2014 Legislative Session: Third 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)

Monday, November 3, 2014

Afternoon Sitting

Volume 17, Number 2

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

MONDAY, NOVEMBER 3, 2014

The House met at 1:32 p.m.

[Madame Speaker in the chair.]

Routine Business

Introductions by Members

Hon. S. Cadieux: Today, just at lunchtime, we launched Adoption Awareness Month in British Columbia. Joining us in the gallery this afternoon are: Russell Pohl from the B.C. foster parent association, an adoptive parent as well; from Adoptive Families Association of B.C., Mary Caros, Andrea McBeath and Correen Coons.

We also have Daryl Wisdahl and Jennifer Levesque, friends of mine who have three children — Nathan, Jade and Violet — who are all up in the gallery. As well, Joe and Heather Haynes, Carrie Crowley and Lee Carlson, and Margaret Treleaven with her children: Summer, Jess, Jasmine and Venus. Would you please make these families very welcome.

M. Karagianis: Today we have a couple of regular visitors to the precinct and to the House. They happen to be the keenest of keeners. Both the member for Juan de Fuca and I share these two individuals as constituents. They religiously and faithfully watch the proceedings in this House. They probably know more about B.C. politics and what happens here than anybody else you could imagine.

I would like to give a warm welcome to Kody Bell and Mark Bridges, who are regular visitors here. It’s a great pleasure to see them, as always.

Hon. J. Rustad: I had the great pleasure of getting together with a couple of people today to talk about the Stave West recreation master plan. In the House today are Bill Brooks, who is the lead with the recreation master plan team, and Tumia Knott, who is the president of the Seyem’ Qwantlen Business Group and also a councillor with Kwantlen First Nation. Would the House please make them welcome.

S. Fraser: Joining us in the House today to witness the solemn experience of question period is my daughter Emma Fraser, and joining her today in the gallery is her friend Anne Selsberg. She’s from Hamburg, Germany. Would this House please join me in making both Emma and Anne feel very welcome.

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J. Yap: I have two sets of introductions of friends and family. First of all, in the gallery today is a delegation from Zhangzhou, China: the vice-mayor, Mr. Lin Wenyao; director of foreign and overseas Chinese affairs, Ms. Lin Xiuzhen; director of science and technology, Zhangzhou municipality, Mr. Wang Jiyue; vice-magistrate of the Pinghe County government, Mr. Yan Guoliang; vice-magistrate of Dongshan County government, Mr. Yuan Yang; and section chief of general office of Zhangzhou government, Ms. Xie Xiaoying.

With them is a good friend and the vice-chair of the SUCCESS Foundation from Vancouver, Mr. Grant Lin; as well as a friend of his in Victoria, Mr. Liu Hong, who had some kind words at lunch today for the new member for Oak Bay–Gordon Head; as well as my constituency assistant, Mr. Po-Wah Ng. Would the House please give them a warm welcome.

My second set of introductions is closer to home. Some members of my extended family are here visiting Victoria. I have five cousins that are here for a one-day visit. In the gallery is my cousin Ms. Belinda Ng and her husband, Mr. Tock Sinn Ng, and my cousin Mr. Ken Yap and his wife, Mrs. Joanna Yap. They’re visiting from London, England. Visiting us all the way from Singapore is Mrs. Sharon Lee, my cousin. With them is my brother-in-law Mr. Daryl Tan. The love of my life, my wife, Suzanne Yap, is here for the first time at question period.

R. Fleming: I wish to make a couple of introductions as well. With us is in the gallery today is Carrie Crowley, who the minister introduced a moment ago, here for adoption awareness week. Carrie is a child protection consultant with the Ministry of Children and Families. She’s also a family friend and a former co-worker of my sister many years ago in the Ministry of Social Services. It’s a pleasure to see her here in the buildings. I hope the members will make her feel welcome.

There’s also a couple of constituents of mine, Anna Vunder and Cecile Lacombe, who are visiting the legislative precinct for the very first time. I’d like members to make them feel welcome as well.

Hon. A. Wilkinson: I hope the House will welcome Mr. Riley Whitelock, my constituency assistant, who has the good fortune and the good judgment to have moved from southwest Manitoba to British Columbia and to be fully politically engaged. Please welcome him.

N. Simons: I’d like to acknowledge today a volunteer in my office who has recently had a problem — broke her hip. I’d like to just say that she’s a senior, but she’s the most vital and engaging person you’d want. I have to thank her for helping me keep my office open. Donna French is watching from Powell River, as she does faithfully every day. I would like to ask my colleagues from both sides of the House to send her good wishes and to enjoy question period.

Hon. D. McRae: Joining us from the Comox Valley are Cory and Mary Ruth Harris. Cory owns Signature
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West Floor and Window Fashions. Mary Ruth is the executive director of the Comox Business Improvement Association. She’s also the host — you guys may have seen it on TV — of go! Island for Shaw TV, north Island and Powell River, and is also on the board for the Comox Valley Child Development Association.

I’d like to add that just yesterday they had their annual telethon and raised $85,009 for the Comox Valley child development centre. It is a great organization. Mary Ruth and Cory are absolute great assets to our community. I’d like the House to please make them welcome.

M. Karagianis: I have a second introduction to make. I’ve just received a note here that a couple of my constituents are here today, and I’d like to give them a warm welcome. It’s David Lowe and Mary Lightly — and a great pleasure to have them in the gallery today.

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Introduction and
First Reading of Bills

BILL M205 — TAXI INDUSTRY SAFETY
AND FAIRNESS ACT

J. Horgan presented a bill intituled Taxi Industry Safety and Fairness Act.

J. Horgan: I move a bill intituled the Taxi Industry Safety and Fairness Act, of which notice has been given in my name on the order paper, be introduced and read a first time now.

Motion approved.

J. Horgan: Hon. Speaker and colleagues, it’s a pleasure to stand and introduce the Taxi Industry Safety and Fairness Act as a response to the introduction of app-based Internet taxi services potentially here in British Columbia.

We on this side of the House, and I believe on that side of the House as well, want any new entrants into the marketplace to be under the same rules and regulations as those who are already here. This bill will help do that. I’ve been approached on this side of the House by representatives from seniors organizations and disability organizations concerned that cut-rate competition will reduce service to those vulnerable citizens. Again, this bill will assist with safety and security.

The same rules for all participants — that’s what the industry should have, and that’s what any new participants should live by: the same licensing, the same permitting, vehicle inspections, criminal records checks, basic standards. That’s only fair, and that’s, in fact, the Canadian way.

Is the current taxi service perfect? Well, of course it’s not. But the solution is not to have an offshore company come using the Internet to cut service, to cut rates and put tens of thousands of British Columbians out of work and jeopardize the licences of those who have contributed so much over so many years to the economy and the well-being of the people of British Columbia.

I move that this bill be placed on the orders of the day for second reading at the next sitting of the House after today.

Bill M205, Taxi Industry Safety and Fairness Act, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Statements
(Standing Order 25B)

NORMAN WRIGGLESWORTH

J. Yap: Three weeks ago, on October 10, Richmond lost a local legend, Norman Wrigglesworth. Norman passed away peacefully in his sleep at the age of 88. A Second World War veteran, Norman was a philanthropist, a community activist and an anti-smoking crusader.

Orphaned at age nine in his native England, he joined the British Navy at 17 and later immigrated to Canada and settled in Richmond in the 1950s. Working as a carpenter, he helped to build George Massey Tunnel and became known locally for putting a massive anti-smoking sign on the roof of his home which could be seen by passengers travelling in planes overhead. He was a true pioneer in pushing forward the no-smoking campaign, volunteering for the Canadian Cancer Society.

He was also a passionate man who cared for the community and was unafraid to tackle social issues. He wrote frequent letters to the editor in local newspapers and addressed issues such as the need for more public washrooms in Richmond and a plea to stop fireworks on Halloween. He was a regular attendee of Richmond city council meetings and voiced his opinion on many subjects.

Norman lived a frugal life. He was bold enough to challenge the management of the Richmond Hospital Foundation for keeping the lights on during weekends. Yet he was a great philanthropist. He spent the last part of his life issuing cheques to charity, especially to the Richmond Hospital Foundation.

Last year Richmond Hospital Foundation hosted an afternoon tea and presented him a plaque honouring Norman and his wife for their many contributions. In 2012 Norman received a Queen’s Diamond Jubilee Medal to go alongside his Second World War medals.

Madame Speaker, I know you will agree that Norman Wrigglesworth was a pillar of our community, a great example of true citizenship. Norman’s memorial ser-
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vice and celebration of life will be held on November 10. He shall be missed. Our condolences to his family and friends.

CROHN’S DISEASE
AND COLITIS AWARENESS

D. Eby: November is Crohn’s and Colitis Awareness Month. I’m pleased to rise to make this House more aware of the impact of these diseases on British Columbians and Canadians, the need for us to prioritize the search for effective treatments and cures for these debilitating disorders and the need to be supportive of those who suffer from these diseases.

Crohn’s and colitis are the main forms of a group of disorders that as a result of an abnormal immune response, cause the intestines to become painfully inflamed and ulcerated. These are lifelong, chronic diseases usually starting in early adulthood in otherwise healthy, active individuals.

There is no cure. Patients require regular medications to manage their conditions. When medications fail, surgery is often required. Canada has among the highest reported prevalence and incidence of these diseases in the world with approximately 233,000 Canadians living with these conditions.

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Beyond the very real pain, discomfort and social anxiety caused by these diseases, the total economic costs from these disorders in Canada were conservatively estimated at $2.8 billion per year — $1.2 billion per year in direct medical costs and $1.6 billion per year in indirect costs due to time off work as well as out-of-pocket expenses for those afflicted. This is not to mention the uncounted costs of time away from family, volunteering and otherwise contributing to community due to these illnesses.

The Crohn’s and Colitis Foundation of Canada is a volunteer-based charity dedicated to finding cures for Crohn’s disease and ulcerative colitis. They hold a Gutsy Walk across Canada each year, which I was pleased to speak at in June when they raised almost $3.1 million for research. The CCFC is the world leader in non-governmental medical research funding per capita for these conditions, with more than 65,000 supporters, including volunteers in 80 local groups.

Please join me in thanking the CCFC and in recognizing those who live with Crohn’s and colitis. Your courage and dedication is an inspiration, and you have our full support.

WORKPLACE SAFETY AND
FIOSA-MIOSA SAFETY ALLIANCE

G. Kyllo: In any workplace safety is always a top priority. Here in B.C. companies are leaders in reducing hazards and enforcing strict safety policies to the highest standard to ensure their operation is running as safely and as efficiently as possible. Employees deserve to work in a safe environment, and for employers, it’s just good business.

That is why I rise today to talk about the FIOSA-MIOSA Safety Alliance, headed by CEO Lisa McGuire. With over 2,000 members, the FIOSA-MIOSA Safety Alliance is a not-for-profit organization that helps B.C. companies deal with the challenges and opportunities specific to manufacturing in the food and beverage industry and sets industry standards for health and safety.

FIOSA-MIOSA is home to OSSE, the occupational safety standard of excellence accreditation program. OSSE is equivalent to and more comprehensive than WorkSafe B.C.’s partners in injury and disability prevention program. OSSE certification rewards organizations that have made a safety culture in their operations and is a best-practices approach to health, safety, injury management and return-to-work management systems.

On November 4 and 5 FIOSA-MIOSA is hosting its annual Make It Safe conference in Burnaby. The conference will bring together industry, government and occupational safety experts to share and discuss safe workplace measures. Speakers during this two-day event will discuss topics such as people, processes and economics of health and safety, and the most pressing and challenging issues in health and safety management. Trevor Linden of the Vancouver Canucks will also be a special guest speaker at the event, who I’m sure will share a player’s version of safety on the ice.

I encourage my colleagues in the House to give thanks to FIOSA-MIOSA for their work, as they do every day, to make B.C. workplaces safer for B.C. families.

NORTHERN SOCIETY FOR DOMESTIC PEACE
ACTIVITIES AND FUNDRAISING EVENT

D. Donaldson: This coming Saturday night, November 8, I’m spending the evening with Mz Telkwa and also Mz Portugal. It sounds good, I know. Even better, Mz Demeanor and Mz Understood will be there as well. Those I mentioned are part of 17 men donning high heels, ballgowns and mascara to entertain an excited crowd for the third Mz Judged Pageant.

Tickets for the event sold out in 20 minutes. It’ll be a lot of fun to be the judge as well as a blast for the audience and participants. Plenty of fun to be had, but the underlying topic, domestic violence, and the need for fundraising is a serious issue in all communities in B.C., large and small.

The Northern Society for Domestic Peace organizes the event. They do amazing work for communities in the Bulkley Valley, dating back to 1987. In 1992 they began a domestic peace project for men, supported by the Ministries of Attorney General and Social Services.
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Funding for this voluntary preventative and holistic counselling approach for men wanting to address domestic violence dried up about six years ago.

The Northern Society for Domestic Peace began Mz Judged in 2010 to help address the funding gap and raise awareness. It’s timed to coincide with the November white ribbon campaign, the world’s largest movement of men and boys working to end violence against women and girls.

We know this is a huge issue in Canada and B.C., with recent high-profile cases putting violence against women in the global spotlight. Last week, within a 48-hour period, the Twitter hashtag #beenrapedneverreported was used by over eight million people. It helped women speak publicly, many for the first time, about experiences they had been too ashamed of or afraid to discuss.

Congratulations to the Northern Society for Domestic Peace for carrying on with this work. They expect to equal or surpass their mark of $50,000 raised in 2012 through Mz Judged. While having a fun event, it puts domestic violence front and centre — where it should be for all of us. Well done.

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ADOPTION AWARENESS

L. Reimer: It is a pleasure to rise before you in the House today to speak about the importance of adoption. I speak to you as an adopted person who was adopted by my parents, Norma and Bill, at such an early age that I have no memories of being adopted but grew up always knowing that I was.

I see myself as being so very fortunate. I was adopted into a wonderful, loving family and am the eldest adopted child. My brother, Bob, two years younger, was also adopted.

I grew up in a loving, warm and stable home where every need was met, and more. I’m having a wonderful life, and I’m pretty sure that might not have been possible had I not been adopted. It wouldn’t have been possible had my wonderful parents not followed through on what can be a frustrating process but with very rewarding outcomes for both parent and child.

That leads me to speak about those children who are in the care of our province and whose needs greatly require for them to be adopted — children who need love, warmth, security, structure and a stable home. When we raise children who have this, it provides the foundation for a more rewarding life and great outcomes. Every child deserves a stable home and stable adults in their lives who can nurture, love and support them.

In the past five years nearly 1,250 children have found permanent families through adoption. However, the need for more adoptive families continues, as approximately 1,000 children in B.C. are still waiting for a permanent family.

During this month of adoption awareness, let us please not forget those who need a warm, loving, stable, forever home. I would like to ask all members of this House to encourage those we know who are interested in adopting to consider adopting one of our province’s children. Please go to 1000familiesbc.com or call 1-877-ADOPT-07.

SIMON BOLSTAD AND CPR TRAINING

J. Kwan: Simon Bolstad suffered a sudden medical emergency on July 5, 2014. He collapsed on a public street in Vancouver, and even though there were passers-by, no one administered first aid. It was some 20 minutes before a bystander called 911. First responders arrived at the scene very quickly once the call was made, but by that time, too many critical moments had passed with Simon in cardiovascular distress. Sadly, Simon was not able to overcome the loss of oxygen to his brain, and he died four days later.

This was a tragic loss for Simon’s friends and family, and now Simon’s friend Nicole Cote is determined to see that this not happen to anyone else. She’s been talking with the public, has appeared on the radio and written to elected officials to let people know how important it is to have basic CPR skills. Early CPR could be the difference between life and death in a medical emergency.

Heart disease and stroke are two of the three most common causes of death in Canada. Every seven minutes someone dies from heart disease or stroke. Forty percent of people age 40 to 59 and 70 percent of people between the ages of 60 and 70 will suffer from some form of cardiovascular distress.

November is CPR Month. The Canadian Red Cross is challenging everyone to get the training they need, and Nicole is campaigning to see every high school student in B.C. get CPR instruction.

Groups like the Canadian Red Cross, St. John Ambulance and the Canadian Heart and Stroke Foundation offer CPR training events to the public throughout the month and year-round. You can even use this on-line tool to learn at home.

Take the CPR challenge, and you can make a difference. You can be the somebody who saves a life this November.

Oral Questions

GOVERNMENT BORROWING COSTS FOR
PUBLIC-PRIVATE-PARTNERSHIP PROJECTS

Madame Speaker: The Leader of the Official Opposition.

Interjections.

J. Horgan: It’s not even ten o’clock in the morning. It’s even an afternoon question period.
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Even though the Premier has increased the public debt by $16.5 billion on her watch, she continues to maintain that she’s going to make B.C. debt-free. But according to the recent Auditor General’s report, the cost of carrying that debt is more expensive when you use public-private partnerships.

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In fact, the Auditor General highlighted that the average borrowing cost for government is about 4 percent if you do traditional borrowing for infrastructure projects like schools, hospitals and roads. But the cost of P3s, like the Fort St. John Hospital, is as high as 14.79 percent.

It has often been said that public debt is like a mortgage: we all own the assets. Or in traditional forms, we all own the assets, so we’re taking out a mortgage till we get a school or a hospital or a road. But I have to say, 14.79 percent sounds like you’re paying your mortgage with your Visa bill.

My question is to the Minister of Finance: why in the world would the government give up ten points in borrowing just to hold to a public-private-partnership ideology?

Hon. M. de Jong: To the hon. Leader of the Opposition, first I should point out that I think it’s the first report of the new Auditor General, and I think all members are grateful for the work she and her office are performing. I know, for the government, we are grateful that in this detailed examination of the books, the Office of the Auditor General has confirmed something that members of the opposition, I think without exception, stood and proclaimed and said couldn’t be done. That is that the books for 2013-14 were balanced.

The hon. Leader of the Opposition made reference to the Fort St. John Hospital. From my reading of the report, the impression might have been left, and perhaps this was inadvertent, that the borrowing charges that the Leader of the Opposition referred to extended to the entire project.

Because he raised the example, I can tell the House and him that in the case of the Fort St. John P3 project, total construction costs were in the order of $249 million. Of that amount, $95 million was provided by the regional hospital district, $121 million was funded by government, and $33 million was invested by the private sector. The provincial share was borrowed at government’s cost of 5.2 percent, and private sector finance was obtained at the commercial rate of between 11 and 12 percent, for a combined borrowing cost of 6.6 percent.

We are well aware of the opposition’s hostility for public-private partnerships. It exists roughly on a par with their aversion for projects being completed on time and on budget.

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

J. Horgan: Wow, on time and on budget. I can see a really red face over there on the Minister of Energy, because, of course, the northwest transmission line was going to come in at $400 million. It’s not quite done yet, and we’re just shy of $1 billion. So we’re not on time, and we’re wildly off budget, but certainly the Finance Minister can get up and stretch the reality if he wants to.

I’d also think it was one of those backhanded compliments from the Minister of Finance, welcoming Ms. Bellringer, the new Auditor General. We thank her for her work, and then we dissect it and say that it’s not factual.

Well, this is what she told us. She said that for the South Fraser Perimeter Road we’re paying 9.1 percent interest on that money; Surrey Memorial Hospital — 7.7 percent; Sea to Sky Highway — 7.5. The list goes on and on. The end-game for taxpayers is $80 million more, according to the Auditor General — not the official opposition but the Auditor General that was just praised, sort of, a minute ago by the Minister of Finance — $80 million more this year than we should. That’s the $80 million that’s not going to education. It’s not going to health care. It’s not going to children in need.

Again, my question to the Finance Minister: what does he think he would have done with that $80 million that we gave away in interest charges because you’re fixated on P3s?

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Hon. M. de Jong: I don’t know that the Leader of the Opposition really, really wants to engage in a detailed examination of the 40 3P partnership projects that the government and Partnerships B.C. have overseen over the past ten or 12 years. I’m not sure he really wants to engage in a detailed comparison of the record of achievement of projects coming in on time and on budget, as compared to what took place in that other decade.

Interjection.

Hon. M. de Jong: I hear the member’s colleague referring to a particular project that, ironically, was not a 3P partnership. The fact is — and I think the hon. Leader of the Opposition actually does know this — that in signing agreements that provide for a risk transfer to a private partner….

Interjections.

Hon. M. de Jong: Well, only a group that didn’t have a clue about how these projects develop would laugh at the notion of risk transfer.

Interjections.

Madame Speaker: Members.
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Hon. M. de Jong: In providing for that risk transfer, we have ensured that the taxpayers of British Columbia are protected and that capital projects come in on time and on budget. The value that the taxpayers have received has been confirmed over and over and over again.

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

J. Horgan: I know that Larry Blain and Partnerships B.C. reaffirm these things over and over again, because they wouldn’t exist if they didn’t.

For the minister to suggest that the risk has been transferred on the Fort St. John Hospital is absolutely preposterous. The smallest fraction of the borrowing cost is at 14.79 percent. That’s not risk transfer; that’s a gift. It’s not even Christmas, and the government is giving their friends gifts.

Again, my question is to the Minister of Finance. It’s not the official opposition that’s highlighting the $80 million that we don’t have this year for important services to British Columbians. It’s the Auditor General.

My question is directly to him. So $80 million could have gone a long way in a lot of places. I know you’ve got colleagues at the cabinet table that would have loved to have had access to that money. Why did you choose to give it to your friends and bankers?

Hon. M. de Jong: I am well acquainted with the hostility that the members of the opposition have for tapping into the ingenuity that the private sector can bring to the development of capital infrastructure in British Columbia. I am well acquainted with the ideological aversion they have to drawing on the talents of the private sector, partnering with government, drawing on the engineering and design abilities that exist and securing projects that are innovative and that are completed on time and on budget.

But I encourage the Leader of the Opposition — and I know he travels a lot — to stop in at towns right across British Columbia. Visit the hospitals, visit the schools, drive along the highways and become acquainted with the other public infrastructure that has been constructed, that has been provided to the taxpayers of British Columbia on time, reliably and on budget.

BUDGET REVENUES FROM
SALE OF GOVERNMENT ASSETS

B. Ralston: According to the same Auditor General’s report tabled last Thursday, the government is selling the silverware to balance the budget. As the Auditor noted, asset sales are “a significant part of the bottom line for the year.” The Auditor also notes that half of next year’s planned budget surplus will come from asset sales.

Can the minister tell this House what he plans to do when there are no assets left to sell?

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Hon. M. de Jong: I am a little bit surprised but not at all disappointed that the hon. member would raise this issue, because of course, he’s relying on the Auditor General’s report to make a point. She has made the correct observation that…

Interjections.

Madame Speaker: Members.

Hon. M. de Jong: …for fiscal year 2013-2014 we budgeted on the basis of $300 million in the surplus asset sale program. We realized $310 million. She also makes mention of the fact that the surplus, in her view, should be $232 million more than we revealed. And yes, there is a disagreement about the methodology leading to that.

But I remember this hon. member specifically. I remember him specifically standing there in the days before the House adjourned in 2013 encouraging all his colleagues to stand on the highest mountain and proclaim: “The budget can’t be balanced. It’s a myth. It doesn’t exist. It can’t be achieved.” He encouraged every one of them: “Go to your communities, stand on the corners, and tell everyone it isn’t so.”

The Auditor General has confirmed it is very much so. It is a balanced budget.

Madame Speaker: The member for Surrey-Whalley on a supplemental.

B. Ralston: Well, let’s go back to what the Auditor General says. It’s probably a little bit more reliable than what we’ve just heard. She said: “It is important to note that assets can only be sold once and cannot be relied upon as a continuing revenue stream.”

To put it into context, the government was in such a rush to sell the silverware that it increased asset sales from $13 million to $601 million in a single year.

Again to the minister, does he agree with the Auditor General — her observation that the government cannot continue to rely on asset sales to balance the budget indefinitely into the future?

Hon. M. de Jong: Well, the hon. member knows the answer to the second part of the question, because he is an astute observer and studier of the fiscal plan. He will know that for the fiscal year we’re in now, the budgeted forecast for surplus asset sales is $200 million, and for the subsequent two out years, there is no amount that is required, that is being relied upon. That doesn’t mean that there won’t be surplus assets sold. The member knows the answer to the question.
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Interjections.

Madame Speaker: Members will come to order.

Continue.

Hon. M. de Jong: I will leave it to him to decide whether or not he comes and his party comes to this position with clean hands. I note that in that decade of which we do not speak, Crown assets equivalent in today’s dollars to $1 billion were sold.

GOVERNMENT BORROWING COSTS FOR
PUBLIC-PRIVATE-PARTNERSHIP PROJECTS
IN HEALTH CARE

J. Darcy: Fraser Health has hospitals that are ranked amongst the worst in Canada for patient safety — and that’s according to the government’s own review of Fraser Health. Yet this government thought it was fiscally responsible to squander $22 million on higher interest charges in Fraser Health Authority alone. Why is the Minister of Health wasting millions of taxpayers’ dollars on higher borrowing costs instead of investing that money on the health services that British Columbians need?

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Hon. T. Lake: Well, the hon. Minister of Finance has provided some interesting insights into the Auditor General’s report in terms of the amounts that were financed privately versus publicly, and only a small portion, as it turns out, was at the higher interest rate. But for ten years the NDP promised a cancer treatment centre in Abbotsford. Ten years they talked about it. This is the government that built that cancer treatment centre in Abbotsford.

Madame Speaker: Member for New Westminster on a supplemental.

J. Darcy: You know, the Minister of Health can dress it up whatever way he wants, but the fact of the matter is that this government is being taken to the cleaners on high interest rates for borrowing for health care, and British Columbians are hurting as a result. Yet at a P3 forum last year the Premier said: “We combine the accountability of public ownership with the innovation, expertise and cost-effectiveness of the private sector.”

Let’s go back to Fort St. John Hospital. Can the minister explain the “cost-effectiveness” of spending an extra $3.3 million on borrowing charges in a community like Fort St. John, where people are waiting for months in order to get in to see a family doctor?

Hon. T. Lake: I can imagine that the members opposite are a little envious of the amount of investment that is made by this government in health care — over $9.1 billion invested in health care.

I can go through a list of projects that are completed or ongoing, like $606 million for new hospitals in the Comox Valley and Campbell River and $80 million in Kamloops for Royal Inland Hospital. The difference between the NDP investing in assets like fast ferries and us investing in hospitals is that we actually use those hospitals.

RELEASE OF INFORMATION ON
GOVERNMENT LAND AGREEMENT
WITH KWIKWETLEM FIRST NATION

S. Fraser: As part of its rush to sell off the silverware as quickly as possible, government recently struck a deal with the Kwikwetlem First Nation to allow publicly owned property to be sold. In the past two years alone the government has issued press releases and details about economic agreements with First Nations at least 13 times.

Yet when the ministry signed an $8 million extinguishment agreement with the Kwikwetlem last year, there was no release. There was no public statement of any kind. In fact, if it hadn’t been for the federal government’s new rules, the public would have still been in the dark about this.

Why did the Minister of Aboriginal Relations and Reconciliation fail to release details about this agreement until after questions arose regarding $800,000 of a bonus paid to Chief Giesbrecht?

Hon. J. Rustad: Thank you for the question. We work very closely with First Nations across the province on a wide range of things. We’re very much engaged in relationship-building. We’re very much engaged in how we can help, particularly, First Nations to engage in the economy — things like revenue-sharing agreements on forestry and mines and other types of things.

When we’re working with First Nations on a wide range of things, it’s very important that we look at ways to be able to make sure we include them, to make sure that we, as the courts have said, consult and, where appropriate, we accommodate.

Madame Speaker: Member for Alberni–Pacific Rim on a supplemental.

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S. Fraser: Back to the question about the Kwikwetlem First Nation. In August the B.C. Finance Ministry confirmed with the media that the Kwikwetlem were paid $8 million to extinguish their claims to “one plot of land.” But an FOI received by the opposition shows the payments actually extinguished claims to a total of seven plots of land. Several of those plots are currently posted on line — one for $3.7 million and another one for $2.8 million.
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Why did the Ministry of Finance report that the extinguishment covered one plot of land when it actually covered seven?

Hon. M. de Jong: Thank you to the member for the question. The government takes very seriously its obligation to both consult and, where appropriate, accommodate the interests of First Nations. We also take very seriously the obligation to disclose, as clearly as possible, to British Columbians the nature of those transactions, to disclose through our budgeting process — which, by the way, has been acknowledged by virtually every third-party agency that examines such things as being the single most transparent budgeting process in Canada.

Whilst there is a great deal more work to be done, the process of fulfilling our obligations, consulting with First Nations and building a more positive relationship going forward will continue, and everyone in the government is proud of that fact.

S. Robinson: I’m really grateful to hear from the members opposite about the importance of consulting. The government has laid out how to meet legal obligations, when consulting with First Nations, in its latest policy manual. The manual states that the consultation process should be “reasonable, transparent and proactive.”

In this case, we know that many of the 80 members of the First Nation have said that they were not aware their rights to land had been extinguished. We also know that the band’s only two councillors have said that they were not aware of Chief Giesbrecht’s $800,000 bonus until after the fact.

I want to know from the Minister of Aboriginal Relations and Reconciliation how his government can possibly defend the deal as being reasonable, transparent and proactive when it was shrouded in secrecy.

Hon. J. Rustad: As we have said, we go out and engage with First Nations on a wide range of things. We are continually out consulting with them — everything from various activities, resource activities and things that happen on the land base, whether it’s liquefied natural gas or any types of activities that we’re doing. We’re out working with First Nations. We’re building partnerships. We’re making sure that we seek opportunities for First Nations to be able to participate fully.

Specifically, how a First Nation deals with things internally — that’s a matter, perhaps, to be asking the First Nation. But what we do is we engage with the leadership. We engage with the First Nation. We go out and make sure that we walk through everything that’s happening with consultation, and where appropriate, we also put forward accommodation.

Madame Speaker: The member for Coquitlam-Maillardville on a supplemental.

S. Robinson: The minister was certainly talking about consulting, but certainly they didn’t consult with the members of the Kwikwetlem First Nation. Shortly after the $800,000 bonus was revealed, federal MP James Moore said he would investigate this deal and meet with the B.C. Minister of Aboriginal Relations.

I’d like to ask the minister…. James Moore, the MP, said he recommended that the province should have more prerequisites in place when striking economic benefit agreements with First Nations. He said the fact that the chief paid members $10,000 each and then said he had a majority support of the band — the quote is from Minister James Moore — was “dodgy at best.”

[1420]

Will the minister admit that his government played a part in this dodgy deal, and what steps is he taking to prevent this from ever happening again?

Hon. J. Rustad: As has been said, we take our duty to consult very seriously. We are out engaging with First Nations.

I do find it interesting that the member opposite’s line of questioning seems to indicate that there shouldn’t be a respect for aboriginal leadership in the way that they work with their bands. We’re out engaging with First Nations. We’re out working with the bands. We’re coming to understanding, through the consultation, the things that we need to be taking into consideration and making adjustments. As has been said, we provide appropriate accommodation where required.

M. Farnworth: The Minister of Aboriginal Relations and Reconciliation wants to make a great deal out of the consultation that he says his ministry has undertaken. Yet one of the first questions that was asked by the member from Alberni, which he failed to answer, was on the government’s obviously deliberate decision to skirt the federal rules around the release of the agreement until after it had been done. There was no transparency there, none whatsoever.

The other questions that have been asked, the minister has again failed to answer. I’ll ask him one more time if he can tell this House, with regard to the land decision with the Kwikwetlem in the Tri-Cities area and those parcels of land on Burke Mountain: what specific steps were taken to ensure openness and transparency of that land sale and the extinguishment of those title rights with the band members of the Kwikwetlem?

Hon. J. Rustad: To the member opposite: thank you once again for the question. I find it interesting that the opposition seems to think that we should be dictating to First Nations how they should spend money that they receive.

I will say this. As we enter into agreements with First Nations, as we go through and do consultations and final-
[ Page 5133 ]
ize agreements, it’s only appropriate that actually when you reach those agreements, the terms of those agreements are something that should only be shared in agreement between the nation and the province.

When we go into these discussions, we make sure that we’re upfront with everything. We talk to the First Nations around all aspects of what we’re doing. That is what consultation is. Where appropriate, we provide the appropriate amount of accommodation.

Madame Speaker: The member for Port Coquitlam on a supplemental.

M. Farnworth: We’re talking about a specific agreement that saw the extinguishment of title on seven pieces of land on which the band members were not informed, the councillors were not informed and which this government did not release the information, in violation of the existing federal guidelines, until after the deal was done. How on earth is that upfront and transparent?

Again to the Minister of Aboriginal Relations and Reconciliation: what specific steps were taken to ensure transparency and openness so that negotiations were upfront? If you don’t want to answer that question, which you clearly have not been able to, to date, how about just the one: why did you skirt the federal guidelines?

Hon. J. Rustad: When we as a province go about looking at an asset, a piece of property, that we may wish to consider disposing of, it’s important to be going out to the First Nations that may be involved in it and having the discussion and saying: “Hey, this is something we’re interested in doing.” We go out, and we make sure that we understand what their interests may be. We go out and try to work with them, and where necessary or where appropriate, we find accommodation.

[1425]

The process for us engaging with nations is the same all around the province. We engage with the leadership of the nation. We engage in the way that they want us to engage with them. I find it interesting that the member opposite is suggesting we should ignore the leadership of a First Nation and go around and do something with the members.

We take the consultation very seriously. It’s something that is not just required under the courts but is something that, fundamentally, we want to do, and where appropriate, we provide accommodation.

[End of question period.]

Petitions

J. Kwan: I rise to table a petition. I have a petition with 281 names addressed to the Minister of Housing and the provincial government, calling on the government to halt the process to sell Stamps Place and instead to engage with the residents and community partners in developing a comprehensive, place-based housing strategy for the property.

Orders of the Day

Hon. M. de Jong: Madame Speaker, second reading on Bill 6.

Second Reading of Bills

BILL 6 — LIQUEFIED NATURAL GAS
INCOME TAX ACT

Hon. M. de Jong: I think, as members know…. Well, first let me move that Bill 6, the Liquefied Natural Gas Income Tax Act, be read a second time now.

Bill 6 introduces a new tax. It is a tax on income from liquefaction activities in British Columbia that we believe and commend to the House as providing a fair return for British Columbians while ensuring that British Columbia remains a competitive jurisdiction for investment in the liquefied natural gas industry.

I will say at the outset that I’m hopeful. The bill was introduced several weeks ago. I’m hopeful that all members of the House, independent members and members of the opposition and the official opposition critic, have received appropriate briefings on what is, admittedly, a complex piece of legislation. Hopefully, those briefings have provided some additional information and insight that will assist in the discussions and debates that will take place in this chamber going forward.

I’ll, I guess, also say this. I am a member of a government, and have been a member of a government for almost 14 years now, that is not accustomed to introducing legislation that creates a new taxation instrument. That is not to say that it hasn’t occurred, and I know that members opposite have their own favourite example.

Interjections.

Hon. M. de Jong: I was actually thinking about the introduction and discussion that took place around the carbon tax. I recall that one very well. I remember hearing, over an extended period of time, from the official opposition — their opposition to that measure. I heard it repeatedly during the electoral campaign that followed. Then I think one quiet Friday afternoon, someone in the official opposition a year or two ago said: “Well, we kind of got it all wrong, and we’ve changed our position on that.”

I say that because I will be very interested to hear what the official opposition has to say about the taxation measure that is before the House today and to endeavour to understand, as best I can, their rationale for the position
[ Page 5134 ]
that, in a few moments, I am hopeful they will reveal to British Columbians with regards to the establishment or creation of an LNG income tax in British Columbia.

[1430]

In terms of the mechanics of the tax itself and the legislation that we are considering, the tax will be effective for taxation years starting on or after January 1, 2017. It will apply to a taxpayer’s income regardless of whether the liquefied natural gas will be used domestically or exported to expanding markets elsewhere in the world.

The tax will apply on a facility-by-facility basis. A taxpayer that earns income from liquefaction activities at more than one LNG facility must file a tax return in respect of each of those LNG facilities.

[D. Horne in the chair.]

Bill 6 also imposes a tax of 3.5 percent on an LNG taxpayer’s net income. That is, after it has deducted its capital investment and any operating losses from its net operating income, it will pay a tax of 3.5 percent on that net income. That rate, pursuant to the legislation before the House, will rise to 5 percent in the year 2037. While the taxpayer is recovering its capital investment and operating losses, the act imposes a minimum tax of 1.5 percent on net operating income that ensures that LNG taxpayers pay tax during those years when they are deducting their costs.

I might also point out that, through the introduction of Bill 6, the government is fulfilling a commitment that we made at the time we tabled Budget 2014, in February of this year, to introduce liquefied natural gas income tax legislation in the fall of this year. During the 2014 budget we pointed to a general structure for the LNG income tax that is consistent with the structure set out in this bill.

At that time we also said that the tax rate being considered was at up to 7 percent. But we also said that we were intent on reviewing that rate and finalizing it after having due regard for an analysis of the global financial situation, the market and local economic conditions.

I think that it is fair to say that since February 2014 we have seen some changes in the global economic circumstances surrounding the LNG sector. The long-term forecast of the spread between natural gas prices and prices for liquefied natural gas, as given by agencies like the Energy Information Administration, has narrowed relative to earlier estimates.

The tax rate of 3.5 percent of net income — and it rises, as I said, to 5 percent in 2037 — was chosen in light of this change in expected global economic conditions, bearing in mind that the tax must ensure that British Columbia is competitive relative to other jurisdictions competing for investment in the natural gas and liquefied natural gas sectors.

The liquefied natural gas industry — it is, in my view, very fair to say — represents a huge opportunity for our province, in which all British Columbians will share significant benefits. Revenues from the LNG income tax will contribute towards maintaining the world-class suite of services and provide us with other opportunities that other jurisdictions would only be dreaming of.

Bill 6 also includes amendments to the Income Tax Act to implement a natural gas corporate income tax credit that will further encourage investment in liquefied natural gas in the province. The natural gas tax credit applies to an LNG income tax payer that has a permanent establishment in British Columbia.

Now, there has been some confusion about the use of these terms, and I think some of that’s probably understandable insofar as these terms have been considered and have specific meaning within an income tax legislation.

[1435]

I’ll simply say this. Whilst it is certainly our hope, desire and objective to attract as much corporate presence and investment in British Columbia as possible, including the establishment or relocation of corporate headquarters and corporate head offices, the natural gas tax credit is not predicated exclusively on that notion.

It requires the allocation of income to British Columbia in circumstances where investors will have choices about where they allocate income for activities, for example, taking place within their Canadian sphere of operations.

The credit is calculated as 0.5 percent of the cost of natural gas owned by the corporation at the inlet to an LNG facility, with a cap on the maximum credit that can be claimed. For corporations with a permanent establishment in British Columbia, the unused credit can be carried forward and used in future years if the corporation is an LNG taxpayer in those years.

To that end, coupled with the other provisions I’ve described, we believe that the bill creates certainty for investors as they move towards making their final investment decisions. It also sets the stage, we believe, for British Columbians to begin receiving their share of the opportunities created by this new industry.

We have sought, through our analysis and through the discussions and the consultation that have taken place, to arrive at a structure for this taxation measure that represents a balance between ensuring that British Columbians, as the owners of this resource, secure a fair return on the added value that accrues when it is converted into a liquefied form and available for shipment and sale out of the North American marketplace….

It’s a balance between that primary objective and ensuring that British Columbia represents, from a cost perspective, a competitive jurisdiction within which to attract the significant international investment dollars that are seeking to develop and expand the production of liquefied natural gas.

We believe — the government does — that, coupled with the numerous other natural advantages that flow
[ Page 5135 ]
from the presence, in abundance, of natural gas in British Columbia….

Our proximity to market, our available skilled labour, the climate — the significantly reduced operating costs that accrue in the conversion process in a climate that is noticeably cooler, and a gas that emerges from the ground significantly cooler than in other places in the world — and our stability…. All of these, and other advantages, will contribute to providing potential investors and proponents with the comfort and certainty they require to make these investments.

This is a unique opportunity, Mr. Speaker, and one that the government, as you know, is resolved to work to see realized. It is apparent from the comments that British Columbians have heard from the Premier, from the Minister of Natural Gas, that the government has established this as a priority going forward, in terms of the economic life of the province.

We believe that the taxation measure contained within Bill 6, including the natural gas tax credit, will serve as an important plank in the overall suite of regulatory and taxation measures that will render us competitive and attractive for those who are seeking to develop this industry in a way that will benefit British Columbians, their families and communities across British Columbia.

[1440]

I said at the outset that I would be listening with interest to the debate as it unfolds. I have recognized that an instrument like this is complicated and complex and, therefore, purposefully wanted to ensure that members had an opportunity to examine it in detail and come to a position as to whether or not they were supportive of this measure. In this democratic chamber, of course, members are free, and it is an essential ingredient of our democracy, to lay out their position.

I hope that the official opposition and other members in the chamber will do so and will make clear what their view is about the manner in which British Columbians can and should benefit and extract value from this natural resource that we have been blessed with.

I will be listening to speakers from all sides of the House and may, at the conclusion of the debate, have some thoughts on what I have heard about the arguments that are advanced. But for now I’ll take my place and welcome comments from other members.

B. Ralston: I rise to take my place in the debate on second reading of Bill 6, the Liquefied Natural Gas Income Tax Act. I thank the minister at the outset for the briefing. He’s mentioned that. He is, of course, correct that it is a complicated piece of legislation. The briefing did assist in understanding some of the complexities.

I was at an LNG seminar not so long ago where one of the principals, actually a proponent, said that it had become, unfortunately, perhaps too complex. We’ll explore that here and at committee stage, perhaps, in some more detail.

What I want to do is just set out briefly what I propose to touch upon in my comments. I want to talk a little bit about the chronology that has brought us here. Certainly, the promise of establishing an LNG industry in British Columbia was the signature promise of the B.C. Liberals in the 2013 election campaign.

Some have said, and I concur with this, that grandiose and extravagant promises were made. I’ll review those in some detail in order to set the context of this bill. I’ll comment on that.

I also want to get the opportunity to comment on what the minister describes as changing economic conditions that have led to a change in the construction of the bill — in particular, the tax rate and through some additional increments such as the deductibility of pre-construction costs, which weren’t envisaged just seven or eight months ago. That is the peg on which the government hangs its hat, in the sense that it was necessary to change the bill and reduce the prospective revenue should revenue come about at some point in the future.

Certainly, I will say that there’s no doubt that resource industries are notoriously volatile. The challenge in creating tax regimes…. Also, the minister has — in media comments, although not here — talked about economic development agreements with proponents that I gather are intended as companion pieces to the economic elements contained in this package and in Bill 2. It’s no surprise that conditions change. Indeed, that’s the nature of global markets — dynamic and intense.

So to proffer that as the only reason for changing the composition, the tax rate and the elements of the bill I think is not something that bears close scrutiny. I’ll have a few comments on that.

[1445]

I’ll look at the industry in its global context in assessing the accuracy of that claim that things have changed and that they only changed very recently, as opposed to being foreseeable in the spring, back when the budget was tabled and the framework was set out. I’ll then look at some of the elements of the bill itself. There are some significant and interesting elements that go a long way toward reducing the prospective revenue that this measure will capture.

Finally, I do have a few brief comments — again, in the context of the bill — about the economic development agreements, as the minister has chosen to characterize them. There’s a vast literature about those kinds of agreements. They are sometimes called stabilization agreements, and many countries that have a natural resource base and natural resource industries negotiate those with proponents. It’s widely understood, and there are many variants of that, whether it’s in the oil industry, whether it’s in the natural gas industry or whether it’s in the mineral industry. There’s an interesting literature on that, and I’ll review that.

If I could begin, I first want to make it clear at the
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outset that as an official opposition, as a political party, we support and embrace the opportunity that liquefied natural gas may represent for British Columbians. Our leader, the Leader of the Official Opposition, has set out some conditions that we will use to scrutinize the opportunities that are presented.

One is that it come with good jobs for British Columbians. We look forward to express guarantees about jobs and training opportunities for British Columbians, and British Columbians first.

Secondly, we look to a fair return on the resources that are our Crown resources — that belong to the Crown and to all of us here in British Columbia.

Thirdly, that we look to recognition of First Nations in the development of an LNG industry and the manner in which they are made partners in that process, in the revenue that may come, and in the jobs and training that may be offered.

Finally, protection of our air, land and water, as well as living up to our climate change commitments. It’s in that context that we set out to examine what the government has put forward.

I now want to turn to some of the background about how…. It’s useful just to understand, I think, the commitment that had been made in the election and the way in which we wound up here with this particular bill.

It does seem and it is a bit striking that the Minister of Natural Gas has used the language of negotiating with proponents, although I note that the Minister of Finance didn’t use that language. He used what he referred to as “discussions and consultations.”

The idea that one would negotiate with proponents to set one’s tax bill, I suppose, is something that ordinary citizens don’t have access to. But I think it is a more accurate description of what took place than the typical discussion and consultations that the Minister of Finance has referred to. I do note that disparity in the language. I’m not sure whether it’s deliberate or whether it’s inadvertent, but certainly it’s marked in the manner in which the two respectively approach these questions.

Certainly, there always is an element of negotiation in dealing with major resource investments. But on the other side, the sovereignty of the Crown is such that one doesn’t, one would think, lightly give up the sovereign power to set taxes and other ancillary obligations through legislation.

[1450]

The changing landscape of the LNG promises began back in September 2011, although there has been a long history of LNG…. Like many other jurisdictions in previous decades, there was a discussion about importing LNG as opposed to exporting it.

But it began in the September 2011 jobs plan. I say jobs plan because that’s what they call it, although it’s been a failure as a jobs plan, I note parenthetically. The promise there was at least one natural gas export terminal on line by 2015 and at least three in operation by 2020. I think it was generally thought that the project to come on line by 2015 would be Kitimat LNG. That is the now Chevron project with Apache, although Apache has stated publicly their wish to exit the project.

In February 2012 there was a release of what was called the natural gas strategy — again, the date of 2015 and at least three in operation by 2020 with revenue of $90 million annually from the first phase of the Kitimat LNG plant, totalling more than $1 billion by 2035.

In February 2013 — that was the date of the throne speech — the rhetoric had changed rather dramatically, and it became, certainly, more intense. I’m sure that had everything to do with the impending election. What was promised then were five new LNG plants in British Columbia before the end of the decade, projected total revenues estimated between $130 billion and $260 billion over 30 years. The LNG development was poised to trigger $1 trillion in cumulative GDP over the next 30 years.

This was the point at which the prosperity fund was introduced as an element. Priority would be to eliminate the provincial debt, enhance government services and reduce taxes, including eliminating the sales tax — a noticeable shift in the intensity of the commitments. A much more frenetic pace was envisaged, and the construction of more plants was foreseen, or at least projected.

In the campaign in April and May 2013 the platform of the B.C. Liberal Party, the governing party going into the election, was, “We’re going to have a goal of at least three LNG facilities on line by 2020, and there was talk of commitments by multinational companies, projected revenues of the same $130 billion to $260 billion over the next 30 years, $1 trillion in economic activity, and a number was put on the prosperity fund — that up to $100 billion would flow to the B.C. prosperity fund over the next 30 years. “Our goal is a debt-free British Columbia, and we intend to reach our goal 15 years from now.”

It’s perhaps worth noting, in that pre-election period, some of the further comments. February 12, 2013 — this was a B.C. government press release on the prosperity fund.

“LNG development is poised to trigger approximately $1 trillion in cumulative GDP within British Columbia over the next 30 years, and that means more than $100 billion would flow directly to the prosperity fund.

“Provincewide LNG is expected to create on average 39,000 annual direct, indirect and induced full-time jobs during a nine-year construction period. As well, there could be as many as 75,000 full-time jobs required once all LNG plants were in operation.”

A February 2013 B.C. government fact sheet on the prosperity fund says:

“The economic impact of five new LNG plants in British Columbia before the end of the decade will be significant. Projected revenues are estimated to be between $130 billion and $260 billion over the next 30 years.”

That release continues on.

“In order to maximize the benefits of these developments to fu-
[ Page 5137 ]
ture generations of British Columbia, the provincial government is establishing a new British Columbia prosperity fund.”

[1455]

Those were some of the releases that were associated with the release of the Speech from the Throne in 2013.

Indeed, the Premier said, in an article in the Times Colonist newspaper: “‘Once we bring this opportunity home for this province, by the time my son is 26 years old we could be debt-free,’ said the Premier” — and her personal name is used there — “whose son Hamish is 11.”

This was expressed in a very graphic way, with no absence of self-confidence or equivocation whatsoever in terms of the prospect, the shimmering prospect that was out there for British Columbians.

In March 2013 — again, just in that same period just prior to the election period — there was an international LNG conference. The B.C. government held a two-day “Fuelling the future” conference. The government’s news release for that conference states, and I quote an excerpt here: “With five major LNG projects proposed by 2020, British Columbia is on the verge of becoming a global leader in natural gas production, generating thousands of jobs and $1 trillion of economic activity over the next 30 years.”

The government, around the same time, issued their one-year update on the LNG strategy, which said: “Monumental progress has been made in only one year. The B.C. jobs plan goal of three LNG facilities by 2020 is on track. We’re even showing strong signs that we could surpass that target.” Initially, three facilities, one to be commissioned and operational by 2015, expanding to five, and the strategy claims that that goal would be surpassed.

The election campaign. Everyone will remember that the Premier toured the province on a bus emblazoned with “Debt-free B.C.” written on the side of it and said during the campaign: “Our goal is debt-free B.C. We intend to reach our goal 15 years from today.” She made some other similar claims that echo what was in the throne speech and in the natural gas plan.

Then the period after the election. In June 2013 there was a continuation of the same tone, the confident rhetoric — ironically, in a government press release on a BG Group export application. This is because, of course, since then BG has signalled its decision to postpone its final investment decision at least a couple years until market conditions change.

But back on June 20, 2013, the government press release said about the BG Group export application: “‘Once again, we see companies wanting to take advantage of B.C.’s LNG potential, and this move today highlights industry’s continued interest in its potential,’ said the Premier. ‘We are developing this sector so that it benefits all British Columbians for generations to come.’”

In July and August of 2013 a B.C. Natural Gas Workforce Strategy Committee report was released. It mentioned the same number of 75,000 permanent skilled workers once LNG projects were fully operational.

In September 2013 the optimism, at least from the Premier, seemed undiminished. This was on a radio program, September 10, 2013, CBC. “We are going to get, we hope, the final investment decisions made next year. It’s going to be a pretty quick turnaround, and we are planning for those 100,000 jobs now, Rick.”

[1500]

There was no fall session, although the Minister of Finance did note that “the new tax regime won’t be put through until the 2014 session, although he hopes the general outline is going to be settled and shared publicly before the end of this year.” That was the end of 2013.

The tone then begins to shift in October 2013. Notwithstanding the Premier’s continued optimism and the same election rhetoric, the Minister of Natural Gas said the first plant would be on line in 2017 or 2018. The expectation that a plant would be on line by 2015 seems to have been abandoned at that point.

The delayed tax legislation. The Premier said in an article — this is October 2, 2013, in reference to the tax legislation that we’re now debating and that was tabled just two weeks ago — “We hope we’ll have it done in the fall.” That was last fall. The Premier said “an agreement could come as early as the next month or two and would be enshrined in legislation in the spring.”

Then the Minister of Natural Gas said he expected that the earliest natural gas might be flowing from some of the province’s LNG prospects is 2017 or 2018. The B.C. government had said that there are ten proposed LNG projects, three of which have approved export licences from the National Energy Board.

There’s a gathering skepticism about many of these promises. The Minister of Natural Gas felt obliged on November 19, 2013, to defend the prosperity fund number of $100 billion. He said: “I have done the calculation. I have looked at the pure numbers, and I’m quite comfortable that we can reach that goal.”

He went on to say: “Our objective is twofold — to build both. It’s a way to pay down the provincial debt in about 15 years, doing this as we pay down the debt. Then this money will go into a prosperity fund that will help for building a legacy for the future of British Columbia.” That was November 19, 2013. That’s the response to some of the crescendo of skeptical rhetoric that arises.

The next significant step in the process is the tabling of the budgetary framework in February 2014. That is part of the budget and fiscal plan 2014-15, 2016-17. In that document tabled February 18, 2014, there was what’s called a topic box.

That is a couple of pages which discuss the long-term opportunities for liquefied natural gas update. This was included with the Budget 2014, so this is in the three-year fiscal plan. It’s meant to provide guidance. It’s obviously a document of paramount importance in the finan-
[ Page 5138 ]
cial planning of the government. It’s not something that would be undertaken lightly.

The topic box confirms somewhat some of the elements that have been expressed up till this point. The topic box says:

“To this end, the province intends to introduce legislation later this year to introduce an income tax applicable to the LNG industry. The LNG income tax will be a two-tier income tax, with a tier 1 tax…of 1.5 percent and a tier 2…rate of up to 7 percent — the final rate to be determined and confirmed in legislation. The LNG income tax will apply to income from liquefaction of natural gas at LNG facilities in British Columbia.”

[1505]

It explains some of the elements of how it will operate. We’ll talk about those — the minimum tax and its deductibility from the higher rate later on and some of the costs that will be deducted and the way in which that will operate.

Although there is some reference to projected revenue, the text is careful to say that this chart “is not intended to reflect actual revenues to the province but is…an illustration of how the LNG income tax will work under some specific assumptions.” That’s probably a note of caution from the deputy minister, because the deputy minister does have to sign off, I think, quite literally on the budget.

Indeed, at the front of the page there’s a confirmation by the deputy minister and secretary to the Treasury Board, Mr. Peter Milburn, where he sets out some more, I think, cautious and accurate information about what may take place. He does say, at the bottom of the first page: “The fiscal plan assumes no explicit economic activity or incremental resource revenue from liquefied natural gas development in the province.” Notwithstanding the fact that it’s set out in the budget notionally, there’s no assumption by the deputy minister, being cautious and accurate as he must be, that there is any revenue that is likely to come about.

That’s what’s in the budget. Although the legislation that we have before us was promised in 2013 and touched upon in the budget in February 2014, the act was not introduced until just weeks ago. At a recent conference I attended one of the participants, a senior representative of one of the major proponents, agreed. And there was a question from, I think, Mayor Bill Streeper from Fort Nelson — questioning the number of delays of the legislation. I don’t say this to be churlish or peevish. Certainly, the legislation was promised, and I think it’s recognized by the government and by those dealing closely with this bill that certainty, in the sense of knowing what the fiscal framework is, is important to making a final investment decision.

The idea that this tax regime would be in place in advance of a final investment decision is an important element in advancing the prospect of an industry here in British Columbia. So the delay I don’t think has helped. Certainly in the time since this fiscal framework has not been in place, as the minister has noted or claimed, conditions have changed, and that may have had something to do with the change in the legislation. Certainly, it’s clear that timing is important.

The Australian industry — which will be, according to many projections, a global leader up there with Qatar by 2020 — was able to, in the time in which they were looking for long-term contracts, sign and execute long-term contracts of supply with major Asian buyers at a time when the price was higher. They were able to lock in those contracts, therefore providing the long-term fiscal stability to make the final investment decisions to go ahead with a number of plants in Australia. And there are some concerns about the way in which Australia unfolded, but the timing there assisted them. The delay of the statute itself I’m sure didn’t assist British Columbia in how its proponents viewed it.

[1510]

The discussion is of the changing economic conditions. The minister referenced some changes, although the slides that were provided at the briefing and were provided publicly to the media are a bit more succinct. But certainly, I think everyone was well aware, and I’m going to quote from some documents here just about what the lay of the land was economically last spring, a year and a half ago, in 2013, when the….

Deputy Speaker: To confirm, the member is the designated speaker?

B. Ralston: Yes, please. Thank you. I was hoping so. I think that’s a self-declaration. I have the consent of my House Leader, so fear not, and I know the members opposite are enthusiastic in their wish that I continue, so I thank them for that.

Interjection.

B. Ralston: Well, it’s something that bears close examination, and sometimes that close examination is quite revealing.

So in the spring of last year there were…. Generally, the context of the industry is such that rapid change is occurring. When one looks at…. I’m going to cite a KPMG paper — the emerging markets, KPMG, again, at a conference that I attended — Major LNG Projects: Navigating the New Terrain, with a focus on Canada, the United States, East Africa and Australia. Those are new sources that are coming on to market.

There are some significant elements that KPMG notes are challenges for any country or any proponent that proposes to establish a new industry, and I want to review a few of those. Again, these are well known, and they haven’t changed between February and October of this year. There’s an “intense competitive environment,” they say, and they do note that “of the last 12 LNG projects, ten went over time and/or budget, many by 40 to 50 per-
[ Page 5139 ]
cent, according to Deutsche Bank.”

“Labour markets in Australia, for example, were heavily stretched by simultaneous LNG and mining booms…. East Africa needs to create investor confidence, develop infrastructure and build a skilled workforce.”

They mention British Columbia specifically, that a number of capital projects are being contemplated in LNG, mining and energy development. They say: “The vast majority of these projects are in the north, where populations are thin and skilled work has historically been scarce. At the same time, British Columbia continues to be a net exporter of workers to provinces such as Alberta.”

They note those concerns, and that, I think, is something the government would claim that they are attempting to address. This is not me saying this. This is KPMG, who are specialists. They certainly have a section that deals with energy, and particularly LNG.

They mention challenges, and these are all challenges that are known. Some of these are ones that have been referred to by the minister in his presentation about changed economic conditions. I would say that these are well known — and easily anticipated if they weren’t well known. For example, the U.S. Gulf Coast is changed very dramatically in terms of the opportunities that are available in the U.S. Gulf Coast.

One of the projects which is talked about is Sabine Pass. It’s a project that’s owned by Cheniere Energy. It’s an 853-acre brownfield site about a mile and a half from the open water. There’s obviously a port established there. It was an old regasification plant from the days when LNG was imported and then converted back to gas and shipped into the pipeline.

[1515]

There’s a proprietary pipeline connecting that outlet to the natural gas grid in the United States, and it’s very well established. It’s a brownfield site. In fact, this was commented on recently in the decision of BG not to proceed at this time, because BG has an interest in Sabine Pass.

There are others. There are others in Corpus Christi in Texas, there are others in Louisiana as well, but I choose this one for illustrative purposes. It’s two trains that are at a state of construction where they should be operational in 2015, and there are a further two trains which will be operational in 2016 or 2017.

The striking thing about the competition from that part of the world…. Again, this was known. This is not new. This is not surprising. This is part of the challenge that I’m sure the Minister of Natural Gas would say that he is well aware of and that he is hoping to be competitive with. The challenge there is that the gas is sold at the Henry Hub price, which is the American domestic price. What KPMG calls it is a non-traditional commercial model.

“Unlike most traditional LNG projects, the U.S. Gulf Coast will secure gas from the grid rather than from dedicated fields, and its price is expected to be linked to the Henry Hub natural gas index rather than to oil. Dry gas feedstock presents quality challenges for Asian customers. Non-traditional buyers are emerging, such as the Middle East and Caribbean, who may have special requirements, such as different seasonality or small-term contracts.

“North American projects are also being seen in a new geopolitical light as political developments make some traditional gas exporters seem less reliable. Meanwhile, traditional Asian LNG buyers continue to favour security of supply and certainty of timing but are starting to demand more competitive pricing.”

The price element, what LNG proponents in British Columbia are looking for, are long-term contracts. They traditionally have been oil-linked, linked to the price of oil, and it’s been difficult for British Columbia–based proponents to secure those contracts in order to finance the project in a successful way.

So that group there is a major competitor and, indeed, directly connected to the decision of BG not to advance its interests on Lelu Island.

Back in May of 2014, The Economist magazine had an article about the international gas market talking about…. The headline is “Buyers Will Gain More Than Sellers.” They speak of existing supply but new supply that’s coming on — again, speaking of Australia, which will become the largest LNG supporter after Qatar. “‘Although piped gas is set to grow too, LNG’s share of the world gas supply is set to rise from around 15 to 20 percent to as much as 30 percent if all of the projects being planned come to fruition,’ says Dirk van Slooten of the International Gas Union, an industry body.”

There are new projects coming on stream. In Papua New Guinea a plant just opened. There are suggestions that in order to get a better deal from what, I suppose, some of the Baltic countries — Lithuania, Latvia and Estonia — regard as an unreliable supplier, Russia, who has traditionally supplied not LNG but gas by pipe to the Baltic republics…. Given the commercial treatment of Ukraine in recent years, they are scrambling to develop alternate sources of supply, and what they have done is they’ve commissioned a floating LNG plant.

According to this, they bought a floating regasification terminal, the Independence, at a cost of $330 million. Jaroslav Neverovič, the Energy Minister, said that “it is being treated as part of his country’s pipeline grid. Even if it is not used, it pays its way with bargaining power. It starts operating only in December. But Russia has already offered a 20 percent price cut.”

[1520]

There are many other examples of the competitive landscape and the changes. Certainly, if I can turn to some of the specific ones, there are a couple of reasons that are given and that point to, the minister claims, changing requirements, a changing landscape. This is to justify, I think, the change in the rate that was talked about in the budget document in the spring of 2014. These are reasons that are offered to support that decision and claim that these were, I suppose, unanticipated or had to be accommodated.
[ Page 5140 ]

“LNG selling prices have declined.” I’m reading from the briefing slide. “More global LNG supply due to competition.” Well, what’s very clear — from the International Energy Agency and its mid-term report to 2019 — to observers of the industry and the industry players is that there is more supply coming on, due to competition. That’s well known, well established and not a surprise.

The further example is: “China’s economic growth is slowing, and China is acquiring natural gas from pipelines.” The fact is that China’s economic growth has been trending downwards from the heady days of 12, 13 and 14 percent annual growth in GDP down to now 7 percent.

I saw a recent report, yesterday or the day before that anticipated that it might settle at 5 percent, a somewhat bumpy descent — still growth by most standards but nothing like the comparison to the higher growth of previous years. That, again, has been anticipated, certainly foreseeable and known as a speculation, although nothing is known for certain in economic prediction.

In the spring — the next reason that’s given — “Japan is considering restarting its nuclear power program.” Again, that hardly should come as a surprise. Given the post-Fukushima events, there was a natural reaction and a political reaction at the leadership level in Japan. Partly, the result was to drive up the price of LNG — certainly in the Asian region, that sub-market. But the fact that Japan is considering returning to a nuclear program is something that, again, I think was evident.

In my own self-funded, self-guided trade mission to Japan last November I met with the Canadian Ambassador to Japan, and he told me that that’s what he expected would be done at the political leadership level. Because of the economic circumstances of the country, the requirement for and the price of electricity, they would return to nuclear — not in a rush, but certainly not at a much higher level than they’d done in the immediate post-Fukushima era. That element I think is understood and anticipated by many, and I don’t know why that would be signalled as a change.

“Oil prices are declining, reducing the value of oil-indexed contracts.” That may be. This may be the one factor that has changed dramatically, certainly in the last two months. The higher price of oil has declined, and there is an adjustment taking place. But it’s very evident from the work that’s being done by proponents in advance of that price decline that they were unsuccessful in luring Asian buyers to sign oil-linked contracts partly because of the alternatives elsewhere, which I’ve spoken of earlier.

Then the final comment in the slide in this category is: “Potential purchasers are looking for Henry Hub–based contracts.” That’s the reference to Louisiana — Sabine Pass, Freeport and Corpus Christi — those potential LNG plants in the United States.

[1525]

There has been a change, of course, in American energy policy. Americans, for security reasons, were traditionally loath to export energy, given that they were net importers, but the shale gas revolution in the States has meant that for non-FTA countries, the U.S. Energy Department and FERC are prepared to grant export licences. That was previously a sticking point. That’s changed dramatically now. So that opens up those opportunities.

Again, that’s not something that I’m sure that the minister’s advice — the very capable public servants who advise him and advise the Minister of Finance, the Economic Advisory Council…. All these elements were known elements.

They also speak, in the next group, of increasing construction costs. “Cost escalation in Australia has raised cost expectations in B.C.” Well, Australian cost inflation is notorious. The KPMG study that I cited…. I think that’s well known.

I think proponents look on the Australian experience with some horror in terms of the escalation of costs, particularly labour costs, in Australia. That has very much conditioned the approach that proponents are taking here — and I think, in fairness to the government, some of the approach that the government has taken to providing what assurances they can about apprenticeship and an available supply of well-trained domestic labour.

Obviously, it’s difficult when the apprenticeship system was dramatically attacked and scaled down in the first five or six years of the government’s mandate. Only with the report from Jessica McDonald has there really been some real work done on rebuilding the apprenticeship system in order to meet the challenges of what may be a big increase in the labour market here in British Columbia. That’s well known.

Then finally: “Competition for resources likely to increase cost.” That’s a bit of a generic expression. I’m not quite sure what’s referred to by that. That may be supply, although supply…. The price of natural gas has not been increasing lately. It’s certainly been flat or declining.

I want to turn to the elements of the bill, the more specific elements of the bill. The sense that somehow this change in the approach and the numbers in the bill — prospective bill or the prospective act that was set out in February 2014 till now — are somehow explained by this, I think, is not accurate. The market itself is dynamic. It’s always changing. Resources notoriously go up and down. What has happened is a change in the willingness, or the bargaining position taken by proponents in the course of these negotiations.

In negotiations, I certainly wouldn’t claim to know…. I’m not a professional in negotiations, but some of the basic axiomatic principles of negotiations are that if the other side knows that you desperately need and want a deal, your bargaining position is dramatically weaker because of that. Certainly, given the rhetoric and the commitments that have been made politically by the government, proponents would be foolish if they weren’t aware of those commitments and weren’t positioned to
[ Page 5141 ]
take advantage of those in what the Minister of Natural Gas Development describes as a negotiation.

That doesn’t give you strength; that gives you weakness. My sense of the change in the rate and some of the concessions that have been made in the bill are concessions to stronger and more capable proponents who understand the desperate wish of the government to get a deal, to get a final investment decision, any deal, to go forward.

It’s not from a position of strength that they have approached this but from a position of weakness. That is really what has changed, not objective conditions out in the global marketplace.

[1530]

When we come to the nitty-gritty of the bill, there are some interesting changes, which we will doubtlessly explore further at committee stage.

What I’m looking at here and thinking about are some of the changes from the 2014 budget. I’m quoting from a KPMG analysis of the bill, so it is, I think, respectable and well-known, and a specialist in this kind of analysis. They say:

“The proposed LNG rules include several important changes from the proposed framework originally included in the 2014 B.C. budget. Specifically, the rules now propose a new investment allowance when calculating the tier 1 tax. Also, the new rules initially set the tier 2 tax at 3.5 percent, later rising to 5 percent, instead of up to 7 percent as originally indicated. Finally, the new proposed LNG regime introduces a new closure tax credit for LNG facilities.”

The minister has mentioned the 1.5 percent as a minimum tax, but what is clear from the legislation, as I understand it, is that the payment of that tax is then deductible in the future from any future payment of the 3.5 percent, the tier 2 rate. Really, all you’re doing is advance paying it so that there is, I suppose, some available revenue to the government during that phase. But it’s not as though that isn’t deductible against a future tax.

There’s also…. They say that the minimum tax on LNG profits before the recovery of capital investment costs applies to net operating income, which begins with the LNG taxpayer’s profit or loss from the business based on the principles contained in the Income Tax Act.

There is also created an investment allowance, which is essentially a return to the investor. It’s described as: “computed as 75 percent of the average balance of the ‘adjusted capital investment account’…for the year of the LNG facility.”

Not only is the 1.5 deductible against the 3.5. There is a ceiling of an investment allowance before any tax is payable — where a return on capital, calculated according to that formula from the adjusted capital investment account, is permissible before any tax is payable. So the tier 2 tax is only payable once payback is achieved, and that would be payment of the capital cost with those preconditions set into it.

What the bill has now added, or at least in the briefing it was clear — I’m not sure exactly where in the bill it is; I can’t put my finger on it — is that pre-construction costs previously not mentioned in February 2014 are now deductible. Pre-construction costs can be the acquisition of land, legal fees, agreements and contracts related specifically to the construction of the liquefaction facility.

In some of the briefings I attended at the natural resources conference in Prince George last January, where representatives of Shell, Petronas and Chevron, notably, presented…. What was very clear to them — and was not entirely clear to me until after I heard the presentations — was that these companies are capable of making huge investments in advance of a final investment decision and then just walking away if the conditions are not met.

Although a lot of the releases of the government talk about investments being made…. Indeed, I toured the Kitimat harbour. The Chevron site is under construction. They’re skimming back the earth, doing blasting.

[1535]

All of these expenses, several hundred million at least, and maybe more, are being made in advance of a final investment decision, but that in itself does not mean the final investment decision will be to go ahead.

Some of those costs will now be deductible, which will delay…. If it’s hundreds of millions or $500 million, not all of that expense may be deductible, clearly. If those expenses are deductible, it will delay the prospect of the payback period ending and the 3.5 percent rate coming into existence. That’s a fairly steep hurdle that’s been added before the province benefits from the revenue.

I would think that that came as a result of negotiations. Obviously, as a member of the opposition, I am not party to those negotiations. They are not publicly disclosed, so I am only speculating, but I would expect that those issues were issues that were on the table with some of the proponents. The construction of the statute reflects those discussions, which are favourable to LNG proponents, as opposed to revenue for the province. I think that reflects the balance of forces arrayed in the negotiation process.

The other elements of the bill that I want to focus on that are included…. The other element is that the minister referred to the corporate income tax credit for companies that have a permanent establishment in British Columbia. This is something that we raised in question period.

Under the TILMA agreement, Alberta has resisted the reciprocity that was hoped for or expected. Maybe ideologically anticipated was that an energy company wouldn’t have to have a permanent establishment in Alberta in order to do business there. That’s been resisted by B.C. at the bureaucratic level, at the public service level. Certainly the ministers, I’m sure, have been involved in discussion with their counterparts in Alberta.

The prospect…. That is an impediment to the idea that somehow Alberta companies, even those who may be considering coming to British Columbia to take advantage of this credit…. I mean, if there was a natural gas company that is supplying gas, liquefaction, to the
[ Page 5142 ]
plant, and this falls within the definition of the act, they may not want to establish a permanent establishment in British Columbia because of that factor.

It seems to me that in his comments, the minister has resiled somewhat from that. He’s backed away from it. That was something that was, I think, floated at the news conference. Some members of the media reported on it, but it doesn’t seem as though the minister is now stressing that as the major factor. What it does suggest, though, is, again, a concession to liquefaction operators of the prospect of reducing their corporate income tax from 11 to as low as 8 percent. That was not something that was in the framework, in the budget of 2014, in February.

Significantly, if it’s not utilized in a given fiscal year, it can be carried forward, so it’s a fairly sweet deduction for proponents and, again, would postpone the prospect of future revenue from these projects.

Indeed, in the chart that was provided during the briefing, the minister…. I am not allowed to use props in here. I’m well aware of that, Mr. Speaker. So one will have to imagine a graph that’s got considerably more revenue per year — $250 million in an LNG plant producing 12 million tonnes per annum.

[1540]

That was February 2014. The somewhat shrunken chart representing the same number of years, presented October 21, shows income at just over $100 million. Maybe $125 million probably is the most accurate. So a dramatic reduction in the projection of revenue.

The minister does, in his public statements, rely on what the next chart shows. Again, I’m not able to show the chart here. What was explained, I understand, was that most of the revenue — because that revenue, strictly from the tax, is much diminished, reduced by over half — would come from corporate income tax, although potentially reduced corporate income tax because it might go from 11 to 8, motor fuel tax, property tax and PST. KPMG does note in their comment that provincial sales tax on some equipment that’s necessary for the production process would not attract PST. They don’t have a detailed note on that, but given that it’s KPMG, I take their word on it.

In fact, the tax that’s proposed is…. The revenue is substantially reduced. The minister, I think, is upfront about that. I think he’s very straightforward. He’s not concealing anything. It’s there in the charts. But what that reflects is not the changed market conditions but the reduced bargaining power of a government that was desperate to get a deal, continues to be desperate to get a deal and will do anything to get that deal. That’s the explanation, and that’s the consequence for the kind of revenue that the government may achieve in the future.

There are other aspects to the bill, but those are the significant ones in the sense of the reduction in the projected revenue, the mechanisms by which that has been reduced between February and October and the consequences that will flow from that.

Now, the other issue that I wanted to deal with — I won’t take terribly long, because this is somewhat tangential to the bill, although the minister did mention it in the same press conference — is the impact on the total revenue of what are called project development agreements.

I’m going to quote the minister from a piece by Mr. Palmer: “One cannot bind future legislatures. Proponents are aware of that, so the second aspect of achieving certainty for them will relate to a project development agreement which imports the notion of contractual certainty.”

The Premier has spoken of this in a May 2014 speech at an LNG conference. Speaking of Petronas and Woodfibre, she said: “With both companies we agreed to finalize our project development agreements by November 30 at the latest.”

The Minister of Natural Gas Development, quoted on October 30, 2013, said: “The government will soon decide its tax and royalty structure.” That was a bit optimistic. The minister is named there — I won’t use his personal name — and said that “that will be legislated to assure operators that it’s ‘written in stone’ and no future government will try to extract more money from them.”

That’s the context in which these agreements are being negotiated. I believe they’re being actively negotiated. I believe there are three that are underway right now. I know the Minister of Natural Gas Development is heading to Kuala Lumpur to meet with the Petronas board. Perhaps that’s part of the negotiations. Once again, I’m a member of the opposition. He hasn’t issued a news release on it, so I’m not sure what his intention is there. But given the deadline of November 30 and given that we’re in November, I think that that’s very likely part of the reason for his trip there.

[1545]

There is a vast literature on these types of agreements and their relation to taxation mechanisms. It’s important to get these kinds of agreements and these kinds of statutes right because good decisions can, in natural resources around the globe, prove that you can attract enormous revenue and benefit your jurisdiction tremendously.

There’s punishment for bad decisions. It can be very, very cruel. One thinks, in the Canadian context, of an example: the dispute between Quebec and Newfoundland over the sale of power from Churchill Falls. That agreement — it’s one which gave Quebec long-term access to discounted power from Newfoundland and Labrador — is a very, very long-term agreement that was initially designed to last only 40 years. It was extended further, another 25 years starting in 2016.

Newfoundland has felt intensely frustrated by that. Quebec has refused to reopen the agreement. Quebec is reaping literally hundreds of millions of dollars in power sales, which they are getting for power that is supplied to them under the terms of the agreement, much
[ Page 5143 ]
regretted by Newfoundlanders, at a very, very reduced kilowatt-hour price. There have been court challenges. There have been attempts to negotiate it. The agreement is still in place.

I just use that as an example to illustrate that these kinds of long-term agreements are important and, if done wrongly, can really limit what revenue the jurisdiction might encounter.

In the literature they’re typically called stabilization agreements. In a paper by someone called Piero Bernardini, published in the Journal of World Energy Law and Business 2008…. It’s entitled “Stabilization and Adaptation in Oil and Gas Investments”. What he talks about is that there are basically two characteristics.

Since we’ve heard little, if anything, from the government — certainly not in the Legislature…. So only in ministerial briefings, and those are usually not open to members of the opposition, although I’m sure I could extract an invitation if I really wanted to come. There are two types, and it would be interesting to know which type we’re dealing with here.

There’s one that’s called a stabilization agreement, which is basically concluded by an investor with a state or state entity. It’s typically a long-term arrangement far exceeding the normal commercial contract between private parties. It’s a question of making…. By stabilization, it’s essentially to freeze the party’s rights and obligations in the name of sanctity of contracts so that the tax regime that exists at the point that the final investment decision is made is, the Minister of Natural Gas has said, written in stone. In other words, it’s not susceptible to change. It’s designed to provide some assurance to the individual proponent, I would assume.

The other alternative is what’s called an adaptation clause, which is one where both parties bear risk and both parties have the option to reopen the contract in certain stipulated circumstances. There are a variety of mechanisms, whether resort to arbitration or simply trigger negotiations in good faith. That’s something that takes place in a number of jurisdictions.

In this particular paper, they talk about agreements in Kazakhstan, the government of Ghana, the government of…. These are typically petroleum agreements, but the principle is the same. The State Oil Company of Azerbaijan…. Those kinds of agreements are well known in the resource sector globally. It’s not at all clear what is being negotiated here. I’m hoping that the Minister of Natural Gas Development may address this bill, and maybe he will provide some clarity as to what’s being negotiated, what the term of the agreement is and what benefits the British Columbia government hopes to gain by that sort of an agreement.

[1550]

In another publication that was provided to me by the staff from the library, a publication published by the International Monetary Fund called the Taxation of Petroleum and Minerals: Principles, Problems and Practice, they had a chapter on what was called “Contractual Assurances of Fiscal Stability.” Again, the term is “stability agreements.” They have this to say about them. I’m going to quote in some detail just because this is an intricate area, and I don’t want to paraphrase in a way that’s inaccurate.

“Fiscal stability clauses are generally justified by (1) the large size and sunken nature of the initial investment and (2) often a long period required to recover investment and earn a reasonable return, taken together with (3) a lack of credibility on the part of the host country to abstain from changing the fiscal rules, possibly singling out high-rent petroleum or mining operations, once the investment is sunk — the so-called time inconsistency problem.

“It can be argued that the need for a fiscal stability clause is less compelling under certain conditions: a history of sound fiscal management; statutory and effective corporate tax rates in line with international rates; low tariff rates and non-imposition of taxes that distort investment and production decisions — e.g., asset taxes, excises on machinery; non-discrimination between domestic and foreign investors; a low level of corruption; a transparent tax policy; and a reasonably efficient tax administration.

“Adaptability and progressivity in the fiscal regime may also serve as an alternative. There may be other forms of intervention that reduce risk to investors — subsidies, infrastructure provision, perhaps even state equity shares.

“Fiscal stability clauses are more common in mining and petroleum agreements negotiated by developing…countries than in those negotiated by developed countries. Some developing countries with a significant petroleum sector, including Angola and Nigeria, and most developed countries, including Norway and the United Kingdom, do not grant fiscal stability clauses in their petroleum agreements.”

It gives rise to the obvious question, then: if that’s the characterization and that’s the typical practice, according to the International Monetary Fund specialist in this area, why is the government contemplating this in this particular case? I don’t know the answer to that.

What they do talk about in one of the papers is that there are a couple of hypotheses that they have about why a government might do this. One would be the commitment hypothesis — in other words, by entering into the agreement, you agree to bind yourself by a certain set of fiscal terms — although the description of the countries that don’t need to enter into these kinds of agreements would seem to pretty accurately describe British Columbia, certainly from the perspective of the members opposite. So I am a bit surprised as to why this is coming about.

The other hypotheses as to why it might be necessary are signalling, as they call it — signalling to other potential investors that government has a serious commitment to stability of fiscal terms — and, finally, “smokescreen,” in the sense that the government may simply be putting it out but with an intention of bypassing it if need be.

Now, given the volatility of the resource industry and given changes in political regimes globally, there are many that are changed and sometimes there’s expropriation and all the rest of those sorts of things. I don’t think that’s what’s being contemplated by anyone in this House, although I could stand to be corrected.
[ Page 5144 ]

One final thing that they do say about fiscal stability agreements is that if a government enters into them, there are some where the government extracts a premium in terms of higher income tax by virtue of having given the proponent the comfort of an agreement. There are some jurisdictions that are suggested here, and I’m going to quote again.

“In a few cases governments have explicitly charged an ‘insurance premium’ for a fiscal stability assurance. Examples are more common in mining than in petroleum. In the case of mining, Peru charges a 2 percent premium on the income tax rate where the investor takes a stability assurance. Chile for many years offered a corporate income tax rate guaranteed for ten years but at a rate significantly higher than the general corporate income tax rate. Papua New Guinea introduced a premium on the income tax rate for the same purpose.”

[1555]

My question, I suppose, would be: is there any premium being extracted in that manner for entering into these agreements?

Then the authors also go on to say that many of these agreements are what they describe as asymmetrical; that is, they protect the company from adverse changes to fiscal terms, but the company still gets the benefits of any future reductions in tax rates beneficial to the company.

Is the government contemplating an asymmetrical agreement in these cases, where the government provides an assurance of some kind “written in stone,” as the Minister of Natural Gas is quoted as saying? What is the return? Is there paying more tax in another area? Is it asymmetrical? Or is there a willingness or a negotiated willingness to forgo future tax reductions that may benefit the enterprise?

Again, these negotiations take place behind closed doors. I’m not sure whether the concluded agreement will ever even see the light of day. They may well claim that it’s proprietary to the company and the government, and we will never know the terms of that agreement. I may well be wrong on that. There’s not a lot of literature about British Columbia’s experience, compared to other countries and jurisdictions globally.

I merely raise those questions in the context because in order…. This is part of a negotiation, as the Minister of Natural Gas Development has described it, with proponents. These stability agreements appear to be part of that negotiation. So the degree to which that could be clarified and commented on would be much appreciated.

I think I’ve set out in the brief time that I’ve had to speak some of my concerns about the bill. It is a very technical bill, as one of the CEOs or senior executives of one of the proponents has said publicly. I want to examine the bill in some detail at committee stage. I hope we’ll get that example and that it won’t be delayed in the process and go through on closure. I think it’s important on a bill like this — and I’m sure the minister would agree — that we spend some time and understand it, its strengths and its weaknesses. Ultimately, we’ll come to a decision about the bill itself.

I want to thank the Speaker for the time that’s been given to me. I look forward to the comments of other members in the chamber here today.

Hon. R. Coleman: An hour and a half later I still don’t know if the NDP critic supports B.C. getting a fair return on the natural gas that it wants to turn into liquefied natural gas, which it can send anywhere else in the world and get additional revenue and future economic value for British Columbia. I’m sure we’ll find out that someday as we drone on.

I think the important distinction to start with here is this. The member opposite has actually been on a committee that travels the province of British Columbia, called the Finance Committee, which seeks input into the next budget, takes input and comments from the public and industries about taxes and things like that. Those are all tax discussions, and they are all part of consultation. They take place every year. That’s what tax discussions are.

We don’t negotiate taxes. We don’t negotiate taxes because those are in the sole purview of the Minister of Finance, who will bring those to the House as a recommendation, like in a bill like this, that takes into account input and information and discussions and studies with regards to a new industry like this one that would come forward to this House for discussion like it is today.

Project development agreements, on the other side, are negotiations. They negotiate the business model with regards to a specific project in British Columbia, because each one is different and each of those PDA negotiations are ongoing.

[1600]

They’re obviously subject to confidentiality agreements because they can affect markets. They can affect stocks. They can affect people’s investments in their pensions. As a result, those types of negotiations need to stay confidential as they come through to their final conclusion.

The introduction of the LNG income tax gives proponents a certainty that we put a model together so they can go forward and make the next level of investments they want in British Columbia’s natural gas industry. Quite frankly, the whole notion of this was to make sure that we got to a place through discussions and looking at markets and spending an extreme amount of time with people of a very technical nature to get to a highly competitive, attractive jurisdiction for new investment in LNG in the world. This is part of the piece of the puzzle that will get to that.

As we go through this, we have to look at an overall tax system and a competitive royalty regime and take our advantages that we have and offset those advantages to finding how we can actually take on advantages our competitors and other countries around the world might have.

What do we have as our advantages? Well, first of all, we have a large reserve of natural gas with a close proximity to proposed facilities that can come from a pipe-
[ Page 5145 ]
line that can go to a plant that can flow for the next 150 years. If somebody wants to make the investment in a $30 billion investment, they know that they can, over the long-term life of their investment, look at how that value stream can come forward and actually give them the opportunity to make that investment work.

They want a skilled workforce. They want to know they have access to that skilled workforce and a competitive environment so that it’s not a situation where there aren’t enough people to build a plant. Quite frankly, if you don’t have the number of people, like they did in Australia, the costs of the plant will go up by about 45 percent, as it was seen in Australia. There’s a reason today that that jurisdiction is not seen as favourable to investment when it comes to LNG as it used to be.

You need a robust infrastructure, an infrastructure that will allow you to ship and move the product. That is, basically, you build a system in the northeast part of our province, and the pipelines and gas plants will be done. They have that infrastructure so that we can move this to the coast and to the plants through the pipelines that we need to build.

We also have the shortest transport routes from the North American continent to the key Asian markets. One of the things that people seldom talk about with our competitive advantage is we have cooler extraction environmental temperatures, which, quite frankly, means this. It takes less energy to liquefy natural gas in British Columbia than it does in Perth, Australia, because it’s hotter, and therefore it takes more energy in Australia than it does in British Columbia. That is seen by some of our proponents as a significant advantage with regards to natural gas in B.C.

As we come through to build this package that we worked on extensively over a number of times, sometimes we run into things that make us a little confused. Not confused in, actually, the direction we’re going, because, quite frankly, we know where we’re going. Not confused because of what was going on, but we get confused sometimes when our opposition says….

The member started out saying, “I support LNG,” but then, knowing the global markets and the need to move and get things done, he voted last week to actually delay everything LNG in B.C. for six months, which would actually slow down the whole opportunity for investment decisions and actually would put final investment decisions at total risk. If you’re not doing anything, they’d just say: “That’s it. We’re done. We’ll go to a jurisdiction that’s interested.” But the members opposite don’t seem to get that.

Interjection.

Hon. R. Coleman: You know, the fact of the matter is we’re actually right on time, but these members don’t actually do that. You see, it’s the same thing for them. They’ve got to sit there and carp on the negative, because they do not support LNG nor the jobs that come with it in the province of British Columbia’s future.

It’s interesting, because their own members are quoted all over the map on this. It’s not like we’re making these things up. The Leader of the Opposition says we need to get going — we’re not the only people awash in natural gas — on October 8, 2011. Today he’s saying: “Well, we’ve got to delay it.” Nobody wants to know how difficult this is, how complex it is or all the work that needs to be done to get it done.

Today we are talking second reading of a tax bill. The LNG income tax applies to net income derived from liquefaction activities in LNG facilities in British Columbia. It’s designed to make sure British Columbians get a fair return on the gas that goes through that is exported to the world when it gets liquefied into a new marketplace. The tax rate on that income will be 3.5 percent effective for taxation beginning on or after January 1, 2017. These are the basic facts for the members.

[1605]

During the period when the net operating losses and capital investments are being deducted, a tax rate of 1.5 percent will apply and is creditable against the 3.5 percent tax. In 2037 the tax rate on net income will increase from 3.5 to 5 percent.

The reason for that is that this is actually a long-term investment. This isn’t a today-grab-everything investment. It’s pursuing an opportunity to get the jobs, investment and opportunities for Canada and British Columbia — and the rest of North America, quite frankly — with regard to natural gas.

Recently, as we looked at this and we looked at how this package could be competitive, the member for Vancouver–West End — here’s a classic one — of the NDP, says this: “New Democrats support an LNG industry built with 100 percent B.C. workers.” So 100 percent B.C. workers — no Canadians, nobody from Quebec or Alberta or Newfoundland and the Maritimes — just 100 percent B.C. workers.

I don’t know about you, but I know a lot of people from British Columbia that are working in Ontario and Quebec and that I grew up with. They’re working in jobs elsewhere in Canada. If they applied those rules in those other jurisdictions, nobody from British Columbia could work in Toronto or Montreal or St. John’s, because we really don’t want people anywhere else to come and work in British Columbia.

That’s not my position. That’s the position of the NDP — which is another way of saying: “Let’s not, for a second, support LNG. Let’s just make the people think we do, and then what we’ll do is put every single excuse in front of it of why we can’t do it, because we don’t want to admit that we don’t support it in the first place.”

British Columbia, in addition to having the stuff that we have, has an opportunity to move forward on an in-
[ Page 5146 ]
dustry that has significant benefits for British Columbia. One of the things that members opposite don’t realize is that if you can extract the gas and you can actually move it to other markets, there are jobs in the northeast, across the northwest, across northern B.C.; 50 percent of the jobs in LNG are outside of the northeast and northwest parts of the province.

Jobs in the economy — people getting jobs, working, people going to work in other businesses and making investments as a result of that impact on the GDP and income to the province — we see some significant opportunities.

Now, as we talk about this, we also know that this industry has other by-products. We have a liquid-rich play in the Montney today. We could, if we were extracting the gas at the level of LNG, actually attract a gas-to-liquid plant in British Columbia for investment. You need to have the product and the movement of the product, but opposing LNG stops that too. It just means more jobs lost, more jobs not there and a resource that sits in the ground and doesn’t bring any long-term benefits to British Columbia.

I’ve sat in this House and heard people complain about how there are areas of the province that haven’t seen economic activity for a long time, but all of a sudden they’re seeing vacancies go away. They’re seeing prices of housing going up. They’re seeing opportunities for jobs and workforces going up and complaining that they’re worried that that growth is not such a good thing for their communities. It stuns me, to be honest with you, when I hear that. As the member for Victoria–Swan Lake said here in the House one day, it would be disastrous for all of these things to go ahead in British Columbia — disastrous. Yet members opposite want us to believe that they support LNG. It’s just unbelievable.

As we come through this, the interesting one I saw last week was that here in this House the Green Party member and the members opposite voted for dirty LNG. They actually voted against the cleanest LNG facilities in the world. They actually voted against the cleanest LNG. The only question I’ve got is if it’s not the cleanest….

Interjections.

[R. Chouhan in the chair.]

Deputy Speaker: Members.

Continue, Minister.

Hon. R. Coleman: I just think it’s great that as soon as you hit a nerve, they all start to chip and chirp and go on because they know I just figured out what they did. They oppose LNG. They also opposed the cleanest LNG in the world. One would have to suggest that maybe they’d rather have it at 0.22 somewhere in British Columbia for emissions, because that’s what they voted against last week — to reduce it to 0.16, to be the cleanest in the world, hon. Speaker.

[1610]

The funny thing about that is they claim to be caring about the environment, and then they vote against something that actually puts British Columbia in the window as the cleanest producer of LNG in the world. Interesting, isn’t it?

I’m sure they’ll vote against the tax, because they won’t want British Columbians to get their fair return on the dollars that come through LNG in B.C. They’d rather just keep it in the ground.

As we go through these discussions, and the taxes and things that are there in front of us, and the opportunities, we have to keep in mind local communities. We’re working with them to prepare our economic activity to be able to deal with the growth that could come at them, the opportunities they could see in their communities for jobs and opportunities for the people that live there in the northeast and northwest part of the province. We have announced grants to help local communities do that, because we believe this is part of a global plan. This tax is one piece of it.

First Nations are important and have a new, direct role in this. Now, I know the members opposite have different opinions on that as well, but the fact is we actually have a particular focus on aboriginal folks with regards to jobs, training — opportunities for them, the First Nations, to be able to do skills training and apprenticeship programs.

Also, they have an important and direct role in development of our natural export potential, because really, this is a significant generational opportunity for our First Nations in the northwest part of the province in particular, where, for generations, they’ve suffered with high unemployment, and they need to have these opportunities to come to them, to have those chances to change the scope for them.

We always talk about jobs, obviously, when at the same time people across the House here don’t understand some of the things. I want to try and give you a little bit of perspective as you come forward with your opposition to this bill, opposition to LNG, opposition to clean energy, opposition to the cleanest LNG in the world, because that’s where you stand.

By 2022, like it or not, we’re expecting one million job openings in British Columbia — one million jobs openings along with an increase in demand for more and higher skills. More than 78 percent of the jobs are going to require some form of post-secondary education, and 43 percent of those are going to be in the trades and technical occupations.

Every one of us in here — and frankly, in this House, although I’ve been here longer than most — are all actually getting older. We’re seeing a whole generation of people retire. As they retire out, people are going to have to fill those jobs as well as the new jobs that will come
[ Page 5147 ]
from LNG and others.

Our plans to shift how we do that and get there are important — how we do K-to-12 education, how we deal with it and make sure it’s funded for people looking to get into the workforce, all of those things that come as part of the students and workers plan that we have.

I know the members opposite have this thing about the B.C. skills-for-jobs blueprint, about making sure British Columbians have the skills they need and be the first in line to get the jobs for the future. One of them says only B.C. people should actually have jobs in LNG. One of the members opposite. It’s their position.

That juxtaposition continued. The reason Australia isn’t actually seen as the best place to invest today…. What happened in Australia is they didn’t open up their doors to skilled labour. They didn’t recognize the people that could come in and build this industry. As a result, costs got out of control.

In actual fact, our priority here is this. And we’ll be clear about this; we’ve been clear about it. First in line for jobs: British Columbians. Second is Canadians.

Next is a skilled-workforce plan that we’ve built with organized labour — people that the members opposite know well in organized labour — who have stood on a stage with the Premier and said that they support this: to get skilled workers into British Columbia if we have a shortage of workers, to help build these plants — to bring those folks in and if necessary, if we can’t fill from Canada, to look outside our borders. We need skilled workers, and we need to know that.

One of the things the members opposite like to say is that a temporary resident or temporary worker is actually not a new immigrant opportunity for British Columbia. I’d like them to explain to me how one-third, 32.7 percent, of new immigrants to British Columbia were previously temporary residents, including workers, students or refugees.

They don’t follow up with each other. Those comments you make are just not correct. In fact, 90 percent of provincial nominees were previously temporary residents. B.C. continues to advocate that we get our fair share of economic immigration increase from the federal government so we can actually make this plan work for everyone in Canada to bring this multi-billion-dollar investment to B.C.

It’s a long-term strategy, one that requires all the pieces. Those pieces are put together because we can actually build on our investment a fiscal record that creates great certainty for the industry and investment.

[1615]

But more importantly, let’s talk about the tax, with regards to our debt and our future financial position. Now, I know that very few people on the opposite side of this House have ever signed the front of a paycheque, so business to bottom line may take a little bit of thinking on your part.

But if I’m in the tire business and I’ve got all my overheads and my rent covered and I add in brakes and build up my business in the mechanical business over that, my profit keeps dropping to my bottom line. What happens is I build that bulge that can actually reduce my debt of my business and build a future for my company.

The province of British Columbia is no different. It balances its budget, projects its revenues and knows that, going forward, in the next number of years we’ll continue to balance our budget.

So what happens if you get an LNG tax? It bops below the bottom line and the ability of a surplus that you have, with regards to money you can use for other things in British Columbia, including paying down the provincial debt and investing in the infrastructure people want in B.C., like hospitals, schools and other things. The only way you do that is by building an economy and seeking those opportunities that could quite literally be able to let you do that.

So when you go out to the world…. I know you probably don’t get there very often in your discussions, at the multi-high-level of corporations you guys actually deal with, but I can tell you this. If I’m in Malaysia or Hong Kong, Beijing, Korea, New York or anywhere else on the North American content, with regards to natural gas or resources, I can tell you this. There’s one thing they know about British Columbia: fiscally responsible, triple-A credit rating, balanced budget, can be trusted as a jurisdiction to invest in and is seen as a safe harbour for the money that people want to risk when they’re looking for an opportunity.

If you don’t have that at the front end, if you don’t have the ability to sit down and look at a brand-new industry and do all the complexities and understand it as you go forward, you don’t sit where we are today with 18 proposals made up of 30 different companies looking to invest well in excess of $150 billion in the province of British Columbia. They’re here because of that stability.

I can tell you this. They wouldn’t be here if there was an NDP government in the province of British Columbia. You know why I know that? Because they always refer to what the NDP did to mining in the 1990s when I talk to resource companies worldwide. They always recognize how badly you pushed the business out of British Columbia, and it took over a decade to bring it back. It took over a decade to bring it back.

They also know there wouldn’t have been any vision on drilling programs and royalties to even get to where we would find the resource and have it for this, because you would never have had a vision even to try. That’s a fact.

It’s the fact of the matter that in British Columbia we have a significant opportunity, and today’s legislation is a piece of that opportunity. It shows people worldwide that we listened. We consulted with industry, with the public, with all the research we could do and come up with what we thought would be a balanced LNG tax that would cre-
[ Page 5148 ]
ate a competitive balance for us in British Columbia and one that we’d be able to move forward to attract the significant investment that we’re trying to do on behalf of British Columbia.

You know, it is really important that we pursue this opportunity. I know the members opposite will come up with their own quotes. I’ve got some beauties, by the way, here. I’m not going to bore them with those, because why would we want to do that when they can already go look at their own record and find out they have one member that says: “Don’t drill for it”? They have another member that says, “Only 100 percent B.C. workers….” We have another two members that say: “Delay it.” There’s another member that says, “Oh, there’s too much activity in my area of the province. I’m worried about it,” when he hasn’t had activity for over a decade.

In actual fact, it’s interesting to watch as we go along. Listen to this. This is the thinking of the NDP. I’ve explained to you why the tax. We’re going to get the fair revenue. You’ll vote against the fair return to the province, of course, for any resource. You’ve already voted against clean LNG. You’ve already voted to delay the whole thing so you don’t have the jobs and opportunity.

So you don’t want the investment. You don’t want the jobs. You don’t support the industry. But in addition, it says: “The pace and scale” — get this, now; this is from the member from Victoria….

[1620]

Interjection.

Hon. R. Coleman: This is not from us, hon. member.

“The pace and scale that could be proposed for LNG — and there are a lot of big players sniffing around B.C. that probably will work on this…. That would be disastrous, too, if it came to fruition.” He’s afraid we might be successful and get $100 billion plus of investment into the province of British Columbia to see a cash flow we won’t see by trying to export a product to the North American market that doesn’t exist for us. Nor does he want the value-added that comes from this and other jobs into the economy.

That’s the position of the NDP: find any way to use weasel words in any way whatsoever to not say what we really want to say. What you really want to say is you don’t support economic development. You don’t support resource development. You don’t support LNG. You don’t support the jobs and the economic opportunities. You also don’t support jobs for British Columbians and Canadians. You don’t support economic activity that will pay down your debt and give you a prosperity fund. You don’t support employment opportunities for your own constituents, because there are more jobs outside the north than there are with regards to LNG.

You don’t support any of it. It’s fine. It’s fine by me that you don’t, because you’ve never been a party with a vision, and you aren’t today. The only vision you have is: “How can I make a new weasel word up or quote in my head up at any given time in any given week so I don’t have to say what I really want to say?” That is that you don’t support liquefied natural gas in British Columbia. You don’t support the tax because it gets a fair value for the taxpayer. You won’t support the emissions because you don’t want to have the cleanest. You want to have dirtier LNG in B.C. than anywhere else in the world. It’s amazing to watch and listen to you folks.

The reality is this. This piece of legislation is a piece of a very significant puzzle to move British Columbia closer to getting final investment decisions on projects that are bigger than any projects ever imagined in Canadian history. They can bring more to the GDP. They will affect the GDP of this entire country. They will affect the economy of this entire country. They will continue to help British Columbia be something that it is today — a have province versus a have-not province like they became in the 1990s with the NDP. They will continue us to be able to move forward, where we can build a future.

I know your protest is all about the fact that you’re going to have to stand up in the next few days and vote against the fact that British Columbia might get a return on a resource it can send anywhere else in the world by shipping it overseas and getting an LNG tax on it. I know you’re going to get up and vote against that. I know you’re going to vote against it because you want to delay it anyway with your hoist motions. You want to delay it again anyway because you don’t think we should be clean.

I get all that. What I don’t get is this. Why would you turn your backs on pursuing an opportunity that brings billions and billions and billions of dollars to your jurisdictions? Why would you turn your backs on an opportunity for thousands of jobs, economic activity, a future for your citizens and opportunities for the entire country? Why? Because you have no vision.

The only thing you are afraid of is doing one thing: actually standing up and saying what you really believe, and that is that you do not support liquefied natural gas in British Columbia. You never will, and you’ll come up with the weasel words time and time again to just say no.

N. Macdonald: I rise to speak on Bill 6, the Liquefied Natural Gas Income Tax Act.

That was interesting. I’m not sure the minister actually read the bill if you’re talking about the revenues that you still are trying to lay out in front of British Columbians. This bill is a year and a half late coming, and here it is. The reality is here before us to contrast with the frankly ridiculous rhetoric around LNG from this minister and from the Premier in particular, but really from all members — ridiculous rhetoric.

I would invite you to look at the bill and actually look at the numbers that we’re talking about with this tax measure. The one thing that the B.C. Liberals needed to
[ Page 5149 ]
do in the so-called race for LNG was this bill, and it’s a year and a half late and a dollar short.

[1625]

In fact, it’s more than a dollar short. The bill — this is it. This is the 2013 B.C. Liberal campaign in the flesh, and it sure looks different than what B.C. Liberal members promised to British Columbians. It looks a lot different.

The B.C. Liberals ran on a promise. Before we get any further with this bill, let’s just remember some of the things that were talked about: 100,000 jobs created by LNG, $1 trillion in economic activity. It ends the sales tax. It gets rid of $68 billion in debt. It creates a $100 billion prosperity fund, the first LNG plant by next year and 12 to 17 LNG plants.

That is completely, completely missing in this bill. This is the one bill that accomplishes that. The irony here is if I was to keep my campaign promise, I’d vote for this bill, and I do. This is exactly what I said we were likely to get. The sort of fiscal framework that is here is exactly what I said in my campaign and my colleagues said in their campaigns was likely going to happen.

It is the B.C. Liberal MLAs…. You were the ones who promised the $100 billion dollar prosperity fund. I looked for the Minister of Finance’s promises on this, and I could not find them. He is the one that is the most careful with what he said. Even in his speech here he didn’t enter into the bluster of the minister of LNG, because he knows the reality. I would invite you to actually look at the numbers and see how ridiculous your campaign promises were, and understand that if you vote for this bill, you are breaking every one of those promises.

So read it. Read the bill and actually understand what you’re voting for here. It’s not my promises that are broken; it is your promises, and the Premier’s promises, and the bluster of the minister of whatever — LNG, or whoever that was that was up in front of us — that was supposed to be giving us a somewhat sophisticated accounting of what this is.

I saw no sophistication. I saw no understanding of the complexity of this issue from that minister, which is disturbing. That’s our best man on the job? Wow. That is a disturbing, disturbing concept for British Columbians.

You know, the B.C. Liberal candidates…. If you parroted the Premier’s wild claims, then I am sure you can claim to be ill-informed. Fair enough. But if you weren’t ill-informed, then you are not honest about the possibilities here. That’s the reality. This bill confirms that clearly.

The thing is, I can actually vote for this and keep my promises. You can go, and you can look. They’re on line — the debates we had, where the B.C. Liberal candidate was on and on about $100 billion this and no sales tax. I was going, “No. These are the actual possibilities that are available to us,” and that’s what I see actually in this bill.

Look at some of these claims — 100,000 jobs claim. Members should read the Grant Thornton report. You should read it if you’re serious about this job. The B.C. Liberals, the government, told Grant Thornton that they had to use certain assumptions. They said that you have to use the number of five LNG plants. Well, okay. Is there any basis for five rather than six or seven or three? No. It’s an arbitrary number.

Then the B.C. Liberals said to Grant Thornton: “You have to use the number 2,400 as the number of jobs that would be provided by those five LNG plants and the pipelines needed to supply them.” Did that number come from anywhere real? No. It was a made-up number.

Then the B.C. Liberals told Grant Thornton that they were required to use a multiplier of 30 for the indirect and induced jobs for each direct job. So that’s the Grant Thornton…. Have a look at it and read it — a multiplier of 30. Just so you understand, a committee of the House of Representatives in the United States made similar reports. Their multiplier was 3.5. This is a credible group that instead of using a multiplier of 30, used a more realistic number of 3.5.

So the 100,000-person claim is completely not factual. It is not factual. You wouldn’t have to look very hard to actually understand that. So if you are doing your job, have a look at that report and the Ernst and Young report as well. Look at the front, where they say, “Hey, all we’re doing is taking numbers the B.C. Liberals gave us and doing the math. Don’t blame us for anything else.”

[1630]

But what I can say to members is if you took your job seriously, you would actually have a look at that.

B.C. Liberals say it’s 30. U.S. House of Representatives say 1/8 of that amount is a multiplier. There’s something completely dishonest about throwing around fake multipliers, fake numbers of LNG plants.

Let’s just use common sense here. An operating LNG plant employs 120 people, on average. It’s like a pulp mill. In fact, Skookumchuck, which is an average-size pulp mill, employs 290 employees in my riding. That is one LNG plant — 120.

So when the minister stands up and asks us to believe that five of those change everything in British Columbia, in Canada, at what point do you say: “That’s ridiculous and irresponsible for a minister to say that”? I think you would have said it a long time ago, right?

Let’s go to the finance side and actually look at this bill. This tax bill imposes on an LNG plant, according to the Minister of Finance, as follows — and you can look on page 12 of the minister’s briefing: “Six to eight years after the LNG plant is built and operating.” This government promised 2015. We are nowhere near 2015 for an opening. So if one does open, then six to eight years after it is built and operating you get between $100 million and $125 million. That is the type of money that we’re talking about with this bill, okay?

It sounds big to most people — I get it — until you understand that the annual operating budget of this province is — what? — $44 billion. As well, you have capital
[ Page 5150 ]
spending that varies year to year. We are talking about huge sums when you compare it to the tax that comes, with this bill, from an LNG plant — huge sums and a massive disparity.

How does $125 million per year starting next decade get rid of the province’s debt, which is $69 billion now? And it’s growing at a record rate. In fact, for this Premier it has gone up, in her short term, $15 billion or $16 billion. On top of that there’s another $100 billion in financial obligations.

These B.C. Liberals ran on the notion that this bill here would eliminate the debt; $125 million per LNG plant starting six to eight years after a plant is built and operating gets rid of $69 billion. Now, if there’s any thinking person on that side that’s listening to this, explain how that is going to work. You must know it’s impossible. So if you vote for this bill, you are putting into place the reality that is at complete odds with what you ran for in the last election — complete odds. Not me. This is what I said approximately…. This is what was going to happen, right?

The provincial sales tax. Wow, the provincial sales tax. We’re going to get rid of the provincial sales tax with this — $100 million to $125 million six to eight years from now, with an LNG plant giving you between $100 million and $125 million. Do the math on that; $6 billion per year comes in — provincial sales tax. Not only that, we’re also going to get rid of the debt and contractual obligations. Okay.

These B.C. Liberals said this. They said $125 million per LNG plant collected six to eight years after they are up and operating will also lead to a $100 billion prosperity fund. The Premier said it, like two weeks ago, about the prosperity fund. Again, just do the math on it.

We are going to take this $100 million to $125 million per LNG plant in six to eight years, and somehow you get rid of the debt. You get rid of the provincial sales tax. You get rid of any need to worry about money ever in the future because you have a $100 billion prosperity fund.

[1635]

If B.C. Liberals were honest, they would vote against this bill, because it doesn’t come close to getting you there.

This was always dishonest, to me, for the B.C. Liberals to promise untold billions, and we ended up with a bill that gives us a relative pittance. The irony is that that works for me. This is what I said was the reality. This is the reality.

On page 4 of the minister’s LNG income tax briefing documents, the B.C. Liberals try to explain how they got it all wrong. I would invite members to go and look at the briefing documents. They’re there, page 4.

Now, what was not known years ago? What is the big surprise that we see on page 4, and how big a surprise was it to anybody who knew anything about the natural gas markets? None of these factors are not there as issues in world journals from five, six, seven years ago. It was simple, and I thank the library for doing it. I just asked them: “Could you go back five, six, seven years and send me articles from around the world on the LNG issue?” They did. They were fantastic about it.

What do you see? All the factors that apparently surprised the Minister of Finance are there in articles. They’re not new. This was always a very fluid market. Pricing was all over the place. The factors that were laid out are not surprises, really.

The $400 billion pipeline deal between China and Russia — it is regularly predicted. They’re talking about how long it’s taking to get to that deal. Now, the actual day it was announced — that was a bit of a surprise. But that they were working on that deal — no surprise at all.

Other central Asia natural gas plays. The pipelines to China. Turkmenistan is already China’s biggest supplier of natural gas and plans to double exports to China by 2020. China’s reserves are well known. That’s not new.

Australia, Qatar, East Africa, U.S. LNG activities — they were all well known.

People here know that natural gas prices fell dramatically in North America over the past decade as new techniques increased North American natural gas supply. Our critic actually spoke about the topic, unlike the minister responsible for liquefied natural gas, who put no content towards the bill. There was a tremendous amount of content in what our critic said.

Henry Hub is the North American pricing tool. Asia uses the Japanese Crude Cocktail too. It’s a tool that was oil-based, and therefore, there were pricing differences between North America and Asia, which you could take advantage of if we could get our natural gas to Asia.

As members here should know, to transport across the ocean on ships, it has to be condensed, so natural gas is liquefied by cooling it to minus 161. To build the liquefication plants, there is a need to invest billions, and it takes a fairly long time to get them up and going. There are pipelines as well.

The price differential between North America and Asia is the key. If prices in Asia get to around $10 per million Btu, then the economics do not work for the B.C. LNG industry. That’s something the government can’t control. It’s just the reality that we likely face. Most agree that that’s about the price point that’s important.

For a while we were at $18 per million Btu in Asia, but that was always ephemeral. That was always something that we knew was moving. A spike in Chinese demand compounded by the temporary shutdowns of the Japanese nuclear program following the tsunami and the Fukushima problems — all of these were things that caused a spike in prices in Asia. But that pricing difference window, I think most would agree, has for the most part passed, and we are at the $10 per million Btu mark in Asia now, or close to it.

None of that should be a surprise to anyone who was informed about these markets. Even a casual observer should know that. As far back as 2011, contracts into Asia
[ Page 5151 ]
based on Henry Hub pricing were taking place rather than JCC. It goes back as far as 2011.

[1640]

The Premier, in February 2013, told the conference that we would get $250 billion in tax revenue from LNG in the decade ahead. At that conference it was not only that it would get rid of the sales tax; it would create a $100 billion prosperity fund. It was even cutting personal income tax and getting rid of the provincial debt. That was what the B.C. Liberals ran on.

This bill brings in $100 million to $125 million per year per LNG plant, six to eight years after it is built. That is the reality, and you cannot move past those numbers. You cannot get anywhere close to what the Premier continues to claim and, presumably, the LNG minister continues to claims and to reality. These things never will fit together.

If you, as the B.C. Liberals…. If you vote for this, then you are not getting half of what you promised. You’re not getting a quarter. You are not getting 1/1000 of what you went to the doorstep with and promised people if they would vote for you. That is the reality with this bill. So there you are. You are literally taking 1/1000 of what you promised in the last election. It’s like: Thud, thud. This is it.” And well, okay.

With Bre-X — if you’re from my generation, you remember Bre-X — it all fell apart when the reality became clear.

So an election’s like a sales pitch, right? It’s all words, all hope. It’s really exciting, especially when the sales pitch includes salting the claims, which is an awful lot of what took place there. But in the end with Bre-X there was no gold, and here there is no end to sales tax, there is no $100 billion prosperity fund, and there is no end to — what is it? — $168 billion if you combine the debt with the contractual obligations. There’s no gold. That’s the reality.

It is just a bill that gets, if it’s successful…. You hope it’s successful. It’s a marginal amount of money.

Here’s the problem that I have with the initiative. There’s something wrong, first, as a governing body, that so much of our discussion, so much of our conversation here is built around complete fantasy. We should be talking about things that are real. The only way that we move forward in a meaningful way is if the debate is intelligent and honest. This debate, especially when the Premier launches into flights of fantasy, is anything but. We need to have honest, honest debate.

You need to not just focus on something that really is not going to produce the results that are claimed. It should be one of many things that this government pursues. If you look at the list of missed opportunities, it’s disturbing what you see.

With forestry, where I was the critic, there were so many things that we could be doing in forestry that would be good for the economy. I talked about an LNG plant being equal to a pulp plant. It’s in some cases equal to a normal mill. In Nanaimo shutting down that mill — that’s 100 jobs that we had. All we had to do was try to find a way to make that work.

What about Harmac? I see the member from Nanaimo…. Understand with Harmac that there is a need to keep that integrated industry moving, and it wouldn’t take much. There was a government that created that integrated industry, and there should be a government that protects it. Those are real jobs that can be protected.

There are jobs in reforestation that we don’t take advantage of. There are jobs getting accurate inventory. There are jobs available with new products, all exciting, that should not just be forgotten about because we’re chasing something that, while it offers some opportunity, is nowhere near what this government claims it is. There are opportunities in forestry.

[1645]

I’ve had the pleasure to become the critic of mining. It was an unfortunate time to step in, in many ways, with Mount Polley, but as a critic for mining, it’s a wonderful opportunity to go and see what’s going on in the province, and there are some exciting things. I’ve been fortunate. Imperial, Teck, Nyrstar, Hillsborough — they’ve been tremendous about showing me what they have.

What are the things that they’re looking for? Well, they want permitting to come faster. They want, actually, compliance, inspections — for these things to be done properly. But the government doesn’t do them properly. The government hasn’t done them properly. Instead, there is this focus on a fantasy of five, six, 12…. I don’t even know what the LNG minister said was the possibility, but it’s detached from reality. I do know that. I think anybody who follows this knows that it’s detached from reality.

What about other opportunities with LNG? What about other opportunities, because there are some. That natural gas is there; the price is low. There is the opportunity in Revelstoke, for instance, to replace propane with LNG. There are other communities. For instance, while we’re sending natural gas to China, my communities — Invermere, Canal Flats, Golden — don’t have natural gas. Now, the economics just possibly aren’t there, but there are possibilities. Maybe that is a good way to build the economy here locally.

But for that to take place, there would have to be a venue for intelligent debate on some of these issues. I would say that this is one of the biggest failures for this government. Its walk of fantasy of talking about numbers that are completely unreal means that this House cannot have an honest debate — let’s be frank — about skills training, an honest debate about forest policy, about mining. All of those are impossible because the government has to stick to this fantasy of $100 billion prosperity funds and no sales tax.

The minister has said that we’d be the envy of all jurisdictions if we didn’t have a sales tax. Well, Alberta doesn’t have a sales tax — right? There are other jurisdictions
[ Page 5152 ]
that don’t have MSP. In fact, I think all of them don’t have MSP. There are lots of other jurisdictions that are doing just fine. I bet a debate on potash in Saskatchewan or a debate on oil policy in Alberta would not be this devoid of fact from the leading minister and the leader of the government. I cannot imagine that there’s any other jurisdiction that has such ridiculous statements made by people who should know better.

Let’s just come to the essence of this. The essence of it, as a bill, is that it’s on the public record. I’m sure you’ve got 200 or 300 people that watch to see if we say anything stupid so that they can retweet it. Actually, I would invite those public servants that B.C. Liberals have in such great numbers to actually go….

You can go on websites where they still have the debates that we had from the 2013 election. What you will see is me and other members of this House basically saying that LNG is something that has potential. It has potential, but the challenges are real. The challenges are real, and one simply has to work towards this, dare I say, one practical step at a time. You just need to do that work — and fair enough.

I guess, as an election promise, that’s a tough sell, but that is the reality. That’s the reality that this bill represents.

Members, if you’re serious about your job, look at the numbers. Look at the pages that are there in front of you in the Minister of Finance’s own presentation. Look on page 4, on page 12. Six to eight years after one LNG plant is built you get $100 million to $125 million. How does that get you to getting rid of the debt of $69 billion? How does that get rid of the sales tax of $6.7 billion per year? How does that give you a $100 billion prosperity fund? All of that really is, frankly, ridiculous.

So here we are. This bill will proceed. I think the essence of it is really in the detail.

[1650]

I will say a couple things about the Minister of Finance. First off, as I said, I did look for him making those outlandish quotes, and they may be there. I couldn’t find them. It seems that he is a bit more wedded to reality than the Premier. Okay, that’s one thing: I didn’t hear it in his speech. As well, I think that, given that, he’s a bit more straightforward in terms of the reality than others.

We have an opportunity. It is an opportunity that we need to take advantage of but not to the exclusion of all others. As I said for this bill, it pretty well matches what I thought would happen. For B.C. Liberals, with this, it is the end of any chance that you are going to come close to your election promises.

I just don’t think that matters to you at all, frankly, but let’s say that it did. You might want to read this. You might want to ask a few tough questions to the people that were telling you to talk about $100 billion prosperity funds, no sales tax, getting rid of the debt. I mean, all of that was something that’s simply never going to happen. With that, here we are. I look forward to the work that will be done in committee stage by our critic.

The other thing I’d like to say is: I do know and I’d like to recognize that the Minister of Finance did set up a number of opportunities for members to be informed on this bill. I think that that needs to be acknowledged. It should happen as a matter of course. It doesn’t always. In this case I think that that’s important to acknowledge as well.

With that, I take my place, and I look forward to the debate as we go on here.

J. Martin: On behalf of my constituents of Chilliwack, it’s a great pleasure to address what many are describing as one of the most important pieces of legislation to be introduced in the Legislature. Bill 6, the Liquefied Natural Gas Income Tax Act, when paired with its companion environmental legislation, the Greenhouse Gas Industrial Reporting and Control Act, comprises the most impressive effort on behalf of any government to launch an entirely new export industry in British Columbia.

The Greenhouse Gas Industrial Reporting and Control Act makes a commitment on behalf of this government to create the cleanest LNG industry in the world. Bill 6, on the other hand, lays out a tax regime that will attract investment and help generate a new source of revenue for all of British Columbia.

During debate in the House last week, the Minister of Environment made a number of observations about LNG. I think these are worthwhile discussing. The minister acknowledged that there are huge challenges associated with launching an entirely new industry from the ground up. She also noted that these huge challenges come with huge opportunities.

I know the opposition is quick to dismiss LNG. They’ve been quick to dismiss pretty well any effort to create jobs in this province for decades. In fact, the opposition is quick to dismiss any progressive effort whatsoever to improve the lives of British Columbians. When we made a commitment to balance the budget and eliminate the deficit, the NDP said that was impossible and will never happen. Well, the government tabled its second balanced budget in a row this year, and we’re right on target for tabling a third one in the spring.

When the government proposes to create new export markets for our natural resources, well, you guessed it, the NDP opposes it, even though it will create thousands of good-quality, high-paying, high-skilled jobs for British Columbians.

This government is in favour of exporting LNG because it will encourage countries in Asia to reduce their reliance on dirtier fossil fuels such as coal, such as oil. Apparently, the opposition is against that too.

During her speech last week the Minister of Environment pointed out that we have two very distinct choices we can make. We can give up on LNG, as the opposition would have us do, or we can face the challenge
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of competing on the international stage and become the world’s cleanest exporter of LNG. If we were to follow the NDP’s advice and simply abandon all plans to develop LNG, it would send a message to the international community that we are no longer interested in reducing greenhouse gas emissions. That is something that’s just not going to happen.

[1655]

The government is taking up the challenge by implementing the strictest environmental regulations for proposed LNG facilities and creating incentives which we believe will drive innovation in the natural gas sector. That’s what these two bills represent: strict environmental safeguards and an attractive tax regime that contains incentives to develop better technology.

Government is not in a position to fund research and innovation in the natural gas sector. That kind of funding has to come from the industry itself. Bill 6 provides the incentives necessary for industry to pay for all the research and technological advancement that will lead to lower greenhouse gas emissions. With these huge challenges come more huge opportunities. So let’s talk about carbon offsets for a moment.

There are a number of members opposite that have been quite vocal about their belief that offsets are worthless. Well, as the Minister of Environment noted, the NDP should consult with First Nations in this province, because First Nations are in the process right now of negotiations with LNG companies to sell those offsets.

That’s right. If the NDP has decided they’re against the whole idea of reducing greenhouse gas emissions through the sale of carbon offsets, they had better inform First Nations who are on board. We, on the other hand, are leading the way by encouraging revenue-sharing agreements and by establishing a new relationship with First Nations.

Let’s discuss those revenues from LNG. The opposition says the government has set the tax rate too low. Well, I’m sure no tax rate in this province has ever been high enough for the NDP’s appetite. What Bill 6 does is establish a competitive tax rate that will entice investment and still ensure a fair return to British Columbians.

Now, we all know that the NDP is the party that favours high, high taxes. That’s exactly what chased away business and jobs when last time they were in government. So what good is a high tax rate if all it does is discourage companies and business from conducting their affairs in British Columbia? There are no revenues when companies flee the province.

What the NDP fails to realize is that the public will not only benefit from taxes generated from LNG; they will also benefit from all the spinoffs as well. More people working in a new export industry will generate demands for services. In fact, my colleague right beside me from Peace River South is travelling the province and even came to my very own riding in Chilliwack to help educate the public and light industry and small business about how they can better position themselves to benefit from LNG.

In closing, hon. Speaker, I would appeal to the members opposite and encourage them to take a positive outlook on the future of this province. I urge them to support job creation and the reduction of greenhouse gas emissions by voting in favour of this important legislation before this House. With that, I thank you for my time.

R. Austin: I rise to take my place in second reading of Bill 6, the Liquefied Natural Gas Income Tax Act, a piece of legislation that, while it’s nearly a year and a half late — and that’s based on the government’s own timeline — is certainly very important to not only the people of Skeena and the northwest of British Columbia in general but, of course, to the province as a whole.

I just want to speak for a moment in regards to the Minister of Natural Gas Development harping on and berating this side of the House for voting against last week’s Bill 2 in regards to greenhouse gas emissions. He said that we’re delaying the LNG industry by voting against that bill. We voted against that bill because that side of the House promised to bring in the cleanest energy in the world and then exempted 70 percent of all of the emissions from the LNG industry. That hardly says very much about what they want to do.

Also, he says that we’re delaying it. I heard the Minister of Natural Gas himself last year say that they would have this bill in this House by the end of the fall session last year, 2013 — end of November. That never happened. There was no fall session. Why? Because this government that says they’re in a big hurry to bring forward LNG never did the work to bring it about.

He then said — and again, I remember listening to him: “Well, don’t worry. We’ll bring it by the end of this year.” In most people’s minds, the end of the year is December 31. That never happened. Here we are one year later, more than one year later, with what they say is the most important piece of legislation and the whole reason why the B.C. Liberals ran on LNG in the last election.

[1700]

But let me back up for a moment and give some kind of context to this whole debate, because I think people in British Columbia, having only really heard the term “LNG, LNG, LNG” from the election on, don’t recognize that this industry, a potential industry, has been coming about for years. Over the last eight years at least, during large parts of the combination of fracturing and directional drilling, two technologies that have come together, we have seen a surge of discovery of unconventional natural gas, not just here in British Columbia but in several sites right across North America.

Now, this has been a good thing. It’s been a positive. It’s had a positive effect because it enables us to lower our energy costs here in North America, but it also brings
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some major challenges. Let me remind people who are paying attention to this that only eight years ago we were actually importing LNG into North America. That’s right. We were importing it because the price of natural gas in North America was over $8 a million Btu.

The Minister of Natural Gas likes to make out that we’ve been against LNG. Well, let me just state a few things on the public record. I got elected in May 2005. One of my very first meetings was with — I hadn’t even been sworn in yet — a woman, Rosemary Boulton, who wanted to bring a regasification plant to Kitimat. That’s right. They wanted to bring in stranded LNG from another part of the world, build a regasification plant and sell that natural gas on the North American market.

We have been talking with people about natural gas long before this Premier even knew what LNG was. At that time, I believe, she was working on CKNW. If you’d asked her, probably, years ago what LNG was, she wouldn’t have known. But for those of us in the northwest who were meeting with various companies, trying at that time to build a regasification plant — which they later on turned into an LNG plant — this debate has been going on for a very long time.

I’d just like to mention…. Again, the Minister of Natural Gas has stated that we have been against this all the time. I can remember, a year into this job, being interviewed by the local paper in Kitimat. He asked me questions about what I thought of ships taking diluted bitumen off the coast of Kitimat, versus ships that could potentially be moving LNG. I answered in a fulsome way, basically saying that I didn’t think that there was anything like the risk from having natural gas liquefied and put onto ships, as compared to diluted bitumen.

I can still remember the headline, hon. Speaker. This is going back nine years. The headline — it had my name — said something like: “Crude oil, bad; natural gas, good.” That’s nine years ago. So it’s a little bit rich for the minister here to suggest that we have been against the natural gas industry.

Let me get back to the positive impacts of these gas finds. They have of course, as I’ve mentioned, reduced energy costs in North America. But the challenge is to figure out what we’re going to do with all of the gas that’s been discovered. It isn’t just the huge finds in the northeast. We also have to recognize — and I know that the minister has spoken of this, and others have, in the House — that because there have been such huge finds in the United States, we are losing or are about to lose our traditional export markets for this natural gas.

We have built up a natural gas industry in the northeast of British Columbia that has hundreds of millions of dollars that have been put into it as capital investment. We have plants there that process the gas. We have pipelines. We’ve had a huge amount of oil and gas development. That is all put at risk by the fact that now in 2014 the price of gas in North America is so low that we have no one to sell it to.

Not only are our traditional exporters in the United States not willing to buy it from us, but even provinces to the east of us which have the larger populations, whether they be Ontario or Quebec, can now get their gas from the eastern United States much cheaper than we can deliver it from British Columbia. The challenge, then, is: what do we do with all of this gas?

What I would say is this: no matter who won in the 2013 election, it would have been the duty of whoever was in government to figure out, to find new markets for that natural gas.

[1705]

But in the last election, as has been said, this government went out and made very extravagant promises around LNG. That’s the thing that we are so upset about on this side of the House and that I think British Columbians should be so upset about. The reality is, as my colleague has already spoken to, we’re going to be voting for this bill, and this bill is perhaps the reality that all of us knew would come about in terms of natural gas.

We didn’t go out and suggest to British Columbians that we’d be able to pay off all of our debt in British Columbia. We did not go out and suggest to British Columbians that there would be 100,000 jobs as a result of the LNG industry. We did not go out and tell British Columbians that we would be making a debt-free society here in B.C. No, that wasn’t us; that was the B.C. Liberals. That was the B.C. Liberals going out in campaign mode, exaggerating in order to get elected. What we see in this bill today is reality coming and hitting them. That’s what we see today.

Let’s talk about 100,000 jobs for a moment. In my colleague’s riding, to the west of me, there was a large pulp mill. It went down, I think, in about the year 2003. When that pulp mill went down there were 620 direct jobs — never mind spinoff jobs — that were lost. Currently there are two large potential LNG plants in Prince Rupert. Just remember that we lost 620 direct jobs in the northwest, in Prince Rupert. Now one of them, unfortunately, we’ve just heard, is being put on hiatus. It may have a decision in a couple of years, but it looks like, listening to what they’re saying in the media, the BG Group might put their project on hold for a number of years.

My point is this, in relation to this exaggerated claim that we would have 100,000 jobs. Once an LNG plant is built, and once the pipeline is built, they actually are not hugely labour-intensive. They are, of course, hugely capital-intensive. That just describes some of the sort of weasel words that have been used in order to get elected, but in fact, the reality is not what it is.

Of course, there’s further embellishment to this new industry. That was that we would be like Alberta and that we would be able to get rid of our sales tax and be a province that only charges federal GST. You look at Bill 6, and you recognize, looking at the numbers, that all of
[ Page 5155 ]
us in this room will probably be long dead and buried before that ever happens, that we could actually reduce or get rid of the sales tax in British Columbia. The reality of the tax rates that are now proposed on Bill 6, and the government has acknowledged that it’s literally half of what they said only a few months ago, is that, of course, we are going to be saddled with a sales tax in B.C. for the indefinite future.

Doesn’t it all just sound absolutely dandy, what they suggested? Really, the reality is now hitting the cabinet room of the B.C. Liberals. I guess that’s simply what we say on this side of the House. You say one thing to get elected, because that’s what you think the people want to hear, and then, after you get elected, you bring forward the reality of things like Bill 6 because now you actually are in government and you have to do the more appropriate thing.

I think that most British Columbians, certainly the ones who live in my constituency, have long realized the potential of having an export facility in our community and what it could mean in the short term, as it relates to construction work, and in the long term, as it relates to jobs running the plant as well as jobs on the marine side. Of course, let’s not forget that in small communities we are able to charge an industrial tax, a local industrial tax, for any industrial activity that takes place in rural communities. This enables us to maintain and keep some of the benefits in our local community, to put something back into those towns, as well as to pay for all of the extra infrastructure and social costs that relate to having these big projects located in rural B.C.

I’m going to speak directly to something, again, that the minister brought up in regards to people seemingly unhappy with the success that’s happening in the northwest. I want to just put this into a different context. It’s not that people are unhappy. In the last 12 years, under this government, we saw people leave all of northwest B.C., leave to go and find work, because that was the reality.

[1710]

Obviously, people are very happy to see the kinds of investments that are happening now, whether they be in the northwest transmission line, whether they be in the new smelter that’s being built by Rio Tinto Alcan and, I have to say, the money that has been spent ahead of time, ahead of any final investment decision with regards to LNG.

But these are small communities. These are small towns, so the benefits of that come with huge challenges. To go to government and express concerns about these challenges, whether they be on housing, on infrastructure or on lack of sewer…. These are real challenges that small communities don’t have the capacity to take care of.

Those are legitimate concerns to bring forward. It doesn’t mean to say that you don’t want to have an LNG plant. It doesn’t mean to say that you don’t want Rio Tinto to have 1,700 workers and 450 on a ship building a new smelter.

All it is, is a recognition that communities the size of Kitimat, 10,000 people, and the size of Terrace, 13,000 people…. If you add Thornhill, let’s call it 20,000. All it is, is people — local government officials, citizens, those who work with people on fixed incomes…. All it is, is a recognition that this brings huge challenges.

With those challenges, the expectation is that government will be there to assist them. It’s not negative. It’s just the reality of what it is to suddenly have billions of dollars spent in your community when you have a small town.

I think we get very sort of city-centric because such a large population lives in the Lower Mainland. But people have to recognize that in a big city, businesses shut down and businesses open up every single day. Indeed, large companies can shut down and new ones can open up every day.

But in a small town, when an industry or a factory or a mill shuts down, it has a huge effect. By the same token, when you have millions of dollars suddenly pouring into a community, that also has very, very challenging times.

But you know, people are still excited. I often get asked what it’s like to be the MLA for Skeena. People don’t necessarily know about Terrace. They don’t necessarily know that I represent the Nass Valley, but because Kitimat has been in the news so much in the last little while, I do get asked a lot about what it’s like to represent Kitimat.

I’m not playing favourites with any part of my constituency, but the reality is that Kitimat has been in the news an awful lot in the last year and a half. When people meet me and ask what I do, they simply ask what it’s like in Kitimat. So, hon. Speaker, let me tell you what it is like representing both Terrace and Kitimat.

The housing situation in our communities has gone from a high vacancy rate…. In Kitimat it was 42 percent, the highest vacancy rate in all of British Columbia. You could rent a two-bedroom apartment for $400 about 2½ years ago — $400 for a two-bedroom apartment. Now there is zero vacancy, and that same apartment is probably renting for anywhere between $1,500 and — yes, this is no exaggeration — $2,500 in a small town like Kitimat.

So what does that do to people living there who are not part of these new industries that have high wages — people who are on fixed incomes, seniors, people who are only part-time employees? It puts a huge problem on them, and that’s the kind of challenge we’re talking about.

There are also huge benefits. In the last year and a half at the Terrace-Kitimat Airport — which we ourselves like to call the Northwest Regional Airport — I have seen the area that’s designated for those who are in long-term parking go from something about twice of size of this chamber to about 20 times the size of this chamber. That just shows you the kind of activity that takes place when money is spent ahead of time on an LNG plant or on other large infrastructure projects.

The good thing about representing Kitimat is that
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while it is exciting times, it is very precarious times. Let me bring this debate into reality.

We have two projects pending in Kitimat with regards to LNG. One of them was run by Apache and Chevron, 50-50 owned. Prior to that, Apache bought their share from two other large companies, EOG Canada and Encana. Already in Kitimat people have seen how these projects can morph from one large corporation to another. The people are very tentative, because, of course, Apache has pulled out and is trying to sell that stake.

[1715]

People are seeing the boom times right now in Kitimat, but they’re also very nervous. If we don’t get this right, if this bill isn’t successful in putting forward the correct tax regime, then we may see these companies look at our jurisdiction relative to other projects around the world and say no.

Even though it’s exciting times in Kitimat and in the northwest in general, people are looking down the road and saying: “We really hope that we get a final investment decision in the near future.” I’ll tell you why. The Rio Tinto smelter build is going to come to an end probably in the next six to eight months, and with it we will see all those hundreds of workers leave town.

As a result of that new technology at the smelter, which people obviously like because it’s going to be much cleaner environmentally, we’re going to see 500 fewer jobs. So it is very important that this bill be the right bill in terms of being able to attract companies to make a final investment decision, because frankly, it’s the ups and downs that you see in rural British Columbia. With the Alcan smelter build finished and the northwest transmission line being completed, if we don’t get an investment decision, people will be back to the down parts, and it will be a very trying time.

But I just want to express that we have been in support of LNG. We’ve had four very critical things that we believe are important in order to have an LNG industry. It’s important that we have guarantees that the jobs come first and foremost to British Columbians.

I’ll go even further, actually, than the minister who spoke and said that the government is on side with making British Columbians the first in place. I’m going to go further and say that really what we need is, first of all, to make sure that people in the local area of the northwest have the ability to get these jobs.

We often speak about unemployment and statistics in this House. As we all know, statistics can be monitored. They can be sold in such a way as to not really tell the truth.

I’d just like to take a couple of minutes to have a discussion around unemployment. Unemployment in British Columbia, indeed in Canada, is gauged by those who are temporarily unemployed and are collecting EI benefits and who, therefore, are on the unemployment rolls.

The problem with that methodology of looking at unemployment is that once one is no longer on EI or if one was on social assistance, you’re not technically unemployed. So what we see in northwest B.C. is an unemployment rate which is a little bit higher than the B.C. average, but that doesn’t tell the real story. It doesn’t tell the real story.

We want to make sure — and I think the government also wants to ensure — that any LNG facility gives advantage to First Nations. Historically, First Nations have been marginalized in the economic benefits that most British Columbians have had.

Let me speak for a second about unemployment on First Nations communities. I’m going to compare, for a moment, the Haisla community that sits on the other side of the Douglas Channel from the district of Kitimat and is right opposite all the industrial activity that takes place down Douglas Channel….

I was listening to Chief Ellis Ross, their chief councillor, speak recently. He was saying: “As a result of all the economic activity in Kitimat, everybody in the Haisla community of Kitimat village who wants to be employed is employed.” That’s fantastic, and that’s a great testimony to everything he has done in terms of boosting economic development for his people. But unfortunately, if you compare that with some of the other First Nations in the northwest, you get a very different story. Once again, it does not show up in the unemployment statistics.

If you were to go and look at the four villages in the Nass Valley…. If you were to go and look at Metlakatla or Kitkatla, if you were to go and look at Kitselas or Kitsumkalum, you would see unemployment, amongst many of the First Nations communities in the northwest, of 80 percent — unemployment which isn’t gauged in the unemployment statistics.

My hope is that if there are developments that take place, whether they take place in Prince Rupert or Kitimat or anywhere else on the coast — there’s the potential for there being LNG plants in Nisga’a territory — I would hope that we see this as an opportunity to train aboriginal people to make sure they are first in line for these jobs — and then British Columbians.

[1720]

What we don’t want to see — and we are clear about this — is planeloads of people coming in from outside Canada to come and take these jobs. It should benefit British Columbians first and foremost.

Lastly, we want to make sure that any LNG industry protects our air, land and water, including our climate commitments — which is why, in the discussion on Bill 2, we decided very clearly that we had no choice but to say no to Bill 2. It didn’t even come close to what the government had promised when they said that they were going to bring in the cleanest LNG in the world. So they’ve failed on that.

What is most important is to ensure that we take advantage of training opportunities. As I’ve mentioned so
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far in this debate, we have had several large projects take place in the last few years. The Rio Tinto smelter build is one. The transmission line is another. Unfortunately, we missed the boat in terms of training local people to be able to go and do those jobs. We missed the boat. You know what? I think the government would admit to that — that the result of so many people having to come up to the northwest in order to complete these jobs was a result of our inability to train people properly. And do you know what? The government is making changes to the whole system of how they train, and they say they have a plan in place to ensure that these companies will actually provide training, along with the government.

I know that this is not a debate about project agreements. Hopefully, that will come later. But I think it’s very, very critical for all of us who live in the northwest to see that, if we get to a final investment decision, when the government actually sits down and writes a project agreement with any proponent, people in the northwest take advantage of Northwest Community College, take advantage of other training opportunities and ensure that these people — many people who have never worked…. Many people left high school and have never worked in northwest B.C., particularly in First Nations communities but not only in First Nations communities.

It’s imperative that we use these project agreements to put in place the kind of training that’s required to give people the skills so that we don’t end up seeing what we’ve seen in the last two or three years, which are planeloads of people coming from outside the area while we still have quite high unemployment rates in our own home communities.

That is an incredibly important thing. This should be seen not just as an opportunity to bring tax revenue and jobs but that by training people, we are building the future capacity to replace all of those tradespeople who are retiring.

I went to an event with the minister of trades and jobs and tourism last week here at one of the hotels. We were once again shown a very graphic piece of information, which is that the number of people in the trades in British Columbia who are retiring in the next few years — next few years, like next eight, nine years — is catastrophic. If we get a final investment decision around LNG, it is critical that we are able to train sufficient people so that we can make up for that huge loss in our workforce of people who’ve reached the age where they are able to retire.

I’m going to speak for a minute to the actual details of this tax. As has been alluded to by the minister, the first tier of taxes: 1.5 percent, then going to 3.5 percent and, after 20 years, moving up to 5 percent. Now, this is probably the reality of where we would have been without all the hype. But we have to also recognize that only eight months ago we sat in this chamber. While the minister at the time was not bringing forward a piece of legislation, he was certainly putting in place a framework during the short session that we had after the election. The difference between what his framework was and the bill that we see here today…. Essentially, it’s half what it was only eight months ago.

That, of course, is because it was oversold. It was oversold by the government, who wanted to make sure that they could go out there and make these exaggerated claims in the hope that they could get elected on those exaggerated claims. Now the reality is here. We’re one and a half years into the mandate of this government, and the reality is here. This bill brings forward a tax number that is literally half of what it was only eight months ago.

[1725]

I think it’s important that people recognize that and that when we vote in favour of this bill, in fact, we’re the ones who are being more honest on this side of the House, because we always said….

I think that most people who were running and talking about LNG in the last election were saying: “Well, it’s certainly an opportunity. And yes, we have to find other export markets.” But we weren’t going out and exaggerating it. Certainly, this bill that’s brought here today would suggest that we were right.

I’m just wondering what it would have been like to be the head of one of these proponents in the last few years and to watch the media and to see the Premier running around the province — and around the world, indeed — and stating all of these claims that she had. They must be thinking: “Boy, I didn’t think that I’d have to go to my board to ask for several billions of dollars of investment in order to rid British Columbians of their sales tax. I didn’t realize that I’d have to go and convince my board to invest billions of dollars so that I can pay off the provincial debt in British Columbia.”

They must have been chuckling. They must have been laughing, thinking: “I wonder if other industries that potentially come to British Columbia get told that they’re going to pay off the provincial debt.” No, they must have been more than chuckling.

Now, obviously, some serious conversations have happened, and they’ve sat down with the government. And while the government says, “Well, nobody tells us what tax rates we’re going to have,” that it’s the right only of the government of British Columbia to set the tax rate, clearly, conversations have happened. They would’ve been very candid, and what we see here today in Bill 6 is an acknowledgement that all of those exaggerated claims were just that.

I see that my time is coming to a close, and I’ll end with this. As I’ve said, in our region it is very important that we are able to have an investment decision that’s made, certainly, in the next six to eight months. Otherwise, things will get very, very challenging and very difficult for those of us who live in Terrace and Kitimat, not to mention the First Nations who are looking to this opportunity.
[ Page 5158 ]

It should be noted that First Nations have largely been in support of liquefied natural gas, as compared to their lack of support for bringing in diluted bitumen. So there’s a lot of hope in northwest B.C. in regards to this. Obviously, people would have preferred it to have been done better in terms of the environmental regulations that have been brought forward by this government. But at the end of the day, people want to make sure that they can have some jobs, that there can be revenues coming in to our local governments to ensure that we can maintain services.

I certainly hope that at the end of the day, once this bill is passed, we will see a bright future and, hopefully, a decision made in the very near future. I know that it’s very complicated. Governments don’t get to decide whether companies invest in this. It’s largely a matter of the market. Hopefully, the market will move in the right direction.

Deputy Speaker: The member for Peace River South. [Applause.]

M. Bernier: Well, thank you. I now have 29 minutes and 30 seconds to address the House.

It’s a privilege to rise here in the House once again to talk about and in support of Bill 6 and about why this is such an important step for the House. I’m not going to speak too much to the economics of the actual bill. I know that the Minister of Finance spoke quite well about that. I know that some of my other colleagues, as well, in the House have and will be speaking about the actual specifics around that.

What I’d like to do, because this really hits close to home, is talk more about the actual importance of the bill and what it represents for me, for my riding and, I would actually say, for British Columbia, because our natural resources serve as the economic engine for our province.

I would say the beautiful riding of Peace River South, my area, is really the homeland of natural resource development. The people in my riding, for the most part, support what we are doing. They support the fact that we have a natural gas development because they understand the importance of creating jobs and moving the province forward. We live with this every day.

Meanwhile, I find that what happens is that I get to listen to the opposition in the House gather around the fire, singing Kumbayah, everything’s going to be great, but not actually having a plan. As a campfire guitar player myself, I kind of appreciate where they’re coming from, but for the most part, we can’t get distracted. Right now we need to be focused. That’s exactly what this government is doing.

[1730]

When the NDP was in power, I think we saw firsthand what happens when a government gets distracted. For us, we recognize that it’s important today to have tomorrow in mind. We have to have a plan. We have to be moving things forward. Our government understands that. We understand the importance of trying to secure tomorrow for those here in British Columbia.

Economic development, I think we can all agree, is about creating more opportunities for those here in British Columbia. Our government’s primary principles are to control spending, and we want to remain committed to our fiscal responsibilities. We want to open new markets and attract new investment. We want to leverage our existing strengths. We want to realize the incredible opportunities that we have here in the province.

Right now the best opportunity we have that we are focusing on is LNG, because we understand what this can bring to British Columbia. It’s a once-in-a-lifetime opportunity of creating new jobs right here in our province.

I’d say northeast British Columbia, where I am, needs LNG probably more than any other part of this province. We’re dependent on it. In fact, our future is dependent on making sure that we get the taxation in front of us correct, that we get it on the floor, that we can vote in favour. I’m glad to hear the opposition is going to be voting in favour of this. They obviously understand the importance of LNG and what our government is doing.

I should also mention, though, that northwest British Columbia has a lot to gain. In fact, the member before me, although I was a little taken aback…. I didn’t quite understand some of his comments, because he said he was in favour but at the same time was almost complaining about growth in jobs and that all the investment that’s happening in his riding — something we’re working towards — might be a bad thing.

I think it’s also important that my colleagues I had when I was in municipal government — the mayor of Terrace and some of the municipal elected officials in northwest British Columbia — have spoken to me. At UBCM this year I heard them even say that LNG and the opportunities they have — they are seeing that already in northwest British Columbia. And they said it is a godsend what this government is doing to bring opportunities to northwest British Columbia that they haven’t seen in a long time.

I’m pleased that this taxation is in front of us here on the floor for us to debate and to talk about. I listen to the opposition. They say they’re going to vote in favour, but at the same time they’re speaking against the bill. It really doesn’t surprise me. It’ll promote jobs which, you know…. It’s going to be, obviously, something that the opposition continually speaks against.

It’s going to promote resource extraction, when members of the opposition have actually stood and said that they’re against the actual processes of getting the gas out of the ground, which is what’s going to support and promote LNG.

This bill is going to promote amazing opportunities for British Columbia — for communities, for First Nations.
[ Page 5159 ]
It’s going to offer great opportunities for generations to come. So I have a hard time comprehending why the opposition considers not supporting the direction that this province is going. I guess it’s easy to say no to things when you don’t actually have a plan. It’s easier to complain about someone else when they’re actually working towards their goals, working towards their plans.

I guess what’s really important is that they look at this, and they say: “We might as well be against it because it’s easier to try to bring somebody else down when they have a plan and when they’re working toward their goals.” I’d love for once for the members opposite to stand up and actually give us some options, give us some ideas, tell us what their plan is. It might be hard when, continually, they don’t seem to have one.

For one, I personally appreciate the direction this government is going. We have a plan for B.C. We have goals. We have things that we are working towards for the benefit of British Columbia. That’s actually what we were elected to do.

Interestingly enough, the opposition time and time again seems to stand in this House, speak against what we’re doing, try to stop progress, complain that it’s all a fantasy and a dream. Really, what I think the opposition is trying to do is promote and support failure. I think what they would like to do is to be able to stand up in a couple of years from now and try to stop LNG from happening so they can go out to the electorate and say: “We told you so.”

We’re not going to let that happen. We’re not going to let that failure happen. We’re working toward our goals. We’re succeeding because that’s what the people of B.C. want, and that’s what the people of British Columbia expected us to do.

[1735]

At the chagrin of the opposition, who like to argue the facts, let me speak about some of the facts they actually can’t argue about. I get confused every time a different member gets up to speak. One says they support LNG. One says they don’t. One says they support the extraction. One says they don’t.

Interjection.

M. Bernier: Let me explain some facts, because the member to my right, I think, seems to be getting confused listening to his side of the House as well. We have more….

Interjection.

M. Bernier: Let me get facts on the floor, then, and see if I can confuse you more, because I know facts sometimes you don’t like to hear.

We have more natural gas in British Columbia because of shale gas and horizontal drilling than we’ve ever seen in the history of British Columbia. Another fact — we currently have over 15 companies actively seeking LNG opportunities here in British Columbia, all at different stages.

Here’s a fact. We already have thousands and thousands of people working in the natural gas industry in well-paying jobs, supporting families and building communities. In fact, we’ve had that going on for decades. We have billions of dollars a year already being spent here in British Columbia in this industry.

We have pipelines, which are essential for the safe transportation of oil and gas resources. Some pipelines in B.C. are regulated by the Oil and Gas Commission. Some are regulated by the federal government. But here’s one interesting fact. We already have 40,000 kilometres of pipelines in the province of British Columbia that are being regulated by the Oil and Gas Commission.

One more fact that like I like to tout. When everybody in this House has a nice hot shower in the morning, in the wintertime when people in this House turn on their furnaces to warm their homes, I hope they can actually thank the people up in northeast British Columbia, the ones that are working hard to get the gas out of the ground.

We should also be thanking the people who are living in my area with this activity so that we in British Columbia can actually have the opportunities that come because of natural gas. We should be thanking the people who installed the pipelines in the ground that get the gas to our house. We should be thanking those companies that we have here in British Columbia that are employing thousands and thousands of people and offering a better quality of life for us right here in B.C.

It’s hard to sit here and listen to people who complain about what’s actually happening, getting the gas out of the ground, and what we’re actually doing but at the same time try to take advantage and enjoy the comforts of life that are coming because of this industry. It doesn’t matter which way the wind blows, which way you turn your head. Those are facts that don’t change.

Our government continues to move forward to strengthen our future while we’re trying to work to develop and expand the resource sector. We understand the importance of practising sustainable economic development.

In fact, this summer members of the United Nations came up to my riding. I was very fortunate to be able to tour them around. One of the things that they said to me was that we have a province that is built on resource extraction while at the same time having a reputation of being one of the most beautiful places in the world. We have found that balance that most in the world strive for. Unfortunately, some don’t even try.

[Madame Speaker in the chair.]

With this bill, it brings us to a place where all the hard work that this government has been doing is now starting to come to fruition. All the meetings that the Minister of Natural Gas and the meetings that the Premier have been having with global companies, being strong advocates for B.C., trying to encourage them to invest in our province…. This takes us one step closer to that reality. We want to help businesses gain awareness and understanding about capitalizing on the LNG opportunities as well.

Last year our Premier announced what’s called the LNG–Buy B.C. program. The goal of the LNG–Buy B.C. program is about creating and helping get relationships. It’s about the objective of creating a broad awareness of LNG and the opportunities and promoting businesses and jobs right here in British Columbia.

I’m quite honoured to actually have been appointed to be a spokesperson, to be a front-runner to help promote the LNG–Buy B.C. program. It’s something that…. I’m very happy that my colleagues have been inviting me to their ridings, where I can actually meet with them and work with the chambers of commerce and the businesses in their ridings.

With that, actually, I want to thank the chambers of commerce around the province. It’s been a pleasure of mine to actually meet with them, to be able to work in their communities, to work and talk with their businesses.

[1740]

I want to thank them for their hospitality that they’ve shown me as I’ve travelled around the province, because as we’ve been in here supporting and promoting small business, we always need to remember they are truly the major economic engine that helps build a strong economy here in the province.

I’m proud that our government…. [Applause.]

N. Simons: Well, that was helpful.

M. Bernier: It was, and I appreciated it.

Interjection.

M. Bernier: We finished talking about small business over the last month — the importance of chambers of commerce. It is really important that we do that.

I’m proud that our government has taken steps towards establishing the LNG–Buy B.C. initiative and matching businesses up with the large proponents. To me, that’s a big part of what we need to do with these LNG businesses as we go forward in the province.

With this bill coming forward, it’s also going to highlight, I think, another important avenue that we have here in British Columbia right now, and that’s our jobs plan. Our main goal of the B.C. jobs plan is to realize the opportunities provided through LNG development. The jobs plan three-year update delivers on the government’s commitment to grow the economy by creating more opportunities for everyone.

By 2022 we are expecting one million job openings in the province of British Columbia. A great portion of those are actually going to be jobs from baby boomers and other industries that we already have here in the province of British Columbia as people are retiring. But we’re going to have close to 100,000 jobs coming forward because of the LNG industry. Let me repeat that: 100,000 jobs. We have one million projected, but 100,000 jobs, though, specifically around LNG.

That means that even though we’re putting a lot of emphasis on LNG, we recognize that this is not the only opportunity we have here in British Columbia. But it’s the opportunity facing us right now, in our face, that we need to deal with. It’s an important part of moving our province forward. It’s an important part of securing long-term employment for those here in British Columbia. Potential growth in the opportunities in many sectors around the province is going to continue as well, like mining, forestry, tourism. And we heard even in the House earlier today a great discussion around the film industry.

Let’s talk specifically for a moment, if we can, Madame Speaker, on the trades that are going to be needed. We have a clear plan to make sure that young people have the opportunities to take advantage of the trade opportunities that we have right here because of LNG. The B.C. skills-for-jobs blueprint outlined a comprehensive plan to deliver a well-trained workforce for the jobs that are coming because of LNG and the natural gas industry.

As part of the blueprint, Northern Lights College in my riding received funding for an additional 75 training spaces to increase access and help reduce the wait-lists for the trades that are critical to the industry and what’s happening in my area. The allocation is part of about $6.8 million announced recently to create over 1,400 foundation and apprenticeship seats in public post-secondary institutions throughout the province.

Northern Lights College again, in my area received $438,000, including $226,000 for additional seats and $212,000 for operating costs and minor equipment such as tools and safety gear, welding supplies and what’s needed to put on these programs. Of the 75 seats Northern Lights College is putting forward, these are for jobs that are in high demand right now. We want to make sure that we’re training people for jobs that we have right now.

We have 32 electrical apprenticeship seats offered, 16 welding foundation seats and 27 welder apprenticeship seats that are new to the curriculum in Northern Lights College. As a tradesperson myself, I can say that a career in the trades provides the opportunity for British Columbians for long-term, well-paying jobs that strengthen families and help build communities.

We want to make sure that British Columbians are the first in line for these jobs. That’s why it’s important, with our job-skills blueprint, that we’re making sure we recognize the opportunities that are right in front of us, that
[ Page 5161 ]
we’re training the people for these jobs so that as kids graduate and kids move forward into post-secondary education, they have the opportunities for not only the education but to be able to leave and go straight into employment.

In conclusion, let me end by saying that we have an abundance of opportunities provided through the natural resource industry here in the province. It’s stuff that I am very proud to stand up here and support. Our government has a plan to get us there.

[1745]

I know that the word “plan” can sometimes seem like a foreign word for a lot of the people in opposition here. They stand, and they actually say that they support economic growth. Then they turn around, and they obviously speak — sometimes for, sometimes against. To me, that doesn’t show a plan. The motto seems to be that there’s no plan.

On this side of the House I think we’ve proven that we have goals, that we have objectives. We have a plan for those here in British Columbia. We are giving ideas to move this province forward. More importantly, we are giving the people in the province of British Columbia hope for the future. We’re giving them ideas. We are giving them something to look forward to when they wake up in the morning, which is a good-paying job and opportunities to stay and live in British Columbia, to put food on the table for their children and for their families.

That’s why we’re pursuing these opportunities. Are there challenges? Yes, there are challenges, but this government is ready to face those challenges. We are facing those challenges. By pursuing those challenges, that’s leadership. That’s how we’re going to strengthen and promote and support the economy right here in British Columbia.

That is ultimately what the people of B.C. are looking for, that’s what they’ve elected us to do, and that’s exactly what we as a government are doing. We’re showing that leadership. We’re giving the people of British Columbia hope for tomorrow. That is what I am working towards for myself in my riding. I know my colleagues — that’s exactly what they are doing.

Why I am proud to stand up and support this bill…. It’s not just the bill; it’s what the bill represents. It’s a future for British Columbia and for the people of British Columbia.

With that, I will take my seat and look forward to the rest of the discussion.

J. Rice: The member is prattling on about what leadership is and what it looks like, but I think he’s failed to mention that leadership actually means telling the truth. I haven’t heard any of that today.

It seems to me that this afternoon has become a pick-on-the-NDP day. What that tells me is that there is no….

Interjections.

Madame Speaker: Members.

J. Rice: The reason the debate is focused on the NDP right now is because they realize that they have been a colossal failure when it comes to the tax regime. This portrayal that we are against it and that we’re against everything is baloney. Where is the substance in this debate this afternoon?

Interjection.

J. Rice: So 7 percent down to 3½ percent. In reality it’s 1½ percent, if we’re lucky. That’s the truth, and that’s what’s not being discussed today.

Interjections.

Madame Speaker: Members, you will direct your remarks through the Chair.

J. Rice: The member for Skeena spoke about the fact that when the pulp mill in my community was up and running just over a decade ago, over 600 people were employed in that mill. I don’t think he finished his thought, but his point is that if two LNG terminals were up and running in my community, that would still employ less than that pulp mill had employed.

The point he was trying to make was that the jobs are, in fact, in the construction of these LNG terminals. That is where the jobs are. Yet we have a Premier gallivanting around the globe, recruiting temporary foreign workers to come and do jobs that British Columbians need, jobs that people in my community need.

There has been a record number of people in the last few months, compared to the last nine years, come through my office doors in dire need of affordable housing. They are being evicted on the hype of LNG. Once or twice I thought this was a little bit strange, but it is a chronic occurrence.

Interjection.

J. Rice: I would like to know what the Minister of Social Development, who is prattling on right now, is doing about that. The Minister of Housing, the Deputy Premier, has said we can’t do anything until we’ve reaped the benefits of LNG, which we know are decades down the line. That is not helping the people in my community right now.

[1750]

Prince Rupert, in fact, has close to a….

Interjections.
[ Page 5162 ]

J. Rice: I can’t…. Am I supposed to talk here?

Madame Speaker: Hon. Members.

Please continue.

J. Rice: Thank you, Hon. Speaker.

The community that I live in is facing a $250 million infrastructure deficit right now. We flush our sewage directly into the ocean. We have one small part of our town that has primary sewage treatment. We still, to this day, get our drinking water from wooden pipes, and this LNG bonanza has yet to do anything to help us prepare for the influx of workers we’re supposedly getting.

We can barely treat our own sewage and have a precarious water supply, and yet we are supposed to just deal with that after we’ve reaped the benefits of LNG, decades down the line? This is why in the House we are debating petty little things about the NDP party this afternoon. No one wants to face the reality or the truth. No one is being truthful.

We know that with the “Debt-free B.C.” slogan on the side of the bus, members opposite didn’t expect to be elected. Then when they had to make their big huge grandiose plan come to fruition…. It’s just an average industry providing average revenue. This is what we would have expected — not the big booming plans that we’ve been promised. And now that we’re here debating this bill, reality has hit the floor. “We’re going to pick on the NDP instead.”

I spoke to a real estate agent in my community, and she’s been doing property management for 20 years. She said to me: “Jennifer, in 20 years I’ve never seen a zero percent vacancy rate.” And we have a zero percent vacancy rate, all based on the speculation of LNG. Well, that’s fantastic. Where is the support for the communities to prepare for this? There is nothing.

We have a Deputy Premier, a Minister for Housing, who belittles us when we ask for support. We want to be partners in the LNG industry. We’re trying to prepare. We’re trying to contribute. But we get nothing, and we get belittled.

I would just like to comment on the speaker before me. He said that we are here to promote and support failure. I just think that is so ridiculous. Why would we be here? Why are we in this House? Why would we run to be elected as MLAs to promote failure? I feel like it is such a baloney distraction. It’s just gross. It shouldn’t even be allowed. It should be one of those forbidden words, to suggest that we’re here to promote failure and be against everything and not see our communities prosper.

I’ve been an MLA for a year and a half now, and I find this ridiculous. This is the most juvenile debate I’ve ever participated in.

Interjections.

Madame Speaker: Members.

J. Rice: Hon. Speaker, I apologize for my frustration. It’s just that the people in my community, who haven’t seen a boom in over a decade, have been anxiously awaiting this prosperity that we were so promised. We were guaranteed a trillion-dollar industry for the north, 100,000 jobs, a debt-free B.C., the prosperity fund, the once-in-a-lifetime opportunity.

I guess the frustration is that everyone knew that it was going to be as it is right now — except for the members opposite, who now are finally having to admit that it’s not this grandiose plan that it was set out to be. I live in Prince Rupert, and I live on the north coast, so I have to listen.

[1755]

I have to be there with the people in my community that are suffering or who have lost their hope, who were promised so much and are now in my office trying to find an apartment they can afford.

Interjections.

Madame Speaker: The members will direct their remarks through the Chair.

Please continue.

J. Rice: There were days when the Premier was touting from this very building this grandiose plan for LNG, but at the same time, my colleagues were meeting with LNG proponents saying that reality is not as rosy as she portrayed it. I feel that it is pretty obvious that this is the reality that we were going to face, except now we actually get to get picked on because we don’t want to have the dialogue.

The people in my community anxiously await this trillion-dollar industry. They anxiously await the jobs that were promised. We know, as I said a minute ago, that the jobs are in the construction. I do look forward to the construction jobs that they’ll benefit from. I do look forward to the training opportunities that we’ll get. We talked about 100,000 jobs, and the member before me talked about 75 in his community.

Well, in fact, my community college is quiet. It’s like a ghost town in the halls. You can’t tell it’s a community college. In fact, they cut skills training and upgrading at my college. So I’m still waiting, as the people in Prince Rupert are, for these benefits.

I support the LNG industry, providing it provides local jobs — not just local jobs; good-paying jobs. I support LNG if the local people in my community who are going to be impacted by these projects get the training and jobs. I support the LNG industry if we reap a fair share of the resource. I support the LNG industry if First Nations are included and they receive benefits from this industry. And I support the LNG industry, providing we are protecting our air, land and water.
[ Page 5163 ]

J. Thornthwaite: I’m happy to stand up and speak in support of Bill 6, the Liquefied Natural Gas Income Tax Act. I just wanted to comment on what the member for North Coast said earlier about feeling picked on. I can tell you that if you look at my Twitter feed, I’m constantly getting picked on by the opposite side. We do kind of sign up for that, and it’s unfortunate.

But one thing I would like to thank her for is her support for LNG. I will quote something that she had said on a radio station on September 11: “I feel like LNG can be done in a balanced way. If it’s done in that balanced way and those things are taken into consideration and met, then I do feel that we have room for a great opportunity with LNG.” I thank you for that.

I thought that when I would stand up, particularly for my riding in North Vancouver–Seymour…. Everybody is hearing a lot about LNG, but they don’t really know very much about it. As my colleague from the Peace River had said…. I mean, his community is very up-to-date with what’s going on in the industry.

[1800]

I’m going to be quite fortunate in the new year to be holding an information session for the people in North Vancouver on this very exciting new industry. But I just thought that I would briefly mention what LNG is, for the folks at home — if anybody is actually watching.

Basically, LNG is natural gas. In other words, it heats our homes, cooks our food. I’m told by the top chefs that natural gas stoves are actually the best, as far as cooking.

LNG is the acronym for liquefied natural gas. It is natural gas chilled to negative 160 degrees Celsius so that it can be converted into a liquid form. After it has been liquefied, natural gas is compressed, so it takes up much less space — approximately 1/600 less than natural gas. Once compressed, LNG can be loaded onto specifically equipped ships and transported overseas for sale into export markets.

LNG is odourless, non-toxic, non-corrosive and less dense than water. If a spill were to occur, the natural gas would warm and evaporate, leaving no substances behind. We learned that last week, when we were provided with a demo by our Minister of Natural Gas Development and Deputy Premier, as well as our Minister of Jobs, Tourism and Skills Training.

They had a fellow there, Erik Neandross, who was leading us through a scientific demo. What they did was they converted the gas to liquid, and then they went back to gas. And they showed how if there was a spill, there is no spill. It was very eloquent.

Apparently, we are going to be utilizing that fellow and another fellow from Science World to go around and explain to the communities what exactly LNG is and not to be afraid. Because I think the number one thing that we’re dealing with right now in a lot of communities is fear. We want to make sure that there is no fear and to be upfront and personal and honest about what this industry is.

Last week I also spoke on Bill 2, the Greenhouse Gas Industrial Reporting and Control Act, that ensures that our LNG industry will be the cleanest in the world. I wanted to draw your attention to that just in case you wanted to check that out.

The introduction of the LNG Income Tax Act gives proponents the certainty they need to make investment decisions while ensuring British Columbians receive the revenues they deserve from this new industry. Government is confident that B.C. will be a highly competitive, attractive jurisdiction for new investment in B.C.’s new LNG industry.

We have been consulting with industry on a new revenue framework that will deliver long-term benefits for British Columbia and provide industry with the certainty it requires to be successful. Certainly, there are, right now, 18 potential LNG projects in British Columbia that have invested more than $7 billion to acquire natural gas assets in British Columbia, and an additional $2 billion has been invested in preparation for construction for B.C.’s LNG infrastructure.

In addition to a low overall tax system and a competitive royalty regime, B.C.’s LNG industry has many advantages over rival jurisdictions: large reserves of natural gas in close proximity to proposed facilities, a skilled workforce, robust infrastructure, the shortest transport time from North America to key Asia markets and cooler extraction and environmental temperatures that reduce the energy cost during the liquefaction process. This legislation is another step toward providing the certainty companies need to move forward toward making their final investment decisions.

Our minister for LNG brought to our attention to check out the Globe and Mail article today, November 3, “LNG Tax Moves Buoy Chevron’s Interest.” “I think that what we are satisfied with is that the British Columbia government is very attentive to the realities of the industry,” said Jeff Shellebarger, president of Chevron North America Exploration and Production Co. “They’ve listened to what we have said. They’ve listened to what the buyers have said, and I think they have made some very good moves in terms of what reality is out there and what it takes to make these projects economic.”

[1805]

I think that in this regard, this bill is a balance between the revenues that are coming to government and the confidence and security that the industry has. As I mentioned last week with regards to the environmental bill that we also discussed, it will be the cleanest LNG in the world.

I want to make a few remarks about the education system in British Columbia and how we are stepping up to fulfil all these jobs that are going to be coming out in the next few years and decades. In my Parliamentary Secretary to the Minister of Education position, I am
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very cognizant of the necessity of getting our kids up to snuff and being trained for the jobs that are going to be coming available.

That’s where the B.C.’s Skills for Jobs Blueprint: Re-engineering Education and Training comes in. It ensures B.C. has the trained workers needed to fill the top LNG jobs and other in-demand occupations, placing our youth and workers first in line for the jobs of the future. We do not want to repeat what happened in Australia. We want to focus on local jobs first; British Columbia jobs, second; Canadians, third; and then the foreigners, last. The number one people that are going to be in line for the jobs are going to be our British Columbians.

By 2022 we are expecting one million job openings in B.C., along with an increase in demand for more and higher skills. More than 78 percent of the jobs will require some form of post-secondary education, and 43 percent will be in trades and technical occupations.

A few of us had lunch with the president of UBC today, and he said UBC is ready — providing the jobs that we will need in engineering, and other professionals. Our plan shifts funding and programs to a data-driven system where training dollars and programs are targeted to jobs in demand. Not only will the new system be data-driven; it will be outcome-driven. As the economy evolves, we will adjust funding and programming. We will track, measure and report out on performance and outcomes to ensure we are achieving the desired outcomes.

Our blueprint is focused on changing culture and attitudes, and that includes getting more young people involved earlier in trades and technical training. Our government currently invests almost $7.6 billion each year in education and training. Re-engineering our system doesn’t mean spending more. It means targeting more of the substantial resources already available to meet labour market priorities.

That’s why, starting this fiscal year, we’re targeting over $160 million to do just that. In four years this will reach nearly $400 million annually. Over the span of our next ten-year plan this represents about $3 billion redirected towards training for high-demand occupations.

The blueprint we have developed sets out the actions we must take to make the most effective use of our existing resources and future investments in education and training.

Actions include doubling the number of ACE-IT positions to 5,000 over the next two years, giving students more choices and encouraging more students to pursue skills and trades training. Targeting $270 million annually of post-secondary operating grants towards in-demand jobs. Investing $185 million in infrastructure targeted for skills and skills training. And investing $6.6 million in critical trades seats to reduce wait times in trades critical to the LNG sector and other industries.

I’d just like to mention that the $6.8 million investment is throughout British Columbia — 1,424 foundation and apprenticeship seats at 14 public post-secondary institutions in British Columbia as of September this year.

The post-secondary institution closest to my riding, BCIT: 272 seats — 32 steam/pipefitting apprentice seats, 32 welder foundation seats, 16 crane operator apprentice seats, 32 electrician foundation seats, 32 electrician apprenticeship seats, 32 ironworker apprenticeship seats, 16 heavy-duty-equipment mechanic foundation seats and 80 heavy-duty-equipment mechanic apprenticeship seats. This is in addition to all sorts of other post secondary institutions across the province.

[1810]

I’d like to just let the member opposite who spoke earlier know that in her riding there are — I am sure that these are the ones that are closest — Northern Lights College or Northwest Community College. So 75 seats and 100 seats, respectively, for them in various different trades.

In addition, based on the most current labour market data, these are the top 12 LNG trade jobs that are expected to be in high demand: steam/pipefitters; welders; concrete finishers; carpenters; heavy-equipment operators, excluding cranes; gas fitters; crane operators; electricians; iron workers; steel sheet metal workers; heavy-duty mechanics; and insulators. These are the types of careers that these post-secondary institutions are focusing on.

There was a question that came from one of the members opposite in the debate earlier about what we are doing with regards to encouraging apprenticeship. I have a list from the ministry. The number one employer of apprenticeships in the province, in government, for the number of active apprenticeships to date, is B.C. Hydro — 146 active apprenticeships.

I’m just going to go through some that are around the Lower Mainland. There are much, much more in northern British Columbia. In Richmond, PCL Constructors, Westcoast Ltd., 79; CN Rail in Surrey, 64; Glencoe Electric in Abbotsford, 59; Vancouver, White Spot, 59; Allwest Electric in Coquitlam, 50; Richmond, Protec Installations Group, 48; Delta, Millwrights Union Local 2736, 42 spots; Cactus Club Restaurants in Vancouver, 41; and again in Richmond, Bridge Electric Corp., 40.

These are active apprenticeships right now. We want to celebrate them and thank them for what they’re doing.

For kids and parents in the K-to-12 system, we want them to have a head start to hands-on learning so they’re ready for the workforce or more advanced training when they graduate. I was fortunate enough to attend the LNG conference in May this year and to join some of my students from Seycove Secondary and their FLIGHT program for Find your Fit.

I got to witness, I realize that I couldn’t…. As a matter of fact, I think it was with you, Madame Speaker, that we were doing it. You did a way better job than I did. I know that I’m not really very good at the hands-on. But these kids definitely had lots of fun.
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In summary, we are working collaboratively with industry, labour and First Nations to deliver the skilled workforce B.C.’s growing LNG and other sectors need to create the opportunity for long-term, well-paying jobs that strengthen our families and communities. That is the reason why I will be supporting Bill 6, Liquefied Natural Gas Income Tax Act.

B. Routley: It’s interesting. I’ve heard some of the folks on the other side talk about the NDP, which I can understand. They obviously have good reason to be concerned about the NDP.

The reality is that when you think…. What they’re really expressing is the fact that the truth is staring them in the face. The truth of their election campaign, where they ran around the province promising 100,000 jobs, promising this prosperity fund that was going to be so grand that you could actually reduce taxes…. At some point, we would be able to do away with taxes all together.

Then we’ve seen this transition. There are the Liberals before the election, and then there are the Liberals after the election, where they’ve tossed out all of the grandiose statements that they ran on. Now they’re saying that they’re not going to be necessarily debt-free any longer, and there are only hushed whispers, if even that, about a prosperity fund. Now it’s, in the throne speech, just a chance.

I want to be clear, because some of the Liberals seem to be confused. We on this side of the House are very happy to be supporting a real LNG proposal.

[1815]

Obviously, when we saw the vast forest of British Columbia, forest workers started to deal with the forest here on Vancouver Island and throughout the province. When we saw mining opportunities, there was support for those ideas. Obviously, with gas — liquefied natural gas — we see that there is an opportunity. Anybody doing even a little bit of reading on LNG understands pretty quickly that worldwide, when you look worldwide, there has been a tremendous change in the prices over the last couple of years.

The Liberals certainly knew, going into an election, if they were looking at all. They would have been seeing the research, the amount of gas that was being found all over, including places like China, the tremendous increases in the United States in production. All of those things were known. They weren’t hidden. So to suggest that there was going to be this wonderful prosperity fund, $175 billion over the next ten years that’s now just a chance, is really the truth coming home to roost.

The LNG pipedream that…. Global investors are now starting to get cold feet. We’ve seen the exit of one already.

“The projections supporting the B.C. Liberals prosperity fund were to rest on the assumption that there would be indefinite demand to buy into B.C.’s fledgling LNG market. However, as the Common Sense Canadian has reported, the numbers guaranteeing prosperity to Canadians while assuring maximum profit for investors just aren’t adding up. The indicators demonstrate examples of a rapidly shifting LNG market and early signs of hesitation from international proponents.

“The B.C. Liberals are likely considering these factors as they race against the clock to get construction going” — any construction going — “before the…yet ambiguous projections behind their $100 billion prosperity fund are” just now “a faded memory.

“LNG proponents were probably never too concerned that the provincial and federal regulatory bodies would be giving them much trouble….”

They know they’re a pliable bunch. They certainly knew in negotiations that they had the upper hand. I would have loved to have been in a bargaining position with this bunch running around shooting their mouths off promising that there was going to be LNG all over B.C. and billions to be made, and they hadn’t yet even signed the deal to get things moving. They hadn’t got a tax regime.

Now, here we’ve got this pitiful example of what’s left when they end up giving away so much that now they’ve even reduced corporate taxes. Something that is a bit of a sacred cow to the B.C. Liberals is reducing corporate taxes. But to give even additional benefits, they’re talking about a tax after you’ve recovered all of the costs of construction. Then there’s going to be a tax of 3.5 percent. But, by the way, they’re giving a 3 percent tax cut in the corporate tax rate, and with all of the other cuts and all of the other things that they’re doing for the LNG industry, there’s very little left for British Columbians. But it is a chance. We’ll give them that. It’s a chance.

We’re prepared to buy into the idea of what they actually said — it being a chance. It’s sure no mushrooming prosperity fund, and they’re not going to be paying off the debt. That’s an absolute falsehood, to run around with a bus saying “Debt-free B.C.” and that they’re going to basically be debt-free as a result of their actions on LNG.

That’s what was sold to the people of British Columbia. They’ll certainly be waking up to that reality in 2017, that there was no huge increase. We hope that we can hang on to a chance. That’s the one thing that we join with our Liberal friends, is hoping for a chance. I certainly support the notion that there is a chance, but there are serious issues.

[1820]

As the Canada West Foundation discusses in Managing Expectations: Assessing B.C.’s LNG Industry, there may soon be more natural gas available to Asia than it needs. Now, let’s camp on that for a minute. There’s LNG coming from Russia. They’ve got huge gas reserves that have yet to be exploited in their own country that they’re now starting to look at. I read recently that Calgary is sending some people over to China to do some training and talk about getting them started in exploiting their own natural resources.

By the way, we’ve seen this movie before. We’ve seen it in places like coal, where the coal price was hot one day and it’s dropped dramatically the next. I mean, that’s something that we should take for granted. To run
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around the province when they could see a bit of a high at one point, to lock down on that and suggest that there was going to be this wonderful prosperity fund….

I must admit to being shocked when the Liberal government first introduced the notion of this prosperity fund, and it went on and on. I mean, it really did sound too good to be true, and that’s often the way — whether it’s the soap salesman or whether it’s somebody standing in the old days on the back of a wagon trying to sell some kind of elixir that was going to cure everything, cure all of your ails. That’s what we’ve heard from the Liberal government.

When you look at going from Asia to all of the Australian and the U.S. projects that have been underway — dramatic increases. There’s also competition from Africa and, potentially, South America, the Middle Eastern projects. And of course, as I’ve said, China is developing their own. Contributing 150 billion cubic metres of new supply by 2030 is the prediction by some analysts. So that’s an extremely dramatic change over the last year.

A lot of this was already known. We learned recently that the B.C. Liberal government’s LNG export tax, unveiled after many delays in the last week’s budget, will enable proponents to deduct their capital costs for plant construction. Again, the industry is obviously talking about this, but it’s not unexpected that they would be able to get a very good deal indeed.

The early stages of an Asian buyer’s club, getting more for less…. There’s talk of Asia-Pacific groups getting together and forming a block to set prices. The fact is that in December of 2013 countries importing the world’s LNG met in New Delhi to discuss how to get a better deal on LNG. India was calling on large consumers in the region like China, Japan, Korea to forge an Asian buyer’s block.

Again, these are the kinds of considerations that all of us need to have. We need to be aware and go in with our eyes wide open. All of these factors — no question — have had an impact on our ability to negotiate the best deal for British Columbians.

When you look at what’s happening in places like Prince Rupert and Kitimat with the housing boom that’s taken place…. I worry, having been a member of the Finance Committee and travelled around the province. One of the things that was a common concern in northern British Columbia…. There wasn’t a real plan, other than having these fly-in camps — people coming in and then flying out.

I worry with all of this boom underway. Is there anyone really strategically planning for communities? Is anybody really sitting down and saying: “How do we make these growing communities, provide them with infrastructure? How do we provide them the things that families need — everything from…?” A health care facility is obviously basic. If you’re going to have a facility like that in the north, there needs to be planning right now to develop the kinds of health structures that we’re going to need.

[1825]

There needs to be planning now to ensure that there are the kinds of things that keep people interested in communities — everything from swimming pools to theatres to all of the infrastructure that’s necessary to make life worth living in small rural communities throughout British Columbia.

We’ve heard rural communities for some time saying they’re not getting a fair share of their piece of the pie. I’m not convinced that this government has developed a serious enough plan to ensure that those communities in rural British Columbia, throughout northern British Columbia, are accommodated in the ways that they need to be accommodated to make sure it’s….

M. Farnworth: We need to hear about this tomorrow, too, you know. We need you to tell us more about this tomorrow.

B. Routley: Okay. Well, I think that’s a signal, hon. Speaker.

I’m happy to tell you a lot more about this tomorrow, and I look forward to that opportunity. I’m trying to approach this in a more calm, relaxed way. I want to say I think I’m doing better. I think it’s still the same jiggery-pokery bunch that we’ve always had.

B. Routley moved adjournment of debate.

Motion approved.

Hon. T. Lake moved adjournment of the House.

Motion approved.

Madame Speaker: This House, at its rising, stands adjourned until 10 a.m. tomorrow morning.

The House adjourned at 6:26 p.m.

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