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)

Wednesday, November 5, 2014

Afternoon Sitting

Volume 17, Number 5

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

WEDNESDAY, NOVEMBER 5, 2014

The House met at 1:35 p.m.

[Madame Speaker in the chair.]

Routine Business

Prayers.

Ministerial Statements

PRINCESS PATRICIA’S
CANADIAN LIGHT INFANTRY

Hon. M. de Jong: Anyone, any member who has entered these buildings from the rear entrance by the library, will have noticed the engraved words on the parliamentary library cornerstone, unveiled by His Royal Highness the Duke of Connaught in the early part of this century. I mention that because today we are celebrating the achievements of another foundational institution in our nation’s history, for which the Duke of Connaught can claim a small but not insignificant contribution.

It was a century ago when the guns of August erupted across Europe, when Montreal businessman Hamilton Gault deposited the princely sum, in those days, of $100,000 with the ministry of defence and was authorized to raise an infantry regiment for war service. He approached the then Governor General, the Duke of Connaught, and sought permission for the new regiment to bear the name of the Governor General’s daughter. Thus was born the Princess Patricia’s Canadian Light Infantry.

Within weeks the original complement of nearly 1,100 volunteers was aboard the Royal George, sailing for camp on Salisbury Plain in England. On this day 100 years ago the regiment was inspected by King George V before being posted to France and becoming the only Canadian infantry regiment to serve in the European theatre in 1914.

It would not be the last time that the Pats would receive the attention of a grateful sovereign. What has followed is a century-long tale of duty, gallantry and sacrifice. Ypres, Arleux, Passchendaele, Mount Sorrel, Amiens, Flers-Courcelette, Canal du Nord, Vimy — all World War I battles where the Princess Pats carried their regimental flag into action and spilled their blood.

When the guns mercifully fell silent on November 11, 1918, the Pats returned home to Canada. A rifle company was posted to Work Point barracks here in Esquimalt, marking the beginning of a PPCLI presence in Esquimalt that would last for 52 years, until 1993.

When the world was again consumed by the destructive flames of war, the Princess Pats were again called into action at places like Monte Cassino; San Fortunato, Rimini. In 1945 it was the Princess Pats who led the march into northern Holland — Apeldoorn, Amsterdam — and rescued a starving population whose hunger for basic nourishment was exceeded only by their thirst for freedom and liberation from five years of Nazi oppression.

Only a few years later, when the free world united in the cause of preserving the peace, Canada again called upon the Princess Pats to stand in harm’s way. In Korea they stood shoulder to shoulder with an army of peacekeepers from around the world. At the Battle of Kapyong in April 1951, the second battalion became the only Canadian unit to receive from the U.S. the Presidential Distinguished Unit Citation for gallantry in the field.

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Israel, Golan, Egypt, Lebanon, Kuwait, Iraq, Congo, Vietnam, Central America, Angola, Somalia, Rwanda, Korea, Croatia, Bosnia, Cyprus — all places where the savagery of war and conflict has descended upon populations and wrought destruction and death — all places where the men and women of the Princess Pats have been called upon to restore and maintain the peace.

Most recently, in Afghanistan, Kabul, Kandahar and the province of Paktia, the Pats confronted a new enemy, the Taliban and al-Qaeda, every bit as bent on the denial of freedom and fundamental human rights as any previous enemy and every bit as deadly.

Today we enjoy in this House the honour of being joined by those who have carved out the remarkable legacy that is the Princess Patricia’s Canadian Light Infantry. I’d like to introduce them individually, sitting on the floor, to the chamber.

Lt. Col. John Bishop, aged 83, a Korea veteran with the Battle of Kapyong, where, as I mentioned, the presidential distinction was bestowed.

Maj. Chick Goodman, aged 88, a World War II and Korea veteran who was awarded the Knight of the French National Order of the Legion of Honour by the French government for his participation at Normandy.

Maj. Murray Edwards, aged 94, a World War II veteran and also a veteran of the Battle of Kapyong in Korea.

Lt. Col. George Wilkinson, aged 96. Joined the PPCLI at Work Point barracks in Victoria in 1935.

MWO David Shultz, regular force veteran of Afghanistan and the recipient of the Star of Valour for bravery in action while in Afghanistan.

Capt. Robert Dodds, regular force veteran of Afghanistan.

Capt. Wayne Sauve, a regular force veteran of Afghanistan.

Capt. Dougall Salmon, president of the Victoria branch of the association.

WO Ed Widenmaier, vice-president of the Victoria branch of the association.

MCpl. Jim MacMillan-Murphy, secretary of the Victoria branch of the association.
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Sgt. Bruce Dickey of the Victoria branch of the association.

MCpl. Chuck Gibson from the Victoria branch.

Capt. Madeline Doll, former commanding officer of 2483 Princess Patricia’s Canadian Light Infantry Regiments Cadet Corps at Work Point barracks.

Cadet MWO Nick Stefan, Cadet Corps at Work Point barracks.

If the fabric of a national character is woven over many years, then the men and women of the PPCLI represent our strongest fibres. They have carved out a legacy that we as Canadians will be eternally proud and eternally grateful for.

But they have paid a terrible price. Through the battles that I have mentioned, and others, 1,886 have fallen, and many more wounded. These veterans represent them, and we can say to them and through them, to the colleagues and comrades that did not return, we’ll never forget, and thank you. [Applause.]

J. Horgan: It is a privilege to stand on behalf of the official opposition and recognize and acknowledge the history of the Princess Patricia’s Canadian Light Infantry here today in the Legislature.

It’s rare that I follow the Finance Minister and the Government House Leader, and I’m at a loss for words at his eloquence today. I want to commend him for the heartfelt comments that he’s just made.

Although I have two degrees in history, I won’t add to the story he told of the events of the hundred years that have gone by, but I will advise members of the House of the element that was left out of the history books in terms of days and events, and what happened at Ypres, what happened at Vimy, what happened at Normandy.

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It was the PPCLI that created Canada. Although it happened on July 1, 1867, we were a colonial dominion in all intents and purposes. Anyone who studies history will understand that.

It was the contribution of Canadian Forces in the First World War that made Canada a country. It’s renowned and it’s acknowledged across this country that it was the work and the tireless sacrifice of individuals in the first war and again in the second — and, of course, in Korea and in peacekeeping missions since then and most recently in Afghanistan — that Canada became a country.

I want to commend the individuals that are here with us today and those who could not be with us for their sacrifice and contribution to that nationality, that nationhood that we all have the privilege and pride to be a part of.

I also have the good fortune to be married to a Dutch woman. I’ve been to Holland, I’ve been to Normandy, and I’ve been through France. I’ve been through where many of the individuals in this House tread many years ago. And I tell you. There’s nothing better than being a Canadian when you’re in the Netherlands — nothing better than that.

Also, if you have the good fortune to marry a Dutch woman and you are a Canadian, there’s not much that can go wrong after that, even if you’re an Irish ancestor. When you proposed to that woman, they thought you were a doctor, not a spin doctor. That was a bit of a disappointment for them as well.

It was the work and the passion of our Armed Forces and, particularly, the Princess Pats that made Canada what it is today. Again, I cannot add to the eloquence of the Government House Leader other than to say thank you from the bottom of our hearts on this side of the House, not just to those who are here but to the two members of the Sergeant-at-Arms staff who are PPCLI representatives.

I know Noel Stone is one of them. The second one’s name was to come to me before I spoke, and it hasn’t yet arrived. But there are two, and I want to thank them both for their work and thank the Speaker for the opportunity to say thank you to those who are assembled with us here today.[Applause.]

Introductions by Members

Hon. S. Anton: It gives me great pleasure to welcome today my constituent Mr. Kashmir Dhaliwal. Kashmir is the ex-president of the Khalsa Diwan Society, which makes its home in the Ross Street Temple. The Khalsa Diwan Society was formed in Vancouver in 1906 and is the oldest non-profit Sikh society outside of India.

He is joined by his friends and guests. Mr. Darshan Khaira is the ex-secretary to the premier of Punjab and the director of the Canadian Institute of Vocational Courses. He is also a farmer, Mr. Minister of Agriculture. He’s the president of the Holstein Association of India.

Mr. Khaira is joined by his daughter, Jatinder Kaur, who is the vice-president of the Canadian Institute of Vocational Courses and also the CEO of the Holstein Association of India.

I hope that the House will make these guests very welcome.

M. Karagianis: It gives me great pleasure to introduce some guests here in the House today. They are here to observe the bill that I will be tabling shortly. I would like to extend a special welcome to Tseycum First Nation Chief Vern Jacks, to Tseycum First Nation Councillor Josephine Joe and — I believe, in the precinct — to Westbank First Nation representative Nancy Bonneau.

I hope the House will give them a welcome. It’s great to see them here to witness this bill being presented today, and I thank them for coming.

Hon. A. Wilkinson: It’s a great pleasure to introduce to the House Mr. Paul Drohan, who serves as president of
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Life Sciences B.C., which is a very effective organization. Mr. Drohan does a remarkably good job of promoting life sciences and biotechnology here in British Columbia. Please welcome him.

M. Mungall: In the House today we have Steve Atkinson with the Pacific Community Resources Society. He’s visiting us today. So may the House please make him a very warm welcome.

L. Reimer: It’s my pleasure today to introduce three individuals who serve me and my other MLA colleagues on this side of the House so well. Would the House please make Derek Robertson, Suneil Karod and Kadagn Klepsch very welcome.

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H. Bains: I also would like to join with the Attorney General in welcoming my friend of many, many years, Kashmir Dhaliwal, who was an activist in the IWA with me back in those days. He served on the longest-established Sikh organization outside of India, including being a president of that organization. He’s joined by his guest from India, Mr. Darshan Singh Khairan, and his daughter Jatinder Kaur. Please help me welcome them to this beautiful House.

D. Plecas: Today in the House we have two wonderful people from one of our most beloved organizations in B.C., the BCSPCA. We have Erica Mattson, officer in charge of government relations, and David Budd, a board member. Please make them feel welcome.

M. Elmore: I’m very pleased to welcome my friend, Gina Pinangat, today joining us. She’s a former member of the Armed Forces — originally enlisted in Montreal; served in Ottawa; and transferred to the Canadian Forces Base Esquimalt in 2005, where she worked as a communications and info systems technician.

She’s been the military co-chair of the visible minority committee for the Department of National Defence, also volunteered with the Heart and Stroke Foundation, is a board member of the Bayanihan Centre and a member of the temporary foreign worker coalition in Victoria, which recently held a very well-attended forum supporting temporary foreign workers and calling for permanent immigration for all workers coming to B.C.

She’s joined by Janet Plete, who’s visiting from Bologna, Italy — first time in Victoria. She’s a member in Italy of Liwanag, a Philippine women’s organization — she’s the auditor on the board — which is an organization that works for and supports full human rights for women and children in Italy. The two of them completed a medical outreach mission in the Philippines with three sessions in Benguet, Mountain Province, Iloilo, Pangasinan, in August. I ask everyone to please give them a very warm welcome.

Hon. A. Virk: School district 36 in Surrey offers its grade 9s an opportunity to accompany their parents to work today. I’m joined by my favourite daughter, Maansi Virk, today and my wife — my bride of 25 years, five months and two weeks — Jatinder Virk.

J. Darcy: It’s a great pleasure today for me to welcome a friend of mine to the House, Susan Quip, now of Victoria, formerly of Mayne Island and of Vancouver, and, I must say, a superb massage therapist. Would the House please join me in welcoming her to this House.

S. Hamilton: It’s my pleasure to rise in the House today and actually introduce someone who, to many people in this House, probably needs no introduction. She joined Delta council, I think in 1971, as the first female alderman, so to speak. She has served her community for a very, very long time now. She is entering into her sixth term as Delta’s mayor and has, as a matter of fact, scared off all of her competitors. Often referred to as the Margaret Thatcher of local politics, I’d ask the House please make welcome Mayor Lois Jackson.

Mayor Jackson is here, accompanied by her chief administrative officer, George Harvie, and her executive assistant, Dona Packer, having discussions with our Minister of Justice and Attorney General. I’d ask the House please make the other two guests welcome as well.

G. Holman: I would also like to welcome Chief Vern Jacks, who happens to be a constituent of mine. I hope Chief Jacks doesn’t mind me putting it in that way.

Welcome to the House, Chief.

Also a number of other constituents are here to observe the reintroduction of a private member’s bill regarding the Heritage Conservation Act, all of whom have been involved in the Grace Islet issue: Donna Martin, Francis Hill, Leanna Boyer, Lori Waters, Christina Unity, Kevin Henry, Adam Olsen, Mark Coulter, Jean Wilkinson, John Waters, John Livingston and Larry Applebee. Would the House please make them feel welcome.

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Hon. C. Oakes: It truly is my pleasure to recognize family members of the distinguished veterans and guests here today. We have Noel Stone, Judy Moss, Hazel Widenmaier, Anne Marshall, Patrick Wilkinson, Kate Goodwin, Nancy Goodwin, Peter Chance, Bob and Amy Emmett, Lorraine Johnson, Jennifer Schultz, Arnie Levoie and Darrell and Marnie Connick. Would the House please help us make them feel welcome.

L. Popham: It is my pleasure to introduce James Taylor to the Legislature today. James is Ojibway First Nations. He is originally from Curve Lake First Nations and now calls Saanich his home. James works with school district 63 as a First Nations education assistant. He is a trad-
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itional Ojibway knowledge- and drum-keeper, a storyteller and a medicine person. He is here today in support of the Grace Islet issue.

S. Chandra Herbert: It gives me pleasure to welcome three constituents to this Legislature. I welcome Susan, Jules and Sofia Shank Day. Sofia is here, a grade 9 student, on Take Our Kids to Work Day. She’s not my kid, but she’s a great kid. I’m working on my kids, hon. Speaker.

I do want to say thank you for coming to your Legislature.

Please make them very welcome.

B. Routley: It’s a joy today to welcome Diane Hinckley, who’s here representing Cowichan Tribes. She’s here supporting the Honouring Grace Islet petition as well as to witness the heritage conservation act. Would the members please join me in making her feel very welcome.

Introduction and
First Reading of Bills

BILL M206 — FIRST NATIONS HERITAGE
PROTECTION AND CONSERVATION ACT, 2014

M. Karagianis presented a bill intituled First Nations Heritage Protection and Conservation Act, 2014.

M. Karagianis: I move that a bill intituled First Nations Heritage Protection and Conservation Act, 2014, be introduced for a first time now.

Motion approved.

M. Karagianis: I am pleased to introduce the First Nations Heritage Protection and Conservation Act. This represents the sixth time I’ve introduced this bill in this House, and once again I am very hopeful that the government will recognize the need for these changes to the heritage act.

I first brought this bill to the House in October 2007 after excavation by a contractor unearthed a First Nations heritage site along the shoreline of my constituency in View Royal. I was deeply troubled to discover a lack of provincial legislation to safeguard First Nations heritage objects and sacred sites.

This bill will better protect First Nations heritage objects and sacred sites. The bill amends the Heritage Conservation Act to include a process by which First Nations can trigger protection acts when heritage and sacred sites and objects or remains are discovered. I believe that this bill amends the heritage act to better provide a set of guidelines and tools for First Nations, local government, communities and the province in order to implement protection, stewardship and conservation of First Nations heritage and culturally significant areas, their artifacts, their sacred history, as well as to provide for the creation of a program to accomplish that goal.

Recent events on the First Nations burial grounds on Grace Islet serve to highlight the urgent need for better protection. While most communities would be horrified by the concept of building houses on top of cemeteries, First Nations burial sites have frequently been destroyed by highways and housing. It is wrong and unacceptable. I would therefore ask that all members of this House please read this bill and support it.

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

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Bill M206, First Nations Heritage Protection and Conservation Act, 2014, 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)

FALL FAIRS AND VOLUNTEERS

J. Tegart: The leaves are changing, there’s a chill in the air, ranchers are bringing in their cattle, and farmers across the province are wrapping up the harvesting of their crops.

Yes, it is fall. It is that time of year when communities host local fall fairs featuring and celebrating local agriculture communities. They exhibit livestock, choice B.C.-grown fruits and vegetables, unique arts and crafts from skilled artisans in our communities and, yes, so many delicious treats made from recipes passed down from grandmothers to mothers to daughters.

At every fair it’s important to recognize the number of volunteers who work throughout the year to ensure the fair goes off without a hitch. I myself was asked to judge at our local fall fair a number of years ago. Thinking I might be tasting a product made from local grapes, I was quite excited. Little did I know that in the judging world you start your career off with the pickles — some sweet, some sour — and move on from there. Apparently, it’s a long process to finally get to be the wine taster.

Youth is also an important focus of any fall fair, with 4-H clubs across the province giving young people who are passionate about community service and the future of agriculture the chance to showcase their skills and talents at each participating fair. I’d like to recognize the Ashcroft Fall Fair and the Princeton and District Fall Fair for their successful seasons. I know that the volunteers are already at work preparing for next year’s event.

I encourage all members in the House to visit one of the many fall fairs in our province next year.
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DOROTHY CHAMBERS AND COLQUITZ CREEK

R. Fleming: I’d like to take this opportunity to recognize an outstanding constituent of mine, Mrs. Dorothy Chambers. Dorothy is a longtime Gorge-Tillicum resident, renowned across Saanich for her boundless energy and enthusiasm for environmental conservation.

She has for many years been advocating for the precious wildlife that we have in the Gorge-Tillicum area and the need to care for that. Dorothy has helped establish a fish-counting fence on the Colquitz Creek in Cuthbert Holmes Park. She has created education programs for school kids to learn about the ecological diversity within our urban boundaries, and she’s put countless time and energy into helping recover what was once in Saanich the largest great blue heron rookery on all of Vancouver Island.

Dorothy’s efforts have been effective for a couple of reasons. One is that she knows how to get attention. She also knows how to build partnerships. In 2006 — during one of the many unfortunate recent oil spills that we’ve had in the Colquitz River — Dorothy realized, as she was helping to remediate birding habitat for cleanup, that there were volunteers who were compiling data on the rivers, counting salmon — salmon that no one else seemed to know about.

So she teamed up with community activists Chris Bos and Barry Goodwin that year, and they started an education society to teach the community, young and old, about the value of this unknown and neglected spawning ground.

You often see Dorothy spending her days and evenings down at Colquitz Creek. She can tell you anything about this hidden treasure — where the beavers build their dams, where the great horned owl has most recently been seen. While she’s nearing retirement as a nurse, Dorothy is busier than ever. I know I speak for a lot of people in saying how thankful we are for her leadership role to improve her community through her devotion to environmental protection. Her work is unsung. It is not done for recognition or rewards, although it deserves both.

It is my pleasure to have her here in the Legislature — to recognize her in some fashion and potentially embarrass her a little bit here today — to sincerely pass on my thanks to Dorothy Chambers, to the wildlife and fishery organizations that she works alongside to make sure that the Colquitz waterway continues to be beautiful and abundant for future generations.

JOHN SMITH AND CITY OF ABBOTSFORD

S. Gibson: I was in a major stationery store the other day, and at the back of the store there was a simulated business card over the printing department. It read: “John Smith, Anytown, B.C.” Well, I want to introduce to this House today the real John Smith, the authentic John Smith of Abbotsford, B.C.

John may have a common name, but he made an uncommon contribution to the community which he called home for so many years. His command of the English language was legion and enhanced dramatically by his charming Downton Abbey accent.

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John served on school board from 1981 to 2005, including 12 years as chair. He later found an affection for civic government and served for three terms on Abbotsford council.

As a colleague, I always appreciated his strong command of the issues and his money management skills. John was a banker and rose to a senior regional position with HSBC. As well as school board and council, he served on numerous boards and committees, Abbotsford parks and rec, the career technical centre, the Fraser Valley regional district, the chamber of commerce, the Agricultural Advisory Committee and many others.

John is retiring to spend more time gardening with his wife, Judy, on his beautiful Sumas Prairie acreage. His service will be missed by hundreds, indeed, thousands of our residents.

A big thank you to John Smith for your significant contribution to the life of Abbotsford. It’s been a privilege to work with you, and I am proud to call you a friend.

ST. PAUL’S HOSPITAL IN VANCOUVER

S. Chandra Herbert: When Canadians are asked what one of their proudest achievements is for our country, many will say public universal health care, and indeed, in the West End it’s no different. We are proud of St. Paul’s Hospital and especially of the world-class, world-leading health care that is provided there. We are proud that it’s not the size of your bank account that matters but just that you need health care, to get it.

Many in this House and, indeed, across B.C. will not know, though, that St. Paul’s Hospital in many ways is B.C.’s hospital, with 40 percent of the patients treated there coming from across this province. Indeed, many if not all of your constituents have been served at one time, I should say, at St. Paul’s Hospital.

That’s why I speak about helping St. Paul’s today. Our hospital facilities are, admittedly, old, with two-thirds of the buildings facing severe or extreme risk of failure should we have an earthquake. The hospital needs revitalization. Together, as MLAs, we must make that happen. But while our community continues to call for revitalization, they haven’t backed down from improving it today.

I speak of constituents like Dean Thulner, who through his brilliant fundraiser brings together the fashion industry, stylists and more to raise over $300,000 every year to help support mental health. I speak of the St. Paul’s Hospital Foundation, which last year raised nearly $23 million for the hospital and whose Lights of Hope cam-
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paign, which goes live November 27, aims to raise $2.4 million with that event alone. The volunteers who donate countless hours and, of course, the staff, who with hard work and perseverance, push those obstacles away to ensure that patients get good-quality health care.

St. Paul’s Hospital. It’s an incredible place, but it needs our help. Thank you to all who make it one of the best hospitals despite it being one of B.C.’s oldest. Now we must work together to make it even better.

B.C. SOCIETY FOR THE PREVENTION
OF CRUELTY TO ANIMALS

D. Plecas: I rise in the House today to speak about the B.C. SPCA and the important work they do to protect animals from abuse and cruelty.

As we all know, British Columbians are passionate about animals. They love their pets. In fact, some of you might want to know that there is research to show that people love their pets more than they do their spouses. I know that doesn’t apply to the spouses in this House, but at the very least it speaks to the reason why the SPCA is so important to us.

Thanks to the work that they do to investigate reports of animal cruelty and enforce animal cruelty legislation, the B.C. SPCA is able to assist tens of thousands of animals in distress each year, and this includes the adoption of nearly one quarter of a million animals over the last ten years, put into new homes.

But the SPCA is about far more than protecting our furry friends at home. They are also recognized across the country for their work in farm animal welfare and wildlife expertise. The SPCA animal rehabilitation centre, Wild ARC, located in Metchosin, provides direct care to over 2,000 injured wildlife each year.

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The B.C. SPCA also developed national farm animal care standards to improve the quality of life to more than a million farm animals raised in B.C. each year. Remarkably, all of this happens through the funding from some 80,000 donors each year here in B.C.

Let us add to that by being supportive in any way we can, and let us encourage all British Columbians to support this great organization and the important work that they do.

BURNABY NEIGHBOURHOOD HOUSE AND
COMMUNITY ORGANIZATIONS IN BURNABY

J. Shin: Last month Burnaby Neighbourhood House threw a party because it finally has the space to host one. After 15 years of operating out a of tiny warren of run-down rooms, they moved to 8,500-square-foot digs in the brand-new Metrotown Community Resource Centre, developed by Intracorp as part of the city of Burnaby’s bonus-density program.

In this new community amenity space, which you can now see right across from the SkyTrain station, you will find a dedicated classroom for computer and language training; a generous area for children’s care programs, like the very popular parent-child drop-in; a comfortable lounge for youth and seniors to use; meeting alcoves for one-on-one counselling and tutoring; and even a stretch along the hallway for stroller parking.

It’s not just the happy faces at Burnaby Neighbourhood House that you’ll see in Metrotown Community Resource Centre. The National Congress of Black Women, the YMCA child care resource centre and the B.C. Centre for Ability have also been awarded occupation, all with access to an expansive banquet hall with a fully equipped commercial kitchen to serve 140 seated guests for community fundraisers and celebrations.

All of this just a few months after the opening of the new Brentwood Community Resource Centre in Burnaby North for organizations like MOSAIC, Burnaby Community Services, Burnaby Meals on Wheels, the YMCA of Greater Vancouver and, of course, the opening of the new Edmonds Community Centre in Burnaby-Edmonds last year.

It’s one good-news after another in three out of the four corners in Burnaby. I can’t wait to see, personally, the redevelopment of the Lougheed Mall area in my constituency, in the city’s partnership with Shea Properties, to bring even more good news for our community in Burnaby, because our incredible volunteers so deserve safe and comfortable environments to continue their valuable work.

I would like to thank the city of Burnaby once again for another good job well done and for their continued commitment to the vital social programs and services that our residents depend on. Of course, a big congratulations to all the organizations who have found their deserving home at the three new community centres in Burnaby. You’ll look forward to all the wonderful activities and projects to come in serving our community together.

Oral Questions

CONFLICT-OF-INTEREST CONCERNS
REGARDING ADVANCED
EDUCATION MINISTER

J. Horgan: Yesterday in this House we raised issues around a freedom-of-information request that we had obtained — information with respect to the Minister of Advanced Education requesting from his former board-appointed university, Kwantlen College, an indemnity.

Now, I know B.C. Liberals are familiar with indemnities, but not all people watching today will know what those are. That’s a taxpayer-funded lawyer. We have the curious case of the Minister of Advanced Education, after he has left the board of Kwantlen College, requesting
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from Kwantlen College the costs of a lawyer to protect him from some lawsuit not yet named.

My question to the Minister of Advanced Education is: does he believe that the students at Kwantlen College are getting best value for their money for their post-secondary education by finding him a good lawyer?

Hon. A. Virk: Well, the Leader of the Opposition is correct, in one way, that I was a member of a university board and was also informed that that university was involved in a civil case. Indeed, I did inquire about indemnification, but I think the member of the opposition needs to know that I have not received any compensation. In fact, I have paid my own legal costs.

In fact, since the summer 2013 I have been in contact with the Conflict of Interest Commissioner and have kept them apprised of these matters. In fact, I have also asked the Conflict of Interest Commissioner for clarification on the payment of legal costs.

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

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J. Horgan: Again, I’m curious. The minister, who is now responsible for overseeing Kwantlen College, requested from Kwantlen College an indemnity. Now, that is a pretty glaring conflict of interest, and I’m anxious to have the minister table any correspondence he has from the Conflict of Interest Commissioner in this regard. We’re aware of it now that he’s mentioned it in this House. Maybe he could show us the money when it comes to what exactly the conflict commissioner has said.

Let’s go back to some of the other issues at play here, hon. Speaker. You will know that early in the spring of this year the member for Vancouver–Point Grey posed some questions to the minister responsible for Kwantlen College about executive compensation and full disclosure. The minister at that time said that was an outrageous and outlandish suggestion.

We know now — because of the good work of the Minister of Finance staff, a government review — that in fact those rules were broken and that in fact the minister responsible now for upholding those rules couldn’t do so when he was in the position of being a board member.

My question to him is…. Surely to goodness it was past time in June, when this report was tabled, for you to resign. Why don’t you do the right thing today and resign?

Hon. A. Virk: Surely the Leader of the Opposition knows that Kwantlen College became Kwantlen Polytechnic University a number of years ago. Nevertheless, in the summer of 2013 I was in contact with the Conflict of Interest Commissioner and kept him apprised of the civil proceedings. In addition, I have asked the Conflict of Interest Commissioner for clarification in terms of the aforementioned legal costs as well.

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

J. Horgan: I guess that the Minister of Advanced Education doesn’t get the gravity of the situation. We have the bizarre reality that the board he used to be a member of is now investigating him. The board that he used to be a member of is investigating him while he is responsible for overseeing them.

I can appreciate that the Premier doesn’t recognize that that’s a glaring conflict, but surely to goodness the minister does. Wouldn’t it be the right thing to do to step aside until the air has been cleared? You raise now conflict-of-interest allegations that have been put to the member responsible for that. We haven’t seen any of that.

There’s a big cloud over your head, Minister. Step down.

Madame Speaker: Members will direct their comments through the Chair.

Hon. A. Virk: Once again the Leader of the Opposition has bundled a number of things together. The Kwantlen Polytechnic University review has been ordered by the president to do an internal examination of their practices, and in fact, the president of Kwantlen Polytechnic University has made it quite public that everything they can make public will be made public.

K. Corrigan: Surely the situation the Leader of the Official Opposition raised and which we have been raising in this House several times over the last several months meets the very definition of a conflict of interest. As the minister decides next year’s operating grants to post-secondary institutions, including Kwantlen, the minister expects Kwantlen University to cover his defence costs for lawsuits that he anticipates he will be involved in.

My question is to the Minister of Justice. Has she advised the Premier that the Minister of Advanced Education is in a conflict of interest?

Hon. A. Virk: The Conflict of Interest Commissioner is the competent body to make that ruling, not the member opposite. Since the summer of 2013 I have been in contact with the Conflict of Interest Commissioner and kept him apprised of the legal proceedings occurring at that university, in fact.

[1420]

I have written him additionally for clarification on the payment of costs as well.

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

K. Corrigan: Well, I wonder at what point it comes that the Minister of Justice needs to be involved in this
[ Page 5232 ]
case because of the very serious conflict of interest and the fact that this minister is refusing to step down under these circumstances. The Minister of Justice cannot be blind to the fact that keeping this minister in cabinet creates a conflict of interest in more ways than one.

It must be a historical first in B.C.’s post-secondary sector that the Kwantlen University board is investigating the very member of cabinet responsible for both appointing them and funding them. The situation clearly puts the credibility of this investigation at risk.

As government’s chief legal adviser, can the Minister of Justice please explain how a cabinet member who is under investigation by a board he appoints and who expects to be the subject of a lawsuit can continue to exercise authority over that institution?

Hon. A. Virk: Again, the Conflict of Interest Commissioner is the competent authority to determine the suggestions from the member opposite.

I have not received any compensation for legal fees and, in fact, have paid my own fees. Indeed, as I said before, I have again written to the Conflict of Interest Commissioner for clarification on the payment of legal fees.

D. Eby: A very simple question to the Minister of Advanced Education. When did he contact the Conflict of Interest Commissioner about the indemnity issue?

Hon. A. Virk: I know the member opposite certainly has prepared questions. He hasn’t heard what I’ve said. I have not received compensation. I have kept the Conflict of Interest Commissioner, since the summer of 2013, apprised of the legal matters being faced with Kwantlen Polytechnic University.

GRANTING OF INDEMNITIES IN
MULTICULTURAL OUTREACH STRATEGY

L. Krog: Well, between Mr. Basi, Mr. Virk, Ms. Mentzelopoulos and the Minister of Advanced Education making the inquiries, this is truly becoming a lawyered-up government.

They’ve got their hands out to taxpayers, but it doesn’t stop there. According to the Ministry of Finance’s report on government indemnities for the fiscal year ending March 2013, the Minister of Finance granted “an indemnity agreement for two individuals with regards to activities surrounding a draft multicultural strategic outreach plan prepared in 2011 and early 2012.”

To the Minister of Justice: two lucky individuals involved in the quick-win scandal granted indemnities, their legal bills paid by taxpayers — who are they?

Hon. M. de Jong: I think the hon. member knows — in fact, I’m sure he does — that there is a process for the approval and granting of indemnities. With respect to the specific question that he’s posed, I’ll endeavour to get an answer for him.

Madame Speaker: The member for Nanaimo on a supplemental.

L. Krog: The Premier is fond of saying that the Dyble report got to the bottom of the quick-win scandal. Clearly, that is not the case, or else these indemnities wouldn’t exist.

According to the government’s own indemnity policy, indemnities should contain both financial and time limits to reduce taxpayers’ exposure.

[1425]

To the Minister of Justice: what time and financial limits, if any, were set on the indemnities granted to these two lucky individuals?

Hon. M. de Jong: I think the member will understand from my previous response that I’ll take the question on notice and endeavour to get the information.

M. Elmore: While you’re looking into those questions, maybe the Minister of Justice can answer these questions. At the centre of the quick-win scandal were a number of the Premier’s personal friends and leadership campaign supporters, almost all of whom owed their taxpayer-funded jobs to the Premier. We understand that this is uncomfortable for the Premier and her government, but taxpayers deserve to know the truth.

To the Minister of Justice: were these indemnities ever acted upon?

Hon. S. Anton: We have an indemnity policy, as the members know. Senior staff are entitled to go to the deputy minister — my Deputy Attorney General — and seek an indemnity. The terms of the indemnities, the fact of the indemnities — I do not have information on those today. Insofar as they can be public, they are public. But the matters that the member has raised…. I will have to come back with an answer on those.

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

M. Elmore: Clearly, there is much more to learn about the quick-win scandal, but getting anything from this government will be difficult. Let’s try something simple.

To the Minister of Justice: what type of proceedings — criminal, civil, administrative or otherwise — were these two individuals indemnified for?

Hon. S. Anton: As I mentioned earlier, this is not a political process. Indemnities are granted, or not, using a set of criteria, by the Deputy Attorney General. Insofar as they can be public, they are made public.
[ Page 5233 ]

M. Farnworth: My question is to the Minister of Justice. During the Basi-Virk case, where two individuals were convicted and they received their indemnity, their legal costs were covered. Can the Justice Minister assure this House that that will not be the case if the two individuals covered by this indemnity are, in fact, convicted?

Hon. S. Anton: Where indemnities are granted, they are granted on a retainer, which is defined. If they are for criminal matters and the person is convicted of that criminal matter, then the indemnity is repayable.

HORSESHOE BAY–NANAIMO FERRY ROUTE

C. Trevena: On March 27 I asked the Minister of Transportation whether he was considering cutting the ferry service between Horseshoe Bay and Nanaimo, and he replied in this House: “There will continue to be vehicle service between Horseshoe Bay and Nanaimo. I don’t know how much more clearly I can say that.”

[1430]

Yesterday we learned that there is a plan which could mean the end of the service. Clearly, the minister knows what to say but then does what he wants. Could this House please be given an explanation why he misled British Columbians who rely on this ferry route?

Hon. M. de Jong: Regrettably — the member may not know this — the Minister of Transportation is attending meetings with his colleagues from Alberta and Saskatchewan and the Premiers of those provinces so is not here to answer directly.

What I can tell the member, though, is that there are no plans to eliminate the ferry service between Horseshoe Bay and Departure Bay. The minister has been clear about that, members of the government have been clear about that, and today I can be clear about that.

GRACE ISLET DEVELOPMENT
AND FIRST NATIONS CONCERNS

G. Holman: Grace Islet in Ganges Harbour, Saltspring, is a documented First Nations burial island and a sacred site which, by law, the province is obligated to protect. The province is allowing the construction of a luxury home on this site over the repeated objections of local First Nations and despite violations of site alteration permits issued by the provincial archaeology branch.

The minister promised local First Nations that he would stop work on Grace Islet and resolve the situation. To the minister: will he keep his promise and immediately enter into negotiations with the landowner to purchase this site?

Hon. S. Thomson: Thank you to the member opposite for the question. As the members opposite know, and as we know, the Heritage Conservation Act is designed to provide a balance between private property interests and protection of archaeological interests and First Nation interests. That’s the case here. The process on the island was undertaken through site alteration permits.

Again, I understand the First Nations’ interest, the significance of the First Nation site. The member opposite well knows that I understand that because we’ve had a number of conversations, and he knows that I am working to find an alternate resolution. We are engaged with First Nations, we’re engaged with the landowner, and we’re engaged with local governments in finding that alternate resolution, and the member opposite knows that and understands that.

Madame Speaker: Saanich North and the Islands on a supplemental.

G. Holman: I appreciate that response from the minister, who I believe is sincere in his intention to resolve this issue in a way that respects the rights of First Nations and the landowner. But the minister has been saying this for months now, while the construction of a luxury home on a First Nation gravesite continues. The minister will recall the old saying about the road to Hades being paved with good intentions.

Can the minister assure First Nations leaders and their supporters here in the House today that his good intentions have the full support of the Premier and this government?

Hon. S. Thomson: To the member opposite: thank you for the question. The answer is yes. It does have the support. As I said, we’re actively engaged with First Nations, with the landowner, with local governments in finding an alternate resolution to the situation.

I understand the significance of this site to First Nations. I’ve had those direct discussions with chiefs from south Island First Nations. We’re actively working to find an alternate resolution to this current situation, and I’m committed to continuing to work to find that resolution as quickly as we can, recognizing that we need to balance private property rights and the First Nations interests on that particular site.

D. Donaldson: To the minister: considering your answer, will you commit today to stop the construction right now?

[1435]

Hon. S. Thomson: As I’ve indicated in my responses, this is about a process that respects private property rights and respects First Nations — a significant interest in this particular site. We are working actively to find an alternate resolution to the current situation. We’re committed to do that, and I am working to find that alternate resolution.
[ Page 5234 ]

We are discussing this with First Nations. We’re engaged with the landowner. We’re engaged with local governments, the regional district and Islands Trust in those discussions. As I indicated, we have the support of government to find a resolution to that, and my commitment is to find that resolution as quickly as we can. I recognize the importance of the site, and I recognize the timeframe that it has taken to date.

B.C. CANCER AGENCY AND
CANCER TREATMENT WAIT-LISTS

J. Darcy: Every member of this House has been touched by cancer, and we all understand the critical role of research and cancer care to treat this disease and to save lives. So it was deeply concerning to learn that oncologists at the B.C. Cancer Agency and the B.C. Association of Radiation Oncologists have written to this government about unacceptable wait-times and staff shortages, stating: “It is not possible to continue to provide quality care and research under the existing conditions.”

When the former CEO of the Cancer Agency raised some alarm bells a few weeks ago, the Minister of Health was quick to dismiss his concerns. Will he now acknowledge that the situation has deteriorated so much on his watch that oncologists are now saying that treatment and care is compromised?

Hon. T. Lake: I know all members of the House understand the world-leading organization that the B.C. Cancer Agency is and the cutting-edge work that has been done there. We heard from the Terry Fox Research Institute. We heard from Lung Cancer Canada this week about the great work that’s ongoing here in British Columbia. We’ve got personalized oncogenomic medicine tailoring treatment to someone’s individual form of a cancer, to reduce side effects and increase efficacy of the treatment.

That world-leading treatment, that world-leading research is happening here in British Columbia. We are committed to ensuring that that world-leading organization continues to be strong for the population of British Columbia.

Madame Speaker: Member for New Westminster on a supplemental.

J. Darcy: Yes, we were all present at some very moving events in the last few days to hear from cancer patients and from some of these leading oncologists. No one is questioning the superb work that takes place at the B.C. Cancer Agency. But surely, something is not working when the number of people waiting over four weeks for treatment has more than doubled in the last seven years.

The individuals who wrote this letter represent every doctor who treats cancer patients in the province of British Columbia. Many of us have trusted them with our lives and with the lives of our loved ones. Surely, the minister should trust them enough to stop claiming that everything is just okay.

Will the minister commit, personally, that he will sit down and listen to these cancer specialists so that they can get on with doing the work that they want to be doing and we need them to be doing to treat cancer and cure cancer for the thousands of British Columbians who suffer from this disease?

[1440]

Hon. T. Lake: I know all members do understand the great work that’s going on at the B.C. Cancer Agency. I certainly don’t want to give the impression that we’re not involved in making sure that they can continue to do that great work.

As part of our work around the health system, we did a strategic priorities document. One of the first things I did as minister was review the situation and look at the population of British Columbia, the changing demographics and the needs of British Columbians.

Certainly, as the population ages, we know that the incidence of cancer will grow, as it does with age. We have already started looking at this with the B.C. Cancer Agency and the Provincial Health Services Authority.

The letter that the hon. member mentions is from members of a physician workload committee. That’s because we are looking at the resources of the B.C. Cancer Agency. We’re looking at what the needs are around the province.

That work will continue, because I, along with members opposite, want to make sure that this organization remains a world-leading organization here in B.C.

A. Dix: I think it’s incredible that the minister doesn’t answer these very specific questions. He’s received a very serious letter. It says very significant things about increases in wait times. The suggestions of chaos at the agency are being made not by people from the outside but by oncologists.

Will the minister respond to what they said? Will he meet with them in the next few days? Will he get to the bottom of an issue that is serious for everybody, not just cancer patients but their families and everybody in British Columbia?

Hon. T. Lake: The letter was directed at the B.C. Cancer Agency and the Provincial Health Services Authority. I’ve been in conversation with the CEO of the PHSA and the members of the board. We understand the concerns that some of the oncologists have pointed out. They are working in a committee to address those concerns.

We are looking at the needs of British Columbians around the province when it comes to cancer care. We’re
[ Page 5235 ]
looking at the distribution of cancer care around the province. We’re looking at using nurse practitioners to assist oncologists around the province and to make sure the patients have proper follow-up care. All of this work is ongoing.

The members opposite may think that we’re not engaged with B.C. Cancer. We are engaged with B.C. Cancer. We’re working hard with the board of PHSA and the organization to make sure that it continues to be the world-class organization that it has been for the last decade.

Madame Speaker: Vancouver-Kingsway on a supplemental.

A. Dix: It’s not business as usual when people who know point to specific facts, specific increases in wait times, specific problems in an agency. I’m asking the Minister of Health of the province of British Columbia whether he will sit down with those doctors, who have made their very specific concerns known to the entire province. Will he sit down with them and address their issues in the next week?

Hon. T. Lake: The Provincial Health Services Authority has an extremely competent board, an extremely competent executive team. They are engaged with B.C. Cancer on these issues. I am engaged with them to ensure that we make sure this organization continues to be world-leading, continues to provide the kind of care that in this province has the best outcomes for cancer care in all of Canada. That will continue to be the case, as we work with B.C. Cancer Agency to resolve the challenges they are now facing.

[End of question period.]

Madame Speaker: The Minister of Social Development seeks leave to make an introduction.

Leave granted.

Introductions by Members

Hon. D. McRae: It was five years ago to the day. I was sitting in this very chamber, though in a different location. I was called out of the Legislature. My wife called me. She said: “Get home as quick as you can.” This is the day that I had to go back to Comox Valley to witness the birth of my second child, Chloe McRae. Would the House please wish Chloe a happy birthday. I hope to see her very soon.

[1445]

Petitions

J. Kwan: I rise to table a petition. I have a petition here from the residents and members of our community calling on the government to stop the process in the sale of Stamps Place and instead to engage in a process to develop a comprehensive, place-based housing strategy for the property.

G. Holman: I’m pleased to present a petition here to the minister asking him to reverse the decision to allow construction of a home on Grace Islet, to designate it as a heritage site and also to commit to work with First Nations, local, provincial and federally elected officials and with community leaders to identify and protect other sacred and burial sites such as Grace Islet — a petition with over 725 signatures.

Orders of the Day

Hon. M. de Jong: Committee stage on Bill 2.

[1450]

Committee of the Whole House

BILL 2 — GREENHOUSE GAS INDUSTRIAL
REPORTING AND CONTROL ACT

(continued)

The House in Committee of the Whole on Bill 2; M. Dalton in the chair.

The committee met at 2:52 p.m.

On section 1 (continued).

S. Chandra Herbert: When we were discussing section 1, I asked a number of questions around whether or not the entities would be covered under the Freedom of Information Act, the Auditor General Act and the conflict of interest act. The minister had committed to having those answers for me today. I just wondered if I could request that those be read into the record.

Hon. M. Polak: With respect to the Auditor General, yes, we have it confirmed that the Auditor General would have jurisdiction.

With the respect to the Conflict of Interest Commissioner, the Conflict of Interest Commissioner only covers the conflicts of interest that would be related to members so would not have oversight over the technology fund.

With respect to freedom of information, I am in receipt of an answer. However, just as I was about to enter here, I wasn’t completely satisfied with all the information provided. I’ve asked staff to just seek a clarification for me. I expect that shortly and will deliver it when I receive it.

A. Weaver: To start, hon. Chair, I’d like to hand another amendment to put on notice for later today through the Clerk to you.
[ Page 5236 ]

At the same time, I do have a number of questions. I was quite excited to see that we did not call for a vote on section 1, because there are so many profound problems and troubles with the definitions. It gave me the weekend to contemplate whether or not I had further questions to actually seek elaboration on. In retrospect, I did, but for the sake of time, I thought I would save those, perhaps, for another time.

I did have one that I did overlook. It was on my previous list of questions. It was with respect to the term “compliance obligation.” It’s important to get this definition out a little further now, because it will form the basis down the road of an amendment that I’m proposing.

[1455]

Under “compliance obligation,” I’m concerned that…. Given that our province’s contribution to global warming is based upon the net magnitude of emissions released each year as opposed to the emissions intensity, is the minister at all concerned that this definition of compliance obligation leaves open the opportunity for B.C.’s emissions to actually increase over time as opposed to decrease over time? The definition of a compliance obligation seems to me to be rather loose.

Hon. M. Polak: That premise is not limited to the effects of a liquefied natural gas industry or indeed the construction of this act. The idea that British Columbia’s emissions will continue to rise if we don’t take additional actions…. That reality exists whether or not we were discussing a liquefied natural gas industry or Bill 2. The fact is we must identify new actions that can be taken, including within the liquefied natural gas industry, if we are going to see our emissions continue to reduce as opposed to increasing over time.

That’s not confined to the discussion of liquefied natural gas. Without a liquefied natural gas industry beginning in British Columbia, we would still be faced with that prospect if we did not seek to take additional actions.

A. Weaver: Over the weekend — between us ending on Thursday and, actually, perhaps in celebration of the minister’s birthday — the Intergovernmental Panel on Climate Change released its synthesis report. That was approved on Sunday in final plenary.

I would like to quote from section 3.2 of that, because it’s related to this specific definition, where it says the following: “Without additional mitigation efforts beyond those in place today, and even with adaptation, warming by the end of the 21st century will lead to high to very high risk of severe, widespread and irreversible impacts globally.” And that’s with high confidence.

Is the minister not in some sense concerned that this definition of a compliance obligation is abdicating its responsibility to future generations in terms of doing its part to reduce emissions?

Hon. M. Polak: I know the member would have listened with interest to my closing remarks with respect to Bill 2 at second reading.

Certainly, there is a difficult set of choices in front of the entire world. There’s a difficult set of choices in front of us here in British Columbia. The choice we have made is to recognize that without significant technological innovation and without different approaches to the extraction and processing of natural gas, we will continue to see an industry operate in such a way that it does not contribute positively to a transition away from more intensive carbon products and petroleum fuels.

We believe that this is one of many steps that will be needed in order to drive innovation in the industry, in order to make it cleaner and cleaner and cleaner as time goes on. We believe that this set of incentives, along with the benchmark, is the correct tool with which to accomplish that.

A. Weaver: In the same Intergovernmental Panel on Climate Change synthesis report, I would like to quote from section 3.4, which says the following: “There are multiple mitigation pathways that are likely to limit warming to below 2 degrees relative to pre-industrial levels.” That’s important because Canada has internationally committed, along with other nations, to be part of the Copenhagen accord and try to meet that 2 degrees target.

[1500]

Continuing on with the quote:

“These pathways would require substantial emissions reductions over the next few decades, and near zero emissions of CO₂ and other long-lived greenhouse gases…by the end of the century. Implementing such reductions poses substantial technological, economic, social and institutional challenges, which increase with delays in additional mitigation and if key technologies are not available. Limiting warming to lower or higher levels involves similar challenges but on different time scales.”

Would the minister, then, not be concerned that by enabling an industry which will be in place for decades to come, in fact it is abdicating its responsibility through this definition of compliance obligation, not only to this generation but to future generations, because it is implying that there will be continued sources of greenhouse gas emissions, directly in conflict with Canada’s international obligations under the Copenhagen accord?

Hon. M. Polak: I’m absolutely concerned about the impact that the use of fossil fuels has on climate change and take with great concern the warnings that we’ve heard most recently from the IPCC.

Having said that, we cannot pretend that in the absence of British Columbia participating in the development of liquefied natural gas, there won’t be other countries, other jurisdictions, that take up that remaining room in the sector. There will be. The choice we’ve made is to be the jurisdiction that can set some of the strictest regulations, that can ensure that we create incentives for investment
[ Page 5237 ]
into the upstream — which we know is a huge concern with respect to new emissions.

We believe that the most significant, positive impact that we can have, in terms of a sector that will grow with or without our participation, is to be the jurisdiction that drives that change, ensuring that this sector receives the technological advancement from that investment such that the liquefied natural gas — which will ultimately be consumed in various places around the world — improves in terms of its ability to be looked upon as clean, and will in fact have that result.

A. Weaver: I’m wondering if the minister could please provide evidence as to how she knows that this sector will grow when in fact Mark Carney, the former Bank of Canada governor and now the governor of the Bank of England, has specifically talked about “stranded assets.”

Those are assets in the oil and gas sector which cannot be combusted if we wish to meet our international targets with respect to greenhouse gas warming. In particular, Mark Carney has pointed out, as have many others, that the valuations of many of our world’s energy companies are overvalued because of the presence of stranded assets on their books.

My question to the minister. Do you not think — again, through this definition of a compliance obligation essentially allowing an industry to move forward in an area and direction that the rest of the world is not…? If the minister is unable to provide evidence that this market is going to actually continue to rise, is this not in some sense chasing a falling stock and in some sense mortgaging our future to chase this falling stock?

It strikes me as not good economic policy. Please provide the evidence that was suggested to exist.

[1505]

Hon. M. Polak: Leaving aside the question as to whether or not companies will ultimately decide to make final investment decisions in projects in British Columbia, the projections, with respect to increasing dependence and increasing consumption of fossil fuels, namely natural gas, are contained even in the most recent report, which gained much public comment, from PICS through the Pembina Institute.

They cautioned that in fact, although liquefied natural gas or natural gas can be seen legitimately as a transition fuel, nevertheless, there is a huge challenge facing the globe in that it is apparent to them that demand for natural gas will continue to increase. I have no reason to doubt the projections that they’ve made in their report.

A. Weaver: Another definition that I missed last time was with respect to industrial operations. The question was whether or not the minister could answer whether greenhouse gas emissions will be adequately measured and included in this system. This seems to turn on what the definition of an “industrial operation” ends up being.

The question, then, is: are there areas where emissions are likely to be produced that the ministry is expecting to exclude from the calculation? In the actual definition of industrial operation, are there areas where the minister believes there might be means and ways of producing greenhouse gas emissions that would be excluded from the calculation?

[1510]

Hon. M. Polak: This is where we need to recall that this act covers not just GHG emissions from LNG facilities but, indeed, covers broader industrial operations across British Columbia.

While the benchmark applies to a liquefied natural gas facility, the reporting obligations and the attribution of GHG emissions applies across the piece. For example, in the case of a natural gas extraction facility in the northeast, while they would not be subject to the benchmark, they would nonetheless be subject to the reporting requirements, and they would, of course, have to pay applicable taxes, such as the carbon tax.

Is there opportunity for operations such as natural gas wells in the northeast or, indeed, pipeline operations to address their greenhouse gas emissions? Absolutely. It’s one of the motivations behind the incentive model that we propose to put in place. It is also, of course, an incentive driven by the payment of the carbon tax, which will also have an impact on those industries in the upstream and along the pipeline corridors.

S. Chandra Herbert: In the definitions we hear a lot about…. We’ve gone through greenhouse gases. We’ve gone through recognized units. We’ve had a good discussion of how this bill is supposed to work. Of course, we have much more to go.

The question I have…. While this bill — the minister is correct — is not just focused on LNG, of course, much of the attention has been focused on LNG. The minister has said repeatedly that she believes we can meet our 2020 emissions reduction legal requirements, 33 percent of 2007 levels. I’m just curious if the minister is able to share with us, based on the government’s estimation of five LNG terminals, how many tonnes of carbon the ministry is expecting to be released with five LNG terminals.

Hon. M. Polak: I’m sure the member will appreciate that this is an estimate based on numbers, but I’ll provide those numbers to him. At the benchmark level, if there were five plants, if you estimate a production of 81 million tonnes of LNG per year, then you would see net emissions of 13 million tonnes per year.

S. Chandra Herbert: That’s with the terminals. Of course, liquefied natural gas doesn’t just appear at the terminals. There’s the pipeline and the well that it comes
[ Page 5238 ]
from and the processing, compression, etc., that goes along with that. Given that the minister is able to provide an estimate of the terminals themselves, what is the best estimate for where the gas comes from, the carbon emissions for the approximately 70 percent upstream of the actual terminals themselves?

[1515]

Hon. M. Polak: This is why new actions are so very, very important. If you look at the pipeline portion, we estimate that without any mitigation, the increase would be 4.9 million tonnes per year. If you look at the production, new production, we believe, would go from 10 million tonnes to 20 million tonnes. Again, that illustrates right there the importance of investment into the upstream and into the pipelines so that we do see reductions in those emissions and new technologies that can achieve that.

S. Chandra Herbert: This has been a question I’ve asked a number of times, so I appreciate that an answer has been given. Is it possible to share the report where those estimates have been drawn from? I ask that because so far, the best answer I have gotten out there is that approximately 70 percent of emissions come upstream. If I do the math here, it doesn’t look like the ministry agrees with that figure.

What percentage of climate change emissions does the ministry estimate would be from the upstream of five LNG plants?

Hon. M. Polak: Although I have a history as a math nerd, I’m not going to do all the math on it right now. It’s simply putting those numbers together. As I’ve said, we believe 13 million tonnes from the projected five plants based on 81 million tonnes a year, 4.9 million from the pipelines and an additional ten million from the upstream extraction activities. We don’t have a report per se. What I can share and would be happy to share with the member…. Staff can provide the basis upon which we arrived at those calculations.

S. Chandra Herbert: Doing the math on that, that’s 28 million if you’re just adding the ten million for the processing for the new emissions for the extraction. I’m assuming that the ten million the minister is referring to is the current emissions from the natural gas, plus 10.

That’s 28 million new emissions, new tonnes of greenhouse gases potentially into the atmosphere given that in B.C., currently we’re at 58 million tonnes of emissions. We have to actually ratchet that down 33 percent, not add 28 million new tonnes.

What is the plan to get there? This bill, as the minister has said, relates not just to the LNG industry but could in future relate to other industries. How do we get to a 33 percent reduction of 62 million when we are actually adding 38 million tonnes of new emissions without — so far, to my knowledge — a plan to reduce emissions further from where we are today?

Hon. M. Polak: A challenge that faces not only British Columbia but is being faced all around the world, as the IPCC report points out. This is something for which, thankfully, there are eyes being turned to new technologies. We need to employ those technologies. We need to employ research and development.

Just as there are increases of a significant nature in the upstream, so do the opportunities for reduction increase. For example, the role that electrification of the extraction process could play can be extremely significant. There is no question….

I would be saying nothing different here if there was no liquefied natural gas proposed in British Columbia. There is no question that we have to look hard at each and every sector in British Columbia, and not just the industrial sector, if we are going to achieve the aggressive targets that we have set for ourselves. I don’t think at any point in my comments I have ever shied away from outlining just how significant a challenge this is.

[1520]

Again, it’s one where we believe the correct choice is not to vacate the field and leave it to others. Given our record of innovation, given our record of pushing for change in industrial operations, we believe that we can be the jurisdiction to lead that effort. It’s going to have to happen somewhere. It might as well be British Columbia that leads that.

S. Chandra Herbert: Five years to reduce our emissions by 33 percent, but we’re talking about adding 28 million new tonnes of emissions, based on the government’s estimate. It is a big, big challenge — absolutely.

I guess it’s hard for me to understand why we wouldn’t ensure that we had the lowest greenhouse gas emissions possible for the upstream side as well, given the government’s promise to include it in the full life cycle, but then subsequent breaking of that promise to focus it only on the processing.

I’ll just ask again. Given that 28 million new tonnes of emissions could be added and that we actually have to be reducing our emissions, are other industries going to have to make up the difference? Is that the government’s plan? Given that it’s not just liquefied natural gas in our economy — certainly, it’s a minuscule part of it today — who else will have to make up that difference?

What are the plans, given we have five years — no more, no less — to actually reduce our emissions by 33 percent, not increase them by 38 million tonnes?

Hon. M. Polak: Let’s think about that future and how it’s going to unfold. Of course, the most significant target we have to hit is the 2050 one. The 2020 one, though, will be a significant milestone along that path.
[ Page 5239 ]

I know we like to be optimistic about LNG on this side of the House, but it would be extremely optimistic to expect that there would be five fully operational plants by 2020. That would be extremely optimistic, especially given that the nature of the industry is that production would begin and then increase over time.

Now, that doesn’t take away from the fact that it’s a challenge, but it isn’t as large a challenge all at once as one might perceive if you simply say: “Here are five. It’s 81 million tonnes — boom. How are you going to get rid of that by 2020?” That’s not, realistically, the challenge.

In the upstream. I have absolutely no disagreement with the member that there needs to be significant change in the upstream — absolutely. We believe that creating the incentive for industry to invest in that is the best way to accomplish it.

We don’t disagree that you need to see significant reductions of GHG emissions in the upstream activities. Where we part ways is on the way in which we believe that is most likely be accomplished. It will take a significant investment to do that. That has to come from industry. We believe that creating an incentive for them to do that is the best way to accomplish it.

S. Chandra Herbert: Can the minister explain to me why it’s important and why the government believes just an incentive on the upstream is the way to go, yet it’s bringing in limits on the actual plants themselves? What is the philosophical difference between upstream technology and upstream emissions and the actual liquefaction process itself? What’s the difference?

[1525]

Hon. M. Polak: You will likely recall…. Maybe I’m thinking everybody found my comments more interesting than they maybe did. One of the things I pointed out in my closing remarks is that there are two choices. You can vacate the field — not be in this business — or you can decide to address the path of trying to create change in the industry.

I mentioned there, though, that there are two ways you can decide to vacate the field, right? You can decide: “We’re just not in. We’re just not participating.” Or you can create the kind of regulatory environment that makes it economically not viable, and then that’s another way of vacating the field.

We already have an existing natural gas industry in the northeast. They are already paying carbon tax on the fossil fuels they burn, so they’re already subject to a certain amount of regulation, if you will, on what it is that they do.

We’re also aware of the fact that even now, without an incentive program, there is already some investment and some effort taking place around things like electrification and in many other areas — in terms of fugitive emissions, for example, and other areas they are looking at.

Based on what we have seen in the northeast in the extraction of natural gas in that sector — based on what we see of companies that in many cases are integrated and have ownership of fields in the northeast — and based on changes to locations of where they’re going to be drawing that natural gas, we believe that an incentive that creates the opportunity for companies to see an improvement in their bottom line by investment will create the spark that motivates additional investment there and that sees speedier progress toward those goals.

A. Weaver: I do appreciate the clarity and comprehensive nature of the minister’s responses. I do have a couple of quick questions on that note.

Are there direct measurements being conducted by the ministry as to the magnitude of fugitive, or escaped, emissions in and around the fracking fields in northeast B.C. that would allow them to get a handle on the estimates of greenhouse gas emissions? Or is the ministry relying on numbers based on some international standard or observations that were done in the U.S.?

Hon. M. Polak: Actually, that turns out to be a timely question. In fact, staff were in the northeast just last week as part of ongoing work that we’ve been doing together with our natural gas working group. We have been driving very hard — with industry cooperation, I must say, but nevertheless, we’ve been driving very hard — to improve our knowledge and understanding of fugitive emissions, how best to be reporting that.

We’ve recently updated the reporting regulations, and we intend to continue pressing for greater accuracy, greater clarity and a better understanding of how we can assess those and account for them. We expect that to improve over time, but we know it’s something we have to continue to drive.

[1530]

A. Weaver: Often that number is reported as a percentage of overall methane production. Does the minister, then, have a kind of rough estimate as to what the percentage number would be?

Hon. M. Polak: It’s a number that’s publicly available but not consolidated in the way that the member is asking. But we can certainly find that and provide it to him.

A. Weaver: Again, I very much appreciate the answer. One final question on this topic, building upon the very fine questions asked by my colleague here from Vancouver–West End with respect to meeting targets and the minister’s very thoughtful responses about the fact that it would be optimistic to think that five LNG plants would be in play by 2020. I buy that. That argument is acceptable to me.

Now I come back, then, to my earlier question. When
[ Page 5240 ]
industry builds infrastructure, invests billions and billions of money into infrastructure, they’re often not doing so to invest it for a time horizon of two decades.

My question, then, is: buried within these definitions anywhere, is there actually a definition of an industrial operation that has, inherent within it, a sunset clause that will actually turn it off after some time? There is no way, if five LNG plants come on in 2021, that we will get to an 80 percent reduction in emissions by 2050, because these projects are being built with a lifetime horizon of many decades.

Hon. M. Polak: It’s not our intention to set an end date.

A. Weaver: My final question. I’ve tried to comment throughout this, with my colleague here from Vancouver–West End, that there seem to be some inconsistencies with definitions, from my perspective.

There have been some circular arguments with definitions — definitions defined upon themselves. And there are some other definitions that I think are not only scientifically inaccurate but, frankly, make no sense. Hence, the proposition of the amendment with respect to carbon dioxide equivalent. You have, in your definition here, no time scale attached to it, which doesn’t make sense.

[1535]

My question, then, is: if the government were to realize at some point down the road that there is an error in a definition, what is the legislative route to change the definitions? Is it through legislation, or is it through regulation? Is it through order-in-cabinet? I recognize that some of the definitions say: “as defined in regulation.” But for those like, perhaps, carbon dioxide equivalent, which, frankly, is just wrong…. There is no way I can vote in favour of part 1 when the definition is, frankly, wrong. There’s no time scale attached to it. So what is the process for fixing this?

Hon. M. Polak: With respect to process, if we were to change a definition in the act, we would have to be back at the Legislature with an amendment proposed for the act.

However, it’s also possible to provide greater clarity in regulation. It is our intention, because this is an existing component of the current carbon-neutral government reporting regulation, that we would be borrowing over from that the following, which is under carbon dioxide equivalent: “means the mass of carbon dioxide that would produce the same global warming impact as a given mass of another greenhouse gas, as determined using the 100-year time horizon global warming potential set out in column 4 of the schedule.”

That is the regulation that currently exists, and it would be our intention to draw that over into regulation supporting this act.

[1540-1545]

Section 1 approved on the following division:

On section 2.

S. Chandra Herbert: Section 2, “Non-reporting operations”. Section 2(1):

“If required by the regulations, for each reporting period, the operator of an industrial operation that was not a reporting operation in the previous reporting period, and would be a reporting operation but for the level of its greenhouse gas emissions, must calculate, in accordance with the regulations, the greenhouse gas emissions of the industrial operation to determine whether it is a reporting operation for the reporting period.”

I wonder if the drafter was paid by the word. It is a rather obtuse, a rather circuitous legislation discussing regulation, industrial operations, regulations, regulations, regulations. It’s confusing, shall we say? With the regulations, in accordance with the regulations, etc., you could change the meaning, potentially, of this legislation in many different forms.

I wonder if the minister might try her best to clarify this example of — I don’t know — legislation of confusion. How’s that?

[1550]

Hon. M. Polak: It’s actually not as complicated as
[ Page 5241 ]
the legal language makes it sound. Of course, we have a threshold for reporting, right? That’s 10,000. Below that threshold we do not ask for industrial operations to report to us.

However, one might ask — I would: “Well, what stops someone from just pretending that they’re under the threshold, and they just don’t report?” Through this, we require them to do the calculation every year and to have that information ready, if we were to require it, in order to inspect their claim that they are below the threshold.

S. Chandra Herbert: Well, that was easy. No, to be serious, I thank the minister for her attempt to clarify it.

I guess the question, then, is really, in some ways as well: can the minister give some examples of an operation that might be under 10,000 but still required to record their emissions?

Hon. M. Polak: Any industrial operation that is currently covered by our reporting regulation — forestry, mining, what have you — any of those operations that are under 10,000 would still have to do the calculation and, again, be able to provide that to us to provide proof of their claim that they are below the threshold, if we were to ask.

S. Chandra Herbert: Clause (2) in this is: “An industrial operation that is not a reporting operation for a reporting period must, if required by the regulations, (a) maintain the prescribed records of the determination under subsection (1) for the prescribed period and produce those records on request…and (b) provide information to the director as required by the regulations.”

Why such a focus on the regulations, as opposed to legislation, in this respect?

Hon. M. Polak: It’s consistent with the regulations that have been in place for industrial operations and their reporting in British Columbia.

Who’s to say what new industry may develop in 50 or 100 years? When, I’m sure, this act will still be robust and in place. Who’s to say what may occur on the ground in that time? This is only to allow for any necessary changes, based on a new industry or maybe new technologies in those industries. Any manner of things that we can’t imagine now could be addressed in regulation without having to change the bill itself.

S. Chandra Herbert: How many times has the ministry required a non-reporting operation to provide the records for their perusal? Have any fines or levies been issued, should someone not be able to provide those records?

Hon. M. Polak: Now, it’s not information we have readily available, but we’ll endeavour to find out if there have been any incidents where there were non-compliance issues.

This was much more important to address in a world anticipating a cap-and-trade system, where there would have been a significant financial incentive for a company to cheat as to their reporting. Nevertheless, it’s still important for us, but it was originally put in place because of the potential for people to skirt the rules in a cap-and-trade environment.

[1555]

S. Chandra Herbert: What function will these rules have now? What is the purpose of these rules as the minister sees them now? Of course, there are compliance costs for anybody to maintain these sets of numbers of what their emissions are, so one would hope that the ministry was using this data or requiring this data for a purpose, as the government has decided not to participate in the cap-and-trade program that Quebec and California are participating in. What is this supposed to do? What is the function of this requirement?

Hon. M. Polak: It’s the means by which we keep track of GHG emissions in British Columbia from industrial operations.

S. Chandra Herbert: I must be confused here. If these are non-reporting, are they still required to report? How do we track if they don’t tell you but they’re required to keep a record? Or am I misinterpreting the term, what “reporting” or “non-reporting” means?

Hon. M. Polak: There are many instances in life where there’s a threshold at which you must report. For example, I’m sure the member would never contemplate this, but from time to time people drive across the border, and they buy milk and cheese and God only knows what else.

We are trusted to come through and declare what it is that we have purchased. If it’s below a certain threshold, we’re fine. We can go through. However, from time to time a border service agent may look at a person and think: “Ah-ha, something is not right.” They’ll ask for production of receipts or what have you.

By the same token, if you take a look at what might happen in an industrial scenario where perhaps you have two or three operations of similar size, similar nature…. We note that two of them are reporting to us annually and one of them isn’t. That is when, for example, we would approach them and ask them to supply us with the calculations that they are required to keep in order to show us how it is they’ve determined that they’re not at the threshold.

S. Chandra Herbert: I appreciate the answer and the visual demonstration, so to speak. It does help understand it. The person with the rather large sweatshirt pulled over a million other clothes certainly would be a red light, and I certainly have heard that from people
[ Page 5242 ]
who work at border control.

I wonder: how many staff does the government have whose job it is to go out and find that person who wears the extra-large sweatshirt over a million other pieces of clothes as they try to cross the border, so to speak? Of course, I mean that in terms of not reporting GHG emissions when they should while others in the same industry are doing what they should do by law.

How many staff are there? I don’t need to know how many penalties have been levied, necessarily. That would be of interest, but I’m just curious what kind of inspection schedule there is to ensure that this law means more than just on paper.

[R. Chouhan in the chair.]

Hon. M. Polak: We don’t operate with a specific force of compliance and enforcement officers in this particular area. Across the natural resource ministries we have an integrated force of people — involving conservation officers, natural resource officers, etc. I don’t have those numbers here. We’ve covered them in estimates sometimes.

What would occur, though, is that we do have staff who review the various reports that we receive from all manner of industrial activities in British Columbia.

[1600]

If there was a suspicion of non-compliance with the regulations, then at that time we would ask compliance and enforcement individuals to investigate. The number of people deployed or the size of an investigation would, of course, depend on what we believe is the severity of the infraction.

S. Chandra Herbert: What are the penalties under the law that an organization that was not in compliance would face?

Hon. M. Polak: As with any compliance legislation, the amount, with respect to administrative penalties, isn’t determined until after the act, hopefully, passes. Then a fee issue paper would be brought through the appropriate process.

A. Weaver: I’m wondering if the minister could describe the extent to which these reporting conditions either mirror or are different from the national reporting conditions under the United Nations framework convention on climate change.

Hon. M. Polak: The difference is that ours are based on measured GHGs at facilities, whereas the national ones are essentially estimates based on what they would call activity factors, so not counting every cow but making some estimates based on what they understand is present in the industrial sector.

A. Weaver: Forgive me for not remembering the number. Maybe your staff, hon. Minister — through you, hon. Chair — would remember. Is there a difference in the threshold for reporting in British Columbia relative to Canada in terms of tonnes per year? There’s certainly a difference provincially with Alberta and British Columbia, but I’m wondering if the same is true with Canada.

Hon. M. Polak: Their threshold is 50,000 tonnes per year.

A. Weaver: My final question on this section is with respect to what I perceive to be a lack of clarity with respect to the definition of industrial operation — which, of course, we’ve dealt with now — so we’re working within the context of what I perceive to be a difficult definition. I was wondering if the minister could possibly provide information as to how they’ll ensure that all greenhouse gas emissions that arise from these facilities will be covered.

[1605]

What I mean by that is that coming back to the definition, which we’ve now passed, it describes an industrial operation as “one or more facilities, or a prescribed activity” — I’m not sure what that is — “to which greenhouse gas emissions are attributable.” Then we go into this circular argument with respect to attributable.

In essence, I’m wanting to know what prescribed activities are. How do we know that we’re covering them? Is the cement industry, for example, included in this? What is included in this definition of industrial activities, as applied to this particular reporting? And what industries presently will be exempt — that perhaps are not exempt now, perhaps could be exempt in the future; industries which are not reporting now, will have to report in the future?

Are there any changes in the types of industries that actually will have to report or will be excluded or not excluded as a consequence of this new legislation and this new definition of industrial reporting?

I hope I’ve been clear in trying to communicate. What I am trying to say here is that the definition is difficult to understand. Not everything is included in present regulations. Are there industries that will now be included, as opposed to not previously being included? And in addition, are there industries that are included now that will no longer be included in reporting?

Hon. M. Polak: It is our intent to port the current schedule into the new act. So the only change would be the addition of liquefied natural gas facilities.

Section 2 approved.

On section 3.

S. Chandra Herbert: I wondered if the ministry staff was able to get any information on fines or penalties that
[ Page 5243 ]
may have been given since this legislation came into force — not this particular legislation but, I should say, the elements of this legislation have been brought into force under the previous law that they’ve imported to this law?

Has the minister’s staff been able to bring forward any compliance reports or issues where companies maybe undersold the amount of emissions they emitted, only to learn later that they had to provide supplementary information? Is that possible to be shared? I just find that it’s important to see how the law has acted over the last number of years while debating whether or not we should continue with it in this form.

Hon. M. Polak: I will say at the outset that the information I will describe is also available on our website. There have been investigations. In addition to that, there have also been supplemental reports that have been provided when operations have self-identified that they’ve missed something in a report or have not reported adequately. Thus far, we have not levied any penalties, because when we issued advisory letters, we have seen operations come into compliance and provide us with the appropriate reporting.

[1610]

A. Weaver: Again, this is a question that comes back to what I perceive to be a lack of clarity with the definitions. In part 2, section 3(1)(a), it says: “the greenhouse gas emissions attributable to the operation for the reporting period.” So my question is this. Are there any examples of emissions that are not attributable, and if so, what are they?

Hon. M. Polak: Probably the best example is what happens when electricity is imported into British Columbia. The company importing the electricity, in this case B.C. Hydro…. Let me put it the other way around here. They are not the emitter, right? Nevertheless, we attribute those GHGs to them. That would be probably the best example of how “attributable” works in relation to this act.

A. Weaver: In terms of section 3 — this is the same section again — in part (2) of it, it talks about verification statements. It suggests that verification statements may or may not actually be required by the regulation. My question is this. What are the anticipated circumstances where verification statements need not be tabled?

Hon. M. Polak: There is a 10,000-tonne reporting requirement threshold. There is a 25,000-tonne requirement for verification. So you may be in the position where you have exceeded the threshold requiring you to report and yet not have passed the threshold at which you need to engage in the verification activities.

A. Weaver: Section 3(3)(a) and (b) outline the recourse if an operator fails to submit all the information concerning its attributable greenhouse gases and other prescribed information.

My first question on this section is this. How would an operator come to know that information has or has not been submitted? Well, obviously he knows if it has — so if it has not been submitted.

Hon. M. Polak: Again, just as an example, it could be that through inspection, routine maintenance, they discover that a particular piece of equipment is not or has not been operating the way that it ought to. Then they would back-calculate emissions that they had missed based on an assumption they had made that it was operating properly. So at a point like that, they would submit supplemental reports.

A. Weaver: On that topic, then, will there be systems put in place to ensure that there will be, perhaps, random audits or verification processes? In particular, how does the government intend to find out about any such missing information as opposed to, perhaps, being told, as the minister just did through her example, that some piece of equipment failed or some other piece of equipment failed?

[1615]

Hon. M. Polak: In a case where they have to verify or go through the verification process, they are required to keep records with respect to the operations of their equipment and may be asked to offer the opportunity for a visual inspection of that equipment. They are required to keep those records and to be able to provide them as part of the verification process.

A. Weaver: I’m wondering if the government has an intention of setting up a process to ensure that reports are actually completed properly and, if so, if the government is aware of what that system might look like.

Hon. M. Polak: We do have a system of random audits. In addition to that, when staff review the information that is reported, obviously, they pursue more information if they see things that look out of kilter with what they would expect to see in a report.

In addition to that, the verification process, of course, becomes a means by which those industries would be held accountable for the accuracy of their reporting.

A. Weaver: There’s discussion about a leniency period. My question here is: how long will that leniency period be once it comes to an operator’s attention that information in an emissions report is actually not accurate?

Hon. M. Polak: There’s no hard-and-fast rule. The director is provided with discretion to look at an individual operation and consider the factors that seem appropri-
[ Page 5244 ]
ate to the director.

Perhaps an example, though, is in order here, and one we’re well familiar with. Certainly an operation like Mount Polley Mining Corp. would have had to be reporting its GHG emissions. Now, under the circumstances — we all know what has occurred there — it wouldn’t be surprising if, when confronted by….

I’m not saying they’re going to do this, but if they were to come to the director and say, “My goodness, with all that’s gone on, we just have not been able to get everything together to get our reports in order and verified and all that,” I have a fair degree of confidence that in a circumstance like that, the director would employ a more lenient approach to enforcing the regulation than if it was an industrial operator that was just refusing to comply with the regulation.

[1620]

V. Huntington: Given that the scheme of emission reporting apparently is relying on a self-reporting method and using third-party validators, I guess, can the minister tell me how the province is going to require the emissions actually be measured? Will it be at-stack monitoring, or will it be through a calculation method? Can you explore that a little bit for us, please?

Hon. M. Polak: The member probably is most interested in how this will operate with a liquefied natural gas facility. I’ll begin by talking about what currently happens with industries that are under the regulation. For each industry, there is a prescribed methodology that they must use. Those are developed according to Western Climate Initiative standards.

We work together in WCI for those, and there is a list of…. I was going to say more than a hundred. There are several hundred of them listed now. We will do the same thing for liquefied natural gas facilities in terms of their methodology and defining it. Again, that will be done in conjunction with WCI.

V. Huntington: I’m not quite sure I’m following then. Will the methodology be requiring of the LNG industry emissions monitoring at stack, or are you going to permit some sort of calculation method, which has inherent problems in it?

Hon. M. Polak: Not wanting to go too far down the path of the experts that will ultimately design the methodologies, it is often far more accurate to measure the inputs rather than what is coming out of the stack and base calculations on that. That is a methodology that’s used in many other industries. Measuring at stack is not necessarily the best way to go about it. Again, those methodologies will be developed with the Western Climate Initiative.

V. Huntington: The minister may recall the issue of the audit on Lafarge, where the calculations used a modelling that was based on some false assumptions. How will the ministry have a monitoring process of its own to ensure that these inherent weaknesses aren’t present?

[1625]

I know that you can base your emissions controls — or at least your calculations — on inputs. But why wouldn’t you double-check that with having emissions monitoring at stack? I mean, that’s done all over, in many different industries, and I would assume that you’d want to have the best information and verifiable information at your disposal.

Hon. M. Polak: I don’t want to leave the impression that we’re ruling it out, but we are likely to follow well-established guidelines or methodologies for the natural gas industry.

There is, of course, verification that is required. That is quite rigorous. Remember, too, that not only will we have information with respect to what is being taken into the facility; we will also have detailed information with respect to the specs that describe various pieces of equipment. We have knowledge, then, about that and about what that equipment does, how it performs. I’m not ruling it out, but we will leave that to those who are expert. If one looks at the current schedule of methodologies for various sectors, you’ll see that it is quite specific.

A. Weaver: I spent some time looking at the legislation, part 2 here, “Emission Reporting”, in the present act before us and part 3, “Emissions Reporting”, in the repealed…. Well, it has not yet been repealed until we get to the end, but the to-be-repealed cap-and-trade act. They’re quite different.

I’m wondering if the minister could possibly explain to me some of the differences and why they’re different — in particular, when I look at what the director may do at the end here, it says, “The director may (a) require that an emission report be audited at the expense of the operator in accordance…,” blah, blah, blah. This “at the expense of the operator” has been added into the new legislation.

I’m wondering if there are examples where problems arose as to trying to get audits done and the operator was arguing with the government as to who should pay for it. That’s part of the question. The second part is: what’s the overall reason for changing the whole format of the emissions reporting between the two pieces of legislation?

Hon. M. Polak: I’m sure the member will have seen that they are materially similar. They were drafted by a different drafter, but also, we feel that we have made some improvements.

With respect to the director being able to charge costs back to the operator, it wasn’t triggered by any particular incident or experience. It was just felt that this was the right thing to do, and, therefore, it becomes one of the
[ Page 5245 ]
improvements that we’ve inserted into the new act.

A. Weaver: In reference to subsection (5), what is the standard for determining whether or not an inaccuracy, omission or change is immaterial?

[1630]

Hon. M. Polak: I’m told by staff that typically, they would consider a change of less than 5 percent something that would not be considered material, similar to how we operate in our world around our disclosure forms we’re asked to submit if there’s a material change. But if it’s something extremely minor, the Conflict of Interest Commissioner is not looking for a report from us.

Section 3 approved.

On section 4.

S. Chandra Herbert: Section 4, under “Capture and storage of emissions.” I’m curious if the minister might be able to share successful capture of emissions that have become commercially viable worldwide. Are there examples where we’ve had carbon capture truly work? I ask that as at the GLOBE conference and in other discussions I’ve had with people in the industry who have tried carbon capture, who have looked at it as a place to invest…. I seriously wonder whether or not it will ever be viable, given the guarantee you would have to make to keep the emissions underground for 100 years, so just curious where this fits in globally.

Hon. M. Polak: I’m happy to report that there’s actually successful carbon capture and storage in operation in British Columbia, in the northeast of B.C., in the natural gas sector. It accounts right now for about one million tonnes a year that are permanently sequestered underground. There are varying degrees of success, of course, in projects around the world, but our hope is that we see more research and more success.

S. Chandra Herbert: Well, I’ll have to go up there and take a look. I thank the minister for her answer. I guess the question of what commercially viable means may be different to different people.

Certainly, the investors that I was hearing featured on a panel had great concerns about the long-term commercial viability of carbon capture and storage. I hope it can work. I certainly hope it’s one of the ways that technology may be able to assist us in a bigger way to reduce GHG emissions. If we’re not able to stop putting them out, capturing them and storing them may be one way to do it.

I guess the question really is: were there any subsidies or other ways to make that carbon capture work? I can follow that up off line to chase that down. I know some have suggested that carbon capture is still many years away from truly becoming viable, as we’re not able to guarantee that the emissions will stay underground for 100 years or longer.

Are there thoughts around this section of potentially capturing the carbon but then using it to, I guess, get more oil or more gas out of the ground? I know some industries have used it that way. I can’t claim to be conversant in the technology, but is that potentially possible under this section or under this act — that you could use the carbon to get more gas out of the ground as part of your capture of that gas?

Hon. M. Polak: In order to be eligible under this section, it would have to be permanently stored, so it would really depend on the operation. But it would have to be permanently stored in order to be covered under this section.

[1635]

S. Chandra Herbert: Just so I’m clear, is “permanent” permanent in terms of forever or permanent as in a 100-year timeline?

Hon. M. Polak: That would be a 100-year timeline.

S. Chandra Herbert: Is there any restriction in terms of who runs the carbon capture? Does it have to be the same company, or could it be outsourced to somebody else? How does that work with this section?

Hon. M. Polak: It wouldn’t have to be the same company. My understanding is that the Ministry of Natural Gas Development is currently developing regulations that would govern those kinds of activities.

S. Chandra Herbert: So regulations are being developed for this section and for what carbon capture looks like in British Columbia with a functioning carbon capture operation, as the minister has outlined. What regulations — maybe it’s outside the ambit of this bill — would they be functioning under already if we don’t have carbon capture regulations, or am I misinterpreting the minister’s words here?

Hon. M. Polak: They’d be operating under the oil and gas act, but I’m afraid I can’t enlighten the member further. Just to be clear — I think we are — the regulations I referred to aren’t under this act. Just for the member’s information, the Ministry of Natural Gas Development is developing regulations more broadly around carbon capture and storage.

S. Chandra Herbert: I understand, then, that the regulations spoken of in this act — “captured and stored in accordance with the regulations” — are the regulations that are being developed by the oil and gas sector, by the ministry, or are the regulations being developed for this act specifically?
[ Page 5246 ]

Hon. M. Polak: In thinking of how to describe this, it’s probably easiest to do in describing the anticipated end state. The anticipated end state would be that you would have regulations under this act that eventually would point to regulations under the oil and gas act, which then govern carbon capture and storage more broadly.

S. Chandra Herbert: To be clear, that does help me understand how these regulations would be formulated and apply.

Is the thinking based on conversations so far, with LNG proponents and others, that this capture and storage of carbon emissions is something they’re actively considering for their emissions from the LNG liquefaction plants? The reason I ask this is that I’ve heard of this being applied, or attempted to be applied. In the actual…. When you’re pulling the material out of the ground, the gas out of the ground, and you’re processing it, sometimes it’s upstream where the carbon capture occurs.

I’m just curious where in this process the minister guesses or estimates this might apply. Is this just in the act for any industry and not being prescriptive at this point?

Hon. M. Polak: This would apply across all industries. Where we see it occurring right now is in the natural gas sector, but this would be applicable across all the sectors.

S. Chandra Herbert: I didn’t write down quickly enough the name of the carbon capture and storage facility in British Columbia that is commercially viable and successful right now. If the minister might just reshare that, that would be helpful.

[1640]

Hon. M. Polak: I can provide an example. It would be Jedney I and II, owned by Spectra.

A. Weaver: What is being captured and stored by the company that was just mentioned…? If the minister could please spell it for me. I have not heard of this company, and I was busy trying to type it in my iPad to figure out where this company was.

The question is: what are they actually capturing and storing? Is it sour gas, or is it actually carbon dioxide? And where is it happening in British Columbia?

Hon. M. Polak: I will not hold it against the member, because I am in the same boat. It is spelled J-e-d-n-e-y. They are capturing CO₂ as well as sulfur dioxide. Both of those are considered acid gas. It’s an acid gas injection operation.

A. Weaver: I’ve been aware that that sour gas has been captured here in British Columbia.

In terms of new carbon-capture-and-storage systems, would, under this section of the legislation, a company that is capturing carbon dioxide to be used in enhanced oil recovery qualify as having the carbon captured?

Hon. M. Polak: Only if it was permanently stored would it be considered legitimate carbon capture and storage, and the time frame used for that is 100 years.

A. Weaver: Carbon dioxide used in capture and storage for enhanced oil recovery is done to make the oil come out easier, so in essence it really isn’t stored to the same extent as perhaps storing it in an empty gas well, as sour gas may be stored.

Is there an ability to actually have a specific exclusion in regulations for carbon capture and storage that will be used for enhanced oil recovery?

Hon. M. Polak: No, it would be approached that it has to be permanently stored in order to count. If it’s not considered to be stored for 100 years, then it would not count under this section.

A. Weaver: What are the best practices for carbon capture and storage that the minister envisions will be used if it ever actually materializes here in British Columbia?

Hon. M. Polak: Currently the activities that we’ve described are covered under the Oil and Gas Activities Act. As we were discussing earlier, the Ministry of Natural Gas Development is currently developing regulations that would anticipate other methodologies and governing those.

A. Weaver: Has the government available any safety measures for carbon-capture-and-storage facilities that would potentially come about as a consequence of an LNG industry here in accordance with this section 4 of the act?

[1645]

Hon. M. Polak: We don’t at this time anticipate that the LNG facilities themselves are likely to avail themselves of carbon capture and storage initiatives for the facilities themselves. If they did in the future, they would be governed by the Oil and Gas Activities Act. Of course, sulphur dioxide is a very, very dangerous gas to be handling in terms of public health and safety. Certainly, we have considered much of that and will as a result of the Kitimat airshed study, for example. But any of those activities would be governed by the Oil and Gas Activities Act.

A. Weaver: With respect to leakage, what measures does the minister have in mind here to ensure that, once stored, it is stored, as opposed to potentially coming up through the decay of oil wells that are sealed in cement and having that cement decay in time and then having the potential gas emerge in some other location? Is there a monitoring program envisioned in the carbon-capture-
[ Page 5247 ]
and-storage scheme? Is such a monitoring program in existence already with the sour gas storage facilities that exist in our basins here?

Hon. M. Polak: That currently does exist with respect to the sulphur dioxide. This would, though, be covered under the regulation under the Oil and Gas Activities Act. Our act would refer to that. In our regulations we would point to the Oil and Gas Activities Act and its associated regulations.

Again, currently the current activities are already regulated under that act. Anticipating that there is ongoing development in the field of carbon capture and storage, the Ministry of Natural Gas Development is currently developing a regulatory framework to respond to the growth and change in those activities.

A. Weaver: At this point I’d like to move the amendment that I gave on notice last week, which is, in essence, to amend this section as follows:

[SECTION 4, by deleting the text shown as struck out:

Capture and storage of emissions

4 Greenhouse gas emissions that

(a) would be attributable to a regulated operation, but

(b) are captured and stored in accordance with the regulations,

are deemed not to be attributable for the purpose of the compliance obligation of the regulated operation.

Consequential Amendments

7 (1) (b) if applicable, the amount of greenhouse gas emissions that was captured from the operation, and stored, in the compliance period;

12 (2) (2) If greenhouse gas emissions were captured and stored in order to achieve the lower emissions result described in subsection (1), the director, in the amount the director considers appropriate, may reduce the number of earned credits issued under subsection (1) to account for the risk that stored greenhouse gas emissions are released into the atmosphere over a 100 year time horizon.]

There are consequential amendments with respect to sections 7(1) and 12(2) that were also, as part of the amendment, put forward, which we would have to deal with, presumably, at a later time.

The motion is to strike this section 4 from this bill. The rationale for this is that, really, carbon capture and storage is an unproven technology. Right now there really are not jurisdictions out there that, in my view, are doing this in a manner and means that one might be able to quantify effectively. As such, I think that it behooves us to actually remove this from this piece of legislation.

The Chair: Member, I regret to inform you that your amendment is out of order. The best way to deal with this would be to defeat it. The consequential amendments will be dealt with when we get to section 7.

A. Weaver: Sorry, hon. Chair. I don’t quite understand.

The Chair: As I mentioned, Member, the amendment that you have moved is out of order. The way to deal with it would be if we vote against section 4.

A. Weaver: I understand that. So it’s the consequential amendments that should be removed at the appropriate time. This is the reason…. I’ve brought it all together now, but I will move the consequential amendments later.

[1650]

The Chair: You are correct.

Amendment ruled out of order.

Section 4 approved on division.

On section 5.

S. Chandra Herbert: As we’ve discussed, we’re going to have to find a way to reduce emissions over time. As we know, unless we either change technology, which often requires large expenses, or change the law in a sense to require emissions levels to go down….

My question is really why there is not a possibility in the regulated operations’ emissions limits — not a sunset clause but a clause that would allow set emission limits to be reduced over time in order to comply with our law that we’ve reduced emissions by 80 percent by 2050.

Hon. M. Polak: It’s a matter of how we have chosen to go about this. To date we have not instituted any kind of reduction targets placed on any industrial sector. We have instead gone the route of incentives, costs. For example, the carbon tax is one. The benchmark that we have now proposed in this act for LNG would be another, alongside the incentives provided that we believe will achieve the result desired.

S. Chandra Herbert: As the government has admitted in its own climate action reports, the carbon tax, each year we go by, loses its efficiency, its efficacy, its ability to drive down emissions as inflation increases. As we know, you can’t get penny candy for a penny anymore. As inflation has gone up and up, what used to cost $1 may now cost $5.

I guess the question really is: given that the government has said over and over that they will not be increasing carbon pricing, that they will not be increasing the carbon tax in any form, how are we to ensure that ten years, 20 years, 30 years down the road what may have had an effect in 2008 is still effective 30 years down the road when we have inflation and no new policy, as far as the government has announced to date, to bring that price either up or to reduce emissions through regulation and in another form?

Hon. M. Polak: I should just be clear that the position of the government with respect to the current carbon tax is a freeze on rises to that carbon tax, which expires in
[ Page 5248 ]
2018. Government has not yet put forward a decision as to what will occur after that time.

I know the member is aware that a significant amount of review has been undertaken. In addition to that, my own mandate letter has directed me to work with other jurisdictions to advance the idea of carbon pricing such that we are not placed at a competitive disadvantage when compared to other jurisdictions around us. That’s a much broader discussion for our purposes here.

We certainly recognize that the carbon tax, in and of itself, is not going to be sufficient. That is the reason that we have put in place or proposed the benchmark in this act and the reason that we have proposed the incentives that will be provided to industry.

Mr. Chair, I wonder if we might take a very short recess.

[1655]

The committee recessed from 4:54 p.m. to 4:58 p.m.

[R. Chouhan in the chair.]

A. Weaver: In the schedule attached to this legislation, the emissions intensity limit of 0.16 tonnes of CO₂ relative to 1,000 tonnes of…. Oh, I’ve got the number wrong. It’s getting late, and we all know what this 0.16 benchmark is, even if the units slip us by every now and again. The 0.16 benchmark for liquefied natural…. I gather the minister resonates with that as well and understands where I’m coming from.

This number is in a schedule, yet it is a very key aspect of this legislation. The government has made a point of arguing ad nauseam, frankly, that they’re going to have the cleanest LNG in the world. Again, whether one believes that is another question.

The reality is: we are here today in 2014. It is November 2014. It’s November 5, 2014. It’s Guy Fawkes Day. Maybe the cleanest LNG in the world today, as defined by the government, is what it is with 0.16.

[1700]

What about a year from now? Does the government actually envision…? By the time someone actually comes to build a plant, do they actually think that this 0.16 number will still be the benchmark for the cleanest LNG in the world?

The reason why I say that is that you define “cleanest” when you turn on the valves. You don’t define “cleanest” when the legislation is put in place. Does the government have some thoughts on this?

Hon. M. Polak: First, we have, as we considered the 0.16, looked outward, knowing that facilities are not going to be coming on line in production in 2014. We’re looking a few years out.

In answer to the first part of the question, we do believe that the benchmark we have set anticipates what this will look like worldwide in a few years when the plants are coming on board.

Longer term, this again brings us back to the way in which we have constructed all the elements of this. Companies, of course, respond to their bottom line. That is a topic of discussion in this House very often on any range of topics. We know that is a significant motivator.

We can’t forget the carbon tax. Companies have a built-in incentive to reduce their compliance costs in the form of the carbon tax, thereby driving greater emissions efficiency, if you will. The incentive program that we have constructed around this, again, is intended to motivate those companies to drive down even below the 0.16 benchmark.

A. Weaver: I appreciate the many incentives that the government has provided. In fact, this is precisely why I’ve called this a generational sellout. There are so many incentives. There is so much so that you have an incentive…. It’s the polluter gets paid, not the polluter pays model here. Phenomenally bizarre, but nevertheless, that’s what we face here.

Back to section 5, then. My recollection is that when I looked at the material that was presented to justify “cleanest in the world,” the cleanest close by was a plant in Norway. Can the minister please tell me what the — and I’m going to get the units right this time — tonnes of CO₂ emissions per tonne of LNG were emitted at this so-called nearest, cleanest benchmark that the government was trying to beat? It was from Norway.

Hon. M. Polak: I will endeavour to confirm the number I am about to give him. I am looking at a visual bar graph. I can tell the member with certainty that it’s above 0.16 and, I believe, based on where the bar ends, between 0.15 and 0.20. It’s probably 0.18, but staff…. I am getting the thumbs up.

The Snøhvit facility is at 0.18.

[1705]

A. Weaver: The memory that I have was precisely that bar chart that I saw. Can I refer them back to the minister? Is this, indeed, the facility that had the lowest number on that bar chart, or were there others on the bar chart that had lower amounts?

Hon. M. Polak: On that bar chart it was the lowest.

A. Weaver: Did the bar chart survey all the LNG facilities in the world, or did it just pick a few that it decided to look at?

Hon. M. Polak: We looked at all the facilities in the world for which information is available. There are some few that just don’t report that information. We looked at all of those, and the ones represented on the bar graph
[ Page 5249 ]
were the six lowest.

A. Weaver: Does that include those that are currently in construction phase?

Hon. M. Polak: At the time that we looked, yes.

A. Weaver: Both onshore and offshore?

Hon. M. Polak: Yes.

A. Weaver: Finally, then, is there a chance…? I guess what I’m trying to get at is: what is the time period through which a potential change in regulation, which could occur, would actually have an influence on the industry itself?

Let’s suppose, hypothetically, a company in, say, Australia produces LNG at 0.15 tonnes of CO₂ per tonne of LNG. At what point…? What leeway time does industry need to give them certainty enough to make final investment decisions — once a change in this regulation were to occur — for them to actually put in an LNG facility in B.C.? What I’m getting to is that….

Hyperbole — I react very badly to hyperbolic projections and expectations. And this “cleanest LNG in the world” — you know, it’s a catchy phrase. It’s aspirational, and there’s a generational sellout to get there. But we won’t be, perhaps, three years from now.

The question, then, is: what is the leeway time before a change in regulation could occur and might effect some investment down the road, where we’re still really wanting to maintain not only the cleanest LNG in the world but the cleanest LNG in the world in perpetuity?

Hon. M. Polak: Of course, we’re all familiar with the obsolescence that occurs in terms of our smartphones and iPads and all the rest of that. And the member is right in that over time it’s natural that new technologies developed are going to mean that you have new facilities coming on line that enter the field with improvements in terms of their emissions.

On the other hand, there’s no way that one could provide certainty to an industry if one were open to constantly changing the regulatory requirements based on the latest and greatest technology in the field. This is, again, one of the reasons that we have chosen to create an incentive model that we believe will drive constant improvement in the industry and investment into that improvement and, thus, achieve the necessary continued reductions in their emissions intensity that we otherwise would have to try and achieve through constantly adjusting regulations.

A. Weaver: I’m sorry. I don’t want to put the minister on the spot, but if I could translate that, it suggests to me that the 0.16 target is aspirational, that in fact it may not be reached unless incentives are given to industry — tax breaks, really big tax breaks.

[1710]

Even if it does make it, by the time the industry makes it, it may no longer be the cleanest in the world.

Would the minister agree with me that “cleanest in the world” is really a meaningless statement? That what we’re trying to do is drive clean energy in the world with an aspirational goal of trying to have a clean industry rather than the cleanest in the world and continuing down these hyperbolic statements of wealth and prosperity for one and all for an industry that may or may not be here? For example, for an industry that actually reacts equally as badly as I do to these hyperbolic projections, because industry knows it has to live up to these projections if they are being issued forth from government.

Industry doesn’t want to have that bar set. Industry wants to have certainty. They want to have certainty in terms of statements that are made based in common sense, statements that are founded in economic analysis, not silly phrases like “cleanest in the world.”

Now, 0.16 is an aspirational target. The minister is, essentially, confirming that, that they’re going to give incentives to get there, but it is not the cleanest LNG in the world. It is a target to try to attract clean energy to B.C. The sooner British Columbians recognize that, the better.

Hon. M. Polak: It’s not an aspirational target. In fact, we’ve just seen…. Perhaps the member saw the story in the Globe and Mail where Shell, as partners in the LNG Canada project, have announced that they are going to come in at 0.15. So we do have companies that are interested in achieving the benchmark.

The benchmark remains 0.16. They will be required to stay there. The question is one of achieving the goal of having continuing improvement in the sector, such that their performance improves with respect to their GHG emissions.

We obviously disagree with the member’s characterization of the incentives. We believe that is the appropriate way in order to motivate companies to invest and that it takes significant investment to develop new technologies. We believe we’ve struck the right balance of creating a restriction on them while at the same time creating a strong motivation for them to reduce their compliance costs and, indeed, if they get far enough down that path, to even earn some credits.

Again, don’t forget, as well, the role that the carbon tax will continue to play in terms of incentive for them to reduce compliance costs and improve their bottom line.

A. Weaver: But 0.15 with Shell — how are they going to get there? They’re going to get there on the backs of B.C. ratepayers through, perhaps, the investment of $7.9 to $12 billion — whatever Site C comes on — incurring public debt, perhaps putting at risk our triple-A credit
[ Page 5250 ]
rating. As a consequence of that — there will be a question here — debt-servicing costs for all of our provincial debt will go up.

Again, I come back to this. The statements here in the schedule attached to this piece of legislation — which attach specifically and are referred to in this section here…. I reiterate the question: 0.16 is being done on the backs of the ratepayers in British Columbia, on the backs of generational debt passed down to future generations and on the backs of today’s taxpayers through handouts to the actual industry to fulfil an irresponsible election proposal. Would the minister not agree with me?

Hon. M. Polak: It won’t surprise the member that I do not agree with him. While we are required in this House to debate legislation separately, as it appears in front of us — in here, we’re debating Bill 2 — nevertheless, members are of course aware that the operation of Bill 2 will work in conjunction with the incremental new revenue that will accrue to British Columbia as a result of other legislation that is before this House.

While we have to consider those two bills separately in debate, in reality what companies will experience is the effect of both of those pieces of legislation. As we have heard many times from many people in this House, those big corporations respond to impact on their bottom line, so therefore it is the bottom line where we intend to motivate them to make change in terms of their GHG emissions.

[1715]

We don’t for a moment anticipate that companies are simply going to do that out of the goodness of their hearts, although I would love to think they would. The strongest motivator is their bottom line. That’s how we achieved what we did with the carbon tax, and I believe firmly that it is how we will achieve these goals with respect to the natural gas industry.

V. Huntington: Section 5 refers to the schedule found at the end of the act. The schedule is entitled “Schedule of Regulated Operations and Emission Limits.” Could the minister confirm whether this schedule is indeed part of the act or whether it is illustrative of what the regulations are going to require? In other words, is the 0.16 limit in the act or not?

Hon. M. Polak: The schedule is considered part of the act and so would not be subject to change in the way that a regulation would.

V. Huntington: Could the minister perhaps just briefly tell us, then, how this schedule is intended to be a regulated emission limit?

The Chair: Member, will you repeat your question for the minister, the last part of it?

V. Huntington: Well, let’s just say I’m a little confused. It is in the act, so 0.16 is part of the act. It’s not going to be subject to regulated change, but it would be a change that this House would consider. At the same time, the schedule is titled “Schedule of Regulated Operations and Emission Limits.” Could the minister just say it is regulated emission limits? What does this title actually mean?

Hon. M. Polak: Just drawing the member’s attention to the apostrophe after the “s” — it’s the possessive — so it’s those emissions belonging to regulated operations.

A. Weaver: I have one final question based on the minister’s statement that Bills 2 and 6 need to be spoken to in conjunction — well, not spoken to, but they are linked together.

Would the minister agree with me, then, that Bill 6 is the tax regime, the means and ways that the government will pay industry to come here, and that Bill 2, which we’re discussing now, in particular this section, is the means and ways that the industry can actually find loopholes to get out of what they’re supposed to do?

Hon. M. Polak: Not how I would characterize it. I would characterize it this way: Bill 6 is the means by which government will enjoy incremental new revenue from the industry, and the incentives that are now contemplated in Bill 2 cannot be looked at in isolation.

When one says this is going to have an impact on taxpayers, on ratepayers in British Columbia, the reality is that one has to consider that Bill 2 is not happening in a vacuum. It’s happening in an environment in which we will see significant new tax revenues and other revenues accrue to the province.

Section 5 approved on division.

On section 6.

S. Chandra Herbert: Compliance obligation. This discusses that the operator must ensure that greenhouse gas emissions, determined in accordance with the regulation and attributable, are “less than or equal to the emission limit applicable to the regulated operation for the compliance period.”

I’m just curious. Are there other areas aside from LNG at this time that the government may be considering adding to the schedule? So far, I know there are LNG plants and there are coal power plants with a zero-emission limit.

[1720]

Given that this is a rather large bill with, potentially, the opportunity to ensure emissions reductions were happening in a big way in other sectors of the economy, what kind of thinking is the ministry considering for additions?
[ Page 5251 ]

Hon. M. Polak: There is no other sector under consideration.

Section 6 approved on division.

On section 7.

A. Weaver: Why will regulation determine whether or not a regulated operator must ensure that “a verification statement in relation to a supplementary report is prepared”?

Hon. M. Polak: Similar to our discussion about reporting thresholds, we may wish to put criteria around the type of verification required in different circumstances.

If it’s a very small amount, for example, and it’s one that we find quite credible on its own, then we may not see the need to require verification. If it was materially significant, then we may wish to require greater levels of verification. Again, similar to what we have with respect to the thresholds, in this case, we also may wish to outline the degree to which verification is then required.

A. Weaver: Following up on that, what process would be used in determining, under regulation, what is considered to be immaterial “inaccuracies, omissions or changes”?

Hon. M. Polak: The current reporting regulation outlines how we would determine the materiality of a supplemental report. It would be our intention to pull that over into the regulation supporting this act.

I’m not sure if the member was in the room when I discussed it with the opposition member, but the rule of thumb we use is 5 percent. If it’s not deviating by more than 5 percent, then we would not normally consider that material.

A. Weaver: A final question on this section is: given that the auditing process is left to the discretion of the director, does the minister have a sense of when and how often audits would be required to verify the accuracy and quality of the compliance reports?

[1725]

Hon. M. Polak: Of course, verification would occur for any of those passing the 25,000 threshold.

In terms of audits, the director would construct a schedule of audits. They would include not only those based on a risk assessment but then also a series of random audits. I was going to say scheduled. They’re not scheduled for the industry. They’re scheduled for the director.

S. Chandra Herbert: Is it correct that this is a new section of legislation not brought over from the former cap-and-trade act? Regardless of if it’s new or not, has it ever been used before in B.C.? I know compliance reports of how many emissions you put out — maybe I’m not understanding that correctly — aren’t new.

I guess the question is: has any auditing been done so far?

Hon. M. Polak: These would be the first facilities that have a benchmark. Up until now there’s been nothing to audit against in terms of whether or not they’ve reached the benchmark.

Section 7 approved on division.

On section 8.

S. Chandra Herbert: In division 2, “Emission Offsets,” section 8 is “Offset units.” I’m curious: “(a) each verified reduction of one tonne of carbon dioxide equivalent emissions into the atmosphere, or (b) each verified removal of one tonne of carbon dioxide equivalent emissions from the atmosphere….” That gets credited into an account.

Is that a public account? Would the public have some sense of this? How do we ensure, indeed, that the banking of emission offsets is clear, is credible, is able to be…? I know we talked about the Auditor General will be able to look at that. How do you ensure that it is actually a real offset?

[D. Horne in the chair.]

Hon. M. Polak: The operation must provide a verified report. The director would review that report and then, for each tonne of carbon, would issue a single certificate. Then those are provided with a unique serial number and are accounted for in the registry.

Section 8 approved.

On section 9.

[1730]

A. Weaver: I was wondering what criteria could be used to assess whether the plan for an emission offset project and the assertions in the plan are fair and reasonable? Is there any clarity that can be offered about the term “fair and reasonable”? Is this a legal term, for example? Are there established standards that apply to use of the words “fair and reasonable”? In essence, what does “fair and reasonable” mean?

The Chair: Member. Sorry — Minister.

Hon. M. Polak: I’m a member as well, which is just
[ Page 5252 ]
fine with me.

With respect to sub (c), we are talking here about a plan for a proposed emission offset. A proponent would come with a proposal outlining an activity that they believe will result in a certain emission offset. There then would be a review of that plan by an accredited validator. They would be the ones to apply the test of fair and reasonable according to the ISO standard.

A. Weaver: On that same note, what standards or practices…? May I assume ISO is the same answer? I can never remember the number. It’s ISO 14064? May I assume, then, that the standards of practice that will be used to determine whether or not an estimate is considered to be conservative will also come by that? I assume that this does not mean it passes the sniff test of our Prime Minister.

Hon. M. Polak: Without making any kind of determination around our beloved Prime Minister, the answer to the member’s question is yes. I even had — you’ll be impressed — 14064.2 written down here, so there you go.

S. Chandra Herbert: Well, the minister knows we had this discussion around emission offset projects, the definitions, and we had an attempt to ensure that, in law, the ISO standard was actually written in and not just a regulation or a hope. It would be unlike me not to mention it again.

[1735]

I think it’s important that it be there in law and not just in regulation because, of course, when you read “(a) the plan for the emission offset project (i) meets the prescribed criteria, if any, and (ii) is in accordance with the applicable protocol” — forgive me — that could mean anything.

Maybe the Prime Minister would like to be the Minister of Environment in B.C. one day and decides that white is black and day is night and completely disregards the ISO standards just because. Saying one thing and doing another may be something that they want to do.

I just wanted to make the point…. I know that the minister has said we follow that, that it’s in the regulations, but what is the reason, given that we’ve had other pieces we’ve discussed today that are quite complicated in how they’re written, for not ensuring that the appropriate standard is cited in law?

Hon. M. Polak: Remember, this is one of the reasons why it’s extremely important that we recognize that an accredited validator is not going to engage in this analysis on a whim. The reason we would not place this into the act and instead would rely on its positioning in regulation is that from time to time, standards change. They can improve. Knowledge improves.

Even something as simple as a change in the number…. If there’s something else added to the ISO schedule, and what is now 14064.2 becomes 14065, we wouldn’t want to be expending valuable legislative time because we made the mistake of referencing it specifically in the act.

That’s why, when it comes to referencing other standards, it is common practice to have that included in the regulation, but it is certainly our intent to be following those standards, and we’re confident that an accredited validator would certainly do that.

A. Weaver: Does subsection (3) of this section imply that once “all offset units issued in respect of the project have been retired or cancelled” the documents listed under subsection (2) would no longer need to be publicly available?

Hon. M. Polak: It would not require that they be removed, and there’s no intent to require that. This is framed in the opposite: that they must not remove them until all of the retirement provisions are fulfilled.

A. Weaver: On that note, then, would the director be required to keep a copy of these documents in case, for instance, they’re needed for investigative purposes — say, perhaps, through the Auditor General’s office?

Hon. M. Polak: That would be covered under the documents requirements that are applicable across government in terms of retention of documents and disposal of documents.

A. Weaver: What precludes the director from publishing, in section (2), the following, which are outlined in section (2) — the plan, the validation for it — in exactly the format they are submitted, as opposed to some abbreviated format? Is there anything that prevents the director from publishing a synopsis, or must he publish the precise version that was received with respect to the accepted emissions offset project, the validation statement, the project reports and verification statements?

[1740]

Hon. M. Polak: In this instance, the director would have to publish or post these specific documents. A summary document would not be acceptable under this provision.

A. Weaver: Could the minister, then, confirm that they would be as submitted to government?

Hon. M. Polak: More or less. Here’s the caveat: from time to time — and I know this even through the environmental assessment process — not all proponents are created equal. Some are more sophisticated than others. It is not unheard of for us to receive the original submission and find that it is deficient. Then we would ask them to improve it and provide the necessary information. That would be the only caveat. Otherwise, yes, whatever is sub-
[ Page 5253 ]
mitted to us, that is what we would want to see posted.

A. Weaver: With that I propose moving the amendment that I put in earlier today on notice. To amend as follows, by adding the text shown as underlined:

[Section 9

(2) The director must publish the following, in the original format that they were submitted to government, by posting them on a publicly available website:

(a) the plan for an accepted emission offset project;

(b) the validation statement in respect of the plan;

(c) project reports in relation to the accepted emission offset project;

(d) verification statements in respect of the project reports.]

The rest of the text is as indicated here presently, essentially adding the words “in the original format that they were submitted to government.”

On the amendment.

A. Weaver: The rationale or reason for doing this. I recognize that perhaps there may be some iteration process with government prior to these projects being finally approved. But I would argue that in subsection (a) of this, “the plan for an accepted emission offset” would imply that in fact they wouldn’t be posted until, really, they’re at a stage to be accepted. That is the justification for this amendment now — to make it clear that full transparency will be there throughout the entire process.

Hon. M. Polak: Under the provisions as they are currently written, the plan would be posted once accepted. That would not be necessarily in the original format. So to the member’s point — that it’s a plan, it’s been accepted, and, therefore, it must be all right…. In fact, it’s when we’ve accepted it that it would be posted. In my own view, I don’t believe that the amendment is necessary.

Amendment negatived on division.

A. Weaver: I must thank the member from Chilliwack for voting in support of this — Chilliwack-Hope. [Laughter.]

L. Throness: I said yea, just so the House knows.

The Chair: Thank you for that clarification, Member.

Section 9 approved on division.

On section 10.

S. Chandra Herbert: I appreciate the member for Chilliwack-Hope’s candour with the House. One of these days we’re going to catch them all sleeping, and we will get our legislation through.

Anyway, just a question for the minister around section 10. It gives the director the power to describe “the phases of emission offset projects in the class, including, without limitation, describing how the start and end dates of the projects will be determined.” I guess I ask this question because, as we know, it’s challenging with emission offset projects sometimes to determine…. Are they brand-new? Are they something that was already going to happen? To be able to understand: are they actually additional? Are they actually something new, or were they going to happen already?

[1745]

When we talk about the director describing how the start and end dates of the projects will be determined, is that to ensure that they are brand-new? What is the thinking with that section?

Hon. M. Polak: No. This is not about determining whether or not it is a new offset. This is to allow the director to outline for what length of time or during what period of time is this offset valid.

S. Chandra Herbert: I understand that. That’s a helpful clarification.

In the section where it discusses “requiring the project proponent to provide evidence that a covenant under section 219 of the Land Title Act, a statutory right of way under 218 of that Act or another charge under that Act has been registered in the land title office in favour of the Crown and specifying the terms and conditions of the charge….” Can the minister explain what that section is specifically addressing?

Hon. M. Polak: So 10(1)(e)(i) would not necessarily apply to each and every offset project, but in some cases it may be that we need to establish ownership. We need to establish permanency. Therefore, the provisions of the Land Title Act would then come into play.

S. Chandra Herbert: 10(1)(e)(ii). It discusses providing security: “requiring the project proponent to provide security for the performance of the proponent’s obligations….” What kind of form is the minister looking for when discussing providing security?

I understand if it was registered in the Land Title Act. Let’s say it was the obligation to purchase a chunk of land which would have been logged but wasn’t. Maybe that might be an example under the Land Title Act where, if the government retained ownership in some form, that would provide the security. But what are we looking for in terms of providing that security?

Hon. M. Polak: Probably the best example is a forestry example. If it indeed is an offset requiring that trees be maintained in a certain area….

[1750]

We all know the risk of forest fires in British Columbia. Different offset projects have different levels of risks, so
[ Page 5254 ]
this is security that would be provided to offset the risk determined inherent in that particular project.

S. Chandra Herbert: So that I understand this correctly, if, for example, an offset area forest burnt down — as forest fires are an issue in British Columbia and, as the science tells us, will become more of an issue in the future — what is real security to ensure that this is an offset? Surely it’s not money in the bank. Or is it money in the bank that could somehow be used to purchase, in a sense, more offsets down the road?

I hesitate around this because, of course, if we put out emissions now, and then the forest that we thought that we’d offset those emissions with burns down five years from now…. As the science tells us, the more emissions we put out now, the harder it will be to meet our future obligations, because we’ve polluted the atmosphere to such a large extent. I’m just trying to understand what would be real security to ensure that we are accurately and effectively…. Aside from pulling the carbon out of the atmosphere, I’m not sure what real security would look like.

Hon. M. Polak: No, it’s not financial security. It’s actually security in the form of other offsets.

S. Chandra Herbert: If I’m understanding this correctly…. And this may go on to explain: “insuring against the risk of reversal of greenhouse gas reductions or removals achieved…which may include (i) requiring that offset units generated by the project be credited to the contingency account, or (ii) discounting the number of offset units to be credited to the holding account of the project proponent.”

I’m a little bit at sea here. I’m trying to understand. If you had to purchase one offset unit, do you have to purchase another and hold it in a contingency account that you could then, if that one unit burnt down, shift it over and say: “Look what we’ve done”? I just don’t understand how that works — in a sense, potentially double-billing or purchasing another project when it may not be additional or may be additional. How does this work with contingency accounts, holding accounts and security? What does that actually look like?

Hon. M. Polak: If it’s a high-risk offset, then they would not be originally credited tonne for tonne. Depending on the level of risk, there would be a portion of that offset that would be designated toward the holding account. Hypothetically, if, say — I’m making up these numbers, so do not hold me to this — you had a particular high-risk offset and you purchased five tonnes, you may then be required to take two of those five or three of those five and place them into the holding account. All of that would be based on the level of risk associated with that offset.

S. Chandra Herbert: If I understand that, then — let’s just use the hypothetical numbers — if you purchased five, two of those five went over into this holding account, and the forest burnt down, you would then have those two to pull from? If the minister can help me understand the math, because of course, then you’re out the five, not just the two or just the three.

[1755]

Hon. M. Polak: I apologize. I misspoke in one respect. It’s not the purchaser. It’s the issuer. The issuer is pointing to a particular offset and saying: “This is worth this much.” So it’s the amount of…. “Credit” is maybe the wrong word, but I can’t think of a better one. It’s the amount that they are crediting to that offset, so it’s the issuer that is responsible for that.

It is very similar to…. I’m trying to make it uncomplicated. It’s that old saying about how I would have written a shorter speech, but I didn’t have time. If you want to, think of it this way. When you provide securities on a financial transaction, they are financial securities. In this regard, it is a carbon transaction, therefore the securities take the form of carbon.

S. Chandra Herbert: That does help me understand it to a degree, although I must admit that sometimes securities in the financial market, as we’ve known, don’t go so well. We think we’ve got them so properly protected, but because of greed and other reasons, the market crashes and all of a sudden the public’s on the hook for massive bailouts of the banks, as has occurred rather recently.

Of course, the concern here is we’re not looking at just money or numbers in a calculation, but looking at greenhouse gases and being able to accurately say that we have not allowed more to go into the atmosphere than we can afford to.

Just to be absolutely clear here, (1) what is the difference between a contingency account and a holding account; and (2) does this legislation ensure that should one of those higher risk offset projects go up in smoke, there is actually enough, I guess, support or heft in the legislation to ensure that we’re not letting it go up in smoke and that that company — or that offset provider, I guess I should say — actually has to ensure that they have purchased more offsets to make up for what they have already burnt?

[1800]

Hon. M. Polak: Oh boy. Okay, let’s try to do this without confusing everyone.

First, let’s remember that there are two stages being described here. When we are talking about 10(e)(ii), at that point we are talking about the plan for the offsets. So if we cast our mind back to earlier discussions, here is a proponent who needs to find a certain amount of offsets, comes forward and says: “I’m planning to do x, y and z.
[ Page 5255 ]
It should result in this level of offset.” At that point, the evaluation of risk would determine what obligations are there around security, right?

Now, here we move into (f). We get to the phase where: “Okay, so my plan is accepted. I have now gone out. I’ve got these offsets, and I want them to be credited to me, because I have this operation and I want to reduce my net emissions.” At that point, the director can choose to….

For example, I’m saying this is worth 200 units. The director could say, “Well, that’s all fine and dandy, but it’s really high risk; I’m only going to give you credit for 50,” right? Or the director could say: “That’s fine. It’s 200, but I’m taking 150, and I’m putting it into this holding account.” The director could handle that either of those ways.

S. Chandra Herbert: That does help me to visualize it to an extent. I guess the question becomes: if they agree that I will take 50, using the minister’s example, but not count 150, because it’s very high risk, and then that 50 goes up in smoke…? Well, the whole 200 — if that was their argument: there was 200 but they only accepted 50 because it was so high risk…. If it all goes up in smoke, how do you ensure that that 50 that was counted towards the pollution offset is actually going to be captured again somewhere else?

In a sense, you’ve had the 50 that was supposed to be an offset — maybe it becomes 50 that is now in the atmosphere — plus the 50 that you were trying to discount that you had already polluted before — if the minister understands what I’m asking. Then you have double the pollution you had before, rather than no pollution in the sense of offset discussion of what pollution is.

Hon. M. Polak: The offset provider, if it’s a reversible project, is accountable for all of the emissions in the case that the offset is reversed, forest fire being an example.

S. Chandra Herbert: My understanding, then, is if it does go up in smoke, so to speak, they must then replace what went up in smoke plus an additional amount to match the fact that that one offset went up. They’re going to have to replace what was supposed to match the pollution from the industrial operation. Is that what I’m hearing?

Hon. M. Polak: This takes us back to the discussion around the issuance of a certificate per tonne. We have issued to them a certificate for that tonne, right? If that tonne goes up in smoke, they’re responsible to find another tonne in order for that certificate to remain valid.

[1805]

Of course, each one has a unique identifier in the registry. In order for each certificate still to be valid, each tonne, each one would need to be replaced, and it would have to be with a different offset. Up to them where they find it, but it would have to be a different one.

S. Chandra Herbert: I’ll try once more. Maybe I’m just, at this time of day, not understanding it completely. I understand the one for one. An offset is one for one. But if the one that was supposed to offset the other one went up in smoke, I’m understanding that the offset provider would have to provide a new offset to match the one that had already been polluted.

What happens to the pollution that was created when the offset went up in smoke? Who’s responsible for that, or is that just written off? What I’m trying to understand is: is the offset provider also responsible for the pollution that went up in smoke to ensure that the offset is really solid? Or is that captured under other legislation or something else?

Hon. M. Polak: Even though the amounts would be held in the contingency account or would be discounted in terms of their credits, nevertheless, they still exist, so they would still have to replace those. Even though the stuff they were counting on to say “my emissions are low” might be a smaller number, nevertheless, they’re responsible to replace all of those for which they have been provided a certificate of: “Here’s a tonne.”

The difference here in terms of what we are talking about is the difference between what is identified as a certified tonne versus what they are allowed to count against their emissions. Does that do it?

A. Weaver: I have two questions on this section. My first is coming back to (e)(i).

[1810]

My concern, which I think is shared by many: when the reference to the Land Title Act appears, what is precluding a foreign jurisdiction from perhaps offsetting its operations in British Columbia by buying up vast tracts of British Columbian–owned land and transferring title to be in the ownership of a foreign jurisdiction?

What I’m saying… The reason why, of course, is that there are multiple avenues of potential problems. One, it could create a market rise in land for British Columbians. Two, it could limit the amount of available land for future British Columbians. Three, to what extent do we have jurisdictional right at play?

For example, let’s suppose a state-owned corporation — not one that shares the same democratic values as we do here in British Columbia — buys 200,000 acres of pristine farm/forest land. Then they preserve that in perpetuity. On the agricultural component, they add a whole bunch of trees. Then they seek, under regulation, approved protocols like under Dogwood. There are other international protocols for land use reclamation and afforestation.

They seek offset from the provincial government. Is there a means and a way to stop this from occurring? I recognize that the director has a role here, but this is put-
[ Page 5256 ]
ting an awful lot of power in one or two people if they’re making decisions.

Perhaps the minister can provide some clarification, some certainty and some confidence to British Columbians that, in fact, this will not be the intention of what’s happening here, and this will not occur.

Hon. M. Polak: First, let me be clear. It is not our intent to see offsets achieved through the planting of trees on good agricultural land, in particular in the ALR. Jurisdictionally, though, it is an area of active concern for government. It’s a topic about which myself and the minister responsible for the ALC have been in dialogue and in discussion to determine where the jurisdictional boundaries lie and what can be done to prevent this kind of circumstance.

With respect to British Columbia, we can determine which offsets we wish to accept or not accept. The challenge becomes more difficult when it comes to international jurisdictions because, of course, we have no jurisdiction over what a European country or another agency may determine is an acceptable offset.

It may be, although it has yet to be determined, that the means by which we achieve the prevention of this is through determining what might be an acceptable farm use, in terms of the ALR. But that is a point of active discussion. I just wish to make it clear that it’s our intent that that would not become the practice in British Columbia — that you would see farmland planted with trees. We certainly acknowledge the concern and share it.

A. Weaver: Thank you to the minister for the response. My second question is with respect to the other piece of legislation that is on the books. It is the carbon-neutral government legislation. My question revolves around to what extent the whole offsetting approach that’s laid out here, through legislation and subsequent attached regulations, is consistent with, or will overlap, or will be part of, or will include the carbon-neutral government direction that the province has been undertaking?

[1815]

Hon. M. Polak: We will, of course, retain our requirement for carbon neutrality in government. With respect to the offset regulations, it’s our intention to bring over the offset regulations that you would be familiar with under CNG but adding new provisions for accountability. We will accomplish that by repealing the regulations under CNG and then providing new regulations under this act.

The change, though, is around new accountability provisions.

A. Weaver: There’s an opportunity here, I would argue, for actually some investment in the public sector from industry, and here’s what I’m getting at. Right now, under carbon-neutral government, there are aspects that are called in scope and aspects that are not within scope. School buses — they are not in scope in terms of carbon-neutral government. B.C. Ferries — not in scope.

My question is: to what extent are there plans to have government work with industry to have offsets using industry money that are not in scope for carbon-neutral governments but will actually be investments in the public sector, like B.C. Ferries, like school bus transportation? Are there efforts underway to do that? This is a means and ways of, rather than having public money invested in private sectors, having private money invested in public sector offsets.

Hon. M. Polak: There are efforts underway. We’re running an RFP right now, so I can’t talk about it in any detail. But we align with what the member has proposed. That’s where we want to see this go as well.

I know we’re getting down to the end of the day but not quite, and I’m wondering if we could have another short recess.

The Chair: All right. The committee will recess for five minutes.

The committee recessed from 6:18 p.m. to 6:28 p.m.

[D. Horne in the chair.]

A. Weaver: I’m sorry to ask a question that’s kind of related to another act, but they are, as you might imagine, somewhat interrelated. In Bill 6, which we will be discussing at another time, there’s talk of a technology fund that can be put in place. So my question here relates that back, through this legislation, in terms of an offset. To what extent can moneys put in the Bill 6 technology fund be applied for an offset through this legislation here — through some technological investment that creates an offset that could then be back channelled in through here to count as an offset in this legislation?

[1830]

Hon. M. Polak: The short answer is that you can’t double-count. The longer answer is that if you had something that would qualify as an offset, then you would do that through the standard offset procedure.

I would also note that the technology fund that we reference is expressly for purposes like research and development, which ordinarily would not be counted as offsets. They are intended to be two separate worlds, rather than being able to say: “I have funded an offset through the technology fund, so I want that credit, and then at the same time, it’s an offset, and I want that.” You wouldn’t be able to double-count.

A. Weaver: To provide a little bit more clarification, suppose I am a company…. This is relevant to this bill.
[ Page 5257 ]
As the minister has pointed out, both bills are intertwined. It’s difficult to ignore one and not talk about the other.

Here’s the scenario. A company then decides to invest in a technology fund as a means of meeting its requirements under the Bill 6 legislation. That technology fund then makes an R-and-D investment in, say, some magical electrical vehicle, and as part of their R-and-D investment, they take X number of cars off the street. Then that technology fund or those people who had moneys from the technology fund seek — from their innovation, from moneys directly received from the technology fund — an offset for what they’ve done, the widgets they have produced, as a direct consequence of technology fund funding.

Can they sell that offset, or can that offset then be included as one that is counted in this legislation here today?

Hon. M. Polak: The illustration, I think, is helpful. The magical car, the activities involved in the research and development, even in terms of developing a prototype, would not be able to produce emissions reductions. It would be the emissions reductions….

You’ve conducted this research and development that’s been funded by the technology fund, but you haven’t achieved any emissions reductions as a result. It wouldn’t be until you moved into the product stage where you’re actually producing these fantastic magical cars, and for each one, there may be emissions. That’s when you start counting something as an offset, but the research and development leading to it would not, to our mind, produce any material reductions in emissions.

A. Weaver: That was very clear. Thank you very much.

In terms of finally coming down to one last aspect of trying to bring in other pieces of legislation and their relevance in relation to this, back to carbon-neutral government, is there an intention in government to narrow or redefine what is considered to be in scope versus out of scope in the carbon-neutral government legislation which would then allow more things that are out of scope within the public sector that would be allowable as offsets for private sector funding?

[1835]

Hon. M. Polak: We have no plans at this point to change what’s in or out of scope.

Section 10 approved.

On section 11.

A. Weaver: Just a couple of quick questions. What’s the process for determining this “prescribed amount” operators are required to pay for a funded unit?

Hon. M. Polak: As with any other fee, that will be established in regulation after the act, hopefully, makes its way through our House.

Section 11 approved.

On section 12.

A. Weaver: With respect to earned credits, since the emission limit is an intensity limit rather than a magnitude limit, how does the ministry calculate the total number of tonnes of CO₂e emissions that an industrial operation is below that limit? That is the total limit.

Hon. M. Polak: That will be calculated by multiplying the amount below the benchmark by the total production. In the case of a plant that was at, say, 0.14, you would multiply 0.02 times the number of tonnes of LNG produced.

S. Chandra Herbert: In terms of earned credits, I must admit I’m trying to understand what their worth would be. If the company is below the emission limit — let’s say they’re at 0.15 instead of 0.16 in terms of LNG operations — they are earning credits, so to speak, for being below the limit. What do they do with those? Can they sell them? Are they able to sell them as offsets, or can they…? Who gains the value from them? Is that value taxable? I’m just trying to understand what the earned credit is and how it would function in the market.

Hon. M. Polak: They could bank them for use in future years. They could sell them. If they made money from selling them, then that would be taxable.

S. Chandra Herbert: In a sense, they could sell them. They don’t pollute as much — they pollute below the limit — but they’re still polluting, just to be clear. They’re polluting lower than the 0.16. They’re gaining credits, which go into an account. In terms of selling them, is the thinking that they could be then used as an offset for somebody else who is polluting more than the limit? I’m just trying to understand how that works, because it’s not really an offset, in the sense that there’s still pollution. Who would buy them?

[1840]

Hon. M. Polak: Another facility could buy them and use them for their compliance. But the member is correct: they are not considered an offset.

S. Chandra Herbert: Just so I understand it. Plant A produces, let’s say…. They get 100 credits because they pollute at 0.1 percent below the limit, let’s say. Plant B is 100 over the limit. They could purchase those? Or is that considered part of the government’s incentive program where the taxpayer, in a sense, would be buying part of
[ Page 5258 ]
the units to get that plant B up to the 0.16? Is that how it works?

Hon. M. Polak: Purchasing those earned credits would be, as with purchasing offsets or contributing to the technology fund, another means for them to get into compliance.

S. Chandra Herbert: Maybe it’s because it’s still to be designed, but it’s still unclear to me how much money — how many British Columbian tax dollars — would be put towards getting from, say, 0.28 to get to 0.16. Of course, you get more as you get closer to 0.16. That’s my understanding. Could it be that for a company to be below the benchmark, another company which is above the benchmark uses tax dollars to purchase the credits from the company that’s below the benchmark?

How much money are we talking about here on a typical plant, let’s say? I know that’s too big of a question to ask. There’s a whole bunch of modelling that would have to be done. I just want to understand how much money of British Columbians could go into supporting getting to the 0.16 when we are talking about earned credits.

If a company has come forward, as Shell has done, and said that they can do 0.15, how do we know that that credit is (1) valuable and (2) that it’s just not the public paying that company, in a sense, to be below the limit? I want to make sure that companies are actually paying for their pollution. It’s not coming just from the taxpayer, so to speak.

[1845]

Hon. M. Polak: First, to be clear, an earned credit is not dollars. An earned credit is a certificate issued to the company based on how far below 0.16 they have got, combined with their production. You’d have to calculate what their earned credit was, but it’s not dollars.

If the facility with the earned credit then didn’t need them for their compliance in out-years, didn’t feel they needed to bank those, then another company that’s attempting to get into compliance could then purchase that earned credit from that facility.

This is where we get into, I guess, the perspective that I shared, which is that you can’t look at this bill in isolation around the incentives. It’s not as though we are looking at current revenues and saying: “Therefore, we’re going to cut you a cheque.”

Ultimately, what happens here is not a transfer from the taxpayer. It would amount to foregone revenue from the incremental new revenues as a result of the taxation royalties, carbon tax — go down the list. The earned credits, though, again, are not monetary. The earned credits are a certificate with respect to compliance, not with respect to finances.

S. Chandra Herbert: I thank the minister. I understand that it is not monetary, but certainly a certificate could be monetized if you were going to sell it to another company. If you are at 0.15, you earn a credit. If the company B is at 0.17 and needs to get to 0.16, I guess they could buy the credit from the company that was at 0.15 to get them to 0.16, so to speak.

I guess the troubling part for me is understanding why, in terms of foregone revenue, we’ve got that set up so that they can both, I guess, in some ways, be at 0.16 together, because we’re not really gaining emissions in some ways by being at 0.15 versus 0.17.

I’m trying to understand how it is really reduces pollution in the sense that that company is at 0.15. They said they can do it. If they are already doing that, how is that an additional credit that they can use by another, to sell to another company to reduce their emissions to get them to the 0.16 so they can claim to be the cleanest LNG in the world? I guess the cleanest L, since natural gas is not included in the government’s understanding of LNG in terms of emissions, unfortunately.

It’s different from an offset. I understand that. But if we are talking about actually being the cleanest LNG, why would we allow the sale of an earned credit to another company just so they can say that they’re at 0.16 when they really aren’t?

Hon. M. Polak: Here’s the missing piece. You’ve been issued an earned credit. You have not yet deployed it. You possess this, but it has not yet counted against your emissions. In that respect, it’s not as though “Here I am, and I have counted these, and because they’re excess to my needs I am also going to sell it to you, and now you’re going to count it.” That doesn’t happen. Maybe that gets at it. I’m not sure if it does, entirely.

S. Chandra Herbert: It doesn’t quite help me understand it. Is the carbon tax part of this equation here that the minister is saying? I’m just trying to understand how we’re actually going…. If somebody is at 0.17, and somebody is at 0.15, you want the person at 0.17 to get to 0.16. When you sell an earned credit from the company at 0.15 to the company at 0.17, they can now claim they’re at 0.16, so to speak, I guess, in the sense that they’ve cancelled it out because one is below what the actual target is.

[1850]

But you still have the same amount of pollution. That company is still polluting at 0.17, not 0.16. I’m just trying to understand how that gets us anywhere in terms of emission reductions or being in compliance when, in effect, the 0.17 company is still polluting at 0.17. The 0.15 company is still polluting at 0.15. There is no emission gain to be made here, because that company has already committed, as Shell did the other day, to be at 0.15.

I’m trying to understand how this is an offset. Maybe the minister can determine and define for me that, yes, it’s not an offset — that it won’t be counted towards emission reductions. Is it just an accounting thing? I don’t understand how this gains us anything in the fight against climate
[ Page 5259 ]
change. Maybe the minister can explain it to me. But if a company is already committed to do 0.15, this isn’t incentivizing them to be better technology. It’s just money that they can make by selling off a credit that they’ve earned for being under a number that the government has set.

Hon. M. Polak: I’m going to use an extreme example to hopefully make the math easier for all of us and also to maybe explain it better. Company X has the most amazing LNG facility you can imagine. They have a facility that is at 0.10, so 0.06 below the benchmark. Tim in my office is doing the dance of joy, and in the midst of that, they issue this wonderful company earned credits based on that 0.06. It costs money to get to 0.10, right? That takes a significant investment. The earned credits recognize that.

Here, I think, is where the member’s question is. At that point, though, we look at the company at the 0.16, the benchmark. If they sell those earned credits to another company because they’re not planning to use them in the future or, indeed, if they use them in the future, we’re only accounting them at 0.16, even though they’re actually at 0.10 for the purposes of our evaluation.

[1855]

In essence, those 0.06 worth of earned credits still have not been deployed.

You could look at it, although this is a real flawed example…. But if you want to conceive of it as though the other company that then purchases those earned credits has essentially been paying for this company to get down to the actual 0.10, for our purposes they’re still at the 0.16. That gives life to the earned credits. Does that help?

The Chair: Do we have significant additional questions on section 12, or should we note the hour?

A. Weaver: I see the Speaker, and I suggest that.

The Chair: Nothing the hour, we can perhaps….

Hon. M. Polak: Nothing the hour, I move the committee rise, report progress and seek leave to sit again.

Motion approved.

The committee rose at 6:56 p.m.

The House resumed; Madame Speaker in the chair.

The Committee of the Whole, having reported progress, was granted leave to sit again.

Hon. M. Polak moved adjournment of the House.

Motion approved.

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

The House adjourned at 6:57 p.m.

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