2013 Legislative Session: Fifth 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)

Thursday, February 14, 2013

Morning Sitting

Volume 41, Number 3

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

THURSDAY, FEBRUARY 14, 2013

The House met at 10:05 a.m.

[Mr. Speaker in the chair.]

Prayers.

Reports from Committees

E. Foster: Mr. Speaker, I have the honour to present the report of the Special Committee to Appoint an Auditor General.

I move the report be taken as read and received.

Motion approved.

J. Horgan: Point of order.

Mr. Speaker: Proceed.

Points of Order

J. Horgan: I want to thank the committee members for concluding their work — the Chair, the two members from the government side and the two members from the opposition side. But as I understand it, once I've had an opportunity to peruse the report, we have no resolution to the question of how this place will be reappointing an officer to manage the accounts of the province of British Columbia.

You will know, Hon. Speaker, that the Auditor General is a creature of this place, an officer of the Legislature, not of the government. I believe all members — all 85 of us — have a vested interest in coming to a resolution on how we're going to proceed.

It was our view as a caucus that Mr. Doyle should have stayed on for a second term. There was, I believe, interference at the end of the process, and an offer was made of a two-year extension, which was not in the terms of reference of the committee when it left this place when it was constituted last May. I'm left, hon. Speaker, to ask you, as the head of this operation and the Chair of LAMC: how do we proceed absent an officer of the Legislature as important as Mr. Doyle and the Auditor General has been?

Hon. M. de Jong: Whilst I'm not entirely sure it qualifies as a point of order, I understand the spirit with which the inquiry is made. I think all members are aware of the public commentary that has occurred and the intentions, as reported, of the incumbent Auditor General. I think all members share the hon. member's interest in whether there will be a vacancy and, if so, when that vacancy will occur, particularly given the sitting schedule we anticipate for this House over the course of at least the next two or three months.

Having said that, I would amplify what the hon. member had said about the Auditor General being an officer of the Legislature specifically and not reportable to the executive branch of government. A starting point — if I may be so bold — I would suggest, is for the Office of the Speaker to ascertain if and when a vacancy will occur in that office and to make inquiries. Then this chamber can address its mind to what the appropriate next steps would be. That is merely a suggestion on my part, and I leave it to your good offices.

Mr. Speaker: I thank both the Government House Leader and the Opposition House Leader for raising this matter. On behalf of the House, I would be happy to write a letter to Mr. Doyle requesting that he advise the House of his intentions. I will keep the House Leaders and all members advised of his response.

J. Horgan: Further clarification, hon. Speaker, and I thank the Government House Leader for his intervention, and I appreciate the initiative that the Speaker will take to clarify Mr. Doyle's situation.

One of the issues that I think we need to address is that there was some controversy around start dates for that individual. There was a position put forward that he started when he was appointed by this Legislature six years ago in May.

There's another point of view, which I think is conventional wisdom and common sense, which is that when you start a job is usually when you get there and you put your picture of your family on your desk and you get your first paycheque. That happened in October. So there's a dispute about whether the position was filled in May or in October.

[1010]

I think that will have to be resolved in some manner, and I'm hopeful that your letter will shed some light on that, particularly because in the interest, again, of all of the people of this place and, most importantly, the Minister of Finance — actually the previous one for the previous budget — we need to audit the books for the Public Accounts in July. It seems to me that if we don't have that position filled during that period between when we rise in a number of weeks and the tabling of the public accounts, it creates a further complication for the government and for all people in British Columbia. So a clarification on the start date of May versus October, I think, would be useful in your correspondence.

Mr. Speaker: Thank you, Member. We'll certainly work to that in making sure that we all understand when the actual legal start date is and when, as I said earlier, we get the response from the Auditor General, Mr. Doyle.

B. Simpson: I stand on a point of order.
[ Page 12770 ]

Mr. Speaker: Proceed.

B. Simpson: Mr. Speaker, I think we also need clarification in this House…. The committee report tabled today is an offer to an Auditor General who we're not sure is going to take the offer. But the committee also began a process — and it's part of the problem with the whole committee process — of hiring before it changed course and then made the offer.

We need to know in this House, as part of….

Mr. Speaker: Just to clarify with the member, my understanding is that it's not an offer. There's only a recommendation in the report.

B. Simpson: Correct. My point, though, and what I would like to add to the request for clarification from the Speaker, is: what is the status of that committee's hiring process that it began, and when will we see the hiring committee restruck, so that we can fill that position as necessary? I think we need clarification on this report that came forward to us and the other process that was started as part of that committee's work.

Mr. Speaker: Just to make a point of clarification, the decision of that is for the House to decide. The committee at prorogation actually ceases to be in existence right now. The report is tabled.

I understand from the House that they want the House, represented by the Speaker, to clarify exactly where we're at, and I will proceed to do that in the coming days. I hope that we should have something by maybe next Thursday.

Orders of the Day

Hon. M. de Jong: Mr. Speaker, on this day dedicated to love and romance, I call Bill 2.

Second Reading of Bills

BILL 2 — PROVINCIAL SALES TAX
TRANSITIONAL PROVISIONS AND
AMENDMENTS ACT, 2013

Hon. M. de Jong: I move that Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013, be read a second time now.

Mr. Speaker: Proceed.

Hon. M. de Jong: As the House was advised last spring, when the Provincial Sales Tax Act was introduced, that act did not include the required transitional provisions or consequential and related amendments to other acts of this Legislature required for the reimplementation of the provincial sales tax.

[L. Reid in the chair.]

Bill 2, the bill before the House today, completes the legislation required to reimplement the provincial sales tax.

I'll provide a brief overview of Bill 2 to the House. That bill provides the following. Firstly, it provides transitional provisions for the Provincial Sales Tax Act for transactions that straddle April 1, 2013, which is the date upon which the reimplemented provincial sales tax takes effect.

Those transitional provisions don't impose tax. They set out when the Provincial Sales Tax Act applies to those transactions. The transitional provisions are technical, as is much of this act, and designed to work in conjunction with the federal transitional rules for the elimination of the HST in British Columbia.

[1015]

A notice outlining the transitional rules, with examples, was released in October — including, I think, some practical examples that, hopefully, were, are and will be of assistance to British Columbians during the transitional period.

Other transitional provisions include transitional provisions for the Motor Fuel Tax Act, the Consumption Tax Rebate and Transition Act, the Hotel Room Tax Act and the Social Service Tax Act.

The transitional provisions for the Motor Fuel Tax Act relate to the taxation of propane, heating oil and non–motor fuel oil under the Motor Fuel Tax Act, again, for transactions that straddle April 1, 2013.

The transitional provisions for the Consumption Tax Rebate and Transition Act, Hotel Room Tax Act and Social Service Tax Act are required for the repeal of these acts effective April 1, 2013. The taxes previously imposed under those aforementioned acts have been incorporated into the Provincial Sales Tax Act itself.

Bill 2 also provides consequential and related amendments to other various acts, including increasing the tobacco tax rates from 18.5 cents to 21.3 cents per cigarette or gram of tobacco. That is done to offset the elimination of the provincial portion of the HST on tobacco and to keep the overall tax and price of tobacco constant.

The further consequential related amendments: reimplementing the 2.7-cents-per-litre tax on propane as of April 1, 2013 — that tax will now be imposed only under the Motor Fuel Tax Act, rather than under both the Motor Fuel Tax Act and the PST, as was previously the case — and clarifying the requirements related to, and taxation of, heating oil, non–motor fuel oil and natural gas, to provide certainty as to when the PST applies and when motor fuel tax applies to these substances.

The bill also provides for amendments to the New Housing Transition Tax and Rebate Act. These include amendments to ease administration and clarify various
[ Page 12771 ]
provisions which were passed last May. I think it is fair to say there are no substantive changes to the new-housing transitional provisions that were passed last May.

Finally, the bill also provides amendments to the Provincial Sales Tax Act itself, which this House considered at some length in the spring session. Now, the amendments to the Provincial Sales Tax Act include new provisions necessary to complete the PST and amendments to clarify those provisions.

Finally, I feel I would be remiss if I didn't take a moment simply to alert the House to something I think it knows. That is, having now had an opportunity to view the bill and the legislative package and the complexities associated with a transition that on the surface one would think quite basic — the return to a former tax regime and the elimination of the HST…. But it is very complex. There has been a dedicated team of public servants working on this for the last 18 months — not just the policy work and the analysts but the drafters in the legislative counsel shop.

It has been an onerous task, and one that they have applied themselves to diligently, understanding the glare and scrutiny they are under from not just legislators but the public who were asked to vote and express an opinion on this matter and who, I think it's fair to say, having expressed that opinion, were seeking for the transition to occur as quickly as possible and as smoothly as possible. I'd like in this chamber to express my thanks for the work that has been undertaken by them.

[1020]

The work is not done. If the House chooses to endorse, as I hope it will, this piece of legislation, we will move to committee stage. Of course, as I think members know and I think the official hon. critic knows, much of the detail relating to the part about this that people have most interest in — the exemptions that were in place and will be in place again — is contained in the regulatory provisions that are being finalized and will be available for members when we get to committee stage so that they can refer to them.

I know members in the chamber are aware of the desire, which at this point virtually everyone has, to have this regime legalized and proclaimed as soon as possible so that through the month of March the final adjustments can be made by British Columbians, the businesses that will be responsible, in many cases, for collecting the tax. I have a sense, and I'm grateful, that the opposition and the opposition critic are prepared to devote themselves fulsomely to that task. We'll have, I expect, a more detailed conversation around specific provisions contained within this bill as we move into committee stage in the next couple of weeks, I hope.

I think, subject to any remarks I hear during the course of this debate, I will move second reading and listen to other comments from members.

B. Ralston: I want to begin by thanking the minister for making some of the senior staff in the team who have been leading this transition available for a briefing yesterday. It's impossible not to be impressed with their breadth of knowledge and their prodigious energy that they've put into this transition. There are numerous arcane provisions that they explain very lucidly and clearly, and one comes away with a sense that one almost understands some of these very intricate statutory devices.

I suppose this is the final stage. It has been a long journey. Really, when one looks back, this entire parliament, which we're on the verge of concluding at the end of this session, has really been dominated by the journey from the PST to the HST.

If one accepts what the former Premier said, the discussion of the HST, the transition to the HST, began the day after the 2009 election. Now, in the final session, on the eve of the provincial election, we're debating the legislation that would reactivate the PST.

Regrettably…. I'll talk a little bit more about the economic impact of this, although I do note that there is some good news in the return to the PST. This morning the Central 1 Credit Union has released a report that says it expects the move back to the PST will boost consumer spending and provide some inflation relief. So just when one thought that maybe it was not economically to the advantage of the province, we have some optimistic outlook on the impetus to consumer spending. Certainly, I know some sectors will particularly welcome the return to the PST, given the fact that they will be exempt from charging that to their customers.

I understand the volume of work that was necessary. I think some of the delay, though, has created a sense of uncertainty.

[1025]

I know when the B.C. Chamber…. There is a B.C. Chamber of Commerce, and they've been engaged with the ministry in conducting seminars explaining the transitional rules to their members. But when they did conduct a survey — it was reported in January, but they'd conducted a survey of their members in early December last — they found that 65 percent of the respondents were either unaware they were going to have to collect the provincial sales tax and the federal goods and services tax separately or they were unprepared for it, even though they were aware of it.

Now, that was a few months ago. I know there have been concerted efforts by local chambers of commerce and by the ministry itself, through a publicity program, to bring merchants up to speed, but there's no doubting the enormity of the task that awaits them. One hopes that things go smoothly or as smoothly as can be predicted.

I do want to note and compliment the ministry in transitioning to electronic filing of PST returns. I think that will be a considerable advantage. Back in my previous day, in my business life, filling out the forms at the end of the
[ Page 12772 ]
month and facing, I think it was, a 25 percent penalty if it was a day late was certainly an incentive to get it in on time. But it was a manual form which had to be submitted by the post. So this is an improvement.

I'm not sure. I know the ministry has been engaged in soliciting people to sign up. I understand that process is going well, and perhaps that's something on the administrative side that we can touch upon when we get to committee debate.

It is, I suppose, a reassurance to the public that the long and tumultuous history of the HST — the broken promises, the instability, the furious public debate, the referendum result and now the transition back to the PST — is coming to an end.

I think one of the things that business looks to government for is a stable and predictable business environment. While, certainly, there will be administrative aspects of the PST that will be unwelcome, one hopes that it will be at least predictable.

I know that in my discussions and the briefing I received there has been an effort to modernize some of the definitions that were in the previous act, to have them conform with what was contemporary administrative practice at the time the PST was phased out. That will doubtlessly provide a greater certainty in interpretation. I'm sure that will be welcomed by those people who have to deal directly with the consumer tax branch and the possibility of audit of their returns.

Obviously, much of the more detailed discussion properly belongs at the committee stage rather than here at second reading. But as the minister has noted, there are specifically transitional…. A big section of the bill is devoted to transitional provisions which simply allocate the payment of tax on either side of the April 1 deadline. Those are extensive and I think will provide some clarity to those who have to make those decisions.

The other ancillary acts — the Consumption Tax Rebate and Transition Act, the Hotel Room Tax Act, the Motor Fuel Tax Act and the Social Service Tax Act — are all being amended in order to conform with the incoming PST regime. That's something that is welcome.

I do want to devote a little bit of time to what I think is one of the biggest industries and has a significant economic impact on the province, and that is the construction industry.

The president of the B.C. Construction Association, Mr. McLachlan, made a presentation to the Select Standing Committee on Finance and Government Services back in the fall. One of the topics that he addressed in that presentation was the impact of PST and the transition back upon his members.

The sector is a big one. I think most people are aware of that. According to his information, 160,000 people are employed directly in construction and housing, and construction accounted for over 5.9 percent of gross domestic product of the province, larger than — with apologies to these sectors — forestry, logging, mining, and oil- and gas-extraction industries combined.

[1030]

In the past the administration of the PST has been a burden for the members. That was the case put forward by Mr. McLachlan on behalf of his members.

He did make some specific recommendations. We did touch upon that in the briefing, and that's something that I will pursue at committee stage. In his view, his members are subject to audit perhaps more than others, and they require comprehensive books and records to satisfy the tax authorities. While they are acknowledging some of the administrative efficiencies that appear to be put in place, they did have some more specific demands that would enable their members better to function in this environment.

What they're asking for is more detailed rules. My sense from the briefing was that, in fact, some of the more detailed rules will actually be incorporated in the legislation, and if not in the legislation, in the regulations that the minister said are being drafted but not yet complete.

In his view: "The lack of detailed rules hurts contractors because it presents opportunities for PST auditors to apply their own personal judgment and generally to issue assessments for one perceived error or another that may have been made by the contractor. The absence of specific rules means the taxpayer cannot argue his case legislatively and is left pleading for a commonsense, reasonable conclusion by the PST auditor."

There was a review conducted of the real property back in 2007 by the then Ministry of Small Business and Revenue to deal with the red tape faced by the construction contractors. There was an announcement by the government in October 2008. In his view, it didn't go far enough to address the industry's problems with sales administration at that time. In his view, and I only am quoting him…. I'm sure there's a response, and I don't want to be unfair to the consumer tax branch. But this is his view that I'm expressing and I'm quoting. "The spirit of the new policy has not been universally employed by the PST auditors."

In his view, again — and the minister may choose to correct this if this is an error — the CTB, the consumer tax branch, audit policy "must be administered more diligently and respectfully, reasonably aligning the administration of the PST with the legislation that contractors are trying to comply with."

He does make some recommendations. I'm briefly going to go through them, just putting, I hope, the minister and his officials on some notice that in the course of the committee stage I'm hoping that these recommendations would be addressed, either confirming that they've been implemented or explaining, if they have not been implemented, why they might be impractical or not implementable at this time.

The recommendations are as follows. The BCCA rec-
[ Page 12773 ]
ommends that the B.C. Ministry of Finance enhance the PST legislation by listing specific conditions under which a construction contract will be taxed or exempted, which would eliminate opportunities for PST auditors to apply their own personal — when there appears to be an error — interpretation, allowing the taxpayer to argue his case legislatively. That's the first one.

The BCCA recommends the B.C. Minister of Finance expand the study of serious PST issues still facing the construction industry and work cooperatively with BCCA and others to "enhance the PST legislation for clarity within our industry."

Thirdly, the BCCA recommends the B.C. Minister of Finance expand rules contained in — he refers to Bill 54 — the draft Provincial Sales Tax Act, which would affect construction contractors and provide clear policy statements respecting the intent of these and other rules.

The BCCA finally recommends — and this is not a legislative recommendation but an administrative one — that the Ministry of Finance "instruct the consumer tax audit branch to relax its historic and current approach and honour the B.C. government's prior commitment to simplify the application of PST in construction service contracts as announced in October 2008 following the B.C. PST review."

[1035]

He goes on to say that perhaps one assistance in approaching the construction industry would be to "recognize the distinction between small enterprises and larger sophisticated contractors." For example, specialized professionals such as security system installers and electricians might fit a subcategory of contractors where a major simplification of the PST rules is more feasible.

He does have another recommendation along this line in terms of recommending a difference be drawn between major general construction firms and smaller firms. "Distinguishing small business issues could be achieved by alternate means such as total annual revenues under $500,000. This or some other small business approach would enable new procedures to be implemented more fairly. Further, separate categories of contractors, through licensing or otherwise, would permit each entity to effectively declare its level of sophistication and comfort with the new measures."

I would add that this is his recommendation. I'm not necessarily endorsing the licensing, but I'm raising the general approach of drawing a distinction between small contractors and large or sophisticated contractors. In his view, his recommendation is that that would streamline administration of the PST.

He also has some further recommendations about transition that would appear…. These are technical questions. I think they're probably addressed by the transitional rules, so I'll omit those. But the further and final recommendation that he suggests, again, would be more an administrative one which would flow from the implementation of the policy.

He says: "We implore the CTB" — the consumer tax branch — "to establish clear PST audit policy to ensure that a contractor's intentions are respected. Where a discrepancy or perceived discrepancy exists, the nature and terms of the contract should be the determining factor. Where there is no formal agreement, a purchase order or a letter of understanding may take precedence. In the absence of formal contract documents, the invoice will prevail."

I think it seems to be a plea for common sense. Since there is a relatively clean slate at this point, there's an opportunity for the ministry, in the administration or proposed administration of the PST as it applies to the construction sector, to take these recommendations to heart. I think there's certainly some opportunity to do that so we can — and I'm sure the minister will be able to respond at committee stage — deal with those recommendations.

As I say, some of this was a report presented in the fall. Some of those may have in fact been considered and implemented as we now approach the date — and we're quite a bit closer to it — because considerable work has been done in the meantime.

The other thing I wanted to say about the transition back is to set this in a bit of a larger economic context. The B.C. Business Council and the B.C. Chamber of Commerce issued a call for what they called an agenda for shared prosperity. They enumerate a number of economic challenges for the province, but certainly the PST and its administration form part of the business environment of the province. Now for whatever arrière-pensée one might have about the debate and what system might have been better, clearly, the referendum result is clear. We've settled on the PST, and we're moving forward with that.

What we on this side of the House would hope for is that the act be as clear and precise as possible, that the administration be as uncomplicated as possible and that as we go forward, businesses have some certainty and some stability in the area of retail sales and other aspects of commerce where the PST applies. It's really pervasive throughout most of the commerce of the province.

I think there's that opportunity. Certainly, Mr. McLachlan gives a fairly vivid example in the case of the construction sector of what clarification might be achieved at this stage in order to avoid further complications and frustrations down the road.

[1040]

Generally, if I might conclude, the official opposition supports the bill and looks forward to discussing the specific provisions of the very lengthy act in committee. We'll deal with some of the more nuanced questions there. So with that, I would conclude.

I do note that some of my colleagues wish to also briefly address this bill as well.

D. Donaldson: I'm very pleased to take my spot to-
[ Page 12774 ]
day in the second reading debate of Bill 2, the Provincial Sales Tax Transitional Provisions and Amendments Act — all 149 pages of the act. It's a hefty act, and I'm looking forward to debate on it.

I was asked by a constituent before returning to the Legislature in this session, after nine months, what I thought would be on the legislative agenda. I wasn't exactly sure. Of course, we speculated on two or three different things. When I said that the one thing for sure that will be on the agenda is this act and this legislation to return to the PST, the constituent said to me: "It's about time." I eliminated the expletive deleted. It followed: "It's about something time."

Yes, I concurred with that constituent, because Bill 2 — the bill that we are considering today in second debate — has been a long time coming. It's approximately 19, 20 months since the initial results in August 2010 of the rejection by the people of B.C. of the HST. Bill 2, in second reading that we're debating today, is a result of that, and it has taken a fairly long time to get to the Legislature.

I appreciate the comments by the Minister of Finance that it's a complicated task, and I actually commend the administrators in the Ministry of Finance, the bureaucrats there who worked hard on getting this in place. But when one considers that it took approximately 11 months to bring the HST in and then 20 months to remove it and bring the PST back, it is cause for frustration. That was reflected in the constituent's comments to me when I said that I was coming back to Victoria after nine months.

Bill 2 is what we're considering today in second reading debate. Again, its genesis, the genesis of Bill 2, was back in August 26, 2010, when approximately 875,000 people in B.C. rejected the HST, the move by the government to bring in the HST. That was 54.73 percent of the people who voted on the referendum. That brings us to Bill 2 today — the bill that will reinstate the PST with all the provisions that we're going to consider.

Again, in that referendum that created the need for Bill 2 that we're looking at today, there were many constituencies that supported the rejection of the HST — in Peace River North, for instance, and Penticton and others. Those were the people speaking out against the HST, and now here we are with Bill 2 today, the Provincial Sales Tax Transitional Provisions and Amendments Act.

The commitment by the government after the people in the province spoke in opposition to their move to bring in the HST was to reinstate the PST in the same way that it was before the government brought in the HST, especially on the exemptions front. I look forward to committee stage to making our way through this 149-page bill to ensure that that is the case.

[1045]

I'm not doubting the Minister of Finance when he says that was the commitment, but our job as official opposition is to ensure that the government is true to their word and, you know, backed up on the record. I mean, the record around trust in this government on the HST issue has not been great. We know the history. I won't get into all of it here, but it does relate to Bill 2 and the history of saying the HST was not in the works before the election in 2009 and then bringing it in.

I just bring that up in relation to Bill 2 because we are going to be looking at the exemptions in the committee stage to ensure that they are in place, the same as they were before. You know, it has had a checkered past — how we got to Bill 2 here today — on the role of the government side.

We had different claims that…. Again, this is in relation to Bill 2 and that it's a trust issue. We have to look carefully at how the bill is crafted because we do recall that the HST was claimed to be revenue-neutral by this government, and we know that that wasn't the case. We know that a lot of public dollars were spent by the government in promoting the HST to try to change people's minds and reverse the eventual referendum results. We know $780,000 was spent on an HST pamphlet that never even saw the light of day.

So we are going to go through, in committee stage, clause by clause to ensure that the exemptions that were in place before the HST came into effect will be once again in place with this PST, Bill 2, legislation.

We should look at some of those exemptions, hon. Speaker. In one case, we'll look at how the exemptions made it more affordable for people in their daily lives. Really, the consumers were the losers under the HST. A Statistics Canada report had the extra cost an average of $520 a year for an average family under the HST.

Things like haircuts we'll be going through. It's not perhaps a big-ticket item on most people's revenue stream, but certainly for people who are having difficulties with their budgets, haircuts are a big deal. So haircuts are one of the exemptions that, of course, in committee stage we'll be looking through.

Private tutoring — very important, I know, for people in my area who have children who they want to be able to achieve certain levels in post-secondary training and have to get there through secondary school and use the services of private tutors. That was exempt under the previous PST regime, and then that cost more money tax-wise under the HST. So we'll be looking at Bill 2 to determine things like private tutoring as well.

Even for certain small business owners…. You know, a lot of people don't think of small businesses as small as a single person. In the area I come from there are many small businesses that are single-person operations. I think of fallers — people who fall trees in the woods and do that kind of work. It's very rewarding but very dangerous work, very physical and difficult work, but good work, nonetheless, in my area, in Stikine, and elsewhere in the province.

Previously, under the PST regime, equipment for loggers was exempt, and then after the HST came in, those sole business owners were burdened with more tax levels.
[ Page 12775 ]
So now we'll be looking in Bill 2, under the exemptions, to see if equipment for loggers….

[1050]

In speaking to that issue, it harkens back to how some members on the government side obviously didn't understand the implications of the HST when it was brought in and, in fact, thought that the cost of the PST was embedded in things like chainsaws and logging equipment when it wasn't. Again, this led to another issue of mistrust from the public around the government's efforts to bring in the HST.

As well, in Bill 2 we'll be looking at some of the exemptions that were in place before this government brought in the HST, which, as I said, was rejected in a provincial referendum. These were exemptions for public policy reasons — things like bicycles. We want to encourage people to be more active, more fit, less potential burden on the health care system and to do more family-inclined activities, bicycling, and also reduce reliance on vehicles and carbon emissions. Bill 2 will be looking to see that the exemption on bicycles from the PST is reinstated, as it was before the HST.

We know that many bicycle shop owners — again, small businesses — were very vociferous in their belief that they did not think the HST was being implemented and then came in by happenstance after the election, even though it was denied by the government that they were considering bringing it in. So bicycles in Bill 2.

School supplies in Bill 2 — another public policy reason to have control over taxation within the province. Again, if you're on a very strict budget, it can be a very difficult time of the year in August, when you have your family going back to school and you're wandering the aisles of the local store looking at school supplies. It can easily add up to $100 or more. What we look forward to under Bill 2 is the exemption being brought back on the PST on that item.

Again, under the HST brought in by this government, we would not have control over that taxation policy, being able to exempt school supplies for a good public policy reason.

Restaurant food. Many in the restaurant industry brought up their objections to the HST. Of course, they had to do it after the fact and after the election, because we knew before the election that the government said that the HST wasn't on their radar. In Bill 2 we'll be looking at the restaurant food exemption from the PST — again, good public policy reasons.

You want people to frequent their local businesses, restaurants, more often. You want to have those restaurants being able to employ more people locally, and under the HST that became more difficult. That's why restaurant owners spoke out strongly against the government's bringing in of the HST — again, good public policy reasons not to have HST. We'll be back in control of that once Bill 2 receives its committee stage scrutiny and once we are able to vote on that, depending on what we see at committee stage.

Finally, I'd like to wrap up my words on second reading of this bill, Bill 2, by looking at the improvements and the transition elements that are part of the bill, which the minister mentioned. We are very concerned that small businesses are able to deal with the transition. I know that one small business in my area has expressed the concern that they have to reregister for the PST, even though they were registered before the implementation of the HST. That sounded to me like needless paperwork that the government was insisting they go through.

Hopefully, in Bill 2, when we go through clause by clause, we'll be able to determine if that's an issue and make suggestions as to how to improve that.

[1055]

I finally want to finish off, hon. Speaker, on Bill 2 second reading debate by saying that when I became an MLA in 2009, it was my first time winning the provincial election for Stikine. I was appointed Deputy Chair of the Finance Committee and spent the first two years of my experiences as an MLA…. The total focus, it seemed, was on the HST. Bill 2 seems to be bringing that episode, that unfortunate episode in our history — as 875,000 British Columbians spoke — to a close. But the energy that was expended by the government being totally consumed in the first two years of their most recent mandate in 2009 to 2011 on the debate around the HST and trying to convince people that the HST was a good thing and then having to go back to the drawing board and bring back things like Bill 2….

The energy that was consumed by this government, some would say, was to the detriment of energy being able to be put into other important matters in the province. Other things fell off the table on this government's agenda, fell by the wayside, because of the amount of energy that it took for not only the MLAs on the opposite side but the administrators and ministry workers to work on correcting, basically, the wrong that the HST brought, according to the people of the province.

With that, I will conclude my remarks in this second reading. I look forward…. Perhaps that's an odd thing to say when we have 149 pages of clause-by-clause to go through, but I look forward to it to ensure that the word of the government — and I don't doubt the word of the government — on exemptions…. As the minister said, it's a very complex bill. We want to make sure everything is in place that was in place before the unfortunate episode of the HST came into existence in this province.

M. Elmore: I'm very pleased to take my place and give some remarks on second reading for Bill 2. I'd just like to say that it feels like the…. Finally we're at the point of discussing Bill 2. It's really the conclusion of, I think, a long saga on all sides for the government — the HST saga and the period that created quite a bit of instability for
[ Page 12776 ]
the province. So I'm very pleased for the opportunity to give some remarks, and I also look forward to the committee stage, looking at the various aspects and details in terms of the application of the transition back to the PST.

[H. Bloy in the chair.]

I'd just like to make some remarks in terms of the importance of finally…. It's been a long journey. I think the lessons learned in terms of public policy, the lessons of how not to implement big public policy changes, on the one hand, and also the specific criticisms and arguments of the tax itself, HST…. It's been quite a tumultuous process that we've been through in British Columbia. I'm looking forward to the implementation of the bill to bring, I think, what all aspects of the business community expect and have been asking for in terms of certainty of the tax regime and also stability. These are some of the questions to be covered in the committee stage.

As well, questions…. I guess we'll see, once the list of exemptions has been put forward, what they are. The expectation is that the list of exemptions previously under the PST will be the same as the ones that we'll be seeing implemented now with the transition back. So we'll wait to see what those are to ensure that there is consistency and that, in fact, all of those exemptions are to be included.

[1100]

With regards to the impact…. We've heard some of the points around the winners previously of the HST and the losers of the HST. The transition back now to the PST, I think, will see…. Consumers will appreciate that there's a prediction that we'll see a boost in consumer spending and also support, particularly to the service industry and jobs in the restaurant sector, hair salons — service sectors that tend to be more labour-intensive and to hire more workers.

This is looking to be a positive move, adopting the PST. In terms of the details and how it's going to be implemented, what the exemptions will be, I look forward to having those discussions during the committee stage.

As well, I'm very pleased that with discussing the committee stage of Bill 2, British Columbia returning to the PST, we will have retained our ability to set our own tax policy. The importance of that is to reflect our tax policy, as has been mentioned, to promote certain public policy initiatives or objectives, to have that ability provincially — the exemption of taxes on bicycles to incent more people to ride bikes and have a healthier lifestyle.

These are some important levers for our provincial government to have in place, to have the ability to prioritize and incent and also support our broad range of public policy priorities. That's an important principle that we will retain and that we will be able to discuss fully in terms of the details in committee stage of Bill 2.

The return of the PST will also have a beneficial impact on our service sector and on our small businesses. I know that right after I was elected in 2009 and the bombshell was dropped, even though there were election promises that there were no considerations of implementing an HST, the truth came out about the nearly four-time increase in the projected deficit and that, indeed, the provincial government was undertaking negotiations with the federal government to implement the HST, with the provision that a $1.6 billion transfer payment would accompany that.

I would say that over my term and, I think, distinct from other terms of office, this has been the single most defining policy initiative that has dominated our political discourse and really reverberated through our communities and has had the greatest impact in terms of instability in our economy.

When the HST initiative was undertaken and signatures were being signed, I visited every single business in Vancouver-Kensington. The support and the concern of business owners and also constituents were twofold. On one fold, they were not advised that the HST would be brought in and, also, the negative impact on their businesses and of the regressive tax shift to middle-class families, particularly families raising small children. This was something that was very clear to me as an MLA in my community.

I think we really saw that reverberate throughout the province. Certainly, having the first initiative successfully adopted and propelling us to the referendum was….

[1105]

On all those marks, on the process of bringing in the HST we've seen, really, an unprecedented response from the public, from small business and, really, a mobilization and an expression of the democratic will of British Columbians.

It brings us here today, finally, to the point where it's the much-awaited bill in terms of looking at what the provisions are, in terms of the transition back to the PST. It's been quite a long and arduous process, and I am awaiting the details and the opportunity to go through the steps of the transition back to the PST.

I would like to wrap up briefly with the expectation and to hold out the hope that the exemptions in place, which were promised under the old PST, will be intact coming forward under the bill and that creating stability and also having a clear process and a clear procedure for the transition back will provide certainty and stability for all businesses in British Columbia. I think that will contribute to the expectation that the government's role is to provide stability, clarity of rules and, as much as possible, to streamline the process and to improve the administration adopting the PST.

I'd like to conclude my remarks. I'm looking forward to the committee stage for Bill 2, and I await that discussion.

Hon. M. de Jong: I take it there are no other contributors to the debate, which is fine with me, and I will wrap up by making a few very brief comments.

First of all, to thank the members that did participate
[ Page 12777 ]
in the debate and to acknowledge that this is a complex piece of legislation that will require closer scrutiny at the committee stage — which, for the information of members, I anticipate beginning the week following next.

[Mr. Speaker in the chair.]

The second-last thing I would say is this, because I have heard a few variations of this from the few speakers from the opposition benches. It is simply this caution that however one felt or the position one took on the debate between the PST and the HST, I hope that people, and members in particular, will be prepared to recognize that the PST was far from nirvana.

There were a myriad of concerns that accumulated through the years, some of them no more basic than a mechanism for establishing exemptions that at some point became a little bit difficult to follow and at times very subjective in its application.

I am not here to redebate a debate that has taken place at length, except to say this, that the legislation that is before us and the regulations that will flow from it recreate that PST. I've already heard from a few folks who have said: "But you can just change that."

[1110]

The choice for British Columbians was between the HST and the PST as it existed prior to July 1, 2010. They opted for the latter, and that's what this legislation recreates — and tries to do so as faithfully as possible. But it does so by reimporting all of what many would argue are the positive virtues of the PST but also the negative issues.

As we move through it in committee stage, there may be, from members, questions: "Well, why did you do that?" I won't want members to feel I am being short or cheeky with them. In many cases, the answer is not more complicated than: "Because that's the way it was." There will be no shortage of people who say: "Well, I didn't like the way it was." But that's the way it was.

In any event, we'll move through that, but I did want to say that the opposition critic was kind in acknowledging that we have tried to make some administrative changes that will facilitate a more efficient flow of information — electronic filing and that sort of thing. But substantively, in terms of how the PST will apply and to what it won't apply, it will be the regime that was in place prior to July 1, 2010.

Finally — again, only because I am acutely aware of the work they have been doing over the past 18 months under intense scrutiny and intense expectations from the public and from the government — to the officials who have gotten us to this stage in terms of the drafting, in terms of pulling together very, very complex legislation, working with federal partners in terms of transitioning out of the HST, many thanks.

These have been long hours tucked away in windowless rooms, poring over and bringing together a myriad of legislative provisions that all need to work together and work in unison. We would not, any of us, be in a position to have the discussion and debate that has taken place and will follow without the dedicated efforts of those staff who continue to work very hard.

With that, I'll move second reading.

Motion approved.

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

Bill 2, Provincial Sales Tax Transitional Provisions and Amendments Act, 2013, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. M. de Jong: I call continued debate on the Speech from the Throne.

Throne Speech Debate

(continued)

B. Simpson: I did get a chuckle out of the Finance Minister and Government House Leader's comment about taxes in nirvana. I don't think anybody would buy that any tax comes anywhere close to nirvana, never mind the PST.

[H. Bloy in the chair.]

I also chuckled yesterday when the member for Vancouver-Quilchena, during introductions, remarked that there's a lot of job insecurity in this building just now, and there always is before elections. But I do want to thank all of the members who have already indicated that they are going on to a different future than standing for election. I thank them all for their public service, and I hope that as we get closer to the end of the session, that people who have dedicated themselves to the public, regardless of where they sit in this House, are duly recognized and honoured. Thank you all for your service, and I wish you well in your future.

Now, of course, as an independent, I would argue with the member for Vancouver-Quilchena that my electoral chances are more insecure than some others in the House. I do believe that we're going to be giving people in Cariboo North a historical choice, and it will be an interesting election.

[1115]

When I ran in 2005, one of the things I committed to myself and my constituents is that I would only run if I felt I had a meaningful contribution. Really, at the end of the day, and it's the beauty of democracy, it is the voters' choice. So whatever happens after this election will be what the voters decide, and that's what democracy is about.
[ Page 12778 ]

One of the things about being an independent, though, over the last couple of years — and it happened in my initial comments to the budget, on line — is that people have an expectation that as an independent you are free to be positive. I got quite a bit of feedback from some folks about the fact that my initial appraisal of the budget seemed to be in NDP language — that is, solely negative — and that as an independent, I should free myself from that oppositional trap and be more positive.

One of the things I note — and I reflected it back to some folks who were saying to me that I do have that freedom — is that not even the government members could rouse themselves to applaud this throne speech. So it's a little bit much to ask me to applaud something that the government could not bring itself to applaud.

That's a telling statement. I've been in this House…. I think I've had nine throne speeches. It's the first throne speech that I recall — and I don't have too many senior moments yet — that there hasn't been a response from government in the positive. In fact, when Mr. Campbell was Premier there were often pauses within the throne speech where we would get a standing ovation. I think if there was any realism to the prosperity fund, which I'll speak to in a moment, that was one of those moments for government members to show their support for that, by way of applause.

However, the lack of applause at the end does show that some dynamic exists within the government caucus that isn't reflecting an overwhelming approval of the throne speech. I will speak to some of the things that are in the throne speech that may or may not be positive, depending on how they come about.

The seniors advocate. Apparently we're going to get legislation to that effect. That is a positive move. It is eight years late. We've been asking for a seniors advocate for a long time. There are a lot of seniors, I think, that have been disadvantaged in this province because they did not have a place to go with their concerns.

It does remain to be seen how the government will introduce that legislation, because if it's a function of government and a function of the minister, then it is not a true seniors advocate. So yes, it's good that that's going to come forward. Maybe it's good that it will be put in position, but it has to have the strength of independence. That remains to be seen.

The promise of an integrated organization to seize the opportunity that Asia presents. I think that might be positive. Again, no details in the throne speech and no details forthcoming from government. But yes, we need to be in a position with Canada, with the business community, with educational institutions to seize the opportunity that Asia brings. But I would add to that, that integrated organization also has to look at the social and environmental implications of our mad dash into the Asian marketplace.

If we don't do that — if we don't take a look at what the implications are of feeding unfettered development — then I believe that we are culpable for a lot of the social and environmental ills that are occurring in some of those nations. That's the lens I think we need to put on coal and coal exports. That's the lens we need to put on LNG exports from the province. Yes, we should have a coordinated approach. It has to be more robust, however, than just the economic lens.

There was a commitment to renew the commitment to small business owners. Great. I think our small business owners are the lifeblood of many of our communities in our province. But again, a statement as generic as that is very hard to get very excited about. This statement, again, shows the lack of depth and thought in the throne speech. It's a direct quote from the throne speech: "Your government will begin work to create the environment for a school of traditional Chinese medicine at a British Columbian post-secondary institution."

[1120]

Now, that may be laudable. That may be something that honours and respects an alternative approach to medicine, honours and respects the growing Chinese community in our province. But really, the looseness of this language…. You know: "We're going to begin work. We're going to create an environment. We might pick an institution." Again, I think it's really just difficult for us as legislators to take a statement like that seriously. At face value, maybe this is something that is worthwhile. In the language used, it's not real. So the government has to prove that they're actually doing something here.

Health care — again, very loose language: "Outline improvements for patients in rural and urban areas." Okay. "Outline improvements for patients in rural and urban areas as well as improvements to primary health care that will have lasting benefits…throughout the province." I mean, I think it's laudable. I don't know what it means. Do we need to improve the health care system? Absolutely. How we improve that health care system is a subject for debate. We need to understand what it is that the government has in mind. This gives us no clarity whatsoever.

Then the comment on the balanced budget, quite frankly, drives me a bit crazy because it is the language going into the election. And the language going into the election is: "Please pick a B.C. Liberal government because we're the fiscal champions of the province, and you can trust us." The language of the throne speech says — and again it's a direct quote: "Your government is determined to balance B.C.'s budget year after year after year so our children can make their own choices when it is their time to lead."

Well, what we've seen in this entire last parliament, the one we're winding up, is year-after-year-after-year deficits. That's the fiscal reality — an increase to the debt of billions of dollars. That's the fiscal reality that occurred, and of course, now we're supposed to be getting a budget next week that says: "But don't worry; be happy. The budgets going forward will be year-over-year-over-year balanced."
[ Page 12779 ]

And because the Finance Minister knows that the public will not trust them after what happened in the '09 election, when the promise was a deficit of less than half a billion and a deficit that, really, was almost five times that and an HST that wasn't in the promise — in fact, it was, "We aren't going to do it" — and an HST that was in. The Finance Minister has publicly admitted that the public are right to be cynical of any promises this government makes of year-over-year-over-year balanced budgets. He has hired an independent economist to sign off on the revenue side of the government's budget and was explicit in saying it will be the revenue side of the government's budget.

Well, I think that the reality is that we need to get out of a pre-election budget cycle. We need to move the fixed election date to the fall. We've asked, as independents, that that be done in this session. No independent economist's stamp on a budget, saying, "Yeah, I think this is okay," is going to meet the sniff test in the public domain. It's just not going to.

We had an independent assessment of the HST from an Alberta economist. What did the British Columbians do? They rejected the HST. An economist signing off on the revenue side of the budget does not satisfy what British Columbians want, which is a budget debated, passed, reviewed by the Auditor General, reviewed by the comptroller general and in the works for the six months leading up to the election. The only way to fix that budget, the only way for a government to claim with any kind of credibility that they are going to balance the budget, is to actually have the election in the fall with a budget that's actually in play.

Then the final comment in terms of things that may or may not be positive in this throne speech is the statement that the government wants "a ten-year agreement that would allow children entering grade 2 next year to graduate high school without a single labour disruption." Now, I find the insertion of that into the throne speech quite disturbing, because that announcement, when the Premier made it, died the minute she made the announcement. It's not real. It's not credible. It's an idea floated out for political purposes.

[1125]

The members of the government caucus from Prince George, the Minister of Jobs and the Solicitor General, and I met with the northern school trustees in our annual meeting — very productive meetings. We meet with them every year in January…. Yeah, I guess it's January every year that we meet with them. They said to us: "Look, that announcement…." Not only did the B.C. Teachers Federation renounce it, but what the trustees said to us is that undermines the legitimacy of their role in the co-governance structure of our education system in this province.

The ten-year pronouncement of this government in the throne speech has already been rejected, yet it's still in the throne speech. I find, quite frankly, Mr. Speaker, that's disingenuous to the public of British Columbia. It isn't giving them a sense of what really is possible and achievable, and it diminishes the throne speech quite dramatically.

That's the best I can do in terms of offering some things that are in the throne speech that might be positive. But I want to come to the centrepiece of the throne speech, which was the LNG and the B.C. prosperity fund.

Now, I have long been a proponent of a rainy-day fund for British Columbia, even before I was elected, when I worked for a forest products company and saw how much money the company was putting into the provincial coffers. If you look at the history of the province in mining development, forestry development and fisheries, we have had a lot of money flow through this province, and unlike Alberta, we have never got our arms around how we mitigate the boom and bust of the natural resource cycle so that we can maintain some certainty in the delivery of public services in the bust times. Alberta has their heritage fund. I believe we are long overdue in doing something to that effect.

I think a rainy-day fund — call it what you will: Alberta, the heritage fund; in British Columbia, the B.C. prosperity fund — as a concept is not a bad concept. It's something that we should look at. Can you pay down the debt with it? Can you balance the budget in the down-cycle of your natural resource economy — all of those things? Absolutely. We should be having those conversations.

The problem I have with this fund is it's a single-resource fund in a resource area of this province that we are not guaranteed at all will realize anything. There may be no pipelines; there may be no plants — and I'll get into that momentarily. To pin it all on that, to not have the conversation writ large about: do we have the pricing right for all of our natural resources, and can we use all of our natural resources to build a fund that buffers us in the boom-and-bust cycle of the economy…? I think that, again, is questionable.

To do it in the way of a pre-election promise, "If you vote us in, in 2013, and you vote us in again in 2017, then we'll start to realize this fund," I think, again is treating British Columbians as if they are fools. I think it's a disservice to British Columbians that then that becomes the focus of whatever election we are going to go into.

Now, the Minister of Community said that Alberta has built their economy around a fund like this, and he said that Alberta is the most economically comfortable province in the Confederation. I guess the Minister of Community isn't staying up to date with what's happening in Alberta. As we all know, Alberta has gone back to debt financing. They have a deficit. They just lost $6 billion in revenue from the tar sands. They're talking now about a value-added tax. While the Premier is projecting, post-2017, that we may get away from a sales tax, Alberta is actually looking at maybe having a conversation about some kind of value-added tax on their sales.

This is how quickly things can turn around — either way. It can go to the positive and make LNG absolutely
[ Page 12780 ]
work, or it can go to the negative and make it disappear. In May 2011 a 2½-year study — David Emerson, whom we all know in here, was part of that study — finished and indicated that Alberta was in for a long-term rosy future from its oil and gas revenues. From 2011 to today they have plummeted in pricing, they have plummeted in revenue to government, and they are now looking at deficit financing. That's how fast this can turn.

[1130]

The government's response to critique about the 2017 time frame is to suggest two things: one, that they are taking the long-term view, and two, that what they are attempting to do is show leadership to position ourselves to capture what is an emerging market. They give two examples. They give the example of the Olympics, and they give the example of lumber to China.

In the case of the Olympics, there is no comparison whatsoever. There's actually a thing called the Olympics that actually does occur. There is actually a process by which you apply for that and you compete. The only decision that the government had to make, and it was the NDP government at the time, was: would we or would we not support a B.C. bid? Then Vancouver led the way on the bid. So to suggest that somehow the Olympics is a corollary for what we're talking about in LNG is just nonsensical.

Lumber to China is the other one that's been thrown at us. The Minister of Jobs raised that yesterday in the House. I have admitted in this House that I was wrong in what I thought was happening in China. I applauded the government members — three successive Ministers of Forests who drove that agenda, who went after that.

My community is benefiting from government leadership in China developing a market that there were lots of questions about. I have mills operating in my riding explicitly because they're producing lumber for China, so that's terrific. But does lumber for China equate to what we're saying about LNG?

Here's where it falls down. We had the mills. We had the wood. The market development wasn't there, so we went and developed a market. We knew without a doubt we could be price-competitive because we had a long history of being price-competitive.

We didn't need the infrastructure. We didn't worry about the supply side. We knew we could get into the market if we could develop it in a price-competitive fashion. So the leadership, if you will, was to grow an existing industry that we knew we were already world-class and leaders in. That's the fundamental difference in what we are talking about with LNG.

What is it we're talking about with LNG? One of the things I really did not like, and I found it disdainful, was the language that's used around investment, and the throne speech gives the impression to British Columbians that $6 billion has already been invested in LNG.

Well, let me give a news flash to British Columbians and to government members. Announcements do not constitute investments. They're promissory notes. They're signals to shareholders that companies are moving in a certain direction and they're going to get into a certain game. To say that we have already had $6 billion investment in this province, again, is treating the public with disdain because it's not true.

I want to give an example. In 2005 there was a press release from this government, on November 7, 2005: "Local Economies to Benefit from Beetle Wood." It targeted my riding and the riding of Prince George and Williams Lake. It said that two large forest licences were awarded to Ainsworth Lumber that will see innovative new uses, 750 jobs, $400 million investment in those jobs, two OSB plants and up to six pellet plants.

This was an ironclad announcement from government, with job numbers and with investment numbers. What was realized on the OSB side? Zero. Was there a retraction from government? Was there a press release issued saying that those licences didn't work, the $400 million wasn't invested, the jobs weren't created? No. No retraction from government.

One of the problems we have with our politics is that we'll show up on the announcements and the ribbon-cutting and we disappear when the thing doesn't work. I think there needs to be a responsibility on the part of all of us that if you are there for the ribbon-cutting or the announcement and the thing doesn't work, you're there to tell the community that it didn't work and why.

In the case of natural gas, a classic is that no politician showed up for the announcement when Enbridge stated that even though it had built its Cabin gas plant, phase 1, in the Fort Nelson area — even though it was built, even though they invested in it — it's mothballed. It's not going to run. They've walked away from it, and they are actually writing it down on their books. They're making money off of the write-down because they bought it from EnCana.

[1135]

A gas processing plant shut down. Where are the government members standing there, explaining to the community what this means with respect to natural resource extraction in this province?

There is a Suncor Energy Voyageur upgrader in Fort McMurray, announced as $11.6 billion project — mothballed. The Globe and Mail called it a giant tombstone to the future of the tar sands.

The announcement of $11.6 billion — that makes politicians happy. No politician in sight when the company decided to just shut the thing down, not continue building it and take a $1.5 billion write-down.

So $6 billion invested already? No. Announcements for pipelines, plants, etc., already? Yes.

But — a huge but — one of the government's things that they have to straighten out for the public is: how many plants are they talking about? They keep talking about five plants. Seriously? No one, and I mean no one, who knows anything about the industry believes that we
[ Page 12781 ]
will get five plants. Most industry analysts would say we'll be lucky to get one and very, very lucky to get two. But it is fraught with problems.

Here's the CEO from Chevron Corp., one of the partners in a $10 billion potential LNG plant in B.C. He has expressed concern that they need substantial prices from the Asian market to be able to continue with their project. It's in the concept phase. None of these projects are board-approved. He needs a substantial price difference from the Asian market to achieve that and expressed concern that they are having difficulty being competitive under the current regime in British Columbia. Not a new tax regime — not an LNG tax, not super-royalties — but under the current regime.

Today gas production in the Peace occurs because we as taxpayers subsidize it. We subsidize the extraction. That's why it occurs. So how are we supposed to believe that somehow at the end of all of this we're not going to be subsidizing it, we are going to be making super-royalties or super-taxes off of it? That's what the Canadian Association of Petroleum Producers and others are now publicly asking the government to explain.

On the extraction side of this, of course, in order to get into LNG, we have to discount all of the environmental costs. I want British Columbians to clearly understand that we get this gas from deep shale fracking, which uses trillions of litres of fresh water every year, permanently toxifies it and permanently removes it from the water cycle. We're talking about taking where we're at now, with trillions of litres of fresh water and toxifying it, and increasing that 100-, 10,000-fold — whatever that number is — to get from one to five plants.

The industry in Alberta has said that their biggest challenge is water. They know it's a problem. They know they have to figure out other ways than water. The independent member for Delta South and I have asked this government to go and figure that out — figure out what the issue is in British Columbia. We're not doing that.

Water, greenhouse gas emissions, the use of toxic chemicals, the fragmentation of the land base…. We're doing a health and safety impact study because the cumulative health impacts and the cumulative safety concerns in that area are accruing, with the industry effectively in hold mode. And we're talking about ramping it up.

In order for the government to sell this to British Columbians, they have to discount all of the environmental, social, health and safety concerns. The cost of extraction — and this is important to understand — in British Columbia for the North Peace area, around the Fort Nelson area, is anywhere between $5 and $7 to get the gas out of the ground. It's $3 to $5 to get the gas out of the ground in the Dawson Creek south area.

The reason that basin is being developed is because they get liquids out of that that help us to move bitumen. They make money off the liquids, but that's the only reason it's developing.

[1140]

The price differential between $5 and $7 to extract in the North Peace and $3 to $5 to extract in the South Peace with a North American market that's $3 means we're subsidizing the industry to make it work, as taxpayers. Now, you've got to take that extraction cost and you've got to add the pipeline costs. Again, there are no pipelines.

This government said that they've added a First Nations requirement. You must address First Nations concerns to the Enbridge pipeline. I wonder if they're going to apply the same principle to the pipelines that will have to be built for LNG, because we already know First Nations have chased the surveyors off their land. So no pipelines, but you've got to include the pipeline costs.

Then you have to build the plants. All of the proposed plants' owners, those who've made the announcement, say they are worried about two major things about plants in British Columbia: energy and labour. They believe that the energy costs and the labour costs of these plants are going to create an uncompetitive situation in British Columbia.

The pricing potential to the market from B.C. is up to $12 — up to $12 to get it onto ships to get it over to Asia. The Asian market just now is around $13. That's why the industry is saying to the government: "You can't compare us to Australia, because their delivered cost is not the same as ours. There's no room to make your fund off of the industry." That's why they're going to Ottawa.

At the same time that this government is saying, "We're going to get trillions of dollars and hundreds of billions of dollars in the fund," the industry is going to Ottawa and saying: "In order for us to even contemplate doing this, we need $2 billion in tax relief."

B.C. simply is not going to be competitive. If the government wants to create a prosperity fund from this industry, then it's most likely going to drive the pipelines to the south, and the LNG plants are going to be south of the border. That's the reality of this government's announcement.

I would like to just speak to the fact that while that's unreal, while that's magic, while that's fantasy…. And it is. It's not a matter of a long-time planning horizon. It's just fantastical to believe that a government would pin all of its hopes out to 2017 in a province where we may not get one LNG plant, the way that things are going.

The other thing the throne speech said was that we are at a historic crossroads. But the crossroads that the government is talking about is the political crossroads in May of this year, 2013.

I think that that's shortsighted, because I do think that we need a real plan for climate change. We're not getting that from this government. We need a real plan to address systemic poverty and the pressures on the middle class. We need a real plan for a sustainable economy that gives pre-eminence to renewable resources, not non-renewable ones. We need a real plan for health care and education.

Unfortunately for British Columbians, that cross-
[ Page 12782 ]
road on May 14…. Neither political party is putting those plans forward. I think it's going to be a very difficult choice for British Columbians to make. So again I restate that my preference would be fall elections. Pass budgets, real plans from governments — not a throne speech that points to an uncertain future that is, quite frankly, unrealistic.

D. Donaldson: I am very pleased to take my spot today to deliver my response to the throne speech. In the next 15 minutes I will do that.

First of all, as I said, it's an honour to be here, an honour to take my spot. It's been a while. Fall 2011 was the last time we heard a throne speech — fall 2011. It's been quite a while, so there's lots to catch up on.

I should take the opportunity, though, since we haven't had a chance to do a response to the throne speech, to thank the three CAs, constituency assistants, that work on behalf of the MLA office in Stikine. We have an office in Hazelton with a full-time constituency assistant, Julie Maitland. We have an office in Smithers with two half-time constituency assistants, Shelley Worthington and Michelle Larstone. They have an incredible amount of workload — people coming through the doors and using the services of the office. I thank them for the work they do.

[1145]

As well, I know all MLAs thank their family and family members for the understanding that we get from them in doing the job. It's a great sacrifice of time.

As well, I would like to acknowledge the MLAs who won't be running in the next election, on both sides of the House — there's a large number on the government side and a smaller number, but a few, on the official opposition side — for the sacrifices they've made to public service over the last four years and sometimes much, much longer.

I would like to acknowledge especially the member for North Coast on the official opposition side, who I have gotten to know. It's a neighbouring constituency, one over from mine but downstream on the Skeena — lots of connections between the coastal communities and the area I represent. I thank him for the work he has done, especially representing Prince Rupert on the employment front and, also, the stellar work he's done on the Enbridge file.

I would like to respond to the throne speech, first off, to touch on something that I think the government needs to be commended on, which should be pointed out, in the throne speech. That was the words and the emphasis on the unacceptability of bullying.

I think that's an important message for all of us in this House to take forward and also to exemplify by our behaviour in the House the message that we are members of the Legislative Assembly. Whether we like it or not, we are role models, so the way we behave in this House has impact, especially on those watching — perhaps on television, perhaps on Hansard or in the gallery.

I really take to heart the Premier's words on bullying. It's why last spring in a partnership we — the MLA Stikine offices, myself, in partnership with Dan Hamhuis and the Vancouver Canucks — ran a contest called Don't Let Cyber Bullies Score. Cyberbullying is a major issue in communities across B.C. We ran that contest last spring.

The winning young woman from Hazelton, it happened to be, in that contest wrote a poem around cyberbullying. So I'm glad to see that the government followed up on the emphasis on cyberbullying, as exemplified by the contest, and launched a website in the fall to report incidents of cyberbullying.

To respond to the throne speech, I'd like to talk about some of the realities in Stikine, the constituency I represent — a massive constituency east-west along Highway 16 and then all the way up along Highway 37 to the Yukon border. Many people have a close connection to the land and close connection to kin, whether it's from the settler culture or First Nations culture.

There are Tlingit, Kaska, Tahltan, Gitanyow, Gitxsan-Wet'suwet'en and Nisga'a represented in the traditional territories in Stikine. Again, fierce independence, pride in communities. Also, many of the communities facing horrific social and economic conditions. In some cases, the socioeconomic indicators are equivalent to what we see in developing nations — in Third World nations, so-called.

I recently visited a community in the western part of the constituency, along Highway 16 — Kitwanga, a Gitxsan community. I heard a story there that I had heard as well from a community a little further north on Highway 37, Gitanyow.

This had to do with concerns about bills, for one thing. The winter has not been a particularly severe one, but nonetheless, heating bills through electricity are very, very high. We know that under this government there has been a continual rise in the price of electricity and the price of hydro over the last few years, in fact attributable to policies, restrictions that the government has placed around B.C. Hydro's ability to operate. So what we've seen is an increase in hydro bills.

[1150]

The stories, the incidents, I wanted to relate to the House around that were people who are having challenges finding work. In Gitanyow the band councillors and band chief councillor that I met there related stories of 90 percent unemployment in that community.

People are having a hard time paying their bills. When they do have the electricity bill paid, one family I heard about in another community had about $20 left over for food — at the start of the month, after paying bills. One would say: "How does any family exist with that minimal amount of cash to feed themselves?"

Well, the way many people in Stikine exist and carry on and feed themselves is through the sustenance of the land — moose, for instance. A moose in the freezer is an
[ Page 12783 ]
extremely important item, an extremely important food source. And salmon — jarring salmon, having salmon in the pantry.

When we talk about stewardship and stewardship of the land, it's not just a nice idea. It's not sort of a theoretical concept. When we're talking about stewardship of the land in Stikine, it can mean the difference between having enough food and not having enough food.

What we've seen in the last few years is an incredible decrease in the moose population. Of course, it's hard to get a firm grip on this because the inventory situation, through the wildlife branch, has been severely depleted by the funding not forthcoming through this government. What we have seen in the upper Nass River is a 65 percent decrease in moose populations in the last ten years.

[Mr. Speaker in the chair.]

There are only 80 moose left in this small corridor that you would call the Cranberry Junction area. I was talking to the head of the Gitanyow Chiefs' office, Glenn Williams, about this issue. He is facing development issues on their territory where that section of the road, where there are only 80 moose left, would be open, due to development, in the winter months. It's not open right now. He's very concerned about that, about the impact that will have on the 80 moose that are left in the area.

What he is advocating for is a cumulative effects trust. He'll be meeting this month with this government to talk about that and talk about how money could be put into that trust through the developments that are happening that need that road open. That way the trust can have guardians on that road and monitor the moose population.

The point of this story is that there are people who are in support of development. In this case, that's a mining development. People are in support, but they need to know that this government and governments will be cognizant of how important the land and the stewardship of the land is. I look forward to hearing positive results from those discussions.

I was also happy to see mining mentioned in the throne speech this week. We are very aware on this side of the House how important the mining sector is, not just to rural communities for employment but for revenue generation for the province in general. We feel that we have shown and demonstrated that support for mining through our support for the mining flow-through tax credit program and through our support for Geoscience B.C. funding and for Genome B.C.

We have attempted to try to make the government understand that industry has some concerns. Those are typified by the presentation by Bing Giraud to the Finance Committee over the last couple of years around the lack of framework around First Nations consultation and accommodation coming from this government. That has led to some impediments and some delays.

Good companies like Imperial Metals want to do a good job, and unfortunately, they aren't getting enough direction from the government on the framework into which they want to plug their efforts around First Nations accommodation and consultation.

There is also concern on the mining front about environmental standards and the ability of this government to uphold high standards. We have seen these standards eroded. In 2002 this government gutted the Environmental Assessment Act. That has led, again, to delays and uncertainty, especially on First Nations involvement in that process.

[1155]

We see the government's ever-changing response on the Enbridge file. We don't know…. One month they seem to be supportive; another month they're not supportive. What we do know is that they did not allow the proper input by provincial government ministries into that public review process.

So lots to do on the mining front. I think there have been lost opportunities in this past decade, even though commodity prices have been extremely high. We look forward to working with the mining sector to develop more opportunities in this province because we know how important that sector is, overall.

One thing I saw and I heard in the throne speech….

Mr. Speaker: Noting the hour, Member.

D. Donaldson: Well, thank you. I am noting the hour. I would like to adjourn this part of the debate and reserve my position to resume debate on my throne speech response, hon. Speaker.

D. Donaldson moved adjournment of debate.

Motion approved.

Hon. M. Polak moved adjournment of the House.

Motion approved.

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

The House adjourned at 11:56 a.m.

[ Return to: Legislative Assembly Home Page ]

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

TV channel guide • Broadcast schedule

Copyright © 2013: British Columbia Hansard Services, Victoria, British Columbia, Canada