocean to our country, the first place you see is British Columbia.

[1905]

The heartbeat of the world economy has moved. It's no longer in the United States. It's no longer in Europe. The heartbeat of the world economy is now in Asia. That is where jobs will be created for British Columbia. That is where investment will begin for our province to make sure people are working here in our resource sector and our tech sector and many of the other sectors that we depend on to make sure that we are creating jobs for British Columbia families.

That means that we need to be out there doing what we do best, what we have always done as a province. That's making sure that we are focused on trade, on building our relationships overseas and facing and engaging in those incredible economies in China, in India, in Japan, in Korea and all over Asia. That is the future of Canada. It is nothing less than that. And we intend to make sure that British Columbia is doing its bit for our country in engaging in those economies and bringing that investment home.

We have the power to fuel the national economy. We have an opportunity here to really lead the country in a way we never have before, to take our place in Confederation in a way that we never have before. The key to that is making sure that we are engaging with our neighbours, our long-term friends and our partners in Asia.

It means that we're working to unite the country, not divide it. It means that we're talking about the things that we agree on and talking about how, as a country, British Columbia can make its full and equal contribution. For years, or at least for some years, sadly we were a have-not province.

When we were a have-not province, I think a lot of us felt a little bit ashamed — maybe more than a little bit ashamed. In those years, we would hear from the rest of Canada: "Boy, isn't it great you've got us to support you."

Well, now here we are in British Columbia in a position to power our national economy, in a position to take our place in Confederation as a have province. It's our chance to say to the rest of the country: "We want to step up. We want to help. We want to be part of building this great project that is Canada." This is the opportunity that we have now.

Our jobs plan is unique in some ways. In one way in particular, it's because we're looking all across government and saying: "How does government get out of your way? How do we make it a little bit easier for the private sector to be able to do business in British Columbia?"

We identified eight sectors in our jobs plan. Those eight sectors are not the responsibility of one minister. They are the responsibility of every minister across government and every member of government. We are harnessing the full power of every individual member of government and every ministry behind the jobs plan to make sure that we can deliver on our promises.

As I said, since February 2011 we have seen almost 58,000 net new jobs in British Columbia — 19,700 in April alone. Those are pretty fantastic job numbers. I don't know if there's any province across the country that can claim those kinds of jobs numbers. We are certainly living up to the promises that we made to British Columbians when we said we wanted to make sure we are powering up our economy, make sure we are creating jobs and make sure that we're contributing in full share to our country.

Three weeks ago, just one example, we issued a permit for Red Chris Mine. Red Chris is $444 million project. It's going to create 250 direct jobs up north. It's going to have huge impacts all across the economy. It's one of 17 new and expanded mines that we are going to get going by 2015.

Mitsubishi recently gave us a huge vote of confidence by investing almost $3 billion in EnCana's natural gas operations here in British Columbia. That is a tremendous vote of confidence in the path that this government
[ Page 12616 ]
has chosen and in the fiscal prudence that we've demonstrated over the last decade.

That's part of introducing a brand-new $600 billion liquefied natural gas industry to British Columbia. We said we'd have three lines up and running by 2020, the first by 2015. They are clearing the land for the first one already. This is on its way to becoming a reality. The new industry will create thousands of jobs — welders, engineers, construction jobs all across British Columbia.

[1910]

I was just at an LNG plant when I was in Japan, and I saw firsthand the incredible potential for opportunity there. Just to give you a feel of how hungry the Japanese are for our liquefied natural gas, when you walk down the halls of government offices, the lights are out. The lights are out because the Japanese are doing everything they can, and particularly people in government are doing the best they can, to try and conserve energy.

As Japan moves from nuclear power to other forms of power, they're experiencing deficit. They look to us here in British Columbia to help them solve that problem with the cleanest-burning fossil fuel out there, liquefied natural gas.

Rio Tinto Alcan is investing $3 billion to modernize its Kitimat smelter. At $3 billion I'm told this may be the largest private sector investment ever made here in British Columbia so far.

As we talked about today, working with Seaspan to help ensure that we landed those shipbuilding jobs for British Columbia workers, British Columbia shipyards, with the $8 billion federal contract — that could be 4,000 jobs over the next eight years. As the company says, it would not have been possible to land that contract without government being there at the table. We made sure that we were.

We are a small, export-oriented trading jurisdiction. We are an open economy, and we've always done well when we're more open and when we're more open to trade. We are going to aggressively pursue trade over this next year just as we have over this past year, making sure that we're reaching out to new markets and reassuring our existing partners of how important they are to British Columbia.

Now, I was just in Japan and Korea talking to some of our existing partners. They said they value our long-term relationship that we've had with them. They want to continue to do business with us. They know us. They understand us. They are some of the most dependable partners you'll find anywhere in the world, and they're open to the opportunities that British Columbia presents.

I also, before that, was in China and India, two new and emerging markets — one newer than the other for British Columbia — again, hungry for the opportunities that British Columbia has to help build their country as they continue to build ours with investment.

I also went to the Philippines, a country which has two million workers who are looking for work. They are our most important overseas supply of workers. I went to the Philippines to talk about how we're going to help fill that trade gap that we have emerging, a million new jobs opening up in British Columbia without a million British Columbians to fill them.

We are going to have to find a way to make sure that we power the economy with people. We could find new partners, we can get new investment for British Columbia, and we can enable that investment by making sure it happens as quickly as possible, but we need people to fill those jobs. With a million job openings over the next ten years, that may be a good problem to have — certainly, better than the opposite.

One of the things that we learned in British Columbia is that it's not a good idea to put all your eggs in one basket. Seven years ago the now Minister of Jobs, Tourism and Investment went over to China and started knocking on doors over there, talking about how we could open those markets for British Columbia wood. He was a phenomenal success.

Our softwood exports to China have gone up by 900 percent. In some months, at least in one, for the first time in history our softwood exports to China outstripped our softwood exports even to the United States — $1 billion worth of exports, just in softwood. That's an incredible growth in the numbers.

We can continue to grow that, but one of the things that we know is that the Chinese, the Japanese, the Koreans, the Indians aren't going to be nearly so interested in investing in British Columbia if we don't make sure we're on a sound financial footing, if we don't make sure that we are continuing to protect our triple-A credit rating. Maintaining that credit rating…. It's hard to overstate how important it is for us to be able to maintain that credit rating in order to attract investment.

Money is mobile all around the world. They are looking for places to invest. There are few places that have a triple-A credit rating. When you want to attract investment from another country, being able to talk about that is probably the best part of your sales pitch.

[1915]

We get there by making sure that we keep taxes low, that we balance our budgets, making sure that we do what we say we're going to do when we're reporting on our books. All of those things are what make a triple-A credit rating happen. It's a commonsense approach to government that investors are looking for.

I'll give you some examples of some of the ways that we've tried to demonstrate over this last year that we want to be, that we intend to be, a fiscally responsible government, one with a conservative approach to budgeting and taxation and regulation, one that thinks through problems and then figures out how we will fix them.

B.C. Hydro is a company that when I became Premier was proposing 50 percent rate increases over a period of
[ Page 12617 ]
five years. Then it looked like, after that, they were going to about a 32 percent rate hike plan over three years. We went in, and we told them that that was too high. I said to them — and, in fact, I said this even before I was sworn in as Premier: "I care about families. I care about the total cost burden that government imposes on families. B.C. Hydro is clearly part of that cost burden. Those planned increases are way too big."

We sent in an audit team, which was headed by my deputy minister. They spent months going into B.C. Hydro looking very, very carefully at the company, at the books, at the plans, and thinking about how we could make sure we got that planned rate increase down to a more manageable level for British Columbians. They found a way to reduce the cost to ratepayers by 50 percent. Now, there's an example of how, when we see a problem, if we decide we're going to do the hard work and the homework of going in and figuring out the basis and the root of that problem, it's possible to solve it in a way that works for British Columbians.

It's the same reason that TransLink is undergoing an audit: to ensure that money is well spent before they go and ask taxpayers for even more cash. It's why in contract talks with the public sector workers, we've been clear: we will not go to taxpayers and ask for more money in order to give government employees a raise.

Those are some of the critical elements of making sure you have a triple-A credit rating. And a triple-A credit rating says to investors: "We are a safe harbour. We are a place where you can come and invest, create economic activity, create jobs and put people here to work."

That matters for two reasons, by the way. The first, as I said at the beginning, is we want to make sure that families are able to look after each other, that people are able to bring home paycheques. The other reason, though, is that we want to make sure we're able to support the important public services that people depend on. When government revenues go through the floor, you can't keep doing that.

A shrinking economy, one that scares away investment, one that scares away business, is one that can't support public services. And that's not a place that any economy wants to get to. Go ask the government of Greece. Go ask the government of Spain. That's been a recipe they've followed, and it doesn't work. We are taking the opposite path.

Now last, I want to say this. I said at the beginning we had three central priorities for the government: families, jobs and opening up government to people. We've made some moves on that front, although we have a long way left to go. There is absolutely no question about it. We've begun to reach out to British Columbians to really try and engage them.

We introduced Data B.C., which is an important innovation. We're putting a huge number of data sets out and making them available to the public, making them available to entrepreneurs in the private sector to be able to use them so they can create apps and provide information to the public. The most important part of being able to engage with your government is having the information you need to ask the right questions. That's what the data sets are all about.

We've also launched Open Info, which posts all the monthly travel expenses of ministers and deputy ministers for the first time. As well, the site also hosts all freedom-of-information requests that are automatically posted, allowing everyone to be able to have access to them.

[1920]

Then more recently, on Monday, we announced the results of a provincewide vote on Family Day letting British Columbians choose what day they wanted for a holiday in February. Some groups came to us with a convincing argument as to why it should be the second Monday in February. So 31,000 people took the time to participate in that. They took the time to have their say on when they wanted their holiday to be. They wanted to make their voice heard, and they were.

Just as a footnote on this, though. Over 3,000 people went to the site and didn't actually express a preference one way or another. They voted: "Either one is fine." I think that tells us that British Columbians, who may not be motivated by wanting to choose one or the other, still want to make sure that their voice is heard. They still want to be part of the process, and I'm sure many of those 3,000 people were amongst the many that offered comments that helped give the government guidance on what we should do.

That holiday will be February 11 next year, and the second Monday every year after that.

It's been a good year for British Columbia. It's been a tough year financially for British Columbia, for Canada and for many countries in the world, but nonetheless, we've been making smart investments to make sure that we are looking after British Columbians. I'm looking forward to this debate and this discussion in the last estimates that we'll be doing in this legislative session, and I'm looking forward to some of the questions that we'll have from members of the government and the opposition and independent members as well.

With that, let me, first of all, thank the Chair and the Clerks for helping us today and also introduce to you some of the people that are with me today. John Dyble will be a familiar face to many of you. He's Deputy Minister to the Premier. He's also cabinet secretary and head of the B.C. public service. Neil Sweeney is a deputy minister in my office, responsible for corporate priorities and planning. Deborah Fayad is assistant deputy minister and executive financial officer with the Ministry of Finance. She's sitting there. Michelle Leamy, director of executive operations in the deputy minister's office.

We also have here some staff from the Intergovernmental
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Relations Secretariat. Pierrette Maranda is with us as well. She's associate deputy minister.

Thanks to all the staff who are supporting us today. I very much look forward to engaging in what I'm sure is going to be a very interesting and enjoyable debate.

A. Dix: Thank you to the Premier for her opening statement, and welcome to Mr. Dyble and Mr. Sweeney, Ms. Leamy and Ms. Fayad.

Just to clear up something, before we start, about these estimates. The Premier said on Monday, and I'm going to ask her why she didn't go to the Western Premiers Conference: "The reason I'm not going…is because I'm doing my estimates in the Legislature." On Tuesday the Premier said: "We have to negotiate with the NDP to schedule the estimates, and the original plan was to have them today" — meaning Tuesday — "so that was why. That changed at the last minute, and that's something I'm not in control of."

I just wanted to ask the Premier to clarify, because not going to the Western Premiers, I suppose, is a significant thing. On March 12 the Government House Leader informed us that we'd be having the estimates May 30 and 31 — namely, today and tomorrow. That was March 12.

As the Premier will know in any event, as an experienced MLA, the government sets the agendas. The government sets the agenda and decides. For example, this afternoon they decided to debate in 30 minutes, with closure, a bill that had been introduced on Tuesday. The Minister of Jobs, who went to the Premiers conference, was back for question period today, in any event.

To the Premier: maybe update the explanation as to why she wasn't at the Western Premiers Conference.

Hon. C. Clark: Well, as the member knows, it's never entirely clear exactly how the schedule of the House will unfold. I know there was talk at some point of having the estimates earlier, and I wanted to make sure that I was here for that rather than trying to get on a plane from Alberta to try and make it here at the last minute.

[1925]

I wanted to make sure that this time was free. I was glad that I did, because I was able to meet with Catalyst on Tuesday as well.

I should add, Premiers are often not present at Premiers' meetings. I don't know if I have been to a Premiers' or western Premiers' meeting that has had all the Premiers at it. In fact, I know that I haven't.

A. Dix: To be clear, when the Premier said that "we have to negotiate with the NDP to schedule the estimates, and the original plan was to have them today," that was incorrect.

Hon. C. Clark: The answer is as it stands, the answer I made just a minute ago. There has been discussion about having the estimates earlier and later. As the member knows, the House schedule is always fluid. So I was trying to make sure that I could accommodate the timing of the estimates as we got to the very end of session.

A. Dix: Well, the House schedule is fluid, except in this case when we were told on March 12 that they would be today and tomorrow.

On another question, the issue of cosmetic pesticides is before us. The member for Kootenay East, the co-chair of the Premier's platform committee, sent someone an e-mail tonight and said that he'll take 350 scientists at Health Canada over the politically motivated, left-wing conspiracy theorists any day. Is the Premier in agreement with the co-chair of her platform committee that the Canadian Cancer Society, Canadian Pediatric Society, Canadian Breast Cancer Foundation, the College and Association of Registered Nurses of Alberta, the Public Health Association of B.C., the Lung Association, and so on are part of a left-wing conspiracy?

Hon. C. Clark: No. I would also say this though, that the committee in its entirety did a very good job of soliciting a broad range of information from a broad range of sources. I think that despite the comments that the member has quoted there, the committee did a very good job on this. It is important to respect the work that the committee does, and it's important that we take adequate time to properly review it.

When I say I want to open up government and I want to start listening to British Columbians, it means making sure that we are giving legislative committees their due. It means listening to them and taking into account what they have to say. It doesn't always mean taking their advice. But it does mean doing more than just saying, on the one hand, "Hey, thanks for your work," and on the other hand saying: "Sorry, we've already decided that we don't agree with it."

I think the legislative committees deserve a little bit more respect than that. In the past, I've heard the member get up and talk about how legislative committees need to be respected and need to be heard and that they can't be just a big waste of time. Now his position is that this should all be just a big waste of time, because he's already made his decision.

A. Dix: We'll get into the decision perhaps later.

I think that it is possible to disagree in politics without terms of abuse. The groups involved, who went before that committee, deserve better than to be characterized in that way. But that apparently is the way of the world, or at least the way of the government.

The Premier referred to the jobs plan. In her speech where she launched the plan at the board of trade, she said: "The first foundation is creating a strong, skilled B.C. workforce, trained for the jobs our economy needs today
[ Page 12619 ]
and in the future."

A question she didn't bring up in her opening statement. She talked about bringing workers from elsewhere. She goes on to say: "That means promoting education that will give our citizens the best chance to get the good jobs that will allow them to stay close to home, keeping families together."

Why did the Premier agree, under those conditions, with major cuts in apprenticeship programs and cuts to the Ministry of Advanced Education in the budget in March?

Hon. C. Clark: The number of apprentices the ITA educates has doubled in the last decade.

[1930]

A. Dix: The Premier knows that in the budget the one ministry that was subjected to nominal cuts was the Ministry of Advanced Education and skills training, which runs, presumably, contrary to much of what is said in the jobs plan. In fact, it runs contrary to what is said by just about every business person I meet with and presumably the Premier meets with, which is that we're facing a skills shortage in the country.

In fact, the Globe and Mail did a recent survey of executives, and 89 percent of them advocated increased spending in skills training. Yet the government cut the budget in February after the jobs plan came in, after the words of the Premier weren't met with actions. I mean, those statements would be reinforced by statements in the forest industry, statements in construction, statements in virtually every industry in the province.

Perhaps the Premier can attempt to explain what seems unexplainable: the decision to cut that ministry, cut that ministry's budget in a skills shortage, cut the ministry responsible for skills training in a skills shortage.

Hon. C. Clark: Well, first of all, the member in his last question suggested that the 1 percent reduction in the budget equalled a cut in apprenticeships. I take it that he's withdrawing that comment, because he hasn't…. He's now…. In his second question he talks about the 1 percent reduction in the overall budget, which is absolutely there.

That's a 1 percent reduction where we are asking advanced education, the whole sector of advanced education, to find back-office savings. It's something that, in the Ministry of Education, school boards have done and are continuing to do quite effectively. We want to see the advanced education sector find those savings as well. We believe it's possible.

It is a really difficult task to try and balance a budget at the same time that you're investing in services. We have found that balance, I think. And in this ministry we wanted to make sure that we were spending money as smart as we possibly could.

The member will see over the coming months new initiatives in skills training that are going to make, I think, a very real difference, and I hope, as well, see this 1 percent savings realized in back-office costs in advanced education, which I think are entirely achievable, based on some of the success that we've seen in other ministries across government over the last many years.

A. Dix: In fact, the actual funding for public providers, for skills training out of the ITA budget, declined every year between 2008 and 2011. That's what happened. That budget is going to further decline. In fact the government plans to spend less over the next two years.

The budget for training in the ITA service plan goes from $77.4 million in '12-13 to $73.9 million in '14-15. So that's a cut. I don't know if the Premier considers that a back-office cut or a front-office cut. It's a cut at a time when we surely need to be providing more opportunities to young people.

I guess the question, given all of the words about skills training, is: how could they possibly have arrived at a cut like that?

Hon. C. Clark: The member is — and I'm sure, mistakenly — talking about two different ministries at the same time. On the one hand, he's talking about the 1 percent reduction in the Ministry of Advanced Education. And then he's talking about the budget for the ITA, which is in another ministry. Those two changes are unrelated.

The 1 percent cut at the Ministry of Advanced Education is not…. In his first question he seemed to conflate those two issues, so I just want to be clear that they are separate issues.

[1935]

Second, the government invests about $100 million annually in industry training through the ITA. That's a pretty significant investment. It's significantly higher than it has been in the past, despite the fact that it's tough economic times, because we need to make sure that we are investing in our workers here in British Columbia.

Now, one of the most important things that we're doing with respect to training across British Columbia is trying to come up with a way to predict the needs of our economy five, ten, 20 years out. One of the things that we've set up are regional workforce tables. This is part of the jobs plan.

We are talking to the private sector, to non-profit groups, to community groups about what they think the needs of the economy are going to be and trying to figure out as best we can what training is going to be required in order to meet those needs and then going back and making sure that we are shaping our education system so that we can meet those needs as effectively as possible.

As I said, a million new job openings in British Columbia. It's a big problem. It's a better problem to have than the opposite, which is too many workers, not
[ Page 12620 ]
enough jobs. It's nonetheless a big problem that we have to solve. We have to make sure that every worker in British Columbia has the first chance at trying to get some of those jobs. We need to make sure that they are trained up to the standard required to be able to meet the needs of our economy.

That's the work that we're doing with the regional workforce tables. It's the first time, I think, that it's been done on this scale in any province — well, certainly in this province. The work is going well. We are getting good results, and I think we'll get some very, very good guidance about how we can make sure that we are meeting those needs in the long term.

There are a lot of things that we need to do in the shorter term as well. But I don't think the future of British Columbia will be well served if we forget our longer-term goals because we haven't done the long-term planning that we're engaged in at the moment.

A. Dix: But they are related in an important sense. The government's cutting the ITA, and it's cutting advanced education and skills training. That's clearly the wrong direction to go in. The government claims in its six-month progress report that it met its aim to "enhance access to skills and apprenticeship training." The plan doesn't expand skills, and the recent budget disinvests in advanced education and skills training.

I think the government was simply off base in this regard. We know and the Premier knows, because it's based on the government's own labour market reviews, that 80 percent of the jobs of the future require some form of post-secondary education — 34 percent of that university-type education, 44 percent of that other types of education.

That's what the information says. The government decided nonetheless to cut those ministries in a skills shortage, contrary to the advice of the Business Council, contrary to the advice of the labour movement, contrary to the advice of educators.

In fact, as the Premier will know, in an unprecedented step, 25 university and college presidents sent the Minister of Advanced Education a somewhat incredulous letter, given the government's apparent public commitment to these issues, saying that their ability to even maintain existing services was severely compromised.

Wouldn't the Premier agree with me that that was the wrong direction to take the province — that cutting apprenticeships, cutting advanced education, is the wrong approach to take?

[1940]

Hon. C. Clark: We have been, as I said, working very hard to try to make sure that we are supporting skills training across the province. It is probably one of the most important areas of the jobs plan and is also one of the most difficult to achieve, I should say.

Our education system is big and complex and, in many cases, almost completely independent of government in the way that they make their decisions. Nonetheless, it's an important way to feed our economy and make sure our economy is working.

We've been working with post-secondary institutions across the province and with school districts to make sure that we're meeting our needs in education. In terms of the 1 percent reduction in the budget, we saw a very significant savings in Health, as one example, where we centralized back-office functions.

School districts have seen savings in some of their budgets as a result of centralizing back-office functions. So we're hoping that post-secondary institutions can achieve something similar. There's every reason to believe, based on government's experience — every ministry is different — that these back-office savings are achievable.

Someone just handed me the line item for ITA. I should say that in '11-12 it was $94.444 million, and in '12-13 it was the same number.

A. Dix: The Premier's deputy, who was also a former deputy in Health, knows as well that the attempt to centralize services is a major challenge. In fact, he will know, and the Premier will know, that for a time they tried to centralize communications between the health authorities just in the Lower Mainland. One person became the vice-president for all three, and then they sent them back a little while later.

They tried to do that in human resources. It was an utter and complete failure. The reality is that the assumptions being made by the government that they can greet more students and increase spaces while cutting the ministries involved is contrary, I think, to the reality that the university and college presidents know — and they've informed the government of this — and contrary to common sense.

The other challenge on the trade side in particular is, frankly, inadequately funding capital equipment. As the Premier will know, there are many high-technology trades, and this is what people and businesses are in fact expecting now. There are numerous programs around the province where apprentices have been trained on equipment that is 20 years out of date.

In addition to the other issues involved, this is a significant challenge right now. Needless to say, I would say — and the Premier surely would agree with this — that many employers find this frustrating.

I guess I wanted to ask the Premier what her response is to input that I've received from both employers and from people in post-secondary education of a real need for investment in capital equipment and skills-training programs.

[1945]

Hon. C. Clark: I'm not in a position to delve too deeply into the specifics of other ministry budgets, which I'm sure the Leader of the Opposition had a chance to canvass during the other estimates debates.

But I will say this. Since 2001 there have been 25,000 new graduate spaces created in British Columbia, 32,000 new public post-secondary spaces, seven new universities.

Those universities have been outfitted with capital. That is a very significant capital investment. That investment means that British Columbian students are able, if they want to, to get an education here in our province. We have made historic investments in capital in opening new universities and new institutions across the province and in opening up more seats for more British Columbia students. Those investments have been significant, and they've been worth it.

Many people in the job-creating community will say that they have seen a very real difference in the quality of our workforce as a result of the investments that this government has made over the years in post-secondary education.

I think we have every reason to be proud of our record with respect to post-secondary education. You can travel the province and visit those institutions — institutions that didn't exist ten years ago and are now thriving and competing around the world in successfully delivering some of the best education that you can find anywhere.

A. Dix: The Premier perhaps is going to get back to me on my actual question with respect to the state of capital equipment, which is a key issue in the relationship between training and the creation of jobs in the province — perhaps later.

I'm going to ask the Premier — because of course the government polled extensively, including on the name of the jobs plan and so on — whether she received a briefing on that extensive polling. I think it was conducted, at least in part, by the Angus Reid company.

In that extensive polling and research around the jobs plan, they asked what the name should be. They asked other questions such as that. They focus-grouped. They spent, I think, in the neighbourhood of $140,000 all told. Was the Premier briefed on that?

Was she briefed in particular….? The decision of the government to cut skills training would have been a bit of a surprise in this regard. There was a poll taken, and the top-rated idea from the public in the poll was that the jobs plan should achieve…. The top goal was to take steps to ensure that young people can enter the workforce. There was support for increased skills training.

Why the decision in that context? Perhaps it's because the Premier no longer believes in polls, and that wasn't followed.

If the Premier can tell us a little bit about the extensive polling taken out and used by the government in forming its communications around the jobs plan.

Hon. C. Clark: It's early to be getting chippy, I would say.

Let me say this. In response to the member's first point, no, I do not intend to get back to him in the course of these estimates on that specific question. It's something that he should have explored with the appropriate minister in the appropriate estimates.

I'm happy to speak broadly about the government's direction, as I did about the number of new campuses and new buildings and capital projects and the number of new spaces that have been created. But in terms of the details of some of those ministries, he and the opposition need to make sure that they are pursuing those in the appropriate ministries with the appropriate ministers.

[1950]

In terms of the jobs plan, one of the things that we learned from British Columbians is that they want a government that's going to create and protect jobs all across the province — almost 58,000 net new jobs in the last year, 20,000 net new jobs in the month of April alone. We are delivering on the number one priority of British Columbians.

When people say they want to make sure that their kids can go find work in British Columbia, it's premised, first, on this assumption — that there is a job to go to. We've been working hard over this last year and making sure that we're growing our economy, making sure that we're keeping taxes low and keeping our economy sound so that we can enable the creation of jobs all across the province.

We are delivering on that crucial priority for British Columbians. If there are no jobs to go to, what people will do is what they did in the 1990s: get trained here and go find a job somewhere else. They will do what they are doing in countries like Greece and across the European Union in countries that are struggling, and that's to get trained in the country they're in and take their training somewhere else to where the economy is growing.

We don't want to see that happen in British Columbia, so as a first priority, we have to make sure that those jobs are there for British Columbians to go to.

A. Dix: Of course, the Premier will recall the question was about the polling conducted in support of the jobs plan — polling conducted by Angus Reid, by the Mustel Group, by a group called Innovative Research, with which I'm sure the Premier is familiar. Presumably, the Premier's opening statement, which dealt with the jobs plan, implied to me that she might want to take some questions on the key aspects of it. I'm more than willing to focus in on other items, if that's what the Premier would prefer.

In any event, I asked the Premier whether she had read the polling done around the jobs plan and whether she
[ Page 12622 ]
had read the polling that said that people wanted more support for skills training — which preceded a budget where she, of course, cut skills training.

I wanted to ask her what, in general, she thinks the value is for government in engaging in extensive public opinion research, such as that conducted by the Innovative Research group, such as that conducted by the Mustel Group and such as that conducted by Angus Reid. I wonder if the Premier might share her views on the role of polling on government and why the government did that extensive polling.

Hon. C. Clark: Well, we do think that advanced education institutions can find administrative savings, and that's where we've asked them to find them. They are doing that. We're working hard with them to see that that happens. As I said earlier, we want to make sure that those savings are found without impacting services.

We've had some experience with that across government, at slimming down administrative costs. We've had some good success with it too, so we believe that that's possible to do in this ministry as well.

[1955]

With respect to polling, the member is no stranger to polling, I'm sure, from his days in government. I'm sure he could answer that question as well himself, although it might be a different answer. I don't want to guess what his answer might be. Mine is that polling helps inform decisions, but it doesn't make decisions. It helps give us a sense of where the public is at. It is a snapshot of where people are. It's not a complete picture. It's helpful. It's a piece of the puzzle, but certainly, without context, it doesn't give you the whole picture.

The government did some polling on the jobs plan. I think the member may be in receipt of what the polling was. I don't know if he is or not. It was useful information. Nonetheless, we did not need polling to tell us that British Columbians cared about jobs, and we didn't need polling to know that British Columbians care about skills training and education.

Even before I became the Premier of this province and the leader of my party, before I was in receipt of any polling information, I talked about protecting and creating jobs across the province as a single priority for government. I maintained that that needs to be a central priority for us. It absolutely continues to be, and we're going to carry on down that path. Just as we have over this past year, we're going to do it over the next year as well.

A. Dix: Well, in fairness to the Premier, she's right in one respect. The polling said that the government should invest in skills training, and they cut skills training. In that sense, I guess, they didn't follow the poll.

Just to be specific, then. The Premier will know that we did receive some information, although some was severed, about the poll conducted by Angus Reid for the Premier in advance of the launch of the jobs plan.

Can the Premier tell us…? Innovative Research Group, which is the former employer of the former chief of staff to the Premier, Mr. McDonald, conducted a public survey in December 2011. The total billing was $42,560. I'm wondering what that poll was about. Maybe the Premier can let us know some of the findings.

Hon. C. Clark: I'm sorry. I can't provide the member with the contents of that poll. It's not under my estimates.

I can give him this guidance on the Ministry of Advanced Education budget, because he keeps saying that it has been cut. It's true we are asking post-secondary institutions to find savings on the administrative side. Absolutely, that is true, but the Advanced Ed budget for '11-12 is $1.963 billion. For '12-13 it is $1.971 billion. That budget was not cut.

In JTI the ITA, as I said earlier, is $94.4 million in '11-12 and $94.4 million in '12-13.

I understand the member's political purpose in trying to characterize it this way, but I do want to be clear about what the real facts are in the budget.

A. Dix: Of course, the Minister of Finance said in his budget speech that they were cutting the budget, so I don't know why this point is a point of contention, but there you go.

Well, $42,000 — it was a political poll done by one of the Premier's and the Liberal Party's key polling agencies. The public paid for the poll. What was it about?

Hon. C. Clark: I'm glad I got the chance to clear that up for the member by giving him the numbers that are in the budget on Advanced Ed and ITA.

[2000]

In terms of the polling, my answer is no different. I don't have the details of that poll with me today. That would have been properly pursued — and I'm pretty sure the member or some of his opposition members did — in the budget estimates for the appropriate ministry. That poll would have been done by GCPE, which is under the Minister of Labour and Citizens' Services and public engagement.

A. Dix: Was the poll that was conducted by them shared with the Premier, and can she tell us what it was about? An FOI request went into government about polling, and no information was provided about that poll even though, of course, the poll was conducted in December of 2011.

Simply put, it's obviously a poll done by Innovative, and the Premier will know of their qualities because the Liberal Party hires them as well. I'm just curious to know why that $42,000 was spent while excellent projects like NorKam are still waiting for a response from the government.
[ Page 12623 ]

Hon. C. Clark: I'm sure the Minister of Labour and Citizens' Services would have had a binder in front of her that had all the information that the member was looking for in quite a bit of detail. I don't know specifically which poll he's referring to, and I'm very hopeful that he pursued or sought this information when those estimates were underway.

A. Dix: Well, it's this poll conducted for $42,000 by Innovative Research around the jobs plan, which the Premier introduced herself into this debate in her opening statement. So it seems like a reasonable question. The Premier herself will know if she read the poll and was informed by the poll, and apparently, she's not going to answer that question.

We don't like to get stuck here with the estimates. We'll move on to the next item, which is…. We might want to explore a little bit the issues around aboriginal relations, which are key IGR issues that the government is facing. In particular, I wanted to ask the Premier about comments by Sophie Pierre around the treaty process.

The Premier will know that we've reached the 20th anniversary of that process, and Sophie Pierre had some very critical things to say about progress — not just, by the way, progress under the current government but overall progress that included time under the NDP. I just wanted to know what action the Premier is taking in response to Chief Commissioner Sophie Pierre's concerns.

Hon. C. Clark: The treaty process has been slow, and I don't think that's a mystery or a shock to anybody.

Let me go backward, because I just want to say a word about Sophie Pierre. She has served our province — all citizens of this province — incredibly well throughout her life in all of the tasks that she's taken on and, in particular, this latest one.

I want to just take a minute to publicly say thank you to her for all the work that she's done and the huge contribution that she's made to British Columbia — to our people, to our economic interests, to First Nations communities and non–First Nations communities alike. She commands respect for a reason. She's done more than most people will ever be able to say that they've done in her life to further the aims of a civil society. So I want to just take a second to say thank you to her.

[2005]

It's true. The treaty process has gone very slowly over the years. The Minister of Aboriginal Relations has been working very hard to try to make sure that we are advancing the economic interests of First Nations. That's been her major focus over this last year. She's going to continue with that focus over the next year, recognizing that First Nations are, in almost every case, just as hungry, if not more hungry, for economic opportunity as any other community out there.

We certainly see that in the Haisla. I met with Ellis Ross just the other day, a councillor from the Haisla, to talk about the economic opportunities in Kitimat, for example. I meet with First Nations leaders all across the province, and I can tell you that their focus is to say: "How do we create more economic opportunity for our people and for the communities where we're located?"

I think it's a real attitude of partnership on the part of First Nations. That's one of the reasons that the ministry has been very closely focused on trying to create economic activity on economic agreements with First Nations, and I hope that that is going to go some ways to getting us toward communities that are fully self-sustaining for aboriginal people that depend on them.

I think that's one of the ways that we'll get there. I hope that we'll also get to treaty. I think that's another way to provide real certainty over the land base.

We've certainly seen, for the First Nations that have gotten a treaty, that it has meant many, many good things. Kim Baird in Tsawwassen is a living example of what can be accomplished when a First Nation wants to pursue a treaty to make sure that they can ensure the future of their people.

There's lots of good news in the area of government-to-government relations between our government and First Nations governments. There's much more to be done, but I'm very hopeful about the future.

A. Dix: Specifically, what action has the Premier taken to respond to the chief commissioner's recommendations?

[2010]

Hon. C. Clark: As I said, I think that she did have some legitimate criticisms about the process. I don't think it's any surprise that she would say, that someone informed about the process would say, it has taken an awfully long time — much, much longer than anyone would have anticipated, I think, when the process first got started.

Our response to that as a government has been to say…. My response to that has been to direct the Minister of Aboriginal Relations to focus on trying to find economic development agreements that are going to spur economic growth for First Nations communities before we get to treaty — recognizing that some First Nations say that they don't want to get to treaty but still engaging and making sure that we are creating that economic opportunity.

My view is very much that when First Nations communities…. When any community has economic opportunity in abundance, the people in that community will find themselves better off, more likely to be better educated, more likely to be able to go out and lead a better life than perhaps their parents or grandparents did. All of those things are part and parcel of economic development.
[ Page 12624 ]

We're trying to make sure that First Nations have access to and opportunity for economic development so that they can continue to grow, their populations can continue to become healthier — doing that in communities and not necessarily waiting for a treaty to be signed before we start engaging in concluding agreements around economic growth. That has been very much what the Minister of Aboriginal Relations has been focused on.

A. Dix: Just to follow up on some of these questions, in a search for specifics.

In January the Prime Minister appointed James Lornie as a special representative to the Hon. John Duncan — who's the Minister of Aboriginal Affairs and Northern Development, as the Premier will know — to report on the treaty negotiations in B.C. Mr. Lornie's recommendations were released recently. I'm wondering if the Premier has a view on those recommendations. What has the Premier done to press the federal government to implement?

Hon. C. Clark: The criticisms, as I said, that have been lodged about the treaty process are, in many ways, legitimate. It has taken a long time, it has cost a lot of money, and there have not been the results that people had hoped for. Again, that's why we're pursuing these economic agreements, many different types, with First Nations across the province — so we can unleash economic opportunity for those communities.

The ministry is currently working with the First Nations Summit and Canada on a treaty revitalization package. That work is underway at the moment, and we hope to be in a position to announce it soon. I know that the member will forgive me for not announcing it today in estimates.

A. Dix: Specifically, though, Mr. Lornie had nine recommendations. I'm wondering if the Premier has a point of view on those.

Hon. C. Clark: I do. The member will gain some insight into that when the treaty revitalization package is announced. That is going to form, in large part, the response to some of the criticisms that have been lodged. So that will reflect the view that the government has on this and our response to it as well.

The process needs to be revitalized, and it needs to be revitalized in partnership with First Nations and in partnership with Canada. That's what we're working on doing right now.

[2015]

A. Dix: The Premier will know that many people, including some First Nations, including the Treaty Commission — the Premier has speculated on that herself — have identified a potential for what you'd call incremental treaty agreements to be complementary to the treaty process. I ask if the Premier considers such agreements, such ITAs, key to economic development projects such as new mine developments. If so, how does she think they'll work?

Hon. C. Clark: Well, there are a number of different forms that our agreements with First Nations can take. I'll just give the member one example. The Kaska Dena strategic engagement agreement is one agreement the government has entered into whose aim is to try and streamline decision-making. That in itself is going to make sure that we are getting closer to economic opportunity for First Nations.

There are a number of these kinds of agreements. They all, though, ultimately have a similar purpose — that is, to make sure that we are unleashing economic activity, making it easier for First Nations to engage with the private sector and attracting investment in their communities, making sure that the private sector understands how to engage with First Nations as well.

We are trying to make it easier, through all of these different kinds of agreements, to open up economic opportunity for First Nations. They all have a similar purpose.

Different First Nations have different expectations on this. As I said, there are some First Nations that say they don't intend to get to treaty and some that very much would like to. In the meantime, we need to make sure we're coming to agreements. The Minister of Aboriginal Relations has made this her central focus — to open up economic opportunity.

A. Dix: I'm going to keep trying, nonetheless.

Another key issue in aboriginal relations is the debt burden that faces many First Nations who are involved in the treaty process. The Premier will know, of course, that it's the federal government that provides the loans, but they're a source of concern for everyone. The sum total of these loans is significant. Now, obviously, it's a significant burden for First Nations communities who are involved in the negotiations.

I don't know if the Premier has raised this issue with the federal government and whether the Premier has taken a position on this critical question.

Interjections.

Hon. C. Clark: Is everybody following the hockey game? Is that what I'm missing here?

A. Dix: We were hoping, maybe, for a change.

Hon. C. Clark: I'll have to check in later, when the member is up speaking.

Let me say this. I think that the member does identify an issue that is of very, very real concern to all the
[ Page 12625 ]
parties in this. It is something that we are going to be speaking to in the treaty revitalization process — which we'll be announcing soon, I hope. I should say that the member knows that the federal government provides the cash and the provincial government provides the land in a treaty. I'm sure I'm not telling him anything that he doesn't know.

Nonetheless, I'm advised that the minister has been engaging with our federal counterparts about the issue that he's raised. I know it's something that, obviously, we're vitally interested in — as are First Nations, as is the federal government — because it is a big problem.

[2020]

A. Dix: The Premier will know — and this is a key issue in First Nations communities and other communities — that the federal government is passing amendments to the Fisheries Act that will reduce standards for protection of fish and fish habitat.

This is a key intergovernmental issue in B.C. because there are some significant joint issues involved here. This is a resource issue also of concern to a vast majority of First Nations communities. Several former Conservative Fisheries ministers have expressed strong opposition to the changes, especially the taking out of fish habitat and the protection of fish habitat from the bill.

I'm wondering if the government of British Columbia has taken a position or communicated such a position to the federal government.

Hon. C. Clark: It's possible that the minister responsible has spoken to our federal counterparts about some of the issues that the member has raised. I'd be happy to get back to him about that.

A. Dix: I'm asking the Premier…. I appreciate that I may be incorrect about the minister responsible for intergovernmental relations, but these questions are, I think, central. They're central to B.C. First Nations in terms of food supply, economic activity, traditional culture.

Of course, we've raised these issues, as the Premier will know, in question period. Every reputable scientist and four federal Fisheries ministries — none of them, by the way, NDP — have spoken out, yet the government of British Columbia hasn't taken a position.

I wonder if there's any strategy or plan to intervene in that debate, especially since…. While closure is not as rapid a process in the federal House of Commons as it is here in our provincial Legislature, nonetheless, the bill is going through rather quickly.

Hon. C. Clark: Well, B.C. does have a very strong interest in ensuring that we are protecting fish habitat. I'm from a family of fishermen, and I understand more than many, I think, how important the fishing industry has been in shaping and building our province over the last over 100 years. We are working with the federal government. I'm advised the Minister of Environment has been engaged with his federal counterparts on this issue.

B.C.'s interests and whether or not they are well served…. We'll know whether or not B.C.'s interests are going to be well served when the regulations are written. We have a chance now to really have input into the regulatory process, into building the regulations. That could be central in determining whether or not British Columbia's interests and the protection of fish habitat meet the standards that we expect for them.

That engagement is happening now, and the Ministry of Environment is working very hard on making sure that we defend British Columbia's interests in that back-and-forth with his federal counterparts. He tells me that they are very open to our input on this. We welcome the opportunity to have that input, and I'm very hopeful that it will be productive and ensure that British Columbia's needs are met.

[2025]

A. Dix: I'm very encouraged by that. Is the Premier saying, since it's the legislation that reduces standards for the protection of fish habitat, that the province of British Columbia is against those changes to the legislation?

Hon. C. Clark: I'm saying that the implications of the changes will depend heavily on the regulations that are drawn up to support it. The federal government is welcoming our input on this, and we are making sure we avail ourselves of that opportunity.

A. Dix: The reason that four former Fisheries ministers — including Mr. Siddon, including Mr. Fraser — are so strongly against this…. It's not about the regulations; it's about the legislation. They're lowering standards in the legislation. They're removing protection of fish habitat from the legislation. That's what they're doing.

The regulations will be interesting, but the Premier will know that they flow from the legislation. Hopefully, at some point the province will express a view on that consistent with the interests of British Columbia.

I want to ask the Premier about the Taseko Prosperity project. The Premier will know that there is a new application in the federal EA process. The Premier had previously expressed support for the proposal of Taseko to use Fish Lake as a tailings pond. I wonder if the Premier has a position on the revised mine proposal.

Hon. C. Clark: First, let me say this. My government is pro–economic development and pro-jobs. I hope that there is some way that the parties can come together and find agreement around allowing this mine to go ahead. I hope that the parties can find a way to make it work for everybody in the region, because it would be great for employment in a region that's had some really
[ Page 12626 ]
tough times.

That's consistent with a government that's pro-jobs and pro–economic development. That's what we are.

With respect, though, to the proposal that's been to the federal government, once the federal review is done and we've seen the results of that discussion that the mine has with the federal government, we'll be prepared to offer some comment on that.

A. Dix: The Premier will know that Taseko sent a request to the federal government saying, amongst other things, that they not appoint an aboriginal member to the Canadian Environmental Assessment Agency review panel; that they not start hearings with drumming or aboriginal prayer ceremonies, something Taseko says is inappropriate; and that they not consider the spirituality of a place as an aboriginal right.

[2030]

I'm wondering if the Premier at least has a position on those questions.

Hon. C. Clark: My position on those questions is to talk about my government's commitment to this. We have a deep respect for First Nations, First Nations tradition, First Nations culture. I think that's been demonstrated in this last year of my government and in the ten years preceding.

We wouldn't have got to this place in British Columbia, where we are moving so rapidly down the road of economic development agreements with First Nations, if that basis of respect wasn't there between us. That is my government's position, and it's worked to build trust between us.

My recommendation for all the parties involved is to try and make sure that you're doing everything you can to build trust. It's worked for us here in the province of British Columbia, and I think that's a good model for all the parties involved in this to look to.

A. Dix: Well, the Premier will, of course, recall that the provincial EA process approved the original project and that the federal process rejected it. I'm wondering why the Premier is reluctant….

The letter from Taseko received a lot of attention. I think a lot of people think — I certainly think — that the letter and what it said about First Nations was not appropriate. I'm wondering why the Premier isn't prepared to criticize or condemn it.

Hon. C. Clark: As I just said, it's not something that we would do. It's not the model that we are setting. I think that in order to make sure that these kinds of discussions get you to the conclusion that you want, it's really important to demonstrate that respect. I think that we do as a provincial government. So that would be my recommendation to all the parties involved.

The Chair: While I've been giving considerable latitude in allowing a wide-ranging policy discussion this evening, I would remember that we're on the Premier's estimates. I do understand that this is remotely to do with IGR work but would remind the member to try to keep the questions to the Office of the Premier.

A. Dix: Absolutely. Thank you, hon. Chair. I'll continue to ask these IGR questions, taking into account your point.

I just wanted to be clear. The Premier has no position on Taseko's demands around the EA process?

Hon. C. Clark: I think I answered both of those questions, but I should advise, now that you raise it, that the intergovernmental relations office is not managing these discussions. It hasn't been done out of the IGR office. I'm glad I had the opportunity to correct the member about that. But I do believe I answered both those questions.

A. Dix: I guess the Premier didn't take a position on it, so I guess that's the answer to that.

With respect to the issue of Taseko, of course, the Premier herself has been involved in that question, as she will well remember.

I guess what I find a bit disconcerting about that is that…. I think what that situation shows…. It may be that everyone's perspective is different.

I went and visited Fish Lake as a guest of the Tsilhqot'in. They expressed, I think, their strong commitment to their community, and they participated in the Canadian Environmental Assessment Agency process. Now there's this effort to really disrespect their role in it. What I would have expected the Premier to do, as her Minister of Environment did, would be to criticize that. But in any event, that isn't the case.

I just want to ask the Premier, with respect to the Enbridge pipeline, why the government of British Columbia hasn't provided any evidence or did not seek full provincial intervener status, as the province of Alberta did.

Why haven't they provided any evidence? The Premier has occasionally expressed a view on why the government hasn't expressed a position, contrary to what the government of Alberta has done and indeed, to some degree, what the current government of Canada has done.

[2035]

But the Premier hasn't explained, other than some questions asked and some change-of-address information they've sent into the process, why they haven't provided any evidence to that process.

I guess I wanted to ask the Premier…. While the JRP process is not immediately post-evidence entered by participants, there's no indication they provided any such evidence. I'm wondering: if this is the case, why is it the case?
[ Page 12627 ]

Hon. C. Clark: I hear the member talking about how the government isn't taking positions on things. I have to say that's a little rich coming from the opposition, when we've been trying for months to find out the leader's position on a range of issues that are crucial to the public interest and the public debate, including things like wages for public sector workers — where the money would come from, if not from tax increases, to fund that — and what the budget is that he proposes.

I think it's a little rich for the member to stand and make those kinds of accusations. It's a little like the pot calling the kettle black, I think.

On to the question, though. The government does have the opportunity to enter the discussion as an intervener. The process is far from over.

As I've said a number of times, I think that the position the Leader of the Opposition takes is irresponsible. If we want to attract investment to British Columbia, if we want to send a message to the world that we are going to operate fairly and that we are going to make sure that people have a right to due process, it's important that government not prejudge the outcome of the process.

The position that my government has taken has been to say that rather than deciding in advance of the evidence even beginning to be offered that we knew what the outcome should be and that we were going to make sure the project didn't happen, as the Leader of the Opposition promises to do…. Rather than doing that, we've said: "We want to make sure that people have access to due process." We want to make sure that investors know that if they come to British Columbia and make an investment, they'll have a chance to be heard.

That is an important part of making sure that our reputation as a sound harbour for investment is maintained. It's an important part of maintaining our triple-A credit rating. It's an important part of being able to continue to create jobs across British Columbia.

Investors expect due process, and in British Columbia my government is determined to make sure that they get that.

A. Dix: I asked the Premier if the government of British Columbia had submitted evidence to the JRP.

Hon. C. Clark: No, we have not done so yet. As I said, the province has intervener status. It's possible that the province may intervene in the process at some point.

[2040]

I should say that in ensuring that the applicant has due process, we are trying to send a message that we will not prejudge the outcome. Frankly, I think that is irresponsible, and I think it will put a chill on investment. I think it suggests a basic, fundamental misunderstanding of the things that drive our economy.

Ultimately, I think it suggests a view of government that would result in the loss of thousands and thousands of jobs, not necessarily from this project but from all of the other investors who are scared away as a result of the fact that the government might decide that they know the outcome of the process before it even begins.

A. Dix: Well, the Premier recently said that B.C. receives about the same amount of benefits from the project as Nova Scotia and takes all of the risks. That was the Premier's position, although that position — or even the evidence — isn't being provided to the joint review panel. The way the process works is that you have to provide evidence.

The joint review panel cannot consider what they don't have in front of them. If you don't provide the evidence, then they cannot consider B.C.'s interests in a fair way. By the way, Enbridge submitted its application in full two years ago in May. But if the government of B.C. doesn't submit evidence, then the JRP can't consider that evidence, and the interests of the people of B.C. aren't being protected.

The Premier's position is basically that she wants to let the process work itself out. But if the B.C. interests aren't represented in that process, if we don't provide information into that process, then the process itself, the voice that we are elected to represent, the voice of the people of B.C., isn't reflected in that process.

I'm guess I'm asking the Premier if the government plans at any point to submit evidence into this process, other than the questions that they've asked of the proponent so far. It's true that government has intervened, I think, nine times. Some of those are changes of address, so we're cornering the market on that.

They have asked some questions. But I guess in terms of evidence, because the process depends on the evidence, I'm curious to know why the government isn't submitting any evidence to the process, as the government of Alberta has done, as the government of Canada is doing, as a municipality in Alberta is doing.

When British Columbia takes all the risks — according to the Premier, we are taking all the risks on this project — and the oil industry is getting all the benefits, why isn't British Columbia intervening in the process?

Hon. C. Clark: As I said, we are registered as an intervener in this process. So while we are monitoring it very closely, we have not yet provided information to the committee. We haven't done that yet, but the member can stay tuned about that. It's a long process yet ahead of us.

With respect to risk and benefit, my view is this. We do not, as a province, as citizens, understand yet the balance of risk and benefit inherent in this project. We don't understand fully the risks, and we don't understand and don't know what the benefits are. So we have to, in the next year and a half, define what those risks and benefits are and make sure that we understand them. Then British Columbians will be able to, I think, under-
[ Page 12628 ]
stand whether or not this is something that is good for our province.

[2045]

As always, the balance of risks and benefits is going to be crucial in this. I think, on the one hand, there are many, many British Columbians, particularly in the north, who would love to see jobs, revenue and other benefits that could potentially come from a project like this — people in the south as well. Equally, people across the province are deeply concerned about our environment.

We believe very much in economic development, but not economic development at any cost. So we need to understand and are just beginning to understand, as this process has gotten underway, what the risks of this might be and what the protection against some of those risks could be.

We're continuing to monitor it. As I said, we have not yet offered information to the process, but we may still do that. So the member should stay tuned for that.

The Chair: Leader of the Opposition — and a very brief one.

A. Dix: Very briefly, there was a deadline of December 22, 2011, for interveners to submit evidence to the NEB. Does the Premier believe that that will affect the government's ability to provide evidence in the future? Perhaps I'll even leave the Premier with that question for her to start the next day, if she wants to do so.

Hon. C. Clark: As interveners we may be, should we choose to, participating in the process more fully than we are now, and we may be providing information when we do that.

With that, I move that the committee rise, report resolutions and completion of the estimates of the Ministry of Energy and Mines and progress on the Office of the Premier, and ask leave to sit again.

Motion approved.

The committee rose at 8:47 p.m.

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