2014 Legislative Session: Second 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, April 1, 2014

Afternoon Sitting

Volume 9, Number 7

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

TUESDAY, APRIL 1, 2014

The House met at 1:33 p.m.

[Madame Speaker in the chair.]

Orders of the Day

Hon. D. McRae: The galleries are full. It's a beautiful day.

Interjections.

Hon. D. McRae: People just couldn't….

I call continued debate of the Justice Statutes Amendment Act, and in the Douglas Fir Committee Room I call continued estimates of the Ministry of Transportation and Infrastructure.

[1335]

Committee of the Whole House

BILL 14 — JUSTICE STATUTES
AMENDMENT ACT, 2014

(continued)

The House in Committee of the Whole (Section B) on Bill 14; M. Dalton in the chair.

The committee met at 1:36 p.m.

On section 40 (continued).

K. Corrigan: We left off this morning with a question about why the minister had chosen to have the audits done by the director of police services on major cases that had gone cold, essentially, for a year — major case investigations that had gone cold — and why they were discretionary as opposed to mandatory, which is what Justice Wally Oppal had recommended in his report on the inquiry into the missing women.

I just wanted to follow up on that. We did talk about it earlier just a little bit, and I raised it also in second reading, so I'm not going to spend too much more on this issue. The response, I believe, that the minister gave was that there is an internal report first. Just to follow up on that, is it because of the internal review that's going to happen within police departments that the minister made the decision that an audit would be discretionary in the hands of the director? Was it because of that?

Hon. S. Anton: The reason for the discretion is that the director will order an audit if there is an identified non-compliance with the standards, but if the review demonstrates compliance with the standards, it is at that point that the director can make the decision that there is no need for an audit.

K. Corrigan: Well, I believe that the minister previously had said that the question of whether or not there would be an audit ordered was going to be complaints-driven, which seems different than what the minister is saying right now. So I'm wondering if the minister could explain.

[1340]

Hon. S. Anton: There is a positive requirement that at the end of the year of an inactive investigation, there does need to be a review by the chief of the police service.

The complaint comment is that…. Of course, anybody can make a complaint at any time, and people do. There is a positive requirement on the police service to do that in the event…. Again, I am just prefacing this with the comments the member made earlier. We do have good police departments in British Columbia, but in the event that one of these files languished overly long, certainly a complaint would draw attention to that. But generally, it is the obligation of the police chief to be paying attention to these files.

K. Corrigan: When the minister previously said that the process would be complaints-driven, I'm trying to figure out exactly how that squares, then. I heard the response.

But is the minister saying that if there is a complaint, more attention would be paid to it? I mean, either the investigation complied or it didn't, and I'm trying to figure out where the complaints would fit into it.

Hon. S. Anton: There is a positive obligation on a police chief to review an inactive case. I'm not exactly sure which quote the member is referring to. I think I have in the past referred to the possibility that a complaint may be made in terms of the review. I think the only circumstances that would happen is in the very unlikely circumstance that a review should occur but had not occurred. Then someone might bring it to the attention of that police department or to the director or to the minister or to some other person who could say to the police department that it's time to get on with the review.

But as I said earlier, there is a positive obligation on the police department, on the police chief, to create a review, to prepare a review if there is an inactive major case investigation inactive for a year.

K. Corrigan: When the minister talked about it being a complaints-driven process, was the minister talking about a complaint to the police department, the complaint commissioner or the director of policing?

Hon. S. Anton: It is not a complaints-driven process. The act has a positive requirement on the police chief that the police chief must carry through on an inactive investigation if it's been inactive for a year.
[ Page 2636 ]

K. Corrigan: Is the minister saying that the minister did not say it was a complaints-driven process?

[1345]

Hon. S. Anton: The process is driven by the act. The positive obligation on the police chief is driven by the act. In the unlikely event that a chief ignores the act or overlooks it, it is possible that a complaint at that time would, in fact, remind the chief of his or her obligation under the act.

K. Corrigan: Just to reiterate about where the complaint…. I'm trying to understand the process. Would it be expected that there would be a complaint that would go to the police department, to the Police Complaints Commissioner or to the director of police services? Could it be any of the above? Would that be open to a member of the public?

Hon. S. Anton: That is correct.

K. Corrigan: In this section 45, the prospective 45.03, if the director does say there needs to be an audit and orders that an audit take place, presumably because of deficiencies that are noted in the internal review…. Actually, I'll ask a question about that. Would the director have the ability to go back and have a discussion with the police chief who had submitted the report if there appear to be deficiencies? Or would the only thing open to the director of police services be to order the audit? Is there any kind of flexibility there?

Hon. S. Anton: The act as written determines that if the chief of the police service determines that the review demonstrates that there was not compliance with the standards, then the director may require the audit.

K. Corrigan: I'm just asking the minister as a practical matter: could that review of the internal report include going back to the police chief or whoever it is that made the report? Could they go back and say: "Look, it's deficient in area C. Give us more information, and if you give us that information, we may not have to order an audit"?

[1350]

Introductions by Members

V. Huntington: I'm just thrilled to be able to introduce a group of students who have spent time touring the Legislature and who have visited my office. I'd like to introduce Mrs. Megan Andersen — or Mme. Megan Andersen, because it's a French immersion class — and 30 grade 5 students from South Park elementary school in south Delta. Would the House make them feel very welcome.

Debate Continued

Hon. S. Anton: In order to exercise his or her discretion under this section, the director may indeed follow up with the police chief and clarify or get more details of the review in making his or her decision as to whether or not an audit will be required.

K. Corrigan: Assuming the director has made a decision that there needs to be an audit, then the director can designate as an auditor a person who "(a) is a provincial constable, special provincial constable, municipal constable or designated constable, (b) is not a member of the police service that conducted the major case investigation, and (c) consents to the designation."

This ties into questions about a later section, but would it be expected that that person would be on loan? Or would that be somebody who would be paid specially as part of the audit? Just wondering about that.

Hon. S. Anton: I believe the question was whether the person would be on loan. The answer is no. They are a designated person who can fulfil the audit function. There is a later section on the responsibility for audit costs.

K. Corrigan: I just wanted to make clear, though…. And we will talk more about the costs. The costs, essentially, for most municipalities will be the responsibility of the police force.

The director can designate somebody. Would the municipality that potentially is losing their officer for a while to do an audit…? I'm assuming it could be a full-time thing for a while. Would they have the ability to say no, that they didn't want that person doing it?

It talks about the consent by the person who's doing the audit — they consent — but it doesn't talk at all about getting permission or whether or not the detachment or department would have any say or any control over the fact that this person was going to be gone to do an audit.

[1355]

Hon. S. Anton: The potential auditor is under the command of their own police service. So that consent would not just be their personal consent; it would be the consent of their own service.

K. Corrigan: The next subsection, subsection (3), says that "In auditing a major case investigation, the auditor must review all of the following" — the evidence, the records, investigative steps and actions, and any other information the auditor considers relevant to the audit. It actually then goes on to talk about the audit powers.

The powers are wide. The potential scope of the audit is fairly wide. I'm wondering if the minister, in putting this legislation together, did any kind of analysis about how long, potentially, it would take — how many hours, how
[ Page 2637 ]
much person power — to do audits of this type.

Hon. S. Anton: There are two things that will have a direct impact on the length of the audit. One is that the audit itself is around standards, so that does limit the audit, to some extent. But the other variable, of course, is the complexity of the initial investigation. The standards, obviously, could be more complex if they apply to a bigger piece of work than if it's a more confined piece of work.

K. Corrigan: The minister is referring to audit standards, talking about public sector auditing — the police standards. The police standards that are going to be developed will define the scope and the parameters of the audit. Is that correct?

Hon. S. Anton: The role of the audit is to determine compliance, or otherwise, of the police standards and how those standards were applied during the course of the investigation.

K. Corrigan: I appreciate that, but it doesn't help me understand exactly how comprehensive these audits will be. I guess it's hard to talk about it ahead of time. Has analysis been done on how many cases per year, for example, would fall in the category of likely being designated as something that should be audited?

[1400]

Hon. S. Anton: Based on a sample of police data, it would appear that there would be in the range of 35 to 50 inactive files a year which would generate a review. It's hard to say after that how many of those would require an audit, but obviously it's going to be a smaller number. But that's the order of magnitude that we're talking about.

K. Corrigan: I guess the follow-up, then, is that given there is an estimation — and I'm sure it could vary — of perhaps 35 to 50 inactive files per year, based on the past and the understanding of the past, do we have any estimation of how many of those could end up being…? Particularly, I guess, taking a look at those forces where the process of internal review already happens, has there been any analysis of how many audits there could potentially end up being in the average year?

Hon. S. Anton: Our experience with police standards is that police follow standards. So the expectation that there would be a review and then a case that required an audit because of non-compliance with standards…. Our expectation is that that would be a rather low number.

K. Corrigan: Just returning to a previous question about whether or not the process would be complaints-driven, the minister said on March 3, 2014: "The decision on which cases to audit will be largely driven by public complaints." Has the ministry…?

Considering it would be a low number — I hope that would be the case — and that the reports would be complete and robust, has there been an estimation of how much any one audit would cost — what the range is? I know, again, that we're talking of possibly a wide range, but can I get an estimation of how much an audit would cost of a major case that has gone cold?

Hon. S. Anton: There has been some analysis done on potential costs, but I want to be very cautious about this because it is a new system. How it plays out over time and the complexity of these audits does remain to be seen. It is thought that a relatively simple audit that took no longer than a week would cost about $2,500, and that is likely a minimum charge which could go up depending on complexity and length of time of audit and so on.

[1405]

K. Corrigan: Well, the minister was not at the briefing that we were at. We asked the same question, and I ask the question now because I want to get it on the record. The response that we got was…. There wasn't a discussion about $2,500, although I'm sure it wasn't precluded, but there was talk about many cases being in the range of…. I said $50,000, and the response I got was: "Perhaps more, and even more in very complex cases."

I'm asking these questions because the government has decided that audits of major case investigations can be imposed on municipalities, and municipalities have to pay for it. It's the provincial government that decides whether or not an audit will happen, but the municipal police force is the one that has to pay for it.

I think it's important that appropriate analysis is done. In this position of asking questions about the act, I have a certain responsibility to municipal governments around this province to have some idea of what is going to be happening to them in terms of costs that they have no control over. I'm not saying the process isn't a good one. But the government has decided to make municipalities pay for the audit, so I think it's important.

Let's use a very extreme case: the Pickton case, the Pickton investigation. If there had been a major case investigation in that case, which Justice Wally Oppal said would have been a good idea, obviously…. What would have happened, I would assume, in that case is that, hopefully, it would have found that there were gaps in the investigation, perhaps focused the attention back and restarted the investigation and perhaps avoided later tragedy.

Let's say the Pickton case. Is there any thought of a major case…? In a major, major case like that, how much would that audit cost under this act?

Hon. S. Anton: In the case mentioned by the member opposite, that did result in a prosecution, so that itself
[ Page 2638 ]
would not have been audited. But what might have been audited had the standards been in the place at the time — remembering always that this is a system which is moving into implementation, not looking backwards…. One of the major issues identified by Commissioner Oppal was the fact that there were missing-persons investigations which did languish and had not been pursued, and those are the kinds of investigations that in the future could be caught by this process.

K. Corrigan: Well, I'm going to turn to a couple of the types of things that could happen in this major cold case investigation or audit of the investigation to get a better idea of how extensive the audit could be. It says that under audit powers the auditor can "without a warrant or order: (a) access, at any reasonable time, premises of the police service; (b) inspect a record or thing in the possession or control of the police service; (c) require a person to produce..." records. And here's one of particular interest: "(d) require a person to (i) answer questions in respect of matters that the auditor considers relevant to the audit."

Would that include reinterviewing witnesses?

[1410]

Hon. S. Anton: The audit is around the process of the investigation. It is not a reinvestigation.

K. Corrigan: Is the minister saying, then, that the auditor could not re-interview witnesses if the auditor felt that doing that would be relevant in terms of assessing whether or not the standards had been met?

Hon. S. Anton: The section does talk about a person, so it is conceivable that that could be a person interviewed — but around the investigation, around the process of the investigation. It would not be an interview relating to the investigation. It would be an interview relating to the process of the investigation, because the purpose of the audit is to determine whether or not the standards are complied with.

K. Corrigan: This section also gives the auditor the ability to apply to a justice for an order under subsection (3), which essentially allows a justice to issue an order authorizing the auditor "to access premises of a police service and prohibits a person from obstructing the auditor's access; (b) an order that authorizes the auditor to inspect records" and prohibits obstruction of that again — so those things and others. I could refer back to subsection (1) as well, the ones we talked about.

My question to the minister is, then: what was expected? Why was this section put in place? Is it expected that there would have to be orders from justices in some cases?

Hon. S. Anton: The expectation is generally that there will be compliance with the request of the auditors, and the expectation is, on subsection (3), that it would seldom be called into use.

K. Corrigan: I am wondering, on this section and, of course, the amendment act as a whole: did the minister or staff consult with the B.C. Police Association about these provisions, and if so, what was the response?

[1415]

Hon. S. Anton: The B.C. Police Association was consulted. Generally, it was a favourable response from that association. There have been no concerns raised since the legislation was tabled.

K. Corrigan: Under this section as well, 45.05 imposes a duty to cooperate by the officers of the police service that conducted the major case investigation. They have to give them access to the premises, comply with the requirement of the auditor and so on. I'm wondering if there were any particular concerns about whether or not there would be lack of compliance. Or is it expected that in most cases there would be compliance by the officers?

Hon. S. Anton: In 45.05 it is expected that there would be cooperation with the audit.

K. Corrigan: I'm wondering whether or not the minister and staff have thought out what the role of counsel for police officers whose investigation is being reviewed…. What would be the role of counsel? Would it be expected that in this review, in this audit, counsel would be fully involved? Or if there was an interview — there's reference to interviews — would it be expected that counsel for the police officer would be present?

Hon. S. Anton: The review here is a review of the process, not of the individual. The requirement to follow the standards is the requirement of the department. Generally, it is expected that there would be no need for counsel.

[1420]

K. Corrigan: On this specific subsection, did ministry staff and officials consult with the B.C. Police Association about that very specific point?

Hon. S. Anton: The overall proposal was consulted upon with the police. As I said a moment ago, the consultation was, overall, favourable. And as I said earlier, since the full piece of legislation has been tabled, there have been no comments.

K. Corrigan: I know that the minister has said that these audits are to take a look at the process and to look at whether or not the standards were met. Some of the
[ Page 2639 ]
standards that are being talked about are standards that have already existed. But also, we've added — or will be adding, if this bill comes into force — that, for example, there can be standards with regard to the promotion of unbiased policing and law enforcement services and community consultation regarding the priorities, goals and objectives. So there's a wide scope to those standards.

This seems to be saying this would be a high-level review, but I could imagine that it could lead very quickly into having to talk to witnesses about whether or not there was unbiased policing in law enforcement services. Certainly, when you look at an inquiry, which is different than an audit, the scope can widen very, very quickly, as in some cases it should. So I just want to get a confirmation from the minister that it is not expected that that's the type of scope that an audit would have.

V. Huntington: Mr. Chair, I seek leave to make an introduction.

The Chair: Permission granted.

Introductions by Members

V. Huntington: It gives me enormous pleasure, again, to be able to introduce the remaining 30 students from South Park elementary school in south Delta, Tsawwassen. They are here with their teacher, Ms. Brea Maurice, and I hope the House joins me in making them very welcome.

Debate Continued

Hon. S. Anton: The audit is around the principles, practices and strategies to be used in investigations.

K. Corrigan: My understanding is that the audit can also be about whether or not the standards have been met. Is that correct?

[1425]

Hon. S. Anton: The audit is ensuring compliance with the director's standards referred to in the section that I just read out, which is the section requiring that the standards be applied with regard to "principles, practices and strategies to be used in investigations."

K. Corrigan: When we have an audit that is going to be looking at an investigation of a serious crime — murder, complex crime and so on — does the minister not have concerns that there is going to be an insistence by police officers…? If their investigation is being reviewed, being audited, is there not a thought that they will want to have their counsel with them at any interviews or in other parts of the audit, overseeing or at least having a chance to comment on what's happening in the audit?

Hon. S. Anton: This part of the Police Act is not about sanctions for individual officers; it's about creating a better outcome for investigations. Will an individual officer want a lawyer? We don't expect so, but I don't want to predict every situation down the road. It seems to the ministry rather unlikely at the moment, but many things are possible in life, and I don't want to say that it'll never happen.

K. Corrigan: So 45.05(2) says: "Without limiting subsection (1), and despite any other enactment and any claim of confidentiality or privilege other than a claim based on solicitor-client privilege, the officers of the police service that conducted the major case investigation must…." And then, basically, cooperate with the auditor.

Would information that's gathered in the audit be compellable for the purposes of court proceedings?

Hon. S. Anton: It's a very hypothetical question, and I think the member would have to come up with more specific examples before the question could be answered.

[1430]

K. Corrigan: When putting together an act with the legal beagles that are available to the Ministry of Justice, of all ministries, I would think that on the question of whether or not information that is gathered in an audit, the minister would know whether or not that information would be compellable for the purposes of a court proceeding, either civil court proceedings or criminal proceedings.

It's a simple question. I'm not sure why it is that the minister expects that I should come up with an example. The answer is: yes or no. Would it be compellable — unless it was protected by solicitor-client privilege?

Hon. S. Anton: There are no provisions in the act which make the information non-compellable.

K. Corrigan: I'm going to assume that what the minister is saying is that the information is compellable. I'll go on, and if the minister wants to respond to that, that's fine. But that would be my interpretation of it's not "non-compellable." It means it is compellable.

[R. Chouhan in the chair.]

Going on, I don't have too many more questions about this part. The audit reports, then. The auditor has to provide a report within 60 days, give a written report, but that can be extended under section 45.08 and include recommendations.

In terms of the recommendations, what is the status? I know audit recommendations are simply there, but is there any kind of expectation that the auditor's recommendations would be acted upon?
[ Page 2640 ]

Hon. S. Anton: An audit report may include recommendations, and if it does, "the director may request information from the chief of the police service on the investigative steps" that are taken as a result of those recommendations. That is a requirement by the chief of the police service — that he or she follow up on those.

K. Corrigan: Is this referring to section 45.07?

Hon. S. Anton: Yes.

K. Corrigan: If we have an audit report that has gone to the director and the chief of the police services, is there anything that would require for that report to be made public?

[1435]

Hon. S. Anton: The Freedom of Information Act does apply in these circumstances, so an FOI request would be replied to with the usual qualifications as to what information can actually become public or not.

K. Corrigan: Then going to 45.07, which is the post-audit request for information, it says that if there's an audit report with recommendations — we spoke about that previously — the director "may request information from the chief of the police service on the investigative steps and other actions taken as a result of the recommendations." So would it be seen that these reports are largely about providing recommendations about what other investigative steps could be taken? Or is it more…? What kinds of things are contemplated as recommendations in these reports?

Hon. S. Anton: Without limiting the nature of the recommendations, two forms that the recommendations might take are to recommend fresh investigative actions for the particular investigation, and the recommendations might also apply to processes used by that particular police department in a more general way.

K. Corrigan: I want to go on now to section 45.09, responsibility for audit costs. I have referred to the responsibility for audit costs in second reading and also tangentially talked about it when we were talking about the earlier sections in terms of the scope of an audit.

This section says basically that these major investigation audits will be paid for by municipalities if they are over 5,000 people. My concern is that we don't know how much audits are going to cost, and we could end up with a municipality with a population as small as 5,000 people being responsible. If there was a major case in a small municipality for an audit, that could really hit the budget of that small community.

I'm wondering if the minister has thought particularly about the costs associated with a major case that happens to occur in a small community and what kind of impact that could have on the budget of the police department.

Hon. S. Anton: If there is a rural area, a municipality with under 5,000 people, the government will be paying for the audit. If it's more than 5,000 persons, the municipality will be paying. Similarly, if it's the municipal police department, the municipality will pay, and in a major case investigation by a designated policing unit, the entity on behalf of which the designated policing unit was established.

K. Corrigan: Would these audits be part of the policing agreement? In other words, in municipalities that are from 5,000 to 15,000 people, under the policing agreement the municipalities pay for 70 percent of their policing, and the federal government pays for 30. For municipalities that are larger than 15,000 people, the municipalities pay 90 percent, and the federal government pays 10 percent. So in those cases, is the minister saying that there would be shared costs with the federal government, or would it be all paid for by the municipalities?

[1440]

Hon. S. Anton: For municipal jurisdictions over 5,000…. I think the member is asking the group between 5,000 and 15,000, which have the 70-30 arrangement. It is the case that the act requires the municipality to pay. The reason to put it in the act in that way is because we can't legislate the cost-sharing agreement.

It is our intention that the policing costs of the audit would be attributed according to the cost-sharing that is applicable to that municipality. This is something…. Once the act passes, which I hope it does, this will be a subject of discussion with the RCMP at that time.

K. Corrigan: We don't know, at this point…. It could be that large municipalities have to pay the whole, as it is now. It will be subject to negotiation. I'm not sure how much leverage there is there. Is there any kind of legal ground that either the 30 percent or the 10 percent, depending on the size of the municipality…? Or a municipal police force? Is there any legal basis to expect that this should be part of that agreement that is cost-shared?

Hon. S. Anton: There are processes in the provincial police service agreement to deal with issues such as this. Those processes will be followed in this particular discussion and negotiation if there needs to be one.

K. Corrigan: There is nothing in that agreement, which I've read — not for a while, and it is very lengthy — that essentially would provide that if new costs come up that are related to policing, but not directly part of the police service, the police force investigation and so on…. There is nothing in that act that would do any more than
[ Page 2641 ]
really represent a request for the federal government to come to the table and negotiate it. There is nothing in the provisions themselves that would allow the ministry to argue that those cost-sharing arrangements should apply.

[1445]

Hon. S. Anton: Article 6 of the provincial police service agreement sets out a framework for this kind of discussion.

K. Corrigan: It would rightfully or properly be described as a negotiation. Would that be a good way to…?

Hon. S. Anton: It is a consultation and a negotiation.

K. Corrigan: I just have a couple more questions on this section. It says in section 45.11: "This Part applies only to major case investigations initiated on or after the date this section comes into force."

Looking back at the definition of "major case investigation," it would appear to me that what we're saying is…. Where an incident happens, where a crime is committed, from the moment of the major case — an attempted murder, murder, investigation into a missing person — would, then, this act apply from the date that the crime was committed, the commission of the offence? Is that what we're talking about?

Hon. S. Anton: It is dated from the commencement of the investigation, not necessarily the date of the offence.

K. Corrigan: We've talked a lot about missing-persons investigations over the last couple of months in this place. In the case of a missing-persons investigation, which is specifically included in these "major case investigations," would it be the moment that the missing-person case turns into a criminal investigation? That would be the point that this act would apply — from that date?

Hon. S. Anton: Yes. In the case of a missing person, if it is a civil investigation — the person might have gone to Mexico, whatever — sometimes those missing-person investigations do in fact turn into investigations where foul play is suspected. It is at that point where the major case investigation is initiated.

Section 40 approved.

[1450]

On section 41.

K. Corrigan: This section, section 41 of this bill, amends section 68.1 of the Police Act. Essentially, it seems to me that what it is doing is saying that for the purposes of the Freedom of Information and Protection of Privacy Act, information and data that is kept by a designated service provider in an information management system…. An application for information must be to the original police force or community where the information originated from and that you can't do a freedom-of-information request to the designated service provider. Did I get that about right?

Hon. S. Anton: Yes, the member has it right.

K. Corrigan: An example, I believe, of one — and probably the primary example that applies under this provision — would be PRIME-BC, or PRIMECorp Police Records Information Management Environment Inc. Would that be the primary one that we're talking about?

Hon. S. Anton: That is correct.

K. Corrigan: It's my understanding — and I could be wrong — that presently, if somebody is seeking to find out what information is contained in PRIME-BC, they are able to contact PRIME-BC. Actually, representatives of this government have in fact been encouraged to contact PRIME-BC for the information that is on their file.

Would this provision mean that people could no longer access their PRIME-BC files by going to PRIME-BC and asking for that information?

Hon. S. Anton: You do have to go to your own police service to acquire the kind of information that I think the member is referring to.

K. Corrigan: Is the minister talking about under this act or under present circumstances?

[1455]

Hon. S. Anton: The new subsection, subsection (9), is in fact the way PRIME is working currently, which is that the FOI goes to the originating jurisdiction. What this is doing is putting into law what the current practice is.

K. Corrigan: I'm trying to figure out what the change is. My understanding was that citizens had been encouraged, if they wanted to find out what was in their PRIME file…. We know that there are 4½ million or so PRIME files — I'm sure it's gone up over the last year or so — on citizens of this province, which is data that is contained in the police data system. My understanding was that people were encouraged to go ask for that information and that PRIME would provide that information — say: "What's in my PRIME file?"

It concerns me because it sound like there's a problem here for people. If the practice has been for PRIME to refer people back to the individual police force that originally provided the information, how are people going to know, if they can't go through PRIME, what information there is that is gathered in PRIME? Or can they still make their request to PRIME, and then PRIME would
[ Page 2642 ]
refer it back to the law enforcement service where the data came from?

Hon. S. Anton: A person seeking the information in their file from a police agency does need to go to that police agency — not to PRIME but to the police agency.

K. Corrigan: Well, what the minister is saying, it seems to me, is that a previously FOIable government agency…. I look at the schedule 2 of the Freedom of Information and Protection of Privacy Act. Public bodies includes PRIMECorp Police Records Information Management Environment Inc. So it is a public body, and now what the minister is saying is that it will no longer, I guess…. It may be a public body, but people do not have a right of access, under the act, to the information.

[1500]

What people are concerned about with PRIME often — and often innocent people who have not been charged with anything but have had what is called a negative contact with police that could include anything as, to them perhaps, seemingly trivial as being a witness in a case….

It seems to me, and maybe the minister can confirm, that what is being said here is that information that could be accessed to get an understanding of the totality of information that is on that major police database about contact with police, whether criminal or not…. Formerly, somebody could apply through PRIME and get that information, which they no longer can.

Can the minister please confirm whether that's true or not?

Hon. S. Anton: PRIMECorp became subject to freedom of information in March of last year, a year ago, and that is what prompted this amendment. There have been consultations with the Privacy Commissioner.

I think the bigger point here is that PRIMECorp is a way that information can go out to police services. A police officer on the road can have access to the information in PRIMECorp. But PRIME does not control the information or own the information or generate the information. The information is generated in a local police department, a police service. So if a person has an issue with any information or wants to know information, they do need to go to their police service because that's who controls the information — not PRIME.

[1505]

K. Corrigan: Well, it was this government that decided that PRIMECorp should be a body that was considered to be a public body and did so, and made it under the Freedom of Information and Protection of Privacy Act. In fact, I probably could go back and find several examples of various government representatives saying, "If you have a concern about what is in PRIME, our database…." I mean, it is essentially a centralized database.

The minister has repeatedly taken credit in this House for what the government has done, taken credit for PRIME and said it's basically a government accomplishment. If that is the case, then the government has some responsibility in this area.

The reality is that what is in PRIME is a gathering of data. My interpretation of what government has said in the past is that people have a legitimate concern about what is in this database that gathers all of this information together, and have a right…. I think I'm paraphrasing, but I think government has said that people have a right to know what the government….

I mean, who cares whether it is local or provincial? All government agencies — provincial policing, local policing and the RCMP and the federal government, therefore — have access to this database. It is the one place that a person could find out the gathering of information that the government or whoever has about them with relation to their interaction with police.

To suggest that there should be a change really disturbs me. Just one more time, before we finish questions on this section, I want to confirm with the minister that what this section says is that previously people had a right to go and make the request of PRIME for the information that was in the database related to them and now they will not.

[1510]

Hon. S. Anton: The provisions of the Freedom of Information and Protection of Privacy Act in regard to PRIME came into effect in March of 2013. The intention of this section is not to change anything which has happened since then but to add greater certainty and to confirm current practice.

I will just read out the letter from the Information and Privacy Commissioner from January 2013, prior to that, where one of the commissioners says: "We are of the view that adding PRIMECorp as a public body under FIPPA would not change how police agencies presently respond to requests for access to records. We are inclined to the view that the records would continue to be in the custody and control of the police agencies and that any requests for personal information that are made to PRIMECorp would still be directed to the appropriate agency."

K. Corrigan: Thank you for that. That is information I didn't have, so that's useful. But the minister didn't answer the question. My question was that if somebody were to…? I'll rephrase it. If somebody were to make a request today, under the present law, they would have the right, would they not, to make a request to PRIMECorp because they are a public body? Would they not have the right to make that request, and if so, what would the process be?

Hon. S. Anton: If a person goes to PRIME to ask for their personal information, they will be directed back to
[ Page 2643 ]
a law enforcement agency.

K. Corrigan: If a person goes to PRIME presently and says, "I would like to have access to the information that is in my PRIME file in its entirety," what would the response be?

Hon. S. Anton: PRIME will direct an inquiry back to a police agency. It is that police agency — which has the same information, because they are using PRIME — which, through its own freedom-of-information rules, will give you what they may or may not give you under the normal rules of freedom of information on your own personal file.

[1515]

K. Corrigan: Is the minister saying that if somebody applies to PRIME today for their file in its entirety that's in PRIME, they would then be directed to the police agency, the law enforcement service, and that law enforcement service would have access to the same database and then would be required to release to that individual all of the information in PRIME or only the information that they gathered or that relates to that person vis-à-vis that law enforcement agency?

Hon. S. Anton: Whatever information that police agency has custody of and control of, it may release.

K. Corrigan: Well, I'd like to understand what that would include. For example, if an individual had had a negative contact with police in West Vancouver and West Vancouver entered that data, and then they were a witness in a case in Burnaby and that information was entered in the database, and the person went to PRIMECorp and said, "I want the information," would PRIME then refer them to both of those agencies? Or would they send them to one?

I'm asking this for a very serious reason. People, individual citizens have, I believe, a very justifiable concern about the totality of the data that's in the database. It seems to me that making it very difficult for an individual who may have had three or four mostly positive, but maybe not, interfacings with the police…. Maybe they're witnesses in many cases, for some reason, or had contacts that are considered negative and are not criminal. That's the thing to remember: it does not have to be criminal behaviour. But it seems to me that it is not right that somebody cannot go to one.

If government thinks it's worthwhile and law enforcement agencies think it's worthwhile to gather the data together, as is obviously the whole purpose of PRIME, then should citizens not have the right to have that gathered data, which is easier to access and gives them a more complete picture? Do they not have the right to get that data? Would they be able to get all of that data if they made a freedom-of-information request, either to PRIME now, or later under this new section?

Hon. S. Anton: Remembering that we are dealing with this section in particular, the records in question are not under the custody and control of PRIME, so PRIME has no authority to release them.

K. Corrigan: Am I mistaken? Did not representatives of government over the last few years say, I think, perhaps…. I don't want to misquote. But I believe the former Attorney General said, perhaps in interviews, that if people have concerns about the data that's in PRIME, then they can go ask PRIME about what data is in there, and they can satisfy themselves. Has that not been the case? Has PRIME not processed FOI requests in the past?

Hon. S. Anton: I can't comment on what others may have said. All I can say is to repeat what I have said already, which is that these records are not in the custody or control of PRIME. PRIME will not be releasing them.

K. Corrigan: I'm just going to ask a couple more questions. Why did government, then, designate PRIMECorp as a public body that would therefore be subject to the Freedom of Information and Protection of Privacy Act?

[1520]

Hon. S. Anton: The records which the member is referring to would be those relating to the corporate governance — the records of the running of PRIME but not the personal records of individuals that we've been talking about prior to this.

K. Corrigan: Has PRIME, then, never released any of the records to individuals who have asked for their file in the past — released the records not having to do with governance or other administrative matters but related to what's in that record? PRIMECorp has never released that information in the past?

Hon. S. Anton: The practice was to refer to a law enforcement agency. Just to reiterate, the section confirms that those records are not in the custody and control of PRIME, and they will not be released by PRIME.

K. Corrigan: In the past — this is my understanding, then, from what I've learned today — PRIME would not release the records, but PRIME would refer the individuals to the appropriate agency. I would assume that could be several agencies if there's more than one entry in the database. Is that correct?

Hon. S. Anton: The record is not in the custody and control of PRIME. PRIME cannot determine or recommend as to which agency you should go to. They will
[ Page 2644 ]
simply say: "You need to go to a law enforcement agency to make this request."

K. Corrigan: Okay. Well, I guess I have to go back and look at the responses when there were serious concerns raised a couple of years ago by the Civil Liberties Association about the fact that there were 4½-million-plus records in PRIME. I could be wrong — so I apologize if I'm incorrect — but I believe that the general response of government at that time was: "You can make a request to PRIME to get your information."

What I'm hearing today is that that has never happened and that in fact there is no provision for people to get some idea of what's in that file — which disturbs me. Therefore, I think, I have real concern about this section. Whether it is a de facto change of practice or not, I think it misrepresents what people of this province thought about in terms of accessibility of what was on their police files. For that reason, we're going to vote against this particular section.

Section 41 approved on division.

Section 42 approved.

The Chair: I believe section 43 has already been taken care of.

[1525]

On section 44.

L. Krog: I'm going to ask a fairly general question, and we may be able to get through these sections quite quickly. The only one I have any real interest in is section 45. My understanding is that these provision are simply to take into account the changed titles. That's all these sections have to deal with, save for section 45.

I just want to ask one question on that. If the Attorney General will even nod and confirm that that's in fact the case, that's fine. Otherwise, 44, 46, 47 and 48 all relate to a simple word change. Not 46 — 44, 47 and 48.

Section 44 approved.

On section 45.

L. Krog: Just to confirm, the existing provision talks about "beyond a reasonable doubt." It's the criminal standard. This takes it to the civil standard — on the balance of probabilities. The reason for this comes from where? Is it a request of the Provincial Court judges themselves? Does it come through recommendation of the Law Society or counsel or the family law subsection or something like that?

Hon. S. Anton: Yes, I can confirm that this is a request of the chief judge. The standard that was in there really was in error. It always should have been the civil standard on this kind of matter.

Section 45 approved.

On section 46.

L. Krog: Just to confirm, we're striking out "must" and substituting "may." Does this change, making it permissive as opposed to mandatory, have anything to do with funding?

Hon. S. Anton: This provision was put in some time ago. There never has been funding for these committees. There was "a municipality must." There was no way of enforcing compliance. So we have now made it permissive. Some municipalities have family court committees; others do not.

L. Krog: I wonder if the Attorney General can confirm how many communities have family court committees and how many communities in total in British Columbia could if they wanted them. Obviously, not every community has a courthouse.

Hon. S. Anton: There are 17 family court committees now. The exact amount of how many could, I don't know. But it's communities with a courthouse or around a courthouse.

[1530]

Sections 46 to 48 inclusive approved.

On section 50.

L. Krog: I just ask the Attorney General to explain the reason for this change. I'm going to presume it just has to do with the basic change — we're moving from grants to the new representation agreement, etc. Is it as straightforward as it looks, in other words?

Hon. S. Anton: The goal is to bring these sections into compliance with other legislation. It's no more complicated than that.

Section 50 approved.

On section 51.

L. Krog: I just wonder if the Attorney General can explain the difference between the existing section, which is being repealed, and the new section and the purpose for it.

Hon. S. Anton: Subsection (2.1) under 51 makes the
[ Page 2645 ]
definition in the Wills, Estates and Succession Act consistent with the definition of "spouse" in the Family Law Act.

L. Krog: And if the Attorney General can explain the purpose of that. Is it to ensure just uniformity, or is it to provide some protection in the case of any claims being made?

[1535]

Hon. S. Anton: Under the old Family Relations Act, the spouses did have to take some positive action — for example, filing a separation agreement — in order for an interest in family assets to arise. However, under the new Family Law Act, a right to family assets arises at the moment of separation, and this is to make this act consistent with that.

L. Krog: What impact will that have on any claims that can be made by parties who have been living in a marriage-like relationship, in terms of making a claim against the estate?

Hon. S. Anton: You cease being a spouse in the case of a marriage-like relationship if one or both persons terminate the relationship.

L. Krog: My question was: what impact will this have on spouses who do separate, in terms of any rights to make a claim against the estate of the deceased spouse?

Hon. S. Anton: This is not intended to be a substantive change — rather, a clarification, to clarify that your rights acquired under the Family Law Act rights or otherwise…. You may have them or you may not have them. The rights as they exist will continue after the death of your spouse or your former spouse.

L. Krog: Just to clarify, in a common-law relationship, as I would use the language, where the parties have separated, the limitation period isn't up under the Family Law Act, and one spouse dies, you will still have a right to make the claim against the estate under the Family Law Act. Is that correct?

Hon. S. Anton: The answer to the question is yes. Your rights under the Family Law Act apply, and it's that distribution or that division of property which can be made prior to the estate itself being settled.

[1540]

L. Krog: The reason I wanted to confirm that is that I know the Attorney General has had to respond to at least a couple of letters from lawyers mainly concerned with estates or concerned that in the ordinary circumstance, if the common-law spouses were separated, there would be no right, potentially, under the old law to make a claim as a spouse because of the separation if the parties were truly separated, whereas in fact this change confirms that you won't have a claim against the estate per se as a common-law spouse, but you will continue to have a claim as a separated spouse under the Family Law Act.

Hon. S. Anton: That is correct.

L. Krog: I just want to thank the Attorney General. That's on the record, and the lawyers in British Columbia can relax now.

Sections 51 and 52 approved.

On section 53.

L. Krog: This rather lengthy and difficult section…. The explanatory note says it "clarifies the distribution of an intestate's estate to grandparents and great-grandparents and their descendants." What change does it represent from the existing section?

Hon. S. Anton: I think when the member opposite and I went to law school, we had the good old per stirpes designation, but we don't talk about per stirpes anymore.

These sections are intended to designate what the respective shares should be in an estate. There was an inadvertent change made by the Family Law Act which impaired the relationship between sections 23 and 24. Sections 23 and 24 are intended to work together, and the amendment is to remove the reference to "in equal shares" to ensure that the two sections work together as intended.

Sections 53 and 54 approved.

On section 55.

L. Krog: Again, if the Attorney General could explain the effect of section 55. What's the existing section, and how does this change it? Is it for purposes of clarification, or is it a substantive change in the law?

Hon. S. Anton: Subsection (4) here was contained in the Supreme Court civil rules. In the work around developing the new probate rules, it was concluded that the provisions in subsection (4) are substantive rather than procedural, so they are better placed in the act rather than in the rules.

[1545]

L. Krog: I appreciate that explanation because I must say I always rather thought that it didn't make much sense and it wasn't an appropriate place for it. So in fact, we're doing the right thing. Having said that, I'm happy to see section 55 pass.
[ Page 2646 ]

Sections 55 to 58 inclusive approved.

On section 59.

L. Krog: Just to confirm this again, it only relates to changes in language, using the new language, and that's all that's really happening. It's not a substantive change.

Hon. S. Anton: Mostly it is a question of language, but there is in fact one expansion of the term, under "representation grant." A representation grant does include the resealing of a grant of probate or a grant of administration from another country, and that was not included in the original language.

Section 59 approved.

On section 60.

L. Krog: Sections 60 and 61 essentially make the same provision: "any other person the court considers appropriate to appoint, including, without limitation, and subject to the Public Guardian and Trustee's consent, the Public Guardian and Trustee." I'm just wondering why we're including the provision that requires the Public Guardian and Trustee's consent, because they have always been the fallback position for these matters generally, as I understand it.

I'm wondering if this is a request from the Public Guardian and Trustee's office. Is this a request that's come up through lawyers in the province? Where does this change come from?

Hon. S. Anton: This change was requested by the Public Guardian and Trustee. She was concerned that without the amendment the section as drafted could require her to consent to the appointment of any other person applying to administer a deceased's estate. So the wording is intended to ensure that the Public Guardian and Trustee is only appointed to administer if the Public Guardian and Trustee deems it appropriate, not that they consent to the appointment of other people — a family friend, for instance, if the court considers that person appropriate.

Sections 60 and 61 approved.

On section 62.

L. Krog: With respect to section 62 and, in particular, the provision that the registrar may reseal a foreign grant in certain circumstances, is this a substantive change, or is this a situation where you're bringing it from the rules back into the act? What's the explanation for it?

[1550]

Hon. S. Anton: This is a substantive change. It is to enable a registrar, as opposed to a judge, to reseal a foreign grant.

Section 62 approved.

On section 63.

L. Krog: It's one of those interesting little sections where you're changing all sorts of little words in various places. I just want the Attorney General to explain what, in fact, the effect of this is on the section, what it enables the court to do or not do.

Hon. S. Anton: There was a mistake in the way it was originally written. The amendment reflects the original recommendations of the B.C. Law Institute. The object of the section is that anyone who is dishonest, bankrupt and so on can be passed over, and it can be on application of anyone who has an interest in the estate, not just a creditor.

Section 63 approved.

On section 64.

L. Krog: I'm just curious with respect to section 64. I take it there was some concern that this section was going to require some form of oral hearing as opposed to affidavit, which is usually the kind of evidence that's submitted.

[1555]

Hon. S. Anton: Yes. The point is that this should be a more simple process. It's an amendment requested by the Public Guardian and Trustee. Without amendment, the requirement to satisfy the court could imply different kinds of evidence, but in fact, the object here is that the Public Guardian and Trustee can satisfy the court by way of an affidavit.

L. Krog: I'm just curious. It's a small point, and I may be completely off base here. But the section reads: "A grant of administration…with will annexed must not be issued unless the Public Guardian and Trustee files an affidavit swearing that no person in British Columbia (a) is entitled to share in the distribution of the estate of the deceased person, and (b) is ready and competent to apply for a grant of administration."

I'm just wondering. From a drafting point of view, might it not be more appropriate to require the Public Guardian and Trustee to swear an affidavit that says that she, he, it is not aware of any person? I think the wording of it implies some very positive knowledge that it may not be possible to hold. How can one say that that's the case, as opposed to saying that they are not aware of anyone?

It's a small point, but before we pass this section, I want
[ Page 2647 ]
to give the Attorney General a chance to think about this before we have to do another amendment down the road.

[1600]

Hon. S. Anton: The change here is at the request of the Public Guardian and Trustee. It is a two-part test, so it's not just that they believe that there's no person entitled to share in the distribution, but they believe that there's no person entitled to share in the distribution and who is ready and competent to apply for a grant of administration. So, yes, I'm satisfied that the wording works for this section.

L. Krog: I don't wish to belabour it, but it's requiring the Public Guardian and Trustee to swear to the truth of something that requires the kind of conclusion around a matter of fact that we generally reserve to judges making a decision.

A judge finds as a matter of fact that the accused held the knife or that Mrs. Schwartz hit Mr. Schwartz with the stick — whatever. But what this says is unless he files an affidavit…. It's "swearing that no person in British Columbia is entitled to share in the distribution…."

[D. Horne in the chair.]

It's requiring the Public Guardian and Trustee to come to a conclusion of fact, that this is, in fact, the truth. All I'm suggesting is that the more accurate and fair way to put it is to say that they are not aware of any person, because it's requiring…. Unless you're giving the Public Guardian and Trustee the right to make conclusions that we generally reserve to courts, I think that's an almost impossible thing — to swear to the truth of it.

That's my point. I'm just offering this up now rather than us come back down the road and have to make an amendment. But I trust the Attorney General and her staff appreciate the point I'm trying to make.

[1605]

Hon. S. Anton: A couple of points. First of all, the Public Guardian and Trustee did request this amendment, and the goal is to maintain a high standard of knowledge by the Public Guardian and Trustee and place a positive obligation on the Public Guardian and Trustee. So, yes, I am satisfied with the language as it is.

Sections 64 and 65 approved.

On section 66.

L. Krog: This makes the notice provisions with respect to minors and how they're to be given. I'm just wondering: as part of this, will the person mailing the notice have to prepare and file an affidavit, obviously, that confirms under which of the subsections, (a), (b) or (c), they're sending the notice? What it says now is if a person is entitled to receive notice, it's only valid "if it is given as follows: (a) if the person giving the notice knows that the minor resides with all of the minor's parents" or (b) if that does not apply or (c).

In other words, will the particulars of the affidavit they'll have to file in accordance with the application specify which of those sections, (1)(a), (b) or (c), applies? Or is it just going to be a general declaration: "I've mailed it to the minor; end of story"?

Hon. S. Anton: There is a form P9, which is an affidavit of delivery. It does require the person to indicate to whom notice was given.

L. Krog: Just to confirm, that would either be the parents or the parent or guardian who has responsibility, or it would state that it's just been mailed to the address of the minor, I take it, as opposed to just a general statement.

Hon. S. Anton: The form would specify to whom the notice was given, the name of the parent or the guardian, and their relationship to the minor.

Section 66 approved.

On section 67.

Hon. S. Anton: What I'm going to recommend is that section 67 be voted against.

Section 67 negatived.

The Chair: The sections of the bill will remain as they are, and we'll deal with the renumbering.

On section 68.

L. Krog: And we're sure we want to do this?

[1610]

Sections 68 to 71 inclusive approved.

Hon. S. Anton: I would wish to move an amendment, the amendment by adding section 71.1, standing in my name in the orders of the day.

[SECTION 71.1, by adding the following heading and section before the "Related Amendment" heading:

Estates of Missing Persons Act

71.1 Section 2 (3) of the Estates of Missing Persons Act, R.S.B.C. 1996, c. 123, is amended by striking out "an official administrator" and substituting "the public guardian and trustee".]

[SECTION 71.2, by adding the following section:

71.2 Section 9 is amended by striking out "on the grant of probate or grant of administration in respect of the estate of the missing person," and substituting "on the issue of a representation grant,".]

Hon. Chair, this amendment is relocated from the voted-against section 67 of this bill and will directly
[ Page 2648 ]
amend the Estates of Missing Persons Act.

On the amendments.

L. Krog: If the Attorney General could just explain the necessity of this particular section so we can all understand? I'd probably be happy to be support it, I'm sure, but….

Hon. S. Anton: I'm going to read this out so that I don't get the details wrong. I trust that the member opposite is listening carefully. The House amendment to the Justice Statutes Amendment Act, 2014, is being requested due to technical issues relating to when the legislation comes into force.

Essentially, section 67 — which we just voted against — will no longer work as drafted. That's because section 67 of the Justice Statutes Amendment Act, 2014, amended section 215 of the Wills, Estates and Succession Act. Section 215 of the Wills, Estates and Succession Act amends the Estates of Missing Persons Act.

That section, section 215, came into force yesterday, March 31. As it is an amending section, it is considered spent and no longer exists after March 31. Thus, section 67 had nothing to amend.

Therefore, the amendment to the Justice Statutes Amendment Act, 2014, proposes deleting section 67 — which we have done now by voting against it — and adding two new sections, 71.1 and 71.2. These newly added sections will directly amend sections 2 and 9 of the Estates of Missing Persons Act.

The reason why the House amendment was done now and not at first reading is because had the Justice Statutes Amendment Act, 2014, moved through committee and received royal assent on or before March 31, 2014, the amendment would not have been necessary. It was only when it was clear that royal assent would not be possible before then that the House amendment was pursued.

L. Krog: Isn't the Attorney General grateful to have staff who can figure all of that out and give her a cheat sheet? We've performed a virtual Lazarus-like resurrection of a statutory section. I'm happy to see it pass.

Amendments approved.

Sections 71.1 and 71.2 approved.

The Chair: So for clarity, we've passed 71.1 and 71.2.

[1615]

On section 72.

L. Krog: I think the Attorney General requires staff, if we can just stand down for a second or two.

I wonder if the Attorney General could simply explain: is this adding a new category of people who are entitled to receive commissions, so to speak? If so, what's the purpose, where does it come from, and why are we doing it?

Hon. S. Anton: This amendment to the Provincial Symbols and Honours Act has been requested by municipal police departments over a few years now. What the municipal departments are asking is that they might have a recognition and an honour to senior-ranking members, similar to what exists currently in the RCMP.

The goal, of course, is to foster the culture of professionalism. It does allow cabinet, the Lieutenant-Governor-in-Council, to prescribe qualifications and criteria in order for a person to receive the honour — the commission.

L. Krog: I trust this is the end of it. We won't be bringing back knighthoods or baronetcies or anything like that.

Hon. S. Anton: I am a monarchist, so it is possible, but it's not on my work program at the moment.

Sections 72 and 73 approved.

Title approved.

Hon. S. Anton: I move that the committee rise and report the bill complete with amendments.

Motion approved.

The committee rose at 4:19 p.m.

The House resumed; Madame Speaker in the chair.

[1620]

Reporting of Bills

BILL 14 — JUSTICE STATUTES
AMENDMENT ACT, 2014

Bill 14, Justice Statutes Amendment Act, 2014, reported complete with amendments.

Madame Speaker: When shall the bill be considered as reported?

Hon. M. Polak: With leave, now.

Leave granted.

Third Reading of Bills

BILL 14 — JUSTICE STATUTES
AMENDMENT ACT, 2014

Bill 14, Justice Statutes Amendment Act, 2014, read a third time and passed.
[ Page 2649 ]

Hon. M. Polak: I call second reading debate on Bill 11.

Second Reading of Bills

BILL 11 — PROTECTED AREAS OF
BRITISH COLUMBIA
AMENDMENT ACT, 2014

Hon. M. Polak: I move that this bill be read a second time.

This bill will add more than 55,000 hectares to B.C.'s protected areas system by adding land to two conservancies and two class A parks and marine foreshore to four conservancies. The amendments continue the implementation of the Atlin Taku land use plan, which began in 2012.

[D. Horne in the chair.]

More than 33,000 hectares will be added to two of the conservancies established in 2012, those being Indian Lake–Hitchcock Creek/Át Ch'îni Shà Conservancy and Upper Gladys River/Watsíx Deiyi Conservancy. These conservancies recognize the importance of these areas to the Taku River Tlingit First Nation by ensuring that they will be able to continue to use the resources in these areas to sustain their communities and their cultural connections to the land.

These amendments also further the 2006 coast land use decision by adding marine foreshore areas totalling more than 22,700 hectares to four existing conservancies. Three of the marine foreshore additions are considered to be part of the Gwa'sala-Nakwaxda'xw First Nation's sea gardens, protecting, for example, 15,444 hectares of Ugʷiwa'/Cape Caution Conservancy with high ecological values, including kelp beds, a number of intertidal flats, high tide lagoons, globally significant tidal rapids, marine mammal habitat and seabird colonies.

Also 736 hectares are being added to the Qwiquallaaq/Boat Bay Conservancy as a result of collaborative management planning processes with the Mamalilikulla-Qwe'Qwa'Sot'Em First Nation.

The proposed amendments will also add approximately 23 hectares to the Syringa Park, a class A park in the Kootenays, as a result of a private land acquisition and land transfer, protecting important habitat for bighorn sheep.

Bill 11 also contains amendments to modify the boundaries of one ecological reserve, six class A parks and one conservancy. The boundary of Tow Hill Ecological Reserve on Haida Gwaii is proposed to be modified to remove less than one-tenth of a hectare to exclude a residence and to enable the transfer of the lands to the federal government for inclusion in the Indian reserve.

Approximately ten hectares are proposed to be deleted from Elk Falls Park to remove Brewster Lake Road and other lands required to enable the city of Campbell River to proceed with their replacement water system project in conjunction with B.C. Hydro's John Hart dam redevelopment project. These lands, if removed from the park, are proposed to be established as a protected area under the Environment and Land Use Act.

Bill 11 contains an amendment to delete approximately 11 hectares from Indian Arm Park to remove 26 recreational lots. These lands are proposed to be transferred to the administration of the Ministry of Forests, Lands and Natural Resource Operations, who will assume responsibility for the administration of the leases. It is also proposed to change the name of Indian Arm Park to Say Nuth Khaw Yum Park, consistent with the collaborative management agreement with the Tsleil-Waututh Nation.

The boundary of the Kleanza Creek Park, near Terrace, is proposed to be modified to delete approximately two hectares required to provide safe and reliable drinking water to the Kitselas First Nation community of Gitaus.

[1625]

The amendments also propose to remove approximately three hectares from Paul Lake Park, located northeast of Kamloops. This will exclude a community water development, including a water reservoir and water lines, from the park.

Also, it is proposed to upgrade Paul Lake Recreation Area, which is 3.9 hectares, to class A park status by adding the lands to existing Paul Lake Park.

Bill 11 also contains amendments to modify the boundaries of McDonald Creek Park, Mount Richardson Park and Kamdis conservancy, each amendment being less than a hectare.

The boundary of McDonald Creek Park, south of Nakusp, is proposed to be modified to remove less than .01 hectares to provide for an easement to a private inholding in the park.

The boundary of Mount Richardson Park, on the Sunshine Coast, is proposed to be modified to delete less than a hectare to correct an administrative error made when the park was added to the Protected Areas of British Columbia Act in 2000 and subsequent errors in tenure administration.

The boundary of Kamdis conservancy on Haida Gwaii is proposed to be modified to correct an administrative error that occurred in 2012. It is proposed to remove .06 of a hectare from the conservancy that is encumbered by a licence for the purpose of a parking lot and barge unloading site and add .05 hectares of foreshore.

Finally, the amendments make some administrative corrections by changing the spelling of three conservancies within the Gwa'sala-Nakwaxda'xw First Nations territory.

These are the amendments in Bill 11 which, if approved by the Legislature, will add the net total of 55,802 hectares to B.C.'s protected areas system, continuing the tradition of legislatively protecting some of the most
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ecologically diverse and biologically rich landscapes in the world. I look forward to second reading comments from members.

S. Chandra Herbert: Bill 11, Protected Areas of British Columbia Amendment Act, is a good act. It's an act that balances the need for ecological conservation, for supporting our wild places, for increasing the size of parks. It supports public health of First Nations. It supports economic activities of a number of First Nations but also, of course, the City of Campbell River, so it will receive the support of myself and the official opposition.

Bill 11, I think, speaks to what we can do well and what we could do much better, which in a number of cases in Bill 11 is to work collaboratively with First Nations communities, whether it's the Atlin Taku land use plan and actually bringing in an increase in size of the management area, whether or not it's up on the central coast, ensuring that sea gardens and important foreshore areas are protected — but not protected in the way we used to protect them, in some cases.

I think it's important to recognize that when parks were first established in British Columbia many years ago there was a real feeling in the parks movement across North America, a sense of preserving what we were losing, preserving what was disappearing.

Whether it was the great buffalo on the plains, with the creation of Yellowstone National Park, or in B.C. the establishment of Strathcona Park, the idea was to preserve an incredible wonder. With Strathcona it was the idea about preserving the wonder so that tourists could be drawn to that area for the great fishing and other things, but often First Nations people were excluded almost entirely from the process. They weren't spoken with. They were often treated as if they didn't exist.

I think back to — it's not a provincial park, but it's a municipal park — Stanley Park, in my neck of the woods of Vancouver–West End. While there were First Nations communities there, the government of the day decided — municipally anyway, and also federally — to treat them as squatters as opposed to people who had long lived in those communities.

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By allowing, through the creation of conservancies, traditional uses to continue on the land — whether or not it's the collecting of certain resources for food, for economic uses within the community; whether or not it's spiritual, religious uses of the sites — those are very important considerations and ones that we should hold in mind when developing parks. I do appreciate that through the creation of 55,000 hectares of additional parks and conservancies, we are doing that in many areas.

I think of Indian Arm. We often say a name so often that we stop thinking about what its meaning is. Where does it come from? Well, Indian Arm, of course, was named after the Tsleil-Waututh people — the Indians, so to speak, in that area — of course, without speaking with them and really without much thought, I would imagine, aside from that's where the Indians lived.

To change the name of Indian Arm Park to reflect the true name or the name that actually feels right to the Tsleil-Waututh people — Say Nuth Khaw Yum Park, a.k.a. Indian Arm Park — I think is a good action. Now there are certainly many questions the Tsleil-Waututh people have about protecting foreshore and those areas. They've raised many of them around oil exports and others and are not feeling that they are appropriately consulted nor that the area they used to be able to rely on for seafood is protected adequately.

While we have some great examples in this bill of areas — through the addition of conservancies, particularly in the central coast area and the sea gardens that the minister spoke about — where that level of protection could lead, with further oversight of the whole coast, to a sustainable resource for generations to come — and generations and generations to come — in other areas like the Indian Arm, Say Nuth Khaw Yum Park, we're not quite there yet.

Parks are important for the caribou, I think. But I would say that while parks are important for caribou and bighorn sheep and other creatures that we know — grizzlies, for example — they're not the be-all and end-all, and that's where the government I think still has a way to go in terms of management plans for other territory where more active uses like forestry, mining, and so on take place. Our caribou species in B.C. in a number of areas are not doing so well. Many question grizzly numbers and survival as well.

There are many species in B.C. which are threatened or could be close to threatened unless we start paying attention now. We don't want to get to the situation where we protect certain parks because they have species that are important to us and that are threatened but potentially create little islands — of course, unless the species lived on an island — where the species are trapped and can no longer get to breed with other species and lose their genetic diversity, lose the ability to breed, in many cases. That has occurred across the globe.

B.C. is a special place. We have many wild areas that still remain. I think this act goes a bit of a ways towards protecting those areas at a greater level of protection. There's much more to be done.

Of course, we also know that only about 70 percent, I believe is the number, of our class A parks have management plans. Certainly, there's more work to be done in that regard as well. You can say an area is protected, but if you don't have the staff to go out and ensure that it's not being abused, if you don't have the planning resources to know what it is you're indeed protecting, it's just a word on a page, as opposed to a protection in real life.

The B.C. Parks service works very hard. I think these new additions to parks will make them work even harder.
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Their budget has not largely increased over many years, so we have seen some issues of maintenance in the parks, in some cases, whether it's a washroom door falling off or a trail boardwalk being broken or certain levels of safety you would expect a park to have — certainly a class A park — but they don't. Of course, other issues of poaching and those kinds of things have been reported in parks as well.

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I think this is a good bill. I'm happy to support it, and I understand a number of other people will be speaking in support of this legislation.

I thank the hon. minister for bringing it forward. I thank the staff of B.C. Parks and the Ministry of Environment. I certainly hope we get greater park space and protected areas as it moves ahead. It's good for tourism, it's good for ecological values, it's good for First Nations reconciliation when done in partnership with First Nations, and it's good for community prosperity.

There are a few park deletions, a few areas that are deleted out of the parks for a number of reasons that the minister highlighted. That seems to be the way we do this here in the Legislature. Bill 4, which we discussed earlier…. I'm concerned about its impact on bills like this.

But as for today, I will speak in support of this bill and continue to work for parks and a healthy environment.

S. Gibson: I'm reminded, as I look through this act, that we're stewards of beautiful British Columbia. We take care of it for a season and then pass it on.

There's a Swiss watch called Patek Philippe. Some of you have maybe aspired to have a very expensive watch. The Patek Philippe watch will more than meet your objectives for an expensive watch. Their marketing slogan — I've used it in my business classes — is this: "You never actually own a Patek Philippe. You merely take care of it for the next generation." In the pictures it's got a father and a son or a mom and a daughter.

It's the same way when we talk about the lands, the precious resources and the green space that we look after as a government here. You might take the words out and say: "You merely take care of the lands that we're entrusted to as stewards for the next generation."

I'm pleased to rise and speak here in support of the Protected Areas Amendment Act, encouraged by the earlier remarks by a colleague from the other side of the House. This will add land to two conservancies, two parks, marine waters, to four existing conservancies to be enjoyed for future generations. Many of us here have children, and some have grandchildren as well. It'll also modify the boundaries of six parks and one conservancy and one ecological reserve. A lot of research has gone into this to do the right thing. Very encouraging.

Since 2004 we've increased parks, conservancies, ecological reserves and protected areas by 32 million hectares. There's a real trajectory here, and the public is, I know, very supportive.

This legislation is helping protect our environment, including the habitat. And habitat for large mammals…. Much of the habitat of North America has been lost for large mammals, but here in British Columbia we're thrilled to know that we're one of the last areas with major habitat for animals such as caribou, bighorn sheep and in the marine area — the kelp beds, coral — breeding grounds for grey whales. This government takes that very seriously. I'm thrilled to report on that.

So 23 hectares added to Syringa Park in the Kootenays; four hectares to Paul Lake Park near Kamloops; 33,000 hectares added to Indian Lake/Át Ch'îni Shà Creek Conservancy; and 22,000 hectares of marine waters added to four conservancies on the central coast — beautiful pristine areas.

It was my privilege as a young student at the University of Victoria working on B.C. Ferries up the coast on the Queen of Prince Rupert, to see these magnificent waters. Again, some more will be protected.

These proposed amendments meet the objectives of the agreement with the First Nations community. That's very encouraging, because we know that when we work together, we succeed. Economic opportunities will spill out of that. Tourists value the green space. They come here because of beautiful British Columbia. It's not just a theme; we live it.

Also, there are some administrative errors in the legislation. Those will be corrected — some small ones.

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The ministry consultation has been very well done, very detailed, and I'm encouraged by that. All members here now can have the opportunity to hear more about that.

The Protected Areas Amendment Act — it's exciting. It's part of the vision that we have as a government, and I'm very pleased to rise here as the representative for Abbotsford-Mission to give my support to it.

D. Donaldson: I rise at this second reading to speak to Bill 11, the Protected Areas of British Columbia Amendment Act. I'm in favour of this act. However, during this general debate on second reading there are a number of areas I'd like to raise as topics for the minister and for the people that I represent in Stikine.

The act actually adds a little over 33,000 hectares to two conservancies in Stikine. One is the Indian Lake and Hitchcock Creek Conservancy — about 7,835 hectares, primarily, from what I understand, for winter caribou habitat — and in the Upper Gladys River Conservancy, about 25,255 hectares, mainly regarding traditional use areas for the Taku River Tlingit First Nation.

The Indian Lake and Hitchcock Creek Conservancy is just to the east of Atlin Lake as you come down the highway. Indian Creek drains into Atlin Lake, and there's a guide-outfitter who has his camp there. The conservancy,
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the addition, is to the east of that, and the Gladys River area is to the south and east of that conservancy.

These are both, from what I understand, additions recommended in the Atlin Taku land use plan. That land use plan, as the minister said, came into effect in 2012. It took eight years to put that plan into effect, and it was a good process. It allowed the Taku River Tlingit to explore the land and their authority and jurisdiction over it for a number of years before actually engaging, then, with the province and other interests in the latter part of that eight years. They came up with the plan in 2012 and are now implementing it.

But I've got to point out that although this bill concerns adding and following recommendations of the Atlin Taku land use plan, there are some major concerns the Taku River Tlingit still have with the land use plan.

Back a couple of years ago, in 2012, Chieftain Metals received a permit, a special use permit, for a 162-kilometre access road to, potentially, the Tulsequah Chief mine. This was something that was, according to the company, part of the understanding on the Atlin Taku land use plan that is referenced in this bill.

However, shortly after that announcement the Taku River Tlingit said they had not made a decision regarding this industrial road. In fact, in January of this year the Taku River Tlingit filed a lawsuit in the B.C. Supreme Court to stop, as they said, "the controversial Chieftain Metals proposed project from proceeding further" on the grounds that "the province failed to consult and used an unlawful decision-making process." That will result in the environmental assessment being not considered sufficient by the Taku River Tlingit.

That's just to point out that although this bill is following the recommendations of the Atlin Taku land use plan, there's still a lot of work to be done on that plan, as typified by the fact that the Taku River Tlingit are not in support of the road or the mine that's in the plan and that is covered by the plan.

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The other area of concern I'd like to address in this second reading debate is the fact that although 33,000 hectares have been added to these conservancies in the Stikine, the constituency I represent, and approximately 55,000 hectares overall in the province, we still…. If we're going to establish conservancies, I think the public would expect some oversight on the ground, boots on the ground, too, for the reasons cited. If we're setting this area aside at Indian Lake for winter caribou habitat, then who is keeping an eye on it?

I noted that earlier in this session we passed the Off-Road Vehicle Act. I was in support of that. However, the fees associated with that, I suggested to the government, could be used to improve the conservation officers budget so that they could actually spend some more time to the ground to have oversight on these conservancies. That was not something that the government seemed to accept.

I again want to emphasize that we are adding 55,000 hectares in this bill, so I think that it's necessary, hand in hand, to add some resources to make sure that the proper oversight on the ground is done in these areas, for the reasons they've been set aside.

The minister, in reference to this bill, made comment in the media regarding Bill 11 and pointed out that, since 2004, class A parks, conservancies, ecological reserves, protected areas — the areas in those types of land designations — have increased by 3.2 million hectares. Today we're talking about another 55,000 that would add into that 3.2 million hectares.

Yet in Bill 4 that was passed, the Park Amendment Act, not supported by this side of the House, opens up the parks for industrial activities such as geotechnical studies for pipelines. The latest data I had on class A parks in the province is…. I believe about ten million hectares are in class A parks.

On the one hand, you've got the government saying that this bill will add 55,000 hectares and that since 2004, they like to say, 3.2 million hectares have been added to class A parks, conservancies and ecological reserves and protected areas. But with a stroke of the pen and their majority votes just a couple weeks ago, they added ten million hectares of class A parks that could be opened up for industrial activity. So I don't think…

That's almost a 3-1 ratio of area that's been opened up for industrial activity — geotechnical studies for pipelines, for instance — in class A parks. Although the minister likes to point out part of the record, I think the whole record has to be considered when we consider this government's views and approach on protected areas.

Finally, in regards to this topic today, Bill 11, which I support, I'm also curious how it reflects on other government ministers. A year ago February we considered Bill 5, Protected Areas of B.C. Amendment Act. That was in February 2013. That was similar to this bill. It set aside lands in protected areas, like conservancies, just like we're considering today. Yet the then MLA for Nechako Lakes, who is now the Minister of Aboriginal Relations and Reconciliation, objected and spoke against Bill 5 last year.

As reported in the Prince George Citizen at the time, he said: "We keep adding and adding with no real plan. We haven't even had a real debate about it." He goes on to say: "A lack of parkland planning translates into a lack of industrial certainty" — this is the current Minister of Aboriginal Relations and Reconciliation — "Investors, communities and governments cannot make effective decisions about where industry should happen until the places it should not happen are solidified."

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He went on to say: "But I'm saying up front at this juncture that before we go ahead with any more park designations, we should do the work to form a proper plan for the future of parks and protected areas and through to
[ Page 2653 ]
industrial and community uses…. It shouldn't be something arbitrarily set by a particular party or a particular minister, and it shouldn't go on without some kind of guidelines."

I'm wondering in second reading of this bill, Bill 11, which again addresses additions to conservancies, whether the Minister of Environment has taken up what the member for Nechako Lakes said a year ago and has created an overall proper plan, as he says, for the future of parks and protected areas. That's been left for a year now, since the member for Nechako Lakes brought it up within his own government, when he was opposed to Bill 5 last year. Now we have Bill 11, essentially the same type of bill.

It would be informative if the Minister of Environment could elaborate on how she has incorporated the comments of her now cabinet colleague, the Minister of Aboriginal Relations and Reconciliation, into what we see in Bill 11 and whether there is a plan, an overall plan, for the future of parks and protected areas from this government.

As well, then the member for Nechako Lakes — this is from Hansard — on that debate said: "Are we going to start talking about taking some out because we'd like to add some in, or are we in a pattern where we will just be continually adding parkland into the province of British Columbia, to the detriment of our industrial base?" I would like to point out that this is now the Minister of Aboriginal Relations and Reconciliation.

In relation to Bill 11, the government says Bill 11 reflects land use planning and agreements with First Nations. So is the position of the Minister of Aboriginal Relations and Reconciliation…? Does he still hold to the position he did a year ago that this adding in and adding out is not what the government should be doing, or does he believe that this Bill 11 is good in that it follows agreements with First Nations? There are four First Nations that are mentioned.

I support Bill 11. I support the additions, especially the ones that I've mentioned in Stikine and the additions in the rest of the province. I'm not sure if the Minister of Aboriginal Relations and Reconciliation supports Bill 11, because he didn't support Bill 5 last year. I don't know if his comments from last year have been incorporated by the current Minister of Environment, and I don't know if he supports the fact that Bill 11 reflects agreements with at least four First Nations.

I look forward to those responses, and I look forward to the committee stage of this bill.

L. Krog: I'm pleased to rise and say a few words today with respect to Bill 11 during second reading. I'm going to do what I would call the Chinese-food-takeout approach — the sweet first and the sour afterwards.

The sweet is that I want to thank the government for this. I have always indicated that when the government did something positive, I would publicly compliment them, and I certainly do so today. The addition of lands to the protected areas of British Columbia, preserved for generations, I think is always important and needs to be recognized as such, and I certainly offer my compliments in light of the fact that this follows on the 275,000 hectares added to the park system in 2013 as well.

You know, the old joke about they're not making any more of it is always so clearly true, particularly when one looks at the price of housing in Vancouver, for instance, or the Lower Mainland generally.

But my colleagues have pointed out quite rightly that the mere addition of parkland without a budget to support the staff who can provide protection for the land is in itself really indicative of the half-measures by which this government has proceeded.

I certainly recall during the early '90s, when the government of Mike Harcourt, who certainly had some notoriety today in the news, was working very hard to implement the recommendations of the Brundtland Commission to preserve 12 percent of representative ecosystems. I remember the Vancouver Island land use plan, which saw roughly 15 percent of Vancouver Island preserved.

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At the same time, that government was not only preserving what we generally refer to or think of as wilderness areas. In my own constituency, which was Parksville-Qualicum in those days, the government was responsible for the preservation of the Parksville Flats, as it was commonly known to people who were growing up in that area but which was, in fact, the Englishman River estuary.

I note the sitting member for Parksville-Qualicum the other day was waxing eloquent about the Brant Festival, inviting members to attend. Well, it was an NDP government that saw the preservation of the Parksville Flats so the little brant would have someplace to land as they worked their way through the area and, of course, in old days provided food for local hunters and now dollars for local businesses. People come from literally all over North America to see the Brant Festival now.

In addition, Jedidiah Island, on the far side of Lasqueti, as we say, closest to the Lower Mainland, another act of preservation of the NDP government of Mike Harcourt. I had occasion to run into Mary Palmer the other day. Now, Al and Mary Palmer owned Jedidiah Island. They were originally an American couple and retired there some years ago.

Mary is still alive and well, I'm happy to tell the House. Al passed away a few years ago. She still has a driver's licence. I won't mention her age, but I can delicately say it's well past eight decades. It was through their generosity, offering the province Jedidiah Island at a very substantially reduced price, that we now have a wonderful park on Jedidiah Island.
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In addition, again it was the NDP government of Mike Harcourt that provided the funds necessary to purchase Neck Point, which is one of the most important parks in the north end of the city of Nanaimo.

My point in mentioning those is that they are not the kinds of traditional areas in which government has necessarily funded. Certainly, the estuary arguably is; Jedidiah Island, somewhat so; but certainly not Neck Point. I think the government has to take some responsibility, if we're talking about preserving areas, to also consider the necessity of preserving those areas close to where people live.

As much as I am very fond of the concept that there is wilderness out there that is literally almost untouched, there are people and families who require the opportunity to get into a park in fairly short order. They have neither the time nor the money to travel great distances to enjoy outdoor excursions and experiences in the wilderness that the wealthier amongst us do. So I think government has to spend some time focusing on that policy.

Certainly, some of these parks, I appreciate, are closer to urban areas, and that's a very positive step. But, for instance, with respect to my point around the willingness of the government to fund the park system, I have raised and the member for Nanaimo–North Cowichan has raised several times in this House the issue of Morden mine.

Morden mine is one of the two tipples remaining in North America that represent a significant aspect of our industrial history. That tipple is literally — and I say without exaggeration — in a state that it could collapse any day. And yet, the province can't seem to find the money to provide the funding to repair it.

Indeed, the city of Nanaimo, much to its credit, recently provided funding in order to do some engineering work and studies on it — a modest amount but a large amount for the city in comparison to the provincial budget. I would respectfully ask the minister, who, I know, is listening intently to everything I have to say today, to perhaps sit down with her staff — I know she's been approached by the Morden mine society — and representatives and figure out a way to ensure that that tipple is preserved. It is already a provincial park.

One can only imagine, for instance, that if the longhouse not far from this very Legislative Assembly was in a state of collapse, the money would be found to preserve it. Now, surely we can do the same for Morden mine.

Surely, if we're going to provide provincial dollars as this government did, in fairness, indirectly towards the building of a cruise ship pier in Nanaimo, to an expansion of the airport — all funds designed to enhance tourism on Vancouver Island — it would only make sense that you would also ensure funding when we're talking about protected areas, as we are in Bill 11.

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Surely, it would only make sense that you would try and fund as well the preservation of those very attractions which would bring tourists and enhance economic development and employment in my community.

I'm not going to go on any longer today. Again, I thank the minister for Bill 11 and what it does. But I would ask her, given the enormous responsibility and obligation she has to the people of British Columbia, to consider seriously what needs to be done at the Morden mine site before British Columbia and Vancouver Island loses one of its most significant historic relics of the great mining past that was responsible for the prosperity of Nanaimo for nearly 100 years.

In fact, the coal that came from Nanaimo enabled the city of Victoria to prosper, because it enabled Victoria to become a coaling station for the naval fleet and led to its prosperity. Given all the incredible history of coal mining in this province and its contribution and the fact that mining is represented in one of the four murals outside in the rotunda here, surely the minister can find it in her heart and in the treasury to see that Morden mine is preserved.

G. Holman: I am rising, as have a number of my colleagues, to support Bill 11. I congratulate the government on this initiative, this addition to marine and land-based parks.

I do find it interesting. There was an announcement just the other day as well about the acquisition of parkland on Quadra Island. There's a very strong public support for protection of our natural heritage in British Columbia.

There was a reference to the increases to the protected area network that were made by the NDP government during the '90s. As an economist I supported a number of those land use tables and saw firsthand the willingness of even sectors who may have felt they paid an economic price for that.

Certainly, forestry unions were somewhat skeptical and concerned about the implications for protected area on the timber-harvesting land base, for example, yet virtually all of those tables came to consensus agreements. I do think it's an indication of very strong public support for these kinds of measures.

There is also a very strong business case for establishing new protected areas. My colleague just mentioned the implication for tourism, particularly for parks that are in and around populated areas. Absolutely, there is a strong business case around the tourism issue and also in terms of the services that protected areas supply — for example, in terms of stormwater protection — very important natural services that these natural areas provide, that if they didn't exist, local communities and senior governments would have to address in some other way.

There is not only a very strong public support but I think a strong economic argument for establishing new parks and marine conservation areas in British Columbia.
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I do want to take this opportunity to encourage the minister to make best efforts to move forward the marine conservation area proposal for the southern Strait of Georgia. This process has been underway for a decade. My understanding, talking to the minister's colleague in forestry and natural resources, is that the province does in principle support the establishment of a marine conservation area in the southern Strait of Georgia.

As I say, this has been going on for ten years, and the process appears to have bogged down. It's not at all clear where we are. There is a complication in the southern Strait of Georgia. The province owns the seabed and has to agree to transfer that seabed to the federal government.

I believe there is strong public support and, again, a strong rationale for establishing a marine conservation area in the southern Strait of Georgia. It could be part of the brand that area is already known for.

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Of course, we have the national park. We've got a number of provincial parks. The area is already known as a natural wonder and is a very key attraction for tourists to my constituency among others.

I would urge the minister to play her role in moving that process forward. My understanding is that there is a socioeconomic study of the implications of establishing a marine conservation area in the southern Strait of Georgia, and yet I've heard nothing of the status of that, where that process is. I would strongly encourage the minister to lend her support to that process and move it along.

In summary, I congratulate the government on these additions to protected areas in British Columbia.

Deputy Speaker: Seeing no further speakers, the minister closes debate.

Hon. M. Polak: Thanks very much for the comments. Thank you, Members, for your support for the bill. It is important that we are managing our park system appropriately and considering adding lands to parks, but also, necessary amendments to those boundaries is an essential part of that process.

I move second reading.

Motion approved.

Hon. M. Polak: I move that the bill be referred to a Committee of the Whole House to be considered at the next sitting of the House after today.

Bill 11, Protected Areas of British Columbia Amendment Act, 2014, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. M. Polak: I call second reading of Bill 18.

BILL 18 — WATER SUSTAINABILITY ACT

Hon. M. Polak: I move that this bill be read a second time.

The bill represents an important evolution in water resource stewardship for British Columbia. The new Water Sustainability Act will replace the Water Act, which was first passed by the Legislature in 1909. Over the years it was amended a number of times. In fact, 100 years ago this month the Water Act of 1914 was given royal assent.

The act set aside the riparian right to use water and required those users to file claims for a water licence in order to bring all surface water users under the same system of water rights that exists today. Now, a century later, with the bill before us we are embarking on another historic step forward in the stewardship of our water.

The Water Sustainability Act was prepared after an unprecedented public engagement process spanning four years. We met with British Columbians across the province, in all sectors, and received thousands of comments, ideas and recommendations from First Nation organizations, stakeholder groups and individual citizens. All of this input was considered in preparing the bill and will continue to guide us as we work toward implementing the legislation.

I want to thank all British Columbians who took time to contribute their thoughts through this process, including the many First Nations representatives and organizations who met with us and provided written submissions. We acknowledge that First Nations have unique interests in water and will continue to consult with First Nations on further policy development and decisions that will result from implementing the act.

The Water Sustainability Act builds on the Water Act and makes a number of key improvements. First and foremost, the bill recognizes that groundwater and surface water are a single and often interconnected resource. One-quarter of British Columbians rely on groundwater for their daily needs.

The bill brings groundwater into the water-licensing system so that groundwater and surface water can be managed and protected under the same framework. Groundwater users will be subject to the same rights and responsibilities as surface water users, and government will be able to manage groundwater to secure water rights and protect the environment.

The Water Sustainability Act expands our ability to protect fish and aquatic environments. It requires decision-makers to consider the needs of the environment when issuing authorizations, and it gives water managers the ability to issue temporary protection orders to provide life-sustaining water for fish and aquatic ecosystems during water shortages.

In addition to protecting the environment, British Columbians told us that we need to secure water for basic human needs and for agriculture. The Water
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Sustainability Act does this by ensuring that during droughts and other times of water scarcity, water for essential household uses takes top priority. The act will also allow us to dedicate water for agriculture and create water reserves for irrigation to support food security.

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British Columbia is a large province with a wide range of local conditions and interests. We therefore need tools that allow us to tailor water management to the unique needs of a region. The Water Sustainability Act introduces a number of these tools.

Water objectives can be used to set water quality and quantity benchmarks for a water source, which must be met by land use and resource development activities in the area. Area-based regulations can adjust regulatory requirements for specific locations or water sources. Water sustainability plans provide a comprehensive means of involving citizens in customizing water management, including activities that impact water. These plans could be developed for areas where water supplies are limited, where there are conflicts over water or where watersheds need restoration.

During public consultations the public and communities expressed their desire to be more involved in water management decision processes. The Water Sustainability Act introduces a number of new ways for water governance to include stronger citizen voices.

In addition to water sustainability plans, which I have already mentioned, the act enables the formation of water advisory boards to provide input into the development of standards and practices for topics such as environmental flow needs, water use and groundwater protection. The act also allows us to make regulations that delegate specific water management authorities to individuals or organizations outside of government in given circumstances or areas.

Strong laws are meaningless without a strong system behind them to encourage compliance and, when necessary, take enforcement action. New offences have been added to the Water Sustainability Act to better align with the act's requirements. The act also adds administrative monetary penalties and compliance agreements to the range of existing compliance and enforcement instruments. These tools allow water managers to take enforcement action that is tailored to the severity of the violation and give violators the option to come into compliance through strong, enforceable agreements with the province.

Finally, we all know that pressures on our water resources will require all of us to pay more attention to how we use water. The Water Sustainability Act will require all water users to ensure that they are using water efficiently. It will also allow us to require large water users to measure and report how much water they use so that we have better information for making important water management decisions.

I look forward to the comments of other members in second reading debate.

S. Chandra Herbert: Thank you, Minister, and thank you, Members and all of those who are here to listen and are listening at home about Bill 18, the Water Sustainability Act.

Interjection.

S. Chandra Herbert: "Yay," says the minister, and I agree. It's been a long time coming.

This bill, of course, as the minister mentioned…. The last time we really had a major legislative exercise involving water was 1914 — a long time ago. A lot has changed since then. Of course, one thing that this bill does…. Well, I'll get to what the bill does in a moment.

First, it's a bill, for those interested, that's about 148 pages long. If you want to understand legislation, this would be a good bill to start digging through. There are a lot of interesting little pieces and clauses and regulations that are being brought in to modernize how we treat water, and a lot of that has come out through good consultation.

While I feel that this government rarely does good consultation — and governments, indeed, all over the world are often criticized for lacking consultation with those that they govern on behalf of — in terms of the Water Sustainability Act I think the government has done a pretty good job of speaking with people. For years it got stalled, after two years of hard work. Then, of course, the government had a new leader, and the HST and all that occurred, which delayed things. But we are here today, and that's what's important now.

In terms of consultation I think it's going to be important with this act — given that there are a huge number of areas that will require regulation not legislation — for that consultation to continue. I'm going to be asking the minister for a commitment to continue to consult as the regulations are developed, because you can't bring in legislation which is enabling, which gives the government the right to do things, and then not ask the people what the government is actually doing with those rights and how those rights are enforced.

[1715]

I've called this act the "Watered-Down Act," because it could be. It could also be a water sustainability act. A lot depends on the regulations, a lot depends on the enforcement, and a lot depends on the communities' continued involvement in how we treat the water.

So the Water Sustainability Act could be the "Watered-Down Act." Certainly, in some areas I believe the government has watered down legislation from what they were discussing before and from what the community wanted. But there are many, many good things to promote this bill.

Why is it important that we value water? What do we
[ Page 2657 ]
judge a piece of legislation like this with? Well, I think we have to understand that the people of B.C. value water as pretty much one of the most important things that the government looks after, that we think about. It's one of our most important resources.

Of course, you don't have to think very hard to think of something that's important to British Columbians and have it connect to water. You like to eat? It requires water. You like to fish? It requires water. You want a job? Likely, it requires water.

Interjection.

S. Chandra Herbert: As my friend the member for Port Coquitlam says: "If you like a beer, that requires water." Yes, indeed it does. We will have to have one of those later, once we get through all of these clauses and all of this legislation.

That reminds me. I'll have a sip of water right now. Nothing like good tap water from British Columbia. Yeah, no bottled water for me. I'm happy with the tap water.

When we think about water, we also know that it's at risk, that there are big challenges facing our water supply. Certainly, yesterday's release of the international panel on climate change report really shows us that water is going to be one of the most valuable resources in the future, which I think reflects the people of B.C.'s concern that we treat it well. When you have Canada's ambassador to the United States saying that water will be as valuable as oil because of climate change and huge pressures, we really do need to sit up and take notice. We really do need to consider how we treat this valuable resource.

But according to some, it's not a resource, and I think this is also important. For some, they talk about a relationship to water. It's not something you can buy and sell.

I was at a water conference put on by the Polis institute where there was a woman who spoke about how to her people, the Similkameen people, water is about a relationship. It's not something you can buy or sell. It's not something you can mistreat, any more than you could mistreat your partner or your child. Water is a relationship. I think that's something that we should all hold in our hearts as well, because if you think about it as just something you can dispose of, you might not treat it as well as if it's a relationship with something that, in a sense, is living in its own way.

Now, that's the one area in this legislation where I think we have a challenge. It's something the minister has acknowledged, and that is the relationship to the water, the relationship to First Nations people. This bill is really about how the government looks after water for everybody.

First Nations folks, of course, were here long before any of us in this place — at least most people in this place, in the legislative world. They were here before we had a government like the government of B.C., working with water, using water in their own local economies, in their own local communities. They have spoken quite strongly about how they feel that this legislation may not respect their rights as First Peoples. That's something we should consider as this legislation goes forward. That's something I think we also need to consider when the regulations are developed.

I'd like to start by taking a look at page 16, which in the act speaks about what "vesting water in government" means. It says: "The property in and the right to the use and flow of all the water at any time in a stream in British Columbia are for all purposes vested in the government, except insofar as private rights have been established under authorizations."

[1720]

It talks about:

"(2) The property in and the right to use, percolation and flow of groundwater, wherever groundwater is found in British Columbia, are for all purposes vested in the government and are conclusively deemed to have always been vested in the government except insofar as private rights have been (a) established under authorizations, or (b) deemed under section 22 (8) [precedence of rights].

"(3) No right to divert or use water may be acquired by prescription."

When I read that, I think about it. So the right to control and the right to manage water are vested in the government. Now, that is important, because of course, the government is supposed to be looking after the interests of the people.

Many people, though, in the consultations on the Water Act said that water is so valuable it has a value beyond being just controlled by the government. We need a statement which categorically says the water is held as a public trust by the government on behalf of the people of the province so that if a government decided to do something which forever damaged water — forever damaged a river or a stream or something like that in such a way that that water was no longer accessible for ecosystems, economic uses, community use, etc. — that government could be held accountable.

If water truly is something that belongs to everybody, then the argument would be that it should be held in public trust for everybody — not in a "might makes right, and I'm the boss, and I can make a decision which damages your future" way but in a way which says: "This is something that should be held for everybody forever, on into infinitum."

I was disappointed that this act did not attempt to legislate the public trust. There are some challenges with that, because the First Nations will say: "Well, wait a second, you're not holding it in a public trust for us. We hold that in a public trust for ourselves as nations."

I think we could find agreement that the Water Act could be strengthened to say that water is held for everybody and that future generations must be considered. Some have suggested going the route of Ecuador, I believe it was, where they've decided to legislate that Mother
[ Page 2658 ]
Nature, the river spirit — Pachamama, I think they call it — has legal rights. In that country people can actually sue on behalf of the environment to say: "You've damaged the environment, and we are going to sue on the environment's behalf."

That's not something B.C. has considered or really had much discussion about — the rights of the environment, the rights of Mother Nature. But it is something we should consider, as hard as it may be for some to consider that nature has rights.

I think this is something that requires further development, and it feeds into the question of public trust. Certainly, we know, in the past, governments have made decisions that have been disastrous for water — decisions which have led to pollution of water resources, to the loss of water resources and, of course, the huge consequences that come out of that. Public trust is a doctrine which I think is worthy of further review and worthy of implementation. I'll have more to say about that in the days ahead.

Another area — and this ties into the question of public trust and ownership of water — is the FITFIR, as they call it, the first-in-time, first-in-right designation for water. It's something that's existed in B.C. since we started licensing water — the idea that if you showed up first and you've applied to use that water, you have the first right to use it. That's not to say somebody couldn't come around later and also access that water resource, but you have the right to use it.

This has been an important designation for agriculture, for industry, for communities because, they would argue, it gives them certainty. They know who has priority because whoever showed up first has the priority over that water — and then down the line, based on who came later.

Again First Nations people will say: "Well, we were first-in-time, first-in-right. We were here first. You just refuse to acknowledge us. You refuse to listen to us." Of course, that has led to many treaty arguments at the treaty table — in some cases, some settlements but also, in many cases, continued litigation.

[1725]

Certainly, water litigation has been a big issue in many parts of the province with local First Nations who feel, again, that they are not adequately represented and that their interests are not listened to.

First-in-time, first-in-right does have a lot of benefits for some, in terms of certainty, but it also has challenges. What can happen and has happened and may happen again…. If we add first-in-time, first-in-right to groundwater resources, which we plan to do with this legislation, some would argue that you're just continuing a policy which could, when you get into times of real drought, lead government to have to make decisions which are not in the best interests of the economy, not in the best interests of the wider community, but interests that reflect just the person who showed up first.

It's an interesting balance, because you want to acknowledge that certainty, you want to acknowledge those who went there and did that work, but you also need to acknowledge that…. I've just come up with a hypothetical example here.

If somebody had first-in-time right to use the water for a use which generated very little money, had very low employment, but somebody came along later who developed an incredible winery, a very good product, very good jobs — that kind of thing — under first-in-time, first-in-right, if there was a drought situation, the winery could be cut off completely, whereas the person who was there first could continue to use the water even if it didn't generate many benefits locally. That's a challenge with first-in-time, first-in-right.

In speaking about that, it does remind me that efficiency of the use of water is in this legislation, and that's something that I'm encouraged by: the beneficial use of water. People have wondered: what does that mean, beneficial use? Is that about a public use? Is that a term that speaks to environmental uses? Is that something in the legislation that can be used to interpret the public trust, the idea that water can only be used in a beneficial way to the public, or is that just a private concern?

Now, there are regulations which still have to be brought in which could further explain that. But I am satisfied that efficiency is one of the principles of beneficial use: the idea that water should be used in an efficient manner, that you can't — just because you have a water licence, whether it's a first-in-time, first-in-right water licence or you've got a new well — just waste the stuff and pour it all over the place and drain the well. That's not acceptable. That is a good improvement, as is, of course, the very regulation of groundwater itself.

That is, I think, the best thing about the act: the regulation of groundwater. Nowhere else in Canada would you get away with saying: "Well, it's under the ground. You can do whatever you want with it." But in British Columbia that has been the standard, really, for 100 years.

Right now, as this act is not law, you could go out somewhere, drill a well and pull a bunch of water out of it. Maybe it would drain the aquifer, but really, there are no rules. There is nothing that somebody could do about it. Your neighbour has a well, and you drain all the water out of the well from your well — because the aquifer is on maps, and nobody knows what's going on down there. You could do that, and nobody could really say anything about it. That's the way it is in British Columbia today.

This act would bring in well regulation, in terms of how you construct the well, which is really important for the 25 percent of the population who rely on groundwater in their communities. You don't build wells that then pollute the water system. And it brings in regulations for how much you can use for industrial users, for agricultural users, etc., when you deal with issues of groundwater.

That is a very important thing. When we're regulating
[ Page 2659 ]
groundwater, we improve how we use it. When we're bringing in beneficial-use requirements for groundwater, that improves how we use it. But again, bringing in groundwater regulation under FITFIR — first-in-time, first-in-right — as the government has chosen to do, some argue, has just delayed the day of reckoning. It has delayed the day where we face up to those issues of drought.

[1730]

Thankfully, much of British Columbia has abundant water. But we know that on eastern Vancouver Island, in the Okanagan, in the northeast of the province, there have been real issues with water, lack of it. I was out in Tofino a while back, and of course you'll remember that Tofino, on the west side of Vancouver Island, even had issues with the amount of water. They, as a tourist community, had to tell people: "Well, you can come, but in some cases, you can't have a shower. Just go jump in the ocean, I guess, to try and get clean, but you can't have a shower because we're out of water."

Applying FITFIR — first-in-time, first-in-right — could lead to some of those issues when you deal with groundwater, because again, in my hypothetical example, some people could be pushed out of using water at all, crippling their businesses. Some people could be pushed out because of a lack of groundwater, while the person who showed up first is able to continue using. There are some — hopefully good — regulations that will come, which will, hopefully, spread that load a little bit so that everybody gets some access.

I think the argument that we should have domestic water use as a separate category to say, "Yes, we need to continue to be able to get good water for people's use at home for domestic use," will help. But I have some concerns. Of course, the government has decided it does not want to regulate every last well user because there are a lot of them, and I can understand why they wouldn't want to do that. Administratively, that could be quite a headache for those people as well. There could be the cost factors too.

The challenge, though, and I hope that this is addressed, is: what happens if you have an industrial user who is using the same water that community users need to access? What happens in that case? The industrial user has the licence. They were the first person to show up. They have the groundwater licence. Domestic water users or other users don't have that licence because they're not being regulated in this act.

I'm hoping that this question is answered here, that the domestic water users do not have to cap the use in the same way that they might have to if a major industry is pulling from that water. We'll see. That may be addressed in the question of beneficial use, around efficiency. That could also be addressed in community water plans.

A community water plan. What could that be? How do you get to good governance of water supply? Well, I think of one — Cowichan. I think of the Okanagan Water Board. I think of a number of small community efforts who have tried to address the conflicting uses of water in their neighbourhoods, who have tried to address the fact that many people want access to that water. So do the wild critters. So do those species that we all rely on. But not everybody can get access, because water is finite.

[R. Chouhan in the chair.]

A community water plan, where you balance the needs just as we've done with land and resource management plans, could be a solution. Allowing some local guidance, some local governance, could really show ways to get community buy-in — to get the volunteer efforts that are already going on to feel like they're actually truly appreciated and that they're not just doing a bunch of work only to see some other bureaucrat in some far, distant land change what they've done and not reflect or understand what they want to do.

The question again is…. This is talked about, but with regulations still to come, with staff support still to come, with dollars for the ministry still to come to actually do this, we're not sure if this is going to be a good word, a good idea on paper and never enacted, or something truly useful that could make a real difference in our community.

Now, one area which I'm disappointed about and I think has led me to term this act as potentially the watered-down act is a decision that the government has made around short-term water permits.

The government currently has been taken to court over concerns that they've been issuing short-term water contracts again and again and again — the permits, I should say — as a way of getting around the higher regulatory standard for longer-term water use permits — the idea being that if you are going to pull water from a lake, if you're going to pull water from an aquifer, from a river, a stream, you need to talk to the public.

You need to make sure they understand what you're doing, why you're doing it. A certain amount of consultation is required, and a certain amount of reporting is required.

[1735]

The court case, of course, is not what we're debating here, but the concern people have had for a number of years has been that companies use short-term water permits to get around having to do fulsome community consultation, including with local First Nations. But what this act does is basically says that what we've been doing….

We used to issue a 12-month or a 24-month permit. This basically says you can do that ad infinitum. You can keep doing this, so what is termed a short-term permit may actually be a permit that goes on for many years, potentially even longer than a long-term permit. That is
[ Page 2660 ]
not about democracy. That does not lead to greater transparency, and I hope the minister is able to provide some argument for why this is necessary.

Again, people want to know that their water is protected, and this section of the bill, I think, lowers the protection. It doesn't increase it, doesn't lead to greater accountability but finds a way around it just at a time when a number of groups have taken the government to court for this very action under the current act. So that is a concern.

I think the other concern, of course — and we will see — is that when the government floated this legislation last fall, they talked about incenting deep saline aquifers. Most people at home will have no idea what a deep saline aquifer is unless they're a hydrologist or somebody particularly interested in way down in the crust of the earth.

But when I got up and was talking with folks in the northeast, in the gas sector, about deep saline aquifers, they said this is an area they want to go so that they use less drinking water to do their hydraulic fracturing. They said this would be an area…. A number of companies have done it — not many. Not a huge percentage of the water used is coming from deep saline aquifers. But they said this would be one way they could do it.

Now, a saline aquifer is not water that you want to drink. It's murky stuff. It's high salt content and other things that are in it. It's not pure water, but it does have a value. The government argued in the fall, and have been silent since, that if they just said you could take that water without regulations and for free, in a sense, that would incent companies to take that water rather than drinking water. It's very expensive to drill deep, deep, deep into the crust of the earth.

The cost of water, at least currently in B.C., to an industrial user is fairly low, so I question whether or not that would incent much of anything. But I also question saying that deep saline aquifers don't need regulation because they're so far down that they don't communicate with water further up in the groundwater and, potentially, into creeks, streams, etc., because the government just simply doesn't know. The science is mixed, what little of it there is.

I hesitate to say that just because we don't know about it and it's way down there in the earth, there really probably isn't a lot of risk. We don't know that. The science doesn't know that, and certainly, I think we should be doing whatever we can to protect our drinking water.

We should also understand that deep saline aquifers have a use. The water that passes through them may show up hundreds or thousands of kilometres down the way in somebody's potable water, in their well. Indeed, deep saline aquifers actually have a use for drinking.

Texas, as one jurisdiction, has used up most of its drinking water. They didn't have a lot to begin with because of how far south they are in their geography, but their intensive use, whether it's in agriculture or industry, has led them to using up most of their drinking water. I think what they're doing now in Texas is building desalinization plants, at incredible cost, to pull that water from deep in the earth's crust, desalinating it and then drinking it. They've run out of the other stuff because they did not look after the water.

In the state of Texas, indeed, there have been court cases over who owns the water on your driveway. If it comes off of your driveway, do you own it, or does somebody else? It just is a cautionary tale about what can happen if we take our water for granted.

[1740]

One area that the minister has highlighted, which I think is an improvement and could be even more of an improvement and really be about a water sustainability act, is critical environmental flow protection, the idea that we can no longer take as much water as we want because we've got a licence and end up leaving a river or a creek dry or so low that you've left the salmon spawning areas unreachable or that you've left wildlife in small sections of a river you can no longer access because the water has dropped so much.

Environmental flow is very important. I think people will remember the horrifying stories of a number of run-of-river projects where, due to ramping, the practice of rapidly releasing water and then really pulling it back, you ended up with a lot of salmon spawn and other species killed. That, of course, is horrifying to most, because that's an iconic species, our provincial fish, but it's also very valuable for people in their freezer, for the tourism industry and for other areas too. It's also incredibly valuable for our bears.

It's important for our bears. Of course, the bears eat the salmon. They take them up in the trees, and as the story goes, the salmon carcasses decompose, which of course then feed the cedar trees, which then feed — on and on you go, down the web of life.

So to have critical environmental flow plans brought in is incredibly important, because people will then know that they can't go beyond a certain area. The challenge, though, is this is very much a reactive thing, or it could be a reactive thing. These plans could kick in when you've got so little water that you're at risk, as opposed to understanding the water flow needs of a community long term, having continual monitoring and being sure you're well ahead of the game. So it's not just critical, but you've got a bit of a bumper of water to ensure that if something goes wrong, you're not ever in that situation.

Again, that comes to enforcement. That comes into whether the ministry has the ability to actually work with the community to create these plans, to create community water objectives and the various other potential planning tools that exist or could exist through regulation in this act.

With climate change staring us in the face, the question of environmental flows are going to be even more
[ Page 2661 ]
important. When I was up in Fort Nelson, I had a good conversation with some folks that worked in the gas sector and also folks that had tourism businesses along local rivers and First Nations folks who relied on those rivers for their jobs and also for water and for food.

They told a story about how in 2012 the water didn't arrive. There was no snow. The snow didn't fill up the valleys, didn't fill up the mountain passes the way it used to. This is something that we're seeing more and more. Of course, this year is one of our lower snow years, in many parts of the coastal area anyway — the Vancouver coast, the Vancouver Island coast and a number of other areas.

Their concern was with climate change. Is this going to get worse? Are we going to get situations where people are pulling water for industrial uses, for gas and other things in that area, and leading to more situations where the water dries up and nothing can go on? So environmental flow plans are going to be incredibly important, as is the ministry.

Now this is where I think it gets a little interesting. What ability, and this is a real question, does the ministry have to fulfil all the rhetoric or all the law, all of the possibility — hopefully more than rhetoric — in this act? Do they have adequate staffing? Do they have adequate resources to do it? I don't believe they do.

The minister herself acknowledged this. There were quotes around the question of how many million dollars more do we need to actually do the act, to actually be able to do the community water objectives, to be able to actually do the enforcement.

I had the pleasure of going out and speaking with the good folks at Nestlé out in Hope, past Chilliwack. They of course have been, to an extent, demonized in the media, because so far they've been paying — at least, in terms of the cost of the water, for pulling it for their water bottling operations — zero dollars at all.

[1745]

What they said to me there — and I was pleased to see it — was that they were willing to pay for the water they use in their water bottling operations. But they wanted to know that the government actually had a handle on the water resources in the province. They wanted to know that the money that they paid, just as many other folks that I've talked to who rely on water and pay for it….

They want to know that enforcement of the law is going to happen. They want to know that the province is actually adequately mapped in terms of its water resources, including aquifers, streams, rivers, etc. They want to know that the monitoring continues, so as the climate changes — and as in some areas we may see more water and in some areas we may see even less — we've got a handle on what's going on so that we can plan, so that industry can plan and so that communities plan.

Right now we have a number of industrial projects which come to the province which could bring good jobs. But they get challenged, often, because we don't know what the water resources in those areas are. Will doing this project pollute groundwater? Will doing this project lead to pollution of a sound which is important for shellfish?

In many cases, the government has not been able to answer those questions because they simply do not have the hydrological maps. That's a challenge, because people want and value their water. They want to protect the water. But if you don't know what it looks like deep underground, if you don't know what the water flow needs are in a community, in both average years but also in drought years, that's very hard to plan.

If you don't have the staff who are able to go out and say, "Wait a second. You've been breaking the law here, putting water at risk," and actually follow through with penalties, then again it's just rhetoric rather than action. I think that's going to be a very important part of the act — again, the regulations, but the enforcement, compliance, education aspects.

I understand that right now the ministry is undergoing a consultation on the price of water. People, of course, look at this act and are outraged when they hear that companies bottling water — currently from groundwater anyways — are not paying a penny. But they also are upset when they hear that potentially, as had been floated by the government, for a million litres of water, you could buy it for 85 cents. That does not sound in any way fair to the people. They don't think that it would properly, in any way, fund the legislation so we can properly protect our water. And I agree.

I don't understand how we've done this poorly for so many years; how we've not valued the resource, the people's resource, for so many years; how we have not done the work to actually go out and understand what our resource is for so many years and put it at risk with situations, as I've mentioned earlier, of our fish being killed, water being polluted and very little backstop from the ministry being there to ensure that the people's rights to clean water, that the public trust I believe the government should hold for the water, is being respected.

I understand that consultation is going on now. It'll be interesting to see what comes out of it. But I think that the government needs to put in a lot more effort to value and protect our water, because we've seen what happens in governments elsewhere when they don't. We've seen the very real risk to human health, wildlife health and, in the end, economic health in other places when they don't.

The Privacy Commissioner, Elizabeth Denham, has raised some concerns around the sharing or the need to capture personal public information. I'll be interested to hear what the minister has to say around this piece of legislation, whether or not she is going to amend the act to more accurately reflect how personal information has been collected by governments before, or if this is going to be a new term, a new direction, from government in terms of how they relate to people's privacy and the information.
[ Page 2662 ]

I will be watching the orders of the day and, hopefully, will hear from the minister about whether or not she plans to respond to the commissioner, whether she plans to introduce amendments to her legislation to respond to those concerns.

[1750]

To finalize, and to go to the next stage of this bill, I would just put a plea to the minister. Regulations are going to be so much of where this act becomes good or becomes bad, where this act becomes strong or fails to protect our water again. This act can really be a catalyst, if done well, for changing how we treat our water and for respecting it, in a relationship with the water, with a true valuation of the water and what it brings to us and our community. Or it could be a PR exercise, full of spin, without action.

If the government doesn't put in the resources, if they don't put in the time with consulting the people that rely on the water day in and day out to ensure that the law actually means something real — is enforceable, is actionable, is something that small business people, big business people, First Nations, community leaders are able to get behind and support — then we'll be still where we are today, which is to have legislation as we currently do, with little teeth and very little hope for the future, I think, given a changing climate and huge pressures on the water resources we share.

I thank the hon. minister for bringing this legislation before the House. It's been a long time coming, and I know her staff have worked very hard on it. I hope that they are able to continue working hard on it with the community, in a transparent way, where these clauses can actually be made into strong legislation which really protects the water resource.

I look forward, I hope, to being able to continue to be a part of that. Certainly, the opposition side of the House, while we may criticize certain aspects of this legislation — and we will get into much more detailed questions in the committee stage of this process — wants this legislation to succeed. Water is something that transcends political lines, unites people in ways that you would never expect, because it's the stuff of life.

I thank the hon. minister. I will be supporting this bill, and I look forward to continued debate and discussion.

L. Throness: It's a privilege to rise and speak to issues of concern to my constituents of the most excellent riding of Chilliwack-Hope, concerns about water — water purity, water scarcity, water sustainability, water management, water availability. And so we come to the Water Sustainability Act, which has been, as the former member noted, a long time in coming.

It's gone through four years of consultation, consideration and deliberation. In our election platform last year we made the following promise, and I want to quote it because it was an important promise, and it was certainly the best election platform in the country. It said this: "To consult on the water sustainability act in 2013 with the intention of passing this legislation in 2014. The act will protect B.C. aquifers and drinking water resources while providing industry with a framework under which drinking water allocations are made."

Now, following that promise and the mandate, the great mandate that the people of B.C. gave to our government, we introduced a white paper in the fall. We elicited yet more comments, and I want to point out that we are fulfilling yet another election promise — a promise that we are delivering on just as we made it, on time and on point, with regards to subject. I want to point out that even the NDP critic for the environment, the member for Vancouver–West End, is applauding the fulfilment of the B.C. Liberal platform. I think that's a great step in the right direction.

I digress. I have to go back to water sustainability. The whole question of water sustainability is driven by concerns about water purity and about the prospect of water scarcity.

In my own riding the beautiful Fraser Valley is so beautiful and so productive in part because it's an area of rainforest. It has traditionally enjoyed a great deal of rain, during the winter months in particular, and it has always been assumed that we will always have a lot of wonderful, pure water.

In fact, we enjoy enormous water resources. I have a riding of some 10,000 square kilometres. We have the mighty Fraser that runs the length of my riding. We have Harrison Lake, which is about 40 kilometres long. We have Cultus Lake and Chilliwack Lake, which are beautiful, pristine, mountain-fed lakes, and other lakes and rivers and streams.

[1755]

We have underground aquifers in my riding that supply drinking water to thousands of residents. I would point out that the underground spring in Hope alone supplies about half of the bottled water for all of Canada in addition to the drinking water for the people of Hope — water so pure and clean that it doesn't need any chemical treatment. Of course, we'd love to keep it that way.

But last year the city of Chilliwack was told that it had to chlorinate its drinking water, something it had never had to do before, and there was a lot of concern about it in the city. At some points along the waterline — and there are 400 kilometres of waterline in Chilliwack — contaminants were creeping into the system. It raised obvious and legitimate concerns about our supply of water.

Further, the application of the Trans Mountain Pipeline to the National Energy Board for a second oil pipeline through my riding has also raised local concerns about water purity. The pipeline is, in total, about 1,200 kilometres long, and 8 percent of that pipeline will run right through the centre of my riding. Although the present pipeline has sat for 60 years above the aquifers that feed
[ Page 2663 ]
both Hope and Chilliwack with drinking water — and, I would point out, without incident over six decades — the remote possibility of a leak and the resulting contamination has raised local attention to this issue.

Now, in addition to questions about purity, we have to add questions about scarcity. Over the last two summers we've had long stretches of hot and dry weather in Chilliwack and area, as long as six week without rain. I can tell you that the land in the Fraser Valley, which is porous and absorbs rain very quickly, also becomes very dry and dusty quite quickly. That has worried people in Chilliwack and Hope. When the people of Hope have to stop watering their lawns although they live next to one of the most abundant springs in Canada, they get concerned about it, and I hear about it.

I would also point out the population of Chilliwack has grown by about 25 percent over the last decade. Industry has increased in the riding as well. All of this increases the demands on the water supply. This perception of the prospect of scarcity is really a microcosm of our province, which on a provincewide scale is increasing in population density, particularly in the Fraser Valley, and in the demands of industry, particularly in B.C.'s north.

Finally, when you throw climate change into the mix, you heighten those concerns even more. While I question the science of human-caused global warming, I think it's obvious that climate change is occurring, at least on a regional basis. And it is, in a sense, irrelevant as to who or what causes it.

We certainly need to adapt to that climate change. Part of that change could mean that we will have less water in the future. So it's a matter of prudence and caution and good judgment and wise management that our government has tabled the legislation. I'm fully in support of the wise and responsible use of water that the law will encourage.

Now, this act is quite extensive. It has 218 sections. It's a long law. All I want to do is highlight a few features of the bill which are important to my own constituents, and so I want to talk first of all about groundwater.

We in the valley draw a lot of water from underground aquifers. Historically, access to groundwater was not a concern. In fact, we haven't regulated it at all. But since about the 1960s groundwater use for a range of purposes has intensified, and our ability to get at that water through different kinds of technology has enabled easier access to groundwater resources and, therefore, more demand on our groundwater. Currently about a quarter of British Columbians rely on groundwater as their primary source of drinking water.

It's also vital to B.C.'s economy, providing water for businesses and industries. There are two water-bottling plants in my riding, providing water to all of Canada and even to China. B.C. is the only province in Canada that does not regulate the extraction and use of groundwater. So I think it's high time that this bill do so.

The minister noted that groundwater and surface water are interconnected in many cases. Water from aquifers flows into streams, contributing to sustained stream flow, especially during droughts. Protection of fish and aquatic ecosystems relies on this base flow, and without the ability to regulate the extraction of water from aquifers, we can't be sure that we can keep ecosystems functioning through periods of drought.

Regulation of groundwater also corrects the inequality in our current water management system. Until now, use of groundwater has not required an authorization or payment of fees and rentals, whereas surface water used for the same purpose has.

[1800]

The regulation of groundwater on the same basis as surface water will level the playing field, especially for large users, and will provide water securities for British Columbians who rely on it.

I want to talk about fees for a moment. I like the way the government has approached the issue of fees. It's a principled approach, and I want to note just a few of the principles on which the bill before us is based.

The idea that groundwater and surface water should be subject to the same fees is a good principle. The principle that fees should encourage the efficient use of water so that it's not wasted is something that I can completely agree with and something that all my constituents, I'm sure, will support. The importance of food security, to me, simply means that agriculture is a key value, particularly in my riding, which depends to a huge extent on agriculture. The principle of recovering the costs of managing our water and operating a licensing regime and enforcing our laws will help to guide us in setting fees for the use of water.

I want to point out that in my riding, which is huge, there are many existing wells, individual wells that individual households use. We are not going to require that 25,000 existing individual households in B.C. who get their drinking water from a well should have a licence, although we would encourage them to register. Any new well, even for…. A household will need to register that well.

It's a good idea for them to register that well because they could have input on public use decisions. It's important for officials to know that a well is there so that they can take account of it in periods of drought to make sure they have water allocated to them.

We are going to require industrial water users to have a licence, and licensees will also have to pay a water rental fee, the same as surface water licensees will have to do. The fee will be based on the volume-of-water licence and also what it's used for. There are a number of categories in that regard. The amount of the fees has not been set at this point. What we have before us is enabling legislation, which enables government to enact regulations about how much we should charge.
[ Page 2664 ]

Right now we have some of the lowest rates in the country, and I think this is because water has been so abundant in this province for so long. Nestlé Waters in my riding, for example, supplies about half of the bottled water in Canada, as I said, and reports that its plant in Hope uses about 71 million gallons of water annually, which under the current water rental rate is approximately $265 per year. Of course, that's way too low, and Nestlé agrees with that. My constituents agree with that. They would be happy to pay more, and they simply argue for a framework that is provincewide so that they are treated on the same level as everyone else. I certainly agree with that.

How much should the fees be? I would argue that they should at least be enough to pay for the program costs, which are estimated at about $60 million over the next decade. We're consulting further on those fees, and British Columbians can weigh in. In fact, anyone can make comments right now on the website of the Ministry of Environment.

I've gone to the Ministry of Environment's website, and I would encourage my constituents to do the same. Go to the home page, click on the Water Sustainability Act icon on the right-hand side of the page, and make comments on the blog that's provided there. That blog is open for comments until April 8, so we have a week left to let our feelings be known on the topic of fees.

What I think we want to avoid in this fee structure is any idea that water is a commodity that can be bought and sold, because we want to avoid being required to supply the U.S. — places like California, where there's a huge drought right now — with water under our trade obligations.

Water should be viewed more as a public good. We know that it's a renewable resource. We have new water falling on our land every day. We don't want to price it as if it's some other commodity for sale. Water is special to British Columbians and to the people in my riding, and we need to treat it as special and different.

I want to talk about scarcity for a moment. Presently there's not a lot the government can do if there's a drought. There's nothing to protect homeowners with individual wells to make sure they can continue to draw water during a time of water scarcity. We're going to fix that through this law.

This act will allow to us protect aquatic ecosystems in times when water is scarce, to make sure that streams have enough water to support fish and other aquatic forms of life. It will also mean that we can ensure that water is available for essential household needs and also to maintain secure water supplies for agricultural use.

Access to water, obviously, is crucial to our agricultural sector. I'm always astonished, even with the amount of rain, the tremendous amount of rain that we get in the Fraser Valley, that we often need irrigation there as well. It's a fact, and our government is going to protect water for agricultural use. I think that's very important to my own constituents.

[1805]

I want to talk about measuring water for a moment, because concern has been expressed about this. How much water do we have in B.C., and where is it? We have no idea because not all licensees have reporting requirements. It's hard to manage what you don't know much about.

This bill has provisions in it to improve our knowledge about our own water resources. Our new act will allow us to require licensees and water use approval holders to keep records of water use, to report water use and to set standards for how water use is measured. I think these things are a great step forward.

Finally, I want to talk about governance. I know that there are some in our riding who have emphasized complete local control over water in a given area, but I have opposed that on principle, because water has this tendency to move, and water belongs to all the people of B.C.

In section 5 of the bill it vests all the use and flow of water of B.C. in the government. That's just another way of saying that it vests the use and control of all the water of B.C. in all the people of B.C.

Water is not local. It can't be controlled exclusively by any local authority. Water has this tendency to flow from place to place, and complete local control would inevitably affect downstream users in a negative way. There needs to be an overarching provincial authority that can make sure there is enough for everyone. I would reiterate and support that principle of vesting all of the authority over water in all of the people of B.C.

That being said, there is provision in the bill to delegate some authority over water to other officials, including local officials, and we'll be able to provide opportunities for the public and stakeholders and First Nations to be involved in decisions about water.

In conclusion, I think we have an act here that fulfils our election promise and ensures that we'll have the legal tools we need to measure our water; to manage our water in times of scarcity; to get value from our water; to encourage the efficient use of water; to preserve water for domestic and agricultural use, particularly in times of drought; to decide how to divide or allocate water between industrial and other users in a fair way; and to ensure that all British Columbians — including First Nations — have input into decisions about how we use our water.

I think this is an admirable bill. It will have my full support and, I hope, the support of this whole House.

L. Krog: Always delighted to rise in the chamber.

I think we've all read enough to understand that water is now prophesied to be the new oil. Certainly, several decades ago it was clear that imperial powers around the planet, the major nations of the world, were all jockeying to ensure that they had a continuous supply of oil available to run their economies. Once we moved from the
[ Page 2665 ]
extensive use of coal for fuelling ships and into oil and petroleum and the great advent of the automobile, oil became where it was at.

For example, we know that the United States very wisely secured agreements with the Saudi Arabian government of the day in order to ensure the supply of oil. We know that Hitler's armies were largely defeated by the absence and the unavailability of oil.

The new oil, the new lifeblood of the world is becoming water, so it's extremely timely that the government finally brings this in. I can tell you it has not come without some controversy over time.

I certainly recall in the '90s there was a proposal to bring in a new water act, but Jack Weisgerber — who became leader of the B.C. Reform Party and has done very well, receiving various appointments from this government in particular — led the charge in those days. The threat was, of course, that they were going to tax your wells. They were going to tax your wells. Jack did a good job, and the government of the day backed down from bringing in a new water act.

I don't say that with any pride, but it's sort of public record, and there's no sense pretending that history didn't happen.

The reality is, with increasing urbanization, increasing demands on water and a recognition of climate change, a water act that actually addresses the significant concerns around this particular resource…. You can call it the basis of life. However you want to phrase it, whatever highfalutin terms you wish to use to describe water, it is a paramount consideration for any modern society. There is no question that water, its overconsumption, its misuse and its waste have become significant around the planet.

[1810]

We need go no further than our own backyard, but I'll start with a more common example, because it relates very much to the whole issue of agriculture, the salinization of the soil in the great breadbasket of California, the Central Valley.

We know that the famous Colorado River doesn't make it to the sea anymore because of consumption. We know that our reliance on vegetables from California will change in the very near future. We know that with climate change, regardless of the supply of water in addition as a problem, certain climates will not be able to produce food without a significant diversion of water, and water that simply doesn't exist anymore.

It becomes even more imperative that agricultural land which has any potential for productivity is even more and more important. The concept that we would consider seeing the removal of agricultural land from the agricultural land reserve, when we talk about water, is a fairly significant issue for British Columbians.

It is why the Water Sustainability Act, on one hand, is progress, whereas the legislation to essentially divide the agricultural land reserve into two parts is a retrograde step. The two, I would argue, essentially go hand in hand. The availability of water to water the crops is crucial, and you need the land for the crops. What may or may not be available or make sense today will certainly make sense as climate change approaches.

I remember some years ago Dr. Richard Hebda — he was, certainly, at that time and I believe still is the chief botanist at the Royal B.C. Museum — was giving a completely non-partisan and fascinating presentation. He pointed out, with respect to forestry, that the western red cedar, which is a prime source of fibre, if you will, and a much desirable tree for the forest industry, would disappear from the west coast in 50 or 60 years, based on climate modelling. The Garry oak, which is native only to southern Vancouver Island and some of the southern Gulf Islands, would grow happily in Prince George.

Now, what that means is that we are in a period of adaptation, and that's certainly what the UN report has indicated. So how a society manages its water becomes even more and more important. For those of us who've enjoyed the privilege of being able to travel up to the Okanagan to buy wine from time to time, that whole area — the prosperity of it, if you will — the wine industry, the orchardists in previous times, certainly, were all reliant on the provision and steady availability of water.

Water is at the root of agriculture, and societies that cannot feed themselves and are reliant on others are, in a sense, in thrall to those other societies. I think there was a report the other day indicating that within a few decades there will be something like only 17 nations on the face of the earth that will be in a position to provide food for themselves and surplus food products.

Now, I can't begin to recite whether those are small countries or large countries, what sort of geography we're talking about, but what that tells me is that agriculture, and water, therefore, become increasingly important. The assumption has always been that technology, that science, that fertilizers, that whatever, whatever — that mankind will somehow discover the new solution to the growing problem, and everything will be fine.

Certainly, you can argue that world population growth isn't diminishing significantly. Forty years ago college professors, teachers were all warning us, as did Paul Ehrlich in the Population Bomb, that with increasing population we would see world famine. We would see the kind of social dislocation and wars that would flow from that.

[1815]

What we have seen is that it hasn't quite happened that way yet, but the world population has certainly increased dramatically and, it appears, will continue to increase dramatically. Nations that can't possibly sustain themselves are seeing incredible population growth. Nations in arid climates are facing devastation, droughts and famines. We only need to look to Ethiopia, the former Abyssinia, if you will, Somalia, places like that, where the
[ Page 2666 ]
social order in many respects has broken down entirely, nations that can barely sustain themselves — all getting back to the issue of food and water.

I'm delighted that the government has chosen to introduce the water act, and I must say, giving the sweet approach as opposed to the sour, it appears that with some reservations, the Water Sustainability Act has met with a fair bit of support and not a great deal of criticism, because it recognizes, I think, that without regulating groundwater, we are going to face the same sorts of problems.

It's quite interesting. For instance, the community of Lantzville in the Parksville-Qualicum constituency has recently entered into agreements with the city of Nanaimo with respect to the provision of water because it can't rely on its wells any more. Communities are discovering that the concept of unlimited growth and development just isn't on, because based on our present consumption — Canadians are a high per-capita consumer of water — we will face significant water shortages in a province that is always jokingly referred to as the place where everybody is always wet because it's always raining.

I was speaking to a friend earlier today who has just retired after a very successful career in the federal public service and used to reside just outside of Ottawa. Speaking to one of her friends, the friend was complaining that while Milly was out here enjoying sunshine, in Ottawa they just got I think another 15 or 20 inches of snow.

Those kinds of dramatic weather changes mean that there will be even increasing demands on governments to deal with adaptation issues. It also means that notwithstanding the rain we have out here, which we associate with an oversupply of water, the truth is that groundwater is and has become a significant issue.

For those native-born British Columbians, particularly those who grew up on Vancouver Island — and I certainly enjoyed that privilege — it is only in the last decade that you have seen, completely unscientifically, I might add, the deaths of trees, particularly cedars, because there isn't sufficient groundwater to sustain them anymore. That's not something we saw three and four decades ago.

There is undoubtedly a significant climate change taking place, and I'd like to think we won't be spending any time in this chamber arguing about the cause of that. It seems fairly clear that humanity, and we're all consumers, is making its due and full contribution to that climate change. That climate change means and that population growth here in British Columbia means that access to water is becoming an issue even for us.

It's important that as a society we get ahead of the game. Arguably, we're still behind, even with the introduction of this bill now. We should have done this ten and 20 years ago. But we need to get ahead of the game, because we only need look to other countries around the world where water resources are so absolutely precious — Jordan, Israel, Egypt, Lebanon, Syria. Those countries which face significant challenges in geopolitical terms also face significant challenges because of water.

[1820]

It is, therefore, important that we as a society step forward and provide an example, if you will, of what needs to be done with respect to water to ensure that we monitor; that we use our resources carefully; and, frankly, as municipal governments are starting to figure out, that water be charged on the basis that will encourage a reduction in consumption. We can no longer be profligate users of that which we think will continuously fall from the sky and fill up our wells and our reservoirs.

It is simply unacceptable in 2014 that we continue those profligate ways while we know that around the world people face, literally, starvation and incredible deprivation because of their inability to access water — because they can't water their crops, can't water their livestock. They can't even provide enough water to sustain themselves. They can't clean themselves. They can't support the kinds of industries that use significant amounts of water.

That brings me to one of the issues that we have to confront as a society, and that's the issue of fracking. It will be interesting to see how the Water Sustainability Act works in conjunction with fracking, which requires a significant use and consumption of water. It's key. It's going to be key for us when it comes to the pricing of industrial and commercial water use. It's going to be key that we not waste our resource in the belief that we can continue along that path.

We need to encourage the kind of conservation, as opposed to consumption, that is consistent with a society that has access to knowledge, that has a well-educated population, that has the financial means, I would suggest, to ensure that we don't waste what we have been so generously given by the good fortune of being able either to immigrate to or live in this country and this wonderful province.

I think there is no better example of the lack of attention to this issue than the fact that — what is it? — Nestlé Waters Canada will draw 300 million litres of water for its bottling plant in Hope. Currently it pays nothing for that resource — nada, zippy, zero. I mean, it's inconceivable that you would go to Syria or India and try and explain to a government official or a peasant that a company can take 300 million litres of groundwater without any return to the government, without any return to the owners of the land, if you will.

And yet, that, in fact, is the case in British Columbia today. That is the political and legal and economic reality — that Nestlé is in a position to draw that water, with no small consequence, and the only benefit that we receive in return as a society, as government, is the provision of some employment arising from that extraction. With re-
[ Page 2667 ]
spect to everything else, there is no return on it.

It reminds me of one of the great methods of encouraging people to support the NDP in the 1972 election. I've mentioned it before in this House. The NDP had a pencil, and on the pencil was stamped this saying. It said: "B.C. gets less royalty for a tonne of coal than the cost of this pencil." That was 1972. Mercifully, we increased revenue from coal for the public after that, but it is that kind of attitude about a resource that we need to think about when we're talking about water.

The concept that you continue to use it, that everyone gets to draw on it without resort to being obligated to disclose how much — without measuring, without testing our aquifers, without ensuring that we are not using it in a way that is unsustainable…. All of those things are incredibly important.

[1825]

Without water monitoring, we have no idea where we're at — no idea. It is incumbent upon government to ensure that that information is secured and made available so that governments can make the tough decisions — whether it be municipal governments when it comes to the question of growth or provincial governments when it comes to the issue of taxation or charging, if you will, for the consumption of the resource.

We never want to be in a position where government has to say: "Oops, sorry. We're going to turn off the water for a day or two." Imagine for a moment. Many jokes have been made about increasing ferry fares and saying that if you said to the average member of the public, "We're going to shut the highway down for 30 percent of the time," that would be acceptable. Well, you can't turn off people's water.

Noting the hour, I would move adjournment of the debate. I hope to have an opportunity to continue to speak to this matter on another day.

L. Krog moved adjournment of debate.

Motion approved.

[Madame Speaker in the chair.]

Committee of Supply (Section A), having reported progress, 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 tomorrow afternoon.

The House adjourned at 6:26 p.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF
TRANSPORTATION AND INFRASTRUCTURE

(continued)

The House in Committee of Supply (Section A); S. Sullivan in the chair.

The committee met at 1:40 p.m.

On Vote 44: ministry operations, $812,293,000 (continued).

G. Holman: I did have a couple of questions about transit in the greater Victoria area. As I'm sure the minister is aware, the greater Victoria transit commission has requested support from the province for a two-cent increase in the fuel levy to help fund expansion of the service in the region. My understanding is that the transit commission has gone to the CRD board and received broad political support for that proposal from the CRD board. I was wondering if the minister could inform me what the status of that request is, in terms of your response at this point.

Just to make a general point, in my constituency and, I know, throughout the regional district, certainly, there is a need for expanded transit service. You're aware of the success that the Saltspring service has had, and I'll be making some comments about that later in the week. There is going to be a celebration of the increase in the ridership on Saltspring. The southern Gulf Islands, as you may be aware, are looking at…. Transit is doing a feasibility study for some of the other southern Gulf Islands.

Of course, on the peninsula there is a whole range of need. There are thousands of workers working in the west Sidney industrial area who are, essentially, driving their cars. There certainly is need for improved service there.

The Tsawout reserve has requested an extension of the existing service further into the reserve. Brentwood Bay, where the ferry is, needs a stronger transit connection. There are a number of examples where there's a need for improvements on the Saanich Peninsula in my constituency and also the regional district as a whole. The approval for that two-cent levy would be an important step towards implementing those kinds of service requests.

[1345]

Hon. T. Stone: I want to start off by welcoming the member for Saanich North and the Islands to the estimates debate this time around. I look forward to, I'm sure, a number of questions on a number of different topics.
[ Page 2668 ]

First, on transit, the member is indeed correct. We have received a request from the Victoria Regional Transit Commission for approval to increase the fuel tax. The number one consideration that we have in assessing this request is, obviously, affordability for families and the impact that this new fuel tax would have on the economy.

I met with the VRTC chair and a few other representatives not that long ago and was very clear at that time that we would need a detailed business case from them, and not just on what the additional moneys that an additional fuel tax would actually be able to provide. So in terms of additional capacity and additional…. If money was to be used towards just increasing bus capacity, or if some of it was going to go to other purposes. But we also need to understand from an analysis perspective what the impact of the additional tax would be on the economy generally.

We're prepared to work with the VRTC as they pull that information together. Obviously, we view the VRTC in the context of B.C. Transit as a key partner in helping us achieve our provincial transit goals. There have been a tremendous number of success stories. A big part of the success, I should say, is what has been happening in greater Victoria with respect to transit expansion.

I would be pleased also, perhaps off line, to sit down with the member and to talk about ideas that he has with respect to how we may work together to look at feasibility of transit options for folks on the Islands, in other parts of his constituency. We will perhaps facilitate that at a time in the near future.

G. Holman: Thanks to the minister for that. Is there any sense of timing on these deliberations around the economic implications for the fuel tax increase, either on your part or the transit commission, that you can provide at this moment?

Hon. T. Stone: Certainly, in my mind, the ball is firmly in the courts of the VRTC. I'm well aware of their request. I am well aware of, I think, the ambitions that the VRTC has in terms of expanded capacity. What I am not aware of yet is the impact that an additional fuel tax in greater Victoria would actually have on the economy.

That's the piece that we very clearly put back to VRTC. Now, on that, B.C. Transit is more than prepared to work with VRTC on a business case, and I'd be absolutely willing to take a look at that business case once it's provided.

[1350]

C. Trevena: I would like to ask the minister more generally about transit. The hydrogen bus demonstration project, which is now complete in Whistler — I understand it cost $89 million. It was running. It's now complete. I guess: what next? We had the buses. We had the questions in the last estimates, where the minister explained bringing the fuel over and how it was all worthwhile. But it's now over. Is this a project that was deemed a success? Is it a demonstration for future activity? What's going to be happening?

Hon. T. Stone: I thank the member for North Island for asking the question about the hydrogen fuel cell bus project. She quite correctly has indicated that this project officially came to an end literally yesterday, on March 31.

The Whistler hydrogen fuel cell bus project was the largest demonstration of this zero-emission technology in the world. Indeed, we are very proud to have played a role with the hydrogen industry in helping them literally prove the technology and its application with buses, particularly in a climate as harsh as Whistler's is.

That being said, we came to the decision that as a result of the fact that we believe that every facet of the project had actually accomplished its goals, had actually met the objectives that were desired at the outcome of the project, we would not be extending the demonstration project for any further period of time.

I will say that we remain committed to cleaner-burning fuels in our bus fleets, so notwithstanding the decision around hydrogen, we are very proud of our commitment and B.C. Transit's commitment to LNG-fuelled buses. The Nanaimo transit system has taken delivery of the first LNG-powered buses there — 25. The second demonstration project for the LNG program will be in Kamloops. The Kamloops transit system will take delivery of those buses early next year.

C. Trevena: Why did the hydrogen bus project stop? What was the reason, if it was so successful and it proved that the technology worked and everybody was loving it so much?

[1355]

Hon. T. Stone: With respect to the member's question on the hydrogen bus program, this was a five-year project. The project just came to a conclusion yesterday. As I said in my last response, the project was successful on each and every point. It was an $89 million program in terms of the provincial support for this program.

We are very proud of the technology that Ballard has developed. The technology that was used in the buses at Whistler was sixth-generation Ballard hydrogen technology. There are now going to be buses in Aberdeen, Scotland, seventh-generation hydrogen buses, that will feature Ballard technology.

Ballard, I think, has got a number of other transit systems in the world interested. At least they're in discussions on this. They've also been very successful at applying their technology to other applications, whether it be backup generators, forklifts and so forth. So we're very proud of the role that we played in the program.

But the program was never contemplated to be anything more than the five-year time horizon that has now come to an end. Indeed, we are focusing our efforts and
[ Page 2669 ]
energies into LNG fuel propulsion of our bus fleet across British Columbia.

C. Trevena: A couple of questions from that. One is…. Just taking what the minister is saying — that it was never expected to continue — $89 million is quite a lot of provincial money to invest into a demonstration that is not going to go anywhere.

There was at the time of the previous Premier, Gordon Campbell, a commitment to that hydrogen highway idea, starting in Whistler and ending up somewhere down in California. So the assumption from, I believe, many people was that $89 million was going to be invested into…. You had the demonstration there, but it was going to expand through B.C. Transit and B.C.

If the minister believes that is different, I'd like to have an explanation of why that $89 million was done just for a showcase. It seems an awfully expensive showcase when the province is then turning away from hydrogen fuelled vehicles.

One of the very simple questions is: what's going to happen to all the buses now? I mean, they cost over $2 million each. What happens to them? What happens to the plans for growing that market and that sector of the transit fleet?

[1400]

Hon. T. Stone: In terms of the question of why not continue the program, if I understood the member correctly, the province of British Columbia did invest $89 million in the program. From the beginning of the program five years ago to the end of the program yesterday, the plan all along…. The announcements that were made, any other documents that were publicly announced, and so forth, all referenced a five-year program. That's point 1.

Point 2 is that, again, by every measure the program has been successful. Since the beginning of this program to today, we now have a hydrogen cluster in British Columbia, largely centred in Vancouver. Over 1,000 people are employed in the hydrogen industry — not all at Ballard Power, but a good number of them. That's one of the larger hydrogen clusters in the world. We're very proud of that.

As I mentioned earlier, Ballard has been successful as a result of this demonstration project at not just positioning their technology for sale in bus fleets around the world, as evidenced successfully by their recent announcement to put their technology into the seventh generation fleet in Aberdeen, Scotland, but also to put their technology into other applications like backup generators, forklifts, and so forth.

The program has been successful. There is no need at this point for the taxpayers of British Columbia to put more money into this program. It's on its own legs. It's doing very well. They're entering into commercial agreements to sell this technology to bus fleets in other parts of the world, and that's a very good thing. That was one of the intended outcomes of the program.

In terms of the second part of the member's question with respect to what happens to the hydrogen buses that have been serving Whistler, as of today, they're parked. What B.C. Transit will begin is a process immediately of taking a good long look at each and every one of the buses and making a determination as to whether they can be repurposed and retained within the B.C. Transit fleet elsewhere in the province.

I should correct myself. I think earlier an answer I said LNG, and I meant CNG.

So they could potentially be repurposed within the B.C. Transit fleet as CNG buses or as diesel buses. They could also be sold. I understand that B.C. Transit is exploring potential opportunities with other transit agencies in different parts of the world to sell the buses as hydrogen-powered buses.

C. Trevena: Thank you, Minister. A couple of questions from that. One is that $89 million was invested in this, into a public transit system that the government of the day looked at as an experiment but has actually walked away from. We've walked away from that as the way forward. B.C. Transit is having to deal with what to do with the $2.1 million buses, each. I have a couple of questions. I may be reading it wrong, but the minister is talking about the support that went to Ballard.

[1405]

The way the minister is talking — again, I may be reading this wrong, so please do correct me if I am wrong — it sounds like this is a multi-million-dollar subsidy to a single company to ensure that that company can grow and prosper, creating jobs in B.C. and selling technology out of B.C. That's how the answer sounded to me. Correct me if I'm wrong, if we're not providing a multi-million-dollar subsidy to one company here.

The other question I have…. This was a part of a bigger project from the former Premier, when we had some commitment to carbon neutrality and trying to bring down greenhouse gases. In that, I know that there was some talk about having other areas where we might have hydrogen buses. I wonder if the minister can at least state whether there are any other hydrogen fueling stations for transit elsewhere in the province that have been established.

[1410]

Hon. T. Stone: I certainly would be willing to provide the member with a very detailed breakdown outside of the estimates process here as soon as possible, but I'll give you the numbers that I do have.

The $89 million program. First off, $45 million of that represented a contribution from the government of Canada; $26.7 million was the B.C. government's contribution; and $16.8 million came from the resort muni-
[ Page 2670 ]
cipality of Whistler, with approximately $1 million also being contributed by the Canadian Hydrogen and Fuel Cell Association. That's the first point.

The second point, in terms of how those dollars were actually expended. About $40 million represented the investment in the buses and the hydrogen fuel stacks combined. That part of this overall project actually went out to competitive bid. It was New Flyer, which is a big company in Manitoba that builds bus infrastructure…. It was a partnership between New Flyer and Ballard that ended up winning that bid. Again, that was approximately $40 million for that part of the project. The balance of the $89 million represented the cost for the fuelling infrastructure and some upgrades to the B.C. Transit facility in the resort municipality of Whistler.

C. Trevena: I thank the minister for that breakdown. I did ask, as well, because there was the potential rollout further, whether there were any other hydrogen fuelling stations anywhere in the province being built or that have been built, ready to go.

Hon. T. Stone: My apologies. I had neglected to mention that part. There are no fuelling stations anywhere in British Columbia, and there are no plans to build any in the near future.

C. Trevena: This was going to be the hydrogen demonstration project that was much touted, the California-to-B.C. green highway. I think it's called the Pacific Coast Collaborative green highway from Baja to B.C. I wondered, one, whether the province is still committed to that, in the transportation concept.

Secondly, how committed is it in terms of the fact that…? Looking at, again, the transit service plan, we're seeing with the end of the hydrogen fuel project in Whistler, an increase in carbon intensity per service hour and no sign — or a very, very small decrease over 2014-15. It's a very small decrease for the next two years, and it's still higher than 2012-13. If the minister could elucidate that, great.

[1415]

Hon. T. Stone: Well, first off, I'll make the statement that British Columbia continues to remain committed to low-carbon-emission technology, particularly in its application from a bus fleet perspective. As part of that, British Columbia is also a strong and an engaged partner within the Pacific Coast Collaborative, which is, as the member knows, the organization that includes British Columbia, Washington, Oregon and California.

Now, within that collaborative, there are a tremendous number of projects and technologies and priorities. Hydrogen continues to be at the table, and it certainly continues to be in that mix. I would also say that electric vehicles and the use of electric technology is also increasing in prominence and certainly seems to be of significant interest to a number of the participants in the collaborative, not the least of which are Washington and Oregon. At the end of the day, British Columbia is going to continue to be a partner in this collaborative and is going to continue to be committed to low-carbon-emission technology.

On the second part of the member's question, with respect to B.C. Transit's commitment around carbon and continuing to reduce carbon. First and foremost, the most important point to underscore is that this is exactly why this government is going to continue to lead the country in terms of our investments in not just the operating side of transit but also the capital side.

The best thing that we can do is get the people out of their vehicles, in terms of reducing carbon emissions overall. Certainly, a project like the Port Mann Bridge has resulted in rapid transit for the first time in 25 years — 50,000 people per month. The vast majority of those people were in their vehicles before. They're now riding this rapid bus, and that is dramatically reducing emissions overall.

[1420]

I would also end on this note. B.C. Transit has met over the last number of years and will continue to meet all of the environmental standards that it's expected to meet in terms of its fleet, from a carbon emission perspective. Part of how B.C. Transit is going to continue to better those standards moving forward is going to be by moving an increasing number of buses in the fleet to the CNG technology, which is a cleaner-burning fuel, certainly in comparison to diesel.

C. Trevena: To the minister, the CNG buses that he has been mentioning…. He mentioned there's a trial in Nanaimo, and there is going to be one in his home riding of Kamloops. Is CNG fuel tax-exempt?

Hon. T. Stone: I'm wondering if the member could clarify her question or just provide a little bit more detail into specifically what she's looking for.

C. Trevena: I'm wondering if B.C. Transit has to pay fuel tax on CNG, like they pay fuel tax on diesel — whether they have to pay fuel tax on that, whether it's an incentive to increase the use of that technology or whether there is still a tax that's coming back to the province for that.

Hon. T. Stone: To the member for North Island, I believe that the answer to her question is yes. However, we're going to undertake to do a detailed analysis and make sure in looking at the tax structure that we're absolutely precise in that response. We'll get back to the member as soon as possible.
[ Page 2671 ]

C. Trevena: I thank the minister. I've been very aware of the limited time. This is a big ministry. I thank the minister for providing written responses where we can't get the verbal one quickly. I will be providing written questions for all those areas that I've either had to miss, like bicycles, or get through somewhat too quickly for my own comfort. So there will be a list of written questions at the end of this process.

My last question on B.C. Transit might be, again, a very simple one to answer. Capital projects. There's going to be a new transit facility here in Victoria, and there's going to be one in Kelowna. Both have the same description in the service plan. Both face the same risks, effectively. They don't even have the land for them. Both are worth about $60 million.

I wondered if the minister could explain why there's been $100,000 — at the time that this came out — spent on the Kelowna one and nothing on the Victoria one. It might be a simple answer.

[1425]

Hon. T. Stone: The question was: why has $100,000 been spent towards the $60 million project for a new transit facility in Kelowna and no moneys have been spent yet for a similar facility in Victoria, both of which are in the plan? We're 100 percent committed to both.

The $100,000 was spent on the Kelowna project quite specifically to engage an engineering firm to look at the feasibility of some options to extend the life of the existing facility in Kelowna. The capacity is just so maxed in Kelowna that while land is being secured and the longer-term plan is being developed for the new facility, the $100,000 was utilized to come up with some options to extend the life of the existing facility by five-plus years.

I'm advised that, in fact, as a result of the expenditure of those funds they have come up with a solution to extend the life of the Kelowna facility.

C. Trevena: Just to advise the minister, we're now going to be moving on to ferries — a couple of questions on inland ferries and then looking at B.C. Ferries — if you need to change staff.

I've got a couple of questions on inland ferries, and I may go back to them. I've got a colleague who wants to come in. He did alert me it would be around 2:30. We might be running a little ahead of time. He wanted to ask a question here.

We have the new Upper Arrow Lake ferry being built. It's almost completed, I believe, up in Nakusp. It is being built in Nakusp — $26½ million to build it. It created, obviously, a lot of work around Nakusp for that.

I just wondered why the minister…. We talk quite a lot about ferry construction. We've obviously talked about B.C. ferry construction going to tender overseas, the cable ferry having the tender here in B.C. Why has this one sort of gone under the radar so much? It's happening, it's almost been launched, and it's one that people don't seem to be celebrating, except for the good people in Nakusp, who are getting a lot of jobs out of it.

[1430]

Hon. T. Stone: With respect to the Arrow Lakes ferry, the ferry that the member for North Island mentioned, this is a tremendous success story. I agree with her 100 percent. It is a ferry that, by the time it's done, will have created about 65 construction jobs. Those jobs have actually been created all across the province. The steel was fabricated in the Lower Mainland and shipped up to Nakusp, and different parts were made and provided from other parts of the province as well.

I will say that this particular ferry was procured through the standard competitive procurement process that we have. There were a number of different companies — some in Canada, some outside of Canada — that expressed interest early in that procurement process. I believe, at the end of the day, there were two bidders left standing at the end, and the contract was awarded in May 2012.

We do expect that the ferry will be complete and ready to be launched this summer. Hopefully, it'll be at a time when we can all be there to celebrate the successful launch of this new ship.

The Chair: The member for Kootenay West.

K. Conroy: Yes, the very community where the ferry is being built. I was very happy to hear that.

I wanted to just talk a little bit more about what's happening in Nakusp and the work that's been done. They've employed a number of people, a lot of local people. They've managed to bring in a lot of people that have the skills — a lot of welders, which is what's needed. It's been a real boon to the community and a boon to, I think, shipbuilding in the province — the fact that a small ferry like that can be built in a local community.

What is hoped now is that there might be potential for more work to be given to the folks that are building the ferries in Nakusp. I know there are a number of ferries that need to be retrofitted. The Galena Bay ferry needs to be done. Arrow Park, Francois Lake and Burns Lake all need to be done.

This would be a perfect fit. They're small ferries. It's already set up. The carbon footprint would be very minimal to move the existing ferries that need to be retrofitted to the site there in Nakusp. Those are all ferries within a short distance of the site where they're building the new ferry.

[1435]

It's set up perfectly to build and retrofit ferries across the province, as opposed to dragging them all the way down to the Lower Mainland. It's right there in Nakusp, which is close to where they actually sail. So I'm put-
[ Page 2672 ]
ting in a plug to the minister that this would be a perfect opportunity to keep people working. Existing skills are there, and I think it would be a great opportunity for the region and for the province to maintain those skills that are there and carry on with the work that needs to be done in the province.

Hon. T. Stone: I thank the member for Kootenay West for her question/plug, and I think it's great. It is a success story. This is going to be a beautiful, gleaming new ferry — as she put it well, I think — that was built in a small community in the interior of British Columbia. I think it's something that we'll all be very proud of.

To that end, there is no question that there will be additional refits and other related capital work coming up for the inland ferry system. The member mentioned a number of the ships in question and so forth. We are refining the capital plan at the moment to make sure we've got those priorities right and the timing and so forth.

With respect to the procurement, first and foremost, we're committed to a transparent and fair procurement process and one that ensures that the taxpayers are getting the best value for dollars spent. I will say, however, that the skills that have been developed and that exist now in Nakusp, the jobs that are there now, will have demonstrated through this initial project their ability to deliver a ship on budget and on time. That will certainly put the proponents involved in this project in a very good position to bid and, hopefully, bid successfully on future projects.

K. Conroy: I thank the minister for that and hope that the time frame will be such that we won't lose all the people working there who may leave their community to go find work elsewhere, because welders are a needed trade in this province. A lot of them want to stay there and live there, so I'm hoping there is a time frame that's going to move smoothly with the finishing of the existing ship and then on to the new projects. I'm hoping the minister recognizes that time frame.

Hon. T. Stone: I certainly do. We will keep the member for Kootenay West apprised of the timelines moving forward. We are, as I said a moment ago, working on that capital plan. We'll be happy to share those details with the member in the coming weeks.

[1440]

C. Trevena: It is fantastic for Nakusp, and I think it shows the ability of our communities to actually build ferries.

I have a follow-up on that. We're obviously going through the acquisition of three new ferries for B.C. Ferries. We've got the fourth, the cable ferry, which actually is being built by Seaspan, but whether the minister would look at the skills that we have here in B.C. and the ability to build a ferry in a place like Nakusp. We're looking at intermediate-sized ferries for B.C. Ferries — that, in future, there would be a preference given to the ability to build in B.C. than having to go out to international tender.

Hon. T. Stone: Certainly, the balance that we will want to strike moving forward, which we believe Ferries has been trying to strike in the past number of years…. On the one hand, if we can continue to create jobs and build British Columbia's shipbuilding industry and help grow that industry over time through the procurement of vessels, that is absolutely our intention.

On the other hand here, we also want to make sure that, in moving forward with vessel procurement, we're doing so in as responsible a manner as possible when it comes to the expenditure of tax dollars. It's really trying to strike that balance, which is the critical piece moving forward.

The very large federal contract that was awarded in part to British Columbia's shipbuilding industry — no question that that will have a positive impact on Seaspan and other shipyards to enable them to skill up and grow their expertise. We were very pleased to play a small role in helping land that contract.

We're very pleased that Seaspan was awarded the cable ferry vessel very recently. It's a small vessel, but it's a $15 million project nonetheless that will be built entirely here within British Columbia.

Like the member opposite, I think we were all disappointed when Seaspan pulled out of the procurement process for the three intermediary ships that B.C. Ferries is in the middle of procuring. That was their decision to do so. It's unfortunate from the perspective of creating more jobs as a result of those contracts.

What Seaspan has said, however, is that they just literally don't have the capacity today to build three intermediary ships with the work they have from the federal government and the work they now have with respect to that cable ferry.

What I've said to them and to other shipbuilders, and what I've said to Jim Sinclair of the B.C. Federation of Labour, and what I've said to the boiler and marine workers union is that we are very interested in sitting down and talking about a longer term, looking at ferry procurement, with B.C. Ferries and looking at the long term here.

If indeed there are multiple vessels that B.C. Ferries will need to renew its fleet over the next 15 to 20 years, let's make darn sure that we procure those vessels in a manner that gives B.C. shipyards the best possible chance to win those bids but to win those bids within a competitive environment.

I'll be having further discussions with Mr. Sinclair and others and B.C. Ferries obviously in the coming weeks and months on that.

G. Holman: Regarding shipbuilding, thanks for your
[ Page 2673 ]
response to that question. I'm wondering if the minister or the ministry have done any economic analysis — particularly on the provincial government revenue impacts — of building ferries in British Columbia.

You're probably familiar with the study done by the Columbia Institute for the three intermediate-class ferries. I think if the capital cost is in the order of $300 million, something in that order — you can probably give me a more precise number — they've estimated that provincial government revenues generated by building those ships in British Columbia would be roughly $36 million.

[1445]

I'm just wondering. In your deliberation about trying to strike that balance between the taxpayer and generating economic benefits and jobs within British Columbia, do you take that kind of analysis into account? Have you done any work in that regard, or do you plan on doing that kind of work in coming to those decisions?

Hon. T. Stone: Again, we'll reiterate some of what I've already said. There is no question that building ships in British Columbia — barring any other consideration — results in jobs and that there is a significant degree of value in having those jobs here in our province, not just from the tax revenues generated but also from the skills developed and retained locally. We certainly want to make sure that that happens to the greatest extent possible, but we also need to strike that balance.

I've talked about it a bit today already: ensuring that we're absolutely respecting the taxpayer in getting the best value we can for the vessels that are purchased for the refits that are done.

I might be going way out on a limb here, but I suspect we may be talking about fares at some point this afternoon. It may be a huge stretch to suggest that, but you know, one of the greatest pressures on fares in the years ahead is going to be the capital program, and increased amortization and financing costs related to that program.

Any way you look at it, the B.C. Ferries fleet is in need of a significant amount of upgrade and refit. The pressures that are going to potentially be there as a result of the increase in capital costs…. The pressure on fares will be significant. It's all the more reason that we need to make sure we double-down on the side of getting the best possible value for taxpayer dollars spent in the procurement of vessels.

[1450]

I will end on this note. Again, as I said earlier, we're committed to sitting down with B.C. Ferries and with labour as well. I do not pretend to have all of the answers, nor does B.C. Ferries. I think this is going to be a key challenge in the years ahead at B.C. Ferries. Government, industry and labour need to sit down together and talk this through.

That certainly is the commitment I'm making on behalf of the B.C. government.

G. Holman: A quick follow-up to that, and thanks for the minister's response. The linkage that you're making between fare increases and the cost of capital — my only comment on that, and we probably will come back to it later in estimates, is that unlike…. Other transportation infrastructure — the users aren't forced to bear the full cost of capital replacement.

When we talk about building a new highway or a significant upgrade to a highway, we don't then impose those costs on the users of the highway. That's a rhetorical comment. If the minister wants to respond…. It may come up later in estimates.

C. Trevena: I think that rhetorical comment is exactly what I was going to follow up with when I glanced over at my colleague — that the ferry users are the only ones who are paying for capital. I know there are tolls on the Port Mann Bridge, and there were tolls on the Coquihalla.

My question to the minister is: why is there a $5 million reduction from the province to B.C. Ferries this year, when we see an increase in spending on B.C. Transit and an actual freeze on tolls on the Port Mann Bridge until 2050? At the same time, we see a reduction in the transfer from the province and that increase in fares — 8½ percent in the last three months.

[1455]

Hon. T. Stone: Again, in answering the member's question about why the $5 million difference year over year in operations. In 2013, in order to enable the engagement process that took place in November and December, the Ministry of Transportation provided a one-time increase in taxpayer contribution of $7.1 million. That brought the one-time taxpayer contribution above and beyond the regular fees paid from $79.5 million plus the $7.1 million, bringing that up to the $86.6 million, which is often referenced by me as the additional taxpayer contribution within that PT3.

There was a $7.1 million one-time payment made last year. Why is the difference $5 million this year and not $7.1 million this year? The difference is because we've actually increased the dollars within the social program that we have, where we offset the costs for seniors, for students and for the disabled. The increase in those programs is a little over $2 million, so you take the $7.1 million minus the $2 million, and you have a difference of the $5 million that you mentioned.

C. Trevena: That leads me into a couple of things. Question 1. What exactly is the figure for social programs? Is it divided into how much is going for the seniors, school kids, disabled?

Question 2. There has been in the past money or passage available for people accompanying students, when they're travelling with students. I was wondering whether that is still available — the parent fares on B.C. Ferries.
[ Page 2674 ]

We have here a letter from my colleague from Powell River–Sunshine Coast — one of his constituents, a Gambier Island parent. When parents had to take ferries to get their kids to school or travel with the kids, they used to be able to travel free. Now they're paying full fare. With this week's or this year's 8½ percent increase in fares, it's obviously going to impact people. I'm wondering if that is being looked at to be reinstated.

[1500]

Hon. T. Stone: Actually, if the member for North Island would indulge me for a moment, I'm just getting another piece of information back to you that reflected a question that you asked earlier.

I think it's important to also just say for the record that in terms of refit work that B.C. Ferries actually does in British Columbia today on an annual basis — so quite separate from new vessel procurement — the total dollar value of refit work that B.C. Ferries does each and every year with British Columbia shipyards and British Columbia workers is in and around $100 million per year.

It's not an inconsequential dollar amount today. I think we all agree. Let's work on strategies to figure out how we can build on what is a pretty good foundation, in terms of the vessels that we want to procure in the future.

Back to the last question, in terms of the parent programs within B.C. Ferries and specifically the Gambier ferry which was mentioned, there are actually no parent programs and haven't been for quite some time on any other ferry routes across the system.

The Gambier ferry, which, as the member knows, is a passenger-only ferry, is an outlier. It was a unique situation whereby the school district in question actually provided a subsidy or some support to parents. For reasons known only to the school district, they discontinued that program.

Again, just to put a nice tight fence around the social program at B.C. Ferries, it includes students, seniors and the disabled. For the 2014-15 budget, the projections are just under $3.4 million for the student part of the program, just over $18 million for the seniors program and just under $900,000 per year for the disabled component of the program.

C. Trevena: Since seniors are starting to have to pay for part of their ferry fare, the amount that is being transferred for seniors under the social program — has that been cut in half, or is that pretty much the same as B.C. Ferries received last year?

[1505]

Hon. T. Stone: With respect to the seniors component of the social program at B.C. Ferries, I think it's worthwhile to reiterate how this has worked over the years and what the effect of the change on the seniors fare actually is, moving forward.

To date, so up to today, the British Columbia government has been providing a subsidy directly to B.C. Ferries based on a projected number of seniors that were expected to go through the turnstiles. The senior would show up Monday through Thursday and would not be charged at all for their passenger fare — again, Monday through Thursday only. The British Columbia government was providing the equivalent of a full fare for those seniors.

The British Columbia government is going to continue to do that. In fact, the funding from the province to B.C. Ferries for seniors for the last fiscal year was just over $16 million. We're actually increasing that to $18 million for the current fiscal year. That's projected to increase again, in our service plan, to about $19 million per year, next year. Those amounts will be fixed regardless of the actual number of seniors that end up travelling. We think that's a very good way to go with this.

The change, in terms of moving to a 50 percent fare for seniors, is really taking place at the turnstile. In addition to the transfer that the province is going to continue to pay on a fixed basis for B.C. Ferries, seniors will also now be asked to sacrifice by paying half of the full passenger fare Monday through Thursday.

We anticipate that asking seniors to pay half of the passenger fare will generate $6 million or $7 million per year. Those are dollars that will stay within B.C. Ferries and that we believe are critical as part of the overall solution to applying downward pressure to fares.

G. Holman: Further to that question, to the minister: does this mean that if you're maintaining the transfer to B.C. Ferries related to seniors, have you in fact made up part of the funding gap as a result of that? Can you put those together for me? I'm not sure if you understand the question, but you can ask for a clarification.

If you've maintained the funding for seniors, does that mean that you have, with that change alone, made up part of the funding gap that you were trying to make up for this particular service period?

[1510]

Hon. T. Stone: I'll take a stab at answering the question, assuming I've understood it correctly. Our strategy on the seniors program is, on the one hand, maintaining and actually escalating slightly the overall funding that's provided from the B.C. government, all the while charging 50 percent for the fare to the senior at the turnstile Monday through Thursday. Again, 50 percent of the passenger fare — they were paying the full vehicle fare previously.

It really is one of a whole bunch of other initiatives, on our part, to not just address the gap for PT3, which we're currently in, but to do everything we can now to be preparing for what we believe will be an even larger gap in PT4.
[ Page 2675 ]

This is why we're aggressively encouraging B.C. Ferries to move forward with LNG propulsion. This is why we're encouraging the use of alternative technologies, including the cable ferry for Denman Island. This is why we're encouraging Ferries to look at passenger-only vessels in complement to vehicle service on some routes. This is why B.C. Ferries is working on a new reservation and point-of-sale system. This is why, frankly, we're considering gaming as a pilot on the majors.

It's each and every one of these initiatives taken in combination that we believe is going to provide a long-term solution to keeping fares down and to ensuring that the ferry service is affordable and sustainable for the long term. There is no silver bullet. There is no one simple answer, one quick solution that you can flick a switch and suddenly fix Ferries for the long term.

I hope I've answered the member's question.

G. Holman: Thanks, Minister. I think you did understand the question. My apologies for any confusion.

Essentially, what I understand the minister to be saying is that, yes, over and above the service cuts and the fare increases and everything else that you're doing to meet your funding gap in this service period, the policy action on the seniors front is actually enabling you to deal with cost pressures beyond the service period. That's my understanding of what your response was.

I guess my question, rhetorical as it may be, is: gee, could we have avoided some of these service cuts for this service period and dealt with those other alligators in the following service period? What you seem to be suggesting is that the policy actions around seniors are helping you to address the longer term, beyond service period 3 cost pressures. Why not avoid some of the service cuts that you made in this service period and deal with that alligator a bit later?

[1515]

[G. Kyllo in the chair.]

Hon. T. Stone: Again, I come back to the high level first here. Certainly, for every day that I have been Minister of Transportation and the minister responsible for ferries, I have heard loud and clear that fares are at a point of unaffordability and that if we continue on the path that we were on, we would see fares escalate even more than they have.

That requires change. That requires doing things differently. Every consultation and engagement, including the last one in November-December, the really large consultation in 2013, the B.C. Ferry Commissioner consultation in 2012…. The number one theme that we heard consistently was: "Ferries are no longer affordable."

We said to British Columbians, particularly those in coastal communities, that we were going to fix this. That's what I intend on doing. That's what the government intends on doing. Fixing it means making some tough decisions. I know there are many that are probably tired of hearing me say that and may not agree with the solutions that we have put forward, but we are attacking this challenge at B.C. Ferries more so than, I think, any government before us.

We're taking a long view. This is why we have invested upwards of $180 million in the last fiscal year, which is a record level of contribution to B.C. Ferries. That includes the additional one-time contribution of $86.6 million. This is why I have been vigilant on behalf of government in insisting that B.C. Ferries be held accountable for its own administrative and operational costs.

In fact, the Ferry Commissioner and the B.C. government combined have said: "We're going to hold B.C. Ferries accountable for their $54 million efficiency target." They are well on their way to meeting that target through PT3.

We have insisted that B.C. Ferries rein in expenditures at the executive level. They now have half the number of executives. They've cut executive compensation by 54 percent.

Part of moving forward is the service reductions that began to take effect today — the $18.9 million. I've said consistently that these service reductions are going to hurt. They're going to result in varying degrees of pain in different coastal communities — there's no question about that — but this was a critical part of the solution, moving forward. We cannot continue to have more staff than passengers on ferries. It's just not sustainable. That's part of the solution.

[1520]

Part of the solution is the change to the seniors fare. We are asking seniors to contribute in a manner, as well, to the solution here.

It's hard, frankly, to explain to families, in particular, who are dealing with fares that have been escalating consistently for some time now why the fares continue to go up for them and seniors receive a free passenger fare Monday through Thursday. Again, a very tough decision, a very unpopular decision but the right decision, in our opinion.

While many previous governments have applied band-aids, we are trying to fix B.C. Ferries for the long term. It's also why we're looking at LNG propulsion, new reservation point-of-sale systems, interoperability and standardization of vessels, passenger-only in complement to vehicle. I understand that this may not be what you want to hear, but one can't say that they want to fix the problems at B.C. Ferries but refuse to embrace any of the solutions.

I'll leave it there. Again, to sum up, we are attacking this challenge in a very serious way, in a very deliberate and a very professional way, because we want to fix the problem for the long term. There is no silver bullet. As much as some members may wish that there were, there is no silver bullet.
[ Page 2676 ]

C. Trevena: The minister talks again about tough decisions and how hard this is. I have to say the minister would have much more credibility if he'd done a few things before changing the service structure, before increasing the fares again, before saying that seniors, who are family members of those families whose fares are going up, are going to have to pay when there is still the transfer going through — effectively, B.C. Ferries is doing a double-dipping there — so they're going to have to pay. If he had done a few things….

If he had done some economic impact analysis, so they would know what the impact of the changes in the schedules, the increased fares and the impact on seniors were going to be. If they had done some analysis, the minister would have some more credibility.

He's being left with picking up the pieces for 12 years of a failed policy. I mean, this is what we're talking about. This is what we're spending the afternoon talking about, to be quite honest. We'll be going through the details of it, of where we completely disagree with the government's position on B.C. Ferries. I'll be asking specific questions about it. But it is a government policy that has fundamentally failed. We've been left with a management company, not a ferry company, running our marine highway system, which has resulted in these spiralling affairs.

Talk about how difficult it is for families. Minister, you've got an 8½ percent increase in the last three months. This is on top of over…. I know that on my own route it's well over a 100 percent increase over the last ten years. In other routes in areas that I represent it's a 140 percent increase. Yet this is supposed to be a viable opportunity for families and for businesses. I think that we've got….

We do have really serious problems. This is not dealing with it in the long term. This is yet another band-aid. It's looking at fares as the one solution for the ferry system. It's, again, downloading. We asked the question a short while ago, when we started looking at capital costs. When we have infrastructure, B.C. Ferries is the only time where we have the users having to pay directly for the capital infrastructure. We have to pay for the operating costs and the capital costs.

There has to be a different way of doing it. The minister has not really looked at the opportunities. He's turned to B.C. Ferries and said: "Okay, we've got to make savings. Cut sailings, and let's look at increasing fares again. Oh, and by the way, we're going to put slots on the ferries too." I have a number of questions about that, which I'll get to, through the Chair to the speaker.

I'd like to ask the minister a very simple question. We have seen vehicle traffic decline, ferry advisory committee chairs are saying, to historic levels. February to February we saw vehicle traffic go down by 8.2 percent, passenger traffic down 7.3 percent. Fares have been going up. They've gone up again.

[1525]

Does the minister make any correlation to the fact that we have increasing fares, decreasing ridership of our ferries and the impact this is going to continue to have as the fares continue to go up? The minister talks about utilization rates. What he has forgotten to look at in his utilization rates is not just the car decks, not just the number of vehicles on a car deck; it's the number of passengers upstairs in the lounge. And most people are going up into the lounge because they can't afford to take their vehicles on the ferry because the rates are so high.

To the minister, a simple question, and I'll follow it up with a number of other questions. I would like to look at the consultations that we looked at — I'm just giving him a highlight here — the scheduling and moving on to a number of the other areas.

Has he looked at the very simple equation of "the fares go up, ridership goes down"? You're going to continue hurting yourself, continue hurting B.C. Ferries. It's not going to work. That band-aid doesn't work.

Hon. T. Stone: There is no question that there is some correlation between rising fares and declining traffic volumes. There's no question about that. In fact, I come back to what I said a moment ago. This is exactly why we are taking the action that we are on a number of fronts. We want to respond to coastal communities very clearly saying to government, saying to B.C. Ferries, that fares cannot continue to escalate as they have. I agree with the member for North Island that there is a correlation.

I would say, however, that if you look at other ferry systems around the world…. Just look at Washington State Ferries in Washington State. During the same period of time, the last ten years, vehicle volumes have actually declined at the same pace in their ferry system as they have declined at B.C. Ferries in British Columbia. Now, their fares have been increasing in the same percentage terms as ours have in dollar terms. Again, it's an apples-and-oranges comparison.

I think it's also somewhat simplistic to simply suggest that fares, in and of themselves, is the only cause of traffic decline. There was a pretty significant recession that we experienced in this world, and Washington State Ferries, almost to the day, can pinpoint a decline in traffic within days after the recession really took hold in the United States. The same can be said for British Columbia.

We are doing everything that we can, as I said a moment ago, on a wide number of fronts to try and apply as much downward pressure as possible on fares. Certainly, once fares can be stabilized, we would hope that that would play some part in contributing to traffic volumes increasing again.

C. Trevena: We have a couple of points, just to pick. Washington State Ferries — actually, their ridership went up over the last two years.
[ Page 2677 ]
It went down. It's gone up again over the last two years.

We're seeing at the moment an increase in fares. We have our 5 percent increase that came in today. We had the 3½ percent fuel surcharge — we keep getting this fuel surcharge — which bumps up the fares. It may not be seen as part of the performance-term fare increase, because we've got another 4 percent coming next year.

To the minister, can he guarantee that we do not get any more fuel surcharges — you'd have thought that an organization like B.C. Ferries could work out how much they're going to be paying for fuel — and secondly, after the next 4 percent fare increase — the minister is talking about downward pressure — that we would agree to have no fare increases for a certain number of years until we can sort out this mess and ensure that our businesses and our communities can get back up on their feet?

Hon. T. Stone: To the question: can I guarantee that there will be no fuel surcharges in the future? The answer is no. Can I guarantee that there will be no fare increases generally in the future? The answer is no.

C. Trevena: It's very interesting — the hands-on, hands-off approach from the B.C. government with B.C. Ferries. Sometimes their hands are really deep and dirty into fixing the schedules with the ferry advisory commission, and sometimes it's completely hands-off when it comes to dealing with fares.

I want to ask a little bit about the consultation and how we got, partly, to this place. I want to wrap a few questions in together because we have limited time.

[1530]

I wanted to know: on the engagement of the end of last year, was there an RFP put out for it — for this consultation that was carried out by Kirk and Co.? How much did this cost, and how much went to the consultancy? How much was this in Ministry of Transportation and Infrastructure staff time and cost, and how many ministry staff were involved in working on the cuts framework — the change to the schedule?

[1535]

Hon. T. Stone: Again, I'll just do my best here to answer each of the specific questions that the member asked.

First question, with respect to consultation that was done at the end of 2013. I believe the first question was: was there an RFP for that work? Yes, there was. The proponent Kirk and Co. was the successful bidder in that competitive procurement process.

The second question was: what did that consultation cost in terms of the fees that were charged by Kirk and Co.? The total cost was approximately $600,000.

The last question, as I understand it, was: how many Ministry of Transportation and Infrastructure staff were involved with B.C. Ferries in developing the service reduction plan? There were three individuals within the ministry that were actively engaged with B.C. Ferries in developing the service reduction plan.

I want to take the opportunity to also say that it is the B.C. Ferry Commissioner who determines the price caps. He determines what the fare levels are going to be and, indeed, if there are going to be increases. He came up with the price caps of 4.14 and 3.9 percent for the balance of performance term 3, which we're still in.

He came up with the final determination on those price caps based on a number of critical inputs, those inputs being $180 million of taxpayer contribution, $54 million efficiency target at B.C. Ferries, as well as the $18.9 million in service reductions. Again, on the service reduction side, $14 million of that $18.9 million relates to the northern and minor routes, which begin to take effect today. The remaining $4.9 million represents service reductions which we're still working our way through with B.C. Ferries. That will apply to the majors and need to be rolled out at some point between now and the end of performance term 3.

C. Trevena: I just want a very quick clarification at the start of this. The minister keeps mentioning these service changes coming today. I believe that it's the fare increases and the seniors rates that have come into effect today. The service changes are not till the end of the month. Otherwise, there are going to be a lot of people aiming for the 5:25 ferry for my route and not having one for another 25 minutes. I just wanted to quickly clarify that.

Going back to the consultations and the $600,000 fee for Kirk and Co., I am making the assumption — but I'd like the minister to clarify — that that included all expenses for Kirk and Co. as well as Ministry of Transportation and Infrastructure staff, including travel for the consultants and the staff. I know that to get to certain places, because the ferry schedule didn't work, they had to fly and had to charter flights. I would like to know about that cost.

Also, when the new schedules were drawn up, the ferry advisory committees were asked to be involved, and they took part in it, some more willingly than others. When they were asking — trying to get this weird jigsaw in place to help their communities along and wanting to know whether they were near the dollar figure that they needed to make those reductions, to make it all work — they were told that they couldn't have that information. They had to go through a freedom-of-information request for that. There they were in the midst of this but weren't able to get the information they needed to make this happen. This has just happened over the last few weeks.

So I'd last like to ask the minister why we have this very convoluted thing of bringing in the ferry advisory chairs and them trying to the best of their ability to make things work in a game they don't want to play and then being told that the rules are changing.

[1540]

Hon. T. Stone: First, I want to acknowledge the member for North Island in her clarification at the outset of her last question. She's quite correct. I did not intend to strike any panic in people's hearts by suggesting that cuts were taking place today. I meant the announcement of the final posting of schedules and so forth.

The changes for the most part will take effect on April 28. I believe there are a couple of routes where the implementation takes a little bit longer. Again, we'd be happy to provide her with those details so she has them.

The first question that she asked was with respect to the $600,000 contract with Kirk and Co. I think another way of looking at this would be to point out that the total cost, including the Ministry of Transportation and Infrastructure's cost for this last round of engagement, was $650,000.

Now, that $650,000, again, is an all-in number. It represents the fees, obviously, that were paid to Kirk and Co. for their time. It represents facility and amenity costs. It represents the cost of materials that were provided before, during and after the consultation. It represents the travel expenditures incurred by both Kirk and Co. staff as well as the three Ministry of Transportation team members that participated in this process.

Last but not least, the member asked a question with respect to the ferry advisory committees. I do want to take this opportunity to thank the men and women who worked very, very hard on these ferry advisory committees around coastal British Columbia. They have been active participants in each and every round of consultation to varying degrees. Some are more engaged than others, but they did make a difference, and I know that their communities know that they made a difference.

[1545]

At the end of the day, this last round of engagement was focused primarily on providing suggested schedule changes for each and every route to the affected coastal communities and encouraging feedback on those schedule changes, with the intention being that if there's an opportunity to tweak the schedules somewhat so that they work better for the communities affected, then certainly, we would try and B.C. Ferries would try to make that happen.

The ferry advisory committees were the last checkpoint in that process and were instrumental in facilitating or enabling some last-minute schedule changes that will enable the change, at the end of the day, to work as best as possible for their community.

I do want to provide a couple of quick examples. The Comox to Powell River, route 17,which I know the member for Powell River–Sunshine Coast is keenly interested in. For the Saturday night sailing…. The Powell River Kings hockey team and the community had expressed a tremendous amount of consternation about losing the last sailing. They originally had an 8:45 p.m. sailing on Saturday night. The original proposal that was put forward as part of the consultation was that the last sailing out of Powell River on Saturday night would be 5:15 p.m.

We heard loud and clear from the community, and we heard loud and clear from the ferry advisory committee, that that was not going to work for Powell River. We worked very hard to make this change in the schedule. I'm pleased that in the final schedules that were posted yesterday, the refined schedule now provides for the last sailing leaving Powell River on Saturday night at 8:30 p.m.

It is, again, not perfect. Originally, it was 8:45; it's now 8:30. But we've had confirmation back from the Powell River Kings, as well as the mayor of Powell River, that this is going to work much, much better for Powell River.

Likewise…. I will give credit where credit is due. The member for North Island had a conversation with me just the other day about Hornby Island and how critical the last sailing was to Hornby. The original sailing was to leave Denman at 9:15 and 10:35. The proposed change when the schedules were first provided was for the sailings to leave Hornby at 7:15 and Denman at 7:40. Again, the member for North Island brought this to my attention, as did the minister from Comox Valley. We were able to make a final schedule adjustment that provides for the last sailings leaving Hornby at 9:30 p.m. and leaving Denman at 10 p.m.

I could go on and on. There are a tremendous number of these kinds of schedule refinements which we believe work better for the communities affected but, all the while, ensure that we are still able to generate the desired savings — in the case of the minor and the northern routes, the $14 million of savings — that are required through the balance of performance term 3.

C. Trevena: Thanks to the minister for his explanation.

The $650,000. We, in ferry-dependent communities — I think that's most people on this Island and other islands — are pretty fed up with consultation and engagement. The last round of engagement really did annoy people more than anything. They thought that there were alternatives.

I've just got to say: $650,000 in a consultant's fee is actually the estimated annualized net savings for route 6, which is the Crofton-Vesuvius; route 7, which is the Earls Cove to Saltery Bay route; route 8, Horseshoe Bay–Snug Cove; route 9, Gulf Islands to Tsawwassen; and route 20, which is the Chemainus-Thetis-Kuper route — or the Penelakut route. It's still down as "Thetis" here. It's the Penelakut route.

There is, obviously, some concern that, you know, you put out all this money and if you had looked at things differently, you wouldn't have had to make any of these cuts anyway. That $650,000 would have saved those routes from going through this agony. It wouldn't have saved them from the fare increases, but it would have saved them from all the changes.

We've extended the routes, extended the time, and
[ Page 2679 ]
people worked very hard at it. But one of the things is that there was common sense to a lot of these schedules. For many people looking at the new schedules, the common sense is gone. I just would like to put that out there.

[1550]

The alternatives. We keep talking about alternatives. My office got, through freedom of information, the briefing notes for the last estimates, which were back in July, from the minister's office. It said at that time the province was exploring the use of bridges on some smaller routes. I wondered if the province is still looking at bridges as an alternative, and if so, on what routes?

Hon. T. Stone: Again, first, I just want to address the statement that the member made at the outset of her last question. We certainly are trying our best here to employ as much, as she put it, "common sense" moving forward with all of the strategies that we're pursuing, including the service reductions. This is not easy, and it weighs on me every single day of the week. I know that this affects communities, and I know that it affects some more than others, but I'm also committed to doing my job. We said we were going to fix Ferries, and that's what we intend on doing.

I do not believe that it makes common sense to have a Monday evening sailing from Skidegate to Alliford Bay, which has a capacity of 26 cars and 146 vehicles, on average carrying one or two cars and four passengers — a utilization rate of 3.3 percent. I also do not believe that it makes common sense to have an off-peak, 11 p.m. sailing from Gabriola Island to Nanaimo with a vessel that has a capacity of 70 cars and 400 people but on any average 11 p.m. Tuesday evening sailing carries one or two cars and five people.

These are extremely low utilization rates. If we allow these kinds of low utilizations to continue, all we're doing is passing the buck down the road in terms of having to make even bigger and tougher decisions in the years ahead — if we truly are focused on applying downward pressure on fares.

That, straight and simple, is the genesis of why we believe the service reduction component is just so critically important. We cannot continue to have more staff than passengers on sailings.

[1555]

Now, with respect to the question related to bridges or fixed links, I will acknowledge that the member is quite correct. We did include as part of the announcement of our ferry vision back on November 18, 2013, that amongst a long list of initiatives…. I've mentioned them several times already today. I'll spare the member going through the list again. I think she's appreciative of that.

One of the initiatives that we said we would be willing to explore is, indeed, fixed links. I will also say that there is no department within the Ministry of Transportation that's whirling away, coming up with all kinds of plans for fixed links. However, while the member knows well…. I'm not sure exactly how long you've lived on Vancouver Island, Member. I'm sure you're well aware that there have been very strong opinions, particularly on the Gulf Islands and within the Islands Trust area, with respect to fixed links.

If attitudes are shifting on some of these islands in question and communities are willing to have a discussion with government about the feasibility, the viability, of a fixed link, then we would be more than prepared to sit down and engage those communities with those discussions.

G. Holman: With regard to fixed links, I assume there wouldn't be a toll on those bridges. The minister can save a response on that for another question I have.

You talk about utilization rates. The long-term concern is that by continually increasing ferry fares you're going to put downward pressure on use, and that's what's been happening.

The ferry advisory committee chairs, who — I totally agree with you — do excellent work…. I, myself, was a member of the Saltspring committee for six years in a former life. They do excellent work, and they do serve as a very constructive bridge between B.C. Ferries and the ministry and communities. They do great work.

They've pointed out that passenger and vehicle usage on B.C. Ferries is at an all-time low. The point they've been trying to make is that that's a direct result of the increase in fares — in many cases more than doubling.

In fact, it's a bit of a perverse circle here. While the minister does quote low utilization rates, in a large part that's a result of the very sharp increase in fares over the last decade. We have this very unvirtuous circle happening, and it's not clear to ferry advisory committee chairs or members on this side of the House when that perverse circle is going to end.

My question after that long rant, Mr. Minister, is: have you done studies of demand elasticity? Do you have any notion of the impact of increases in fares on usage rates on B.C. Ferries? Have you done any recent studies, and what were the results?

[1600]

Hon. T. Stone: To the member for Saanich North and the Islands, quite simply, if I understood his question correctly — have any demand elasticity studies been done? — the answer is yes. B.C. Ferries has actually done a number of demand elasticity studies. It's a matter of normal operations that they do so.

I would caution the member, though, on this point from the perspective that, at a high level, what these demand elasticity studies have often shown is that yes, there is a correlation between fares going up and traffic volume going down. But the third factor which is critical here as well is that while that is true, overall revenue has actual-
[ Page 2680 ]
ly gone up. That revenue has been critical as part of the overall sustainability picture of B.C. Ferries.

Again, as with everything ferries-related, nothing is completely straightforward and cut and dried. It's quite complex, as the member knows well. I come back to…. Without going through my laundry list of all of the various initiatives, this whole theme of increasing fares is exactly why we are working so hard to implement, on as many different fronts as we possibly can, strategies that will apply downward pressure.

Fares cannot continue to escalate as they have. I've said that quite consistently for the last ten months, and that's why we're fully committed to the vision that we've put forward and all of the different strategies that are being pursued.

G. Holman: Thanks for the response, Mr. Minister. I would suggest that another question to consider is not just whether revenues have gone up as a result of fare increases but what would revenues be without fare increases? I think if you do those studies properly, it would parse out those issues. Can you tell me when the last study was done on demand elasticity?

Hon. T. Stone: I don't know what the exact date is, but I'd be more than happy to find out that information and get that back to the member as quickly as possible.

The Chair: Members, I'd like to call a five-minute recess, if I could.

The committee recessed from 4:05 p.m. to 4:09 p.m.

[G. Kyllo in in the chair.]

[1610]

G. Holman: Just following up on the general theme of due diligence — and I will look forward to hearing from the minister when the last demand elasticity study was done — on another issue. I won't belabour this, just as the minister has agreed not to belabour certain points with us.

Around the economic impacts of the service reductions and the fare increases. This is a complaint that we've had on our side of the House. It's never really been done — a proper economic analysis of the implications of these cuts and continued fare increases on coastal communities.

I have a question, just to point out a simple example of a concern that the province might have. Does the minister know what B.C. Ferries generates directly and indirectly — directly from its operations and indirectly through the tourism activity that it supports? Does B.C. Ferries know, does the minister know or does the provincial government know: what's the return to the provincial government treasury of the annual operations of B.C. Ferries?

[1615]

Hon. T. Stone: There's absolutely no question that B.C. Ferries has a significant impact to not just the economies of all coastal communities but certainly the economy of British Columbia.

As the member knows well, B.C. Ferries moves about 7.7 million vehicles per year and about 20 million passengers per year. B.C. Ferries employs over 4,000 men and women across coastal British Columbia. As I mentioned in a previous answer this afternoon, B.C. Ferries invests over $100 million per year in refit and maintenance work that goes to various shipyards and other related companies across the British Columbia economy.

You take all of that together on top of the tourism impact that is facilitated in part by the services provided by B.C. Ferries, and there's no question that the economic impact is significant. But there is no analysis done, from a GDP perspective, on B.C. Ferries' impact to B.C.'s economy — no more than there is a GDP impact done of the economic impact of B.C. Transit or B.C. Hydro or any ministry within government.

Is there an impact and a high value to B.C.'s economy as a result of B.C. Ferries? Absolutely.

G. Holman: Thanks for the response, Mr. Minister. The simple point I would make is that yes, we are in agreement that B.C. Ferries has a substantial economic impact to the province on an ongoing basis — aside from the shipbuilding but on an ongoing operating basis.

My question specifically was…. The minister does like to repeat about the $180 million in annual subsidy. What is B.C. Ferries generating back for the province in terms of provincial government revenues? That may offset, more than offset, the annual subsidy that the province gives or the service fee that the province gives to B.C. Ferries.

My point would be: if that analysis isn't done, it should be done. It should be something that the minister takes into account when making decisions about service levels for B.C. Ferries — the actual return to the provincial treasury on an ongoing basis. I suspect it more than offsets the $180 million per year that the minister likes to talk about.

Hon. T. Stone: I certainly understand where the member is coming from.

As I've said several times today in estimates here, we were elected in part to balance the budget. We brought in our second consecutive balanced budget just recently. That means that across government, including within our ministry and certainly B.C. Ferries, we are asking everyone to tighten their belts. We're asking everyone to live within their means. We certainly are asking British Columbians to do so, and we intend on continuing to lead by example within government.

Again, I come back to my previous response. There is no question that B.C. Ferries has a significant economic
[ Page 2681 ]
impact not just to the economies of coastal communities but indeed to the province of British Columbia. That is not in dispute here.

I've said very clearly that the service reductions will impact communities to varying degrees. No question. That is not in dispute either, but I come back to the balancing act that we are always trying to find in government.

[1620]

On the one hand, it's ensuring that core service levels are there for British Columbians on routes that B.C. Ferries provides across coastal British Columbia — that British Columbians are able to get to work, that they're able to get their kids to school, that they're able to conduct their lives as they need to.

That needs to be balanced with the reality that the taxpayer is not a limitless pot of money. There's been an unprecedented contribution of $180 million in the last fiscal year to B.C. Ferries. Certainly, we answer first and foremost to the taxpayers of British Columbia.

That is why we have maintained, as part of the overall strategy to apply as much downward pressure on fares as possible, that an important part of that is squeezing as much underutilization from the system as we possibly can.

I certainly can't imagine that the member supports sailings that have capacities for hundreds of vehicles and hundreds of passengers and carry…. Those sailings are carrying one or two vehicles and a handful of passengers. That is just not an appropriate expenditure of taxpayer dollars. Continuing to allow those types of sailings to exist within Ferries operations is in no way whatsoever going to assist in the very difficult challenge of applying downward pressure to fares.

The Chair: Member for North Coast.

C. Trevena: North Island.

The Chair: Member for North Island.

C. Trevena: That's fine. North Coast is a little further north. We have lots of ferries there in the North Island, Chair.

I just wanted to pick up on the minister talking about belt-tightening and hard fiscal times and how hard it is.

We'd had a round of — I'll call it — community engagement, because it wasn't really consultation, the preceding year — not the 2013 one, but in 2012. Everyone knew that there was doom coming, that we were going to face cuts. Yet last summer the board of directors awarded B.C. Ferries executives $5.19 million in bonuses.

Now, bonuses are usually paid to…. If you agree with bonuses at all, they are usually paid to those executives who are turning a profit for their company. B.C. Ferries was a loss-making company. If we're doing loss and profits, it was a loss-making organization that we knew we were going to have to make a lot of cuts in, yet there was still a $5.19 million payment of bonuses.

We've had the whole discussion about bonuses. Bonuses are now no longer going to be paid. They're going to be rolled into base salary.

I have a couple of questions for the minister on executive structure and executive pay. One is: does the minister know how many managers there are now working at B.C. Ferries and what the compensation package for them is? How many and what roles are earning over $500,000 a year? We'll start on that. I have a number of others.

[1625]

[D. Ashton in the chair.]

Hon. T. Stone: To the member and her questions with respect to B.C. Ferries compensation and managers and so forth. First off, I want to say, in response to her question on exactly how many managers there are there at B.C. Ferries today and what their compensation plan looks like, or total compensation, I don't have those numbers. I would encourage the member to contact B.C. Ferries directly and make that request.

I can say, however, that on her specific question as to how many executives at B.C. Ferries earn in excess of $500,000, as of this moment, to the best of my understanding, there is only one individual at that pay level.

I do want to also say that with respect to B.C. Ferries executive compensation, this was one of the very first files that I found on my desk upon becoming the minister last summer. Upon learning of the payment of bonuses at B.C. Ferries, particularly at a time when fares had just recently gone up again and we were in the early stages of working our way through service adjustments, the bonus plan struck me as being the wrong plan at the wrong time.

Certainly, as we're asking British Columbians to tighten their belts, as the B.C. government is tightening its belt, B.C. Ferries needs to do the same thing. Upon learning of the bonus plan, I immediately met with the chair of the board of the B.C. Ferry Authority and expressed my displeasure and the displeasure of the B.C. government and said to them: "You guys need to fix this."

So they went away as a board, and they deliberated, and they voluntarily decided to bring the executive compensation plan at B.C. Ferries in line with the compensation plan guidelines that exist for Crown corporations and generally the public service.

[1630]

In fact, I believe today was the first day that the bonuses actually take effect — have been converted into holdbacks and so forth.

I want to say, and it's important for British Columbians to hear this, that while the internal operations of B.C. Ferries is internal to B.C. Ferries, and as the minister, I cannot direct B.C. Ferries to do what I want them to do on a day-to-day basis from an operational perspective, I
[ Page 2682 ]
certainly met with them. I applied as much urgency and as much pressure as I possibly could to have them convert the bonuses, the bonus program, to a holdback program, and they complied.

They complied voluntarily. Their compliance voluntarily with this matter will result in almost $1 million of savings to B.C. Ferries each and every year on a go-forward basis. That's almost $1 million per year that will now be available internal to B.C. Ferries to help keep fares down. It's one of the many strategies or initiatives that we've talked about today.

I want to also acknowledge that B.C. Ferries, at the time that they voluntarily agreed to comply with the executive compensation guidelines for Crown corporations and the public service, they also agreed to put in a wage freeze, a general salary freeze, through to 2016. That was welcomed as well. You know, I'm pleased to report that B.C. Ferries is fully compliant now with the Crown corporation and the public service guidelines related to executive compensation.

The final point I'll make, and it's an important one as well…. I think it's certainly easy for some to beat up B.C. Ferries in terms of their internal administration and operational management, but they are actually a very well-run organization in terms of their operational expenses. Since 2008 B.C. Ferries has reduced its executive by half. They've reduced total executive compensation by 54 percent, and I think that's notable.

I think it's also notable that in 2004, of the total cost of B.C. Ferries, the total operational cost, which was $479 million in 2004, administration expenses accounted for $32 million, or 7 percent of the overall budget. That was in 2004. In 2013, on total operational expenditures of $742 million, the administrative component of B.C. Ferries' budget didn't just decrease in percentage terms from 7 percent in 2004 to 4 percent in 2013, but their total administrative costs actually also decreased in total dollar terms from $32 million to $30 million.

We're going to do everything that we possibly can to ensure that B.C. Ferries meets the $54 million efficiency target that the Ferry Commissioner and the B.C. government combined have put in front of B.C. Ferries. I'm pleased to say that, at least at this moment, B.C. Ferries is well on their way to achieving that $54 million efficiency target.

[M. Bernier in the chair.]

C. Trevena: I don't want to denigrate the minister at all. He's obviously a smart and committed man, but surely he can see that it's absolutely risible, ludicrous, to say that he has no ability to direct B.C. Ferries to do things like deal with what people outside of B.C. Ferries and ferry users say is a bloated management. He has no ability to direct B.C. Ferries when he has just said earlier on today that three of his staff were involved in tweaking the day-to-day sailing schedules for 20 different routes.

I mean, what is more hands-on than dealing with minutiae of ferry schedules? It is really astounding. It's astounding. We have a situation that has gone on since the establishment of B.C. Ferries, of a management structure that is set up as a management company to run the ferries that the minister says he has to be hands-off on. But his staff can get completely involved in the scheduling.

[1635]

The issue of the bonuses. I think the minister is also playing a little…. I think there's an issue, really, of smoke and mirrors. We don't have bonuses anymore at B.C. Ferries; we have holdbacks. If the management achieve their targets, they still get the money. They just don't call it a bonus.

I think that when we are talking about belt-tightening and you've got the wage freeze, surely you should get rid of those bonuses — that $5 million that we're talking about that was approved by the board in September in the midst of this crisis at B.C. Ferries. If the board turned around and said, "We're not giving it at all" — no bonuses, no "holdbacks" — I think it would make it at least a bit more palatable to people who are paying the 8½ percent fare increase.

I would like to ask the minister two questions. He mentioned that in the structure there is still one person earning in excess of $500,000. I wonder if the minister could tell me which job that is. Who is earning more than $500,000? That's a lot of money for running a ferry corporation. I know it's not Mr. Corrigan, because he has very clearly said he's taking less than that.

The other question is the staffing structure. The minister says he has no ability to get involved in the organizational structure of the ferries. Okay, that's under the coastal ferry services contract. The ferries are described as an service integrator. We know that under the contract the government has no say on management. This is an issue.

I'm still a little puzzled. We have involvement in the minutiae of scheduling. We have hands-off on management. We have, really, problems with management.

B.C. Ferries has since 2003, since we had the Coastal Ferry Act, the same number of ferry routes, the same number of terminals. When B.C. Ferries was a Crown corp, up until 2002, there were nine terminal managers overseeing 47 ferry terminals. Now we still have the 47 ferry terminals — that's not gone up — but we have 24 terminal managers who are reporting to terminal directors who then report to terminal superintendents.

If the minister and his staff can get involved in scheduling, can he get involved in what everybody does perceive as a bloated management structure, to make sure it is more slimlined and we can get some of the savings through the management rather than downloading on users?

[1640]

Hon. T. Stone: First, very, very quickly on the question with respect to who is the individual making over $500,000. Again, I'm not certain where the member has received her information. The information that I have says that president and CEO Mike Corrigan for 2013 made a total compensation of just over $500,000. Now, that's all in. That's the base salary, the holdback plan and his pension as well. On an all-in basis, he was the only individual that was in excess of $500,000.

With respect to the member's comment earlier about where the government of British Columbia has the ability to weigh in and engage with B.C. Ferries and "direct" B.C. Ferries and where we don't, again, I want to step back and be very clear here. I know the member knows the Coastal Ferry Act probably as well or better than most. It's the Coastal Ferry Act that provides for the structure that currently is B.C. Ferries today.

[1645]

It's within that act that, fundamentally, two realities exist. One, it provides for a contract between the government of British Columbia — specifically, the Ministry of Transportation and Infrastructure — and B.C. Ferries. That contract deals with service levels. As part of the contract, it lays out each and every route in the B.C. Ferries system, and it provides for minimum levels of service that must be provided on each and every route. It provides for the minimum length of the service day. It provides for the minimum number of round trips on each and every route.

Now, that contract provides for the ability, upon agreement of both parties, the B.C. government and B.C. Ferries, to agree on changes to service levels. In fact, as part of our overall plan here in applying downward pressure on fares and getting Ferries to a place of sustainability and affordability long term, it was the government of British Columbia that was determined to move forward with the $14 million in service reductions to the minors and the northern routes and a further $4.9 million in reductions to the majors.

We put those numbers to B.C. Ferries — the B.C. government does. We say to B.C. Ferries, in the context of the schedules, which B.C. Ferries has complete control over: "Please, we would like to make the $18.9 million in service reductions." B.C. Ferries then…. It's their responsibility to come up with proposed changes to those schedules to reflect, at the end of the day, the savings that government desires.

That's how that whole side of things works, and again, it's all governed within the contract that's provided for in the coastal ferry services act.

The other side of it…. Again, to be very clear with the member, the act is also structured such that B.C. Ferries legislatively exists as, essentially, a private corporation. It has a board of directors, the B.C. Ferry Services board, to whom the president and CEO reports. It is as a result of that firewall, which exists within the act, that precludes the Minister of Transportation from directing B.C. Ferries on operational matters.

Again, I come back to the member's questions about the bonus issues that existed last summer. The moment that that came to my attention, I was incensed. I was frustrated. I got the B.C. Ferry Services board chair on the phone, and we had a frank conversation about it.

I also knew that, based on the act, I could not say to the chair: "Chair, do away with these bonuses." That being said, I applied as much pressure as I could. Through moral suasion, I was able to convince the chair and his board to do the right thing, in the context of coming service adjustments and in the context of fare increases, and make the adjustments to their executive compensation plan so that it would be brought in line, generally, with the public sector and Crown corporations. That's what they did, voluntarily.

The result of that change, the result of that voluntary compliance, will save B.C. Ferries upwards of $1 million per year. Again, those are dollars that are pumped right back into Ferries' bottom line, which will help B.C. Ferries keep fares down.

The members opposite can't have it both ways. We cannot say no to every strategy that the government puts out there in an effort to keep fares down. This is restructuring the executive compensation plan, continuing to hold Ferries accountable for their efficiency target of $54 million. I mean, I hear nothing from the members opposite that acknowledges $54 million of efficiency savings, which they're well on their way to achieving.

There's no credit given whatsoever for the efforts there. There's no credit given for the fact that B.C. Ferries has cut their executive team in half, that the total executive compensation is 54 percent of what it was only five or six years ago.

There are lots of efforts being made. Is there more to do? Yes, there is. I am the minister that's going to be on B.C. Ferries every week of every month moving forward to make sure that they achieve their efficiency target.

[1650]

C. Trevena: I'll try not to be flippant. When the minister says he'll be on B.C. Ferries every week, he'll actually be on the sailing? I couldn't resist that.

The $5 million. I do want to move on. Clearly, we have a very different perception, as $5 million in bonuses that are renamed holdbacks which are still paid out as a holdback rather than a bonus, in everybody else's eyes is a bonus. Changing it has saved $1 million a year. That's still $4 million going out there. We have 615 managers and administrators in B.C. Ferries. That is an exponential growth. There is no question about it.

We have on the one hand, as I say, the minister talking about how he can't get involved in the day-to-day operations, on one side. Yet he had three staff members working, very clearly, on the day-to-day operations. I think
[ Page 2684 ]
the problem is very clear. The minister says that we don't come up with solutions. Well, we are the opposition. We are not the Ministry of Transportation.

I think one of the things that is really clearly a problem is the Coastal Ferry Act. It is set up to run, basically, privatized ferry operations. It's set up as a management company. It's not set up to run the ferries in the way that B.C. needs the ferries run — if the minister would like to take a good look at that.

I'm very mindful of time. I would like to move on a little bit to one of the things on the minister's shopping list of ideas of how we're going to make B.C. Ferries costs sustainable, as he says, and keep the pressure on the fares down. That's the idea to have a pilot program to introduce slot machines on B.C. Ferries. Now, we heard quite a lot about this when it was first mooted, but we haven't heard much since. I wanted to use this opportunity to ask the minister a few specific questions about this.

One, it's a pilot project. We know it's going to be on the Swartz Bay–Tsawwassen run. I just wanted to know…. We've got…. Where to start?

I guess one of the basic questions to start is: how much is going to be spent on doing this? When you are putting slot machines in the ferry, you're not going to just put them down in the middle of the room next to the play area where the kids can play. You're going to find a place where you can put them. You're going to have to power that room up. You're going to have to refurbish the vessel to put them in. There's likely to be a refit required. Who will bear that cost?

Secondly — I'll try to keep these together so the minister isn't jumping up and down too often — who will bear that cost? Will it be B.C. Ferries or the government? We often hear that the ferries…. People who are disturbed about the way that the ferries are run say there are too many crew on board. Talking to B.C. Ferries themselves, they've got their whole safety analysis. They're working under Transport Canada regulations. They have a set crew working.

Will this entail extra crew being brought on to cover the staffing, making sure that that's all working, that that's safe. Will there be extra crew? If so, who will be paying for that? Will that be B.C. Ferries trying to get that out of their limited resources, or is that going to be the government?

The next point is that this is a union shop, B.C. Ferries. But BCLC is also a union shop. Which union is going to be working on this? Is it BCFMWU or the BCGEU?

My final question for the moment, waiting for the answers. Obviously, it is a pilot project, but the minister didn't just pull this out of the air. I'm assuming that there was some research done and there was some analysis done on the potential benefits and potential losses of bringing slot machines onto B.C. Ferries. I wondered if he could share that with myself as the critic.

[1655]

Hon. T. Stone: First off, before I provide a response on the gaming front, perhaps the member for North Island could advise the member for Saanich North and the Islands that we were able to determine when the last demand elasticity study was done. It was done in 2011, and it's actually on the B.C. Ferry Commissioner's website, for easy and quick download.

With respect to the member for North Island's question on gaming, I think I want to take the first opportunity here to very strongly say that there's no sure thing here. This is a project that is still in the early stages of being considered. There are extensive conversations taking place between B.C. Ferries, B.C. Lotteries, the Ministry of Transportation as well as the Ministry of Finance.

[1700]

We recognize that there are a number of legitimate concerns with respect to the possibility of gaming, having gaming on our B.C. ferries, whether they are concerns related to parents who bring children on board, other safety issues, other gaming considerations. We're going to make sure that all the time that's necessary to be taken to be very deliberate and thoughtful about this analysis is in fact the case. Those discussions are taking place.

The questions that the member has posed, in terms of…. Will extra crew be required? How much would extra crew cost, and who would pay for that? What would the overall implementation costs be? Which union shop would the employees report to? — Lotteries versus Ferries — and so forth. These are all excellent questions. They're questions that are right at the centre of the analysis that's being undertaken at the present time.

C. Trevena: This was put out in the $600,000 consultation, along with the service reductions and the fact that we've got seniors fares. There was a serious discussion about this, but is it still just something in the ether or something that's still very much on the drawing board that the minister has had no real…? It sounds like it is something that was just plucked from the air, like: "We need money. Oh, slot machines always bring in a lot of money."

I'm just intrigued. We had a very serious although disappointing engagement process. People seriously had this discussion. We already had people working on how to change the ferry schedules, and this has just come, as I say — is still coming — from the ether.

I'll go back to my last question to the minister on this, because it's just being put out there. I like the minister's line that it is no sure thing. We are talking about gambling. Does he have any documents that he can provide that justify why it's even being brought up in the first place?

Was it something that was sort of back of a napkin? Having a clam chowder on the ferry one day, you think, "Oh, I know what we can do. Enough of the children's playrooms. We're going to put in slot machines here.
[ Page 2685 ]
That'll raise a lot of money. It's better than free Internet" — so just if the minister's got anything better than the back of a napkin.

Hon. T. Stone: I can assure the member for North Island that we're not talking about the back of a napkin here. In all seriousness, the ferry vision that I announced back on November 18 included, yes, a service adjustment plan of $18.9 million of reductions. Yes, it did provide for a reduction in the senior discount to 50 percent of the full fare. It also included a tremendous number of other potential initiatives, which we are exploring with B.C. Ferries.

Now, some are more fully developed than others. The desire to convert vessels' fuel propulsion from diesel to LNG is one that is a bit further down the line. The three intermediary ferries that B.C. Ferries is currently procuring…. One of the specs, one of the requirements of those ferries will be to have dual-fuel technology so that they'll be able to switch between diesel and LNG. That's an important step.

LNG provides the potential for significant cost savings. Fuel is actually…. In 2004 fuel was $50 million of the overall operating budget at B.C. Ferries. Last year it was $121 million.

That's one strategy. We are also pursuing the standardization and interoperability of vessels. Again, those three intermediary vessels are going to be an important first step on that path, which is going to help us achieve additional efficiencies at B.C. Ferries in the years ahead.

Some of the strategies…. We talked about fixed links earlier today. Again, we do not have a team of officials beavering away in a department somewhere, coming up with all kinds of plans for fixed links on islands. However, if communities were to come forward and say, "We want to talk to you about the potential for a fixed link," we're open to that. That concept is a little less developed.

[1705]

I would suggest that the gaming consideration is one that does require a tremendous amount of thoughtful analysis. That is why there are conversations being held with B.C. Ferries, B.C. Lotteries, the Ministry of Transportation and the Ministry of Finance to go through all of the questions that the member posed a moment ago, and a whole bunch of others, to really determine: is gaming truly a viable opportunity to generate additional revenues for B.C. Ferries and to do so in a safe and responsible manner? If we cannot meet the test of safety and responsibility, we will not proceed with gaming on ferries.

The last thing I'll say in summing up is: again, gaming represents one potential strategy amongst a long list of initiatives that we've talked about today — the new reservation and point-of-sale system, LNG propulsion, the interoperability and standardization of vessels, the service reductions in and of themselves, the change in the seniors discount and so forth.

We will see, as a result of the analysis that we're doing on gaming, whether or not it's truly a viable solution to helping us address the serious challenges at B.C. Ferries.

C. Trevena: I thank the minister for clarifying that, because I think there's been a lot of questions about it.

I want to go back. The minister mentioned LNG, and it's where I was going to go. I've got a couple of questions going back to ferry capital issues.

LNG ferries. Has the minister talked to Transport Canada? What regulations are in effect here? These will be the first LNG ferries in Canada. I know they are operating in other jurisdictions, but what's Transport Canada saying about that? Would that entail…? Has the minister talked about increasing crew numbers because of the fuel source?

My second question…. My colleague is here and would like to move on shortly to his part of his critic portfolio. Going back to the cuts and the changes in the service, the Nimpkish, the vessel that is taking over on route 40, is obviously, going in for a refit to get potable water on board. I wondered if the minister could say how much that refit is going to be costing.

[1710]

Hon. T. Stone: First the question with respect to Transport Canada and whether there are any requirements related to LNG propulsion or dual fuel propulsion for B.C. Ferries. Does this new propulsion technology and fuel mean more crew members potentially? It is our understanding that there is actually one vessel in Quebec that operates with LNG propulsion.

That being said, the member is quite correct. This is a fairly new technology and a new fuel propulsion source here in Canada. That's new to Transport Canada. They're in the process of finalizing a review of any new requirements or regulations that may be required.

What is important is that B.C. Ferries will ensure that they receive the necessary certifications through Transport Canada. They will apply for and receive a certification through the alternative fuel program, which is administered as part of Transport Canada. We will look forward to them doing that in the coming days and weeks.

With respect to the Nimpkish, which indeed will sail between Bella Bella and Bella Coola, B.C. Ferries is finalizing a refit plan at the moment, which will ensure that the Nimpkish has the amenities that travellers and tourists would expect for a comfortable journey. Yes, it will have water. Yes, it will have comfortable seats and so forth.

That refit plan, again, is being worked on by B.C. Ferries. What we do understand, and certainly what we'll be holding Ferries accountable to, is that the vessel refit has to be done, obviously, in time for the upcoming summer season.
[ Page 2686 ]

C. Trevena: I actually asked the minister for the dollar figure for the refit for the Nimpkish, if he has that available. I mean, B.C. Ferries have their nice grizzly bear pictures at the moment, and they're promoting the northern route. They've got a caption contest. They've got lots of good things going. You go down. You've got the Discovery coast route. You look at the price tag. It's a package there, a nice package starting from $930 per person. So people are going to be expecting quite a lot.

I just wanted to get the dollar figure for the refit of the Nimpkish. Also, if I might ask, as we're coming close to the end of the Ferries questions — we've got about two more questions to ask — whether the minister himself would take his family on that route for nine hours.

[1715]

Hon. T. Stone: Very quickly on the question related to the cost of the refit to the Nimpkish. I don't have that number here today, but I would be pleased to provide that as soon as I do have it.

In terms of her other question with respect to whether or not I would take my family on the Nimpkish, I absolutely would. Just this last summer….

As the member knows well, I have three little girls — nine, seven and four. My wife and I loaded them into the van. We drove from Kamloops to Fort St. John. These are the types of adventures and trips that we go on as a family. We drove to see my brother and his wife up in Fort St. John. That was over two days of driving each way, doing what families do and enjoying time together — 22 hours total driving and 1,900 kilometres. I'm pleased to say there are 18 rest areas between Kamloops and Fort St. John.

We take our kids on all kinds of trips, and certainly at least once a year we ensure that we take a trip somewhere in British Columbia. We also have family on Vancouver Island. We often come to Vancouver Island to visit our family. We have family in the Kootenays. I would certainly be willing to take my children on the Nimpkish. It will be comfortable.

C. Trevena: I thank the minister.

I have some questions on the B.C. Ferries travel centre. We don't have time to canvass them now. I'd just like to read them into the record, and then the minister or his office can provide written answers or indicate which should come back from B.C. Ferries.

The questions are the cost of the lease at the Fairmont Pacific Rim building, the number of staff there, the number of managers working there, the number of ferry tickets purchased from walk-in customers, whether the minister's office knows how many ferry tickets are likewise bought across the street at the Tourism B.C. office, how the centre reflects the value-for-money goal stated in the business plan and what the intent was of including space for management personnel at the centre.

I expect a written reply. I know my colleague has one more Ferries question.

G. Holman: Reviewing the annual report for B.C. Ferries recently, I was surprised to see that B.C. Ferries pays a dividend to the province of $6 million a year. Like I say, this surprised me, given that I don't think anyone would characterize B.C. Ferries as an entity that's making a profit. One could even argue with the dividend from B.C. Hydro, but certainly for B.C. Ferries…. It's not a profit-making entity.

Could the minister confirm that, in fact, the dividend is $6 million a year and how long this dividend has been paid? And what's the rationale for B.C. Ferries paying a $6 million dividend to the province when the cuts to the minor routes were only slightly more than that? I find this very surprising and would be interested in the minister's rationale for this.

[1720]

Hon. T. Stone: Yes, the member for Saanich North and the Islands is correct. When B.C. Ferries was set up as a private company in 2003, when that transformation took place, the British Columbia government was provided non-voting preferred shares in this private corporation which we call B.C. Ferries. The value of those non-voting preferred shares is $75 million.

Each and every year since 2003 the B.C. government has been provided with the equivalent of an 8 percent return on the value of the $75 million in shares. Effectively, this is a return on the initial investment that British Columbia taxpayers made when the B.C. Ferry Corporation was set up initially.

C. Trevena: That, sadly, concludes our cover of B.C. Ferries, though we could go on for many more hours. Unfortunately, we do have time constraints.

I have one question going back to the transit file. It's just one quick question. Then I'll hand over to my colleague who's going to be looking at PavCo. And that is whether the minister can tell me….

He mentioned — and I should've asked at the time — that the hydrogen buses…. B.C. Transit is looking at repurposing them and selling them off. I'm wondering what price — they were bought for $1.2 million — they're looking at selling them for.

[1725]

Hon. T. Stone: As we talked about earlier this afternoon, the hydrogen fuel cell buses in question are effectively parked as of today. Now begins a process that B.C. Transit is just embarking upon to determine whether or not it makes sense to repurpose these buses within the existing B.C. Transit fleet in other parts of the province or repurpose these buses — I believe B.C. Transit refers to it as repurpose and repower — to convert them, es-
[ Page 2687 ]
sentially, to diesel or CNG buses; or, as a second option, to sell them.

Now, there have been a number of unsolicited inquiries that have come in to B.C. Transit just in recent days which B.C. Transit will explore. But first and foremost, they're going to determine whether or not it makes sense, as a priority, to repurpose these buses for continued use elsewhere in British Columbia.

If, at the end of the day, some or all of the buses are determined to be sold by B.C. Transit, then of course that would initiate a transparent process to do that. It would obviously start, likely, with an expression of interest.

S. Simpson: I'll tell the minister that we're going to go to some questions around the Pavilion Corporation. I'm sure he may have some other officials that he'd like to bring up. We'll wait for them until we start.

I have just a series of questions. We don't have a ton of time, but we'll see how we do in getting through them.

I'd like to start by going to page 21 of the service plan. On page 21 it's the PavCo strategic goals. This particular section is "Optimize corporate profit and create economic benefits." The first area says: "Economic impact at B.C. Place from spending by visitors from outside of British Columbia."

[J. Thornthwaite in the chair.]

What we see here is there's a forecast of some $38 million for the 2013-14 year, but this drops to $20 million by 2016-2017. Could the minister explain how this is almost cut in half over the period of four years?

[1730]

The Chair: Minister.

Hon. T. Stone: Well, hello there, Chair.

To the member opposite, I believe his question was in terms of the economic impact, the table on page 21, the targets for '15-16 that reflect $38 million of economic impact and then $20 million for '16-17.

The very simple answer is that as PavCo develops these numbers, they only include in their forecasts the significant events. These numbers are driven by significant events that have been booked. There are no significant events, as of today, that have been booked for PavCo's facilities for 2016-2017.

For 2015-16, a large part of why the number is $38 million there is because that is the year that the FIFA Women's World Cup event is booked for the facilities. Again, PavCo only includes in these numbers events that are actually booked when they're estimating the economic impact.

S. Simpson: Should I assume that the significant event for '13-14 is the Grey Cup?

Hon. T. Stone: Actually, for '13-14 the significant events included TOIFA, the Justin Timberlake concert, Taylor Swift and the Heritage Classic. In '14-15 the Grey Cup would be the significant event there.

S. Simpson: I wonder if the minister can explain. As I go back down to the third line here, it talks about delegate-days to the Vancouver Convention Centre by visitors from outside of British Columbia. We see the forecast for '13-14 is 313,000 visitors from outside. That number goes to 450,000 in the next year and then is projected to be consistently at 450,000.

Then if I go over to the next page, to page 22, delegate-days for all visitors outside of greater Vancouver regional district to the Vancouver Convention Centre, the number then goes up even more. I'm assuming that's another 110,000 or 113,000 people that are projected there who will come from, presumably, not outside of British Columbia but outside of the area.

[1735]

Could the minister tell me what the basis is for what is almost a 50 percent increase in projected delegateships, what events are happening, or why the minister and PavCo have confidence that the numbers will increase that dramatically when they don't seem to have done that in the past?

Hon. T. Stone: If I understood the member's question clearly, he was asking what events would account for the fairly significant increase in delegate days to the Vancouver Convention Centre from '13-14 to '14-15. Is that correct?

S. Simpson: And moving on to the subsequent years.

Hon. T. Stone: And then moving on.

Certainly '14-15 is pacing to be a much stronger year than '13-14. Actually, '14-15 has 62 conventions and 43 trade and consumer shows. That's up considerably from the numbers in '13-14.

Perhaps the single largest highlight for '14-15, which accounts for a big portion of the delta here, is the SIGGRAPH Conference. That's almost 16,000 delegates — that one conference alone.

In '14-15 we're also going to see the return for the second time of the TED Conference. That's also the year that the Grey Cup is being held at B.C. Place. There are a tremendous number of other Grey Cup–related events, most of which will be held at the Vancouver Convention Centre as well.

S. Simpson: I'm bouncing a little bit here, but the minister, hopefully, will forgive that.

If I look at page 22 again, I look at total attendance at B.C. Place events. It showed me that just over 1.23 million people attended those events in 2012-2013. The number
[ Page 2688 ]
dropped by about 50,000 — 45,000 or 50,000 — for the forecast for '13-14. Then when I go back to page 21, the economic impact, it tells me that in 2012-13 the economic impact was $26 million. That jumps to $38 million projected for this year.

[1740]

Can the minister explain what the expectations are about that are going to take 50,000 less people and create $12 million more of economic impact?

I know that the minister mentioned some very significant concert events of international stars, and they will draw, but I'm assuming that the majority of the people who come to those are going to be people who are resident and going to enjoy that. There may be some people who come from out of town and stay in hotels and things, but I would think the majority of those tickets would be bought by people in the Lower Mainland who are looking to enjoy those events.

Could the minister tell me how it is we have this dramatic jump in economic impact from 2012-13 to 2013-14, and yet 45,000 less people participated in B.C. Place events?

Hon. T. Stone: Perhaps the best response that I can provide is actually just providing the member with his own words back. I mean, it really does depend on the type of event. In the time frame that the member referenced, yes, it is true that there were fewer people but more economic impact. That is because of events like the Heritage Classic — and TOIFA, for that matter — which actually tend to draw more visitors from outside of Vancouver and even outside of British Columbia.

Obviously, the economic impact of a visitor from Alberta or Washington State or further away that comes and ends up staying in hotel rooms and eats in restaurants, and so forth, is going to be a large part of the reason why the economic impact is greater for those types of events. The other side of it as well, is a number of the concerts — not all of the time — tend to be higher-margin events. People tend to spend a fair bit more money at concerts as well.

[1745]

That's the best I can provide at this point. I'd be more than happy, if the member would like some further details on these fiscals, to provide that to him.

S. Simpson: Yes, I appreciate the minister's offer, and I'd be happy to get more detail on how those costs and benefits get projected out.

Again, on page 22, I go to the last…. In the grid here, the corporate operating deficit before government contributions, what we see for 2013-14 is projected at $26.3 million. It then drops to $22 million and a bit for '14-15 and '15-16 targets and then drops dramatically to $7.2 million, $7.3 million in 2016-17.

Can the minister explain what happens between 2013-14, when it's at $26 million, and a little bit lower but not dramatically lower for the next two years, and then it falls right off to about $7 million?

Hon. T. Stone: I'll just walk the member through this as quickly but carefully as I can. We're talking about the line item of corporate operating deficit before government contribution. The forecast for 2013-14 is just over $26 million. It drops down to $22.6 million in '14-15. That's the combination of two factors. One, there is a significant amount of cost saving, administrative costs reduction, at PavCo. Secondly, which we've already talked about in a few of your previous questions, there's going to be, on the revenue side, more opportunity in this fiscal year, and that's because of the types of events and so forth, which we've already talked about.

The combination of the reduced expenditures and the lift in revenue, we anticipate, will carry forward through '14-15 and '15-16 — but then the very legitimate and good question from the member in terms of what accounts for this big drop to $7.2 million in '16-17. That is entirely an anticipated land sale. The member would be aware of the property known as 10C, which has an appraised value of $15 million. It's anticipated that that land would be sold in the '16-17 fiscal for that $15 million, which is what brings the deficit before government contribution down to this $7.275 million number.

[1750]

S. Simpson: Just to follow on that, would the minister then speculate that in the following year, when there isn't the $15 million to be recouped from a land sale, the deficit goes back up into the $20 million–$22 million range or something like that?

Hon. T. Stone: The simple answer to the member's question is yes. We would anticipate that the number would be back in the range of the number in previous fiscals. That being said, by that time, by 2017 — certainly, between now and then PavCo is going to continue its efforts to rein in costs as much as it can and pursue new revenue opportunities.

One of those new revenue opportunities will be the lease revenue from the Paragon lease deal, which will have kicked in by that time. That will contribute positively to the bottom line here as well. But the one-time $15 million land sale will have been booked and will be behind PavCo.

S. Simpson: We'll talk a little bit about the Paragon deal in a minute.

I want to go to page 28 of the service plan, under "Capital plan." We noticed there under the "B.C. Place" heading a fairly modest capital expenditure. It's $2.7 million in '12-13, $1½ million '13-14, and then it spikes to almost $16 million in '14-15. The note to that says: "Capital
[ Page 2689 ]
projects for fiscal 2014-15 include $12 million for the construction of infrastructure on B.C. Place lands."

Could the minister tell us what that is, and is that related at all to the Paragon deal?

[1755]

Hon. T. Stone: With respect to the member's question about the $15.8 million allocation for B.C. Place, and then there's the subnote of $12 million, and what exactly that is.

That is an allocation that's been made for this out-year for the potential construction of a parkade. It's still very early days. It may be the case that this parkade, at the end of the day, isn't even needed. But it's an allocation that's been made for a parkade.

S. Simpson: A quick follow-up on that. Is this parkade a requirement of the municipality to meet parking needs, or is this a PavCo decision — that improving or putting in a parkade would create another revenue stream, presumably for PavCo, through the parkade? Is that the thinking — that it creates another revenue stream by putting in parking adjacent to B.C. Place?

Hon. T. Stone: Yes, this parkade…. I mean, the reason it's been included as an allocation in this out-year is because it is anticipated that parking may be a requirement on this site in the years ahead. PavCo is actively engaged in discussions about this parkade with the city of Vancouver.

S. Simpson: With this parkade and in those discussions, I would expect that the new Paragon development, should it go forward — the hotel-resort-casino development — would have parking requirements and obligations to meet its development obligations.

Will this parkade be part of the commitment that Paragon needs to make? Is this parkade going to help them to fulfil their obligation to the city for parking spots?

[1800]

Hon. T. Stone: Paragon has its own obligations with respect to parking requirements that the city of Vancouver has for the Paragon development, and Paragon will have to meet those obligations.

S. Simpson: Just so that I'm clear. This parking installation, should PavCo determine to build it in the next year or two, has no connection at all to Paragon in terms of meeting any of their obligations or generating any potential revenue for Paragon. All of this revenue will come directly to PavCo as an entity.

[1805]

Hon. T. Stone: The $12 million allocation for a parkade has actually been in the service plan for several years now. It is quite separate from Paragon's obligations to the city of Vancouver with respect to parking. Should PavCo actually proceed to the construction of a parkade, that $12 million parkade, PavCo would accrue all the benefits that would flow from that, both from the use of the parkade as well as any revenues generated.

S. Simpson: I'm just going to go, since we've kind of got close…. There are a couple of questions related to the relationship with the Paragon application.

A couple of things. First of all, we know that back when the discussions were first going on, the first time that the application was made by Paragon for a significantly expanded casino, the minister of the day — it was not the current minister — talked about how the hope — and the expectation, I believe, more than hope — was that this opportunity would, in fact, end up in many ways paying for a significant portion of the roof, the $560 million or whatever it was that it cost for the new roof and other improvements inside the stadium.

We know that that initially was projected as a lease payment of roughly $6 million a month. That was going to be the lease payment. We now know that the new proposal cuts that in half, and the projected lease payment is $3 million.

I'm kind of combining a few questions here because of time. It's my understanding that the carrying costs on the roof are in the $7 million range. I'd appreciate to know if that's generally accurate.

My question to the minister is: why did we accept, essentially, a cut to half for the lease payment if it's based on the value of the property? As part of that, was due diligence and was that property…? Did the real estate folks and that go out and look for other opportunities, other potential lessors of that property, who might have given us a better deal than it appears we're going to get from Paragon if this goes forward?

I'll leave that, and the minister can try to make sense of that question.

[1810]

Hon. T. Stone: Let me just very quickly here…. As the member knows, the master development agreement was signed in March of 2013, and it provided for a $3 million lease payment. Of course, this was after the city of Vancouver had turned down the development permit. They subsequently approved a development permit for a casino half the size, so that was the fundamental shift in terms of the deal. But the master development agreement was indeed signed in March of 2013. It does provide for a term of 70 years.

Back in June of 2009 Paragon was selected as the organization to assume a lease on this land, and that was done through an RFP process. Subsequent to that, in 2012 — and getting to another part of the member's question — PavCo did indeed conduct an independent assess-
[ Page 2690 ]
ment of the site to validate whether or not the $3 million payment was still representative of fair market value and good value for the lease. That independent assessment did in fact confirm that the $3 million was representative of the current fair market value for the value of the lease.

S. Simpson: I would hope…. Now that the deal is done with Paragon, and that has been settled — the agreement is in place — I guess the only matter now is Paragon being successful with the city of Vancouver in order to allow them to proceed with their development.

[1815]

Now that that deal is done, I'd ask the minister whether the information about the review that was done by the ministry and by PavCo as to what was fair market value for the property could be made available.

The Chair: Minister, and noting the hour.

Hon. T. Stone: The very quick answer to the member's question is yes. If the member would like a copy of the independent assessment that was done, that PavCo did, we would be more than happy to ensure that he's provided a copy of that document as soon as possible.

S. Simpson: I say to the Chair that I have two more questions and we could just about be done. The PavCo people won't have to come back tomorrow.

The first question is…. The current subsidy from government, I believe, is $9 million a year to PavCo. I believe the service plan projects that out for the next couple of years. Could the minister tell us: what's the longer-term projection for subsidy for PavCo from the provincial government? And is that $9 million anticipated to be a subsidy going forward for a number of years?

Hon. T. Stone: I think that at a high level it certainly would be government's desire, and PavCo understands this, that continuing to work hard to reduce and hopefully eventually eliminate the taxpayer subsidy for PavCo in the out-years would be a desirable goal. That is why PavCo continues to work as hard as they do on both the revenue side, looking at new potential revenue opportunities, as well as attacking expenses day in, day out.

That all being said, I think it's also worth noting that PavCo is a critical economic engine that generates hundreds of millions of dollars of economic activity not just for the city of Vancouver but for the province of British Columbia. There are hundreds of millions of dollars of economic opportunity. It does so for a subsidy currently in and around the $9 million range.

We would love to get that subsidy scaled back and eventually eliminated. But we do believe that there is a pretty darn good return on investment today in terms of the economic opportunity that's generated through PavCo's activities.

[1820]

S. Simpson: I'm going to assume by the minister's answer that, obviously, they'd like the subsidy to be reduced, but the benefit is significant and so the subsidy can continue.

I have one more question I'm going to ask now, but I'm going to just preamble it a little bit by saying there are a number of other questions that are around specific information. We don't have a lot of time here, but if the minister is agreeable, I'd like to provide a letter to the minister's office laying out some of those questions. Any of them that answers could be provided for would be appreciated. Or maybe we can do some kind of briefing or something, a technical briefing on that, at some time in the future.

I'll be happy to provide…. There are three or four other items that we're just not going to have time to get to today. I'll put them in the form of a letter to the minister on that.

With that I'll ask the final question. The final question is around the past CEO, Dana Hayden. Could the minister tell us if there was severance there, a severance package, and provide some information about the scope of that severance package?

Hon. T. Stone: First off, to the member, we'd be more than happy to receive a letter with specific follow-up questions. We have no issues whatsoever in providing a couple of hours of technical briefing for the member, as well, on anything to do with PavCo whatsoever. No problem.

To his specific question with respect to Ms. Dana Hayden, she in fact resigned, so there was absolutely no severance paid to her whatsoever.

I move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 6:22 p.m.

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