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)

Tuesday, July 23, 2013

Morning Sitting

Volume 4, Number 3

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

TUESDAY, JULY 23, 2013

The House met at 10:02 a.m.

[Madame Speaker in the chair.]

Prayers.

Introductions by Members

J. Horgan: I just want to advise members of the House that if you're wondering why the member for Port Coquitlam looks a little bit older today, it's because he is. This is a special time for the two of us because for the next ten days or so he is a year older than I am. Would the House please wish the member a very happy, happy birthday.

Hon. M. de Jong: Well, I have a birthday present for the member. Happy birthday.

Tabling Documents

Hon. M. de Jong: Madame Speaker, I have the pleasure to rise and table the Public Accounts for the 2012-2013 fiscal year, which fulfils the requirements of section 9 of the Budget Transparency and Accountability Act.

I also table, on behalf of the ministers responsible, the government's strategic plan report and service plan reports, as required under sections 15 and 16 of the Budget Transparency and Accountability Act. The service plan reports are presented in two binders. The first binder contains service plans for the Office of the Premier and 16 ministers. The second binder contains service plans for 30 Crown corporations and agencies.

Orders of the Day

Hon. M. de Jong: In this chamber, Section B, Committee of Supply, I call the estimates of the Ministry of Health; in Section A, the Douglas Fir Room, Committee of Supply, the Ministry of Natural Gas Development and Housing; and in the Birch Room, Committee of Supply, Ministry of Advanced Education.

[1005]

Committee of Supply

ESTIMATES: MINISTRY OF HEALTH

The House in Committee of Supply (Section B); R. Chouhan in the chair.

The committee met at 10:09 a.m.

On Vote 28: ministry operations, $16,403,475,000.

Hon. T. Lake: It's a pleasure and an honour to be standing before the members of this House today to debate the estimates for the Ministry of Health. Before we begin, I'd like to introduce the members of my staff who've joined me here today. I've got my Deputy Minister of Health, Stephen Brown.

[1010]

I have our chief administrative officer, Elaine McKnight, behind. We have Assistant Deputy Minister Manjit Sidhu to my left and executive director Nick Grant behind me as well.

I'd also like to thank the 1,240 Ministry of Health employees who work so diligently for the public service and also the thousands of health care professionals and allied workers, as well as the people throughout British Columbia working in the health care system, for the outstanding work that they do.

British Columbians have entrusted our government with a mandate to build a strong economy, a secure tomorrow and a lasting legacy for generations to come, and as Minister of Health I'm committed to fulfilling that mandate. It means protecting and enhancing the health care system while ensuring the best possible value for taxpayers.

As many of you know, currently B.C. has some of the best health outcomes in all of Canada while controlling health care spending relative to other provinces. I think that's something we can all be proud of. It means we are delivering excellent results for patients while also conserving every tax dollar we can. As Minister of Health I have a mandate to continue this record.

Preserving a strong British Columbia for ourselves, our children and our grandchildren means making the right choices now to control spending and to balance the budget in health care. We understand the system is facing increasing pressures precipitated by a growing population and, of course, an aging population as well.

Budget 2013 is a budget that shows restraint despite the temptation to spend now and worry later. We're balancing the budget, but we're also continuing to invest in health care, of course. Over the next three fiscal years the Ministry of Health will receive an additional $2.4 billion in funding. We continue to manage the rate of growth in health expenditures, and that's the right thing to do for system sustainability and, of course, for the taxpayers as well.

Before the worldwide economic crisis, health funding was growing by about 7 percent a year. In this year's budget we've put the growth down to 2.6 percent, which means we're managing wisely, but it also means that we will require innovation to achieve this bending down of the cost-increase curve. We're driving down administration costs and focusing available resources where they are most appropriate.

Through innovation we will improve our performance and the efficiency of our health system and ensure
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the long-term sustainability. We're doing this in three primary areas.

The first is focused on health promotion and disease prevention. Our healthy families B.C. agenda is an example of where we are helping people to keep healthy by creating conditions that improve physical activity levels, increase healthy eating and, of course, reduce tobacco use.

The secondary focus is developing a system of integrated primary and community care — programs like Home is Best, which helps seniors with high care needs live longer in their homes as an alternative to being admitted to residential care and avoiding preventable hospital admissions.

Lastly, we are ensuring that we have a high-quality and accessible hospital care system. Over the next three years investments in new medical equipment and modernized health facilities will reach $2.5 billion. Examples include the redevelopment of B.C. Children's and Women's Hospital in Vancouver, the redevelopment of Royal Inland Hospital in the great city of Kamloops, the replacement of the Queen Charlotte–Haida Gwaii hospital and a new Surrey Memorial Hospital emergency department and critical care tower.

As leaders we all have a duty to be disciplined for taxpayers today and a responsibility to be fair to future generations. Our health care system is founded on the principles of caring for those who cared for us and helping those who need our help now, and our targeted investments are paving the way for a brighter future for the next generation.

I welcome any questions that opposition Health critics or other members of the House may have in respect to our budget and the programs of the Ministry of Health.

J. Darcy: Let me thank the minister for his opening remarks and begin by congratulating him on his appointment as Minister of Health. I look forward to the next three days — 16 hours, I believe — of questions.

Interjection.

J. Darcy: It will go fast, will it? Okay.

Well, both the minister is new in his role as Minister of Health and I'm new as the Health critic. You do have previous experience in other ministries, so I'll take your word for that, that it will go quickly.

[1015]

We certainly have a number of questions in a number of different areas. I will be addressing questions to you this morning and early in the afternoon on some of the big-picture financial issues, the overall budget analysis, federal transfers, health authorities, the mandate letter from the Premier to the minister, as well as capital commitments. I would expect that would go for a couple of hours this morning and then a couple of hours this afternoon, and we may be able to start to get into some of the other issues this afternoon.

In the course of these three days we will be addressing a number of other issues, including wait-lists, primary care reform and community care, as well as having my colleagues who are the critics in specific areas of health care addressing questions. My colleague for Surrey–Green Timbers — it takes a little practice to not actually use their names — will be speaking to mental health issues.

My colleague from the North Coast will be speaking to northern and health issues, and my colleague from Kootenay East will be speaking to seniors issues. We will at the end of this morning or at the end of the day be able to give you a clear sense of when those other issues will be coming up.

I want to begin by assuring the minister that our objectives on this side of the House and in all of the questions that we pose are certainly about improving health care for British Columbians, improving health outcomes for British Columbians and, yes, also improving the effectiveness and the cost-efficiency of our health care programs. So we will, as I said, cover a wide range of issues, and I'm certainly eager to get into those and anticipate the minister's fulsome responses to the questions in a manner that we're perhaps not able to do during question period.

Let me begin with the budget overall. I want to say that we appreciated the opportunity to be briefed by ministry staff a few days ago on some of these questions. We do want to clarify a few things, so I will put some of these questions to the minister.

The first question has to do with the overall decrease in planned spending in the Ministry of Health. I think we can agree that that's an accurate way to portray it. From our analysis, we see a $234 million decrease in planned spending from what had been put forward in the 2012 budget. That includes a decrease of $165 million for health authorities alone this year and then another $164 million reduction in planned transfers to health authorities the following year.

Based on the revised budget for 2013-2014, it would appear that the annual spending increases over the next three years average about 2.6 percent a year, making them the lowest health increases in ten years and certainly lower than what was previously committed in the 2012-2013 budget.

Can the minister please explain: what are the key changes in the budget that account for the $234 million decrease in planned spending, which effectively cut the increase in the budget from a lift of 3.9 percent to a lift of 2.4 percent?

Hon. T. Lake: As mentioned in my opening remarks, we are bending down the cost-increase curve on health care, as many other jurisdictions are. I believe Alberta has a 3 percent increase this year, 2.1 percent the follow-
[ Page 887 ]
ing year and 2.0 percent the year after. So this is, I think, an effort that many jurisdictions are trying to get a hold of because, as the member knows, if health care increases outpace economic growth, you then have to increase taxes or take from other programs, and neither one of those is palatable.

We have tried to protect health authorities. The member mentioned that health authorities would be getting less. In fact, their expenditures, or their share of the budget, have been preserved.

[1020]

In budget 2012-13, their spending grew by 3.5 percent, and funding increases for 2013-14 and 2014-15 are estimated at 4.3 percent and 2.9 percent respectively. The one area where there could be some possible impact is on the pay for performance model that we had in the past. There was an additional amount of money put into that pot that health authorities could access. What we have done now is take that back into the global budgets for health authorities. They will still have incentives to attain that money, if you like, but there will be a possible small reduction in that area.

Overall, the health authorities…. What we've tried to do is protect the health authorities. They're the ones providing the front-line services. Where we're trying to save the money is in the central services and areas like MSP and PharmaCare, where we are trying to drive costs down through various initiatives.

J. Darcy: I will come back to the issue of pay for performance, but let me ask first of all: in the budget documents and in the mandate letter to the minister, as well as in the service plan, the government seems confident — I would say supremely confident, perhaps — that it can achieve a reduction in health spending increases without sacrificing health outcomes or direct health services to British Columbians.

But given the government's emphasis on balanced budgets for health authorities, given the announcements of cuts that we are now hearing on a weekly — sometimes even daily — basis, it's very difficult for us to imagine how direct health services will not be affected by reductions in planned spending in the budget.

Just in the time that this House has been in session, we have seen — and just a few examples — a new wheelchair fee of $300 a year, cuts to numerous community mental health programs that I know that my colleague the critic for mental health will speak about later on, reductions in emergency room hours in rural communities, cuts in lab services in VIHA, and the list could go on.

I want to ask the minister: specifically, can you explain what changes in the budget will impact home care and seniors care and what changes in the budget will impact mental health and addiction services?

Hon. T. Lake: There are no cuts. I think that's important. We are, as I mentioned, putting an additional $2.4 billion into health care over the next three years. Every health authority is getting an increase in their budget in each of the three years of the fiscal plan.

Some of the things that the member talked about — for instance, the wheelchair fee…. This is something that has always been available to health authorities in terms of providing services to residents in long-term residential care. Last fall we clarified with health authorities what was permissible in terms of allowable charges, and this was one of those that was permissible. Some of the health authorities have been charging it. Some of the for-profit spaces that the health authorities employ have been using this.

Just as someone who is living in the community would be expected to pay for their own mobility device — my own father, for instance, who lives at home, pays for his own mobility device — those in residential care are expected to do the same. However, each health authority has a plan in place. So if someone simply cannot afford to pay that fee, it will be waived. We always protect the most vulnerable, and this is no different.

There should be no impact on mental health funding. We have a ten-year mental health plan that comes with significant investments that we've made. We have increased funding for caring for seniors at home so that they can stay in their homes longer and not have to go into long-term residential care or end up in acute care.

[1025]

So in every way we are increasing funding to health authorities and increasing funding for those front-line services.

J. Darcy: To the minister: just on that question, you say the ability to impose the wheelchair fees has been in place for some time. But it is this time that the health authorities have chosen to impose it. Surely that has to do with some financial hardship that they're experiencing, and I hope that you can come back on that issue at a later point.

I think the overall issue that we're raising here about the budget is that the planned lift was 3.9 percent to Health spending. It is significantly less than that. Health authorities plan, as do, I'm sure, ministries. But health authorities plan on three-year cycles, and we'll speak further about health authorities and some of the challenges that they're facing and some of the things that are being said at health authority meetings, board meetings, about the challenges that they're facing.

But surely the minister will accept that significantly reducing the planned spending in Health and for health authorities will have an impact on services. How can it not have?

Hon. T. Lake: As I mentioned earlier, although the planned increase over the '12-13 three-year plan is smaller now in this current '13-14 three-year plan, the health
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authorities' budgets have been preserved. They are getting the same amount with the exception of the pay for performance that was in addition to their regular funding in the previous years. So we've preserved health authorities to ensure that they can continue to provide the services, the front-line services that people depend upon.

The changes in the budget that the member mentions primarily come from the reduction in the MSP budget and the reduction in the PharmaCare budget, because we are embarking on significant reform — of the lab system, for instance — to try to reap benefits for taxpayers with improvements in technology and a different model. We firmly believe that we will achieve those savings in a way that does not impact the front-line services provided by health authorities.

J. Darcy: Thank you, Minister.

The minister has stated that savings in this budget come from the use of patient-focused funding, pay-for-performance models and from a new drug-pricing regulation that came into force on April 1, 2013. Can the minister explain what total savings these contain for the budget and in what line items they're contained?

Hon. T. Lake: The PharmaCare line of the budget will see a savings of $43 million in 2013-14, $80 million the subsequent year and $80 million the following year. As the member noted, we have reduced our generic drug costs down to 25 percent as of April 1, 2013, and that is scheduled to go to 20 percent in 2014.

J. Darcy: Thank you, Minister.

In the discussion we had with ministry staff last week it was explained to us, in response to questions about the reduction in planned spending, that $50 million — and you've referred to this $50 million — that had previously been allocated to pay for performance is no longer allocated for that purpose.

Has the $50 million been moved to a different line item, or has that amount been eliminated from the budget? If it's been moved rather than cut, can the minister provide more information about how that funding will be distributed differently than it was while it was under the regional services line item?

You referred just a moment ago to incentives that were being given to health authorities. Could you speak to that, please.

[1030]

Hon. T. Lake: The $50 million was through the B.C. Health Services Purchasing Organization. This was more or less a pilot program to look at the pay-for-performance model. It proved successful, certainly in some health authorities more than others. It has paved the way for us now to use that concept in the global budgets of the health authorities.

In the past what we've done is essentially give the health authorities a global budget, and then they spend it as they see fit. What we're doing now is that $50 million is gone, and within the global budget there is a certain amount held back that essentially has to be…. Certain targets in different areas have to be met to access that part of their global budget.

This is a concept that has been used around the world, in places like New Zealand, where it creates an incentive to have measured performance and measured quality performance targets as well. This is the first year of transitioning from the pilot that was created and now moving it into the normal way of doing business, if you like, for each health authority.

J. Darcy: Just further on that issue, Minister, is that $50 million still in the budget, or is that $50 million being cut from the budget?

Hon. T. Lake: That $50 million is no longer in the budget.

J. Darcy: I was going to pursue this issue a bit later, but perhaps I'll ask the question now. Presumably, to bring about the efficiencies through systems like pay for performance, there is investment required in capital equipment, in use of operating rooms, in additional staff, because it takes all of those things in order to move more people through surgical procedures and diagnostic procedures more quickly.

Can the minister explain what the incentives are? If it took $50 million to achieve some measure of success in those areas, how are the health authorities expected to achieve that same measure of success without those financial incentives?

Hon. T. Lake: As I mentioned, we are using 2013-14 as a transitional year, going from the additional money that was provided through the pilot program through to doing this on a regular basis. In the transitional year we are setting targets in two main areas of service capacity and quality. These include system capacity and access.

There are four measures there, including the percentage of patients presenting at emergency departments admitted within ten hours of initial triage, system capacity measured by health authorities for same-day care and in-patient workload, and percentage of elective surgery patients waiting greater than 52 weeks, as well as compliance with ministry data reporting for home and community care and diagnostic imaging.

There are three quality measures, including the percentage of hip fracture fixation patients treated within the defined target; nurse-sensitive adverse events, measured as the number of events per thousand patient admissions to hospital; and the quality improvement measure proposed by each health authority, subject to approval
[ Page 889 ]
by the ministry.

Within the 2013-14 year there'll be $130 million of base funding to health authorities that will be allocated to performance-based goals that I have mentioned.

[1035]

J. Darcy: Is that new money — the $130 million?

Hon. T. Lake: Well, some of it will be new, because we do have an increase in the budget. Obviously, there is some incremental money there, but it is part of their global budget. Within their global budget, $130 million will be put into this pay-for-performance account, which they can access if they meet those targets that I mentioned.

J. Darcy: I just want to make sure that we're understanding this correctly. Previously there was additional money provided by the Ministry of Health in order to achieve certain targets. Now the health authorities are being expected to take $130 million out of their existing budgets in order to meet targets. Is that correct?

Hon. T. Lake: As I mentioned earlier, health authorities are getting in the order of $300 million more this year than last year. But $130 million will be held in the pay-for-performance component of that funding.

The $50 million was provided earlier so that health authorities could understand how the system would work. They could get the systems in place and understand how they needed to change their capacity and the way they do business in order to reach those targets.

Now that that's done, it's been incorporated into their global budgets as a holdback, if you like, to ensure that they meet those certain targets. Again, this is a model that has worked very well around the world.

Now that the health authorities have had the opportunity to pilot this, get their systems geared up, we feel they are in a much better position to make that part of the way they do business on a regular basis. We didn't think it was fair to impose this on health authorities without that additional funding, because it does take time to make the changes necessary, to understand how that model is going to work.

We feel that after having done that for a number of years, they're capable now of making that system fit into the way they do business under their global budget.

J. Darcy: I just want to clarify. There was part of my question that I don't think that you fully answered. Is it not the case that money allocated for pay for performance, among other things, is spent on things like increased OR capacity, equipment, staffing and so on in order that wait-lists can be reduced in a number of areas?

Hon. T. Lake: Well, certainly, some of the money would be spent on all of the things that the member mentions.

But now that they've had an opportunity to get those systems in place, understand the staffing levels required, how they can schedule things — all the myriad of things that need to come together to make that system work better…. Now that they've had the pilot, with additional money that was available, we feel those systems are in place and that transitioning over to this pay-for-performance model….

Again, it will start off relatively small, in comparison to the global budget for health authorities. In each subsequent year it will grow larger as the system gets used to the model of meeting certain targets of quantity and quality.

J. Darcy: If I could move on to another area. Ministry staff also explained to us that $72 million has been reallocated to Vancouver Coastal Health's capital budget for IM/IT as part of their clinical transformation.

Can the minister explain how that $72 million was previously used, what it will now be used for and what the justification was for moving that $72 million? Is the $72 million all from the reduction in planned spending in the first year, or is it spread out over several years? In particular, what portion of the planned reduction in spending for 2014-15 is due to the reallocation of this planned spending for Coastal Health?

[1040]

Hon. T. Lake: At the request of Vancouver Coastal Health, $72 million in each year of the three-year budget was moved from operating into capital for their IT transformation. This was at their request. They feel that this investment into capital will actually allow them to create efficiencies and innovation that will more than pay for themselves on the operating side.

J. Darcy: Can you please clarify…? Can you give us, perhaps, a Coles Notes version of what that project is?

Hon. T. Lake: While I don't have all the intimate details, I can give, like the member says, a Coles Notes version. This is a large clinical transformation project with changes in care models, changes in clinical efficiency, through the use of their IT system. A project plan is currently being prepared. Again, this was at the request of Vancouver Coastal.

They felt that this transformation project around clinical care was something that would be a better use of the money, if you like, moving from operating to capital, and would essentially more than pay for itself on the operating side once the changes were made. As I mentioned, there will be a project plan filed shortly.

J. Darcy: The other part of the question that I asked
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was: can the minister explain how that $72 million was previously used?

Hon. T. Lake: The $72 million would have been part of Vancouver Coastal Health's global budget. It would have been spent however they decided to allocate those resources.

The Chair: Member, do you have a question?

J. Darcy: That was the shortest answer so far.

Has the government done any analysis regarding the potential impacts of the $25 million reductions in discretionary grants? What is the total amount that is allocated to discretionary grants? Is the $25 million cut the same in subsequent years?

[1045]

Hon. T. Lake: The discretionary grants, of course, vary from year to year. It is dependent upon the spending of the ministry. As the member well knows, in a budget of $16.5 billion it's difficult to come in exactly on that $16.5 billion. Often it's the case that there is money unspent at the end of the year. Some of that is given as discretionary grants, and it can go from $50 million one year up to $100 million another year. Of course, there would be priorities of government that would direct those discretionary grants.

In each of the years coming forward there'll be $25 million less than historical levels, but again, we don't know if there will be any available money at the end of the year. If the budget is totally spent, then there won't be any discretionary grants available. If the money is unspent, there will be a pot of money that would be available for discretionary grants. What we are trying to do is to reduce the amount of discretionary grants by $25 million in order to balance the budget, as we campaigned upon recently.

In terms of impact, these are different organizations. Some of them are small; some of them are large. There has been no analysis on the impact of the constraining of discretionary grants. This is something that we'll have to manage at the end of the year as we see how the budget ends up at the end of the fiscal year.

J. Darcy: So there is a line item, normally, for discretionary grants, and you say the amount goes up every year? The answer to my last question seemed to suggest that it was about what money was left over at the end of the year. That's the first part of the question.

The second is: you said there has been no analysis of what the impact of that reduction in discretionary grants could be. How can the minister, then, say that he's confident that there is no impact on services? Surely, the ministry is not handing out to organizations money that the ministry doesn't believe is well spent in meeting the health needs of British Columbians.

Hon. T. Lake: There is no line item for discretionary grants. Essentially, they are discretionary because we don't really know if there will be money left at the end of the year. Historically, on a $16.5 billion budget there is a certain amount of money that is available at year-end. Typically, then, a discussion would be had in terms of discretionary grant availability.

What we are saying is that in the next three years we expect there will be less money, if you like, at the end of the year, because we are trying to manage our budget very carefully. We expect that there will be $25 million less available for discretionary grants at year-end.

J. Darcy: The ministry has indicated that $6.45 million of the cut in planned spending for 2013-2014 was due to a reallocation of the meat inspection program from the Ministry of Health to the Ministry of Agriculture. Can the minister elaborate on why this program was moved and whether it is in fact funded in the Ministry of Agriculture?

[1050]

Hon. T. Lake: Yes, the meat inspection responsibilities have been moved from the Ministry of Health over to the Ministry of Agriculture, and $6.45 million was reallocated to the Ministry of Agriculture budget in 2013-14. In '14-15 and '15-16 it will be $5.4 million.

J. Darcy: Has there been any change in funding for the minister's office?

Hon. T. Lake: In '12-13 the minister's office was allocated $1,090,000. In 2013-14 that has been reduced by 30 percent to $714,000. This is a result of several things. We had a Minister of State for Seniors, previously. Those responsibilities have come back into the minister's office, so there's a savings there. And just the general tightening, if you like, of travel and expenses in the ministry office has resulted in a 30 percent saving.

J. Darcy: My question was specific to the minister's office, not the Ministry of Health — the minister's office.

Hon. T. Lake: That was the answer.

J. Darcy: That was the answer for the minister's office. Thank you.

The Chair: Member, do you have a further question?

J. Darcy: Yes, hon. Chair, I do indeed, if I can just take a minute to find it here. Lots of paper going on. We destroy a lot of paper, a lot of trees, in the course of preparing for these budget estimates.

Okay, I'd like to move on now to some questions related to health authorities. First of all, at a public meet-
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ing of the Vancouver Coastal Health Authority that was held on June 25, the CEO, Dr. David Ostrow, stated that Vancouver Coastal Health is facing a financial shortfall of approximately $27 million this fiscal year and that even though there is a funding lift from the ministry, it is not sufficient to meet demand.

In a PowerPoint presentation he made at the board meeting — a public board meeting, I should add — he stated, for instance, that between 2011-2012 and 2012-13 emergency room volumes were up by 3.26 percent, surgical non–operating room volumes were up 10.5 percent, and home support hours were up 8.9 percent. So it would appear that the transfers to the health authorities are not a sustainable funding lift, one that would ensure that Vancouver Coastal Health can maintain service provision at the same level.

We've already seen cuts to several programs — especially, severe cuts to several mental health programs — in Vancouver Coastal Health. Can the minister explain how he expects Vancouver Coastal Health to meet the growing service demands that far surpass the funding lifts from the ministry?

Hon. T. Lake: As I mentioned earlier, we are preserving funding to health authorities to the greatest extent possible. It's not unusual for health authorities early in the year, when they're doing their draft budgeting, to face some challenges when they're budgeting.

[1055]

Vancouver Coastal Health has managed to balance its budget each year. We feel that they will be able to balance the budget this year.

Some of the changes that are happening will, I think, decrease some of the pressures that the member mentioned. For instance, caring for seniors at home through the Home is Best program means fewer seniors will have to access acute care. There are some exceptional examples of that all around the province.

Programs like the BreatheWell program, helping those people suffering from chronic obstructive pulmonary disease, mean there are fewer acute care visits to the hospital because they're being managed better at home with respiratory therapists that go into the homes and provide instruction and assistance. So there are those types of things.

Another example, for instance, is Car 40 in Kamloops, which is a combination of an RCMP officer with a paramedic. They often attend to vulnerable people on the street that normally would simply be taken to the hospital. They can attend and assess whether the person needs to access acute care or whether they need social services or mental health services. That, again, will decrease pressure as well.

There's no question that in today's world it's challenging to meet budgets when we're trying to bend down the cost curve. But through innovation, through creativity and through, quite frankly, doing things differently, we feel confident that health authorities will be able to meet this challenge.

J. Darcy: I referred to a few specific items that Dr. Ostrow spoke to at a Coastal Health Authority meeting just a few weeks ago. All of those have significant costs attached to them. Can the minister please respond to some of the specific things that were mentioned here?

You spoke to some new programs that are being initiated, which, hopefully, in the long run will reduce costs, which is the objective, I'm sure. But the fact still remains that volumes in these three areas, at least — and there were others — have gone up significantly.

How do you explain to the Vancouver Coastal Health Authority board, for instance — that appeared deeply concerned about this and about not being able to meet these needs — how, in fact, they are going to meet those services?

[D. Horne in the chair.]

Hon. T. Lake: Well, I did address, I think, the concerns that the CEO of Vancouver Coastal expressed. I met just yesterday with the board chair for Vancouver Coastal, and there was no alarm that he indicated in terms of meeting their budget. They understand it's a challenge, as we all do in government.

When we campaigned on a balanced budget, we — and British Columbians — agreed it was important to do that. Everyone understands that there are challenges. You have to be creative. You have to do things differently in order to save money.

We are, throughout government, looking at the way we do business to make sure that we are using taxpayers' money efficiently and effectively. I am confident that all the health authorities will be able to meet that challenge.

J. Darcy: The Fraser Health Authority is the fastest-growing health authority in the province and is experiencing, also, some particularly severe funding challenges — one of the factors being the removal of the funding incentives to shorten wait-lists through pay for performance. Has the minister had meetings with Fraser Health to discuss how they plan to address the funding shortfalls in their budget, and if so, which programs or services does the minister expect will be cut?

Hon. T. Lake: I have not had the opportunity to meet with the Fraser Health Authority yet. As soon as our session is over we will, certainly, be making sure that we do that. I can say to the member that it is a fast-growing area of the province, and that's reflected in the funding increases.

[1100]

This coming year they will get an increase of 5.6 per-
[ Page 892 ]
cent, which is significant; the following year, 4.9 percent; and the following year, 2.5 percent, for a cumulative change over three years of 13.6 percent.

That is, as I mentioned, quite a bit higher than we're seeing health budgets in Alberta increase, for instance. Since 2001 the Fraser Health Authority has received over 100 percent increase in funding.

J. Darcy: Can you please go through the lifts in spending for each of the health authorities?

Hon. T. Lake: As I mentioned, over the three-year plan Fraser Health Authority will receive a 13.6 percent increase; Interior Health Authority will have a 9.5 percent increase; Northern Health Authority, a 6.2 percent increase; and Vancouver Coastal Health, a 6.4 percent increase; Vancouver Island Health Authority, 9.4 percent increase.

J. Darcy: Can you please explain the annual increases in each of those as you did for Fraser Health?

Hon. T. Lake: Certainly. Again, Fraser Health has a 5.6 percent increase, followed by a 4.9 percent increase, followed by a 2.5 percent increase.

Interior Health Authority has a 4.1 percent increase, followed by a 2.3 percent increase and then a 2.7 percent increase.

Northern Health Authority, 2.3 percent increase, followed by a 2.2 percent increase, followed by a 1.5 percent increase.

Vancouver Coastal, 2.6 percent in this year, 1.6 percent the following year and 2.1 percent in the '15-16 year.

Vancouver Island Health Authority, 5.2 percent this year, 1.8 percent in '14-15 and 2.2 percent in '15-16.

J. Darcy: We may come back and ask some further questions about those planned spending increases in each of the years for each of the health authorities.

I'd like to come back to the issue that we touched on earlier about pay for performance. You've explained that the ministry is moving away from the incentives that were previously provided to health authorities under pay for performance to reduce wait times. We understand that there is now a system of penalties if certain benchmarks are not met. If so, how are those benchmarks established?

Hon. T. Lake: As I mentioned, when we started the pay-for-performance model, we used a bonus system, if you like, to transition health authorities to get them to understand the process and to make the necessary changes to respond to the incentives that were there.

Now, in our transitional year, as I mentioned earlier, we are putting the pay-for-performance funding within the global budget, and that would be $130 million in the first year.

I mentioned there were two main areas that would be part of the pay-for-performance model, including system capacity and access. I mentioned the four areas. That was the ER department, the number of hours from admission from initial triage; system capacity and percentage of elective surgery patients waiting greater than 52 weeks; compliance with ministry data reporting for home and community care; and diagnostic imaging.

On quality there were three measures that I mentioned: percentage of hip fracture fixation patients treated within the defined target, nurse-sensitive adverse events and a quality improvement measure that will be proposed by each health authority in conjunction with the ministry, so it may be different from one health authority to another.

[1105]

We will work very closely with the health authorities as we transition over. That's why it's a relatively small part of the global budget that is being put in the pay-for-performance module. As we transition and health authorities become more used to this kind of a model, each year we will increase the component of pay for performance so that there are incentives for efficiencies and efficacy in the performance of the acute care, particularly, but in other areas as well.

J. Darcy: Again, on that same issue. The areas that you just outlined — are those new areas for which you're now introducing the pay-for-performance model? The previous areas that were covered under pay for performance, for which $50 million was allocated — what are the benchmarks that you were previously targeting for those?

Hon. T. Lake: The pay-for-performance model previously was based on volume and access, primarily — so percentage of patients. The four measures that I spoke of previously — timely access into emergency departments, the system capacity with daycare and in-patient workload, percentage of elective surgery patients waiting greater than 52 weeks — were the measures in the pilot program. Those remain, but we're also now focusing on quality because, as has been exhibited in other areas of the world where pay for performance is utilized, sometimes volume increases but you can have quality issues.

If someone gets a hip replacement, if they are discharged early, if they have to come and be readmitted, then you are obviously no further ahead. The quality measures have been added, and those, as I mentioned, are the percentage of hip-fracture-fixation patients treated within the defined target, nurse-sensitive adverse events and then one other quality improvement measure that will be negotiated between the health authorities and the ministry.

J. Darcy: As the minister meets with health author-
[ Page 893 ]
ities — you've indicated that you've met with Vancouver Coastal, and I assume that you have planned meetings or have had meetings recently with all of the health authorities — is part of that discussion what cuts to services and programs they anticipate they will need to make because of the reduction in the planned lift?

Hon. T. Lake: I've had the opportunity to meet with members of the Interior Health Authority, Vancouver Coastal and the Provincial Health Services Authority to date, and we'll be meeting with the others in the near future. We have discussed, certainly, and will discuss the challenges that we face. We have not discussed the individual changes that occur throughout each health authority.

As mentioned earlier, certainly, things will have to be done differently in some areas. We have added the home support services, in terms of the Home is Best program. Hopefully, that will have an impact on the number of acute care admissions. We'll be discussing with the health authorities.

[1110]

We plan to sit down with them and have some dialogue with each of the health authority CEOs and chairs, with our ministry staff, and just talk about health care in general and about the next three to five years — how we are going to approach the challenges that face British Columbia and face the rest of Canada, essentially, in providing sustainable health care.

We are at a very interesting time with technology, when we look at electronic medical records and when we look at diagnostic imaging and the ability to access information. I think we are in a transformative period of health care, and we want to discuss that with health authorities. We want to work with them so that we're not imposing something upon them. They are part of the solutions that we need to find to make health care sustainable.

J. Darcy: Certainly, on this side of the House we're also very supportive of transformation in our health care system. I will be coming back on some issues related to that a little bit later.

We understand that health authority service plans will be received by the minister by the end of July and released to the public in September. I want to ask the minister whether he believes that it makes sense that health authority service plans are often released six months, sometimes even eight months, after the beginning of the fiscal year, when ministries and Crown corporations are required to table theirs when the provincial budget is tabled.

Hon. T. Lake: The health authorities don't fall under the Budget Transparency Act, so they're not required to file their service plans at the same time. But the ministry is working with health authorities, and the goal would be to narrow that gap so that the service plans are created and released closer to the start of the fiscal year. By providing this three-year budget and working with them over the next several months, I think we'll be able to close that gap considerably.

J. Darcy: Perhaps you could clarify. It was my understanding that there was a point in time when the health authority budgets were in fact covered by that act and were released earlier. Is that the case?

Hon. T. Lake: My understanding is no.

J. Darcy: Okay. I'll check that reference at lunch. Was there a requirement — perhaps not under that act, but was it the practice for them to be released earlier?

Hon. T. Lake: I'm seeing a lot of heads shaking, so apparently not.

J. Darcy: I mean, I think my question actually was: do you think it made sense for them to be released so much later than the budget — sometimes five, six, seven, eight months after the start of the fiscal year? Does that make sense to the minister?

Hon. T. Lake: Five weeks into the ministry, there are some things that don't make sense to me yet. But as I mentioned, the ministry is looking at trying to close that gap. I certainly, personally, feel that obviously it would be nice to narrow that gap so that the public can see the service plans closer to the start of the fiscal year. But it's something that we will be working with health authorities on — to try to narrow that time frame.

J. Darcy: I understand that the first-quarter performance reports for health authorities should have come in last week, reports which should give a good indication of developing trends and the shape of things for the future in health authorities. Has the minister received those reports? And if so, can he please make those reports available to us?

[1115]

Hon. T. Lake: We have not received the first quarterly performance reports as of yet. We expect to have them over the next several weeks.

J. Darcy: When will those reports be released to the public?

Hon. T. Lake: The performance reports are not released publicly. Government as a whole does a quarterly fiscal update, which includes the health authority budgets, in the Health budget.
[ Page 894 ]

J. Darcy: To the minister: so are you saying that the public or the official opposition does not have access to that kind of information on a budget that is 42 percent of the provincial budget — that those figures cannot be made available publicly?

Hon. T. Lake: As I mentioned, the government submits quarterly fiscal updates which include the Health budget. The performance reports that the hon. member is talking about are submitted to the ministry, but they are not intended to be released publicly.

J. Darcy: Well, if I could just comment. It seems that not just the official opposition but the public, taxpayers, should have the right to know how plans are progressing in health authorities, and not just at the end of the year but on a regular basis, in order to make assessments about how taxpayers' money is being spent and, also, what the impact of budget decisions is on services and programs.

But let me move on. If I could move on to another question.

The Chair: Proceed, Member.

J. Darcy: The government has signed collective agreements with all of the unions in health that include the 2013-2014 fiscal period. In light of the cuts to planned spending in health, how will the government honour the agreements it has reached — for example, in the case of the Nurses Bargaining Association, to add 2,125 new positions to the health system by 2016; in the case of the Facilities Bargaining Association, a commitment that there will be no layoffs due to contracting out, as in the pre–Bill 29 agreement?

Yes, I'll ask that one first and….

Hon. T. Lake: As I mentioned, the health authorities are getting increases in their budgets, and those increases are expected to cover the agreements that are in place with the various employee groups.

Of course, as the population grows, the number of nurses needed will grow. We anticipate that the funding increases that we have allocated to the health authorities and to the provincial budget will, in fact, be able to meet the needs of the growing employees as well as any agreements signed in labour contracts.

J. Darcy: Further to the minister on this subject, all of those health agreements were signed under something referred to as the cooperative gains mandate. Can the minister explain whether or not those gains have been realized?

[1120]

Hon. T. Lake: In the previous year, '12-13, the cooperative gains were achieved. The savings were achieved. We understand that for '13-14 they are on track to be accomplished this year as well.

J. Darcy: To the minister, I just want to clarify your answer to the previous question. In the case of the negotiations with the B.C. Medical Association, the funds for that come out of the Ministry of Health budget. Am I correct in that?

Hon. T. Lake: Yes, the fee-for-service for physicians comes from the Medical Services Plan, which is being increased 2.4 percent this year over last.

J. Darcy: To the minister again. But in the case of the health bargaining associations, money is transferred to health authorities to cover those increases? Or does it come out of health authority existing budgets? Can you please clarify?

Hon. T. Lake: The funds to pay those employees comes from the health authority budgets, as I mentioned. We went through each health authority and the exact increase that they're getting over the three-year plan.

J. Darcy: I'd like to move on to some questions related to the minister's mandate letter from the Premier. In the minister's mandate letter it states that "British Columbia has the best outcomes for patients in Canada, while having the second-best spending on a per-capita basis." Can the minister outline what outcomes, specifically, are included in that claim?

Hon. T. Lake: British Columbia does compare very favourably with other provinces. Some of the outcomes that we can certainly be proud of are…. Life expectancy at birth — we are No. 1 in the country. Cancer mortality per 100,000 population — we are No. 1 in the country. Heart disease mortality per 100,000 population — No. 2. Infant mortality per 1,000 live births — we are No. 4. And overall health status — we are considered No. 5, compared to the rest of the country.

J. Darcy: There has been much written, including in documents from the ministry itself and from health authorities, about the issue of social determinants of health and about child poverty and the connection between that and health outcomes. Can you share with us the health outcomes as they relate to social determinants of health in British Columbia and how we relate to other provinces in that regard?

[1125]

Hon. T. Lake: I must apologize. The deputy minister responsible for population health is not with us. We certainly can come back to that, but I will say that the mem-
[ Page 895 ]
ber is correct. There are social determinants of health which are very important in terms of making sure that people have good jobs, available education. These are priorities of our government, which is why we have a jobs plan, which is why we are increasing funding for education year over year and why we have made great strides in reducing child poverty in this province over the last ten years.

J. Darcy: I think that's an issue that we will pursue at another time.

Can the minister explain in that same quote that I referred to what having "the second-best spending on a per-capita basis" means? Does that mean that B.C. spends the second-lowest amount of money in Canada on health on a per-capita basis? Is this a particular objective of the minister, and does the minister foresee any problems with using such a gauge to denote success or lack of success within the ministry?

Hon. T. Lake: British Columbia is second lowest on per-capita health care spending. If we look across the country, Quebec spends the least per capita — $3,407 per person — compared to British Columbia at $3,604. We compare that to Alberta, for instance, which spends $4,528, and yet, British Columbia has among the best health care outcomes.

Is it our objective to be the lowest per-capita health spending? I would say that if that is tied to remaining with the best outcomes, yes. I'll just quote a couple of people that I think have some knowledge on this. Michael Rawlins, the chair of the National Institute for Health and Care Excellence for 14 years in the U.K., a very well-renowned body: "Priorities must be set on the basis of evidence of both clinical effectiveness and cost-effectiveness."

So it is outcomes that are important, but it is also, of course, the cost-effectiveness as well as the health efficacy of our health care spending that's important to this government.

J. Darcy: Well, certainly, health outcomes are critical, and we will be returning to a number of other areas that relate to health outcomes, because there are certain ones that the minister has referred to. There are a considerable number that have not been included in that, and I will be asking the minister some questions about those later, as will my colleagues who are critics for particular areas of health.

In point 7 of the mandate letter, can the minister please explain what is meant by the laboratory reform initiative achieving required savings, and are the recent cuts to VIHA's home lab services part of this initiative?

Hon. T. Lake: The answer to the second part of the question first. The changes that Vancouver Island Health Authority has made are not a part of this effort on the part of government to overhaul, if you like, the way laboratory services are provided in the province.

[1130]

My understanding from VIHA is that they are reducing the number of available areas for taking lab samples because of the very low volumes that are present.

We expect that all health authorities will look for efficiencies. When things change in terms of the number of patients that are accessing services, they will respond, and where there are increases in patients accessing the service, they will respond. But under our proposed agreement with the ministry, the BCMA and the ministry will work to identify additional ways that we can ensure that our lab system is as efficient as possible.

We pay for over 41 million outpatient lab tests annually on a fee-for-service basis. That's a 61 percent increase over the 2002 volume. It far outpaces population growth. We don't view that as sustainable into the future.

As the lab system is currently set up, government, on behalf of taxpayers, has no ability to really take advantage of technological changes. As technology changes, certain tests may actually cost much less to perform than they did previously. Government, under the current model, doesn't have the ability to capture those savings on behalf of taxpayers. This is a discussion that we'd like to have.

J. Darcy: If I can just ask the minister to be a bit more specific, what does the laboratory reform initiative consist of?

Hon. T. Lake: Lab tests are done either for in-patients by health authorities or on an out-patient basis. That is through MSP, fee-for-service, using a private company. Our lab redesign will involve legislation and will enable us to coordinate better with the health authorities and employ some lean redesign initiatives to improve the efficiency in terms of the laboratory collection and processing.

We will need a discussion with the out-patient side of the lab system as well. British Columbia pays a lot higher than other provinces for this part of the lab system. Much like the generic drug side of things, we want to be able to capture savings for taxpayers in those discussions with the design of the out-patient model as well.

J. Darcy: Part of the question that I asked earlier was about the changes in lab services at Vancouver Island Health Authority. You referred to it being a change in the number of locations, I believe, where the lab specimens would be taken.

[1135]

I'd like to ask the minister: is he not aware that one of the cuts in service involves staff visiting frail seniors in their homes in order to collect lab specimens, and that the reduction in locations will create some significant
[ Page 896 ]
barriers for seniors — in particular, to be able to travel to those locations to have their lab work done?

Hon. T. Lake: As I mentioned, each health authority is trying to ensure that their budgets are being efficiently used.

VIHA did a review of the lab services. They identified several areas with very low demand and/or duplication of service. They made the decision to decrease the hours of three satellite lab locations in the afternoon, when these lab locations typically see only five to seven patients. So they are moving those patients over to the other hours.

Two of the labs will no longer be open on Saturdays. Again, this is due to low use.

Each of the labs is within three kilometres of a hospital lab that is open during those hours. I do understand that Vancouver Island Health will discontinue their mobile lab specimen collection but that the private provider continues to offer that service at the request of a physician.

J. Darcy: If I could just clarify the taking of lab specimens in seniors homes. The people who were doing that work were visiting approximately 25 seniors or other patients per day. Are you saying that that work that was presently being done by employees of the health authority will now be done by LifeLabs?

Hon. T. Lake: Vancouver Island Health was doing a part of the out-patient service that in most health authorities is only done on an in-patient basis. They have, where there is duplication of service, decided to reduce the out-patient service that they provide. But if a patient's physician makes a request, the private provider, LifeLabs, continues to offer the home service for collection of specimens.

J. Darcy: I want to move to another issue. That is the issue of utilization of nurse practitioners and of other health providers and health care professionals to the full scope of their practice. Point 8 in your mandate letter refers to increasing the scope of practice for nurse practitioners, something which, on this side of the House, we are certainly supportive of — ensuring that not just nurse practitioners but all health care providers are able to work to the full scope of their practice.

I wonder if the minister could tell me, first of all, as it relates to nurse practitioners, what the statistics are on how many nurse practitioners are presently trained and qualified to work in the province of British Columbia, as opposed to how many presently have positions in the health system in British Columbia.

Hon. T. Lake: Nurse practitioners, I think, are a valuable addition to the health care professional team. In 2005 nurse practitioners were established as part of our health care team in British Columbia. Our government was the first in B.C. history to establish a nurse practitioner training program.

[1140]

Currently there are 252 nurse practitioners registered with the College of Registered Nurses of B.C. In this province we have the ability to train up to 45 NPs per year at UNBC, UBC and UVic — each has 15 seats. In May of last year, in 2012, we announced we were funding 190 new nurse practitioner positions over the next three years. So we certainly see nurse practitioners as a growing part of our health care team, and we continue to hear very good stories of nurse practitioners being part of a multidisciplinary primary care system in B.C.

J. Darcy: Part of my question that you didn't answer was: how many of those nurse practitioners presently are being utilized in the province of British Columbia?

Hon. T. Lake: I unfortunately don't have that number, but we'll certainly find it for you and provide it later in the day.

J. Darcy: The reason for asking the question…. I don't have the statistics in my hand, either, but my understanding is that there are a significant number of nurse practitioners who are trained and qualified to work in the province who are not presently being utilized in the health care system.

Can the minister also tell us what plans are in place for ensuring that all health care providers in the health care system are able to work to the full scope of their practice? Surely, the minister believes, as we do on this side of the House, that utilizing health care providers to the full scope of their practice is critical to the long-term sustainability of our health care system.

Hon. T. Lake: You know, there's not a specific strategic plan to address each one, but every health authority, and the ministry, wants to use people to the full extent of their training — the appropriate person for the appropriate role. We have seen, for instance, on Vancouver Island a different patient care model where nurses are utilized for their very rigorous and specific skill set that they have, assessing patients. Whereas activities, caring for patients, that don't require that skill set are then allocated to other members of the health care team.

The B.C. Cancer Agency is hiring nurse practitioners to work with unattached cancer survivors that have undergone treatment. Nurse practitioners will be able to visit and care for these patients that currently don't have a family physician. Of course, we can talk about respiratory therapists and the great work that they do.

In Interior Health, for instance, they have HART teams, which are high-acuity response teams that combine an emergency physician, a respiratory therapist and sometimes a nurse in the ambulance to go and attend certain
[ Page 897 ]
accident scenes where they feel that is necessary.

I think all of us agree that we want to use each and every member of the health care team to the full extent of their abilities.

J. Darcy: The minister says — if I heard you correctly — that there are strategic plans in place?

Interjection.

J. Darcy: There are no strategic plans in place. I was going to question the minister if, in fact, that is what he'd said, because there are no strategic plans in place, and it is certainly an area where the ministry needs to take leadership and needs to take the bull by the horns.

[1145]

You've referred to nurse practitioners. Our understanding is that there are significant numbers of nurse practitioners who are not able to find work because there are barriers. There is resistance to the utilization of nurse practitioners, as there is resistance all the way down the line to utilizing health care providers, health care professionals to the full scope of their practice.

I guess my question to the minister would be: will the minister take leadership with the health authorities in ensuring that all of the health care professionals, all of the health care providers, in British Columbia are able to work to the full scope of their practice and of their training? And does he believe that it is, in fact, a critical factor for the sustainability of health care in British Columbia?

Hon. T. Lake: I think if we have demonstrated leadership, it is a philosophy. We lead by example by encouraging health care authorities to utilize each member of the health care team to their full extent.

There is some resistance. The member is quite right. We have seen nurses object to the use of care aides for doing certain tasks. There are entrenched institutions in health care, and the system needs to be built around patients, not around institutions. So we believe that we need to be having a conversation about how we work together cooperatively in the patient's best interest, rather than trying to maintain the silos that sometimes exist in a very large sector like health care.

As I mentioned, we have established nurse practitioners. We are utilizing them in various ways. Health authorities are utilizing nurse practitioners as part of multidisciplinary teams. A good example is the new Oceanside Health Centre in Parksville. As mentioned, the B.C. Cancer Agency is utilizing nurse practitioners for unattached patients.

I do know, and have had conversations with people about, nurse practitioners. My understanding is — and this is anecdotal, as the member is hearing, not backed up by data — that there are some nurse practitioners that can't find positions. Sometimes that is, like other professions, where they may not want to move to where those positions might be in different parts of the province.

But I think all of us together have to work towards, as the member mentions, utilizing people to their fullest potential and creating a multidisciplinary team so that the appropriate person at the appropriate time for the appropriate patient would be the core message.

J. Darcy: Well, this is an issue that we could spend considerable time on and one with which I'm intimately familiar and would be quite willing to discuss with the minister further. But let me move on.

In the mandate letter, point 10 refers to carrying out the government's end-of-life strategy and creating a plan for hospice plan expansion. The June throne speech committed to delivering "an end-of-life care plan to double the number of hospice beds by 2020 so we can better care for those we love in their last days."

What money has been allocated in this budget for that initiative? And if the government has yet to come up with a plan for expansion of hospice spaces, how does it know whether this strategy to double the number of beds by 2020 is realistic?

Hon. T. Lake: End-of-life care is something that many of us obviously care deeply about, and as the population ages, availability of end-of-life care becomes increasingly important. I know the hospice in my community provides invaluable service. You know, friends and colleagues have experienced the magnificent care that's provided for their loved ones as they come to the end of their life.

[1150]

We have set the target for 2020 of increasing the number of hospice beds available by 100 percent. I would say to the member that unless you set a target, it's difficult to get there. You need something to aspire to. We will be planning over the next year how to accomplish that.

We'll be working with health authorities. We'll be working with non-profit organizations that are involved in hospice care. We'll be working with the providers of long-term residential care that can provide hospice care within those facilities as well.

We don't have money, specific money, in this year's budget, but we will be planning a future strategy to accomplish that goal. As I mentioned, it's something that's very important to the Premier and to all of us, I'm sure, in the House.

J. Darcy: Certainly, it is an issue that everyone in this province and everyone in this House is deeply concerned about. In my constituency of New Westminster there are at present no hospice beds, which means that people who have lived and worked and loved in that community are not able to die in their own community. We certainly support, on this side of the House, the goal of doubling the
[ Page 898 ]
number of hospice beds.

I'm very concerned that I need to repeat my question to the minister. If we are planning to double the number of hospice beds by 2020, why is there not any money allocated in this year's budget in order to move forward on that goal?

Hon. T. Lake: We are seven years away from 2020. Within the ministry operations budget, there will be available funds. It's just not allocated for this specific project. But the ministry does planning and strategic initiatives in the ministry operations part of the budget, so this will be incorporated into the work that is normally done within the ministry.

I would mention that the Provincial End-of-Life Care Action Plan was released this past March, with three priority areas identified: redesigning health services to deliver timely, coordinated end-of-life care; providing individuals, caregivers and health care providers with palliative care information, education tools and resources; and strengthening health system accountability and efficiency.

We've also, at the time of that release, committed $2 million to establish a provincial centre for excellence in end-of-life care as well as providing one-time funding to support hospices, including $950,000 to Vancouver Hospice Society's hospice home, $2 million to the Tapestry Foundation to support the Marion Hospice in Vancouver, $3 million to the Peace Arch Hospital and Community Health Foundation to support a hospice in White Rock and $2 million for Canuck Place Children's Hospice.

So money has been allocated. There is just not a specific line item in the budget for the future planning. That is within the corporate planning that is within the ministry operations budget as it is set.

I would mention that through the changes in palliative care that we see, there are opportunities for residents of her community to have an end-of-life plan in the home. I hope the member will be able to…. I'm happy to have her meet with our officials to discuss that.

J. Darcy: The money that you refer to being allocated — is any of that being allocated to increase the number of spaces?

Hon. T. Lake: I'm just doing quick addition here. About $8 million was given to various hospice societies. I don't know, hon. Member, if that was to increase spaces or to assist in their operations, but I can find that out and provide that answer later.

J. Darcy: We would very much appreciate hearing the answer to that question. I want to raise a related question with the minister, because I hear this from….

[1155]

I see the Speaker telling me that I should conclude. I thought I had five more minutes, so I will speak more quickly than usual.

Queens Park Care Centre in my community is literally a block from the building where I live. I have the opportunity to speak to people who work there on a regular occasion, and to speak with other people who work in residential care facilities. One of the things they say to me that I want to put to the minister is that, as an interim measure, we could be providing far better training for the staff, including care aides and LPNs and RNs, who work in residential care — training in palliative care and in hospice care.

So even before the beds, the spaces, are actually created, we could be utilizing existing staff better, because it does take particular training and particular skills in order to care for someone who is at the end of their life. Are there any plans to do that? I put that question to the minister.

Hon. T. Lake: I mentioned earlier that when we released the end-of-life care action plan in March of this past year, we committed $2 million to establish a provincial centre for excellence in end-of-life care. That centre of excellence is expected to accelerate innovation and best practices in end-of-life care by focusing on research, education and information management; supporting the development of policy; and improving clinical care.

So I take the member's point. I think this is something that is important, something that we have initiated with the establishment of the centre for excellence.

Noting the hour, hon. Chair, I move the committee rise, report progress and seek leave to sit again.

Motion approved.

The committee rose at 11:57 a.m.

The House resumed; Madame Speaker in the chair.

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

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

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

Hon. M. Polak moved adjournment of the House.

Motion approved.

Madame Speaker: This House at its rising stands adjourned until 1:30 this afternoon.
[ Page 899 ]

The House adjourned at 11:58 a.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF
NATURAL GAS DEVELOPMENT

(continued)

The House in Committee of Supply (Section A); G. Hogg in the chair.

The committee met at 10:12 a.m.

On Vote 39: ministry operations, $15,694,000 (continued).

J. Kwan: Thank you to the minister and to the staff who will be responding to these questions. No doubt we will have a long conversation about this. Perhaps not all the matters will be covered in this estimates debate, and there will be other opportunities, I assume, for us to continue on.

Let me ask the minister the first question on the strategic…. Excuse me. I'm sorry. I might be doing this periodically, as my cold has morphed into a cough.

Let me ask the first question around the letter of expectations. The key strategies and actions as outlined in the document states that the ministry — or B.C. Housing — will work with ministry partners to analyze the provincewide demographic trends and identify critical housing gaps. I'm wondering if the minister can advise what housing gaps have been identified.

Hon. R. Coleman: I recall a debate in 2009 where the member had a similar cold, and then I got sick for the rest of the writ period. I would appreciate that she stayed on this side of the room today, that's for sure. It was on one of the TV or radio stations, if I recall.

[1015]

Basically, we do this on a regular basis, but we are doing it again. It really is about finding where gaps might exist with regards to the need for housing. A few years ago, for instance, we identified a gap in seniors housing in small communities. I mean very small communities like McBride and Valemountand Hudson Hope — no, it wasn't Hudson Hope; it was Taylor — places like that, Chetwynd, throughout B.C. In small communities, could we find a place to fill the gap? So when an opportunity came along, we knew what the gap was.

With the federal government to match funds, we were able go out and build 1,350 units of seniors housing in small communities to fill some of that gap. It's in places like Gibsons and Sechelt and places like that, as well as other small communities. We actually thought we could do 1,000. We did 1,350 with that particular program.

You do find, as your housing demographics change, that you have to change to adapt to the demographics. One of the challenges we've had in housing in British Columbia and across Canada…. Before either one of us actually entered public life, there was a concern that we had built housing in one era for one group of people, but we had another demographic coming at us.

That was why there was an initiative in the late 1980s to, for instance, pursue a number of family housing options, simply because we hadn't built the product for the demographic. At the same time we had product where the occupancy was wrong, because it was larger than what the people needed.

There's always that work going on, and this is the same thing. We're looking at that demographic and analyzing trends so that we are able to respond if something comes along. Or if we identify something we build in addition to our programs, we would add into our programs once we've identified it as a particular issue.

J. Kwan: Well, I guess I could say I'll try not to breathe on the minister so that you don't catch the cold. But I think I'm beyond the stage of being contagious, so I think you're safe.

In terms of the gaps that are identified…. I understand this work is being done periodically to try to address the need and take advantage of, potentially, new federal dollars. It is always welcome when there are federal dollars. I'll leave that debate for another day. But in terms of this fiscal and then, I guess, for the service plan period, for the next three years, what gaps have been identified?

Can the minister say, through their exercise of doing this, what gaps they have actually identified? And is that report…? Maybe there's a report that's been done with respect to this. Could the minister share this report with the opposition?

Hon. R. Coleman: The report is not complete. Certainly, we'll share it with the member when it is. At the same time, basically, what it is, is that we're starting to see each…. Not even just by region but sometimes even just by community, there are particular issues with regards to housing in individual communities.

[1020]

So this is what we're trying. We, actually, have moved very much to a regional basis in trying to deal with regional and local issues at a level that requires significant consultation. We have moved to a model…. As the member knows, in 2006 the state of local governments…. Where is the land you want to put into, let's say, new construction? What are your issues?

What are you going to do with regards to taxation to assist in delivering some of these services in your com-
[ Page 900 ]
munity? What about your development cost charges when somebody's doing something new? And look for partners, across the housing spectrum, particularly at local government and other.

This is basically for us to be able to get a chance to look at demographics. We're looking out at the next five years. That next five years would allow us, if there's money that comes in a partnership — let's say, from the federal government — to target it to where we think is the best place for the demographic that we've identified. It will also help us in the planning of our next stages of housing: what we have, what we keep, what we do with it.

Of course, obviously, it does come down to the focus with local government. I'll just give the member one example. For instance, a few years ago the city of Quesnel had a particular issue in the downtown core with regards to some homeless people with mental health and addiction issues.

We went into Quesnel, looked at it, and then we ended up buying the Wheel Inn. The Wheel Inn was then renovated and turned over to a non-profit to have a place for that population to be. That solution in Quesnel could be different than the solution that we did with the South Okanagan Mental Health Association in Penticton, for instance.

What we try and do now is…. As we work with the demographics and the need, we're working with a package that says: what have we got in our portfolio that we can use to enhance it? What do we have that the community needs? And what does the community want to provide and work with us on?

In addition to that, it also means, quite frankly, that we have to be more…. Well, we're much more, I think, flexible on the ground than we would have been, let's say, five or ten years ago. We used to build…. Just everything go out in a particular proposal call for this many types of this much housing…. People then would adapt their proposals to try and win those particular opportunities.

We shifted, particularly in the housing strategy, to going after homelessness, mental health and addictions, because we knew that was where the significant challenge was with regards to housing in B.C. A lot of people can be accommodated under the rent assistance program or SAFER — within the marketplace, for rent — who don't have those issues. Our focus is, and will continue to be, on our most vulnerable populations.

J. Kwan: I'm wondering: what's the timeline for the report to be completed?

Hon. R. Coleman: It will be sometime this fall.

J. Kwan: I'll look forward to receiving a copy of that document. I'm wondering: would the document also show, then, the gaps region by region? The minister was identifying the more specific areas — right? — in the local communities so that you can try and figure out how best to address those concerns. Presumably, the report will actually break it down community by community so then you can have a better sense of where their problems are.

Along with that, just for a better understanding of the different trends that are taking place throughout the course of the province over the years, I'm wondering if I could also get previous reports so that I can actually see how that trend has evolved and the actions that the government has taken to address those particular trends at different times.

[1025]

Hon. R. Coleman: No, this is the first provincewide breakdown that's ever been done in the history of British Columbia. It's being done by region, not by community, simply because the data set would be too extensive. By region, we feel that we can narrow it down.

On top of that, we do sit down with local government on a regular basis when they think they have a need, and we try and work on their local issues with them individually as well. That's been going on for some time.

It doesn't matter which community it is. They've either met with me at UBCM or met with me separately — or, in actual fact, worked through our regional management — to identify concerns and bring them to us with regards to a specific need in a specific community. Sometimes it's a need that isn't actually covered by Housing, but then we try and facilitate what area of government might be able to help the community.

J. Kwan: Well, I'll look forward to, then, receiving this document sometime in the fall from the minister. Thanks very much for that.

I just want to ask a few quick questions on the Aboriginal Housing Management Association. To my recollection, this was actually set up, I guess, by the previous government. At that time, it was at its infancy. I'm wondering how that's coming along. If the minister could advise, first of all: who is actually on the Aboriginal Housing Management Association?

Hon. R. Coleman: We transferred some smaller amount of units to the Aboriginal Housing Management Association a number of years ago to help build capacity. I've worked with them extensively. The chair of their board is Margaret Pfoh. In November of 2012 we transferred another 4,000 units to the Aboriginal Housing Management Association, which now manage those units on behalf of us. They're a society, basically, and I think that their growth as an organization, as I've watched it, is pretty good.

J. Kwan: How many organizations now are being administered by the Aboriginal Housing Management
[ Page 901 ]
Association? And how many units, then, in total?

[1030]

Hon. R. Coleman: At the moment, there are 35 groups whose housing is managed through AHMA now. The transfer of 4,000 was on top of 200, so there are 4,200 units now that are under the management of the Aboriginal Housing Association. In addition to that, they also manage the aboriginal shelter program, the aboriginal homeless outreach program.

Out of that outreach program, last year they housed 1,750 aboriginal people who were homeless or at a risk of homelessness from unstable housing — through the aboriginal homeless outreach program.

J. Kwan: There are 35 groups that are now managed by the Aboriginal Housing Management Association. That's assuming, then, that groups have the option to opt out — right? — to not join the management group. Is that right? If so, then do those groups remain with B.C. Housing? Is that who, then, administers their contracts and so on?

Hon. R. Coleman: Certainly, there's no opt out now, because the transfer has taken place. Prior to November last year people were given the opportunity to have that discussion. In addition to that, we did extensive consultation.

This is about, basically, the critical mass to make the organization work, as well as anything else. They're now under AHMA, and my advice is that it's working well.

J. Kwan: Thanks for the clarification. So all of the organizations, all of the aboriginal housing units, are transferred, then, under the management of the Aboriginal Housing Management Association.

The federal subsidy agreements, as the minister knows, are going to expire. Has there been a review of the impact of the expiry of these agreements for this group of projects?

By the way, how much is being paid to the association for the work that they are doing?

[1035]

Hon. R. Coleman: We'll get the exact number, but it's between $1.5 million and $2 million a year for management of AHMA, which we would be spending anyway on our own end to manage the portfolio.

The operating agreements with the federal government are a significant issue nationally, as the member is probably aware, with regards to the fact that the federal government has not indicated a renewal with regards to those non-profit agreements. As a result of that, we're looking at all our inventory and how it could be affected, if there was the evaporation of their participation on those particular projects.

Some will be affected; some wouldn't be affected. We've said to the federal government that our money is there. We're going to continue with our subsidies for the units in British Columbia.

We are pursuing this with other ministers across Canada, with regards to this as well. We think that on a national level for housing, this is probably the most significant housing issue that faces provinces across Canada. They were in long-term deals with B.C. and other provinces, obviously. It was always understood that we would be negotiating how this extension would look to this deal, and at this point in time we don't have an extension.

We are looking at our risks management. We are confident in a lot of our projects being able to be sustainable, but there are some that would be affected and would affect us with regards to the portfolio.

It's pretty tough to be totally specific on that today, though, because it is a pretty big piece of work. Certainly, every minister across the country is saying to the federal government and at every level, "You've got to come to the table," and we haven't backed off on that.

J. Kwan: I understand. I mean, these are big issues, and it may well be that in the estimates process the minister doesn't have all of the numbers and details on hand. I'd be happy to receive them at a later date.

Because of the looming problem, I think that if the federal government doesn't come to the table to address this in some way, then we're going to have a major crisis on our hands. That will only escalate up, starting with 2013 and then going forward.

I'm curious, though, in terms of the review. More specifically, I'm trying to understand the potential impact more clearly in the area of the aboriginal housing projects, right? Has the review been done? Has the association or the government done a review of what agreements will expire? How many units would be impacted in what year? Is there a breakdown of that information? If so, can the minister share that with me?

[1040]

Hon. R. Coleman: We start working with the groups about three to five years out if their particular agreement is going to expire in order to look at what their situation is, how the costs are, work with the federal government to try and get extensions on those. Our best would be if the federal subsidies would not expire and they would extend them.

The challenge we face is that over the next 25 years about $140 million a year in federal subsidies will expire in agreements throughout B.C. So it's a 25-year-out program. Over the next four years about an estimated 4,000 housing units will have their operating agreements expire. That doesn't mean they won't be able to survive, because obviously, we're going to be there in a relationship on subsidies. But it also depends on whether they, frankly, have a mortgage that's already paid off or not. Obviously,
[ Page 902 ]
that affects the operating of each one of these.

By 2030, which is 22 years away, 75 percent of the agreements will have expired. The period that most agreements will expire is the years between 2024-25 and 2029-30. So in that five-year period between 2024 and 2029-30, 11,000 units of housing will see their agreements expire.

We're working to make sure that we have…. Frankly, we want to win the argument, to be honest with you, about the fact that the subsidies should continue. Each project should be taken on its merits as far as what that subsidy would be in the future to make sure they're sustainable. But having said all that, we've continued in all our modelling to make sure that our money, our subsidies, would continue.

[1045]

J. Kwan: Of those units that the minister identified, how many of them are deep core? And maybe, just for clarity, if the minister could define what the government deems is deep core subsidy at this moment.

Hon. R. Coleman: It really depends on the program that each project has been developed under, quite frankly, because as the member is well aware, there are a number of programs.

The core need is still established under the CMHC core need guidelines, which they've established nationally, which is housing income limits, which drives the point-score system within the system itself. Then, of course, as the member knows, there are other things on that matrix, which includes, "Are you homeless?" and situations like that — all of those sorts of things with regards to how the core need is developed and where the project might be and what community it's in.

Given that the portfolio is around 60,000 units or something like that, it can vary from community to community and what have you. But basically, we use the same system we were using, actually, when the minister was in government, with regards to how the housing income limits were established for housing. The matrix was established by CMHC and by government at the time.

J. Kwan: I heard the number 60,000. Does that mean to say that there are 60,000 units that are now receiving core need or deep core need subsidy from the government?

I recognize that different projects do different things and it's a different number, but I'm trying to get a sense of what the picture looks like across the province, of individuals and families who are in need of core need versus the number of people who are actually receiving core need or deep core subsidy.

Hon. R. Coleman: Again, it does vary, but for the majority, because it is rent-geared-to-income and there is the matrix, most of the people that would be in our housing would be in the area of the core need, relative to the rent-geared-to-income calculation.

There are 60,000 units managed by non-profits in B.C. and operating agreements with B.C. Housing, and obviously, the federal government is involved in a large number of those. There are 8,000 in public housing that are run by B.C. Housing.

[1050]

That doesn't include other housing groups that may have housing. For instance, Metro Vancouver has 3,000 units that they manage, which are not B.C. Housing units and are not non-profit units. They're basically…. In that 3,000 units they have, only 30 percent of their actual tenants are rent-geared-to-income. So they would not ever run into the same pressure, simply because they've only got less than one-third of their housing in rent-geared-to-income. Then the rest of it is all market housing.

This is why this is a significant issue, given what I mentioned to the member earlier about the number of units affected over the next 25 to 30 years. Fortunately, they're not all coming to us in 2014 or 2015. We have time to work with each one, build a plan around each one and have the solutions for each project.

Hopefully, we will be able to come to a negotiated arrangement with the federal government that makes sense for the long-term health of all the housing in B.C. But at this stage, we are pretty confident that we can manage this thing. We'll manage it, but our preference would be that the federal government continue to be a partner with us in the housing that's affected by their funding.

J. Kwan: Well, I see in the service plan and also with other non-profit associations' documentation, particularly the B.C. Non-Profit Housing Association…. They have actually talked about a plan that they are working on with the government. Now, cited in that plan, of course, there are real challenges as well.

For example, the document actually recognizes, in terms of that strategy, part of that housing…. If the subsidy is gone, some of those units may well go to market rent, right? In other situations, it may well mean that the project might be deemed not to be viable. Ultimately, if that's the case, then the project would be lost.

You could imagine, in that scenario, the situation impacting our overall state of affordable housing needs in the province. I'm wondering, in that instance, if the strategy of increasing market housing — which ultimately means the loss of affordable housing units — or the strategy of increasing rent for the core need tenants — which means a loss of affordability…. I guess we run into a real crunch and a real squeeze on how to address that.

So for 2013, this upcoming fiscal year, how many units of the 60,000, and then the 8,000 that the B.C. Housing manages, are faced with an expiry of the federal subsidy agreement?
[ Page 903 ]

Hon. R. Coleman: I don't know whether the member wasn't listening. I never said for a second that we were going to get rid of any of our non-profit housing in B.C. and that it wouldn't be there for our tenants. I never said that in the comments I just made — or moving to market rent. I gave you an example of Metro Vancouver, which isn't in our portfolio, as somebody that has a mix in their portfolio. But we have some of that today in some of our projects because of the way they were developed under whatever program.

What we're doing at B.C. Housing is looking at densification to help bring down the cost with regards to the units that we have. We're looking at refinancing, because obviously, today's refinancing is a lot cheaper than it was when some of this stuff was done. There's some stuff out there where we can't get out of the mortgages. They are still sitting at 10 percent long-term mortgages, and there's no penalty buyout for those societies. Now, we don't have those. Those are directly CMHC, but that causes a concern for those.

There are a variety of programs that have been developed since 1940 on housing across the spectrum. We're upgrading, for instance, for energy efficiency to reduce our costs of operating. We're looking at how, in the future, we will have to look at our subsidy programs, if we have to come forward with new subsidy guidelines or whatever the case may be. That's only as we come through this management. Our goal is to maintain all of our affordable housing units.

[1055]

J. Kwan: I made an assumption, and I am very happy to be corrected if I'm wrong. In the service plan it talks about B.C. Housing working with the B.C. Non-Profit Housing Association in trying to address this issue.

In the B.C. Non-Profit Housing Association document they actually cite these strategies as approaches to try to deal with this in terms of options for the housing providers if the agreement expires. It states:

"Increase market rents. Subsidize from other assets within portfolio for multibuilding providers. As existing rent-to-geared-income tenants leave, increase rent-to-geared-income revenue by accepting new rent-to-geared-income tenants with higher incomes. Increase the rent-to-geared-income ratio charged to tenants — i.e., 32 percent or 35 percent of income. Introduce or increase market units at time of turnover, depends on quality and condition of the units. Negotiate new rent supplement agreements with the funder — which, ultimately, would be the best option. Finally, where projects are unviable and in poor state of repair, assess whether to retain."

I am assuming — maybe I'm wrong in that assumption — that these are the strategies the government is looking at as they work on dealing with this issue with the B.C. Non-Profit Housing Association and, at the same time, as the government works to strive towards getting the federal government to come to the table.

Hon. R. Coleman: First of all, that's not our document; that's theirs. These are the types of items they feel they should discuss with their members. They even go so far in their thinking as: "What if there were no partners? What happens to the stock then?" Obviously, we've said we're committed to our part of the partnership, so that changes a number of the points in the document already.

[1100]

The fact of the matter is that we have housing stock that's aging. Some of that housing stock is aging to the point where to repair it is very expensive and maybe not viable, so sometimes you do redevelopment.

As a result of redensification, redevelopment, we've actually produced 2,000 additional units in B.C. in the last five years, quietly just going in and looking at a property, working it through, taking care of our tenants, adding more units. We came out with more debt-free units, and we pay off debt. We can actually have more people pay rent geared to income at less cost to government because we don't have, for instance, the financing costs.

In addition to that, we have a number of societies. I would think the one comment in their report with regards to rent-geared-to-income is geared to this. We have some that are not our product that have come to us who all of a sudden, after a number of years of not adjusting their rents to rent-geared-to-income on an annual basis, find that their rents are way below even the rent-geared-to-income calculations for their tenants.

Now they have a big capital problem in front of them. They can't raise the rents, because there are rules around that, as the member knows, and they cannot manage the building. We have had people actually come to us and say: "We'd like to give you our building, because we can't make it function anymore." They had decided, at a board level over a number of years or whatever the case may be, not to understand the economics of making sure that the rents were tied to income, which would tie into the operation of the building.

[J. Thornthwaite in the chair.]

The reality is that there's going to be a demographic shift in housing over the next decade, two decades, as it is. We have to continue this. We have, basically, our commitment to the subsidies. Our units are in our portfolio. We manage those and subsidize those. We have relationships with the federal government on a bunch of units, which is of concern to us.

Obviously, the B.C. Non-Profit has some of those same concerns and are partners with us in trying to work with the federal government. At the same time they have said to their members: you should look at what your options are going forward.

I have units in B.C. today, not in the Lower Mainland but in some places, where I don't have the family mixes required for the units. I actually had to put a person with one child into a four bedroom just to have somebody in
[ Page 904 ]
there, because I can't find a family with three children to meet those criteria in a particular unit. The demographics have shifted, even in the last 20 years.

When I was doing this form of consultation stuff in the private sector, the reality was that we were building based on certain criteria that today have changed just by demographics in the last 20 years.

Housing is a moving, evolving, regularly needed thing, so what we do is we try and plan ahead to make sure that this all works as a package. Our intention is to lose no units but to add units over the next number of years by using our portfolio and our financing ability as leverage to be able to do more, simply because the numbers have changed even around financing in the last ten years.

J. Kwan: Does that mean to say that these items that have been listed in the B.C. Non-Profit Housing Association documents are not some of the strategies that the government would adopt to deal with the expiry of the healthy federal subsidy — that is to say increased market rents, the increase of the rent-to-gear revenue by accepting new tenants with higher incomes, etc.? Those situations or those instances or those options would not be something that the government would agree with to address this issue?

I understand. I think we're all in agreement here that our goal is to get the federal government to the table so that we don't end up in this situation. But I am worried that in the event that doesn't happen, what does it mean for 2013? For this coming year, how many units are in that situation, and then going forward? Maybe the easiest way to actually get clarity on what the situation is, is that based on the review that the government and B.C. Housing has right now….

[1105]

Is there a chart that actually shows the breakdown of how many units for 2013 for which the federal government subsidy agreement expiry would actually kick in, where these units are and the demographics of who will be impacted, as an example, maybe broken down region by region, so we can have that information all the way out to 2036? Then we're in a better situation of trying to figure out what the plan is moving forward.

Also, I want to offer this as well. This is a major problem, no matter who is in government. That's the truth of it. I want to offer the opportunity and also say to the minister that I want to work with him to make this work.

I fundamentally believe that the federal government needs to be at the table. It's not acceptable to me that they have actually opted out, for all intents and purposes, of really doing a national housing program since 1993.

Now, I know that's neither here nor there and that they've been doing one-off programs. We welcome all of those one-off programs, but we're seeing a major crisis around the corner here. It's going to impact us in a big way, and I actually think that we need a concerted effort to address this.

I would offer the opposition's support to the government in trying to deal with this with the federal government. In the meantime, I just want to know and have a better understanding of what our situation is and how best to address those concerns.

Hon. R. Coleman: In the next year 943 units are affected by the agreements. We have no problem managing those 943 units and protecting them.

Every year we know how many are coming. We're looking…. Like I said, every time we're working three to five years out with societies that could be affected as to what the solutions are or whatever.

We have properties in B.C. that…. I'll use the example of one in the Fraser Valley that is five acres. It has less than 60 units on it. Obviously, there's a huge opportunity to not only develop additional units and get additional units out of it by doing something with that property but also to enhance the ones that are there for their long-term sustainability. That means our operating costs are down to nothing, because they don't carry any, virtually. They're pretty much covered by a very small subsidy.

One of the largest subsidies on a lot of projects is the mortgages, right? They're financed, and the mortgage is built into the subsidy. So we cover the mortgage, the taxes, the interest, the operation. If that piece disappears, the subsidy costs really do go down dramatically, to the point where it's a lot easier to manage with the subsidy that would go to the project, because it's a lot different.

If I can comment just for a second on B.C. Non-Profit, I think what they're trying to do is be prudent and let their members know what the world looks like or could look like and start thinking about what they might bring back as ideas. I do think, though, that by innovation and thinking it through and working with organizations like B.C. Non-Profit, we will protect our units.

I also think that coming at us is a significant opportunity to enhance housing in B.C. by looking at our assets — how dense they are, where they're located. We have projects, quite frankly, in the hands of other non-profits that have nothing to do with us.

They are 30, 40, 50 years old. The societies are older. They have difficulty continuing to manage them, and they're looking to us and saying: "We'd like some advice as to what we do with this project. Our housing is something we can't maintain anymore because it's expensive. We'd like to do something. Can you give us advice?"

That's when we go into predevelopment funding, sometimes, with folks so they can get some planning in to see what they can do with their land long term to maintain the number of units they have but also see what else they can bring into the portfolio for them to be able to take care of their tenants.

I am glad the member is prepared to work with us. This is not an easy portion of our portfolio going forward, but
[ Page 905 ]
we are very aggressively looking at how we're going to manage to maintain our stock. At the same time, given what I just described, if the federal government was at the table still, that would just give us more creativity for more housing.

J. Kwan: So for next year 943 units would be impacted — for the fiscal 2013-14. The minister says the government is managing that and it's not a problem. Can the minister advise: how is it being managed?

[1110]

On those units does that mean to say that those who are receiving core need subsidies will continue to receive core need subsidies? In other words, there will be no core need housing stock lost as a result of these 943 units and the federal government subsidy expiry.

Hon. R. Coleman: Yeah, we're going to maintain the rent-geared-to-income on those units. We're not going to lose any units as a result of this. As we build the plan going forward, obviously there'll be key pieces in negotiations with the federal government, which will be ongoing. Then we are aggressively looking at all our solutions, and we have some pretty good ones, I think, in the mix that will help us to maintain our units for rent-geared-to-income for the long term.

J. Kwan: Okay, that's good. The units will be maintained. Does that mean to say, though, that for the tenants that are there, there'll be no change for them, or would their rent also increase? So there's no change for them.

Then for the people who vacate those units for some reason or another…. For new units that are coming in, the tenants' income would not…. In other words, there won't be a view to look for tenants with high incomes so that the subsidy levels could decline.

Hon. R. Coleman: Our goal is that we will not lose any rent-geared-to-income units, period. That means that based on income, they pay a percentage of their rent. As the member knows, there's a calculation for those people who might be on social assistance as well, and that's not going to change either.

The management of housing is pretty straightforward. What it costs to operate the package minus what the tenants pay…. Each tenant is different in a project, because it depends on their income, their family mix, all of those things. But it's all rent-geared-to-income. Off of that, the amount that it costs to operate the project, the difference is paid as a subsidy by B.C. Housing. That's how we do rent-geared-to-income.

J. Kwan: Yes, thank you, I understand that. So how many of those units or ratio of units are designated for rent-geared-to-income based on core need versus deep core? Would that ratio remain the same, then? Is it staying the same with these 943 units? There's no change, then, whatsoever.

Hon. R. Coleman: I'm making the commitment to the member that not a single RGI unit will be lost. I don't know what else she would like to have an explanation on.

If a tenant moved out of a project and the next tenant came in with a slightly higher income — they're still in core need, but they happen to make, let's say, $15,000 versus $12,000 a year — they would pay about another $20 a month, because that would be how the rent-geared-to-income calculation works.

The theory around rent-geared-to-income is that as your income changes, your rent changes, on an annual basis. That's the way it is.

It also works in reverse. If your rent goes down…. As a matter of fact, if somebody was working in a situation and making a small income in a rent-geared-to-income unit and they lost their job, they could immediately, by coming to their manager, get their rent adjusted downward because their income had changed.

[1115]

You cannot take a one-size-fits-all and describe all the tenants in all housing in B.C. We have rent-geared-to-income units. We're going to maintain them. They're going to be subsidized. I don't know what other explanation the member would like.

J. Kwan: Well, I want to have some assurances, then, that as a tenant vacates or leaves and a new tenant comes in, there's not a strategic strategy to actually accept tenants with higher incomes, right? That's all that I'm trying to establish. This was outlined as one potential strategy — to say that existing rent-geared-to-income tenants leave and increase the rent-geared-to-income revenue by accepting new rent-geared-to-income tenants with higher incomes.

What I'm saying is that all things being equal, you have somebody who is actually on income-assistance-level income versus someone who is slightly higher and both needing housing at the same time. It wouldn't be a strategic choice to say that the person with the higher income would be selected because of the subsidy issues.

Hon. R. Coleman: The same point-scoring system that's in place today is the same point-scoring system we'd use for those situations. If you think it's only income that is the measurement on the point-scoring system, then you should go back in your memory bank and understand that there are other factors.

Let's say you had one family with a number of children that were on the streets and homeless and had no place to live, and you had somebody who was living somewhere where maybe their rent wasn't totally affordable but they're managing. You had the family on the street, and let's say they had a child who required special needs,
[ Page 906 ]
for instance, to a specific school district, or mental illness within the family — all those factors. They might go up in the point score and actually get the unit.

You can't just say: "If somebody with this income and somebody with that income shows up at your door, who gets the unit?" If it was that way, then you wouldn't actually be handling other needs for people.

J. Kwan: That's why I said "all things being equal," right? What I'm hearing from the minister, then, is that there isn't a strategic decision or move to try to get new tenants coming into these units with higher incomes — that that is, in fact, not the case and that it wouldn't be part of the strategy.

I'm asking this, and I'm hoping to get certainty — right? — in terms of the challenges that we face and the number of people that are challenged with trying to find affordable housing in the system. The lower the income you receive, the bigger the challenges become. Your options become severely limited because of your inability to afford to pay for rent. That's all that I'm trying to establish. So if that is the case, and I'm assuming that's the case, I will leave it at that. But if that's not the case, I would, of course, ask the minister to clarify it.

Now, for 2013 the minister says that 943 units have been managed and that plans or a review have been done for five years out. I wonder if the minister can provide me with the information for 2014, '15, '16 and '17. I don't know if he has that information.

Maybe it's easier if the minister could just, after the estimates process, give me a chart that actually says how many units are in this situation, where they are and break it down on a region-by-region basis so that I have a sense of what the picture looks like across the province.

[1120]

Hon. R. Coleman: We have them. We don't have them here, but we will get those numbers. I'm happy to share them with the member, by region. The member will find that there's not a single riding in B.C., on any side of the House, that is unaffected by this, by what we face.

Actually, I'm probably more confident than most ministers across the country as to how we can manage this, simply because I think I have an organization that's been pretty good at managing and being creative to figure out solutions to problems.

Certainly, our final thing would be: "Let's continue the relationship with the federal government." If not, I do have a structure of people that I've got a ton of confidence in who can manage this portfolio as we go forward.

Fortunately, we're not having it, like I said earlier, coming at us all in one year — boom — which would be a huge challenge. We can now be flexible in our portfolio in how we improve assets and what have you, to be able to handle this. Certainly, I have no problem sharing that information with the member, and we'll get it to her.

J. Kwan: Great, thanks very much. I wonder if the minister could also attach with that information the subsidy dollars that are being allocated out of this fiscal budget for the projects.

Hon. R. Coleman: I hesitate to say what I can do on this because there's a ton of work that some people would have to do. It would take a lot of time away from what they're doing to just amass that much data.

We will endeavour to come up, basically, with the matrix that shows the number of units by region, and then we'll endeavour to see what the subsidy is by region federally and endeavour to break that down to some level of understanding for the member.

I know that when you're dealing with 60,000 units, although it's so many per year, you still have to go back in, and each one of them is a different program, in some cases.

[1125]

I could have five projects affected by federal funding, let's say, in a community. One could be a 25 percent old, old program. One could be a 75 percent match. One could be a program that was run in the late 1980s. One could be affected by….

None of this stuff that was built in B.C. in probably the last 20 years is probably affected by a federal program at a high level. Most of this stuff would have been pre the exit by the federal government and most subsidy programs.

We'll endeavour to sort of see what package we can put together that makes some sense.

J. Kwan: Thanks very much. I would appreciate that. I wonder if it could also include the provincial subsidy dollars, then, by region as well, so that we can do a comparison on that. I think that would be very helpful.

Now, this is one part of the challenge that I know B.C. Housing faces. Another part of that is the core need housing projections, in terms of what the needs are and the increasing demand for affordable housing across the province.

I don't know if these numbers are correct. I will put them on the public record and ask the minister to advise on his point of view on them. According to the B.C. Non-Profit Housing Association, core housing need projections in B.C. from 1996 to 2036 show that starting in 2006, core housing needs begin to rise from 138,242 to 215,964 for the year ending 2036. Is this generally correct, this assumption or projection?

[1130]

Hon. R. Coleman: My experience is statistics are a snapshot by somebody predicting. We know how well some of their predictions have taken place in the last number of years in Canada on all kinds of issues. Look, this is….

I'm going to give you a couple of examples. It took us
[ Page 907 ]
seven years to get through zoning and to start construction or build 14 sites in the city of Vancouver — seven years to do about 1,400, 1,500 units, right?

On the rent assistance program, 25,000 families have been helped in the marketplace on rent assistance now in the last five years, and 10,000 of them are still on rent assistance. Some have moved on. They come on, they get the assistance they need, their situation improves, and they move on. That's a pretty flexible program for how you manage your housing stock.

In addition to that, in 1996 in B.C. 36 percent of people were in core need, and in 2006, 31 percent of people in renting situations were in core need. So it's actually a dropping statistic. We know that it's dropped; we just don't have the latest statistics. But we do know by our own experience that the numbers are dropping.

The challenge with this is: what's it going to look like for housing into a decade from now or even into two decades from now? My experience was in the decade of the 1980s and into the '90s. We built a bunch of housing that was going to be for a specific group of people in subsidized housing for families. As we saw that evolve, we also came to the understanding that we couldn't build it fast enough — I think we came to the understanding — and provide the units that would be needed for people where they lived. You take, for instance….

I'm going to give an example of Clayton Heights, in Surrey. By us doing nothing, the rents in Clayton Heights have dropped. The city of Surrey did something. They allowed for illegal suites, and they allowed for coach houses over garages. So a two-bedroom basement suite was renting three or four years ago for $1,250 a month. Today it's about $850 to $875 a month. Why? Because you actually brought some supply into the marketplace for renters. In addition to that, as that happened, a number of the families living in that area of Surrey get rent assistance where they live. Nobody knows but them, but they are subsidized in the marketplace. Those are low-income families.

In addition to that, the demographic shift that's going to take place with an aging society and stuff in British Columbia is going to, over time, I believe, identify what our priorities will be in housing as we pay attention to the shifts that take place in the marketplace. So it's not possible to take a blank statement and lay it over housing.

I've been the minister now since 2005. Housing strategy was written in 2006. It's going through a refresh now, with our experiences and what we know today versus what we did when we wrote the strategy to begin with. To the member, I mean, I was happy she said she wanted to work with us, because this is an evolving file. Governments can't just have their heads in the sand and say there's only one option.

At the same time, the B.C. non-profit has its own members that it's trying to help and provide information to. For the lack of a better description, they're obviously both an advocate and a lobbyist to government with regards to housing. So they'll do their studies and come….

There's no shortage of studies with opinions on housing from this group and from other groups across the spectrum and across North America. So you have to rely on your people that are professionals in the housing side to understand the trends, to understand what we're going to need and to adapt accordingly. That's the expectation we have going forward.

I think we'll see some adaptation into the marketplace by B.C. Housing in the next number of years, probably even long after we're both not here. They're going to have to be adaptable, because the Housing portfolio and the different housing needs are shifting. They will continue to shift, and we have to have the ability to shift with them.

[1135]

J. Kwan: Maybe the best way to do this, then, is for the minister to provide me with information they have from his professionals who have actually done up the projections — what that looks like and what strategies the government is adopting to address the upward trend in core need housing. Maybe that's the best way to do it.

It's true that there are many, many studies out there and many opinions out there. Although, some of the information that I know that folks have gathered is based on statistics that have been released. I don't actually doubt their information.

That said, it would be really good to work off them on the basis of where the government is at with those projections. Maybe he can share that with me, and then we would actually — probably, then, for next year's estimates debate — be in a better position to address some of those more specifically.

Hon. R. Coleman: I just said earlier, about an hour and a half ago, that I'd provide the demographic study to the member. In addition to that, I think that the member should understand that, at times, housing, I think…. Unfortunately, for a number of decades in B.C., it was just build, operate and rent — and not identify talking about the people whose buildings you were cutting ribbons around. It was all about: "We've got to have the building and announcement. Build the units. Cut the ribbon."

I changed that shift in 2006, when we came out with Housing Matters B.C., to say: "Let's figure out who our clients are, who the people we need to help the most are."

As a result of the Premier's Task Force on Homelessness that was started in 2004 by Premier Campbell at the time, through to 2006, it became apparent that there was a need, or something, that had to be aggressively pursued in the housing in B.C.

We went after homelessness, mental health and addiction. We did two things. We moved quickly into the marketplace to protect and improve some stock for that particular purpose, and then we went to communities and said: "We're prepared to build. Are you prepared to
[ Page 908 ]
partner?"

We built units in Kelowna, Victoria, Nanaimo, Campbell River, Vancouver, Abbotsford, Surrey and communities all across B.C. to go after that particular need, because that was identified — not just by us and communities, but also by social agencies, policing, all those folks who said that we need some stability for this population.

That's why we took the shelter program and more than doubled it. That's why we took it to 24-7, and then we put in the outreach system to actually connect people with housing and supports, because some people need a lot of supports to transition their lives. Today we've had some remarkable success on that.

It also was the focus. The focus was also on the homeless intervention project, which had a goal of getting 100 very, very severely in need people from the streets of British Columbia a month for 18 months.

Almost 3,600 people at the end were actually brought from the streets and into housing as a result of that project, which is a focus of all levels of government, pointed in a direction right across government. So it was Health. It was Social Services. It was Housing. Housing drove the agenda.

I think that it's important to realize that statistical information helps you to a point. What people are seeing actually on the ground in their communities — the feedback from communities and municipalities and groups that work on the ground in each community — is a very valuable piece of information as you decide to start to try and identify the needs by local community and to be partners with them.

I think it's important that the one thing you don't do is decide that one size fits all. That's been, I think, the success of what we've been trying to do the last number of years.

I've always had the opinion that if there's a really good idea somewhere else that's working, I'm happy to steal the idea. If it works for the citizens of B.C. to improve their lives or to save lives or to stabilize their families, I'm all for it.

We will, obviously, over the next number of months and years, see an evolution again in housing in B.C., from what was built in the '40s, the '50s, the '60s, the '70s and all the way through to now, and what the need will be. Part of that need will change by demographics.

We have a baby boom coming through that will move through, and then there will be a different demographic on the needs of housing in B.C. We may find that we have a whole different need paradigm.

That's why we need to try to just find a way to make sure that we're nimble enough to react to and plan for the future in a way that we can make sure the housing that we're either protecting or building is going to be housing that will, long term, serve the needs of a particular portion of our population.

[1140]

J. Kwan: I was only just trying to get clarification from the minister on what projections he has in terms of the upward trend for individuals or families who would be in core need, projecting out into the future. I know that demographics change. Of course that is the case. We all know that. There is the aging population, people are having less children, and so on and so forth. That will obviously impact that.

That does not, though, necessarily impact the core need projection information. Or maybe that's taken into consideration for the core need projection information that's put forward by the B.C. Non-Profit Housing Association. I'm just trying to get clarity on what the government's own projection is on this. If the minister can break it down by demographics, even better. I would love that.

According to the B.C. Non-Profit Housing Association, their core need projections in B.C. for 1996 to 2036 shows that starting in 2006, a core need increase from about 140,000 to about 216,000 ending for the year 2036. Then it goes on to actually provide information on the impact of populations, which is what the minister is talking about. The demographic breakdown is homeless houses at 20 percent, special needs at 10 percent, frail seniors at 25 percent, individual seniors at 7 percent, low-income families at 20 percent and aboriginal community or aboriginal peoples at 7 percent.

I'm just trying to figure out the statistics that are put forward by the B.C. Non-Profit Housing Association. Is that accurate information that they've put out? Does that match the government's own projections — so that we actually have a baseline to know what we're working from?

Hon. R. Coleman: We have a variety…. I said to the member that we'll share our demographic study. We're not going to rely on other people's work. We will look at that work as part of the inputs. The numbers the member quotes are…. What's the difference in population versus the statistical information? What's it by percentage of people versus the…?

You know, you can always take a set of figures and make them work for you for a specific story. I don't buy into that. When I try and build around this, I actually try to build on the long-term understanding of the need and, if we can do that, with the work that we're doing.

I think the thing that people don't really realize…. With B.C. Housing, it's not all about just building, owning, operating — or building, owning, operating for societies. It's also about the rental assistance program, the SAFER program for seniors and the other things that we do. Just yesterday….

We have the ability — quite frankly, because we can borrow at such a low level — to step in and help organ-
[ Page 909 ]
izations that want to do other types of projects, like a 130-bed facility in partnership with the Vancouver Island Health Authority for a seniors village.

[1145]

Basically, that project will be 130 beds focused on seniors with dementia. We can be a partner in the success of dealing with that demographic I just described as an aging population and the baby boomers coming through. It's a $30 million project. We're actually not subsidizing it at all at the end of the day, but because of our strength, we can help finance it.

There was a project in my region where that financing is saving the insurance costs for an onerous CMHC attitude towards some of their financing plus the fees they make people pay. We actually saved the society $5 million in their construction loan, which went directly into getting the building and its budget done and delivering the project in that community.

We have a number of areas where we factor in with regards to the success of housing in B.C., and all of those have to take into account, as we go through it, what we will be seeing as the changes and how we adapt the housing stock in the future. Make no mistake about it. There will be adaptions necessary for us to be successful in housing in the future.

Having said that and noting the time, I move the committee rise, report progress and seek leave to sit again.

Motion approved.

The committee rose at 11:46 a.m.

PROCEEDINGS IN THE
BIRCH ROOM

Committee of Supply

ESTIMATES: MINISTRY OF
ADVANCED EDUCATION

(continued)

The House in Committee of Supply (Section C); M. Bernier in the chair.

The committee met at 10:10 a.m.

On Vote 13: ministry operations, $1,953,255,000 (continued).

A. Weaver: Thank you to the member for Vancouver–Point Grey. We had some communications issues yesterday in terms of where I was going to be speaking. It was gracious of him to allow me to come in at this time.

My question is: over the past decade, up to and including this budget, what's the percentage of managerial and administrative costs compared to front-end operating costs in the advanced ed sector?

Where I'm going with this is I assert that the percentage of the overall operating budget in Advanced Education that's going to administration as opposed to front-line delivery services of education and research has been increasing as a percentage over time. I recognize that it's probably not possible to produce that now, but if you could produce that to my office over time, it would be very helpful.

As a consequence, a follow-up is: what provisions, directives or guidelines have been implemented or are being considered to mitigate and reduce top-end administrative costs as an overall percentage of the Advanced Ed budget?

[1015]

Hon. A. Virk: First of all, I absolutely appreciate the questions.

In terms of the percent of manager and admin costs versus front-line — the question asked in the manner it is, we don't have the data readily available in that respect. What we do commit to is to correspond with the member, from the ministry, to provide additional details in that respect. What I can say is that there are a number of areas that I think we can outline, and then it outlines with the second question, in terms of what is being done to mitigate these costs.

Perhaps the member is aware of the CEO compensation framework that indeed does exist and the caps that have been put on compensation effectively in the last year — the freeze on compensation at CEO levels. That's public post-secondary–wide — the compensation framework and the cap provided. Also, perhaps I can enlighten the member that those making over $250,000, as an example, at the three largest universities in British Columbia remain at less than 1 percent. That's remained relatively constant as well.

An additional factor…. In my mandate letter — which is public and which is, in effect, the mandate for the public post-secondary system — the core review in terms of the examination of costs in the post public university sector, in the institution sector…. Part of that core mandate will be a discussion with the public post-secondary institutions, an examination of the variables, an examination of costs. It'll give the opportunity for these institutions to re-examine the percentage of administration and managerial costs, in that sense, as part of that core review.

[1020]

We're committed to that as well — to examine those costs and have it ongoing. I think the public demands that we be efficient as possible, and that's going to happen.

A. Weaver: Thank you to the minister for the answer.

The concern, of course, I have with the administrators is not only CEO compensation but the breadth and depth
[ Page 910 ]
and scale of the administration as it has grown in the 25 years I have been a faculty member at several universities in the country.

The next question, then. There's a notable jump of 3 percent, from 5 percent to 8 percent, as a target of income-to-loan repayment for graduates from 2012 to 2013, with that 8 percent target to be maintained through 2016. Can the minister explain how this percentage is calculated, and is this an expectation of increased tuition fees or stagnation of income?

[1025]

Hon. A. Virk: I'll start with the larger qualifying statement that there's a commitment by this government in this province to keep tuition rates affordable. In fact, for the last six years standing, they're fourth lowest in Canada, with an extremely robust loan program as well.

Specifically to the question, let me start sort of backwards. There's a number thrown that's 8 percent, and 8 percent is a target as defined by the public sector in terms of private industry. It's set that 8 percent should be a maximum for non-mortgage instruments in terms of credit repayment. That's a commonly accepted target set by banks. In the for-profit sector that should be a maximum in terms loan repayment for non-mortgage instruments.

While that has been set, consistently, the delivery rate for 2010-11, 2011 and '12 has been 5.3 percent. That's been the delivery rate in terms of what students are paying as a percentage of their income towards loan repayment, so almost 3 percent below what is a commonly accepted industry standard across Canada. In that respect, the delivery has been consistently below the 8 percent for several years running.

A. Weaver: To the minister, through you, hon. Chair: with your leave and his leave, I'll provide a list of questions that I clearly won't have time to have answered today. But I do have one final one.

The final one is with respect to graduate student funding. Other provinces have graduate scholarship programs that often attract qualified post-graduate candidates from B.C. to their provinces. Is the ministry considering the introduction of a similar program? If so, would the minister consider using such a program as an incentive tool to attract students to this province, British Columbia?

As a supplemental to that, is there any consideration in terms of the revision of graduate student per-student funding to universities in the province of British Columbia relative to the per-student funding for undergraduate students?

[1030]

Hon. A. Virk: I can answer that. First of all, thank you for the question. It's a question, your first one, in terms of the grad funding. The question I have been asked — not only by universities, by the Research Universities Council, but also by graduate students that I have met with — is the same question I've been asked in terms of what kind of financial assistance policy can we look at for graduate students.

As the student financial assistance policy has been reviewed, that's in my mind. I've got it from the member as well. I've got it from the universities. I've had it from the grad students. That's certainly something that can be reviewed as we review student financial assistance policy.

Now, the second question in terms of the grad student FTE funding model, a revision suggested…. In fact, there were some 2,500 grad student positions increased, and the funding was actually double the undergrad model, so it was $20,000 per seat for 2,500 new grad students. We've delivered on that.

Certainly, as we examine the government's financial position in the years to come, an examination can be done — if those kinds of programs can be examined and can be redelivered.

D. Eby: I'm referring to page 21 of the 2013-14 service plan of the ministry, which the member for Oak Bay–Gordon Head was referring to. It relates to student loan repayment as a percentage of income.

There's a chart that's set out there which says that the 2011-12 actual percentage of what I assume is pre-tax income of university graduates is 5 percent. The minister clarified it's actually 5.3 percent, and then there's another number, next column over, 2013-14 target, which says less than or equal to 8 percent, the same number for '14-15 and '15-16.

Now, my understanding of the word "target" is something that we are trying to achieve. Everywhere else in the document, target means this is the number that we are trying to achieve as a ministry.

For this figure, performance measure 7, can the minister confirm that we are trying to achieve a higher level, or less income, for graduates of university programs and college programs because they have to repay more student loans? Or can he clarify the intent of the 8 percent figure and why they didn't choose 5 percent or 6 percent or 3 percent, for example, as a target instead?

[1035]

Hon. A. Virk: I think, first of all, it's appropriate to clarify that the 8 percent is a commonly accepted standard by which the private lending institutions deem that, as I said before, non-mortgage financial instruments…. That 8 percent should be a maximum loan repayment ratio out of income for an individual. So the number that is set…. I think the reasonable man, as my friend may know — as defined, perhaps, by the Criminal Code — would define that the 8 percent is a maximum goal, not a goal that we wish to attain. We wish to attain a maximum of 8 percent but, preferably, if possible, less than 8 percent. So that's the goal of trying to stay below that.
[ Page 911 ]

Now, the number suggested, that there was a 5.3 and 5 percent — that's a mathematical rounding of, indeed, the number for 2011-12. It was 5.4 percent, and there was a rounding, being less than 5.5 to 5 percent. So those are the actual numbers. There's a commitment, and I'll repeat that, to keep under the private institutions' recommended rate of under 8 percent — to keep under that, not to work to that.

D. Eby: The figure that the minister is talking about is described in the ministry's own document as the figure set by financial institutions for the maximum debt load, and that level is "designed to minimize default levels." That is the absolute peak that banks are telling us that people can carry without defaulting on their loans.

So if you look at this target of 8 percent — well, we want to keep it below 8 percent — if the calculation is based on average debt levels or median debt levels, that means you have half of the student population that is borrowing money that is potentially, if you get to 8 percent, beyond that maximum repayment level. They are at huge risk of default, according to banks.

So can the minister explain to me why what we're measuring here is average instead of looking at how many students are over that 8 percent figure already, how many are at risk of default and, by extension, how much public money is at risk that we're anticipating being paid back but won't be because so many students are beyond their maximum debt load?

[1040]

Hon. A. Virk: Let me provide a response to the member. About 30 percent of students in British Columbia do get loans through the one-loan, one-student program that British Columbia offers, which is indeed a combination of federal and provincial loans. So 30 percent of students do avail themselves of the loans.

Now, of the 30 percent that do get loans, the average loan is $20,000. That's determined…. There are outside agencies that would come out with a different number. But this number — $20,000 is the average — is determined by the ministry's own analysis, the individuals that provide the loans. So the average is $20,000.

Within the loan program there are a number of different ways. There are completion grants provided at the end of completion of a year of study and loan reduction availabilities for low-income students as well. There's a robust program of doing that analysis for those students at risk or low-income students.

A number that I'm astounded by, myself, is that in fiscal year 2012-2013 the province of British Columbia, invariably the taxpayers of British Columbia, spent $41 million in loan reductions and loan forgiveness. That affected 23,000 students.

Effectively, by spending $41 million to benefit 23,000 students, the loan repayment ratio is still at 5.4 percent, considerably lower than a maximum set in terms of non-mortgage financial repayment by private industry. I'm quite proud of that, and I'm astounded by the fact that 23,000 students benefited by $41 million in loan repayment in 2012-2013 alone.

D. Eby: I think this illustrates exactly the problem with the student loan program. We're giving $41 million out the back end, putting students through the stress of borrowing money, going into default, making application for special exemption — a whole new bureaucracy to administer this loan forgiveness program — when at the front end we could identify low-income students, give them the grants that they need to go to school and not have to do it through the back end, through a very, very expensive program, as the minister notes.

I hope that the minister is going to look at that issue, the fact that that number is so high in terms of loan forgiveness — unacceptably high, because there's a problem with the student loans program, a problem with the tuition program in British Columbia — and that he'll look at that as part of his "review of the student loan program." He needs to make recommendations for improvement.

That leads into my next question, which is: what is the scope of the review of the student loan program? What are the terms of reference? Who are the stakeholders that will be consulted? What is the completion target for this "modernization"? How will we know when the system is modernized? Will the minister be looking at fixing this back-end repayment program?

[1045]

Hon. A. Virk: Let me reverse the order of the questions asked and talk first of all about the target for completion of the review.

The work is ongoing, and it's going to continue to work throughout the fall. There will be a broad set of stakeholders that will be consulted — not completely inclusive or spelling out the entire list, but that includes the Ministry of Finance. That includes student groups. That includes groups representing the institutions as well. That means groups representing the banking industry, as well, that can provide guidance in areas. So it's a wide, comprehensive group of individuals that will be consulted.

In terms of some of the areas for review. Student groups were indeed part of the consultation when we're modernizing the manner in which the applications were applied for. So there has been….

[1050]

One of those targets has been completed. The member may know that as of June of this year the new StudentAid B.C. website came live. I've gone on the site myself and looked around. It's very modern and very seamless. I encourage the member to go on that StudentAid B.C. website and look at the modernization there.

It has been voted as one of the top five government
[ Page 912 ]
websites in North America by govloop in September of 2012, before it became live. It achieved a 50-percent reduction in paper and printing costs by on-line applications and forms. Decisions, once made, were posted, so a student in this day and age doesn't wait for a letter in the mail but can go immediately on line from their phone, their iPad, and find out the status of their loan. So that has been a comprehensive change in the way students access information — no more waiting for that two weeks where that letter comes in the mail.

Now, in terms of the scope of the review. It's certainly going to be…. We have to ensure financial sustainability, balancing the need of the student — that's very important — but at the same time balancing the need of society and of the government, looking at labour market analysis. A question I'd maybe pose, I guess, in that review is: can we build in incentives as we do this review — build in incentives in student aid to encourage students to go into those areas where we're going to face those labour shortages?

So indeed, I foresee the work of the review continuing on through the fall, a broad group of stakeholders being consulted, including students, and that review to continue on throughout the fall.

D. Eby: Can the minister advise on the number of adult basic education spaces which are currently available in the province of British Columbia and whether that number has changed over the last five years?

[1055]

Hon. A. Virk: In the 2012-2013 fiscal year there are 6,483 funded — that's FTE — positions for adult basic education. Now, let me qualify that. That's 6,483 positions. Adult basic educators are those that are retooling, relearning, coming at different parts of their education. That may be some for one course, some for two, some for broader programs. The actual number of adult basic learners that are coming in varies from 22,000 to 25,000 individuals in the 2012-2013 year because there are different needs and different levels of enrolment.

In terms of the second part of the question, on the trend in the last five years, I'll have to ask the ministry staff to get those numbers in terms of the trend and baselines for the last several years. We'll commit to providing that information to the member.

D. Eby: Thank you, Minister, for that.

Can the minister advise on the amount of deferred maintenance which post-secondary institutions in British Columbia are reporting to the ministry, the value of that deferred maintenance by institution and how the total value of deferred maintenance in British Columbia has changed?

[1100]

Hon. A. Virk: The government does recognize, indeed, that there are a number of institutions that would certainly have deferred maintenance across the post-secondary public sector. There is, indeed, deferred maintenance that has been requested. Let me sort of qualify that.

Projects are prioritized on a number of factors, one being health and safety, the highest priority and decisive factor. Of course, operating cost reductions, access to education, job creation, economic benefits, infrastructure, sustainability — those are all factors that are considered in assessing and prioritizing funding towards deferred maintenance. Since 2001 this government has put some $672 million to address deferred maintenance at post-secondary institutions in British Columbia.

In terms of prioritization, it's important when prioritization of deferred maintenance is also taking into account the government's financial position, financial sustainability, the spending within our means as well. I must be firm on one part of it. When health and safety are a factor, that is definitely a priority in terms of deferred maintenance.

D. Eby: I'll ask again. Does the minister have the numbers for deferred maintenance by institution, and how has the total amount being reported to the ministry from these institutions changed since the last fiscal?

[1105]

Hon. A. Virk: First of all, I do want to acknowledge that there is, indeed, deferred maintenance at our public post-secondary institutions. Since 2001 this government has spent some $672 million to address the deferred maintenance at post-secondary institutions.

Post-secondary institutions do not submit, as part of their plans, the aggregate amount of what their deferred maintenance is. What they do submit is a prioritized list of the priority projects in terms of emergency projects, funding and allocation towards health and safety, and improvements required in terms of operating cost reduction.

[1110]

Those are the types of information that come from the institutions to the ministry for consideration. They're considered, as I said before, in the order of health and safety, operating cost reduction, access to quality education, job creation, economic benefit and infrastructure sustainability.

Those lists do come from the institutions. They are prioritized by the institutions. The ministry attempts to then, in terms of prioritization, allocate funds on a prioritized level.

Once again, $672 million was indeed spent on deferred maintenance at post-secondary institutions across British Columbia since 2001.

D. Eby: The minister has stood and advised the people of B.C. about all of the money that the province is spend-
[ Page 913 ]
ing on new buildings at institutions across B.C. It surprises me that the ministry would be spending that kind of money on new buildings without understanding what the maintenance costs are of buildings, and that the minister and the ministry can't tell me what the value of deferred maintenance is on the existing buildings on university campuses, given that we're investing so much in new buildings.

We need to plan ahead for those new buildings, which will eventually themselves need maintenance as well. I've heard horror stories from students about the conditions on campuses. I'll note that concern — that the ministry is not addressing that — and I hope the minister addresses it.

With respect to pots of money that could potentially go to addressing some of this maintenance deficit, the Pacific Carbon Trust collects a significant amount of money from post-secondary institutions in B.C.

I wonder if the minister can confirm that in fact, the Pacific Carbon Trust collected $3.77 million from post-secondary institutions in B.C. in the last year and whether or not the minister is looking at, instead of having them transfer that money to the private sector, using that money for energy efficiency upgrades and some of these deferred-maintenance costs that are related to energy efficiency — instead of transferring them to the Pacific Carbon Trust.

[1115]

Hon. A. Virk: Notwithstanding the member's own views on policy, with respect, I'll submit that, in terms of questions on matters of policy on the carbon trust, they be put towards the Ministry of Environment, which has exclusive jurisdiction in that area.

Broadly, yes. The answer is that $3.77 million was indeed the amount in the 2012-2013 fiscal year that was paid by the post-secondary institutions towards the carbon trust. Secondarily, I'll add that from 2007 until the present some $14 million from that very fund was reinvested back into post-secondary institutions for reducing our carbon footprint and making institutions that much more environmentally sound in many ways.

Let me give you an example: UNBC's bioenergy plant. Investments made at UNBC save, now, some $829,000 a year — $829,000 in terms of energy savings over previous systems as a result of investments made. Just for comparative purposes, the savings also equate to CO2 reductions, which equate to some 1,000 cars off the road every single year by that reinvestment at UNBC's bioenergy plant.

D. Eby: Will the minister commit today to fighting on behalf of post-secondary institutions in B.C. — and going to the Minister of Environment, Terry Lake, who is doing a review of the Pacific Carbon Trust — to keep that $3.77 million next year in university and college budgets so that they can spend that money to benefit B.C. students instead of private companies? Will he make that commitment today?

The Chair: Just a reminder that we can't use personal names.

D. Eby: Thank you, Mr. Chair.

[1120]

Hon. A. Virk: I'll just read one of the mandate positions from the Ministry of Environment, just for reference purposes. The Minister of Environment, as part of their mandate letter, is to "review the Pacific Carbon Trust and provide options for reform."

Now, that decision…. Of course, in terms of the review that's done, decisions are made by cabinet, and decisions will be made as a cabinet, as a whole. Members of cabinet will certainly be consulted on the decision after the review is done, and government and cabinet as a whole will make that decision.

D. Eby: Now, I'm going to ask about the quality assurance framework revisioning or redrafting that's discussed in the service plan. It sounds like a bit of an arcane issue, but actually, it's incredibly relevant to a number of people in British Columbia who run, especially, English-as-a-second-language schools.

The issue is that the federal government is changing the rules around who gets a visa to stay in Canada while they're studying. Your institution must be included on this British Columbia list of accredited institutions in order to study in B.C. on one of these visas if it's for longer than six months. Now, the way you get onto the list is to qualify through an accreditation process, and that is this quality assurance framework.

The big issue is that this was supposed to come in on January 1, 2014. It has now been pushed off by the federal government, fortunately, to the spring. The ministry promised, in the 2011 jobs plan, that it would have this quality assurance framework done by 2012. Well, here we are in 2013. It's not done. They're promising again that they're going to revise this framework so that these schools can get on the list and qualify for students, keep these jobs in B.C. and keep these students coming to B.C.

My question to the minister is quite simple. When does he expect to have this quality assurance framework revision done? Who are the stakeholders involved? Yes, let's leave it at that. Who are the stakeholders involved that will be consulted in this process, and when will the minister have this quality assurance framework done for these schools so they can have some certainty that the students will be able to come and study in British Columbia?

[1125]

Hon. A. Virk: If I may, some facts in terms of the jobs plan and commitments for the quality assurance framework. There were a number of improvements put into the quality assurance framework at the end of 2012 — specifically, strengthening the quality assurance process, transparency in terms of availability of information to students. So a number of areas were indeed acted upon in 2012.

But the process of quality assurance is an ongoing process. You must be nimble and flexible and increase quality as you move on. The member certainly may be aware that a green paper was published in the early part of 2013 to generate discussion with the various stakeholders, and there are consultations occurring.

Consultations are occurring and have occurred with public post-secondary institutions; private degree-granting institutions; language schools; private career training institutions; a variety of government agencies, including aboriginal partners; and including theological universities, students and citizen groups. Those discussions have been and are ongoing as well.

[1130]

D. Eby: I'm glad that those conversations are happening, certainly, but I'm also very concerned about the deadline that the federal government has coming up. So I'll ask the minister one more time. When will he have this completed? And when will he be able to tell ESL schools, especially, that they'll be able to keep getting students internationally coming to British Columbia?

Hon. A. Virk: A number of different provinces are continuing dialogue with the federal government in terms of the new changes under federal regulations — CIC changes to that program. The member may be aware that the federal government has changed its deadline to June of 2014.

The ministry will continue its consultations and have the educational quality assurance framework completed prior to the government's new, extended deadline of, I believe, June of 2014. That has been extended from an earlier date.

D. Eby: Well, it's only by the grace of the federal government that this ministry has avoided a disaster around the January 2014 deadline. If the minister's plan is to have this framework done by June 2014 and that is simultaneously when the federal government is going to implement the new regulations, then how are these schools going to get onto the list?

Is the minister saying that they're going to have to wait until June 2014, when the new regs are in place restricting access for students, then apply and just sit empty and wait while the ministry processes their applications, because their students don't qualify for visas?

The minister knows that this House may not sit again until February 2014. It sounds far away, but it is not far away, especially with student visa–processing times. They need to be able to tell Immigration Canada that the school they're applying to is on B.C.'s list. How can that happen if the regulations aren't done by June, Mr. Minister?

[1135]

Hon. A. Virk: In the beginning of this estimates process I had committed to presenting facts and not attempting, of course, to make policy statements or gain political mileage through unsourced statements or otherwise. I'll continue to refrain from that, and I'll let the member opposite continue to do that.

I'll stick to the facts — that there are over 40,000 ESL students in this province alone. To suggest that British Columbia doesn't have an education quality assurance process is pure folly, at best. We have an EQA process that is the envy of many different provinces in Canada, in fact. Our quality assurance process has been consulted by many in other provinces as well.

That doesn't mean there isn't a continuous improvement process in place. This is part of the continual improvement process to strengthen our quality assurance. International students continuing to come to British Columbia suggests that they are not coming because of some deadlines that have been extended. Once again, just mere necessary political mileage out of an issue on the backs of these students.

British Columbia continues to be an absolute choice destination for students across the world, and particularly ESL students.

D. Eby: I regret very much the comments of my friend opposite with respect to the question, which is a very serious one. I will take the minister to the minister's own website.

"Effective January 1, 2014" — we now will accept that the date has been changed to June — "Citizenship and Immigration Canada will only issue study permits to international students accepted for admission at institutions, schools and organizations in B.C. that are on the province's list of eligible institutions."

Next sentence:

"B.C. is working to establish specific criteria that will be used to define the list of eligible institutions…. Further details…will be made available at the earliest opportunity."

I regret very much that my friend across the way is saying that I'm being alarmist about this or somehow taking away from B.C.'s reputation as a place to study. There is a freight train coming towards ESL schools in British Columbia, and the minister needs to address it.

I'm going to ask one more time, because he clearly misunderstood the question: when does the minister expect to have a plan in place so that schools can get onto this list?

Hon. A. Virk: I'll repeat my answer once again for the
[ Page 915 ]
benefit of the member. The deadline has been extended by the federal government until later in 2014. As I said before, there is a great deal of consultation occurring with a broad group of stakeholders to ensure that we have the best education quality assurance process as practical in place in the province of British Columbia.

[1140]

I would suggest that the member opposite will agree that in order to have a best quality assurance process, you must consult as broadly as possible, including students and citizens and institutions and private institutions and private career-training institutions and theological universities — having as broad a consultation as possible.

I'm sure the member opposite will agree that a broad consultation is absolutely necessary to have the framework that is respected worldwide. We commit to have an educational assurance process that is cherished worldwide, and we continue to have students. It will be done prior to the federal government deadlines.

D. Eby: Can the minister advise how much new funding has been set aside for the centre of excellence in agriculture at the University of the Fraser Valley?

Hon. A. Virk: The member may know that there are a number of excellent agricultural initiatives across the Lower Mainland, not only at the University of the Fraser Valley but also at other institutions as well. There are a number of excellent programs at the University of the Fraser Valley that are being consolidated into the construction of a new building. There was a budget of $1 million for construction of new greenhouses, for a set completion date for end of September of this year.

It's an opportunity for collaboration. It's intended to be a collaboration not only within the university, but collaboration with the Ministry of Agriculture, collaboration with other post-secondary institutions that provide specific agricultural training and agricultural expertise. This is absolutely a step in the right direction of consolidating expertise in one location.

D. Eby: Then, do I understand the minister properly to be saying that no new money has been allocated for the centre of excellence in agriculture at the University of the Fraser Valley?

Hon. A. Virk: If I may repeat the exact thing I said no less than a few seconds ago, $1 million has been allocated to the construction of new facilities at the University of the Fraser Valley, with a completion date of end of September.

D. Eby: I apologize to the member. I should have clarified my question: operational funding.

The minister is going to build a new facility there. Is there any new money set aside to operate this centre of excellence in agriculture?

Hon. A. Virk: This is a consolidation, as I said before, of existing programs. However, there is the infrastructure money to assist in the consolidation of those programs, with a common structure.

D. Eby: The same question with respect to the traditional school of Chinese medicine, in partnership with a publicly funded post-secondary institution. How much operational and capital funding is set aside for this project?

[1145]

Hon. A. Virk: With reference to the school of traditional Chinese medicine, the ministry is at the very initial steps of a consultation process. It's a consultation process with post-secondary public institutions to determine, first of all, interest, capacity, ability and, at the same time, define the scope of the type of school that we're working toward. It certainly wouldn't be appropriate to set a budget before we designate the scope, the mandate, the size and quantity of that type of school.

After the consultations, as they occur, and the breadth and depth of the new school are analyzed, and locations and who is going to deliver are analyzed, then a budget will be formulated after that period.

D. Eby: The minister is well aware of the dire situation for First Nations people across British Columbia when it comes to our post-secondary system. I was pleased to see in the minister's service plan and mandate letter the importance of First Nations learners.

I would ask the minister: specifically with respect aboriginal post-secondary education and training in British Columbia, how much new funding will be provided to address the situation of aboriginal people in British Columbia under the various goals that have been set out for the minister with respect to that group?

Hon. A. Virk: The ministry absolutely recognizes that B.C.'s aboriginal population is young. In fact, it's one of the fastest growing. It's integral that as this province embarks on economic growth and our once-in-a-lifetime opportunities, aboriginal individuals are included 100 percent and are absolutely included in our B.C. jobs plan.

Now, specifically, the number of funding…. The post-secondary education training policy framework and action plan is a key priority for government. I'll just give an example of some of the funding in there: $7 million for partnerships between post-secondary institutions and aboriginal institutions, another $4.2 million to 11 public sector institutions for implementation of aboriginal service plans, another $2 million in aboriginal emergency financial assistance, another $2 million for B.C. aboriginal awards for financial assistance, another $1 million for
[ Page 916 ]
financial assistance for aboriginal students taking master and doctoral programs.

[1150]

This government believes that there is adequate funding for the aboriginal programs. It's a synergy; it's a partnership. It's a partnership between communities, cities, towns, aboriginal organizations, government, universities and the private sector to ensure that we uplift aboriginal communities and make them an integral part of our growing economy. Indeed, it's going to be a partnership among all sorts, from social agencies to financial agencies and an incredible partnership that we hope to foster with private industry, as well, to make sure that aboriginal youth are included in this province's prosperity.

D. Eby: I'm afraid that our time is done, but I'm not finished, so I'm hopeful that my colleague across the way will commit to receiving a list of additional questions from me and making best efforts to answer those questions.

Just in conclusion, I would like to thank the minister very much for his efforts throughout this process — that was quite an endurance match — as well as his deputies and ADMs who have been assisting quite ably through this process and, as well, yourself, Mr. Chair, and the Clerk and the Hansard folks for their work through this process.

Hon. A. Virk: I also want to thank the member opposite and all the different members that asked the questions. They were indeed very respectful and very appropriate questions.

I do also commit, if there are additional questions that the member may have, that he may put those in writing, as there's a number of them that we were committed to get back to. We will endeavour to do so as well.

Vote 13: ministry operations, $1,953,255,000 — approved.

Hon. A. Virk: Hon. Chair, I move that the committee rise, report resolution and completion of the estimates of the Ministry of Advanced Education and ask leave to sit again.

Motion approved.

The committee rose at 11:51 a.m.

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