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)

Tuesday, November 4, 2014

Morning Sitting

Volume 17, Number 3

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

TUESDAY, NOVEMBER 4, 2014

The House met at 10:03 a.m.

[Madame Speaker in the chair.]

Routine Business

Prayers.

Introductions by Members

J. Horgan: Joining us in the precinct today is someone who ran through five boroughs in three hours and not very many minutes. I don’t know of anyone else in this precinct today who can stand and say that, but a fellow Irish descendant, Kate Ryan-Lloyd, sitting right before us, has a beautiful, beautiful medallion around her neck. Would the House please congratulate her on her efforts. [Applause.]

Hon. T. Lake: November is Lung Cancer Awareness Month, and it’s my pleasure this morning to introduce representatives from Lung Cancer Canada and their guests. Christine Sit is the program manager for Lung Cancer Canada, Anne Marie Cerato is a Lung Cancer Canada board member and a cancer survivor, Dr. Cheryl Ho is a medical oncologist at the B.C. Cancer Agency, and John Perpitch is a current lung cancer patient.

[1005]

Lung Cancer Canada’s primary goals are to raise awareness about lung cancer, to give support to patients and their caregivers and to provide educational materials to patients, their families and health care professionals. They’ll be hosting us for a lunch today. I’ll be meeting with them a little bit later.

I know that all members of the House are appreciative of their work and for the information they will pass on to us today. Will the House please make them very welcome.

N. Simons: Today in the gallery are Pender Harbour secondary students with a few chaperones and their award-winning science teacher, Jay Walls. These kids took two ferries to get here, and I’m glad they did. This class was recognized by the David Suzuki Foundation for their advocacy to save their school mascot, the Sakinaw salmon, from extinction. In 1947 the number of maturing adults entering Sakinaw Lake averaged about 5,000. In 2002 only 78 fish were counted.

This grade 8-9 class started lobbying in grade 7 to oppose the federal government’s plan to close the local DFO office, the office that had been coordinating the species’ recovery. Inspired by the story Paddle-to-the-Sea, they carved little cedar canoes engraved with “Save the Sakinaw,” which they plan to put into the water at Mile Zero later today. I’m happy to welcome teacher Jay Walls, the parent chaperones and the friendly high school kids from Pender Harbour and, while I’m at it, the 465 adult Sakinaws that returned to the lake this fall.

Keep up the good work.

Tributes

BONNIE PEARSON

J. Darcy: I’d like to pay tribute to a trade union leader who has announced her retirement. Her name is Bonnie Pearson. She is the head of the Hospital Employees Union, which is holding its biennial convention today, as we speak. She’ll be giving her outgoing speech very soon. Bonnie is an experienced trade union leader, an excellent negotiator and problem-solver and is also known for her incredible wit. She’s someone who has never forgotten her Saskatchewan farm roots.

At the end of every bargaining session, when we would do a tally sheet of quotable quotes from both sides of the table, Bonnie Pearson always won with the pithiest quotes. The most memorable one of all was: “You know, I didn’t just fall off a turnip truck.” All the best wishes to Bonnie Pearson on her retirement. I hope that the entire House can send their greetings and their best wishes to her on her retirement from a superb career.

Introductions by Members

C. Trevena: I hope the House will join me in welcoming a school group from Timberline high school in Campbell River, one of Campbell River’s two great high schools. They are part of the high school outdoor adventure program, the grade 11 students, and it’s a great outdoor adventure to come and witness question period today. They’re anticipating a lot of toing and froing in the Legislature and more excitement than you usually get outdoors. They are joined by their teacher Steve Joyce and adult chaperones, Joedy Williams and Suzy Scott. I hope the House will both make them welcome and not leave them disappointed.

Statements
(Standing Order 25B)

EXHIBIT ON SIKH SOLDIERS
IN WORLD WAR I

B. Ralston: The main branch of Surrey Public Library in Surrey city centre recently hosted an historical exhibition entitled Duty, Honour and Izzat: The Call to Flanders Fields. The exhibition tells the history of India’s contribution to World War I and of the soldiers who came, disproportionately, from the state of the Punjab. Soldiers were recruited from across India, yet the Punjab in 1914, although only 10 percent of the Indian population, provided 66 percent of the cavalry, 87 percent of the artillery and 45 percent of the infantry.
[ Page 5168 ]

In 1914 the Indian army was second in size only to Britain within the Empire. The origins of this recruitment can be traced to the Anglo-Sikh wars of 1846 and 1849. British officers were so impressed with their Sikh military opposition that they raised two regiments, the 14th Ferozepore Sikhs and the 15th Ludhiana Sikhs as well as the Punjab Frontier Force. Other Indian regiments from the Punjab fought on the Western Front in 1914, and later the 14th Sikhs served in Gallipoli in 1915.

After the British army encountered a massive German force in 1914, an urgent appeal was made to support the Empire. A Canadian expeditionary force of 30,000 arrived in England in October 1914 and later saw action on the Western Front in 1915.

[1010]

The Indian Expeditionary Force first entered combat in the first Battle of Ypres, where they were joined with British troops to hold that part of the Flanders territory of Belgium and France. Six months later Canadians landed and fought jointly with Sikh soldiers in the second Battle of Ypres. It was of this battle-torn region of Flanders that John McCrae wrote In Flanders Fields.

Ultimately, over 73,000 Indian soldiers were killed in World War I — a heritage shared with Canada, who lost 66,000 lives during the same war.

Steven Purewal, a Surrey resident, was moved to create the exhibition to tell the unrecognized story of that shared military connection. “We have a joint heritage, a joint history…. By not recognizing it, it undermines our ability to have a better common future,” he said.

As we mark the 100th anniversary of the outbreak of World War I and prepare to remember on November 11, we can acknowledge that common heritage.

LUNG CANCER AWARENESS

E. Foster: Since 1995, November has been recognized as Lung Cancer Awareness Month in Canada. The awareness campaign is made possible by Lung Cancer Canada, established in 2002 as the Alliance for Lung Cancer Awareness and officially changed to its current name in 2004. The primary goals of the organization are to raise awareness about lung cancer, to give emotional and practical support to patients and their caregivers, and to provide educational materials to patients, their families and health care professionals.

The month is dedicated to a wide range of activities designed to raise awareness about lung cancer, including focusing on risk factors; prevention; and the importance of screening high-risk individuals, especially smokers, past smokers or those who’ve been exposed to second-hand smoke, who account for 85 to 90 percent of lung cancer patients.

Improvements in lung cancer incidence and mortality rates are largely attributed to changing smoking habits in Canada. Thanks to this progress, B.C. has the lowest incidence rate of lung cancer in males and the lowest mortality rate, both sexes, in the country, yet we are far from our goal of reducing lung cancer deaths altogether. Sadly, it’s projected that 2,300 British Columbians will die of lung cancer, and 3,099 British Columbians will be diagnosed with the disease this year alone. And 26 percent of all cancer deaths are lung cancer.

We’re working for a smoke-free B.C. in conjunction with QuitNow programs run by the B.C. Lung Association and the Ministry of Health, which provides free access to nicotine replacement therapy through the B.C. smoking cessation program. This helps manage withdrawal symptoms and cravings and helps those reduce the urge to smoke.

Madame Speaker, I ask all members of this assembly to recognize the work of Lung Cancer Canada to eradicate lung cancer deaths and smoking in our province.

TREVOR DEELEY CARE UNIT AT
SAANICH PENINSULA HOSPITAL

G. Holman: I want to acknowledge today the opening of the new Trevor Deeley Post-Anaesthesia Care Unit — easy for me to say — at the Saanich Peninsula Hospital. This new unit is the latest in a series of upgrades to a community hospital that is truly at the heart of the community.

The new space was named after Trevor Deeley of Deeley Motorcycles fame, who, upon moving to the peninsula with his wife, Joyce, saw the need for upgrades to the hospital and immediately began fundraising. The Deeleys have since passed away, but thanks to their efforts and the generosity of other donors, the hospital foundation was able to raise $2.1 million towards the $3.4 million cost of the new care unit.

The outstanding leadership provided by Karen Morgan, executive director, and Gordon Benn, chair of the hospital foundation, should also be acknowledged. The Peninsula Hospitals Foundation also raised $5.2 million for a new operating room in 2012 and is now fundraising for a state-the-art sterilization department.

The success of these campaigns is a testament to the leadership of the Saanich Peninsula Hospitals Foundation and the generosity of its residents, including champions like Trevor and Joyce Deeley. They understand the importance of health care facilities to their community, not just to their quality of life but also as a key driver in the local economy.

There is only one caution to this very good news story. Not all communities in British Columbia have the capacity to raise millions of dollars to invest in their health care facilities. As citizens and taxpayers, we must all remain committed to the support of health care facilities throughout the province so that all residents of B.C. have access to the level of care that we would wish for ourselves.

[1015]

EARL AND COUNTESS OF WESSEX VISIT
TO WEST VANCOUVER–CAPILANO AREA

R. Sultan: Some years ago I placed myself at the curb of our Legislature driveway, hoping to chat with the Queen as she strolled by. However, aggressive ladies of the Legislature, led by the formidable Sheila Orr, elbowed me back to the fourth row, and all I saw of the Queen was her hat.

More recently Prince Edward, the Queen’s youngest, and wife Sophie visited my riding to promote the Trans Canada Trail. I was invited to the barbecue. The royals circulated casually, chatted with virtually everyone, and they also hiked a portion of the trail.

Was their visit all hikes and barbecues? Well, not exactly. In three days they inspected the navy; presented awards at Government House; visited Jeneece Place, Our Place Society and UVic; dined with First Nations; presided at the Duke of Edinburgh’s Awards; toured the Vancouver Art Gallery; talked with Rick Hansen; opened the Ditidaht First Nation library; and visited Alert Bay; among other things. Just like any of us at election time.

I met the Prince, told him about my job and expressed admiration for the British parliamentary system we have inherited. I also acknowledged the key role played by the Queen. God save the Queen.

SETH MARTIN AND MARC MARCOLIN

K. Conroy: Our constituency has recently lost two pillars of our communities, Marc Marcolin and Seth Martin.

Seth was born in Rossland on May 3, 1933. Anyone who knows anything about hockey would recognize the name Seth Martin. He embarked on a stellar career as a goaltender, backstopping his way through Europe, Canada and the U.S. Mention his name to anyone familiar with hockey through the ’60s and ’70s, and the words start flowing.

He was a game changer, an innovator, a motivator, a winner and a champion. One of the more famous Trail Smoke Eaters, he is recognized internationally as one of the best. He also had a 36-year career as a firefighter with the Tadanac and Cominco fire department.

As his family said, after a courageous and hard-fought battle with cancer, the final buzzer has sounded. The game is over. Seth passed away with his family by his side on September 6. He is survived by Bev, his wife of 61 years, and his three daughters and their families, including seven grandkids and eight great-grandkids. Hockey was his passion, but his family meant everything to him. Seth was a humble, sincere, genuine guy whose kindness and generosity made him a truly great man.

On October 26, Marc Marcolin passed away at the tender age of 95. He leaves Grace, his beloved wife of 70 years, four children, ten grandchildren and 13 great-grandchildren.

After graduation from the University of Alberta in 1941, Mark embarked on a very successful 43-year career with Cominco. Upon retiring in Trail, he decided to give back. He was Trail’s mayor from ’88 to ’90, a champion of the city, Freeman of the City, a Rotarian and director of the Kootenay Boundary Regional Hospital Foundation.

In 2006 Marc and Grace were named Citizens of the Year and ambassadors of the B.C. Winter Games. Marc was always at community events, always smiling, always with a kind word for everyone.

Both of these men contributed significantly to their communities and continue to after their passing. Their families have asked that any expression of sympathy be made as a donation to the Kootenay Boundary Regional Hospital.

I want to express our sincere condolences to their families and thanks. Thanks for sharing both of these men with our communities and your families.

STATE OF THE ISLAND ECONOMIC SUMMIT

Michelle Stilwell: While all of us are proud British Columbians, we’re also proud to represent diverse communities and regions that have their distinct economic strengths. Vancouver Island is one such region.

Last week I was one of more than 500 participants and speakers who gathered in Nanaimo for the eighth annual State of the Island Economic Summit. Over the years this summit, organized by the Vancouver Island Economic Alliance, has progressed from just an idea to now being the leading event of its kind on the Island.

This year’s theme was “A common thread,” with focus on First Nations, tourism, product and business development. Participants discussed ways to build a diversified and sustainable economy on the Island, attract investment, strengthen regional leadership and create collaborative opportunities with First Nations. There were many keynote speakers, including our Premier.

The Vancouver Island Economic Alliance’s slogan is: “It’s all about the company you keep.” From whom I met and what I saw, it was clear to me that all who attended the summit were indeed in very good company.

A successful conference cannot take place without the people who put in countless hours — to put effort in and toil. I would like to thank VIEA’s board of directors, led by president George Hanson, and the multitude of volunteers who helped to pull it off.

[1020]

The economic alliance will continue to provide innovative and exciting opportunities for economic prosperity and job growth on Vancouver Island.

We’ve a lot to be proud of, and we should never shy away from celebrating our triumphs. One of these triumphs is the State of the Island Economic Summit, and I look forward to attending next year’s ninth gathering.
[ Page 5170 ]

Oral Questions

JUMBO GLACIER RESORT PROPOSAL
ENVIRONMENTAL ASSESSMENT PROCESS
AND SITING OF LODGE

J. Horgan: When projects are approved through the environmental assessment process, they usually are approved with conditions. If a project doesn’t meet those conditions, approval is often withdrawn. Proponents at the Jumbo Glacier Resort have consistently been unwilling or unable to meet the conditions of their application through the environmental assessment process and the requirements of their certificate.

My question is to the Minister of Environment. Has she withdrawn their certificate?

Hon. M. Polak: The member will likely be aware that I visited, together with compliance and enforcement staff, the Jumbo Glacier Resort proposed site, viewed the progress that they had made in order to add to the information that I have for the decision I will ultimately need to make.

The member will also likely be aware that we are required to provide an opportunity for the First Nation to comment on the potential decision that will be made. We are working with Ktunaxa on that consultation, and I will render a decision shortly after that.

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

J. Horgan: Well, thank you, hon. Speaker, and I thank the minister for her answer.

The Jumbo Glacier Resort specifically committed to ensure that their residential and commercial structures were located completely outside avalanche zones. The Minister of Energy knows about avalanches. He said not that long ago that there are 10,000 to 15,000 avalanches a year in British Columbia.

Yet the Jumbo Glacier Resort has put the only foundation that they’ve been able to pour to this point in time, their day lodge, right in a class 4 avalanche zone. For the minister’s edification, a class 4 avalanche zone is really, really bad. In fact, it says: “A class 4 could destroy a railway car, large truck, several buildings and forests up to four hectares.” It’s a big deal.

Again, my question. This is to the Minister of Environment. Seeing that the only place that Jumbo has put any construction is in a class 4 avalanche zone, will she now withdraw the permit?

Hon. M. Polak: I’m sure the member knows that as a statutory decision-maker, it would be inappropriate for me to comment with respect to the details of any kind of analysis that I have undertaken in supporting my position up to this point and the ultimate decision that I will make.

But it is very important that we allow the process to unfold, that we allow First Nations to respond appropriately, provide us with that information. That is made even more important in the ensuing time since the decision on the Tulsequah Chief mine, which was also about substantially started.

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

J. Horgan: I’m pleased to see that the minister now believes that process is important. Just in April of this year, by order-in-council, she exempted ski hills from the environmental assessment process, and it was only after First Nations resisted that that she backtracked. So I’m glad to see she’s on process now.

Again, I want to go back to the footings and the foundation that was laid in a class 4 avalanche zone for the Jumbo Glacier Resort. The last time an avalanche went through there in 2012, there wasn’t significant damage — but in 2009, 10,000 tonnes of snow travelling at 320 kilometres an hour. I’m fairly confident the minister will agree with me — not a good place to put a day lodge, probably not a good place to put a resort.

[1025]

In light of the evidence that the first construction process that Jumbo has engaged in has potentially put people at risk, surely the minister understands the importance of this, and she’ll withdraw any prospect of a permanent application on this site.

Hon. M. Polak: I know that the member has a tremendous past experience working in a government position and well understands the role of a statutory decision-maker. The deadline of October 12 for the project to be substantially started was investigated by myself, along with compliance and enforcement officers. We will review that information, as is appropriate; we will take submissions from the First Nation, as is appropriate; and I will render the decision. But it would be completely inappropriate for me to comment on any of the details of that at this stage of the process.

If the members think that I should abandon the role of statutory decision-maker for some kind of ad hoc decision-making process, they should say so. But it would be inappropriate for me to comment on the details of it.

N. Macdonald: What the Leader of the Opposition said…. I’ll just restate. The process that the minister now says she’s committed to is the same process you tried to eliminate six months ago, and you remember standing here and apologizing for that. You didn’t look happy that day, but that’s our starting point, right? Okay.
[ Page 5171 ]

R.K. Heli-Ski told the minister the new location for the day lodge is sitting in a class 4 avalanche path. They provided pictures to the minister showing the new site hit by a slide with speeds of over 300 kilometres per hour. As the Leader of the Opposition said, class 4 is 10,000 tonnes. The certificate is ten years old. It ran out on October 12, two weeks before the date Jumbo Glacier Resort poured a pad of concrete, claiming it is the foundations of a day lodge.

It’s in the wrong place, and it is in an avalanche path. So what’s going on, Minister? What’s going on?

Hon. M. Polak: I thank the member for his submission. I look forward to the submission from the Ktunaxa, and then I will render a decision appropriately.

Madame Speaker: Columbia River–Revelstoke on a supplemental.

N. Macdonald: The minister had staff up there. The new lodge site is not where it’s supposed to be. It was moved. It is now in the path of a class 4 avalanche path. It contravenes condition 36, which is clear, and it defies common sense, frankly, right?

The minister has cited Jumbo Glacier Resort for three other infractions, and the Ktunaxa have pointed out another seven infractions. Is it possible that the minister believes that a slab of concrete in the wrong place, which happens to be an avalanche path, represents the substantial start of a billion-dollar resort? Is that credible?

Hon. M. Polak: As a statutory decision-maker, it would be absolutely inappropriate for me to make comments with respect to those submissions from the member opposite. If the member would like to have a briefing with respect to the appropriate role of statutory decision-makers, I can arrange that for him.

JUMBO GLACIER RESORT PROPOSAL AND
CONSULTATION WITH KTUNAXA NATION

M. Mungall: Not only has Jumbo Glacier Resort failed to meet the requirement to build outside of avalanche zones; they have also failed to meet the first condition required of them. That is to consult respectfully with First Nations.

[1030]

When responding to the Ktunaxa Qat’muk declaration, which is the nation’s public declaration that Jumbo is a sacred place for them and a part of their spiritual practice, Jumbo Glacier Resort mocked and ridiculed the Ktunaxa. They set up a website with the bold heading “Qat’muk declaration not credible,” and it goes on to ridicule the nation for speaking out.

Mocking the Ktunaxa is not respectful. Does the minister agree?

Hon. M. Polak: I understand the member’s concern for the Ktunaxa and the fact that their voice in this process needs to be heard. That is precisely why I await their submission as it leads up to my final decision.

Madame Speaker: The member for Nelson-Creston on a supplemental.

M. Mungall: Well, four years ago Kathryn Teneese, the chair of the Ktunaxa Nation council, was in the Legislature to tell her nation’s story. She explained that after generations of Ktunaxa being put through residential schools where they were disciplined for speaking their own language and sharing their spiritual beliefs, it took incredible courage to make public their spiritual connection with Qat’muk.

“Unfortunate and unacceptable” was the response from Jumbo Glacier Resort. The ridicule and mockery was all too familiar for the Ktunaxa.

Again, to the Environment Minister, if she doesn’t consider this acceptable, how can she do anything but not support this unreasonable resort?

Hon. M. Polak: Well, once again, the inconsistency on the other side rears its head once more. While on one hand we have a member who advocates that I make the decision about this resort here on the floor of this Legislature without taking the time to hear a submission from the Ktunaxa, we then have a member who outlines her concern for the Ktunaxa’s position and the very important role that they play in leading up to such an important decision. But that inconsistency on this project is not new.

I quote from a previous NDP Premier. This was written to the Jumbo Resort proponents. “I hope that you will be able to proceed on this project and that one day we may see this international venture realized. May I wish you good luck with the further formal assessment and review of your project” — former NDP Premier Mike Harcourt.

REPORTING OF EXECUTIVE COMPENSATION
AT KWANTLEN UNIVERSITY AND ROLE
OF ADVANCED EDUCATION MINISTER

K. Corrigan: Last spring the Minister of Advanced Education said any allegations that he broke rules on executive compensation were “outlandish.” Government’s own investigation, however, revealed that the minister did in fact participate in a scheme to break government’s executive compensation rules. And according to e-mails obtained under FOI, it appears that the minister was so worried about his conduct on the Kwantlen board that in the weeks leading up to the spring session he was asking Kwantlen University if its insurance would cover his legal bills.

My question to the minister, then, is: why did the min-
[ Page 5172 ]
ister seek an indemnity from Kwantlen while he was serving as Minister of Advanced Education?

[1035]

Hon. A. Virk: The member opposite certainly is aware of the report conducted by the assistant deputy minister on Kwantlen Polytechnic University to not fully disclose their salaries. As such, the financial accountability act has been strengthened to ensure that all contracts, pre-employment and post-employment, are absolutely fulfilled.

We have board members all across the province, in all sorts of boards across the province, that give of their time and that continue to do a valuable service to the province of British Columbia.

Madame Speaker: The member for Burnaby–Deer Lake on a supplemental.

K. Corrigan: Well, I find it pretty rich that the Minister of Advanced Education had to strengthen the rules because he was so guilty of breaking his own rules.

According to internal Kwantlen e-mails, the minister was very nervous indeed about what might happen in the courts. One such e-mail reads: “They believe the minister is just trying to do some forward prep work in case he is in a situation where he gets a notice of claim.”

Again to the minister, if he is so proud of his service as the vice-chair of Kwantlen and so concerned about behaviour now, why was he so desperate then to ensure that taxpayers would foot his legal bills?

Hon. A. Virk: The member is certainly correct that I am proud of my service in a variety of ways. I am proud of my service on the board of Surrey Memorial Hospital. I’m proud of my service on the B.C. association of chiefs. I am proud of my 26 years of service to Canadians. I am proud of my service to the students of British Columbia on the board of Kwantlen Polytechnic University.

Government is going to ensure that those people who volunteer — who put, sometimes, their lives on the line or otherwise — are appropriately protected, and we’re going to continue to do so.

RELEASE OF REPORT ON INVESTIGATION
INTO EXECUTIVE COMPENSATION
AT KWANTLEN UNIVERSITY

D. Eby: After the government’s own investigation showed that the Minister of Advanced Education broke the rules on executive pay, Kwantlen University’s president said that they were going to do their own investigation of the Minister of Advanced Education.

Has the minister received the Kwantlen University investigation report, and will he commit to this House to make it public and to table it here?

Hon. A. Virk: That university is conducting their own internal review of the internal matters, and the member can direct their question directly to them.

Madame Speaker: The member for Vancouver–Point Grey on a supplemental.

D. Eby: I thought I was talking to the guy who is in charge of universities in B.C. I must be mistaken.

It’s important that the minister answer this question. It’s a remarkable role reversal where, instead of the Minister of Advanced Education investigating a university, the university is investigating the Minister of Advanced Education. It’s freaky Friday, hon. Speaker.

Will the minister stand up and commit in this House that he will get that report, that he will bring it here, that he will table it and that he will make it public for all of us to read about his proud work on Kwantlen University’s board?

Hon. A. Virk: All across the province universities, institutions and colleges are expected to continuously ensure that they’re as efficient as possible, that they conduct their business of the taxpayers’ money as it comes to the university, that they’re as efficient and effective as possible. In that same vein, this university is examining the way that they are as efficient as possible, and they’re going to continue to do so.

[1040]

S. Simpson: What Kwantlen is investigating is whether there’s impropriety around the compensation for senior members and, in fact, who was responsible for that and whether the Minister of Advanced Education was responsible for that when he sat on that board. That’s what Kwantlen is investigating. The people of British Columbia have a right to know that.

I know this minister is in an uncomfortable place as the Minister of Advanced Education and being under investigation by the university, but will he commit today that the public will see that report in its entirety when it’s released?

Hon. A. Virk: Well, the member opposite certainly knows that B.C. indeed has one of the most transparent executive compensation disclosure systems of any jurisdiction in Canada. We’re absolutely committed to maintaining….

Interjections.

Madame Speaker: Members, the Chair needs to hear the answers and the questions.

Hon. A. Virk: The members opposite certainly know that the government is committed to maintaining and
[ Page 5173 ]
enhancing this transparency. That’s why the recommendations from the various reports referred to have been provided to the opposition. They’re certainly aware of that. And new accountability principles are going to build ongoing operations and even strengthen that world-class transparency that we have.

Madame Speaker: The member for Vancouver-Hastings on a supplemental.

S. Simpson: This minister’s inability to give a straight answer to this House speaks volumes to why that report needs to be made public.

The minister should quit trying to divert, quit trying to obscure the issue and give the House a straight answer. For once, for the first time since he’s had this ministry, give us a straight answer. Will you ensure that report is made public when it’s released? Make it public.

Hon. A. Virk: The member certainly knows that the taxpayer accountability principles for the public sector…. They strengthen accountability, promote cost control and ensure that public institutions operate in the best interest of taxpayers. These were built into ongoing businesses and public institutions. The disclosure of salaries of executives across public sectors in British Columbia is the best in this province.

M. Farnworth: Well, we certainly know the minister is concerned about cost control. That’s why he asked for an indemnity to know if his legal bills were going to be covered. The minister is clearly concerned about that. But what he seems less concerned about on the transparency part is that any findings or a report are made public to the taxpayers who are paying the bills.

So instead of referring to his notes, as my colleague has just said, why don’t you stand in this House and show just how committed you are to openness and transparency…

Madame Speaker: Through the Chair.

M. Farnworth: …and commit that that report will be made public in this House for this House to read and the public to see?

Hon. A. Virk: As a matter of practice, all public institutions are expected to have ongoing efficiency measures to examine the way they conduct business, to ensure that what they do falls within the guidelines of government. This university and other universities are going to continue to examine how they can become more efficient. They’re going to continue to do that.

[1045]

REPORTS ON BUS ACCIDENT
ON COQUIHALLA HIGHWAY
AND BUS PASSENGER SAFETY

C. Trevena: On August 28 a tourist bus crashed on the Coquihalla, injuring 43 people, five of them seriously. We’ve received a review of the bus company done not long before the accident and an audit conducted just after it, both done by the government.

Assuming that the Minister of Transportation has read the review and the audit, can he explain to this House why the two come to very different conclusions about the bus company’s monitoring of driver hours?

Hon. T. Stone: To the member opposite, the reports that she has mentioned I am currently reviewing, and I do not have any comment to make today.

I will say this with respect to the bus crash on the Coquihalla this summer. Obviously, we were all caught by surprise and very concerned for everyone who was affected in that incident. Safety is obviously our number one priority. We are still awaiting the final RCMP investigation of the reports to provide us with those details that we need on exactly what the cause of that bus collision was.

Madame Speaker: The member for North Island on a supplemental.

C. Trevena: I’ll help the minister along a bit. We’ve had the papers for some time. I’d have thought the minister would have reviewed them if safety was a number one concern for him — safety both for regular bus travelling passengers as well as in the tourist industry.

The review and the audit came to completely different conclusions. The review said the company complied fully with the enforcements of maximum daily drive times and rest periods, whereas three months later, after the crash, the audit found instances where drivers had been on duty for 15½ hours straight.

In 2012 this government allowed for more reviews instead of a comprehensive audit, where you can get to the root of a problem, in spite of concerns from the transportation industry. In light of this crash, will the minister really put passenger safety first and reconsider that misguided decision?

Hon. T. Stone: Again, to the member opposite, as I said in my last response, safety is our number one concern with everything that we do in the Ministry of Transportation. When it comes to this particular incident, this particular bus crash on the Coquihalla, we believe, the government believes, that it’s very important to get all the facts before final conclusions are formed. We await the final investigation report from the RCMP. I will review that, as I am currently reviewing the other reports in this matter. We’ll have more to say about this in the coming weeks.
[ Page 5174 ]

K. Conroy: The audit of Western Bus Lines found considerable problems. It found “serious false statements.” It found that “driving over daily and cumulative hours needs to be addressed.” The government’s compliance review of this company did not find any of these problems, and that’s not surprising when you think that these reviews take as little as half a day and audits can take up to three weeks.

Again, in light of this serious accident, will the minister commit to reconsidering this government’s move away from audits and towards compliance reviews?

Hon. T. Stone: As I have said a couple of times this morning, we are going to await the final RCMP report that will provide those details that we believe are important to factor in to any considerations that we make. It is important to have the facts. It’s important to understand what exactly was the cause of this particular bus crash before we form any final conclusions.

[1050]

I will say that the commercial vehicle safety and enforcement branch and other branches within the Ministry of Transportation conduct rigorous inspections of not just commercial vehicles but commercial buses on a very regular basis in every corner of this province. We will continue to do everything we can to ensure that the safety of the travelling public is first and foremost in front of our actions so that British Columbians can ride on buses and know that they can do so safely.

Madame Speaker: The member for Kootenay West on a supplemental.

K. Conroy: This is also about tourism. People come from all over the world to British Columbia, and they expect this government to have taken the necessary steps to keep them safe and not severely injured in a crash. Instead, this government is cutting audits and not doing enough to close the gap between safe and unsafe carriers which present a crash risk on our highways.

So again to the minister, what is he going to do to close this gap and keep passengers safe on our highways?

Hon. T. Stone: As with virtually everything that we hear from the other side of the floor…. While the opposition may want to rush to judgment in this particular case, we in government are all about ensuring that we make informed decisions with the facts as we understand them.

In this particular incident we are going to await the RCMP report so that we understand exactly what happened in this incident. If there are any additional steps that we believe need to be taken in order to enhance the safety of the travelling public, we will do so at that time.

[End of question period.]

J. Horgan: I seek leave to table a document.

Leave granted.

Tabling Documents

J. Horgan: I have for the House photographs of 10,000 tonnes of snow landing on where a day lodge might be built, should Jumbo Creek go forward.

Point of Privilege

K. Corrigan: I rise on a matter of privilege with respect to statements made in the House by the Minister of Advanced Education with respect to executive compensation at Kwantlen Polytechnic University. I reserved my right on October 6, and I’d like to proceed at this time.

The Minister of Advanced Education was appointed to the board of governors of Kwantlen on July 31, 2008. He served as chair of the human resources committee from September 2009 until May 2013, and served as the board’s vice-chair. During his tenure the Public Sector Employers Act set out rules for executive compensation practices at public sector institutions and further required that the Minister of Finance approve executive compensation plans.

On March 5, 2014, the member for Vancouver–Point Grey asked the minister about his knowledge of and involvement in a scheme put in place by Kwantlen to circumvent the reporting and disclosure of executive compensation. The member for Vancouver–Point Grey asked the minister:

“The minister has personal knowledge of the executive compensation reports of the four top earners of Kwantlen University filed with the government because he was vice-chair of the Kwantlen board of governors when all of this took place, and those salaries were not reported.

“He was also chair of Kwantlen’s board human resources committee. It was explicitly his job in the role of chair to make complete and accurate reports to government on pay and perks for top-paid administrators. It was under the minister’s watch that Kwantlen concealed over $100,000 in payments to the current president and a former vice-president.

“As a policy matter, does the Minister of Advanced Education agree with reporting practices like this?”

The minister responded to the member’s question by stating:

“There’s no shortage of outlandish comments that I can attribute to the member for Vancouver–Point Grey, and this certainly is another one of those.

“Kwantlen Polytechnic University certainly reports all their earnings. Like I said before, anything that’s earned over $75,000 is reportable — reportable to the taxpayer of British Columbia, and it’s available for all to see.”

On July 17, 2014, the Finance Ministry issued a report which concluded that Kwantlen had not reported executive compensation in a manner consistent with government guidelines. The report detailed the minister’s involvement in an aborted effort to extend compensation to Kwantlen’s incoming president that was in breach of government guidelines.
[ Page 5175 ]

[1055]

The report notes that the minister was the recipient of an e-mail from Kwantlen vice-president of finance Gord Lee in which Lee outlined a plan to allow Kwantlen’s new president “to be compensated up to the PSEC limit by the university and a supplementary amount of $100,000 by the Kwantlen Polytechnic University Foundation.”

He didn’t say Kwantlen Polytechnic University certainly reports all their earnings. He didn’t even say this was wrong. Instead, the minister replied: “Our advice at present is to hold off, as the risk factors are very high.”

The report then notes that the board concocted a new plan to pay the incoming president a $50,000 consulting contract over and above the $225,000 approved by PSEC. At the request of the minister, PSEC was sent a draft of the employment contract that did not include any reference to the supplementary payment.

Hon. Speaker, one simply cannot square the minister’s statements in the House regarding his knowledge and participation in Kwantlen’s efforts to circumvent provincial financial reporting requirements and executive compensation limits with the facts as laid out in the government’s own investigation.

As a result, one can only reasonably conclude that, through his statements, the minister deliberately sought to mislead the House with respect to his role in and knowledge of Kwantlen’s effort to circumvent PSEC rules. In so doing, he violated the privileges of all members.

Hon. Speaker, I am including a copy of the minister’s remarks and a copy of the relevant report from the Ministry of Finance as part of my submission to you. The tradition of this House is that members are presumed to speak the truth. When they fail to do so, they undermine the very foundation of how we comport ourselves in this chamber.

If, based on my submission, you find that there is a prima facie case of privilege, I am ready to move the appropriate motion, a copy of which I am providing to the Clerk now.

Hon. M. de Jong: Madame Speaker, I’ve listened carefully to the submissions of the hon. member and, with your leave, would seek to reserve the right to respond shortly.

Orders of the Day

Hon. M. de Jong: Continued second reading on Bill 6.

Second Reading of Bills

BILL 6 — LIQUEFIED NATURAL GAS
INCOME TAX ACT

(continued)

[R. Chouhan in the chair.]

B. Routley: I’d like to continue where I left off yesterday and kind of recap, if you like, the statements that I made earlier. One of the statements that best describes that is: “This dog won’t hunt.”

[1100]

“This dog won’t hunt” is just another way of saying that this bill will not fetch for British Columbians anything close to the Liberals’ dreamed-up prosperity fund — not anything close.

This tax bill will not shoot for the Liberals’ pre-election debt-busting dollars. Again, not even close. Billions of dollars they talked about, and now they’ve come down from their high rhetoric place. They’ve downgraded it to rhetoric. It’s just rhetoric. It’s a chance now. In this throne speech we heard “a chance.” So that’s affecting our views of Bill 6 and the LNG tax act, which is clearly a more realistic position. However, it exposes their pre-election jiggery-pokery, which we can count on, on a continuing basis from this Liberal bunch.

I do want to turn to the number of issues raised by Bill 6 and the LNG Income Tax Act and the proposals to import and export LNG to and from British Columbia. These include some safety hazards and concerns about the economics of these projects and their potential impacts on local economies and the environment.

Regarding the safety concerns, I spent some 12 years in my career at the Youbou mill working on safety issues. One of the things that was most frustrating was the repeated occurrence of the same kind of safety issue or accident that occurred in mills all over the coast of British Columbia. Whether it be in the planer mill, having people caught up with their fingers in the pineapple rolls or that kind of thing, we often were not learning the safety lessons learned throughout the forest industry.

I know from past experience that it’s critical that we learn from the safety lessons from other jurisdictions regarding LNG. Of course, that would have an impact on taxation. Because of even the small risk of devastating explosions on LNG carriers, many jurisdictions in the United States have not allowed LNG facilities along their coasts, citing concerns over safety, security and the environment.

A report done by the Congressional Research Service for members of Congress in the United States found that potential terrorist attacks on LNG carriers have been a key concern for policy-makers in ports with LNG facilities. Because such attacks could cause catastrophic fires in ports and nearby populated areas, the U.S. Department of Homeland Security stated that the risks associated with LNG shipment are real and they can never be entirely eliminated.

Jurisdictions which do allow LNG tankers require buffer zones around them. For example, in Boston, when LNG tankers enter a port, they must have a safety and security zone extending 915 metres, or 1,000 yards, in front and behind the carrier and 91 metres, or 100 yards, on
[ Page 5176 ]
each side of the carrier. In addition, all other transportation in the area is restricted. Overlying bridges are closed, and the flight paths of aircraft approaches are adjusted.

These measures are in addition to the U.S. Coast Guard’s aerial and marine escort and surveillance through the harbour passage and port turnaround period. In 2006 the Coast Guard requested funding from Homeland Security in the United States for additional boat crews and screening personnel at key LNG hubs.

Again, these are things that we need to consider and contemplate when we’re thinking about a tax regime such as the Liquefied Natural Gas Income Tax Act.

The costs for the additional protection of these LNG carriers are thus borne by taxpayers while the LNG operators are left to collect the benefits. The need for security buffers around LNG tankers travelling to and from either Kitimat or Texada Island could potentially pose serious difficulties to other maritime traffic.

[1105]

En route to Texada, large carriers would have to navigate the sometimes crowded waters of Juan de Fuca Strait, the Georgia Strait and the narrow channels through the Gulf Islands. Leaving Kitimat, the heavy carriers would have to transit waters filled with commercial and recreational fishing vessels. There are resorts and First Nations communities that are accessible only by boat. These are also major security challenges for LNG carriers travelling from Kitimat.

The closest naval base is located at CFB Esquimalt near Victoria, approximately 800 kilometres away, making it difficult to provide adequate security in northern waters. If public safety concerns were to include closing shipping lanes while LNG carriers are in transit, this would have a major impact on commercial and recreational fisheries and ferry routes as well as the transit to and from boat-access communities only.

Again, this could potentially impact what we’re talking about here, and I hope that the people who are drafting this and drafting regulations are thoughtful of the safety concerns for not only our waters but communities on the coast of British Columbia.

Safety planning must be appropriately considered. While they are very rare indeed — LNG has a wonderful safety record and track record — however rare, there have been LNG spills and fires.

For LNG to reach Kiddie Point on the northern tip of Texada Island, the carriers would need to navigate past Victoria and the Gulf Islands, up the Strait of Georgia, past Vancouver and the Lower Mainland. LNG carriers leaving Kitimat would have to transit Douglas Channel past Gill Island, where the Queen of the North ferry crashed and sank, through the Caamaño Sound, into the treacherous waters of Hecate Strait — which, by the way, is classified by Environment Canada as the fourth most dangerous waters in the world — into Queen Charlotte Sound. Gale force winds, fog and ten-metre waves are not uncommon.

Again, to be clear, I know the LNG industry has a very good safety record. Nonetheless, accidents can and do happen and are always possible. Worldwide, there have been eight marine incidents that have resulted in the spillage of LNG and seven not involving spillage.

Although LNG accidents are very rare, they are devastating when they occur. Liquefied natural gas is considered a highly volatile substance. Fires can occur if LNG spills near an ignition source. LNG fires burn more hotly than oil or gas, and fires cannot be put out until all of the combustible material has burned away. They spread quickly as fuel expands away from the source of the spill, and if such a circumstance were to arise, the rapid burn rate of LNG is devastating. Temperatures can reach 2,000 degrees Celsius, which can cause a second-degree burn 1.6 kilometres, or one mile, away.

Another safety concern is the potential for vapour clouds to form if LNG spills and does not ignite. Evaporating gas can form a vapour cloud that can drift from a spill site. When such a cloud encounters an ignition source, an explosion and airborne fire will result. Communities and municipalities along the coast would be at some safety risk if an accidental LNG spill occurred.

It is absolutely critical that our province commit not only to the profit centre…. I hear a lot of other MLAs focused on the benefits and the tremendous opportunity that is now downstaged to a chance. This side of the House certainly agrees with them that it’s more than likely a chance in this day and age and with what’s happening throughout the world.

[1110]

It is absolutely critical that our province also, in any debate on LNG, talk about the safety issues and commit ourselves to world-class best practices and safety in any rush to approve LNG, and that’s what this bill is certainly contemplating. Safety for both the workers and communities involved is absolutely critical and imperative.

I want to touch on the environmental concerns. When this side of the House commits to supporting the bill, I want to be clear that we’re not only looking at the opportunity. We want to look at the assurance that our air is protected, that our environment are protected. I’m sure that there are concerns on both sides of the House about those issues.

In May of 2014 a Globe and Mail article by Mark Hume talked about the environmental concerns. He said:

“When the Council of Canadian Academies examined the impact of shale gas development on the environment, researchers found a disturbing shortage of data on issues of deep concern to British Columbians.”

There are some — and we hear all kinds of numbers, anywhere from two to 18 — liquefied natural gas plants talked about by the B.C. Liberals. If all of them were to go ahead, up to 6,000 new wells could be drilled to supply them. Currently analysis suggests that it’s more likely that two or three LNG plants…. But time will tell. I’m not going to stick my feet in the cement and commit to a
[ Page 5177 ]
number. I think that would indeed be problematic.

“But what will the development of all those wells, pipelines and processing plants mean in terms of environmental impact?”

The facts are that we just don’t know.

“And that’s disturbing, given the current extent of the industry and the fact that the Premier is going flat out to push dramatic growth in LNG.

“The CCA’s recent report on shale gas leaves little doubt that both air and water are at risk. Exactly how great the risk is, however, the researchers weren’t able to say.

“‘The assessment of environmental impacts is hampered by a lack of information about many key issues, particularly the problem of fluids escaping from incompletely sealed wells,’ states the report, done for the federal government. ‘If wells can be sealed, the risk to groundwater is expected to be minimal, although little is known about the mobility and fate of hydraulic fracturing chemicals and wastewater in the subsurface.’”

You have to look at this statement.

“If wells can be sealed?” — question mark. “You’d think the industry would have to be able to assure the public it won’t let toxic chemicals leak into the environment before proceeding to drill even one new well, let alone 6,000. But that assurance hasn’t been demanded by the B.C. government,” in its rush forward, “which seems far more interested in drafting a tax regime acceptable to industry than it is in setting regulations that ensure environmental protection” for all British Columbians.

“‘A risk to potable groundwater exists from the upward migration of natural gas and saline waters from leaky well casings, and possibly also natural fractures in the rock, old abandoned wells and permeable faults,’ states the CCA, a non-profit supported by the Royal Society of Canada, the Canadian Academy of Engineering and the Canadian Academy of Health Sciences.”

They say: “‘The risks due to surface activities will likely be minimal if proper precautionary management principles are followed.’”

Again, these are cautions that we have to ensure that we are following here in the province of British Columbia. It’s just too important to risk our environment. The one thing I know we all agree on, on both sides of the House, is that we live in one of the most pristine provinces anywhere in the world. I’m sure all of us want to commit to ensure that in the future that continues and that we continue to be known as a province that has the high-end environmental values and standards that we need.

[1115]

You need to think about it. As any government…. Certainly, as the official opposition, it’s our role to ensure that we remind government of the important obligation to protect the environment and to look at what the scientists and the people that are reporting on environmental concerns are talking about.

The Liberals got elected by promising a booming LNG industry that would provide up to 100,000 new jobs and invest $175 billion over the next decade — again, this prosperity plan that is now clearly more of a pipedream. I acknowledge that while the Premier is still talking about the prosperity fund, the Finance Minister, who is very articulate and careful in his words, makes sure that he doesn’t talk about the prosperity plan.

Thank you, hon. Speaker, for the opportunity.

G. Kyllo: It is an honour to speak in favour of Bill 6, the Liquefied Natural Gas Income Tax Act. This piece of legislation is a pivotal mark for our government. This is the first step of moving projects from the planning stage to construction and, eventually, operation.

The designated speaker of the official opposition and the Natural Gas critic still did not provide certainty around support for the LNG tax bill. Subsequent comments from other members of the opposition are somewhat more telling but still show inconsistencies and varied positions within their caucus. This is in stark contrast to our government, which has been wholeheartedly seeking the movement and the support of the LNG industry in British Columbia.

When the minister introduced this legislation, proponents now have certainty and clarity of how British Columbia will develop this sector. Through the hard work and engagement with stakeholders, we have come to this point today, and now it is our duty to move this legislation forward with, of course, proper debate and review by members of this House. LNG means so much for our province. It is a game changer that will help our province plan, fund and administer critical services going forward for decades to come.

However, before we can even talk about the development of this critical industry in our province, we need to talk about the reality of the global market; in short, it’s competitive. British Columbia needs to be just as competitive as every other jurisdiction vying for the development of LNG. Australia, Qatar, the United States and Russia are all working to gain a piece of the Asian LNG market. They all have the self-interest to make their jurisdictions better off by selling their surplus natural gas to countries like China, India, Korea and Japan, which demand this resource to fuel their economies.

Here in B.C. we have vast reserves of natural gas that can be extracted efficiently and within competitive price ranges thanks to technological advances and our world-renowned reputation of extracting natural gas for the better part of the past century. However, during this time we only had one trading partner, the United States. Today and for the foreseeable future the United States will have sufficient reserves of natural gas — so much so that spot prices continue to be depressed in the North American market.

That is why we need to diversify. We need to expand our market to regions where the demand is higher — to sustain the development of one of our most important industries and, in turn, create a new industry, LNG, creating thousands of well-paying jobs in the process. We cannot create a new industry, create jobs or benefit our communities if there is uncertainty or if the tax regime is out of sync with competitors. A positive net balance needs to be struck between proponents, investors, government and, most importantly, British Columbians.

Thanks to extensive consultation with industry and stakeholders and a comprehensive review of other jurisdictions, a new revenue framework has been presented,
[ Page 5178 ]
in the form of this legislation, to deliver long-term benefits for British Columbia and provide industry with the certainty that it requires to be successful. Proponents need to make final investment decisions now.

We are confident that this tax structure will ensure that B.C. will be a highly competitive, attractive jurisdiction for new investment. For British Columbians, this LNG income tax framework will help ensure that they receive a fair return on our publicly owned natural gas resources before they go to export.

[1120]

Here are the technical details. The LNG income tax applies to the net income from liquefaction activities in LNG facilities operating in B.C., where the tax rate on net income will be 3.5 percent, effective after January 1, 2017. When operations are generating net operating losses and the capital investments are being deducted, a tax rate of 1.5 percent will apply and is creditable against the 3.5 percent tax rate. In 2037 the LNG income tax rate will then increase to 5 percent.

This tax structure means that proponents will have adequate time to build a strong foundation in the communities in which they operate before the full extent of the tax is applied and will ensure that revenues start flowing for the next generations of British Columbians and that our province becomes a world leader in LNG production.

We cannot take the risk of a tax regime that is out of sync with other global LNG players. We must remain competitive. The new rate of 3.5 percent is as a result of changes in the global market. The combination of declining LNG selling prices and increased construction costs have resulted in lower anticipated rates of return on projects, but by keeping our tax rates at a reasonable amount we can help make it more attractive to investors and initiate development sooner.

As British Columbians, we own the resource. However, contrary to the opposition and critics, we are not just giving it away either. We are striking a fine balance between a tax rate that will support final investment decisions by proponents while being respectful of British Columbians. The royalties gained from the extraction of natural gas at the well to the processing and export of this gas in LNG form will greatly benefit British Columbians.

To encourage long-term operations in our province, LNG and natural gas producers will also have an incentive to encourage investment by establishing permanent operations here in British Columbia through the B.C. corporate income tax credit. This credit will have the effect of reducing the provincial corporate income tax rate from 11 percent to as low as 8 percent for a company operating a facility here in British Columbia. These tax measures are competitive and reasonable given global market conditions and neighbouring jurisdictions, such as the United States, all vying for the crown that is LNG.

However, we need to think bigger than just the amount of taxes paid by LNG producers. Our government is committed to high environmental standards through our strict environmental regulations and approval process. LNG proponents and projects will continue to adhere to the five conditions outlined by our Premier. We are not going to sacrifice the well-being of British Columbians for any one project.

In a global context, attitudes towards resource extraction have changed considerably in the past. Climate change is a global issue. By exporting natural gas, B.C. will supply growing markets with the cleanest-burning fossil fuel available today. Our commitment to ensure that B.C.-based LNG facilities are the cleanest in the world has not wavered. Our facilities will address greenhouse gases to a higher standard than any other LNG facilities in the world, and our coastlines and forests will be protected through strict codes and regulations.

We should also recognize how this industry will change our province for the better. Communities in northwest B.C. will get the support they need to handle population growth and ensure that transportation links where LNG facilities will be located can move both people and LNG components. LNG will open the door to our skilled tradespeople from across the province to be part of the construction of LNG facilities and supporting infrastructure for many years to come.

Our government is making sure the next generation of British Columbians are well prepared and well educated to take advantage of these opportunities through B.C.’s skills-for-jobs blueprint, our plan to re-engineer education and trades programs across B.C. The blueprint ensures that B.C. has the trained workers needed to fill the top LNG-related jobs and other in-demand occupations, placing our youth and workers first in line for the jobs of the future. More than 78 percent of jobs will require some form of post-secondary education, and 43 percent will be in trades and technical occupations.

Our blueprint is focused on changing culture and attitudes, and that includes getting more young people involved early in trades and technical training. There will also be a particular focus on ensuring that aboriginal people benefit fully from economic and labour market opportunities through the expansion of skills-training and apprentice programs. Our government is also helping connect project proponents with small- and medium-sized B.C.-based businesses through the LNG–Buy B.C. program.

[1125]

Businesses across the province, including right in my own region, will have the chance to participate in the value chain of LNG development by registering with the LNG–Buy B.C. on-line registry.

We want B.C. businesses to succeed and be part of this opportunity. Through seminars by my colleague and friend from Peace River South and LNG energy seminars connecting members of the communities to LNG, we can ensure that British Columbians know what the opportunity is and what that opportunity really means for them.
[ Page 5179 ]

LNG will also open more opportunities to increase our international trade presence, strengthening our relationship with our trade partners to export other products, such as agricultural or manufactured products from across the province.

We need to look at the big picture when we consider this legislation. The B.C. LNG Income Tax Act is just one of several revenue sources we will realize from LNG facilities. Construction activity of building these facilities will generate economic growth and jobs, leading to increased revenue from income and sales taxes. As I mentioned, the extraction of natural gas in B.C. provides revenue through royalties, which already provides benefits to British Columbians.

I believe B.C. has what it takes to get the job done to develop this industry and to create the prosperity and the opportunity that members on this side of the House campaigned on. Passing this bill will be the first step of making this happen. I hope that members on all sides of this chamber can agree that this industry is a once-in-a-lifetime opportunity for our province and that we shouldn’t let it go.

This legislation provides certainty to the LNG proponents and, more importantly, benefits to all British Columbians. Thank you, hon. Speaker, for the opportunity to speak to this bill.

G. Heyman: Well, if this chamber was a class in drama, I guess we’d be calling what’s happened over the last few days, with the introduction of this bill, the denouement. I don’t know if over the last 18 months to two years what we’ve been witnessing is an exercise in monomania or a Greek tragedy.

What we’ve seen in the months leading up to the election was a Premier, a government and candidates who were almost obsessed with the promise of LNG, obsessed to the point of pumping it up to great heights, of hyping it in the greatest of terms. The reason I referenced a Greek tragedy is we often see in Greek tragedies the central characters riding on top of the world, creating a fantasy about everything good that has happened and will happen in the future, and, as events unfold, they are brought crashing down to earth, often with a very heavy thud, often with very tragic circumstances.

What we see with this bill…. After months and months of hype, after months and months of talk about great return — paying off the province’s debt through a prosperity fund, elimination of the provincial sales tax, trillions of dollars in income, hundreds of thousands of jobs — we now see speakers on the other side, in support of this bill, dealing with the reality that this tax bill demonstrates, dealing with the reality of what the real return to the province of B.C. may be.

It is not that that return will be nothing. That’s not what I or any of my colleagues are claiming. What it will be, if some of these proposals go forward…. If one or two of them go forward, as many commentators on the industry believe is the likely outcome, we will see a piece of B.C.’s economy, a promising piece of B.C.’s economy — a piece of B.C.’s economy that if we do it right, with a number of conditions, will benefit some British Columbians. But it will not be the one single industry that takes care of all of B.C.’s problems.

[1130]

I’ve listened to some of the speakers opposite, some of the members opposite, and I have watched over several months, over a year, as members opposite have been loyal spokespeople following the Premier’s overhyped dreams, overhyped announcements — announcements that, let me say, from day one critics, commentators in the media and knowledgable people about the industry warned were inflated, warned were not grounded in reality, warned were not taking account of the natural give-and-take of the market and the state of energy markets in Asia and other places in the world. They warned that it wasn’t useful to carry on with such hyperbole.

Yet every time the subject of LNG comes up in this chamber, we listen and hear speakers opposite repeat promises that virtually everybody knowledgable in the industry understands are outlandish but, more importantly, that people in the industry believe are not useful to them in establishing a viable LNG extraction and manufacturing industry in British Columbia.

I listened just now to the member for Shuswap commenting on statements that have been made in this House, on this side of the House, believing that it wasn’t clear what we believed in, believing that we were demonstrating inconsistency. All I can say is that the member opposite mistakes rationality and common sense for inconsistency.

Yes, we are inconsistent with the hyperbole we’ve experienced from the Premier and members opposite. We are not inconsistent with many knowledgable commentators on this industry or inconsistent with many people who wish and desire and have a stake in this industry going forward.

What we are is rational. What we want to do…. What we’ve said in four conditions that we’ve laid out for an LNG industry is that we believe that the industry, as part of a suite of industries in British Columbia, holds part of the puzzle to our economic future. But it has to be done in certain ways, under certain conditions — conditions that are real; conditions that are grounded in actions that make them real; conditions, for instance, that actually put forward express guarantees of jobs for British Columbians and training for British Columbians so that they are able to take those jobs.

We need to get a fair return for our resource. We shouldn’t be giving it away, and the terms of the return for the resource should be transparent and easily understood by all British Columbians. Of course, that the industry includes real and tangible benefits for First Nations, as well as respects First Nations’ inherent rights, constitu-
[ Page 5180 ]
tional rights, rights that have been recently confirmed by the Supreme Court of Canada and that make it absolutely clear that nothing can really proceed in terms of resource extraction and development that impinges on First Nations rights and title that is yet to be settled without genuine consultation and genuine accommodation.

Finally, we have said that it’s not good enough to talk about having the cleanest LNG industry in the world. It’s not good enough to pretend that because we may export LNG to an area that is using coal, this will somehow replace and transplant the greenhouse gas emissions that are being produced currently in those jurisdictions or even necessarily that we’re replacing greenhouse gas emissions that might be part of those countries’ futures.

That may be true. That may not be true. We simply don’t know, and there are no conditions attached to this industry by the government that would see this be true.

What we have also said is that real, strong environmental standards, as mentioned by the member for Shuswap — that we would have the cleanest LNG in the world, the cleanest LNG facilities in the world and the highest environmental standards — can’t simply be a statement.

[1135]

It has to be accompanied by a plan, a plan that shows British Columbians how this government intends to meet the greenhouse gas emission targets that are contained in this government’s own legislated commitments for British Columbia.

We cannot pretend this industry will not produce greenhouse gas emissions or that they’ll only produce greenhouse gas emissions at the liquefaction plant. We know there are emissions all the way from the extraction in the gas fields all the way down the pipeline.

It is incredibly important that we be honest about this industry and that we show what steps we will take to guarantee that we not only have the cleanest LNG liquefaction…. That won’t simply happen because the government sets a benchmark and requires the purchase of offsets. It will happen when we introduce measures that reduce emissions and we specify where else in our economy, in our industry and in our day-to-day habits we are going to reduce emissions to compensate for new ones that are being produced.

The member for Shuswap touted this tax regime in this legislation as meeting the realities of the market and providing proponents with certainty and clarity, and it may well do that. It may well provide certainty and clarity. Certainly, we now know, after months of living with announcements by the Finance Minister in a February budget that talked about a nominal tax rate of 7 percent once the capital investments were paid off, that that is 3.5 percent.

That’s a significant cut, which means there’s a significant cut and drop in the expectations of British Columbians about what that tax rate and the royalties can support, in terms of the future of British Columbia, in meeting the extravagant promises, the overhyped promises, the constantly repeated promises of the Premier of the province to eliminate the debt, to create 100,000-plus jobs, to create a prosperity fund, to potentially eliminate the provincial sales tax. We now know that that is virtually impossible.

The member for Shuswap may likely be right in that this tax structure, this royalty structure is more in line with what the industry itself believes is necessary in order to make a profit on this industry. But the realities of the market didn’t just pop up yesterday. They have been apparent for a long, long time.

In a few minutes I will read some examples of warnings that were sounded early in 2012 and early 2013 in response to the hyperbole of the Premier that sounded caution. But did the government listen to it? Did the minister responsible for natural gas listen to it? Did the Premier listen to it? No. They charged ahead with claims that are not supported by the realities of this bill or of the other bill that we are still debating in committee stage with respect to greenhouse gas emissions. They are not supported by the reality of what has been brought forward here today.

We’ve seen the tax rate cut in half. We see some potential major loopholes. We see all of this in the context of a major hyping of the possibilities of LNG that showed the proponents, who are shrewd negotiators, that this government was putting all of its eggs in this one liquefied natural gas basket.

As you know, one never wants to appear to have only one possible good outcome in negotiations, because that prejudices you in negotiations. It weakens you in negotiations, and it strengthens the hand of the people you’re negotiating with. So what we have here today is a reduced tax rate.

[1140]

Let me talk a little bit about the prosperity fund. It’s interesting to note that when one of my colleagues, from Columbia River–Revelstoke, did a search on the Internet to find out how many times the Finance Minister had talked about the prosperity fund — he did this because it was notable in the throne speech that nobody was talking about it anymore — you can’t actually find the Finance Minister referring to the prosperity fund. The Finance Minister left the House somewhat disappointed that he couldn’t remain for praise from one of my colleagues about his responsible approach to a prosperity fund that we now know will never exist.

The reason, I assume, is that notwithstanding his role as a senior member of the government, the Finance Minister feels some responsibility to have credibility on financial matters. To hold forth the opinion that this industry, which is yet to be created, with a tax regime that was yet to be put in place, with enough loopholes in the tax regime to allow royalties to be offset by corporate income tax cuts at a later date going into the future…. It’s just irresponsible to talk about a fund that we will, in all likelihood, never see.
[ Page 5181 ]

If this government at some point in the future finds a way to create a prosperity fund out of thin air, I suppose I’ll have to eat these words, but I feel fairly safe making them. I believe that the Finance Minister was very careful, in some of his statements at least, to maintain some shreds of credibility as he proceeds with the budgeting process and other processes for which he is responsible.

Let me simply quote the columnist for the Vancouver Sun, Vaughn Palmer, when pointing out that references to the prosperity fund had fallen off the table. Perhaps the prosperity fund was “not dead, just resting.” That fund may be resting for a very, very, very long time.

It’s hard to imagine how this particular tax regime…. As well, the fact that until the capital construction costs have been paid off, the tax regime is even lower than the half of 7, or 3.5. It’s 1.5. Going into the future, I think we know that some of the money that is paid in the 1.5 so the government gets some income…. It needs to have some income to show that their claims weren’t completely divorced from reality or completely outlandish.

In the future, once the proponents build a plant and go up to the 3½ percent tax rate, they will be able to — if I understand this tax structure correctly, and I believe that I do — deduct from tax payments owing the taxes that they already paid to make a down payment, in order that, presumably, the Liberal government has something to talk about in the next election campaign.

The member for Shuswap, the minister responsible for natural gas, the Finance Minister, even the Premier have recently said: “Well, we only said the tax would be up to 7 percent. It’s been hard negotiations. We need to enable this industry to be put into place. We need to enable it to get started.” They cited changing economic conditions as the reason that some proponents are putting their plans on hold. Some have stepped away. The tax regime has changed. Global LNG prices have declined, they’ve said to us. There is more supply due to competition, they’ve said to us. There’s the potential for rising construction costs.

Nothing in any of this should be a surprise to the government. It certainly won’t be a surprise to the energy companies, the energy experts, the media commentators and the proponents who warned for a very long time that the claims of the government were somewhat inflated, that there were a number of cautions that we should all pay attention to as we sought to start this industry.

[1145]

In September 2012, two years ago, Macquarie Bank wrote a report in which it doubted that even four LNG plants would be built in B.C., even though it did predict that B.C. would become an LNG exporter of some size by 2020. They pointed to delays, to cost overruns and to emerging markets as real threats that could undermine the economics of the project.

In February 2013 I referred to the claim of the government and the Premier that there would be a prosperity fund and there would be over 100,000 jobs. This was based on a report by Grant Thornton. Focus magazine said that Grant Thornton used a flawed methodology that produced a 15-fold overestimation of jobs.

They questioned Grant Thornton’s econometric model. Where that model produced an estimate of 30 indirect and induced jobs for each assumed direct job, the U.S. House of Representatives bipartisan natural gas caucus estimated far smaller — 3½ indirect and induced jobs for every direct job in the U.S. gas industry.

The Premier, for reasons known to her but assumed by many of us to have something to do with the attractiveness of making a 100,000-job promise during an election campaign, ignored the reality and took comfort in the hype that she would repeat over and over again.

In April 2013 just before the election, at an LNG conference in Vancouver global energy experts doubted the credibility of the Premier’s optimism. They said that Asian buyers won’t be paying the windfall prices that have been in place since Japan shut down 48 of its 50 nuclear power stations after the Fukushima disaster.

They said that Asian buyers will seek to decouple the price of gas from the price of oil and that B.C. will face stiff competition over prices, with new supply coming from Africa, the U.S. and Australia.

In May of 2013, the month of the election, Citigroup warned that we will face increased supply competition after the U.S. Department of Energy approved 26 LNG export facility applications in Texas.

In October 2013 after the election, the Canada West Foundation wrote a report titled Managing Expectations. Managing expectations — words that, apparently, the Premier of this province refuses to live by.

Managing Expectations, assessing B.C.’s LNG industry. This report said that Asia may soon have more than enough natural gas of its own, and B.C. will face competition from domestic production in China and from pipeline imports to China. The minister responsible for natural gas responded to the report by saying: “I don’t mind being accused of being an optimist.”

What British Columbians expect and deserve is a Minister of Finance, a minister responsible for natural gas and possibly even a Premier who say, “We don’t mind being labelled realists” — realists, not optimists who live on hype and build up hopes and expectations that can’t possibly be met by this government or this industry.

In December 2013 we saw a meeting of the Asian buyers club that talked about how they were going to get a better deal, and what was the response of this government? That it was a seller’s market.

I don’t know what a seller’s market is when you have a glut of a product, but those two things defy the logic and the laws of economy — a defiance that appears to have gone right over the head of the minister responsible for natural gas and some of the members on the opposite side, who have taken great pleasure in heckling.
[ Page 5182 ]

[1150]

I want to say yes to many things, and I will say yes to many things. I just wish that the government would say yes to a complete suite of economic opportunities for British Columbia, not only the potential of a carefully thought-out and developed natural gas industry….

Interjections.

Deputy Speaker: Members.

G. Heyman: Notwithstanding the din in the House from people who are raising an issue that I’m not actually talking about and isn’t a subject of this bill, let’s talk about what developing a responsible natural gas and liquefied natural gas industry in B.C. looks like in a context of a diverse and modern economy. People involved in the business community around British Columbia have been expressing concern for a very, very long time now about this government’s narrow focus on one industry that does not yet exist.

It is a good thing to have aspirations to create a new industry if it’s done responsibly, if it’s done honestly and if it’s done with real environmental standards and greenhouse gas emission standards that are accompanied by a real plan, not a lot of rhetoric, not a lot of hot air and not a lot of reliance on offsets that have yet to be defined.

Let me close my remarks in the few minutes that I have left by talking about some of the existing B.C. industries that already have more than or close to 100,000 jobs, that have great potential to continue growing, that are doing well but that could do better with a fraction of the attention that this government has placed on LNG and a fraction of the taxpayer-funded support that is being offered to the LNG industry.

Recently the B.C. Technology Industry Association issued a report card on the industry. This industry is tremendously successful. It currently has about 84,000 jobs, the pay in which averages over $75,000 a year, which is 60 percent higher than the provincial average, second only to construction in this province in jobs and creating more jobs in B.C. since 2012 than mining, forestry and oil and gas combined.

These include companies like Avigilon, BuildDirect, Global Relay, Hootsuite, Vision Critical and Westport. The report card gives this industry an A, but when it compares this industry globally and with other provincial tech sectors in Canada, it is only a C-plus.

Now, members opposite may take some comfort in the fact that the C-plus is an improvement from the C of last year’s report card, but let me simply quote the CEO of Canada’s Venture Capital and Private Equity Association, Mike Woollatt. He says governments have a role to play in everything from procurement initiatives, tax policies and procurement policies, while Canadian governments, including this government, only look at cost on procurement.

This is an industry that can and should grow. This is an industry that has repeatedly made presentations to government and that, while being appreciative for the support that has come from government so far, also believes that with nominal investment and a little bit of a commitment in four areas, the industry could do much better, and that if those investments are made, instead of a drop in GDP and jobs over the next five to ten years, we will see a significant increase in contribution to GDP, a significant increase in jobs and, most importantly, a greater return to the people of the province in tax revenues than the expenditures being called for.

[1155]

The actions are simple. The government could invest in talent — in developing talent, in attracting talent, in retaining talent. Instead, we are woefully behind on a per-capita basis in B.C. in graduating people in engineering, in math, in computer and info sciences. We also lag in patents filed and granted on a per-capita basis as well as absolute terms.

We could do better. This is an industry that exists today, that’s growing today, that has roots today, compared to an LNG industry that holds promise but does not yet exist. BCTIA also urged the government to set an example and give the tech industries in B.C. a home-team advantage by encouraging government and business to buy B.C. tech. They also said it could revitalize venture capital in the sector and, by doing so, would encourage more private sector investment.

Finally, they said that if the government expanded some of the existing initiatives — the accelerator programs, the tech hubs, the mentorship programs like the Centre4Growth — that would help B.C.’s technology industry grow from the small and medium businesses that predominate now to include larger companies with over 400 employees that can serve as anchors to build this sector.

This is just one example of how B.C. can do better in an existing industry. We can do better. We can build new industries, but we can do much more than be focused on one industry only when we have existing successes.

[Madame Speaker in the chair.]

With that, I conclude my remarks.

G. Heyman moved adjournment of debate.

Motion approved.

Hon. T. Stone moved adjournment of the House.

Motion approved.

Madame Speaker: This House, at its rising, stands adjourned until 1:30 this afternoon.

The House adjourned at 11:57 a.m.

[ Return to: Legislative Assembly Home Page ]

Access to on-line versions of the official report of debates (Hansard),
webcasts of proceedings and podcasts of Question Period is available on the Internet.
Chamber debates are broadcast on television.

TV channel guide • Broadcast schedule

Copyright © 2014: British Columbia Hansard Services, Victoria, British Columbia, Canada