2013 Legislative Session: First Session, 40th 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, July 11, 2013

Afternoon Sitting

Volume 2, Number 7

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

THURSDAY, JULY 11, 2013

The House met at 1:34 p.m.

[Madame Speaker in the chair.]

Routine Business

Introductions by Members

Hon. M. de Jong: A good evening, a good day. We'll hear more about that formally later, but we're moving the furniture as a result, and that's a good thing.

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Another good thing today is that I have some guests. Relatives of mine from the Kingdom of the Netherlands are here. Jacques and Connie Vassen are visiting. As they sit here in person, the rest of the Van Boxtels and Tolls are watching, glued to their television set. I know that the House will make them welcome. They're going to explore British Columbia and have a great time here in Canada.

Statements
(Standing Order 25B)

ESQUIMALT UNITED CHURCH

M. Karagianis: For 100 years the Esquimalt United Church has been a pillar in my community. The church, on the corner of Lyall Street and Admirals Road, opened its doors for the first time in September 1913. It was called the First Methodist Esquimalt Naval and Military Church and was built through the dedicated efforts of its congregation and the community at large.

Over the years it has built an honoured reputation of serving both the military and civilian communities and has been a place of spiritual growth, outreach and support to citizens and families.

Today that proud tradition continues. The Esquimalt United Church is a regular gathering place for a number of local groups. They include the Esquimalt Garden Club, the Esquimalt Photography Club, the Victoria Association for Community Living and the Senior Ladies Group.

The church is also home to the Rainbow Kitchen, which serves a hot lunch meal at noon, Monday through Friday. I've had the great pleasure of helping those volunteers with their lunch service, and I have to say that they're a dedicated, inspiring group of citizens doing great work.

The Esquimalt United Church really is a place well loved and well used by my community. I hope all members of the House will join me in congratulating the church on its 100th anniversary. All the best to the members of the board, the congregation and all those who have contributed over the years to make Esquimalt United such a vital part of the community.

SALMON ARM
ROOTS AND BLUES FESTIVAL

G. Kyllo: I'm pleased to rise today and share with you the largest and most musically diverse festival in the B.C. Interior — the Salmon Arm Roots and Blues Festival.

This year marks the 21st anniversary of the Roots and Blues Festival, which happens on the third weekend of August at the Salmon Arm Fair Grounds. The event is championed by creative director Hugo Rampen and a dedicated local board of directors, who work throughout the year to plan for this world-class event. A core group of employees, along with hundreds of enthusiastic and soulful volunteers, are responsible, in large part, for the ongoing success of the Salmon Arm Roots and Blues Festival. It brings millions of dollars to the local economy each year.

The main stage is where you can catch the headliners, which this year include the talented Bruce Cockburn and City in Colour. The Boogie Barn Stage pumps out non-stop music for the dancers in the crowd. Overall, six stages run concurrently, featuring blues, world, alternative roots, folk, dance and other genres.

The festival is family friendly, offering plenty of kids' activities and free admission for the 12-and-under crowd.

The festival is a great contributor to our local economy. It attracts performers, vendors and concert-goers, who stay in our local hotels and campgrounds, enjoy our restaurants and peruse our shops during this three-day event.

The pre-festival outreach project, in partnership with Shuswap Tourism, the Shuswap Trail Alliance and other sponsors, takes the roots and blues experience out into other Shuswap communities and hot spots in the weeks running up to the festival, engaging both artists and residents in roots and blues music.

This outreach program also helps to showcase other Shuswap communities and expand the experience of visitors and locals while strengthening community ties and promoting economic prosperity. The Salmon Arm Roots and Blues Festival is a great place to come together with family and friends, and I encourage my fellow members on both sides of the House to bring some music and dance into your lives and experience some Shuswap hospitality this summer.

VETERANS MEMORIAL AND HERITAGE
MURAL IN BELLA BELLA AREA

J. Rice: This past Saturday I had the pleasure of attending two special occasions in Shearwater on the central coast of our province. The first event was a cenotaph and warrior pole dedication commemorating the Bella Bella World War II Royal Canadian Air Force Station, the airmen and local aboriginal veterans who served in the various wars and peacekeeping missions during the 20th century.
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Shearwater was first established as an anti-submarine bomber reconnaissance post in 1941. The warrior pole, carved by Ian Reid, was installed by the descendants of the people who went to war from the central coast.

There was a formal military dedication as well as traditional Heiltsuk blessing ceremony, followed by, of course, a wild salmon barbecue.

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The second event, titled Bella Bella: United in History, was a celebration of the founding of Bella Bella and the united efforts of the central coast communities and their contributions to the area. This included both Heiltsuk and non-aboriginal contributors.

I witnessed the unveiling of a mural that had been painted on the side of an original World War II aircraft hangar by internationally acclaimed muralist Paul Ygartua. The mural features portraits of the four founding chiefs of the Heiltsuk Nation and images of historic Heiltsuk and non-aboriginal community members who made a significant contribution to the establishment of the greater Bella Bella community during the past 150 years.

This special day was the dream of Craig Widsten, who wanted to honour his father's legacy, Andrew Widsten, as well as give back to the community and the Heiltsuk Nation. Craig's father, Andrew Widsten, who was captain of the Royal Canadian Air Force coastal marine division during World War II, purchased the Bella Bella RCAF station in 1947 and founded the community of Shearwater. He established a shipyard, marine business, sawmill and elementary school. Today it hosts a world-class fishing lodge, full-service marina and resort.

A special thanks to William Housty of Bella Bella; Craig Widsten, Tracy Macdonald and Shawn Nagurny of Shearwater Resort and Marina. I encourage members to stop in Shearwater to visit the war memorial, the warrior pole and United in History mural, as well as try out the world-class fishing.

MINTER GARDENS

L. Throness: There's a destination in my riding that has welcomed hundreds of thousands of visitors from around the world. Minter Gardens sits like a colourful painting, framed by the Rocky Mountains. You can get lost on its shaded pathways as you stroll by waterfalls or carefully carved shrubs and pavilions that overlook brilliant beds of flowers — lots of flowers.

The Fraser Valley had come to regard Minter Gardens as a permanent fixture, so it was a shock to learn that this signal attraction will close in October, after 33 years of service. Local residents are attached to the gardens, because they reflect the character of its community. Rosedale is itself a kind of garden — rich farming country dotted with long greenhouses filled with ornamental flowers, and wide fields planted with endless varieties of shrubs and trees, which are in demand all over Canada. Minter Gardens distils all the charms of the valley into just 32 acres.

In another sense, they are a manifestation of Brian Minter's interior life. A passionate gardener and designer, he and his wife, Faye, saw the potential of the bare land and created something wonderful of it, on the way attracting a devoted following of other B.C. gardeners through his television appearances, seminars, regular CBC radio shows and a bestselling book. Brian is also a warm and generous leader, recipient of the Order of Canada and the Order of Chilliwack, two times chancellor of Fraser Valley University and a great deal more. We all wonder where he finds the time.

While we will miss Minter Gardens, we are relieved to hear that Brian and Faye will continue to please their green-thumbed customers at their Country Garden store in Chilliwack, no doubt finding new ways to make the community a more beautiful place. Many thanks to Brian and Faye, and to their children, Lisa and Erin, for working so hard to please so many for a generation.

SECOND-STAGE HOUSING FOR WOMEN
IN CAMPBELL RIVER

C. Trevena: After years of lobbying and seemingly endless negotiations, the reality came quickly. Women started to move into Rose Harbour second-stage housing in Campbell River this last week. By the end of the month all 27 units will be occupied.

The need for second-stage supportive housing for women in the city has been known for many years. Safe places for vulnerable and hard-to-house women to live are very hard to find. Rose Harbour has come out of the hard work and commitment of the staff and board of the Ann Elmore Transition House, who recognized both the need and the dangers women face by not having the stability of a home.

The city of Campbell River and B.C. Housing signed a memorandum of understanding in 2008. The city agreed to provide the property and waive the development fees, and B.C. Housing agreed to provide capital and operational costs. There were hiccups and fears that the fragile negotiations would fall apart, until finally, last year the building in Campbell River's downtown started.

The $6 million project has provided six family units as well as one-bedroom and bachelor suites. The women who live there will get safe and secure homes but must participate in programs to help them gain independence. The project is evolving. At the moment, the women will sign six-month leases, which may be renewed for up to two years. At that point, it's hoped that the women will be able to find a home of their own.

Rose Harbour provides not only homes but space for the women's centre, for child care, for meeting rooms and a public shower for women who may be homeless and
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have no access to such a simple thing as a clean bathroom. Women are often the hidden homeless, and the opportunity to break the cycle, to have a place where they can call home and have the help and support to gain some life skills is extremely important.

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I applaud the hard work of the team at Ann Elmore Transition House, whose dream this was and, in particular, the dynamism of the executive director, Valery Puetz, without whom I doubt Rose Harbour would ever have opened its doors.

TOUR DE DELTA BICYCLE RACE

S. Hamilton: I rise today to talk about an exciting event that recently took place in my community. The Tour de Delta bike race was first introduced to the cycling community in 2001, with its inaugural event attracting more than 200 cyclists from across Canada, the U.S. and countries abroad.

With great weather, challenging courses and enthusiastic spectators, Tour de Delta has been a wonderful success story, growing its prize purse and partnering with other communities to establish B.C. Superweek.

Tour de Delta kicked off last Friday with the MK Delta Criterium. This exhilarating event features circuits around the social heart of North Delta. Spectators were able to see the athletes pass by 70 times as they negotiated the course with a fast downhill section, which saw the riders reach speeds of more than 70 kilometres per hour.

The Brenco Criterium, held in historic Ladner village, attracts thousands of spectators who are able to watch as cyclists manipulate tight corners at speeds up to 60 kilometres per hour.

The Tour de Delta weekend culminates with the gruelling White Spot Delta Road Race. This year's new course wound through the streets of Tsawwassen, with Dennison Park at its heart. This race is challenging, and it's a true test of the athletes' strength, precision and endurance. This road race sees over 150 pro-cyclists racing throughout our community.

This is the first year that this event is UCI-sanctioned. This gives athletes points to qualify for other large-scale international races, not the least of which is the renowned Tour de France.

B.C. Superweek continues throughout this week with races at UBC, Burnaby and Vancouver's Gastown, as well as a full weekend of racing in the wonderful city of White Rock.

I'd like to take this opportunity to thank and congratulate all of the organizers and sponsors of this great event.

Madame Speaker: Hon. Members, the member for Vancouver–False Creek seeks leave to make an introduction.

Leave granted.

Introductions by Members

S. Sullivan: With us today we have Daniel Fontaine, CEO of the B.C. Care Providers Association — hundreds of agencies that provide supports to seniors in care. He's also my former chief of staff from when I was mayor of Vancouver, so I'd like the House to acknowledge him.

Oral Questions

GOVERNMENT SUPPORT FOR
RESIDENTS OF JOHNSONS LANDING

A. Dix: Tomorrow will mark one year since a massive landslide hit the community of Johnsons Landing, killing four people and destroying five homes. At the time, the Premier said that Johnsons Landing residents "have our government's full support as they recover." It's clear, however, that they haven't received the full support of the government.

A recently completed geotechnical report has shown that 12 households are at a high or very high risk of another slide. On the basis of that report, many residents have been told that they can never return to their homes. The risk is just too great. Responding to the report, the government suggested that the province has no capacity or legislative authority to pursue buyouts.

The Premier made a clear commitment. To the current Justice Minister: why will this government not honour the commitment of the Premier and support Johnsons Landing residents, who have not only seen their community devastated but have been financially damaged as well?

Hon. S. Anton: A year ago there was a tragic and unexpected landslide at Johnsons Landing. It resulted in the deaths of four people — a terrible loss to their families. Homes were destroyed, and property was damaged.

For the past year the Emergency Management B.C. people have been on the ground helping out with the residents at Johnsons Landing, with the full cooperation of the regional district. In fact, over $1 million has been spent at that location, both with the technical support and also with financial support. The financial support includes $400,000 in disaster financial assistance and another $178,000 pending in disaster financial assistance.

[1350]

The emergency management team has viewed it as their job to be as liberal and as helpful as they can to residents in the neighbourhood. And they have lost homes. There are homes that they cannot go back to, and there are properties that people cannot return to.

It has been a very tough time, and I would like to thank the residents for their resilience, for their forbearance and for their cooperation with Emergency Management B.C. As I said, the team has been working very hard to
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do the best they can and to apply the remedies and the help that we have as liberally and as helpfully as they can.

Madame Speaker: The Leader of the Opposition on a supplemental.

A. Dix: Well, to put it simply, they can't go back to their homes in these cases, and they can't sell either. The minister talks about applying the rules liberally. Well, as the minister will know, after the 2005 landslide in North Vancouver destroyed two homes and killed one person, the province agreed to pay 100 percent of a buyout plan proposed by the regional district.

Now, the residents of Johnsons Landing and the regional district director met with the Premier and the minister and discussed a potential buyout plan, but now the government says it cannot and will not do anything. The minister might be as surprised as I am and as this House is, however, that the owners of property in Johnsons Landing still have to pay taxes on property that they can't live on.

Can the Minister of Justice tell this House why the liberal approach that has been used in the past is not being applied to the residents of Johnsons Landing, so devastated by this situation?

Hon. S. Anton: As I would like to emphasize, Emergency Management B.C. is continuing to provide all the help that it can within the program that it operates. In fact, we've had a couple of letters from the regional district of Central Kootenay thanking government and the emergency management teams for all the work that they have done in support of the community. We will continue to do what we can to support the residents within the program, within what is possible in the resources of government and the programs of government.

As I said earlier, we've spent nearly $600,000, in fact, in direct benefits to residents. We will continue, and our teams will continue, to apply the programs as quickly, as helpfully and as liberally as they can. It does not allow for home purchase, but it does allow for many other things, which they've been working with.

It has been a very tough time on the residents, and it continues to be a tough time. It's a terrible thing to lose your home, to lose access to your property, but believe me, the Emergency Management people are doing everything they can to help with that situation.

Madame Speaker: The Leader of the Opposition on a supplemental.

A. Dix: The fact of the matter is that when it came to North Vancouver, the government paid 100 percent of the costs. In the case of Johnsons Landing they can't find room within the program to address the question.

I think this is both profoundly unfair to people in Johnsons Landing but also leaves them very little place to go. I mean, the government is happy — perhaps not happy but accepting of the situation where they're paying taxes on property they can't go back to. They're certainly not applying the liberal definition of the approach that they applied for residents of North Vancouver.

So I'd ask the Minister of Justice again — because in the May 16 report the regional district identified the potential to rebuild or relocate homes to safer areas: will the minister not open up discussions on these very questions with the residents of Johnsons Landing and apply the same liberal principles that were applied in the case of North Vancouver?

[1355]

Hon. S. Anton: The circumstances in North Vancouver were different than the circumstances in Johnsons Landing. There was a program that was available in North Vancouver to mitigate future damage, but in this case there is, unfortunately, not a program.

We do have programs of support, and I would like to emphasize that the Emergency Management has been using those programs — nearly $600,000 in direct support to the residents and over $1 million in total because of the other mitigation and technical work that they have done in that district. We have received letters of appreciation. Working within the programs that we have got, Emergency Management has been doing the very best it can helping residents in Johnsons Landing.

M. Mungall: Four people died a year ago in Johnsons Landing. Many of their friends and neighbours have been evacuated from their homes for the past year, and after the recently completed geotechnical report, the regional district is unlikely to lift the evacuation order in high- and very high-risk locations. Residents have been emotionally and financially devastated.

While the minister says that Emergency Management B.C. is doing everything it can, Emergency Management B.C. now needs leadership from this government. Will the minister do the right thing and work with the community on a buyout plan?

Hon. S. Anton: I think everybody in British Columbia…. I'm sure, in their communities, people were horrified at the disaster that struck, at the tragic loss of life in Johnsons Landing. It was a terrible moment.

We do have programs. Emergency Management B.C. runs the government programs that can help in these circumstances. They have been on the ground almost since they could humanly possibly get there. They have worked very hard with the residents — as I said earlier, over $1 million, including nearly $600,000 in direct assistance to families, which they have been giving out as helpfully and as quickly and as liberally as they can.

Those are the programs that we have, and as I said earlier, there have been letters of appreciation. They have
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been working very hard on the ground to do what they can to alleviate the tragedy and the tragic circumstances in Johnsons Landing.

Madame Speaker: Nelson-Creston on a supplemental.

M. Mungall: We have seen in other provinces that governments can and will act to provide assistance to citizens in need when hit by natural disasters. In Manitoba after flooding in 2009 the residents of Breezy Point were offered buyouts. More recently just next door in Alberta we saw the government act promptly in response to the terrible flooding we saw in Calgary and elsewhere. Here in B.C. the Premier made a promise to the residents of Johnsons Landing, and then she reneged on that promise.

This government and this minister need to understand that many Johnsons Landing residents have lost everything and yet can't move on and are even paying property taxes on their homes, buried under metres of mud. What Johnsons Landing needs a year later is genuine support from this government, not empty words.

Will this minister and the Premier deliver on that support and work with residents on a compensation plan?

Hon. S. Anton: Again, I would like to emphasize the support that our teams did get from the regional district of Central Kootenay, who did send a couple of letters of appreciation for the hard work that the Emergency Management teams have done in delivering our government assistance programs to the families of the victims of this tragedy. It was a terrible tragedy, and I know it struck everybody in British Columbia, which is why the teams there have been doing the best they can and the most they can within our emergency management programs to help the people in Johnsons Landing.

[1400]

GOVERNMENT ACTION ON
DELAYS IN COURT PROCEEDINGS

L. Krog: Serious criminal cases continue to be dismissed because they take too long to get to trial. Recently a grow-op case involving more than 1,600 plants in Prince George was thrown out. The presiding judge said that the cause of the delay was tied to a lack of institutional resources and Crown counsel.

Can the Minister of Justice explain why this is still happening after years of both the judiciary and people involved in the legal community pointing out that there was a genuine crisis in our legal system?

Hon. S. Anton: I can assure you, Madame Speaker, and this House that nobody likes to see cases stayed because of institutional resources. On the Crown resources at the time, I would observe that this was federal Crown counsel, not provincial. But on the institutional resources of courts, I am very pleased to be able to report that in fact, the judicial stays have been declining over the last year. I've just lost the exact number, but it's about half of what it was in the previous year.

The important thing, though, is that justice reform has really taken great leaps forward recently with the Justice Reform and Transparency Act and with the justice summit that was held, with unprecedented cooperation between judges, courts, lawyers and other stakeholders in the system.

We are determined to find ways to take the pressure off the courts and to help expedite the process of justice and the process in the courts, because everybody in British Columbia is entitled to timely and accessible justice. That's the mantra of justice reform, and that's what we're aiming for in our ministry.

Madame Speaker: The member for Nanaimo on a supplemental.

L. Krog: Well, the last time there was a great leap forward, that turned out to be a bit of a bust historically as well.

The number of stays may be down, but serious cases are still being thrown out. It's very cold comfort to a victim in Nanaimo that Mr. Fred Widdifield, a member of the notorious Hell's Angels bikers gang, had a case dismissed against him because the court ruled that his Charter rights were violated in a serious extortion case where the victim was trying to be deprived of over $250,000 for a 1994 debt. So that victim has been victimized twice — once by the attempted extortion and a second time by seeing Mr. Widdifield walk out of the courtroom.

So I want to know: what does the Minister of Justice have to say to that victim today in Nanaimo?

Hon. S. Anton: Let me tell you some of the initiatives in our ministry which are taking the pressure off the courts. First of all…

Interjections.

Hon. S. Anton: I still don't have the number, but I'll get it.

...the new Family Law Act, which was passed in this Legislature this spring, emphasizes the importance of family mediation. Take family cases out of court and allow children to get a quick resolution of their family matters.

Second, the immediate roadside prohibitions have replaced criminal penalties in some cases with administrative penalties; 8,000 cases have not gone to court on impaired driving charges, and over 140 lives have been saved.

RECOVERY OF DECEASED PERSONS
FROM B.C. WATERS

D. Eby: I know we're all a little surprised on this side
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to hear that the response to the Hell's Angels is family law reform. But I digress.

Yesterday I asked the Minister of Justice if she would take action to attempt to get the necessary technology to help Raymond Salmen's widow recover the body of her husband from Harrison Lake. May I remind this House that the Salmen family; the family of Sid Neville, who was lost on François Lake; and families across B.C. in similar situations were told by the Minister of Justice to go ask someone else for help.

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Now it has come to my attention that the RCMP in B.C. has recently acquired the exact side-scan sonar equipment required. They're actually using it to search Little Wilson Lake for the remains of another B.C. man.

My question: why is the Minister of Justice refusing to show leadership and coordinate the B.C. Coroners Service and the RCMP to use this equipment and bring these loved ones home?

Hon. S. Anton: These are tragic cases. Once again, I would like to express my condolences to the families of victims of drowning in British Columbia this summer. Some of them have been found. Some of them are not found, and those cases are particularly poignant.

Police search and rescue teams put significant effort into finding the missing persons. Sometimes they succeed, and sometimes they do not succeed. When they don't succeed, it is a very unhappy situation. It is not for me, though, to direct the police as to how they undergo their day-to-day operations. I guess this is not a day-to-day operation. This is a more extraordinary operation.

They take great risk. They work very hard. They go back again and again, in some circumstances, because they, too, want a successful resolution of these searches. I am not going to tell them how they manage their searches, but I am going to certainly encourage them to continue with them and thank them for the hard work that they do. They put themselves at risk and their own families at risk. They want a resolution, the same as everyone else. These are tragic situations.

D. Eby: The RCMP has the side-scan sonar. It has also come to my attention that B.C. Hydro has a Seamor 300F robotic camera that can also assist in recovering the remains of these family members lost in deep water.

Why are B.C. families still holding local fundraisers to bring in Americans to do this work on an ad hoc basis? To put it bluntly, the equipment and the expertise are available here in B.C. The only thing missing is leadership.

Will the Minister of Justice commit to coordinating with these agencies — because if she won't, who will? — and with the families who have lost these loved ones in B.C. waters to use this equipment to recover the remains of these loved ones and bring them home?

Hon. S. Anton: It is almost at the point where the member opposite is suggesting that the RCMP themselves are not interested in making these recoveries. Nothing could be further from the truth. They are as interested as…. It's their agency which must do these recoveries. They are more interested than, I think, most of us, except for the families themselves.

It's they who are out there day to day. It is they who are interacting with the families. It's they who want to find the solutions. I am not going to tell individual RCMP detachments or search and rescue people how to manage their affairs. They are the experts. They make the operational decisions. They take these things to heart.

I think the member opposite should be very careful in the way he's framing his questions. They want a resolution. The families want a resolution. We all want a resolution.

C. James: I'd like to remind the minister that the RCMP are doing everything they can. This is not within their mandate. They need the leadership from the provincial government to give comfort to these families.

The family of Sid Neville had to reach out to the United States, to the generosity of a couple down there to come up and search for their loved one. The community of Burns Lake has reached out and assisted with the search. They've held bottle drives, and they've had garage sales. That's what they've been doing to assist the family. Two agencies that this government already works with, the RCMP and B.C. Hydro, have the expertise and the equipment.

[1410]

Again to the minister, why won't the minister show leadership that is needed and work to assist these families with the closure that they need and deserve?

Hon. S. Anton: I agree with the member opposite. The families do need closure, and they do wish to have recovery of their loved ones. That is why the police go out day after day. They go back again to these locations because they, too, want to recover these missing loved ones. I don't think that there should be anything in this House which sheds doubt on that.

They are working hard to find these missing people. They have found some. There are some they are still looking for. They're working hard to make it happen. I am not going to go out and tell them what equipment to put where, but I think we should all rest assured they are doing everything they can to bring resolution to these tragic cases in British Columbia.

IMPLEMENTATION OF MISSING WOMEN
INQUIRY RECOMMENDATIONS

M. Karagianis: Prior to the provincial election the former Minister of Justice indicated that this government is
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putting the implementation of recommendations from the inquiry into missing and murdered women on hold, citing civil proceedings from the families of the murdered women as the reason. The coalition of advocacy groups, who were shut out of the inquiry process, said this in a letter to the minister yesterday: "The families of the missing and murdered women must absolutely not be made into scapegoats for the government's lack of progress."

They're right. I'm sure the minister is aware that some of the recommendations in the report are a matter of life and death for the province's most vulnerable women. So can the minister, the current minister, tell this House today: does the government intend to continue stalling on implementing those recommendations?

Hon. S. Anton: The case of the missing and murdered women was one of the most tragic events that has happened here in British Columbia. It was a terrible tragedy for the families involved. It was a tragedy for everybody in British Columbia. As we think back to the late 1990s — when many women went missing, where they were unaccounted for — no one seemed to know what happened or even to be able to figure it out. Of course, eventually there was a conviction, and in some of the cases, at least, we know what has happened.

Former Justice and Commissioner Mr. Wally Oppal did his report, and I would like to thank all the families and participants who helped him in that report. I would like to thank Commissioner Oppal for the very strong recommendations that he made to us as a government to make sure that something like this never happens again.

On the day that report was issued, former Lieutenant-Governor Point was appointed to act as the champion. He reached out to families. He started on the process of healing and reconciliation. He hasn't remained in that position, and we are now considering how we should move forward in that.

But I would like to thank, as well, the letter that the member points out from the Union of B.C. Indian Chiefs. They expressed several times in that letter their very strong interest in working together in the implementation of this report.

Just quickly, because it's my first time to address this very serious issue in the House. This was in the platform of our government. This is in my mandate letter. It is in my heart and, I think, the hearts of everybody in this House that we need to do what we can. I can assure this House that we are moving forward on this report in every way that we can.

M. Karagianis: Six months, 63 recommendations. The government has made promises numerous times, but there have been no timelines outlined by the government. There are certainly no resources available to implement these recommendations.

I would have to say we share the frustration of the coalition of advocacy groups when they say in their letter: "We're frustrated and offended by the suggestion that civil litigation by families will constrain the government's response and stall the work that needs to be done." They also say in their letter that such a tactic is not a legal requirement.

[1415]

If the minister disagrees with that, perhaps she could show us any kind of legal opinion that supports why the government would be using the language that civil litigation will constrain them. If in fact that's not true, then will she commit to the House today to set out timelines and get on with undertaking implementing those recommendations?

Hon. S. Anton: It is my commitment, and it's the commitment of this government, to create a legacy of safety and security for vulnerable women in this province. That is a priority.

The report by Commissioner Oppal focused on two main themes. One was the inadequacy of the response at the time to missing-persons reports and missing-women reports in this particular case. The other was the lack of clarity between police forces as to how information should be shared.

The report ended at the period 2002. Over the last ten years there have been significant changes made in the police response to missing persons. There have been significant responses made between sharing of information amongst police departments — so much so that we now have 20 integrated police teams in British Columbia, a commitment of $70 million a year to help those teams.

There is a terrific amount of work being done, and I suspect that there may be another question. I'll be able to report more on some of the things that are actually underway.

PUBLIC TRANSPORTATION SERVICE
ON HIGHWAY 16

J. Rice: In 2006 the Highway of Tears Symposium — which was convened by northern communities, First Nations and service organizations — recommended that "a shuttle bus transportation system be established between each town and city located along the entire length of Highway 16, defined as the Highway of Tears." Six years later the commissioner for the Missing Women Inquiry recommended that this shuttle bus be put in place immediately.

Yet here we are. Another year has passed, and instead of delivering on the shuttle, this government actually approved cuts to Greyhound bus service between Prince Rupert and Prince George.

My question is to the Minister of Justice. Seven years have passed since the recommendation was first made, and we've gone backwards, not forwards. When will the
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communities along Highway 16 get this shuttle?

Hon. S. Anton: I thank the member for that question. The Transportation Ministry is working to identify considerations and solutions to enhance safety for travellers along Highway 16, because there are many women missing on that highway and unaccounted for. That's a terrible, terrible situation.

Let me mention some of the other things that have been undertaken as a result of the Missing Women Inquiry recommendations. We have given $750,000 to the WISH Drop-in Centre in Vancouver, and another $400,000 from the city of Vancouver, for which I thank the city of Vancouver.

Crown counsel is reviewing policy charges related to equality and vulnerable witnesses. We've awarded $1 million dollars in grants for crime prevention, including for projects that prevent violence against women. We have a three-year action plan to combat human trafficking.

The recommendations in the inquiry are being addressed in many different ways.

Madame Speaker: Thank you, Minister.

Hon. S. Anton: Those are a few, and I will be pleased to talk about more.

[End of question period.]

Motions Without Notice

COMMITTEE OF SUPPLY
TO SIT IN THREE SECTIONS

Hon. M. de Jong: By leave, I move a motion that would further the motion adopted on July 8, which would authorize the Committee of Supply for this session, for the balance of the session, to sit in an additional third section, designated Section C — a third House, as it were. I have provided a copy of the motion to my hon. friend and, I believe, to the independent members of the House as well.

[1420]

By leave, I move:

[Further to the motion adopted on July 8, 2013, that this House hereby authorizes the Committee of Supply for this Session to sit in an additional third section designated Section C, which will sit in such Committee Room as may be appointed from time to time. All rules and provisions of the motion related to Committee of Supply - Section A shall apply to Section C with the exception of membership.

The membership of Section C shall consist of 12 Members, being 7 Members of the B.C. Liberal Party and 5 Members of the New Democratic Party. The Members of Committee of Supply, Section C shall be as follows: the Minister whose Estimates are under consideration and Messrs. Gibson, Bing, Lee, Hunt, Martin and Mme. Moira Stilwell, and Messrs. Ralston, Krog, Heyman and Mmes. Elmore and Mungall.]

With leave, I move the motion, and then I have a brief couple comments, Madame Speaker.

Leave granted.

Hon. M. de Jong: The genesis of this — and, I will say, in an unusual session, one that follows the election — the desire is to ensure that there is adequate time for a proper canvassing of the ministerial estimates. There are, admittedly, a variety of ways that can be accomplished.

The government, nor I, wish members to interpret this as signalling a commitment or a desire to proceed in this manner in all instances. It was one of the options that was available in terms of providing additional time and strikes the government as a reasonable one.

I concede that it logistically presents a little more challenge for members of the House, insofar as there will be a third venue in which estimates debates are being undertaken. But hopefully, the corresponding benefit of providing some additional time is one that members will see and assign some value to. Again, as I hope members will appreciate, insofar as examining whether this is an appropriate or applicable measure to take in future sessions, that would be the subject of discussions amongst members and, certainly, between the government and the official opposition.

J. Horgan: I thank the Government House Leader for his presentation. He and I have been in discussions about how we, as members of this place, can discharge our responsibilities to constituents and to the people of British Columbia with respect to the budget that was tabled two weeks ago.

We did agree, in the interest of time, to shorten the debates at second reading on the budget from six days to three days. I thought, and I agreed with the Finance Minister, that we are, in essence, debating materially the same budget that was tabled in February, where we did spend six days debating the budget. We had an opportunity for 32 members of this place to observe and participate in a budget debate, and that was reasonable and appropriate.

But when the Government House Leader identified the duration of this session to be starting on a particular date and ending on a particular date, that shortened the estimates process significantly from previous years. In the examples the Finance Minister used, in my memory, of 2005 and 2009 — where we had budgets tabled, not fully debated, not fully passed and then a repeat of those budgets in the summer or fall of those years — we had in excess of 140 hours of debate time.

With the schedule as it sits, with two Houses, we will only have 120 hours, far less than I believe — and, I believe, the Government House Leader agrees — we need to discharge our responsibilities. So what we've done…. It is reluctantly that I and my colleagues agree to be in three
[ Page 397 ]
places at one time. Members know that we're here…. When we tried this experiment in the year of 2012…. It's really tough to be in Committee A or Committee B, but now we have to go to the boiler room upstairs as well — not equipped with air conditioning, although I know the Clerk and staff have done their level best to make it an appropriate place in July to be having a debate.

It's going to be uncomfortable. I hope, hon. Speaker — and I am making this appeal to you and, of course, to the Government House Leader — we will not repeat this in the future. I do like to harken back to the dirty, dismal decade of the '90s, when we spent 400 hours debating budgets — 400 hours in a particular year.

Apparently, openness and transparency and full disclosure are not as important in the 21st century as they were back in the 1990s. We are going to accept that. We are going to do our level best to hold the government accountable, to address the issues in this budget, which we believe are bogus. We've agreed to the premise that the minister put forward. It's reluctantly that we say we will support this motion.

Motion approved.

[1425]

Tabling Documents

Hon. S. Anton: I would like to table the Forest Appeals Commission 2012 annual report.

Petitions

Michelle Stilwell: Today I have a petition here, initiated by a constituent of mine, with 113 signatures. The petition calls on the province to waive the property transfer tax for those with amyotrophic lateral sclerosis, otherwise known as ALS, and other disabling illnesses if they need to purchase a new residence to accommodate their disability.

B. Routley: Today it's an honour to present this petition from constituents in the Cowichan Valley. The petition concerns revision of the current procedure and timeline under the climate action secretariat. It is focused on greenhouse gases from transportation.

Orders of the Day

Hon. M. de Jong: In this chamber I call Committee of Supply — for the information of members, the continuing estimates of the Ministry of Finance — and, in Section A, Committee of Supply estimates for the Ministry of Environment, to be followed thereafter by the Ministry of Education.

Committee of Supply

ESTIMATES: MINISTRY OF FINANCE

(continued)

The House in Committee of Supply (Section B); D. Horne in the chair.

The committee met at 2:29 p.m.

On Vote 22: ministry operations, $114,879,000 (continued).

M. Farnworth: Prior to our break at lunch we were talking about the Little Mountain land sale and the estimates of the $300 million from that sale.

[1430]

Can the minister just outline as to why it has taken three years to be able to complete this, when nothing on the original deal…? It's still the same deal as what was in place three years ago. Why has it taken so long?

Hon. M. de Jong: In short order, I think the answer relates to the necessity and desire of the ultimate purchaser to secure the proper approvals, zoning and otherwise, from the municipality, from the city of Vancouver, and the fact that the deal wouldn't close until that had been done. That accounts, in large measure, for the delay that occurred. And it was a delay.

M. Farnworth: I understand the government's…. I know this is a unique situation, in that the minister has already stated that this is not part of the land sales. But in terms of how these issues are now dealt with in the future, have changes been made so that we would not see this kind of situation in the future? A piece of land that is being sold is booked in one year, the sale may not be completed, and then it's booked again in the next year. It just keeps carrying on and on as part of the fiscal framework, the fiscal document that the government has tabled at budget time.

Hon. M. de Jong: I don't know if my answer will surprise the member. Maybe it will a little bit. It actually goes to something he has said in the past and commented upon in the past. When you're talking about the sale or disposal of assets — property assets, in this case — there is risk.

The risk reveals itself, and did in this case, where funds that would be derived from this transaction were put in two successive budgets and then did not materialize, which immediately created pressure. In fact, had the funds materialized and the transaction completed in the last fiscal year for which it was budgeted, the government would have far exceeded the target contained within that budget. The deficit…. It still would have been a
[ Page 398 ]
deficit for '12-13, but it would have been a significantly reduced deficit.

Now, to be fair, the revenue showing up this year assists in reaching the balanced budget, the modest surplus. But you do have to ask the other half of the question, or you have to consider the other half of the question. When an agreement is signed that contemplates closure on the deal in a certain year, any responsible accountant will tell you that you are obliged to book the money. To not do so would arguably be as improper as booking it under circumstances where you don't believe you are going to get it. It does work both ways.

[1435]

In this case there were complexities, I am told, around the finalization of the arrangements between the developer and the municipality, the city. That contributed to, first, uncertainty and, then, ultimate delay.

In accepting the proposition that there is risk associated with this, taking steps in constructing the transaction to minimize that risk…. But where deals are contingent upon steps being taken by a third party that does not engage the Crown in the right of the province of British Columbia, that risk exists, and I will not try to diminish that fact.

But at the same time, I don't think it would be proper not to include in a given budget year, a given fiscal year, an accounting of the revenues that the Crown expects to receive on the basis of an agreement that it genuinely believes will close in that fiscal year.

M. Farnworth: I understand exactly what the minister is saying. From an accounting perspective, I get that.

But here's where the issue comes in. It's like: "Okay, we believe we're going to sell it this year. Our job is to table a budget in February that's balanced. That's what the law says, so we table a balance." The revenue doesn't come in, and that doesn't get judged until well past into the next year, by which time that's old history. So around it comes again the next year, and: "Oh, we can book the same piece of property again, because we genuinely believe it's going to be sold again."

I mean, the value of the property is, for the sake of argument, $300 million — okay? So you manage to book $300 million one year, $300 million the second year and then you get to do it a third year. But you've still only got the one asset, and you still only actually have the one $300 million. I guess it's not a question….

It's not so much the accounting principle, which I understand. In this case it's the political perception of a budget that's being balanced, in part, because of an asset that you said will be sold but in actuality doesn't get sold, and the truth of that doesn't come out until much later down the road. By that time you may have other areas of government revenue or what have you. It may have made up, and you're not having to…. But that's not the point.

The point is, when the budget is tabled, in essence, government is able to take advantage of the fact that: "Oh, it still hasn't sold. We can include it this year again."

Hon. M. de Jong: I guess that is — if one considers it from that point of view — an inherent weakness in a budgeting process that, in its simplest form, represents a projection of what will happen in the year ahead. In many ways, the same weaknesses or criticisms or risks accrue in any other area of the budget where one makes projections about revenue and the accuracy of those projections doesn't reveal itself with certainty until the public accounts are tabled.

In the case of fiscal year '12-13, in a week or so when the public accounts are tabled in the chamber, we'll have a definitive statement on the accuracy. In this case, the fact that we went over some of that during the budget, there won't be any great surprises. Better not be.

Interjection.

Hon. M. de Jong: There'll be some questions, but there shouldn't be any surprises.

[1440]

The definitive statement of what took place in a fiscal year, I acknowledge, is set out not in the budget but in the public accounts, which are a retrospective look at what happened, versus a budget document that looks forward and seeks to anticipate what will happen. In the case, however, of a budget which seeks to achieve certain objectives — in our case, nothing more complicated than a balanced status and a modest surplus — the failure to achieve the revenues from a transaction like this can have very significant consequences.

I should point this out. In a legal framework such as we have, where the province is obliged by law to balance the budget, those consequences can be profound in the sense that the government will then be in a position of having to explain why it is that the legal requirements of the budgeting process have not been met.

So I hope the member will appreciate…. I haven't tried to minimize some of the issues that arise or minimize some of the risks associated, but budgeting being what it is — the attempt to project as accurately as possible what will happen in the year ahead — there are risks, and we try to minimize those risks.

M. Farnworth: I think that's actually a good point in our discussion to actually shift to some of those forecasts on the expenditure side and their impact on the budget. As the minister has stated, the government puts out the three-year forecast in terms of what their expenditure projections are. To use a term the minister likes to employ from time to time…. I don't mean to be mischievous with my comments, but the government will stand up and say: "Here's why this budget is good, because we are spending X billions of dollars on health care over the next three years."
[ Page 399 ]

It's not how much you're spending this year. More often than not, the government's position is to say, in answer to a question the opposition poses: "We are spending $2.4 billion." That's what they like to say this year. Last year it was a different number, and it's based over a three-year projection plan. So last year, when the questions were asked, the government would be saying: "We are spending X billions of dollars, and what's the opposition so concerned about?"

Well, last year's financial projection in health care, for example, was 3.7 percent. That was arrived at by taking into account the key figures that impact the Health Ministry. The minister is a former Minister of Health and will understand that whether it's the demographics, health care, inflation, aging population, contract negotiations, the price of drugs, transfer payments from Ottawa, all of those things factor into the size of the health care budget. It is the biggest component of government spending.

But last year the decision was…. The budget said: "It needs 3.7 percent." This year's number is significantly lower than that at 2.6 percent and significantly lower than the historical average that has been spent over the last decade by this government.

The question that I have is: how does the minister achieve…? How did they arrive at this figure of 2.6 percent? What factors were taken into account in arriving at 2.6 percent, and when was it arrived at?

[1445]

Hon. M. de Jong: I was listening carefully to the member's preamble to the question. I turned to the deputy, and I said: "I don't think anything the member said in terms of the numbers and how the rate of growth has decreased was inaccurate, so I don't think that's an area of contention."

The rate of growth in the health care budget has dropped dramatically. I think in '05 to '08 it was in the area of 7 percent per year, and then, I think, 6 percent, and it has dropped since that time. I believe — and as a former Health Minister himself — there is widely held acceptance that health budgets in this country could not and cannot continue to rise at the rate they have historically, and that speaks to the overall ability of the taxpayer to fund those increases.

It might be a good time to point out that MSP premiums — I repeat this because it's surprising how many people don't know this — account for 12 percent, 11-point-something percent, of the health care budget. We'll check on that number, but it's in the 11 to 12 percent range, I believe.

There is an imperative around trying to reduce the rate at which the health care budget increases. I would say this as well. This is where there is the delightful political debate about what one group characterizes as cuts to the health care budget and what I would characterize as something very different, because in very real terms, the health care budget continues to go up. Because of its size, even a 2.6 percent increase represents a significant amount of money, billions of dollars, but it is clearly, under this fiscal plan, not increasing at the rate that it historically did.

The essence of the question is: how to accomplish that? It's tough, because it means asking agencies to look at different ways to do things, occasionally asking them to stop doing things that they are doing — administrative savings, drug costs.

[1450]

The member has been involved in debates in the chamber. We endeavoured to bring drug costs down in British Columbia through a negotiated process that bluntly failed and led to legislation being introduced. The savings that were agreed upon between the parties to be achieved weren't. When the government…. When I became satisfied that the prospects for realizing those savings didn't exist, we legislated à la the province of Ontario.

We are looking at other areas. Laboratory fees in British Columbia are higher on average than elsewhere in the country on a per-capita, per-transaction basis. We think there are savings to be realized there. That is going to require discussions with physicians and those stakeholders who are involved in the provision of that service. But again, that is how we have endeavoured to find the opportunities necessary to bend the cost curve down.

The last thing I'll say in answering the member's question is that we have, in examining and looking for those opportunities, endeavoured to recognize the pressure that front-line delivery agencies are facing, and by that I mean the health authorities. In the midst of his question the member pointed out that in the budget introduced in 2012 there was an allocation over three years provided to health authorities that is different in this budget.

What we have, though, within the Health Ministry, sought to ensure is that the allocations to the health authorities have not changed, on the basis that they represent the agency responsible for the front-line delivery of services.

The last thing I'll say is this. I won't ask the member to endorse this on the record, but you can't ever spend enough in health care. There will always be a demand for more, such that the pressure on other governmental agencies and other services that the state seeks to provide to people is constant. It is impacting on those other agencies and those other services that people expect from government.

The imperative, in my view, to address the overall increases and manage the overall increases in the health care budget emanates both from the need to protect the taxpayer from spiralling costs and also to provide citizens who are depending on other services delivered by government from the assault on their capabilities that spiralling health care expenditures represent. Those are the things that we're trying to manage.
[ Page 400 ]

M. Farnworth: There are a few points I want to respond to in the minister's answer.

The first one I'll touch on: you could always spend all the money you want in health care. No one is going to disagree with that. The question, though, is the budgetary expenditure that has taken place. How is it arrived at? How is it determined? How do you go, in a three-year fiscal plan…?

Not back in '05 and '06, which were different sets of circumstances, but we are now here seven, eight years later in different circumstances. But in '09 the budget had a very small increase — I think about 0.8 percent was the actual increase — and the result was that after the election there were significant cuts that took place.

I may not be completely accurate on the point, but the difference between the year preceding, in '08, and then the '09 election was significant. The result was that after '09 there were cuts in health care in British Columbia.

Again, we have gone through an election where in 2012 the government said that in 2013 we will be looking at a 3.7 percent increase. Instead, they come up with 2.6 percent.

[1455]

The question I want to know is: how is that percentage determined? Was it determined on the basis of a number we are trying to achieve in the overall budget? We've got a deficit that we want to meet, and we've got to take out a number to get a balanced budget that you want to table, which is going to mean Health is going to get 2.6. Whatever the pressures are, that's what they've got to get and that's what we're going to make work.

Or was there a series of areas where we know that we are going to remove services that are going to help us bend that cost curve down? The argument about bending a cost curve down in Health is not new. It's something that every government in this country is dealing with. The question is: how is it being done? It's not something you're doing on an ad hoc basis year by year and deciding: "We'll do it now."

That's why the government has three-year plans — so you can have some sort of expectation of what is happening. The question still is there. Why last year at 3.7 and this year, 2.6?

I don't want to get into Health estimates debate, which we could very easily do. But particularly, the minister knows that the debate in health care spending has been moving the system from an acute care system to a chronic disease management system and the requirement for key investments to be made in that in order for that transition to take place. That's all I will say on that. I know that the minister is aware of that.

It still comes back to that question. At what point was the decision made to go to 2.6 percent, and how was it achieved? Did the minister have a look at the impact of that kind of bending of the cost curve, as he likes to use, on services that people are depending on in this province?

Hon. M. de Jong: I don't think the member either meant to or did in fact suggest this, but I do want to emphasize one thing as it relates to the fiscal plan and the reference to past circumstances where the election cycle interfered with the budgeting cycle.

It is simply…. I hope that the member will agree with this. There has been no change between the February budget and this document. I didn't think he suggested that or meant to suggest it. The rate of growth and the overall expenditure remain the same.

How does one arrive at the number? I wouldn't want to suggest to the member that I or the ministry didn't begin with the proposition or the objective of trying to reduce further the rate of growth. That clearly was part of the objective.

I have referred to some of the areas where an analysis was done around the possibility of further savings, and that is factored into what is achievable.

[1500]

The decision to save the health authorities harmless is, by necessity, factored in because it reduces the opportunity to achieve additional savings in those areas.

The other thing that I would refer the member to — because it is something that we take into account in assessing the achievability of the target — is actually the public accounts themselves and the underspend.

Health. Because of the size of the budget — and the member knows this from the time he spent in that chair — even a very small percentage of underspend results in significant…. It's generally hundreds of millions of dollars.

One has to be careful about that because, at a certain point, ensuring the target is achievable…. One has to be careful that that is so. But the comparison between the growth in the budgeted amounts and the growth in the actual expenditures is an important consideration, I would submit, in determining the achievability of the targets that have been set out in the budget. All of those are factors that have been taken into account.

M. Farnworth: I appreciate the minister's comments around further savings and future savings. There's a flip side to that coin, which is further pressures and future pressures, which can very easily and very quickly offset the savings side.

Right now there are two significant cost-pressure items on the budget. One is the physician master agreement, and the other is the contract signed with the nurses. Again, it comes back to: the government is aware of those commitments, of those cost pressures, when in '12 they are saying that we need 3.7 percent in fiscal year '13-14 to meet the commitments, to meet the service levels in the province of British Columbia.

So how did the government intend to meet those pressures within this framework when they know that they're again at 3.7 percent and now are saying: "No, no, no. We can do this all within 2.6 percent"?
[ Page 401 ]

Hon. M. de Jong: Well, the member correctly refers to one of the areas that are a pressure. I will say this. I'll refine the description of the pressure a little bit.

The physician master agreement that is in place now is achievable, accountable, within the budget. The two-year reopener that kicks in — and the negotiations around that — next year represents a pressure, and one that will have to be managed. It will influence the nature of the discussions that take place. I am certain that they will be, as always, interesting and passionate discussions.

[1505]

The medical profession, as I have learned, is a complex entity, where the interests and approaches of the various component parts are not always directly aligned with one another. I guess that's a long-winded way of saying that there's a finite pie, and everyone wants their piece.

There are two dimensions to the negotiation — the one that says, "How big are you going to grow the pie?" and the other one that says: "How much bigger is my piece of the pie going to be?" Both dimensions influence the discussion that takes place, or the dynamic that exists with respect to the negotiation. I expect that'll be the case going forward next year.

Just to the point, though, that is related to this that we were talking to earlier. If we examine the increase of, for example, the 2012 budget and compare it between the budgeted amount and what was actually spent in the fiscal year, year-over-year, because of the underspend, the increase is actually considerably less. Then it is not 3.7. It is actually 2-point-something. I don't have it here, but it is 2-point-something as opposed to 3-point-something.

I think it is entirely legitimate for the member, as part of a budgeting discussion and budget exercise, to pose the question: in the area of public policy and public expenditure that engulfs the largest portion of the budget, how confident can you be, and on what basis are you saying this is achievable?

I've tried to offer a description of the considerations that have gone into arriving at the number and also highlighted the fact that given the record of underspend, we believe that the targets are achievable. I will not pretend, particularly within the ministry and centralized operations, that it won't create pressure and that there won't be an ongoing requirement to find innovative ways to address the pressure. That is clearly going to remain a feature of public health care and public health care spending not just in British Columbia but across Canada.

M. Farnworth: I thank the minister for his answer.

Well, the physicians…. At the end of the day, what the minister is saying is that those negotiations with physicians are going to be taking place but there's not anticipation of additional moneys within this budget to meet that. That is going to be a significant pressure that's going to have to be managed very carefully if this budget is to meet its targets. The minister and the Minister of Health, I think, have quite the job ahead of them.

The other part of the equation, or the other pressure I mentioned, was the nurses. Again, the contract that was signed commits the government to making significant investments in hiring. I think it's 2,150. Again, within the development of the health budget in the Ministry of Finance, how is that factored into their calculations of achieving this year's budget?

Hon. M. de Jong: Again, an accurate description of a real pressure — a real requirement but also a real pressure. It's one of the reasons that led to the decision within the internal budget to maintain the transfers to health authorities at the levels that had been communicated to the health authorities as part of the 2012 budget and to not visit reductions upon them.

[1510]

That doesn't mean it'll be easy for the health authorities either. There is a desire to deploy nurses and nurse practitioners in ways that historically haven't taken place, but there are costs associated with doing so. That's why we've maintained the increases in the health authority budgets that were included in the fiscal plan in 2012.

M. Farnworth: So if I understand…. The minister, I'm sure, will correct me if I'm wrong. He's saying that the health authorities are going to get the same allocation and they're doing the same level of services that they have been doing. "But by the way, you're going to have to absorb the cost of the nurses' contract within your existing budget." Is that the approach the minister is taking?

Hon. M. de Jong: Well, they are responsible — the health authorities, that is — for the bulk of the front-line services to patients. That is why funding increases for the health authorities are being maintained as per Budget 2012. For '13-14 and '14-15, I believe the average increases will be 4.3 percent and 2.9 percent, respectively, to the health authorities.

So yes, from within those increased allocations, they will be obliged to find the means to achieve on the targets that have been set for the deployment of additional nurses and nurse practitioners.

M. Farnworth: I think the health authorities are going to have an awful lot of pressures to deal with. I mean, the minister has talked about savings, but what we're seeing is an awful lot of pressures being added onto the system.

I'd like to ask about another area of pressure that we know is coming, and that is transfer payments. There has been a reduction. The minister in his budget speech stated a reduction in transfer payments, which impacts on the revenue side, on health care. I'd like to know: are those separate from the reduction in the Canada health transfers that, when he was minister, he would have been familiar with? These other transfer payments the minister
[ Page 402 ]
talked about — are they separate from those reductions coming in health?

Hon. M. de Jong: A couple of things. I want to make sure that I properly understood the question. If I haven't, the member will, I'm sure, correct me.

The budget, when it was delivered in February, built into it the data, the numbers, we had relating to health transfers from the federal government. There is an adjustment that has been made relating to updated census numbers, but I think that is a different thing. I'm not sure that's what the member referred to in the question.

[1515]

We have continued to emphasize to the federal government our concern that reliance on a strict per-capita methodology for the calculation of provincial transfers is problematic and visits negatively in a disproportionate way on jurisdictions with a much higher seniors population. I hope somewhere in there I have addressed part of what the member was inquiring about.

M. Farnworth: No, and again, it's another pressure on the budget. In the case of the general transfers, it's on the global budget. On the health side of things, it impacts directly on the health budget. But in terms of the overall budget, the changes…. The minister has said that those are factored into this year's budget document, if I'm not mistaken. I see him nodding. Can he give me some indication as to the size of the impact that has to be factored into the budget?

Hon. M. de Jong: I'll try and answer on the basis of what I think the member is interested in. Hopefully, this will be helpful to him.

The federal government have indicated that they are going to do two things, and one influences the size of the pie. They've indicated that the usual 6 percent increases in the size, the global amount, of the federal health transfer will not be maintained. It will shift to a different formula, and the global amount of the transfer won't be increasing 6 percent year over year. That's one thing they've done.

They've also said that they are going to change the methodology around how the pie is divvied up amongst the provinces. That is where we have focused our concern, because we believe the impact of that in the first fiscal year when it happens, '14-15, is for us in the neighbourhood of $200 million to $250 million.

[1520]

We have addressed that. We've budgeted on the basis that we experience that impact. It doesn't mean we agree with it. We continue to highlight, for the federal government, why we think that is unfair and unwise on the part of the federal government to make that shift.

I can't tell the member thus far that we have enjoyed success in securing a different response from the federal government, but that is the impact that we have calculated on the decision that the federal government has made to alter the manner in which the great Canadian Health Transfer pie is divvied up.

M. Farnworth: In this particular case not only is there an impact on revenue to the province; it is another cost pressure that has to be absorbed within the….

Interjection.

M. Farnworth: Yeah, exactly — because there is less revenue. But the bottom line is that we have to absorb it. That's going to put additional pressures on a system and make challenges for the budget in terms of….

Interjection.

M. Farnworth: Yeah, but again, it comes back to…. We were aware last year when we had a number. This year we have a number.

I know the minister likes to refer to the underspend. The point I'm getting to now is that underspend is under an awful lot of pressure from an awful lot of different sources.

The reality is, you know, the minister may feel very confident that he can control costs in a particular area, but with so many balls up in the air, it doesn't take many to fall before all of a sudden your targets are in big trouble.

I'm mindful of the time that we've got. I'd like to, on the impact side — this is not related to health — ask a few questions about another area where federal government decisions impact on the province.

We have seen it in health. But federal legislation, particularly in areas where the federal government is quite keen to pass legislation, when they don't have to worry or concern themselves with the financial impact of their legislation, is something that they have discovered, I think, with increasing frequency over the last number of years.

Can the minister tell us: has the ministry been doing any in-depth studies on the financial impact of federal government legislative changes as to how they impact on British Columbia? The obvious one is on the crime legislation, for example. That's an example. There are other areas as well, where the government and the feds have passed legislation, and they impact directly on the provinces and in terms of how that's being dealt with and what studies are being done.

Hon. M. de Jong: To the member, he correctly points out that in our great Canadian Confederation family there is an interrelationship between what various levels of government decide and how it impacts one on the other.

[1525]

We do try to remain vigilant and analyze. The member mentioned one relating to public safety initiatives that the federal government has taken. I have to say — in fairness, I remember having this discussion at a federal-provincial meeting — in large measure, many of them are initiatives that the provinces themselves had asked for. So as contrary as this might seem to the great Canadian tradition, one needs to be fair to the federal government when they have responded.

Here's an area, though, that we have communicated directly with the federal government and that I think the member himself has alerted folks to. That is the negotiations that are taking place for a free trade agreement with Europe — which, by the way, I and the government are supportive of.

We have alerted the federal government that in the give-and-take that comprise those sorts of negotiations, if one of the gives relates to rules around intellectual property and patent protection and it operates in a way to increase in a significant way the cost of pharmaceutical products to the provinces, we will be anxious to engage in a discussion about how the federal government, having acted pursuant to its constitutional authority on trade and commerce, is going to compensate the provinces for the negative fiscal impact that results from that.

Now, where that goes and how that materializes…. I know the federal government at one time was anxious to see these negotiations resolved by the fall. I have not received an update on whether or not that is still feasible or whether they have fallen behind. But that is an area that we are tracking fairly closely and have provided notice to the federal government of our concern.

M. Farnworth: I just want to deal with that one for a moment. So then, has the ministry done an analysis of the potential impact to the province in terms of dollar figures that they are potentially looking at, from the discussions they've had with the federal government?

Hon. M. de Jong: In the example we are dealing with, around pharmaceutical products and intellectual property and patent protection, I know that the Health Ministry, at the time this came up, had conducted some rudimentary analysis. The challenge is that without knowing the end point or where the negotiations end up, it's difficult to know with certainty what the impact will be.

The essence of the concern, however, as I think the member appreciates, is that if it takes longer for a generic drug product to be available on the market, the province will be obliged to provide funding for higher-cost, brand-name products for a longer period of time, and that will have a cost analysis.

The member was perhaps, over the last number of months or years, approached by industry folks who occupy both sides of that argument. The analysis of what that impact will be literally varies from zero to $1 billion, depending on which side of the argument, the industry side of the argument, people are on.

[1530]

I think it is fair to say that there is an impact there, which is why we put the federal government on notice. But I don't want to suggest to the member that there is a…. At this point, in the absence of knowing what the agreement with Europe is, I don't want to suggest that there is a terribly reliable figure that the Health Ministry, or us for that matter, has arrived at.

M. Farnworth: A couple of questions here. One, if the ministry does get more concrete information, if they would be able to make that available, that would be appreciated.

The second, though, is back to the more domestic front. It is the impact of federal legislation on current budgeting procedures. For example, the public safety legislation. As the minister stated, it contained a lot of provisions that provinces asked for and that we on both sides of this House were supportive of — but, at the same time, often bundled with other legislation that was added at federal desires, which again still has an impact on the provinces.

My question is: do we have a much better analysis of the impact of that legislation and its costs that it's put upon the system here in British Columbia? How is that factored into our budget process, and can he give me a number?

Hon. M. de Jong: Two dimensions to this, and they are, I think, dealt with slightly differently. In circumstances like the example the hon. member mentioned, where policy choices made by the federal government will or could possibly impact on expenditures by the provincial Crown — and I think that's the example in the case of public safety — what we rely upon is an analysis by the line ministry to articulate what that creates in terms of cost pressures or what they anticipate it may create in terms of cost pressures.

The Finance Ministry…. I don't like doing this when the questions are reasonable, but I'm not in the best position, individually, to talk about that, where departmentally, they have done the analysis on public policy choices Ottawa makes and how that impacts on expenditures. The Finance Ministry, though, would certainly be at the forefront in analyzing revenue transfer changes that derive from public policy choices in Ottawa.

[1535]

In the case of a taxation change, an agricultural program and decisions that the federal government makes that impact on the flow of revenue from Ottawa, the Finance Ministry would be at the forefront analyzing and determining what that is.

I'm probably less well equipped to provide the member with a detailed analysis of what the impact of a piece
[ Page 404 ]
of federal legislation has in generating additional costs in an individual department of the provincial government. That's a differentiation I would make.

M. Farnworth: I understand what the member is saying. Again, I'm not trying to stray into the estimates of another ministry but rather to get an understanding. Even within the ministry — let's say it is Public Safety or Transportation, for example — they have a budget which…. You know, you go through the Treasury Board process, which you're the key part of, and they're providing a level of service or services, public policy programs that government has decided they believe are important and need to be funded.

Then there's legislative change, public policy change in Ottawa, which puts in place additional costs on that particular ministry's ability to meet the priorities that government has set here in the province of British Columbia. So it has one of two choices — either to absorb that internally and cut existing programs, to absorb the costs to provide the functions that those costs are impacting on. And again, that's something they may choose to do.

But at some point they're saying to the Minister of Finance, "Look, we can't continue to do this. This is having an impact on the job that we're supposed to be doing, the services that the province has identified as priorities," and therefore, they're coming to you and saying: "We've got cost pressures, and we're not able to absorb them anymore. Therefore, we either need a lift or government has got to understand that we aren't going to be able to provide the same level of service."

In that sense, do you have the ability to say: "Look, you know, public policy changes have resulted in X number of pressures overall on government that we've had to absorb"?

[1540]

Hon. M. de Jong: I apologize to committee for the delay. We're trying to identify….

There is a program that I think represents an example of what the member is driving at here and that I think is an accurate example of the concern that he expressed. I'm just not able to refer to it by its proper name just yet. But where the federal government has altered the manner in which the program will be made available and delivered, and gone from a particular funding model to one that requires matching funding from the province, that clearly has the potential to have an impact.

I'm happy to identify that in a little more detail than I….

This is the labour market development agreement with the federal government, and it speaks to some of the changes that they are making in that program that have an impact. In some cases it may alter the manner in which those programs are delivered.

When the federal government has made that particular change, it requires us…. We rely upon the line ministry involved to do an analysis of what that impact is, to what extent it does create a pressure, and then we have to ascertain how that pressure is going to be met. So I think that might be an example — I hope that's an example — of the kind of scenario that the member was describing.

M. Farnworth: Yeah, that's a useful example. I think it helps to illustrate the point. That is, we here in British Columbia…. The government presents a budget each year to deliver services that British Columbians rely on. Key areas that matter to people, whether it's social services, education, health — that's what they rely on.

The budget is presented with a set of assumptions, forecasts, in terms of revenue and growth. All those things come together. At the same time, Ottawa makes public policy decisions which can impact on us, and they've done that in the last few years. There's been much public discussion around the full nature of that impact from a fiscal point of view.

So my concern is to ensure that the Ministry of Finance is taking a good look at those impacts and what those impacts do in terms of our budget, in terms of us being able to deliver on the priorities that we determine, here in British Columbia, are important — particularly when there has been, in the public debate, a considerable amount of discussion around the exact amount, the dollar figure, that those impacts have on us.

I think one of the things that would be useful is for the ministry to be able to undertake some analysis in that area that would inform this House of some of those cost pressures that face government but, just as importantly, would inform the public on those impacts. I think that that would contribute to a better understanding of some of the fiscal issues that face us here in B.C.

I would ask the minister to take that into consideration, because I think it's important. I know we don't have a lot of time, so if the minister could make a response to that, I'd appreciate that.

[1545]

Hon. M. de Jong: I think it's a legitimate issue. It clearly has an impact on the calculation and the analysis that goes into making the budget.

At the risk of presenting a ready-made target for the hon. member, I should probably repeat in here what I have said elsewhere, for his criticism or comment. My and the government's oft-articulated submission to the federal government goes like this: "We are working hard to achieve a balanced budget in British Columbia. That requires us to make choices that some people agree with and many people disagree with.

"We actually expect and are supportive of you" — the federal government — "taking the steps necessary to bring the national budget into balance once again and understand that there are tough choices to be made there.
[ Page 405 ]
But we believe Canada is better off, stronger, more resilient when we have a balanced budget nationally.

"Our vigilance and much of our attention in working with you to try to help the country and the national government to achieve that objective is directed at ensuring that the pain associated with achieving that target is shared equitably across the country. That's why we have made submissions around things like new methodologies for the health transfer and where we think that perhaps that principle of equity isn't quite being achieved."

I think it's fair ball for me to disclose to the member that I have not, and the government has not, been admonishing the federal government to turn on the spending tap on the operations side in what we might call an irresponsible way. We have been broadly supportive of their efforts and the federal minister's efforts to achieve balance, as we have here, but recognize the tough decisions that have to be made and advocate strongly that the impacts of those decisions need to be visited equally and equitably upon all jurisdictions in Canada. We'll continue to be vigilant in that respect.

M. Farnworth: We could get into quite a discussion on this. Unfortunately, time is limited. I wouldn't be surprised if we have a more fulsome discussion in the spring session, when there's more time for our estimates process than we've got right now.

Interjection.

M. Farnworth: That will be in the spring. Even if there's a fall session, it would be in the spring, unfortunately.

Interjection.

M. Farnworth: Exactly — unless we do another budget.

Somehow, Members, I don't think anyone wants to do another budget.

That actually just speaks to, I think, very quickly, the comment on issues around budgeting and electoral dates, but again, that is for another time and another place.

Within the budget we've talked a bit about the forecasts. We've talked a bit about some of the expenditures and the government's rationale around why expenditures are the way they are. There are another couple of areas that are also key. Revenues is clearly one of those. Debt is another area. I'd like to touch on those.

[1550]

The government is claiming…. A key part of the government's pre-election agenda was that we were going to be debt-free. Yet when we look at the financial documents, debt is projected to be increasing from about $57 billion at the beginning of this fiscal to almost $70 billion by the end of the fiscal plan. Yet all we have been hearing about is debt-free B.C. So how will $70 billion of debt be eliminated in the coming years?

Hon. M. de Jong: I'm glad we're having the discussion, and we can have it on the basis of total provincial debt or taxpayer-supported debt.

The numbers are clear. They are set out on page 128 of the document. In the years covered by the fiscal plan, the debt goes up. There's no question about that. It goes up with respect to the capital expenditures that the government is embarking upon. I think we have an $18.6 billion capital program — hospitals, schools, roads. We are building. In fact, we are building, arguably, at an unprecedented rate.

We are very cognizant of the measure that most economists seem to gravitate towards in assessing the health of our budget from a debt point of view, and that is the debt-to-GDP ratio, which at one point, four or five or six years ago, dropped as low as 13 percent. I think at one point in the late '90s it got up to about 22 or 23 percent and dropped as low as 13 percent.

A purposeful decision was made in the aftermath of the '08 circumstance, the recession, to accelerate spending. Happily, because the debt had been paid down during the years with significant surpluses, we had on that basis a lot more room to manoeuvre than most other jurisdictions, and we took advantage of that room. The member will know that in the budget we now see the debt-to-GDP in the fiscal plan top out at 18.5 percent, which is slightly higher than the 18.3 percent we projected in February.

The rating agencies are watching us, which is another reason we're watching it, because we do covet the triple-A credit rating that we earned through the last 12 years. It saves taxpayers tens of millions of dollars in debt-servicing costs that can be devoted to programming, to the delivery of services.

The political criticism and some of the other commentary seems to be: "How can you talk about debt reduction and debt elimination in the context of a fiscal plan that shows debt going up, and isn't that fundamentally inconsistent?" Well, it might be on the face of it, but I hope the member will accept that we have always linked that discussion to the development of this unique economic opportunity that we are confronted by in LNG.

[1555]

I will say again in this House very clearly that the significant revenues that we believe the public, via the Crown and government, will derive from the export of liquefied natural gas do not accrue or begin to flow, if we take advantage of the opportunity and move forward, for another seven or eight years. So they are not contained or projected or included in the budget, the fiscal plan before us.

Our moving our debt-to-GDP ratio down in the short term is dependent upon our conventional economy and our conventional expenditure control and discipline and, for that reason, will occur at a much slower rate than in years where significant additional revenues begin to flow via LNG.
[ Page 406 ]

I will say this. The LNG opportunity is real not because I say so or someone on the government bench says so, but because companies that operate on a worldwide basis are here on the verge of making investment decisions worth tens of millions of dollars. When companies like Shell and Petronas expend the effort…. None of this is a guarantee, but it does render it, in my view, a very real opportunity that is not mythical and not decades away.

The infrastructure that will be required to facilitate this, we hope, will begin being constructed next year. We haven't, by the way, in the fiscal plan endeavoured to quantify any of the incremental fiscal benefits that flow from that activity either. Not counting your chickens is pretty sound advice in scenarios like the situations like this.

But to have set the objective as part of the development of a liquefied natural gas industry…. To set the objective openly and candidly at the front end — to say that if we can make this happen, if we can be in this race and succeed and make it happen, as a first priority we will devote these incremental revenues to the payment down of debt — I think is legitimate.

Does it show up in a three-year fiscal plan? No, it does not. No, it does not. In fact, as the member has pointed out, over the course of the three-year fiscal plan, the debt grows. It does so at rates that are the envy of most jurisdictions in Canada. I was in Toronto. The member may appreciate that the Ontario Finance Minister would love to be dealing with the scenario we have before us, as would most Finance Ministers in the country.

So the observation is correct. The debt in this three-year fiscal plan increases. I would submit that it increases at rates that are reasonable and manageable, although the fiscal plan demands, and we will ensure, that the debt-to-GDP ratio begins coming down after next year.

The last thing I'll say is with a measure of pride. Although our budgeted debt-to-GDP ratios are revealed in this, I can't think of a year in the last five or maybe beyond where we haven't outperformed that, where the debt-to-GDP has not been lower than what is set out in the budget. So if that record is maintained, then the debt-to-GDP ratio for the fiscal year, when it caps, will be less than 18.5 percent. But that will require, again, vigilance and discipline on our part.

M. Farnworth: I thank the minister for his comments.

[1600]

I guess the issue is that the budget and, in this case, the debt projections of the budget take place within a context of the throne speech. They take place within the context of an election campaign. They take place within the context of the Premier's comments, which are that we will be debt-free within 15 years, at a time when overall debt is at $70 billion, according to the documents that are before us.

But the minister is quite correct in terms of debt-to-GDP. It has been down as low as 13 percent, and it has been as high as 21 percent going back over the last 20 years. That's not new in this province. Even within that range, British Columbia's debt-to-GDP compared to other provinces has been about the second lowest in the country. I think it may be a little higher right now. I think it's No. 3.

But be that as it may, whether it's been at 21 or 13 percent, the debt-to-GDP has been amongst the lowest of all of the provinces in Canada. That doesn't even include the federal government, which is significantly higher.

What it says is that this has been the path that we've been on, and the minister now talks about: "Oh. Okay. We have this opportunity with LNG that, on the basis of the fact that companies such as Shell or Petronas are coming here and investing significant amounts of money, we think that there's a windfall. There's an opportunity for British Columbia."

And there may well be. If we can make LNG work, hey, great. But to do it in the context of saying, "Okay. It will happen," which is the perception that is out there amongst the public in terms of, "This is it. We will be debt-free in 15 years…." I think that is problematic for the government in terms of expectations, because you're sitting with $70 billion of debt right now.

That's why when you say we've got a fiscal framework that's going out three years, and there will be balanced budgets in four years, well, that's 11 years at the end of this that we're going to be debt-free. But in the meantime we've been racking up debt each and every year.

There are a lot of questions around that. Statements that are made by the Premier. I'm going to come to the LNG point in a few minutes and some questions around LNG and what the government is doing from the Minister of Finance's perspective. Those discussions have a significant impact, I think, on the reality of what…. Not just towards the end or at the end of this fiscal plan, which the government has tabled, but the fact that they have tied so much of that future down the road with this budget that we have before us today — I think that has the potential to be significantly problematic.

The analysis, for example, that's been done in terms of us being debt-free is based, I understand, on two consultants' reports. Or has the ministry done further analysis on how we're going to get to be paying off the $70 billion of debt that we have at the current time?

Hon. M. de Jong: To the member, in fairness, the reports that the member is referring to, as I recall, purport to consider the potential, or estimate the potential benefits, from an active LNG sector in B.C.

I don't think they consider what government may do with the revenues and how that may or may not contribute to reducing or eliminating debt.

[1605]

Look, I get that in painting a picture of what the future could look like, the government exposes itself to the
[ Page 407 ]
criticism that begins with: "Well, that may be the canvas you're painting for the future, but I'm focusing on the canvas as it looks today that is significantly different."

That notwithstanding, I think it is entirely appropriate for the government, in a measured and reasonable way, to highlight to British Columbians what the result could be or what the impact and positive benefits could be from developing a new sector of the economy, one in which there is widespread interest and that would do much to accelerate economic opportunities in parts of the province where that is urgently, urgently needed.

So if the budget purported…. If we were here discussing a budget that was including revenues and including assumptions that were not tied or were premature, maybe, then I think the criticism would be well-founded. But as I have said many times, pointedly, this budget, looking out over three years, does not purport to rely upon additional revenues and additional benefits flowing from an industry that is only now in its infancy and beginning to establish itself.

Now, having said all of that — and again, I say this only because it helps me sort of consider time issues…. We can say: "Well, seven or eight years is a long time down the road." I just remember, as I look back, being at a restaurant at eight o'clock in the morning one day in 2003 and cheering wildly when the Olympics were awarded, and before we knew it, the Olympics were here. That was seven years.

Looking forward, the planning window seems extraordinarily long. Looking back, it seems an extraordinarily short period of time. To be asking British Columbians now — as the government intends to do, I should say to the member…. I don't think we've settled on the mechanism, but to be asking British Columbians now what to do with the revenues that we believe will materialize from a liquefied natural gas industry and how they might be allocated in terms of debt reduction, in terms of sharing with communities that are playing host to this development, that's an important discussion, one worth having.

The goal of reducing our debt, taking advantage of those incremental revenues and reducing our debt, I think is a legitimate one for the government to articulate in a responsible way that says: "Over time the objective is to reduce the debt, to use these revenues to reduce the debt. Here's the time frame, and here's how we think that might be achieved."

The objective of arriving at a day when British Columbians can boast debt-free status…. It's not going to be easy, but it is surely worth asking British Columbians to assess the degree to which they share the government's view that that is a worthwhile objective and one that justifies pursuing the opportunity that seems to be before us.

M. Farnworth: I think one of the issues has been the political investment made by this government around the issue of being debt-free. It is, as I said, very much tied up with this budget. It was part of the rhetoric of the throne speech. It's been part of the rhetoric around the budget and certainly on the part of the Premier — within 15 years, being debt-free.

[1610]

A nice goal. Hey, if we could be debt-free tomorrow, I'm sure all of us would like that — in our personal lives as well as the province and as well as the nation.

In order to get to that goal, there's a lot of work that has to be done at the current time, and a lot of it is predicated on resource prices and prices for a commodity which is not just unique to British Columbia. You know, the minister has talked about a lot of interest here in B.C. There's a lot of interest in an awful lot of jurisdictions. There's a lot of interest in Russia and in Australia — which have been in the LNG business for a long time — in Indonesia, in the Middle East, in the United States, which is where you're now seeing…. Where Middle Eastern gas used to be sold to the United States, it's now looking for markets at a cheaper price in parts of Europe and parts of Asia.

There's a tremendous amount of competition, and there's no guarantee. There's no certainty of what will come to fruition. But the government has decided this is a path they're going down. Fair enough. At the same time, there have been statements made by the Premier, which I would like to have…. Before we get into the details around some of the assumptions around LNG and the way in which the government intends to see these benefits flow to the province of British Columbia…. I would assume that that work is being done right now. I just want to….

The government said prior to the election that LNG revenue would pay off the debt for government, B.C. Hydro, B.C. Ferries and the Port Mann Bridge. Those are all different kinds of…. Those are all organizations and entities that have debt, but it's not the same debt.

My question is: when the government says that we're going to use this opportunity, these revenues, to pay off the debt of all of these entities, from government itself to Hydro, Ferries and the Port Mann, does that mean government has eliminated the distinction between the different types of public sector debt? There are some very significant differences between the different types of debt that each of those entities that I have talked about holds.

Hon. M. de Jong: If I understood the question correctly, I think my answer is fairly straightforward. At a time when we are talking about prioritizing well into the future, the priority would be taxpayer-supported debt first. None of this happens, obviously, overnight.

I wonder if I might also make these observations about the member's characterization of the opportunity that, if it comes to fruition, gives us the additional revenues by which to achieve these objectives. I think what the member was describing…. And I'll not quarrel with his description about some of the variables that are at play
[ Page 408 ]
here that influence the outcome. We're talking about the risk, talking about the fact that returns and success are fraught with risk associated with a whole bunch of different variables: price, demand, competition.

[R. Chouhan in the chair.]

I hear that observation a lot. I don't dispute it. But where does that risk accrue? It does not accrue to the Crown. It surely accrues to the private sector investors who are going to invest the money, who are even more attuned to assessing that risk, who stand to lose the most if they guess wrong.

[1615]

If the supply from Qatar suddenly accelerates, if the price drops precipitously earlier, my guess is — and I don't presume to be an expert on this — supply and demand. We've seen that with regular natural gas. As more supply comes on stream, as more supply of liquefied natural gas becomes available, presumably the price will drop. I'm not going to stand here and say I'm the expert on when that happens, how that happens, at what rate that happens. If there's a lesson from natural gas, it's that there are not many experts that can do that and stare into that crystal ball, that gas-filled crystal ball.

But in these circumstances, surely there is a measure of comfort that can be taken from the fact that it is agencies with an international presence that are prepared to invest significant billions of dollars which are at the front end and for that reason have the greatest stake in determining and rating what some of those risks are.

Our job, our priority, our responsibility, I would suggest to the member, is to negotiate or consult and ultimately arrive at a taxation regime that properly balances the absolute need for the owner of the resource, the people of British Columbia, to derive a fair return from it and the realization that unless the proponents who purport to make the investment secure a fair return themselves, it won't happen in the first place.

That balance, that sweet spot — that is very much at the heart of some of the work that will be taking place and that the member will have an interest in, in terms of ensuring that the owner of the resource is securing a fair return.

So much of the risk around this, the significant risk, accrues to the private sector that surely there is a measure of comfort to be taken in the fact that the government is not purporting to invest in the development of conversion infrastructure. That is something that the private sector will do.

M. Farnworth: I listened with interest to the minister's remarks, because I don't disagree in terms of the risk to the Crown from the financial perspective of investments in potential opportunities about LNG. There is no disagreement on that. The risk is being taken by the private sector.

The risk to the province is to the public in the sense that a government has gone out and said: "Here is this opportunity. We will be debt-free within 15 years — no debt on B.C. Hydro, no debt on B.C. Ferries, no debt on the Port Mann, no provincial sales tax."

You have dangled a great deal in front of the public on an opportunity that may come to fruition. And if it doesn't come to fruition, it's not the financial…. You're quite correct. It's the private sector that has borne the risk, but it's the public that becomes cynical about government having dangled something in front of them that didn't come to fruition. That, I think, is something the government needs to take into account. People are much more receptive when they've got something absolutely concrete in front of them.

I understand why the government has done this. It's debt-free B.C., and this is where you want to be. But there are two sides to this coin. There is the financial coin, but there's also the message that the government is sending to the public of British Columbia. I think that's something that the minister needs to take into account when the government is talking about the issue and the opportunity that there is with LNG.

I want to go to the minister's comments, because it segues nicely into where I'd like to take the discussion, which is to the revenue framework, which is to the taxation framework. That's key, not just in terms of when this particular budget ends but in terms of where they said they wanted to go and in terms of the work that this budget encompasses.

[1620]

A simple question: what is the tax framework going to be for getting that money from the LNG industry?

Hon. M. de Jong: I'll come to the member's question. There's just one thing I wanted to observe. I understand, in part, the commentary that the member has presented around the discussion around debt reduction and debt-free status, but I would offer this.

There is, in my view, another reason it represents a legitimate articulation of a general direction of the government. It's this. There is another choice when talking about revenues from liquefied natural gas, and that is that they will be devoted entirely to programming.

To leave the debt as is…. I think we lurched to agreement on it. The debt-to-GDP ratio in British Columbia is presently and will, under the plan, be at comparatively low levels and favourable levels compared to other jurisdictions. In those circumstances, it seems to me that if the government had said nothing, the member would be entitled to say, or the members of committee would be able to say: "Well, you talk about this revenue. You haven't told us you're going to do anything about the debt. So where are you going to spend it? What are you going to do with it?"
[ Page 409 ]

Well, the government is signalling from a very early point that it has a bias with respect to the revenues that we believe may be realized. That is, firstly, to address the provincial debt situation. That is a statement of priority.

Others may have different priorities. Others may say they want to grow programming costs. Others may say those moneys should be directed to employees. We have laid out where our priority is, and people may criticize that.

The member has asked about the discussions around tax structure that are taking place. The first thing I would say…. Again, to emphasize — none of this is accounted for within a three-year fiscal plan. But in offering to the member some insight into where we believe, down the road, we will see incremental benefits and how they will be transmitted to government, much of that is through existing tax vehicles: royalty, corporate income tax, motor fuel tax, PST.

[1625]

Those are all taxation instruments that exist today and that, ultimately, would act as a conduit for the transference of revenue to the Crown from the establishment of new industry.

Beyond that, there are consultations taking place around ensuring that the owner of the resource, the people of British Columbia, share equitably and reasonably in the value represented between the price differential in North America and markets in Asia. Those consultations are taking place now. There isn't an answer, I'm afraid, for the committee today about what that looks like. But that is clearly an important discussion.

It will be an important decision. And it will be one, I'm sure, that the member, as Finance critic for the opposition — when we have arrived there and when it has been disclosed — will take a great deal of time to examine, critique, assess and make comment upon.

M. Farnworth: In the New York Times there's an article that the province was in discussions with a company on a tax framework.

An Hon. Member: Wall Street Journal.

M. Farnworth: In the Wall Street Journal there's an article that the government is in discussions with a company on a tax framework. Could the minister say who that company is?

Hon. M. de Jong: The companies that are involved in the consortia at the leading edge and closest to investment decisions…. Shell and British Gas are two that come to mind.

I will say this. Nothing that the member has said…. We are sensitive about this differentiation. The member, as a former minister of the Crown, will perhaps appreciate it. These are consultations. And by the way, the Natural Gas Ministry is very much involved in this, and the Finance Ministry participates from a taxation point of view. But these are consultations.

The Crown guards its jurisdiction to make taxation decisions zealously. It is not a negotiation, per se. We are clearly interested in what these agencies have to say and what information they can bring to bear. But at the end of the day, decisions around the taxation regime that will be in place in British Columbia will be made by the executive council and by the Ministry of Finance.

[1630]

M. Farnworth: I thank the minister for his answer. I think it's important to make a couple of points. Until you've got the taxation agreements into place, you're not going to get final decisions on investment. I see the minister nodding his head. He has indicated that he's in discussions with the companies that are closest to making those decisions. So does the minister have a timeline in mind as to when he expects these negotiations or this framework to be completed?

Hon. M. de Jong: The part about this that we feel as if we have specific control over is the part that the member asked about, which is the determination of the taxation structure. We are hopeful that that will be resolved at least by the end of calendar year.

M. Farnworth: That's important. Because it was the Premier, talking with the Wall Street Journal on the 14th of June — if the minister is looking for the article…. The Premier states that this negotiation will be a model for other agreements. Therefore, I think it's important, if this is in fact the case and the minister is saying the timeline is the end of the calendar year, that we actually get the agreement right and that it's in the best interests of the province of British Columbia. I think that that would go without saying.

The minister, though…. The work that's being done has been done by a couple of consultants. Part of their expertise has been around what Australia has done and has been doing. The government has acknowledged — and it's no secret — that B.C. is in competition with Australia. We see that they are one of the main competitors in the field of LNG, that they have considerable expertise and have been ahead of us for quite some time.

But there, the way in which their agreements are structured, they have what's known as a petroleum resource rent tax of 40 percent on profits. That's a federal tax in Australia. So while you're having negotiations with companies that are interested, have you been in consultation with the federal government on how the proposed LNG revenue framework will interact with federal taxation policies?

[1635]

Hon. M. de Jong: A couple of things. I know the member was not trying to do it purposely, but I do want to emphasize this. There are two dimensions to this, it seems to me. There are the consultations that occur around the development of a taxation structure that will be of general application. So that will be the taxation structure for this industry, and there are certainly consultations occurring around that.

There has been contact between the province and the federal government. I'm hesitant to try to draw parallels between Canada, British Columbia and Australia and whatever state might have been involved there. I don't know who owns the resource in Australia. I don't know if the federal Crown owns the resource there or if it's owned by the state. I just don't know. The measure of interaction or the degree of interaction may be different.

The second dimension, though, would be the negotiation. The negotiation — to the extent, I suppose, that there is one between individual proponents — is different than the consultation that is being conducted to establish a general taxation structure that would apply to all LNG activity in British Columbia.

M. Farnworth: There will clearly be, I think, considerably more discussion on this particular issue. One of the things — I'd like to make the comment at this particular point — is that the previous Finance Minister indicated that the province was going to be looking at the Australian model as a model here for British Columbia.

What I'm hearing now from the minister is that that may not, in fact, be the case, that the ministry needs to determine, exactly, the nature of, I guess, the structure in Australia in terms of resource ownership. It strikes me that there are some significant issues that need to be worked out with Ottawa that have yet to be worked out.

At this point I'd like to take a break from this issue and to allow my colleague from Burnaby–Deer Lake, who has a few questions, before her colleague from Vancouver-Hastings will take over and take us to about quarter to.

K. Corrigan: I wanted to request some information about P3 payments. What I'm looking for is something similar to what I received about three years ago from a previous Finance Minister. I will describe it, try to be as clear as I can. Perhaps the best way to describe it is the language that was used by Minister Hansen, as he was, in his response.

What I asked for in estimates was…. He described it as the publication of the nominal estimated cost comparisons for the public and private options for…. Then I listed a number of P3 projects.

What I'm looking for…. The way I described it when I was asking for it was that I looked for the nominal annualized cash flows for those projects — the comparison between, for each year, for the public sector comparators; as opposed to the payments under the P3.

What I got back was a list of, I think it was, eight projects. I got year 1, year 2, year 3, public sector comparator; year 1, year 2, year 3, the nominal costs, not discounted — the figures that would have actually have been used, that were discounted down to net-present-value calculation.

I am very happy to provide you, if you would like, what it was that I got last time, in 2010. It might help you out, in being really clear about what it is that I want. But also what I would like…. I can go through the names of the various projects that I am talking about.

[1640]

I would like that list, and I would also like not just the total payments but also how the payments are broken out by functions — by capital costs, operating costs, risk adjustment or the various components.

In addition, I had those eight projects. There have been a few years since then, and there may have been changes in terms of the actual costs that were with the public-private partnership. I would appreciate getting the updated for the projects that we already received.

If you don't mind, I'm going to just list some other projects that either have been completed or are in procurement at this point, and make a request for similar information for those projects.

Now, because it's the Ministry of Finance…. I know that not all of these projects will have been under the control of the Ministry of Finance. I would assume that all of the…. Last time all the projects where Partnerships B.C. had been involved were the ones that we received back, so I am going to go through the ones from Partnerships B.C., which is a solely owned subsidiary of the Ministry of Finance. I'm going to go through the list.

So if it's all right, I know you can look back at Hansard later, but maybe I'll just list it now. Then I'm seeking a commitment that I can get that information.

The ones we already received were the Surrey out-patient, the Kicking Horse Canyon, the Fort St. John, the Royal Jubilee tower, the Prince George cancer centre, the Kelowna and Vernon hospitals, Abbotsford Hospital, and Britannia mine. If we could get that again, just to make sure that the numbers are the same, that would be great.

Partnerships B.C. has also written value-for-money reports about projects that are in construction. I'm assuming that there will be value-for-money reports, and that because of the requirements of the capital asset management framework, there will be the public sector comparator versus the P3 — that those annualized cash flows will have been estimated in each of these. It's all making sense, I'm sure.

They are the Evergreen line, the SRO renewal initiative, the South Fraser perimeter road, the Surrey Memorial Hospital redevelopment and expansion — the emergency department and critical care tower. I'm happy to write these out, as well, if there's any confusion.

The Port Mann/Highway 1 project, which has a value-for-money report. The Lakes District Hospital and
[ Page 411 ]
Health Centre replacement project, the Oak Bay High School replacement project, the wood innovation and design centre and the Surrey Pretrial Services Centre.

Now, some have been finished that we haven't received before, either because we haven't asked for it or didn't receive it. I'll just mention these ones as well.

The Canada Line, the Charles Jago Northern Sport Centre, the Golden Ears Bridge, which may be a Ministry of Transportation project. This may not be a request to which the Ministry of Finance is responsive.

The Jim Pattison Outpatient Care and Surgery Centre, the Pitt River Bridge and Mary Hill interchange, the Sierra-Yoyo-Desan road and the William R. Bennett Bridge, which again may be one that was under the control of the Ministry of Transportation.

I would appreciate all of those. Again, what I'll do is pass on the responsive information that we had last time.

If you're confident that I don't need to write out the projects I've mentioned, I guess you can see it on Hansard. So what I would like, I guess, in terms of a question, is a commitment from the minister that the minister will provide that information. I'd particularly like a commitment, if possible, to receive it before this session ends.

[1645]

Hon. M. de Jong: To the member, first of all, it's helpful that she provide confirmation of the form of the material that she received three years ago from Minister Hansen. We'll do everything we can to replicate — for the eight projects and the additional projects, certainly — where the material exists. If it doesn't, we'll tell her that it doesn't. There may be a differentiation between the conventional 3P projects and a design-build project, but we'll certainly indicate where that is so and endeavour to get her as much of the information as quickly as possible.

I am advised that some of the information should be readily available and therefore quickly available. We'll do the best we can with respect to the balance.

S. Simpson: We'll be talking about Lottery Corporation issues. We'll just get focused right into the questions. It is my intention to move through these questions in the next hour that we have. I don't expect to get it all done, but I'll provide, then, in writing, questions that we don't get a chance to canvass here.

The first question is…. I've looked at the government's letters of expectations for the Crowns and for the B.C. Lottery Corporation. I have the one that was prepared by the minister's predecessor, who was then the Minister of Energy and Mines and had been the predecessor with responsibility for the Crown, for 2013-2014. Could the minister tell us if there are any material changes in the letter of expectations since he has taken responsibility for the ministry?

Hon. M. de Jong: May I introduce, to the committee and the hon. member, Michael Graydon and Douglas Scott, who are in the chamber with us.

If I understand the question correctly…. Has there been any material change? We're just checking. I don't believe, since the new cabinet was sworn in, that the shareholder's letter of expectations has been issued. Therefore, there wouldn't be a change. But maybe I misunderstood the question.

S. Simpson: I think it's fine. This is the letter. This letter from the minister's predecessor was dated December 19, 2012. It was signed off at that time by the chair of the corporation and by the minister. I'm just assuming that since the time of that letter being signed and what is incorporated in this letter, that nothing of significance has changed in the government's expectations in regard to that. Would that be fair?

Hon. M. de Jong: That, I believe, is a fair assessment.

[1650]

S. Simpson: The letter, and I guess the next thing I'd ask, talks about executive compensation. I'm wondering if the minister could provide — I don't need it here; I'm happy to get it in writing afterwards — information about any changes in executive compensation since January 1, 2012.

Hon. M. de Jong: I was just checking with officials. I wanted to make sure we have a number of disclosures that are already provided for. But I think the member was a little more exhaustive than perhaps they would include, so I think the answer is yes, and we can certainly do so, to use the member's colleagues' deadline, prior to the end of session.

S. Simpson: Could the minister tell us: is the Lottery Corporation going to be subject to the core review and to the process of core review? If so, how does that affect a corporation like the Lottery Corporation?

Hon. M. de Jong: I was observing that as a result of his insightful question, the two gentlemen to my left are probably as interested in the answer as he is, maybe even more. And the answer to the question is this: the specific mandate for the core review hasn't been finalized. That having been said, an organization like the Lottery Corporation, until it hears differently, should assume that it is. However, as we move forward with the finalization of the mandate, we'll determine whether or not that is so.

That sounds more noncommittal than I mean it to. We haven't finalized the mandate, but I don't want to say to the member no when that may not turn out to be the case.

S. Simpson: I asked that because I believe I heard comments by the Minister Responsible for Core Review, who
[ Page 412 ]
spoke more broadly about Crowns, about other entities — other than ministries, specifically — that would be captured by that. The minister was not a lot more specific than that, but he did seem to cast a net that was wider than ministry, so we'll wait to hear about the decisions of cabinet about the terms of reference.

Could the minister tell us…? There are references in the letter of expectations, and we know around the Crowns that there have been audits and reviews of a number of the Crowns — just looking at operational questions and other questions. Have there been audits or reviews of the Lottery Corporation in the last year?

Hon. M. de Jong: The audits that have been conducted are the normal ones associated with the preparation of financial statements. I think the member is referring to the more extraordinary reviews that have been conducted, and the answer to that is no.

[1655]

S. Simpson: Could the minister tell us: what is the anticipated revenue to government coffers from the Lottery Corporation for the next three years?

Hon. M. de Jong: At page 120 of the fiscal plan for '13-14, $1.16 billion; for '14-15, $1.19 billion; and then in '15-16, $1.22 billion. These are the amounts that will accrue to the bottom line.

S. Simpson: And maybe this question. It links to that, though we'll figure out how it is best decided to answer it. Could the minister tell us, generally, what portion of that is anticipated to come from on line — from PlayNow and from on-line revenue streams?

Hon. M. de Jong: Annualized, about 2 percent of the revenue.

S. Simpson: What is the expectation with PlayNow? I know it's still somewhat…. It's getting established now. I know there are expansion plans into other jurisdictions. Those discussions are ongoing. What's the anticipated revenue, net revenues from PlayNow for the next three years, as a component of the Lottery Corporation's business?

Hon. M. de Jong: For '13-14, '14-15 and '15-16 as follows, the estimated revenues from the e-gaming realm: $37 million, $48 million and $56 million.

S. Simpson: Moving a little bit to an issue around some of the discussions that have been had around challenges with problem gambling and those matters.

[1700]

I'm sure the Lottery Corporation and the minister would know that there has been a significant amount of analysis done that looks at the question of what percentages of gambling revenues come from problem gamblers versus the percentage that come from casual gamblers or people who don't face those challenges.

I know there's been recent research out of the University of Lethbridge. This was related to a study of Alberta gambling. They have suggested that somewhere between 40 to 50 percent of their revenue generated comes from people that were identified as problem gamblers versus people who do it casually and for recreational purposes — people that have other challenges.

Could the minister tell us: has there been any assessment done here by government or by the corporation — or by GPEB, for that matter — that's looked at that kind of information about what percentage of revenues into the Lottery Corporation may come from people who have significant gambling issues?

Hon. M. de Jong: We don't have comparable data in British Columbia to what the member has related to the committee. Conversely, the member I think is aware of the $2 million endowment that's been provided to UBC to establish the research chair into gambling. It may well be an area that the chair decides is worthy of exploration here in British Columbia. But I wouldn't want to pretend to the member that we have comparable data in the way that he has described it.

S. Simpson: Interesting. I appreciate the answer.

Now, we have here…. I guess it's through gaming policy and enforcement. They have a problem gambling research project. I believe there was an RFP let for it around November 2013 and that GPEB is doing research. Mr. Horricks, the head of the responsible and problem gambling program, is quoted as saying that the study would evaluate current counselling and wants to know how B.C. is doing comparable to other jurisdictions around the world and that the RFP would look at a variety of issues around best practices and those matters.

Would the minister tell us: is that study in play now, or what is the status of that? Can we reasonably expect that some of this kind of information might provide part of the baseline for that research project to do its work?

[1705]

Hon. M. de Jong: Two studies that I've been alerted to. One is dealing with prevalency, which somewhat touches on the areas that the member has canvassed — rates of gaming and identification of problem gaming, which presumably would provide some kind of a similar statistical information. That's been awarded and is due, I'm advised, in the fall. A second study is focusing on assessing the effectiveness of the counselling that is provided through the branch.

S. Simpson: I'm going to assume that when those studies are completed, they'll be public. The minister can tell
[ Page 413 ]
me different if that's not accurate.

My question is: could the minister tell me what percentage of Lottery Corporation revenues go into the combination of problem gambling programs that I know the corporation has? What's the percentage, and what's the dollar amount?

Hon. M. de Jong: What I have are the raw numbers. I don't have percentages. For the corporation, $3.5 million; for the branch, $6 million, which I'm reminded includes a significant lift over past years. That's representing $9.5 million, and then the $2 million for the research chair at UBC.

S. Simpson: One of the issues that relates to this…. I was on the website earlier today looking at some of the items. I know that there seems to be a range of incentives that the Lottery Corporation provides. The one I was looking at was the one that says, "If you open a new account with PlayNow and you put 100 bucks in and you spend $500 in the next month, we'll give you $100 worth of chips that you've got to play within a week" — more or less.

I'm sure I can be corrected, but it's generally: "Open up an account for 100 bucks, spend $500 in a month on line playing slots" — I think it's slots — "and then we'll give you another $100 to play slots as long as you play the 100 bucks within a week." I believe there are other incentive programs of that nature to encourage people to sign up to register, to participate.

Could the minister tell me whether it's his view that those kinds of incentives…. I'm going to frame the question differently. Can the corporation tell us whether there's any review or oversight of that in relation to whether that creates issues for people who are already susceptible to getting themselves into a little bit of trouble? The fact you are incentivizing this with "Get a free 100 bucks. As long as you play at least $100 a week for the next month and a half, we'll give you 100 bucks...." Does the minister see that as having the potential to incentivize this for folks who have problems?

[1710]

Hon. M. de Jong: I think it bears acknowledging at the outset of this discussion that if you're an individual with a gambling problem, or a problem gambler, then access to any of these opportunities is potentially problematic. You won't get any argument from me there.

One of the key objectives behind the creation of PlayNow and the e-gaming is to actually try to shift people away from the unregulated sites, where there are no safeguards in place, to the Lottery Corporation–directed site, where there are safeguards. I am told, never actually having accessed the site myself, that for example, you are asked to disclose up front or commit up front to what your spending limit is and that once you hit that spending limit, the system will not permit you to go any further. That is apparently not the case on the unregulated sites.

It's a competitive field. The corporation is clearly trying to attract participants to its site. It is, however, doing so in large measure on the basis of the realization that there are unregulated electronic gaming options available to individuals where none of those safeguards exist — none of the access to counselling, none of the other protections against abuse.

S. Simpson: I appreciate the answer. I'm a supporter of the Lottery Corporation. I realize that it provides a recreational opportunity for people, which people want to take advantage of, and that's all good. It oversees the casinos. The vast majority of people go in, and they're responsible, and they enjoy themselves as they would in going to a movie or a concert. They spend a little bit of money and then go home, and everything's good. Generally, for the vast majority of people, it works pretty well. And it delivers not a bad buck to the government coffers as well, and we all know that's important.

We also know, and because it is a government entity, the public has the historic…. I believe there has always been a historic kind of view of the government involvement in gambling that says, "Okay, you're doing it," and I know there are lots of good works coming out of that in terms of where the money ends up, in terms of services to people.

But we want to make sure that we're actually not exploiting those people who are least able to deal with this. We want comfort levels, and we expect this entity to operate at a much higher and more sophisticated standard than some of those people on the Internet that the minister referred to, who shouldn't be operating at all.

I think that's where the questions come in. The minister talked about the oversight that the corporation does and how the corporation decides to stay on top of PlayNow to try to catch the flags if there are people who have challenges or problems in that. Could the minister tell us how the Lottery Corporation monitors individual or cumulative gambling from people who have accounts and are playing?

[1715]

Clearly, there's, "You hit your limit," but there also must be a way here to decide or look at kind of how people are playing over a period of time — if they're playing inordinate amounts, if the numbers are changed significantly in terms of what money gets played on a daily or ongoing basis from an account and whether that at some point raises flags.

It might raise flags, say, to raise somebody's limit, if they want. But it also might say: "We need to figure out how to at least have an inquiry" — maybe not an intervention but some kind of inquiry — "about whether there's a problem here." We are tracking what might be
[ Page 414 ]
fluctuations of amounts of dollars played that raise flags for the people who are smart about this stuff.

How does that happen with the Lottery Corporation?

Hon. M. de Jong: As I expected, it's confirmed for me that the tracking of gaming behaviour on line is very sophisticated. There's a pretty detailed profile that the corporation has access to, because the player provides that release and authorization at the time they sign on.

The player also has access so that they can determine for themselves, over the last 52 weeks, over the course of the past year. It's fairly sophisticated from the point of view of tracking behaviour. The gap, if you want to call it this, is what the corporation can't assess with any measure of certainty — fiscal wherewithal and impact in terms of income.

Good data, sophisticated tracking mechanisms for gaming behaviour and historical gaming behaviour. Less ability to assess that vis-à-vis an individual player's fiscal wherewithal.

S. Simpson: I don't disagree with the minister on that. What I would hope, though, is that if the corporation sees changes as they watch that 52 weeks…. As it rolls forward and they see what look like significant changes in the amounts that might be played on a daily or weekly basis — not to make the judgment call that this person can or can't afford to do that; it's their call, obviously, as the person — is there some way, a method of inquiry at least, with the person to just flag this to say: "Are we all good here? Is everything fine?"

This is one of the issues that have always been raised at PlayNow. At two o'clock in the morning, with what I'm doing at home on my computer with gambling and that, there's no oversight. If you go into one of the casinos here in British Columbia, there are staff who are keeping an eye on that. There are resources immediately available. If somebody does look like they're having a problem or whatever, they have methods of being able either to encourage people to take a break or any of a number of things, depending on what the circumstances are.

That doesn't exist when you're at home by yourself on the computer. I'm wondering. Is there a way here that the corporation can make that inquiry of people, if they see a pattern that looks inconsistent or may look problematic or potentially problematic, to say, "Are we okay here," or to raise that issue?

[1720]

Hon. M. de Jong: The information I'm provided with does speak to a measure of intervention but one, in fairness, triggered by amounts and frequency of participation. It's difficult, admittedly, to go much beyond that.

The corporation's objective, as I emphasized a moment ago, is to try and move people away from unregulated sites to its sites where, after a certain period of time, a message will appear seeking confirmation or asking that the player consider where they are in terms of how long they've been playing and frequency, and that sort of thing. The volume or the amount money over a more prolonged period of time may well be the result of them not visiting a competing site any longer and directing their gaming activities to the Lottery Corporation site, so a measure of intervention.

I asked the question that I thought perhaps the member would: has the corporation ever intervened by phoning an on-line game? The answer, to this point, is no.

S. Simpson: That was going to be the next question. The method of intervention now is limited to…. As I understand, if you play for an extended period of time, at some point the screen will pop up a message for you that will say, "You've been playing for X amount of hours," and kind of give you a bit of a subtle encouragement that maybe you should take a break or that you've played this amount of money on your account. But the extent of intervention at this point is that technological intervention.

Hon. M. de Jong: That, I am advised, is generally correct.

S. Simpson: I'm going to move a little bit to the issue around money laundering and controls and those limits. Back in — what was it…? Boy, my years aren't so good, but I know that the folks from the Lottery Corporation will be able to give me good dates. Obviously, there have been a couple of instances, and there have been some fines from FINTRAC. I believe that on at least one of those fines there was an appeal on the part of the Lottery Corporation of the fine. Could the minister tell us what the status of that appeal is?

Hon. M. de Jong: I am reminded by the corporation that there was the fine for just in excess of $600,000. It has been appealed, and that appeal is presently before the federal court.

S. Simpson: Could the minister tell us if there have been any other instances subsequent to that instance where that fine was levied — any other instances where the Lottery Corporation has either been noted or cited by FINTRAC for problems — or have they faced any other kinds of fines or penalties since that time?

[1725]

Hon. M. de Jong: No additional administrative penalties. Regular audits — I'm advised by the representative that as a result of those audits, occasionally there are procedural matters that are noted that the corporation responds to, but no penalties or fines.
[ Page 415 ]

S. Simpson: I'm moving a bit to an issue around the Lottery Corporation and the policy enforcement branch. I've had this conversation with the minister's predecessors, particularly now the minister of LNG, who knows this file pretty well, apparently. It's the question of having the Lottery Corporation and the policy enforcement branch sitting in the same ministry.

The view that I've taken has been that putting promotion…. As the minister has quite rightly said, the Lottery Corporation is in the business of promotion. They significantly advertise. They use incentives — not a problem. That's what they do to try to move people over to the Lottery Corporation or to the casinos that are part of the operation.

I get that. That's a clear marketing tool to build the corporation and, I accept, also to hopefully maybe put some limits on some of the other operators out there who are not as scrupulous.

The policy enforcement branch obviously has a very different job. It's to provide oversight, regulatory review. At times maybe they intervene and say to a casino or to whomever: "There's a problem here, and we need to address this" or "We want to look at this."

I've always seen that as a challenge, to have both those sitting with one minister and asking the minister, with one hand, to go out and actively tell the corporation to promote, promote and, with the other hand, regulate when there might be some limitation.

I wonder if the minister could tell us what he thinks about the question of both those entities resting with one ministry versus separating them and putting them under the auspices of two ministries.

Hon. M. de Jong: Well, it's an interesting question. To the member's point, I think that thoughts and approaches to this have evolved over time. I'll give you the example that immediately came to mind, because it's sort of a grand example of this.

This conversation used to come up frequently in the context of the Attorney General, who was responsible for policing, prosecution and the justice system — those being very different and separate aspects of the administration of justice. To the member's point, he will know that this government, at one point, actually did separate out those functions and had an Attorney General and a Solicitor General. Today they are ably dealt with and led under the auspices, again, of a single minister.

The reason I answer that way…. I'm not suggesting that it's not an issue worthy of consideration. Clearly, in that context, this government thought it worthy of consideration. To this point, we have been satisfied that the enforcement administration and enforcement functions can be appropriately and adequately addressed within the context of the departmental configuration that exists.

I know the member is under some time constraints. But to the extent that he has thoughts on an alternative configuration, whether he wants to share them now or at some other point…. The government's view, clearly, today is that the functions can be appropriately and adequately addressed within the present configuration.

[1730]

I hope the member will also take some comfort in knowing that we have thought about these things, and the example I gave of the Justice Ministry and the division between a Solicitor General and an Attorney General is a tangible example of how we have thought about that very issue.

S. Simpson: My view is that clearly, some separation makes sense. I would note that I've looked across the country at other jurisdictions, and it's a mixed bag. Some jurisdictions clearly separate them. Others have a similar model to British Columbia.

What I would hope is that maybe there's some room for conversation there. The criticism has been raised to me in the past. I have picked that criticism up and embraced it, certainly to some degree.

When I think about this, it comes back to the comment that I made earlier about the Lottery Corporation as an entity, the work that they do, the public view of gambling and the role of government in gambling.

Any time you can do things that even are just incremental steps, I think, that create increased confidence that everything is being done in the best interests of dealing with the problem gamblers and making sure the gangsters don't have a role to play and everything is being looked at with the proper oversight…. Every time you can do that…. I think a little bit more is not a bad thing, and this is a piece that I've thought could be helped by that. I would hope that there might be some review of that at some point down the road.

I'm going to just hit a couple more questions. I know we're on a very tight timeline here, and I believe that the Finance critic has a couple of things to finish up. I want to ask a couple of questions about a matter that is pretty current, the Paragon situation, the Paragon deal.

Could the minister tell us what the status is? I believe that the reports in the media, and they may or may not be accurate, are essentially that the Pavilion Corporation has signed a 70-year deal or lease arrangement with Paragon that anticipates a relocation of the current facility or some form of the current facility. My question is: what is the role of the Lottery Corporation in that question and the question around relocation of the Edgewater, I guess it is?

Hon. M. de Jong: Trying, of course, to be as accurate as possible about the various roles and responsibilities in all this. The Lottery Corporation. I am advised its responsibility in this process was specifically to seek approval from the city of Vancouver for the relocation of the facility. That was obtained in 2011. To my knowledge, that
[ Page 416 ]
is the extent of the Lottery Corporation's involvement in the various approval processes.

[1735]

S. Simpson: What I understand the city approved…. The city rejected the expanded facility, but at that time, there was an approval to essentially say: "If you're moving essentially the same operation" — numbers of slots, numbers of tables, etc. — "then we're okay with that, but if you're setting up something much larger, with hotels and whatever, there's a bigger conversation to be had here."

I understand it's not the Lottery Corporation's business to worry about hotels and whether the Paragon people are building hotels or not building hotels. That's not your business. But in the movement, if somebody like Edgewater is going to relocate, then presumably, they're saying: "We're relocating" — I don't know what they have — "X amounts of slot machines, X amounts of tables. This is what we have now. This is how we're going to configure this." And I assume that there'll be some reconfiguration even if there's not some expansion, just as they refine the business model.

Does the Lottery Corporation have a role in signing off and saying: "Okay, we're saying yes to X amount of tables to do this and to do that, and to slot machines and whatever"? Do they sign all of that off and have to sign that off? Is that what the city ultimately will look at and say: "Yes, you followed our rules. You didn't grow," essentially, or "We're taking you back to another public hearing because we think this is different than what we started with?"

Hon. M. de Jong: I'm advised that the corporation is bound and obligated and authorized to provide the authorization on the floor plan for the casino when it's moved. It will exercise that authority, taking into account the approval that it, the corporation, received from the city of Vancouver.

I ask the second question that I thought that the member might ask: has that been done yet? The answer is: no, it will be done closer to when the project is actually underway and the floor is being laid out for the casino. But it will have to be consistent with the approval that was received, which was for the existing casino.

S. Simpson: So it will be the position of the corporation and the position of government that the city's authority here stands. If the city is saying, "You can move, but you've got X amount of tables and X amount of machines there, and that's all you can have at the new site. If you can move and do a business deal here and make that work, then we've got something to talk about, but we're not talking about you growing that in any way, shape or form," I'm presuming that's the city's position today.

It can always change. That's the position. But the position of government and of the Lottery Corporation is: "We are respecting that decision, and we're not anticipating trying to overturn that decision of the city. That's what we'll agree to."

[1740]

Hon. M. de Jong: Let me get this in the right order. It is the Lottery Corporation which is charged statutorily with the responsibility for signing off. They do so on the basis of the approval that they received from the city of Vancouver. That speaks to the relocation of the existing gaming facility. I'm not aware of whether or not the city's view on that dimension has changed or is in the process of changing. What the corporation is aware of and will abide by is the nature of the authorization that it received in 2011.

S. Simpson: I've got about another two minutes here, and then I'll be done.

The question around the advertising budgets for the Lottery Corporation: could the minister give me the total advertising budget for the Lottery Corporation for the next three years?

Hon. M. de Jong: I've got an estimate for '13-14, which is just over $19 million. I'm told that's about a decrease of $1 million from the previous year. That breaks down as follows: for the lottery business, about just over $12½ million; for e-gaming, just over $3 million; for casino and community gaming, about $3½ million; and corporate — have to explain what that is — about $100,000.

S. Simpson: I'm assuming that that's the advertising for the Lottery Corporation. What Great Canadian or Gateway do to promote their own entities, that's a totally…. That's their business, and they're doing whatever it is they do to do that.

A question — and this will be about the last piece that we'll get to. I know, in previous conversations we've had, First Nations in the province have spoken about…. They've looked at their counterparts in the United States and elsewhere, where obviously, on-reserve casinos and things are a pretty significant deal.

I have certainly heard from First Nations groups that are looking at the potential of getting some sort of revenue or economic opportunity or jobs or whatever out of the gaming industry. Are there discussions going on around how that might happen or if it might occur, and is it the Lottery Corporation, this ministry, Aboriginal Relations? Is there a discussion around a role, moving forward — an expanded role for First Nations in gaming?

Hon. M. de Jong: The member, again, correctly characterizes an interest that First Nations have had: to become involved in a different way or an expanded way in gaming.

[1745]

Actually, that may not be the best terminology or
[ Page 417 ]
phraseology, because the request has been for the government to dedicate a certain percentage of gaming revenues. In fairness, the government has thus far indicated its unwillingness to do so and remains reluctant in that regard.

The government has also been reluctant to explore suggestions around creating a parallel gaming structure for First Nations. What we have done is tried to enter into a partnership opportunities — the Ktunaxa, the Cowichan, the Squamish — within our existing gaming structure, where those First Nations also share directly in the revenues generated by enterprises with which they have a direct connection.

I don't want to suggest to the member that we're on the verge of changing that. I see no evidence of that. At the time, I also don't want to suggest that First Nations won't continue to endeavour to make their case for why a new arrangement should be arrived at or a more direct revenue-sharing component shouldn't be considered by the government.

The last thing I'll say on this front is that, as the member knows, gaming generates revenues that are redistributed pursuant to community gaming grants. I have not checked the data recently and perhaps should. At one time First Nations were significantly under-represented there. I suppose the answer, the response, was that, well, First Nations weren't applying in the same way that other community groups, communities were.

I know there was an improvement, but I'll have to check to see whether or not those community gaming proceeds and community gaming grants are finding their way into First Nations communities in a way that is reflective of their important role and presence in B.C.

S. Simpson: Thanks to the minister. Because of short time, I'm going to be done here. As I've said to the minister, I may have some other questions. I'll put them in writing to the minister, and we'll deal with them that way.

Thanks for your time.

M. Farnworth: Just while the Lottery Corporation is here. Port Coquitlam, being in the Tri-Cities…. I know there has been some discussion from time to time about the establishment of a gaming centre in the Tri-Cities. Is that on the radar of the Lottery Corporation? Have they done any assessment into market demands in that area, or are there any plans to go ahead and put a gaming centre in Port Coquitlam?

Hon. M. de Jong: I'm advised by the representatives of the corporation that, having done an assessment, it's their view that the market is largely well enough served at the moment. They have no immediate plans for a new facility or expansion in the area, and I asked. My sense is that that represents a five-year outlook, and a reassessment would take place at that time.

M. Farnworth: We are, I think, pressed for time. There are a number of other topics that I would like to have been able to canvass, in particular on the revenue side and some taxation questions. They may have to wait, or I'll put them in writing to the minister.

[1750]

In the meantime, in what little time we have left, I'd just like to go to the student loans portfolio that is within the Ministry of Finance.

Could the minister tell me what is the total outstanding student loans portfolio? What revenue is generated from student loan interest for each year since 2001, and can it be broken down annually? What is the total outstanding amount of student loans? Has it increased since 2001? If you've got those numbers in real numbers or in percentages, I'd appreciate that.

Interjection.

M. Farnworth: The three questions are: what is the total outstanding student loans portfolio? What is the revenue generated from student loan interest for each year since 2001? If you have it broken down annually, that would be appreciated. And how much has the total outstanding loan amount increased since 2001 in real numbers and in percentages, if you have that. That would be appreciated.

Hon. M. de Jong: I have a specific answer to one of the member's questions. I'll get answers to the other two, and I've got some additional information that may be of interest to the member.

As of March 31 of this year approximately 300,000 B.C. student loans, valued at $2.31 billion, have been issued by the province. In 2012-13 approximately $223 million in new student loans were issued. As at March 31, 173,000 student loan borrowers have loans in good standing, and 24,500 student loan borrowers have loans in default, valued at $171 million.

I will try to get the other information about the interest earnings on the loans.

M. Farnworth: I am mindful of the time, and I know that we are going to rise shortly, so I'd like to take this opportunity to thank the minister for the responses to my questions.

[1755]

As I said, there are a couple of areas that we weren't able to get to — in particular on tax-related issues around targets and revenue and the difference between the actual and the collected. I had some questions around there. We'll see if we have time to answer the question; if not, it's a question that I can….

In the annual service reports of 2008-09, the targeted revenue — the actual collected was 96.96 percent of, I guess, the target. In 2009-10 it was 96.2. In 2010-11, 94.27.
[ Page 418 ]
You know what? It's probably best if I…. We do not have enough time to get into this, so what I'll do is I'll either put the question in writing to the minister, or I'll contact the ministry directly. I can see the Speaker is here.

I just want to say on the topics we've covered, I thank the minister and the staff for their answers. I think there are a number of issues that we'll probably want to explore again in the spring. In the meantime….

Interjection.

M. Farnworth: Yeah, that's actually your job.

I have no further questions.

Hon. M. de Jong: Thanks to the member, his colleagues, for their participation and their thoughtful questions. And to the staff, some of whom are here or leaving the chamber, and others who are watching from the sanctity of the little room across the hallway, many thanks for all their hard work and the preparation that goes into having information readily available for the committee.

I'd move passage of the vote.

Vote 22: ministry operations, $114,879,000 — approved.

Vote 23: gaming policy and enforcement, $19,819,000 — approved.

Vote 24: Public Service Agency, $50,807,000 — approved.

Vote 25: benefits, $1,000 — approved.

ESTIMATES: MANAGEMENT OF PUBLIC FUNDS AND DEBT

Vote 46: management of public funds and debt, $1,257,091,000 — approved.

ESTIMATES: OTHER APPROPRIATIONS

Vote 47: contingencies (all ministries) and new programs, $225,000,000 — approved.

Vote 48: capital funding, $992,535,000 — approved.

Vote 49: commissions on collection of public funds, $1,000 — approved.

Vote 50: allowances for doubtful revenue accounts, $1,000 — approved.

Vote 51: tax transfers, $835,000,000 — approved.

Hon. M. de Jong: I move the committee rise, report resolution on the estimates for the Ministry of Finance and seek leave to sit again.

Motion approved.

The committee rose at 5:59 p.m.

The House resumed; Madame Speaker in the chair.

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

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

Hon. M. de Jong moved adjournment of the House.

Motion approved.

Madame Speaker: This House at its rising stands adjourned until 10 a.m. Monday morning. Have an enjoyable weekend.

The House adjourned at 6 p.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF ENVIRONMENT

(continued)

The House in Committee of Supply (Section A); M. Dalton in the chair.

The committee met at 2:32 p.m.

On Vote 20: ministry operations, $99,946,000 (continued).

G. Holman: We have a number of members here that want to ask questions of the minister, but I have one just to start out the discussion — on the proposed coal mine for the Sacred Headwaters. It did come up this morning as well — the concern about the contradiction between a proposal for a protected area in the headwaters but, at the same time, government entertaining a proposal for a coal mine development in the area. The specific question I have for the minister there….

We've seen, for example, a recent case of a uranium development where government, as I understand it, is being required to compensate for lost development opportunity. My concern there is whether this proposal for the coal mine is going to put government, and then even-
[ Page 419 ]
tually taxpayers, in the position of having to compensate if the province decides later, then, to protect land in that area that interferes — if I could use that word — with their development rights.

[1435]

Hon. M. Polak: Firstly, in the case of the uranium issue, that resulted from a provincewide moratorium on further development of uranium mining in British Columbia — so a somewhat different circumstance.

With respect to the proposed mine…. Again, any time we designate a protected area or park in British Columbia — any time — we are always having to deal with rights and tenure issues. There are times when compensation is a part of that, but it would be no different than any other occasion when we designate a park or protected area.

B. Routley: The Shawnigan Lake watershed is a major concern, as are other watersheds. The Cowichan River watershed region is also a major concern for the constituents in the Cowichan Valley.

I want to start by focusing on the questions I have about the Shawnigan Lake watershed. Briefly, I want to go over just a few paragraphs that were actually signed off by a Liberal, a representative of the Green Party, the Conservative Party and the NDP. I think it's important that the minister be aware of the fact that this is an all-party commitment to the Shawnigan region. It goes like this:

"The safety of drinking water for the residents of Shawnigan Lake is under threat because of a plan to dump contaminated industrial waste within our community's watershed.

"Local residents, drawing on expertise provided by respected independent scientific consultants" — such as hydrologists — "have repeatedly raised concerns about the proposal, yet the Ministry of Environment has issued a draft permit. Residents are concerned about contamination of aquifers and nearby water sources and are unconvinced that the proponent's planned containment works will be sufficient.

"Ensuring clean…drinking water for thousands of residents in the area is an issue that crosses all party lines. The undersigned jointly are calling on the ministry to not issue a permit" — which has been done, by the way — "until the science-based modelling and knowledge gaps are filled and all the community's outstanding concerns are addressed."

I know that it's still under review, but I want to continue on with part of the concern that we have about the science-based questions being answered. One of my questions is about receiving a response from a contractor-consultant hydrologist, rather than from the minister, to my letter to the minister.

I guess I'll start with that question. Is that normal procedure — for an MLA to receive a letter back from Active Earth, who I believe is a contractor working for the proponent in the project? He's answering me. He starts off his letter…. "Active Earth" is at the top of his letter. It says: "This is a response to your letter addressed to the Hon. Dr. Terry Lake."

[1440]

Hon. M. Polak: That wouldn't be ordinary practice. Typically, if there was a need to have further response from those who were in the ministry or from some other expert, the minister would respond and outline that they had, in fact, received your letter and had referred a response to someone else who, maybe, was more appropriate.

At the same time, though, I have not seen the letter, so I'm not aware…. Perhaps the gentleman mentioned who wrote the letter could have been copied on the letter and may have chosen to respond even if he was not asked to respond.

B. Routley: Yes, and I'm happy to give you a copy of the letter and a copy of the petition that was signed by…. The all-party petition.

Just a few minutes more in terms of my questions, but Minister, I urge you to do everything within your authority and discretion to protect the drinking water supply of 7,000 of my constituents, primarily in the Shawnigan region, that feel under threat.

As the MLA representing the Shawnigan Lake residents, I urge you to immediately direct your ministry to address the community's outstanding concerns, to fill in the science-based modelling and knowledge gaps that to date we believe have been ignored.

I am advised that the province has failed to respond to the concerns outlined by hydrologist D.A. Lowen, who has made specific concerns available to your government relating to the lack of protections proposed for the community's drinking water and the integrity of the watershed. His report contained the following recommendations, which I have yet to have a response on from the ministry.

As I've just said, my response came from a contractor. I don't feel that that's an adequate response. When I write a letter to the ministry, I don't expect to get a letter back from some contractor with a passing reference to a minister. It just doesn't fly with me.

This independent hydrologist, who has very lengthy qualifications as a hydrologist, has written independently. His recommendations — there are just four of them.

A comprehensive environmental impact study must be completed before this site could be approved for disposal. These kinds of studies are mandatory for wastewater disposal, which is a smaller risk than contaminated soil.

Two, the construction of monitoring wells, aquifer testing, water quality sampling and contaminant-flow modelling should be undertaken to assess the suitability of this site.

Three, the site should have a leak-detection system and a contamination-containment plan. Commonly, contaminated groundwater is pumped out of the aquifer and piped to a treatment plant.

Naturally, all of these necessary risk-reduction measures are very costly. Therefore, some kind of long-term
[ Page 420 ]
financing plan would also be required. Cost-benefit analysis should be carried out to ensure that this proposal is sustainable. I will attach the entire report for your immediate personal review. I strongly believe that the community is entitled to a fulsome written response from the ministry and from your offices.

Finally, will the minister commit today to ensure that the community receives a response to all of those D.A. Lowen hydrologist questions? And will you commit to work with the community further on their desire to have more community control of their watershed?

[1445]

Hon. M. Polak: I first just want to advise the member that we'll look into the particular letter he was speaking about in the beginning and ensure that an appropriate response is received from the minister's office.

With respect, then, to the discussion, it's important to note that the draft permit that has been issued is for consultation purposes only. It doesn't authorize any discharge of waste. We have, to date, received about 300 submissions from the local government, First Nations, health officials, members of the general community, and our technical staff are taking the time to review all of those to ensure that they are all responded to.

I should also note that in response to concerns raised by the public, the Ministry of Health, the CVRD and local VIHA officials had all raised concerns regarding the geology and hydrology of the site. As a result of that, we've gone a step further. We've asked the British Columbia geological survey to conduct its own independent assessment in relation to the application, and that's been complete. This information is now being shared with the groups that I just listed off.

Lastly, this is a decision that will be made by statutory decision–makers. So the ministry staff will make that decision. It is not interfered with by politicians like myself. It's based on science. It's based on evidence. As such, it keeps it arm's length from ministers like myself.

The staff who are engaged in that process are professionals. They have many years of experience in assessing these types of applications. In the event that there is an approval and the community finds it disagrees with the decision, there is — if they so choose — an Environmental Appeal Board process that is open to them if the decision that is ultimately reached is not one with which they agree.

B. Routley: Thank you, and I will get these documents to you.

The final question I have is regarding the Cowichan River. I appreciate that in question period the other day you talked about professionals, relying on professionals in the decision-making. Well, I guess that was to do with the Shawnigan watershed.

[1450]

The issue here is the fact that people feel that there are the professionals, where there are a number of them…. There are certainly the hydrologists, but then we've got DFO. You've got biologists and others who had great concerns about the issues of fish in the Cowichan River.

I've told this story in the House, but it's worth repeating. I actually was approached by the CVRD chair, three mayors and Cowichan Tribes, representing six different bands. They requested me to support them in meeting with the Minister of Forests about the issue of water.

I know that there's an interagency…. According to the water stewardship document on the Ministry of Environment's website, they talk about the guidelines for watershed management, and they talk about an interagency task force — I assume that's still in place — between the Ministry of Environment and the Ministry of Forests. And I understand that you're responsible for Water Act modernization.

On behalf of all of the various groups that have stepped forward in the Cowichan Valley that want to see more local control of watersheds, I would either urge you to come up and meet with some of those groups…. So I guess I'm requesting that the minister take time to come and actually meet with the round table, the Cowichan River groups that are there, and talk to them firsthand about the number of difficulties in managing the fresh water — the river system. It's a heritage river. It's under your ministry.

There are so many different groups that really would appreciate the opportunity to raise their issues and to hear from you directly on whether or not there's any interest in working with the communities to give some level of community control that would be helpful in the future. I personally believe that should you work towards that kind of collaborative approach, there could be solutions found. I know that that was something that I had hoped to see one day — the fact that we sit down with community.

I know there are certain responsibilities that would have to remain with the provincial government, but some of them — like what happened with the Cowichan River, where we ended up trucking fish upstream — have to be avoided in the future. Certainly, again, it's the concern of water contamination. All of these are areas of community concern that could be dealt with by more involvement in community watersheds.

I guess my question is: are you willing to work with us in a collaborative way in the Cowichan Valley to set up some meetings and try to look at the issue of watersheds?

[1455]

Hon. M. Polak: First, on the letter. We actually got to work on that right away. The answer is this. The deputy minister responded to the letter during the interregnum. Of course, at that time, MLAs can't respond. Ministers
[ Page 421 ]
can't respond. So it would be typical practice, if it's during the interregnum, that a deputy would respond on behalf of the minister. He responded on the minister's behalf on May 23.

Insofar as the questions around the Cowichan watershed, it's something that we are highly interested in. First of all, in terms of the allocation decisions, that's the responsibility of Forests, Lands and Natural Resource Operations. However, the Ministry of Environment is participating with the Cowichan Watershed Board. In fact, we provided $15,000 to support a governance pilot.

In addition to that, as we look ahead to bringing in the modernization of the Water Act, the water sustainability act, the new act, will enable innovative governance structures. A really good example of that would be the current Okanagan Basin Water Board. There should be opportunities under that new act to see the kind of community involvement in governance that the member is seeking.

G. Holman: I wanted to follow up on the Klappan issue. I'm sorry I'm not as quick on my feet as the Environment critic. My understanding is that the commitment to create a protected area in the Sacred Headwaters area was a campaign commitment. My concern is…. I'm still not completely sure why, given that commitment, the government would be allowing a mine development to proceed and that over time it's going to be increasing the value of its asset, essentially.

At the same time that government has made a commitment to create a protected area in the Klappan, it's allowing a mine development to add value to its asset, which surely is going to increase taxpayer liability down the road. That's the concern — given the commitment, why government would be also, at the same time, allowing a development to start to go through the process which will up the value of its asset and up the potential liability to taxpayers if a protected area is created.

Hon. M. Polak: A few things. First, with a careful reading of the mandate letter, it is clear that the commitment is to consult with communities, First Nations and industry to potentially develop a provincially designated protected area in the Klappan. The mandate I have been given is to take a look at the potential for such an action.

Secondly, it still doesn't change the answer from before. It is no different from the circumstances we face when we designate any other park or protected area.

[1500]

Given the nature of the geography of British Columbia, the fact is that virtually anywhere we designate a park or protected area, there are potential projects in various stages of proposal or development or, in some cases, even operating. So it's no different than the process that we would ordinarily undertake when we would be looking at designating a park or protected area.

Finally, there would be no legal basis upon which we could bar someone from entering into the existing process. That in turn would also engage potential litigation and potential compensation. But in that case, we would have very little, if any, legal position on which to stand.

V. Huntington: I did mention to the minister's assistant that I was going to be asking a few questions on FREMP, if you're ready.

As the minister and her officials will likely know, the Fraser River is just a nightmare of jurisdictional responsibilities. Out of that nightmare, a wonderful organization sprouted up in the 1980s called the Fraser River Estuary Management Program. Over the years that program, basically led by the Department of Fisheries and Oceans, federally, has done a lot of work in coordinating the different jurisdictions in project reviews on the river.

Last February or March we found out that the federal government was cutting its budget, which forced the closure of FREMP. At that time, the former Minister of Environment indicated concern about this budget cut and also commented that the ministry had not had enough advance warning to look to creating some other vehicle by which to engage with the FREMP-like activities.

I wonder if the minister can tell me what status that work is at now and what the ministry intends on doing to recreate something of the nature of FREMP.

Hon. M. Polak: The member won't be surprised to hear me agree with respect to the multiple jurisdictions and the craziness that results on the river, given my past experience in Transportation and Infrastructure.

[1505]

Happily, I can tell the member that while the formal structure now is dissolved, nevertheless, the partners — that includes Ministry of Environment; Ministry of Forests, Lands and Natural Resource Operations; DFO still; Port Metro Vancouver; Metro Vancouver — continue to collaborate together and are actively discussing how best they might organize themselves to continue the work which they still have the intention of undertaking.

V. Huntington: I think that when FREMP dissolved, it was a real concern to a great many people who have trusted FREMP or grown to trust and lean on FREMP over the years. The concern that we have is that Port Metro Vancouver, for most of the projects on the river, became the lead agency just by virtue of the way FREMP was organizing itself and the assessment process itself. That is a measure of concern for all of us.

Can the minister tell me what the process is right now? Is the port still the lead agency in terms of how you're going to reorganize this process? Is it going to be responsible for coordinating the review processes? Or is the province going to recognize that it has a very distinct interest in the foreshore and uplands of the estuary itself?
[ Page 422 ]
If you could answer that, I can carry on.

Hon. M. Polak: I can assure the member that we're not backing away from any of our involvement in this. It is very important. It's critical to the Fraser River itself, and we know that the impact is quite broad.

Currently, as they work through this change, the port of Metro Vancouver is providing a coordinating function, but really, that's as far as it goes. Those members I referenced earlier are, as I say, continuing to collaborate, and they really haven't reached far enough along in the process to give you a firm answer as to who might be the lead on which aspect. They just aren't far enough along in their discussions.

I do want to assure the member that we take this very seriously, and we're not backing down as to the position that we've held in the past and the importance of the involvement of all these agencies together in terms of ensuring the health of the estuary and the river itself.

V. Huntington: I think one of the things that's most concerning…. Well, there are two or three things. One is the gutting of section 35 of the Fisheries Act, which leaves DFO almost powerless to override the decisions of the port in relation to work on the river.

The other is the way in which the Port of Vancouver interprets its mandate. It is a very aggressive interpretation of the mandate, which basically led to the provincial involvement in the dredging issue. Previously nobody had ever even thought the province would be involved in dredging. For a hundred years the port has been dredging the secondary channels of the Fraser.

With the gutting of the Fisheries Act and with the aggressive undertaking of the port…. The port determines its mandate to be international trade. It believes it is the project review for all port-related activity on the river and the uplands, so it is aggressively sponsoring that type of economic development.

With that level of mandate, when FREMP…. One of the great things that FREMP did was that over the years it created a designation of habitat along the river. You had no-go zones, which were known as red zones; yellow zones, where some activity could take place; green zones, where — do what you will — the habitat is gone, or it's not within a jurisdictional issue that we're concerned about.

[1510]

When the port became involved — the new port; not the Fraser port authorities but the amalgamated port — we found that they refused to acknowledge or even to permit FREMP to designate areas of the estuary. Areas that commonly and knowingly should be red zones, such as Brunswick Point and Roberts Bank…. The port refuses — had refused and still refuses — to allow the designation of that foreshore as red.

What I'm very concerned about is whether or not the province is going to take up that mantle and step in. Where provincial foreshore interests are involved, where the wildlife management areas are involved, where the safety and protection of the migratory salmon are involved, is the province going to step up and assume the mantle of protection that the port has so far refused to allow along those areas of the estuary that it considers its jurisdiction?

Hon. M. Polak: Areas that are the jurisdiction of Port Metro Vancouver have been determined by the federal government. In those areas and lands the provincial government has no authority to direct Port Metro Vancouver or to override what it may wish to do.

In areas where it is a matter of Port Metro Vancouver asserting some authority over areas that they do not have jurisdiction over…. In those cases, of course, the province certainly would not back down in terms of its ability to offer protection in the form of regulations and what have you.

All in all, this illustrates the very important role that a collaborative body like FREMP did play and the ongoing work of the group to develop a new process in which that collaboration can take place. It is ultimately the only way in which we can have some influence over the decisions that are made on the areas that are the jurisdiction of Port Metro Vancouver as a result of its federal jurisdiction.

[1515]

V. Huntington: I'll just end expressing my real concern — the concern of a lot of people, including, I think, the corporation of Delta at one point. It has been many years now that the port has refused to recognize a designation that FREMP wanted to put on the foreshore at the Delta side of the river and around into the Roberts Bank management line. We know that the port was responsible for the delay of designating the Roberts Bank management plan.

I would be really interested — and perhaps you would like to send me a note or provide a briefing at some point — in what the province looks at as the port jurisdiction. Is it the waters that were designated to the port out on Roberts Bank, the waters that were transferred from the province to the federal government? Does the port have jurisdiction over foreshore in wildlife management areas?

I just need a better understanding of precisely where the province sits with this and why it hasn't insisted that these designations so critical to that area be permitted.

Hon. M. Polak: We'd be happy to ensure that the member is provided with the information — and, certainly, a briefing opportunity, if she'd like.

S. Robinson: In my community of Coquitlam we had some considerable debate and discussion over a number of years about the benefits and hazards of cosmetic
[ Page 423 ]
pesticides. It went on for about four years. After about the last few years the Coquitlam council decided to go with a local ban, given that the new Premier had committed to enacting a provincial ban when she was first determined the leader.

I do know that there has been some work done last year and some decisions made to not actually enact a provincial ban. I just want to know, under this minister, if there is any appetite to continue to permit the sale of cosmetic pesticides, even though the Premier promised to ban them when she was running for the party leadership.

[1520]

Hon. M. Polak: It is important to consider how we developed the approach that we are now taking. There was broad consultation with the public, taking into account more than 8,000 comments. We received recommendations, also, from a special bipartisan committee, which examined and reported on the issue and did not recommend a ban.

Instead, we have taken the approach to put in place, first of all, amendments to the Integrated Pest Management Act, which was passed earlier this year. They, in this way, minimize the unnecessary use of cosmetic pesticides. Work is now underway to develop the regulations. We believe we will have those to come forward in the spring.

The overarching thrust is twofold: firstly, that pesticides "should be used by licensed people with knowledge and training" and, secondly, "allowing the Minister of Environment the ability to identify specific exemptions from the licensing requirement, including prescribing lists of pesticides which can be used by uncertified individuals. These lists would be similar to exempted lists in other provinces and will likely include pesticides with naturally occurring active ingredients."

We did choose not to go the direction of a ban, but that, again, was a result of extensive public consultations as well as the recommendations of a bipartisan committee.

S. Robinson: I do have just a follow-up question to that. Given that there are, I believe, over 40 communities that have local bans and the craziness about which communities permit it and which ones don't, it will continue to be a real challenge for those of us, certainly in the Tri-Cities, that have some municipalities that do have a ban and some that don't and different kinds of bans. It makes for a little bit of crazy-making in terms of the application of the local bans. There had been some hope that there would be some follow-through from the Premier when she promised a ban.

There are some concerns, certainly, about which research was ignored and which was considered. But I am now concerned about this list coming out in the spring, given that it's been sort of a whole other year and we've been trying to manage these bans. I just wanted to know: will all of these — I believe it's 17 — recommendations be fulfilled by the spring, or just some of them?

Also, I will just tack on another question, if I might. The idea that vendors, the retail outlets, need to "ensure that pesticide products are accessible only by interaction with certified dispensers and that the consumer is receiving appropriate information and instruction…." Certainly, in my community that currently exists, and a number of us have tested it out at one of our local retailers. We were able to buy whatever product we wanted and walk right out without any consultation.

I'd like to know what this government is prepared to do to make sure that retailers really are abiding by those standards, because I don't see them actually complying with this very well currently, even though it's required.

[1525]

[J. Sturdy in the chair.]

Hon. M. Polak: With respect to the regulations, we certainly have taken into account the recommendations from the committee. The regulations and the development of them will be informed and have been informed by the recommendations from the committee.

Our hope, of course, is that we will achieve an overall reduction in the unnecessary use of cosmetic pesticides. With respect to the current Integrated Pest Management Act and the regulations of the sale and the use of pesticides, I'll just….

[1530]

Currently the Integrated Pest Management Act regulates the sale and use of pesticides, and authorization. A licence, a confirmation or a permit is required for the use of pesticides on public land and for specified industrial applications when the application is conducted as a service. So a range of ways in which we currently regulate.

We rely very heavily on the education of retailers and also the public. It's a very large province, and there's no way we could station someone in every retail outlet. But we do have a compliance regime in place. We do respond when we have complaints from the public. In some cases, as we are somewhat focused on it right now, we are even receiving complaints from some retailers that we're being a little too tough on them.

There is a mix in terms of what we're seeing in compliance across the province, but we're working to achieve a high level of compliance through our regime.

C. Trevena: I wanted to ask the minister just one question about the allocation of conservation officers. North Island — I'm talking about the real north Island, so Woss north — we have had a number of cougar sightings. It's been recognized there's been a grizzly bear in the area. It actually, unfortunately, had to be killed. But we have a number of sightings.

When the people call the conservation office, they're calling down to Black Creek which, I'm sure the min-
[ Page 424 ]
ister knows, is well south, far south. It's just north of Courtenay, well outside the area. I was wondering whether the minister would be considering redeploying conservation officers to the north Island rather than having them on an on-call basis.

Hon. M. Polak: We do have someone in Port McNeill. When it occurs that they need some assistance, then those from Black Creek will often come to their aid and assistance and help them if there is additional work that needs to be done. If they need more people, they draw on the Black Creek folks.

C. Trevena: Has the minister got any record of how often we've had to have backup, and how long has there been one person in Port McNeill? It was my understanding that they were all now based down in Black Creek.

[1535]

Hon. M. Polak: Up until March of 2012 there were two people staffing Port McNeill, and in April of 2012 that was reduced to one. The other was then moved to Black Creek as a result of higher call volumes. We don't have the numbers here at the moment with respect to how many times they have provided backup, but we can get that to you, and we will.

B. Ralston: I have a question which, just for the benefit of the minister's staff, I asked in estimates Monday, April 16, 2012. It's about what's called expanded polystyrene. It's more commonly known by its trade name, which is Styrofoam.

Mansonville Plastics, which I believe is in the minister's riding, approached a number of members, both on the government and opposition side. They manufacture polystyrene, and they're voluntarily accepting returns of polystyrene, which is quite widely used for packaging, as I suppose everyone knows.

When the minister gave his answer last year, he said, essentially, that government wasn't planning to do anything to include that into the provincial recycling or environmental stewardship program but that a program would begin. I'm quoting here. "Multi-Material B.C. is the organization that is sort of taking the lead on this file. They are working with the newspaper industry, with the Retail Council…to look at a program whereby, by May of 2014, all packaging and printed paper will be recycled."

He anticipated a regulation was going to be coming into force in May 2014, and that was really all he could say about that. I guess my question, on behalf of this particular company, and of those who are concerned about what to do with recycled polystyrene, is: is that still the target? Can the minister provide any more detail about what is anticipated in the way of taking this material out of the waste stream?

Hon. M. Polak: Yes, we are still on target for spring of 2014.

B. Ralston: Given that assurance, I think what I was looking for would be any other detail about the program. Is it intended, then, that this would be fully integrated into the recycling program — Multi-Material B.C. — and taken completely out of the waste stream? Is there any detail?

This company is particularly anxious. They have a mountain of it in their yard there. They're voluntarily receiving it from the public, and I think they're anxious that the government get on with it. Beyond the date, is there anything else by way of the detail of the program that could be offered to this particular company?

[1540]

Hon. M. Polak: Yeah, it will be fully integrated with our product stewardship programs, and MMBC is currently negotiating the implementation. We will reach out to the company and give them a fulsome update as to where we're at. I understand the situation that they're in, and I know that they're quite anxious for this to come into force.

G. Heyman: I'd like to congratulate the minister on her appointment to this portfolio — which, I'm sure she'll be aware, from my own recent work history I consider a very important one. So congratulations.

I'm quite prepared to simply ask to have information provided when the ministry has a chance to compile it in response to my question, because it may actually entail a significant amount of information. But I'm also happy to hear any answers that can be provided today.

My question is rather broad. Has the ministry conducted or compiled any research or studies regarding direct, indirect or induced economic and job benefits of government promotion or investing in energy retrofitting in public buildings or assisting with private retrofitting through incentive programs, loans or any other measure? This may well have been conducted by the climate action secretariat and not the ministry directly.

Hon. M. Polak: I'll resist the temptation to give you my entire binder since you have broad questions. Nobody needs a binder like this.

Yes, we do have a range of different studies, reports, etc. We tend to do that in collaboration with the Ministry of Energy and Mines because they have the expertise around the energy industry. We'd be happy to provide that to you. If there's anything else you're interested in, feel free to ask.

G. Heyman: Yes, I would be happy to receive the information. Or if it's easier to give me a listing of studies or documents that I could follow up, rather than receive
[ Page 425 ]
what may well be several cardboard boxes, I'd appreciate that.

J. Shin: I would like to extend warm congratulations to the new minister and her staff. This is a very important portfolio. I'm an avid fisherwoman, and I have a business in the industry, so it's something that's especially important to me.

I apologize in advance if the questions that I have for the minister today have been already addressed during the previous estimates on some level.

[1545]

I sat in for the discussion yesterday, so I have some idea, but my intention here is to get the ministry's responses on the record as they pertain specifically to the interests of my constituents in Burnaby-Lougheed, who are, understandably, very concerned about the risks that are imposed by the Kinder Morgan pipeline.

From yesterday's discussions, I understand that the ministry has its own provincial response system with ten FTEs and two that are on call throughout the province. I was hoping to get some clarification on what are the allocations specific to the Burrard Inlet for Burnaby-Lougheed. If you can give me a bit of a breakdown as to how much of those resources are allocated for the response system in that area, that would be great.

Hon. M. Polak: The Ministry of Environment is one part of a response system. We primarily provide oversight. As such, we're not located in every community around the province. We're located in regions. We have people in Surrey, Kamloops, Nanaimo, Smithers, Fort St. John and Prince George covering the province.

As a result of our polluter-pay model, the initial response is from first responders, from industry. And of course, every community has an emergency management program with local people, and that's under the auspices of Emergency Management B.C.

Our primary role in Environment is oversight when there is cleanup necessary or response to some kind of an incident.

J. Shin: Thanks for that answer. It gave me the clarification that I needed.

The people of my constituency are quite wary of the answers and information that are available through the company website. What that means is that often a lot of these questions and their concerns end up in my office.

Is there provincial support from the ministry for general inquiries by the public that people can access to ask questions and get some extra information from the provincial stand?

[1550]

Hon. M. Polak: With respect to Kinder Morgan specifically, pipelines such as that are regulated by the federal government through the National Energy Board. That would probably be one very good place where constituents could direct their questions with respect to safety of the existing pipeline, and in future if there was an application in front of them for the expansion.

Generally speaking, if constituents are interested in what takes place broadly in British Columbia around spill response or things like that, we have a general inquiry mailbox to which people can send e-mails. My staff are just looking up what the address is, and we can provide that to you.

A. Weaver: I have a couple of questions to the minister on my favourite topic, and I'm sure it will soon become the minister's favourite topic. We are living here in Victoria, and you cannot talk about environmental issues in Victoria without talking about sewage. So I have a number of questions.

The minister was quoted recently in the paper assuring citizens of Victoria that funding is committed from the province for the sewage treatment plan. I'd just like to get that confirmed for the record.

As a follow-up, I'm wondering to what extent that funding is confirmed before, during or after the construction phase. The reason why I ask that is that during the election there were some allusions to the fact that funding would only be available after construction was done, as opposed to being done up front.

Hon. M. Polak: The funding is still committed. I should advise the member, though, that with respect to how that funding will operate, that is a question that needs to be directed to the Minister of Community, Sport and Cultural Development. We wouldn't have that information.

A. Weaver: The province of British Columbia originally mandated that a plan be put in place under the former minister — a couple former now — Barry Penner. Since that time, federal regulations have come into play and put on the table a 2020 deadline for the construction of the sewage treatment plant in Victoria.

My question to the minister is: are there any other provincial deadlines that exist now? Or are all previous provincial deadlines being eliminated so that the only governing deadline for completion is the federal mandate one of 2020?

[1555]

Hon. M. Polak: The current provincial deadline that they're facing is December 21, 2016. We're aware that that may be problematic for them, and we're certainly willing to consider an amendment that would allow that to be extended. Nevertheless, the 2020 deadline is a hard deadline from the federal government and one we don't have any authority to change.
[ Page 426 ]

A. Weaver: Thank you, Minister. I'm sure the CRD would be delighted to get the amendment to that effect, and so would the citizens of greater Victoria.

A follow-up question, then. Considering that the currently proposed capital regional district land sewage treatment plant does not meet international standards for energy capture — nor does it actually have a tertiary-based system, nor does it address stormwater management issues — do you believe that government funding would be available, were it possible to delay the implementation on the development of the CRD plan by a number of years past the 2020 deadline, should the federal government agree to a weakening of their deadline?

Just to follow up. The reason I ask that, of course, is that the present system is designed to be a secondary system treating the organic material, which many scientists have argued is actually being treated by the highly oxidized region in the Juan de Fuca, whereas the contaminants, including many toxins, are not being dealt with and the wastewater will be put right back into the Juan de Fuca Strait, where it's presently going.

Hon. M. Polak: With respect to the continued availability of funding past a deadline, that again would be something that the member would have to take up with Community, Sport and Cultural Development.

A. Weaver: My final question would be: does the government agree that the current sewage plan does not adequately meet international best practices for sewage treatment, and would the B.C. government consult with the federal government to ask for a potential reasonable delay and guarantee of federal funding to develop a plan that does indeed meet such international standards?

[1600]

Hon. M. Polak: The current standard in the province and, indeed, nationally is secondary treatment. With respect to pursuing a more advanced type of treatment, one has to consider, also, the impact of further delay. As some of my staff will point out, and have to me on occasion, this has been studied for about 40 years now, maybe even longer. Really, we are concerned that action finally be taken, so we are not looking at this stage to interfere with the current national standard for secondary treatment.

M. Mungall: I apologize to the minister and staff if I'm asking a question that requires a bit of a staff shift. I'll allow for that time to take place if that's the case.

My questions are going to be about implementing of and compliance with environmental assessment certificates, specifically around the Jumbo Glacier resort proposal.

Any changes required? Okay.

My first question is on the staffing levels that are available in the Kootenays, both east and west offices. I imagine that most staffing to ensure that there is compliance with the environmental assessment certificate would come from the East Kootenay, but I only presume that. I will let the minister let me know if it's both East and West Kootenay staff who are covering compliance. I am just wondering: what are the staffing levels to enforce that compliance?

Hon. M. Polak: The way in which the environmental assessment office manages compliance…. They don't have dedicated staff who are out managing compliance all over the province. What we do is utilize staff from other ministries and parts of the Ministry of Environment. For example, we have 150 officers from Forest, Lands and Natural Resource Operations.

We also utilize members from our conservation officer service as well as people from our environmental protection division within the ministry. That allows us to have eyes and ears all across the province. Of course, if one is familiar with the operations of FLNRO, it literally has people everywhere around the province. Those are the people that we use in order to achieve compliance with certificates.

[1605]

I'll just add, in the interest of a fulsome response, that we do have two field staff with the environmental assessment office, but they're not the ones who are travelling to every location in the province and checking on certificates.

M. Mungall: I wonder if the minister knows, then, how many staff would be available to enforce compliance of the Jumbo Glacier resort environmental assessment certificate, located near Invermere.

Hon. M. Polak: We can provide that information, but it would take us a little bit of time to gather. We'll commit to getting that to you.

M. Mungall: Great. Thank you very much, Minister.

I'm wondering, then, in terms of the compendium of proponent commitments, appendix F of the environmental assessment certificate for Jumbo Glacier resort. There are 195 commitments that the resort is responsible for adhering to — things such as wildlife impacts, ensuring that there's no net impact on the grizzly bear population, clearing of habitats. For example, another one around birds is that "clearing of habitats will not occur during the critical April 1 to July 31 breeding period," and so on.

Because the area is quite remote and very difficult to get to, I'm wondering: how can the public be assured that Jumbo Glacier Resorts Ltd. is in compliance with every single one of these commitments?

Hon. M. Polak: When it comes to projects like Jumbo,
[ Page 427 ]
when we become aware that work is underway to build or operate the project, then we would typically put in place a compliance management plan.

Now, those aren't made public, the reason being that we would not want them to become a how-to manual for those who are operating to get around the compliance. We want to be able to be certain that our compliance efforts are not used against us. If they have knowledge of how it is we are going to be monitoring them, then proponents or operators could get around that.

That's how we would typically operate in the case of a situation like Jumbo.

M. Mungall: Then I'll just ask some questions about some of the commitments that the resort is responsible for. Because of the date when the certificate was originally issued, in 2005, I would assume that some of this information that they were required to provide to government back then, the government should have. So I'm going to just check on that.

[1610]

Number 57 of the same document that I've been referring to…. The commitment for the resort is to "conduct and submit to the Ministry of Water, Land and Air Protection" — that dates this document — "regional manager of environmental protection additional baseline analysis before any site development, construction activity, well-drilling program is undertaken, including additional sampling in Jumbo Creek to characterize sediment production during spring freshet…additional sampling in Jumbo Creek to confirm the low level of mineralization in the basin, as suggested by the water chemistry data; and an ion analysis component to the baseline water quality monitoring for Jumbo and Toby creeks."

I'm just wondering if the ministry was ever provided with that baseline data that was required of them.

Hon. M. Polak: I apologize, first, to the member. We don't have with us the listing of all the conditions on every project that has come through EA. But I would offer this. I think maybe the most helpful way to provide the member with the information would be to have staff sit down and go over the conditions and the questions that the member has.

In many cases, for example, while the condition is a part of an environmental assessment certificate, the information may in fact be provided not to the EA but to another part of our ministry, another ministry or a department in another ministry. It would not be practical, probably, to be able to go over those here, but certainly, staff would be happy to do that in a briefing with the member.

M. Mungall: Part of the reason why I'm going through all of this, other than wanting to ensure that compliance is being enforced, is that we have a few cases where there have been things that Jumbo Glacier resort should not be doing.

For example, in 2008, somebody who lives in the area, a local resident…. Talk about eyes and ears on the ground. Local residents definitely have those in spades. They were up in the area and noticed a fuel spill that Glacier Resorts Ltd. was responsible for. They reported that, and it wasn't until about a year later that response was even made by any ministry staff. Of course, in the meantime, we have a toxic fuel spill.

I'm wondering if that year-long response time is characteristic of the type of response that exists in remote parts of the province.

[1615]

Hon. M. Polak: I can't speak to the specific incident. I can tell you that there has been an incredible amount of coordination that has taken place now between ministries in the natural resource sector. Whenever we receive a complaint or, indeed, a report of a spill, we attempt to get people into the area as quickly as possible. Utilizing the people and resources we have across ministries, we are typically able to do that very, very quickly.

M. Mungall: This, I think, will be my last question. My understanding is that we're needing to move on.

In 2005 Jumbo Glacier resort was awarded their environmental assessment certificate. It expired five years from that. An EA certificate expires every five years. After, the government has the option to go through an entirely new certification process or to simply renew the certificate, which it did in 2009. It just did a renewal without redoing the entire process.

However, government is only allowed to do that once under the current legislation. So in 2014, if Jumbo Glacier resort has not built anything substantial, they would have to go through the environmental certificate process again. I am wondering what the government considers substantial.

[1620]

Hon. M. Polak: The lucky winner of the sweepstakes of who gets to make that ultimate call will be the minister.

Here's how that works. The act stipulates that the minister has to be satisfied that work is substantially started. That would not be the result of the minister on his or her own making that call. The minister would rely on analysis and advice from professional staff, who would evaluate whether or not any given project was substantially started.

M. Mungall: My conclusion, then, from the minister's response is that it's pretty much wide open, it sounds, in that there is no real standard whatsoever. There is an analysis that does occur, of course. I wouldn't imagine that any minister would put forward a decision without having something to back it up. But looking to some type of
[ Page 428 ]
standard that's been deliberated in reference to the public interest…. What I'm hearing is that that doesn't exist.

Hon. M. Polak: It is not spelled out in the act, the reason being that this act covers, of course, all manner of projects — large, small, resource developments, resort developments. The list would be infinite, so it would be impossible to stipulate what "substantial work" would entail. Each individual project has to be analyzed on its own merits.

But professional staff take that role very seriously. They, I'm confident, would make the appropriate analysis available to the minister — perhaps it will be me — and then the minister has to use his or her discretion in rendering a decision. All of that, of course, as with any actions by a minister in a case like that, is subject to recourse if people believe a minister has incorrectly made a decision according to the act. Then that is challengeable under law, as any other would be.

M. Mungall: Okay. So without any set standard, say, that a development is 10 percent or 15 percent or 20 percent underway or substantial, maybe being more than 50 percent underway, or so on…. Without anything like that and it being quite open to the discretion of the minister, in a hypothetical situation, should the minister decide that it has not gone forward as much as it should to have an automatic continuation of its environmental assessment certificate, there would have to be a renewal of the entire process.

The government, under the current legislation, is not allowed to just renew the certificate. In fact, the proponent would have to do an entirely new process. I'm just wondering if that process would be what's currently laid out in the environmental assessment regulation, I believe, or if there are some other things that the public needs to know so they're aware of what the proponent would need to comply with.

Hon. M. Polak: In that instance, it would operate as a brand-new application.

M. Mungall: Thank you. That concludes my questions, and I don't think there are any others for this ministry at this time.

Vote 20: ministry operations, $99,946,000 — approved.

Vote 21: environmental assessment office, $8,754,000 — approved.

The Chair: This committee stands recessed for five minutes.

The committee recessed from 4:24 p.m. to 4:28 p.m.

[J. Sturdy in the chair.]

ESTIMATES: MINISTRY OF EDUCATION

On Vote 18: ministry operations, $5,329,349,000.

Hon. P. Fassbender: I have just a couple of very quick opening remarks. I would like to say that I am honoured to be here as the Minister of Education. It has been a passion of mine through all my public life, and I feel that this ministry and its goals and objectives are something that I am very passionate about. I have worked closely with staff up to this point, as a newly appointed minister, to see the tremendous opportunities that we have.

With that said, I think what we want to do is proceed with these deliberations, so I would just thank you, hon. Chair, for the opportunity. And to the colleagues opposite, I look forward to the discussion that we're going to have.

[1630]

R. Fleming: Thank you to the minister for the very brief introductory comments. I know we're pressed for time in this summer sitting of the Legislature.

[G. Hogg in the chair.]

I have some questions just to start off the estimates process this afternoon and to carry forward next week when we spend some more time together. Just to talk — I think, maybe to inquire — first about enrolment statistics in the Ministry of Education.

We have, I would assume, actual enrolments now available for last year to check against the assumptions that were made in the budget and fiscal plan. I wanted to ask the minister if he could detail some numbers on the enrolment by FTE of students and break that down in terms of how reporting is traditionally done in the ministry — of K to 12 and also the numbers of students that were involved in distributed learning, in on-line programs in British Columbia, summer learning programs and adult education.

Hon. P. Fassbender: What we have seen is that since 2000-2001 September enrolment, we're estimating, has declined by more than 72,000 to the current numbers that we have. That's gone from 597,948 down to what we're estimating in 2013-2014 at 525,692. That's a net decrease of 72,256.

That said, we are anticipating that 51 of the 60 school districts expect to serve about the same number or fewer students next year. By 2014-2015 we're sensing that that will stabilize, so we should be seeing that it will be relatively flat in that particular period.

The other thing is that we're getting some of the other figures that you've asked for. We don't have them avail-
[ Page 429 ]
able, but we will provide those when they do arrive.

[1635]

R. Fleming: Thank you to the minister. He mentioned 51 of 60 districts anticipate the same or fewer students in the next school year. I'm just wondering if he could elaborate on the other nine school districts in B.C. and what the trend is there on enrolment.

I know that regionally, enrolment is playing out very differently across British Columbia. If he could just delve into those statistics a little bit more. Of the nine, are those some of the bigger districts? In other words, where is growth happening? How significant is it compared to smaller districts? Which districts — in general, which regions of the province — are experiencing continuing declines in enrolment, and which are stabilizing?

Hon. P. Fassbender: The school districts and the regions of the province that have seen significant growth, of course, are the area that I serve in the city of Surrey, which is growing significantly…. When we look at from 2000 to 2001, the full-time-equivalents in the city of Surrey — even when the rest of the province was declining — grew from about 58,648 students to well over 67,400 students. So that's one of the areas.

The other one, of course, is the south Fraser Valley, which includes the Langleys and Maple Ridge and areas like that. In the south Island — the Sooke area and so on — I was very pleased to be at a groundbreaking for a new secondary school just shortly after my appointment. That whole area has grown right across the board, right through K to 12. Then of course, the Kelowna area has also experienced some growth.

Those are the key districts that have seen the growth in the areas, and we anticipate that they're going to continue, especially when you look at communities like Sooke and the south Island and what's happening here, in the city of Surrey, the Langleys, the south Fraser Valley. It's because of the growth both in terms of population — immigrants and the natural growth that we have — as well as looking at the influx of people that are coming to those areas because of their economic growth.

The Chair: Minister, perhaps we're having some people from the viewing audience who are wondering who the good-looking and intelligent staff members you have with you are. Perhaps before you answer your next question, you could introduce them and thereby pacify the members of the audience.

Hon. P. Fassbender: Well, thank you, hon. Chair. That was one faux pas, which is the second one I've made since I've been a new MLA. So I will correct that.

[1640]

To my right is our deputy minister, James Gorman. To my left here we have Rick Davis, who is an acting ADM in the ministry, and behind me is Doug Stewart, who is also an ADM. I do apologize for not doing that at the beginning.

R. Fleming: Just picking up on the minister's answer, the aggregate, then, for enrolment trends in the service plan last year…. I think what he was saying, in part, in one of his answers just a moment ago is that there is an enrolment increase projected in the period that this budget and service plan covers. Previously it began in 2014-15, and I think I heard him say that that is not projected to be a growth year now in this updated budget but is set to begin in 2015-2016.

Now, it's significant nonetheless that there is an enrolment increase projected in the province of British Columbia, because it has been a decade or more of a straight decline. If he could correct that, then. It's only year three — as opposed to years two and three of the service plan that are under discussion in these estimates — that is now projected to see an enrolment increase?

Hon. P. Fassbender: As the member is probably aware, we use B.C. Stats figures and their estimation of what the growth is going to be. The school boards, of course, use those numbers as part of their projections.

What had happened was that B.C. Stats had projected an increase in 2012, which really hasn't been realized. They've been pushing those numbers back for us and have said that basically in 2014 now we are anticipating that the growth will be flat and there may start to be some slight increase in 2015.

R. Fleming: When the enrolment increases take effect…. I just wanted to ask the minister if he could explain, maybe outline some of the budget implications for his ministry when that trend reverses and begins to incline in B.C.

[1645]

Hon. P. Fassbender: As the member is aware, of course, our budgets are annual, and so we do not build in any projections from a budgeting point of view. We do look at the numbers. Of course, as B.C. Stats updates the numbers and we see that growth is coming, we would then take any submissions forward in 2014 as part of that new budget with anticipated growth. But that's going to be based on the numbers we get from B.C. Stats as well.

R. Fleming: While I think a lot of districts and individual schools will be very happy that enrolment numbers are projected to change because it will help them on the operating side of their budgets — they have had to maintain the same kind of learning infrastructure with fewer students and less per-FTE funding, which many hope will change in a positive way — it does bring different fiscal pressures on districts.
[ Page 430 ]

I wanted the minister to explain on the capital side — with school boards that have either closed buildings that may have to reopen them to accommodate enrolment changes or will have to upgrade schools where maintenance is badly deferred or, indeed, in those fast-growing districts where new school buildings are going to be required — with the enrolment numbers that he's using to base his budget assumptions growing, why the capital budget declines at exactly the same time that enrolment increases.

Hon. P. Fassbender: I want to correct something that the member said in his question. In point of fact, our FTE funding has increased, even though enrolments have been going down. We have continued to invest significantly throughout that time, recognizing that growth may come back. So we have actually increased the funding and not decreased it.

[1650]

I think the other point that I want to make is that when we look across the period of time since 2001, we have spent more than $2.5 billion to complete 99 new and replacement schools. We've done 151 additions plus 27 renovations, and we've also had 25 site acquisitions, so we have invested in preparing for what we hope will be a change overall in enrolment.

We also have invested heavily — $4.6 billion — to school capital and maintenance projects throughout the province of British Columbia. That includes more than $2.2 billion for 213 seismic upgrades, which, of course, are very important in terms of the mitigation efforts that we have in that regard.

We also have worked closely with the boards of education as they've submitted their five-year capital plans to the ministry. When we look at where we are going in the future, we really do see a number of new things coming on line.

Just so the member also has this figure, in October of 2011 the ministry announced, and the province announced, $353 million of new-space projects to meet the enrolment demand in the growth districts like Surrey, like in Langford. When I was up there for the opening, that is an example of that money actually breaking ground and starting to be invested so that we are ready to not only deal with growth that we're currently seeing but future growth as well.

R. Fleming: My comment on the capital spending being at an inverse relationship with the enrolment trend that the ministry is now pointing out is summarized on page 30 of the resource summary of the plan. The fact is that the capital spending is decreasing as enrolment is scheduled to increase in British Columbia. While we had a recitation of statistics from years gone by, I'm looking ahead at the actual years in this budget service plan and seeing a decrease in capital.

If the minister wants to comment on the future in the budget that he's now responsible for, in that regard we appreciate it. But I will move on, as well, to ask him a further question on student-teacher ratios in B.C.

Statistics Canada has released a compendium of statistics that compares different provincial jurisdictions on a whole range of indicators about what education looks like in the different provinces and territories in our country. The last report, I think, is a couple years old now. I don't know if the minister, his deputy or someone can answer whether there's a new, anticipated, updated report about that, but using the numbers that are the most recent ones I have available to me, I wanted to ask the minister, in relation to the education plan that's at the heart of this budget document: where is the plan to address British Columbia's gap in the student-educator ratio?

We trail behind almost every jurisdiction in Canada. It's widened even further since the 2008 recession. Other jurisdictions, other provinces did not respond in the manner that British Columbia did, which was to let the student-educator gap widen even further. Our position slipped in the last reporting year, which was 2010-2011.

If there is a new report that is to be updated in this regard, can the minister tell the committee here this afternoon whether that trend is looking the same or worse in terms of B.C.'s position as it stacks up against other provinces?

[1655]

Hon. P. Fassbender: I really want to correct a comment that was made that we have seen a widening gap. From the year 2000 to 2001 the educator FTE was 36,000-plus, the enrolment was 598,631, so the ratio at that time was 16.6. When you move to the current year, 2012-13, the educator FTE was 32,966, and the enrolment FTE was 542,641. That gives us a ratio of 16.5. So actually, our ratio has improved over those years.

I think the other thing that is always difficult…. When you use Stats Canada statistics that they gather, we do not know how the other jurisdictions classify their enrolment and their ratios, so it's very difficult to compare what we're doing. We look clearly at what we're doing in this province and what we've done, and as I have said, we have not seen a widening in that ratio. Actually, it has improved slightly.

R. Fleming: The Statistics Canada report does show that relative to other parts of Canada, the gap has widened. My numbers align, for the most part, with the statistics the minister just used, but the national average is 13.8 students per educator in the last reportable year. Again, that's a couple of years old.

But the trend line in other provinces is that this ratio is getting better, from a student and a learner perspective, and in British Columbia it has barely changed — I'll concede that — in a decade. I'm just wondering if he can
[ Page 431 ]
explain how that aligns with some of the goals that are outlined in the education plan that belongs to his ministry.

[1700]

Hon. P. Fassbender: As I said very clearly, it is not appropriate for us to try and compare with other jurisdictions when we don't know how they calculate their ratios.

Our focus with this government is: what are we doing for students in the province of British Columbia? We're working very hard to reduce the number of classes over 30. We have made significant progress in that area. Well over 90 percent of the classes in the province of British Columbia are under 30. Those that are over are in some specialized areas like band and drama and so on. Or in some cases, where there may be a student added because they need a particular course, it may go to 31.

But our efforts have been, clearly, to improve our ratios. We continue to work on that, and that is part of our ongoing effort within the system.

R. Fleming: Well, I must say I find it a little bit puzzling to suggest that Canada's national statistics agency doesn't use the proper methodology or that the B.C. Ministry of Education hasn't bothered to find out exactly how that methodology works and whether it's fair.

As I mentioned, the number they use for how British Columbia is doing on that student-educator ratio is about the same as the number that he gave me. So they seem to be doing something almost identical to how we track that number in British Columbia. The point remains: why dispute Statistics Canada? If it's indeed the case that B.C. hasn't even bothered to reconcile its statistics with the national statistics agency for key educational indicators, like how much instruction a pupil can receive, I just don't understand it.

Is that what the minister is telling me — that they don't agree with Statistics Canada and that they don't use those numbers for their own purposes and therefore British Columbia doesn't even bother or show interest in comparing itself to how the other provinces in Canada are doing? How do we know how well we're doing if we don't know how well other provinces are doing?

Hon. P. Fassbender: I think it's very important to clarify that we believe Stats Canada's process in collecting their numbers is flawed, and that's shared by other provinces.

What we're focused on in the province of British Columbia, and something that I am very passionate about, is: what are the outcomes? How well are we doing in the outcomes in our classrooms with our students, and how do we fare against the rest of the world when it comes to outcomes — not the inputs but the outcomes?

[1705]

I can unequivocally say that British Columbia is one of the leading in the country, if not in the world, in terms of outcomes. Our focus is absolutely on that. I can also say that I clearly see, if you want to look at statistics and look at numbers in the 1990s, that we have improved on the statistics in classrooms from the 1990s to today. That is because we have worked very hard on the focus on outcomes.

When you look at investments that we've made in things like the learning improvement fund and other measures that we've taken to improve the quality in the classroom so that the outcomes for all the students, no matter what their particular needs are, are improving…. That's what we are proud to stand and say that we are doing, and we believe we're recognized for that in terms of student outcomes.

R. Fleming: I think most would accept that Statistics Canada would use a standardized methodology. So while the minister may say that they disagree with Statistics Canada, they're going to be using, for the purpose of comparison of different provincial jurisdictions, a standardized methodology.

The finding is that B.C. significantly differs from the Canadian average on student-educator ratios, and fairly badly. I'll leave that for the time being, and maybe we'll have some more time to talk about Statistics Canada next week when we resume.

I want to get to something related to the student-educator ratio and look at the B.C. education plan. One of the centrepieces, which I think is lofty and the right focus, in the plan is to promote personalized learning. I can say anecdotally and by a number of other indicators that are rigorous and documented that this is where some of the sourness occasionally is found in the education system in B.C., because personalized learning doesn't always translate into the experience that parents and kids have in the school system.

Leaving that aside, I want to look at some numbers, over the decade between the '01-02 year and the last year that I have available, 2011-2012, on learning resources in the school system — a ten-year snapshot.

Statistics Canada, again, found that British Columbia had 286 fewer teacher-librarians over that decade, by the end of that decade; 120 fewer counsellors to support kids and adolescents in the school system; 770 fewer special education teachers who obviously work with kids in the school system that have learning challenges; 342 fewer English-language learning teachers in B.C. school systems that obviously have a key part in individual learning plans being feasible; and fewer, by at least a dozen, aboriginal education teachers in the B.C. school system that also help promote personalized learning.

All of the parts of the education profession that I have just mentioned, which form a critical basis of an accelerated promotion of personalized learning and the commitments that are made in the B.C. education plan, have
[ Page 432 ]
seen dramatic reductions in their numbers, in the people employed to do this work in our school system.

I want to ask the minister, basically: how does he have, at the heart of an education plan, an emphasis on more promotion of personalized learning while the last decade has seen systematically a reduction in those skilled personnel that delivered exactly those kinds of individualized learning services in our school system?

[1710]

Hon. P. Fassbender: A couple of things that I think we need to clarify. In the 1997-98 period, in librarians we had 778.4; counsellors, 880.7. Moving up to 2012-13, we have 646.6 librarians and 871.1 counsellors. So there has been a slight reduction.

I think what's more important in this whole area is the issue of number of supports in classrooms. Let me give you a for-instance. In education assistance — we have increased that from about 6,900 to 9,300, an increase of 2,400. That's a 30 percent increase in those kinds of specialized supports in classrooms.

I think the other thing that's really important when we talk about personalized learning is that each school board is responsible for making those decisions within their context and within the environment that they're operating. While we see that there may have been shifts, it's because school boards themselves have said: "We see a need in our particular school district, so we're going to put the resources where the best outcomes, again, are for the students in the classroom."

Over that same period, with the reductions that I've talked about, albeit minimal, we've lost 72,000 students. To suggest that there has been a decrease in the classroom in support and that personalized learning is not a priority — that's not a correct statement. I think what we are doing is ensuring that we put the right resources in the right places, and the school districts make those decisions based on their individual situations.

R. Fleming: Well, I know we're going to have a lot of fun with different numbers. The minister cherry-picked a number there from 1997-98, on the cusp of an expansion of the education system, rather than looking at the numbers from '01-02 that I used, which just happens to be when the government changed. But it gives us an even ten-year snapshot to where we are today.

The numbers around specialist teachers and special learning assistance, whether it's in library services, counselling, special education, ESL or aboriginal education…. The fact is, according to his own ministry, the numbers declined by 1,527 full-time positions.

[1715]

Those are the numbers that we've used, that have been gathered from the ministry, that have been widely reported and that I think are the ones that are relevant here. We now have a new education plan that focuses on promoting individualized learning as a way to drive better outcomes and improvements, as the minister was speaking about earlier. Graduation rates, retention — all of those things transition to further studies.

I wanted to ask the minister, you know, regardless of the numbers…. I mean, I don't want to go back and forth on that all day, but the education plan is supposed to be supported by the learning improvement fund.

I want to ask him: where is the replacement for all of those positions that have been lost going to come from in the learning improvement fund? Can he detail any hirings that suggest we're beginning to replace some of the positions that have been lost over the last ten years and that may further and support the promotion of individualized learning in his education plan?

Hon. P. Fassbender: I think what's really important is that the learning improvement fund has been developed to provide additional resources to school districts. As I said, one of the things that we think are very important is that local school boards make the decisions with their staff as to where that support should be.

Just so that the member has some figures, and I agree…. Figures can tell you whatever you want — to interpret them — but here are the facts. The facts are that teacher staffing has received an additional $36,804,446 that has been given to districts where they see significant need. They identify where it is, and they are telling us that is giving them the flexibility to meet the needs.

In terms of professional development, over $1.7 million has been spent in education assistant staffing requirements at the local level, identified by local school boards. Over $17 million has been dedicated to that. Again, we believe, in the ministry, that providing those resources gives the school districts the ability to target the needs that they've identified. The feedback that we've had is that it is working for them.

[1720]

R. Fleming: Well, let me try the question another way. With the demographic shift — we've talked about enrolment; we've talked about the education plan a little bit and what's at the centre of it — does the ministry foresee increasing the number of specialist teachers that it has to hire and will hire over the next few years? Is that part of what the ministry is helping to coordinate with other districts in furtherance of the provincewide education plan?

Hon. P. Fassbender: I'll go back to the comment that I made. We are looking at enrolment growth being flat. That being said, I don't think there is any school district where, if they see either a slight decline or it being flat, they're going to go out and hire new teachers. What we do see is in those districts where there is significant growth and where we're projecting growth…. I mentioned those: Surrey, Langford, Kelowna, south Fraser Valley.
[ Page 433 ]

The beauty of the learning improvement fund is that those resources are given to those districts. They decide within their communities and within their education system where the priorities are. In those districts where there is growth, there will be new teachers hired. In those districts where the growth is either flat or still declining somewhat, no. We don't see a lot of change in hiring practices, because there is no district that's going to go out and hire teachers if their enrolment is static or even still going down a little bit.

R. Fleming: Maybe, with the minister's indulgence, we can leave this topic and go to one that…. Hopefully, the right staff is with him today to assist him in providing answers. I just want to move for a moment to the B.C. training and education savings program, the RESP grant program that government has announced or, I should say, reannounced — quite a few times, beginning in 2007 and reannounced recently, a month ago.

[1725]

Some of the details of this program are unknown at this time. More details have become known, as far as I can tell, because they are contained finally in this budget. I just wanted to ask the minister about one of the assumptions on how this program is going to be paid for and how much it will cost the treasury.

On page 53 of the budget it states that "the assumed initial uptake" — of the RESP program — "is 57 percent based on the current available data. Using this assumption, the estimated fiscal…impact…is $30 million annually, beginning in 2013-14."

I'm just wondering if the minister can further explain why government uses an assumption of only 57 percent of eligible parents taking advantage of this program. I'll wait for his answer and then….

Hon. P. Fassbender: I do want to mention that Renate Butterfield, who's the assistant deputy minister that's responsible for this program, has joined us here.

I am very pleased to say that based on the analysis and the information we had, there are about 56 to 57 percent of families that currently have a registered education savings plan, so we use that as the baseline. Like any program, part of it is going to be the marketing and getting the word out there. Even since we have made the announcement that this is moving ahead, we've already had a 1 percent increase in the uptake on the program. We anticipate that to continue to ramp up.

We know that the industry is going to promote this because they see it as a significant benefit to families, as we do. As that marketing effort continues, we do believe that the uptake is going to increase. To have 1 percent this early, even in the last few weeks, basically, is a significant statement to us that people are getting the message that this is a good program for their families and for their children's future.

R. Fleming: I wonder if the minister could outline the cut-off date for children. By their eligibility, they have to be born on January 1, 2007, or after. When is the cut-off date for the first, I guess, cohort of eligible children?

[1730]

Hon. P. Fassbender: The cut-off date for the first cohort of those children born in 2007 will be February 28, 2014.

I did want to add also, just to reinforce what I had mentioned, that back in 2007 we had 43,000 births — 43,649. The number of RESP beneficiaries that existed at that time was 24,000, and already in July of this year we're up to 25,590. We're seeing that increase from 57.2 percent of families to now sitting at 58.6.

We are seeing that people are taking it out, and we are making sure that the information gets out to the parents that they need to get their applications in. We will have some flexibility, of course, for those because we're still working out the details in terms of implementation. But they will be covered. They can open up an RESP and have it without any money in it whatsoever. As long as it is there and the application form is filled out, they will be captured.

R. Fleming: Just to go back, the B.C. training and education savings program is essentially a repurposing of the children's education fund that, as I mentioned, was originally announced in 2007 by the government. The CEF, the children's education fund, currently sits, I think, in a reserve account, special account, at about $300 million. If I understand this correctly, this will now be drawn down as the 57 or 58 percent participation rate puts demands on the $1,200 that each child is eligible for.

By my calculation of what a drawdown would look like on those participation rates, does this mean that…? Let's say there was 100 percent participation, which I think would be ideal. If the program is for everyone, then we would ideally want everyone to participate. I'm not sure that's going to happen with the February 8 deadline in eight months' time. In fact, it probably will be far short of that.

But if 100 percent of eligible families were to take part in this program, the children's education fund balance of $300 million would be gone in just six years. Now, is that a contingency that the government understands, and is it one that clashes with the goals of the program, which is designed to make this a benefit that everyone qualifies for?

Hon. P. Fassbender: I wanted to make note of one very interesting statistic, seeing we like numbers. We have already, on the promotional video site, received 300,000 hits. When you look at 300,000 hits in that short period of time, it says to us that people are getting the message. The reality is that, indeed, everyone who qualifies, who applies, will be eligible.
[ Page 434 ]

As the member has said, to assume that we could get 100 percent compliance of everyone…. Will that happen? I think the more we start to get people educated and the more hits we get on the site and the industry gets involved in promoting it, we hope that number goes up. Every year we are adding an additional $30 million to that fund, to the $300 million.

[1735]

We know that this is a program that clearly is of benefit to the future of children's education and their post-secondary education. It's a tremendous opportunity for families, no matter what their particular socioeconomic status may be, to invest in their children's future. If all they did was to take the $1,200, that is a significant benefit to their children. But we, of course, hope that they will add to it, that other members of the family will contribute to their grandchildren's education and that this is a tremendous catalyst to provide that opportunity to all families.

R. Fleming: I'm glad the minister has said that he has considerably higher ambitions for a takeup rate on this program than what the budget assumptions are, which are that 4½ out of ten kids…. There's no such thing as a half kid, but a high percentage, 43 percent of kids will never see this RESP. That's the budget assumption in this document.

Now, I'm happy to hear that there are a lot of hits on the website. The February deadline in 2014 is coming rather soon, and for any kid that turns seven and has not registered before then, that's it. The opportunity is gone. Government has finally just figured out some of the details and the ability to enrol in this program and not given families an incredibly long time to get involved. There's obviously a responsibility, I think, of government to push quite hard to help do that.

I'm wondering if the minister can explain what kind of advertising or programs are going to drive more traffic, more enrolment into increasing the takeup rate and, therefore, exceeding the budget that we're debating this afternoon and for the rest of this session. How's that going to happen? If he could explain the mechanics of the promotion.

Hon. P. Fassbender: Absolutely, one of the keys to the success of any program like this is, first of all, getting the message out there. The fact that we already have 57 percent of the population — now 58 in the last little while — that have actually opened up RESPs is a good base to start from.

I also had an opportunity, at an announcement that I made at the Vancouver Public Library about this program, to talk to some of our partners, who are the financial institutions. We are absolutely convinced that….

Aside from the communications plan that we're working on to put information in various periodicals and different things like that, we're going to increase our on-line presence. We're really going to ramp that up in September when the students come back into school and the parents start thinking again about the coming education year and the future of their children.

We're going to be working with our communications specialist to ensure that we have a good strategy. Even more importantly, the members of the financial institutions that I had a chance to talk to already have existing relationships with parents, grandparents. All we're asking parents to do is to open up that RESP, to put it in place.

[1740]

The financial institutions, through a variety of things that they are going to do, including their client specialists who meet with people on a day-to-day basis…. We talked about things as simple as when a parent comes in, or a person comes in, because they already have a relationship and they know these people, they will say to them: "If you have a child or a grandchild who falls within this category, have you considered opening an RESP?" That's the key to moving forward.

We believe, with their support and with the program that we're going to put in place, that we're going to see that number increase as September comes around, with plenty of time before the deadline of February 28.

We're going to continue to communicate to parents that that's the deadline for the 2007 birth year, but we really believe that we're going to see the uptake increase significantly. Will it be 100 percent? That would be an ideal situation for those children and their families.

R. Fleming: I'm glad to hear that commitment from the minister. I'm not going to make a wild guess here, but the 43 percent who are projected in this budget to miss the ability, the entitlement, to participate in this program are probably not going to be Jimmy Pattison's grandkids. Not to pick on one individual, but it's people who are well off — people who have tax accountants who are going to advise their clients that this would be a good move to shelter income and take a tax benefit and significantly add to the contribution of the very small one — let's admit it — that the province is making and build that fund.

The 43 percent who are budgeted to miss this program are probably going to be amongst the lowest-income families or working families in B.C. who file their own taxes or who may not be caught by targeted efforts by the governments to drive up that number, to increase the participation rate. That's my concern here this afternoon.

It's not to second-guess the merits of the program. I think we've talked about it a little bit in the House — about where better post-secondary investments could have been made to achieve greater participation in post-secondary education and the labour market.

The fact that 43 percent of British Columbians in this budget, it is assumed — it's a fiscal assumption — will
[ Page 435 ]
never take advantage of this program concerns me. I'm glad to hear that the minister says he won't be satisfied until 100 percent of B.C. families are involved, but I think a lot of kids, when they turn 7, by 2014…. Their parents may miss this deadline, and that's unfortunate.

My first question really is — I'm going to put a few of them together, because I know we're running out of time this afternoon: would the minister consider extending that deadline, if his goal really is 100 percent participation? We'll see where it is in February, but would he consider extending that deadline to capture more families?

Secondly, because I have said that I think a lot of disadvantaged, lower-income, working-poor families in B.C. are probably less likely to take advantage of this…. They're probably the 43 percent that this government has assumed won't get involved.

People who are known to government and who have an interface with the province through social assistance or through subsidized daycare eligibilities, across an array of points of contact with the province — those might be the people who don't get the $1,200 RESP.

Would the minister consider working with his colleagues that are responsible for those other ministries to make a special effort to make sure that low-income British Columbians, the ones who probably need help the most to be able to afford post-secondary education and probably have cultural barriers and all kinds of barriers to taking advantage of that…?

Will he look at working with his colleagues to drive down that 43 percent non-participation rate and help British Columbians that need it the most to get that money?

[1745]

Hon. P. Fassbender: I would say to the member, and to all of the members in the Legislature, that we need to talk to our constituents as well. I encourage the member and all of his colleagues to get that word out through whatever means they have as well.

That being said, one of the things is that the deadline is a regulation, and we have a statutory obligation with this program to fulfil it, whatever the uptake is, so we are going to work very hard. We've already had discussions with the Ministry of Children and Families in terms of outreach through their auspices as well.

We're going to be working with daycare centres throughout the province to get the word out. Schools — absolutely. When the students come back in September and they're brought by their parents, we're going to be encouraging every school to be communicating to those parents: "Have you heard about the program?" As we develop all of the materials and we get that done, we're going to ensure that we use every touchpoint that we have with people.

I think the key here is that the assumption that people of more means shouldn't take advantage of it is, in my view, a false assumption. I think every family should take advantage of it because I think they will talk to their friends and so on. So we're even talking to people who have taken it up who have RESPs, encouraging people through our communication to talk to their friends and their network so that we get the word out as broadly and as quickly as we can.

While I can't make a commitment today of what we're going to do with the what-if scenario, I can say that because it is a statutory requirement and because of the regulations, I do have some flexibility, and we're going to monitor how well we're doing. As we get closer to the deadline, we'll see where we're at and what's happening. I have the ability then, with staff, to look at what other options we might look at to ensure that we give everyone the opportunity to participate who wishes to.

With that, hon. Chair, noting the hour, which has already been brought to my attention by my colleague across, I move that the committee rise, report the resolution of the Ministry of Environment and progress on the Ministry of Education, and ask leave to sit again.

Motion approved.

The committee rose at 5:49 p.m.

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