2015 Legislative Session: Fourth Session, 40th Parliament
HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

official report of

Debates of the Legislative Assembly

(hansard)

Tuesday, February 17, 2015

Afternoon Sitting

Volume 19, Number 8

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

TUESDAY, FEBRUARY 17, 2015

The House met at 1:36 p.m.

[Madame Speaker in the chair.]

Routine Business

Madame Speaker: Good afternoon, hon. Members. On behalf of all members present, I would take this opportunity to welcome each and every one of our guests to the assembly today. Have an enjoyable afternoon.

Orders of the Day

Hon. M. de Jong: I move that this House at its next sitting resolve itself for this session into a committee to consider the supply to be granted to Her Majesty.

Motion approved.

Introduction and
First Reading of Bills

BILL 10 — BUDGET MEASURES
IMPLEMENTATION ACT, 2015

Hon. M. de Jong presented a message from Her Honour the Lieutenant-Governor: a bill intituled Budget Measures Implementation Act, 2015.

Madame Speaker: The Lieutenant-Governor transmits herewith Bill 10, intituled Budget Measures Implementation Act, 2015, and recommends the same to the Legislative Assembly.

Hon. M. de Jong: I move that the said message and the estimates accompanying the same be referred to the Committee of Supply.

Motion approved.

Hon. M. de Jong: Madame Speaker, I move, seconded by the hon. Premier of British Columbia, that the Speaker do now leave the chair for the House to go into Committee of Supply.

Budget Debate

Hon. M. de Jong: The tabling of Budget 2015 marks the beginning of the new fiscal season for the assembly and for British Columbia. My use of the term “season,” by the way, is probably a reflection of what I was doing when I began the work of preparing this budget presentation to the assembly.

Like many British Columbians, I confess that starting on Boxing Day, for about ten days I become fully engaged in tracking Team Canada’s quest for gold at the World Junior Championships. Of course, we used to be able to take the result for granted, but the world has adopted our game, and the days of foregone conclusions are over. Talented teams from Europe and the United States are motivated and capable now of beating us at our own game.

So what’s the recipe for success? Talent and ability, and to be sure, we had that in abundance, including a strong core of young British Columbians, like Jake Virtanen, from Abbotsford; Joe Hicketts, from Kamloops; Nic Petan, from Delta; Shea Theodore, from Aldergrove; and Sam Reinhart, from West Vancouver. But that’s not enough.

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I think what propelled Team Canada to recapture gold was a carefully developed game plan and the drive and the discipline to execute on that game plan — a balance between a disciplined defence that took care of the things they could control at home in their own zone and a relentless offence that overwhelmed their competitors with imagination and creativity. No bad penalties, no self-imposed mistakes — not a bad formula for success but still no guarantee. There’s always the unforeseen. There is always the prospect of a hot goaltender.

Budget 2015 represents our fiscal game plan. British Columbians, whose interests it is designed to advance, will recognize some of the fundamental features of our plan.

Discipline — to control the things that we have control over, like spending. Prudence — to recognize that in a global economy there are many variables over which we have virtually no control, and we need to plan and protect ourselves from the unexpected. And vision — to train and educate young British Columbians, to develop the public infrastructure, to work with the private sector, to build an economy and create the jobs that will see B.C. lead Canada through the Asia-Pacific century.

British Columbians will recognize and take pride in one other function of our fiscal game plan that distinguishes us to an even greater extent than it did last year. Through their hard work and perseverance, British Columbians have scored a fiscal hat trick. For the third year in a row, British Columbia will have a balanced budget. Easy to say; much more difficult to accomplish.

The league we play in is ever changing. The U.S. economy is strengthening, but longer-term outlooks remain uncertain. China is doing well, comparatively, but has just recorded its lowest quarterly growth since the recession. Japan is in recession, and Europe is barely growing and may not be far behind.

Closer to home, just across the Rockies, the once mighty Alberta economy is in a kind of free fall. The government there, by its own admission, can do little more that watch as billions of dollars in anticipated oil revenues disappear. Even the federal government has de-
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layed tabling a budget, hoping that the impact of falling oil prices will become clearer.

Amidst of all this uncertainty, that exclusive club that I spoke of last year just got a little more exclusive. Alone amongst the provinces, B.C. will likely be the only jurisdiction to table a balanced budget for 2015.

Here that is, by the numbers. For the fiscal year ahead, 2015-16, we are projecting total spending of $45.8 billion, total revenues of $46.3 billion, and a forecast allowance of $250 million, which results in a forecast budget surplus of $284 million.

Meeting even these near-term targets won’t be easy. After all, we’re not immune to the forces affecting the rest of the world. Lest there be any doubt, let me emphasize that we remain absolutely committed to continuing the fiscal discipline that got us here.

That discipline remains at the heart of Budget 2015. It is the main reason we’re able to balance the books and still make modest strategic investments to maintain public services like health care and education, strengthen and encourage growth in key economic sectors and make life a little easier for families and those in need.

Let’s get to the details. I’ll begin, as I generally do, by bringing members up to date on where we are today.

B.C.’s economy experienced steady but not spectacular growth in the first three quarters of 2014. We believe that for 2014, real GDP growth in B.C. will be 2.2 percent, reflecting positive growth in key sectors, including exports, retail sales and housing.

Retail sales have been a genuine source of strength in the B.C. economy, advancing 5.9 percent year-to-date to November 2014 compared to the previous year. There were noticeable increases at motor vehicle and parts dealers, general merchandise stores, and food and beverage stores.

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B.C. businesses enjoyed solid growth in export sales last year. The value of B.C.’s international merchandise exports was up 6.3 percent in 2014 compared to 2013. Growth in B.C. employment has been modest but steady, rising by 0.6 percent in 2014. That increase translates into about 12,800 more jobs, and B.C.’s unemployment rate dropped to 6.1 percent in 2014 from 6.6 percent the previous year, placing us well below the national average.

Within the public sector, significant progress has been made negotiating long-term labour agreements. Currently there are about 200,000 public sector employees covered by ratified and tentative agreements negotiated under the economic stability mandate. That represents about two-thirds of all the unionized public sector employees in B.C.

Not only do these long-term agreements provide certainty for citizens and the folks delivering public services; for the first time, the hard-working women and men who deliver vital services to British Columbians will have an opportunity to share in the benefits that will accrue if we can exceed the Economic Forecast Council growth projections — a tangible means of breathing life into that proposition that we really are all in this together.

When we add it all up, for the fiscal year 2014-15 that will soon end, we are on track to meet our financial targets. In fact, based on the data collected to date, we are targeting a surplus for this fiscal year of $879 million.

What of the year ahead? Members will know that we seek the advice of the Economic Forecast Council prior to developing the budget. I met publicly with the forecast council in December when we received their initial survey results. I must say I was very pleased and grateful to see members from both the opposition and government sides of the House in attendance to watch some of Canada’s leading economists explain the basis for their projections for B.C., Canada, the U.S. and world economies.

Now, it’s still not the hottest ticket in town, but I do believe that by allowing people to witness this fundamentally important exercise in economic consultation, we have begun to eliminate much of the mystery associated with budget-making and demonstrate how it is that B.C. has established such an exceptional track record for hitting our targets.

The forecast council provided a final update to its December projections early last month, in January. The contents of that report are contained within the budget documents, but I can advise members of the House that the forecast council is projecting growth for B.C. as follows: 2.6 percent in 2015, 2.8 percent in 2016 and 2.5 percent in 2017. For the purpose of the fiscal plan I’m tabling today, the government is projecting B.C. economic growth of 2.3, 2.4 and 2.3 percent in those respective years. As usual, these numbers are slightly lower than the outlook provided by the forecast council. That represents the first level of prudence in this budget.

We’ve also built in forecast allowances of the following amounts for 2015 and the subsequent two years: $250 million, $350 million and $350 million again in 2017-2018. These amounts are allocated to help protect against unforeseen changes — you know, like a sudden, dramatic shift in energy prices. That would never happen.

We also have, as a third level of prudence, spending contingencies of $350 million in 2015-2016, $400 million the following year and another $400 million in 2017-18. By the end of the fiscal plan, we are projecting average revenue growth of 2.7 percent and average spending growth of 2.5 percent compared to 2013-14. The bottom line is projected surpluses of, as I said a moment ago, $284 million in 2015-16, $376 million the following year and $399 million in 2017-18.

Here’s what our budgeting forecasts and projections do not include: any of the anticipated incremental dollars that may emerge from LNG development. Much has been accomplished. Much investment has already taken place. While the pricing volatility we have seen in the
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energy sector certainly adds some challenges to those considering multi-billion-dollar investments in B.C., it also represents an opportunity for those proponents who understand and seek to take advantage of the inevitable cycles that characterize energy economics. We remain optimistic, but what we won’t do is make budgetary assumptions until that first final investment decision has been taken.

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Likewise, we are cautious in our forecasts for natural gas prices, consistent with the independent expertise we drew on in preparing our last two balanced budgets. Commodity prices generally have deteriorated over the past six years, and we have no intention of being caught out, like some jurisdictions, and seeing our fiscal surplus turn into a deficit.

With the global economic recovery still very much in progress and still very fragile, we cannot overstate the importance of good, old-fashioned, prudent fiscal management.

If that sounds familiar, there’s a good reason. It’s always been our top priority. Thirteen to 14 years ago the province found itself in a very different position. When this government tabled its first full budget in 2002, we were staring down the barrel of a multi-billion-dollar structural deficit.

Governing is always about choices. We could have carried on down that path, but we were determined to balance the budget, and by 2005 we did. In fact, we delivered five balanced budgets in a row before the tumultuous effects of a global recession in ’08-09 drove us into the red.

What was our response? Well, we immediately set about the task of developing a game plan that would get us back to balance. From 2009 to 2013 we reduced projected spending by $3.9 billion. That restraint served us well, but it did not alter the fact that between 2009 and 2012 we spent $5 billion more than we received in revenue on vital public services. Most of that was borrowed money.

That borrowed money needs to be repaid, and the forecast surpluses I have announced today provide us the means to make significant progress in repaying that debt. Over the term of the fiscal plan direct operating debt will decline by more than 50 percent, from $10.2 billion to $4.8 billion, the lowest level since 1991.

We will not be a government that leaves it to future generations to pay for the services we benefit from today. We will not be a government that forces future generations to pay for our groceries.

Those same surpluses also mean that even at a time when certain revenues are declining, we have options for maintaining the balanced budget and the services that British Columbians rely upon. However, achieving those dual objectives will require ongoing vigilance and spending discipline.

The wage freeze for management-excluded public sector employees remains in place for the present time, recognizing the fiscal reality facing the provincial public sector.

Taking the necessary steps to keep debt affordable will remain a priority and will include continuing to pursue savings from better cash management across the public sector, as recommended by the Auditor General; continuing the review of provincial Crown corporations to ensure that they are operating with the taxpayers’ interests at the forefront; ensuring that our three-year, taxpayer-supported capital plan is built on the basis of reasonable and affordable debt levels.

To be sure, this three-year fiscal plan projects capital spending in the amount of $18.7 billion, of which $10.7 billion is taxpayer-supported, to ensure that key investments in health, education, skills training, transportation and public safety infrastructure are made.

That total includes $2.1 billion in infrastructure spending for post-secondary education skills and trades training for such purposes as the Emily Carr University of Art and Design campus at Great Northern Way; the replacement of the trades buildings in Kelowna, at Okanagan College; the renewal replacement of the trades buildings in Victoria at Camosun College; Vancouver Community College and BCIT’s joint project, heavy-duty commercial transportation trades program, in New Westminster; the Nicola Valley Institute of Technology trades facility in Merritt; funding for new equipment to support existing in-demand priority programs, modernization and additions to increase capacity.

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The capital program includes $1.6 billion in K-to-12 education infrastructure, including such projects as Centennial Secondary in Coquitlam, Oak Bay secondary, Kitsilano Secondary in Vancouver, Willingdon Secondary in Nanaimo, Clayton North secondary in Surrey.

Also, $2.9 billion in transportation investments, including the Evergreen line rapid transit extension, the Cariboo connector, Highway 1, and $2.7 billion in health infrastructure for projects such as Children and Women’s Hospital phases 2 and 2, north Island hospitals in Comox Valley and Campbell River, and the Interior heart and surgical centre in Kelowna. And there will be others.

Two other investments in health care infrastructure stand out as examples of the support our government is providing for British Columbians facing challenges associated with mental illness and substance use.

The $82 million Joseph and Rosalie Segal family health centre, now under construction at Vancouver General Hospital, will provide short-term acute care to those suffering from major depression, anxiety, schizophrenia, psychotic and mood disorders, and drug and alcohol addiction.

The $62 million HOpe Centre, which opened last fall at Lions Gate Hospital, delivers a comprehensive range of services and supports, under one roof, for youth, adults and seniors with serious and/or persistent mental illness.
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These facilities will support the work of health, child care and social workers who strive to improve the mental health of British Columbians and, in particular, the approximately 29,000 children and youth who receive mental health services each year in B.C. They are but two examples of the critical role infrastructure plays in our daily lives and the reason we continue to advance our capital plan.

Notwithstanding the magnitude of our building program, over the next three years our taxpayer-supported debt-to-GDP ratio, a key measure of affordability, will fall to 16.6 percent, lower than we forecast in Budget 2014 and dramatically lower than it was 15 years ago.

Similarly, as we continue to hold the line on spending and implement the debt management strategy, our ratio of taxpayer-supported debt to revenue is much improved since Budget 2014 and is now forecast to decline each and every year.

We take these steps cognizant of the fact that as a relatively small market, representing only about 1 percent of the total GDP in North America, our economic well-being is influenced by many external factors. However, like that team striving to make the playoffs, by controlling the things we can control, our prospects for success will be that much stronger.

In an uncertain world where economic fortunes seem to rise and fall more quickly and unexpectedly than ever, the key to our success, the key to keeping our economy on track, has been our strategy of building a diversified portfolio of trading partners.

In 2001 almost 70 percent of our merchandise exports went to the United States; only 2.3 percent went to China. By 2014 China accounted for almost 20 percent of our exports, and Asian markets accounted overall for about 37 percent, with roughly 51 percent of our exports going to the U.S. Compare that to Alberta, where 90 percent of exports in 2014 went to the United States, or to Ontario, where the U.S. accounted for 80 percent, and you start to get the picture of just how far British Columbia has come.

We have leveraged our position as Canada and North America’s gateway to the Asia-Pacific. We’ve leveraged our cultural and family ties to other countries. We’ve leveraged the knowledge and skills of our citizens and the strengths of our natural resources. With this budget, we are continuing to build on these advantages.

We are investing an additional $31 million over three years to support and strengthen economic growth across the province. As much as we look forward to reaching final investment decisions to develop LNG, we are at the same time moving forward to support the industries that have for decades supported our families, our communities and our economy and to promote new and growing opportunities.

The resurgence of mining continues to be a B.C. success story. Mining exports have more than doubled since 2004. Five new mines have opened since 2011. We’ve also approved seven mine expansions supporting thousands of existing jobs and generating hundreds of new ones. As we promised in the B.C. jobs plan, average turnaround times for exploration permits have been reduced by more than half, and today we are taking steps to keep the momentum going.

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With Budget 2015, we are extending for one year the B.C. mining flow-through share tax credit, which provides incentives for mineral exploration. We are extending the new mine allowance for four years, meaning it will be available to new mines and those with major expansions that start production by December 31, 2019.

We are also providing a base budget increase of $6.3 million annually to the Ministry of Energy and Mines. This funding will support continued improvements to permitting and regulatory oversight, including increased mine inspections. New Mines Act permit fees have also been approved. We expect them to generate about $3 million a year. That money will stay in the ministry, directly supporting service enhancements related to permitting, particularly for major mines.

Budget 2015 also introduces a measure to strengthen the province’s cement industry, which has been working to reduce its greenhouse gas emissions. In 2011, for example, companies in Richmond and Delta started manufacturing a new cement type that results in a 10 percent reduction in emissions. By 2013 the low-emission product accounted for 50 percent of their sales. It’s now the preferred standard for most of our major construction projects. At the same time, new fuel options like biocoal are being developed and are becoming more commercially feasible.

Today I’m announcing measures that encourage a transition to cleaner fuels and act as an incentive for the industry to lower its emissions even further. Over the next five years the province will offer transitional assistance to encourage cement companies to meet or beat new benchmarks for emission intensity. We believe B.C.’s cement industry can produce a product that is competitively priced and that sets the standard for environmental sustainability.

With this budget we are also providing $25 million over three years to the Ministry of Environment and the Ministry of Forests, Lands and Natural Resources to implement the new Water Sustainability Act, which will be in force in 2016. The new legislation replaces a statute written more than a century ago, delivering on the government’s commitments to modernize B.C. water laws, regulate groundwater use and strengthen provincial water management in light of growing demands.

With this budget we’re also delivering on the government’s commitment to direct all revenues from freshwater fishing licences — approximately $10 million a year — to the Freshwater Fisheries Society for conservation activities. Freshwater sport fishing generates about
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$500 million a year in economic activity, much of it taking place in rural British Columbia.

Forestry is another traditional mainstay of our rural communities. More than 40 percent of the province’s regional economies are based on forestry activities, through more than 6,000 businesses. In the year ahead we’ll be working with our partners in the industry to develop a new forest sector competitiveness strategy, addressing issues such as market fluctuations, technological advances and changing land use patterns. Since 2003 we’ve seen a 30-fold increase in the value of B.C. softwood lumber exports to China. We’re looking to repeat that kind of success in India and other overseas markets.

As we continue to build and diversify our natural resource industries, we’re making sure that First Nations are partners in advancing economic prosperity. We continue to make slow but steady progress on the treaty front. In the meantime, B.C. is the first province in Canada to share provincial revenue from mining, forestry and clean energy projects with First Nation communities. We now have more than 200 revenue-sharing agreements in place, ensuring that First Nations benefit directly from the work taking place in their traditional territories.

Some of that work will be driven by transportation improvements. The province recently completed consultation on a new ten-year plan to guide transportation investments provincewide. We already have $82 billion in major projects under construction in the public and private sectors, providing jobs while building out the infrastructure we need to support a growing economy and growing international trade.

That includes moving forward with the province’s commitment to provide $5 million over five years to further expand and grow B.C.’s world-class aerospace sector. The second installment of funding will continue the work that has been launched, aimed at expanding markets and attracting more global business and investment in B.C. The aerospace industry already contributes $2.5 billion a year to our economy and provides direct employment for over 8,300 people. Those impacts can be expected to grow as the B.C. sector forges stronger ties with global partners and exploits our proximity to aerospace giants like Boeing.

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The partnership we’ve established with B.C.’s aerospace industries has received national attention. Last fall the Aerospace Industries Association of Canada opened its annual conference with a ceremony recognizing the leadership and contributions of the government of British Columbia. In the coming year the government will also be working closely with the association’s Pacific branch, airport authorities and local communities across B.C. to eliminate any lingering regulatory hurdles that impede the expansion of our aerospace sector and the family-supporting jobs that go with it.

We’re also moving to re-establish an international maritime centre in Vancouver. Just like the aerospace cluster, the maritime centre will help to attract more international companies to British Columbia, along with the businesses and jobs that support them. Legal, financial, chartering, brokering and market exchange are just a few examples of the so-called upper-stream services that make a vibrant shipping centre and add new value to an already essential industry.

Two decades ago more than 20 shipping companies called Vancouver home. Since the International Maritime Centre wound down its operations in 1998, more than half of those shipping companies have left, taking with them a myriad of opportunities. That’s a loss we are not prepared to countenance any longer. We intend to partner with the International Ship-Owners Alliance of Canada to re-establish an international maritime centre in Vancouver. We intend to allocate up to $3 million over the next three years to draw more shipping companies and their head offices to Vancouver, creating long-term, high-paying jobs, while further cementing B.C.’s reputation as the preferred gateway between North America and Asia.

Today I’m also announcing a number of extensions to tax credit programs that have proven their value in supporting a strong and diversified economy. First, we are expanding the digital animation or visual effects tax credit to include post-production film activities. This, in addition to the broader credits already available, will help to keep our film sector healthy.

Second, the interactive digital media tax credit introduced in 2010 was set to expire this year. Instead, we’re extending it to 2018, to continue offsetting the costs of developing video games and other digital media products.

Third, we are providing a one-year increase of $3 million to the small business venture capital tax credit program. This will allow for up to $10 million in additional equity financing for qualifying new businesses in 2015.

With this budget we are also recognizing the critical role of agriculture in all our lives. B.C. has the most diverse agrifoods industry in Canada, providing approximately 60,000 jobs and generating roughly $11.6 billion a year for B.C.’s economy. Of course, the industry also puts food on our tables, through retail outlets and through donations to food banks and other philanthropic agencies. Every week across B.C. growers donate thousands of pounds of fresh, nutritious food for those who need it most.

We think it’s time those growers saw something in return. Accordingly, the government will explore, over the coming year, options to give farmers credit for their philanthropy. In the meantime, we are committing a further $2 million to our Buy Local program, which helps farmers and food processors promote their B.C. products.

Business in B.C., in Canada and, potentially, North America will also benefit from Canada’s new renminbi hub, the first of its kind in the Americas. The hub is a
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financial centre sanctioned by China to clear and settle transactions in the Chinese currency, making it easier and less expensive for people here to do business with China.

The advantages of RMB-denominated trade are significant. The Canadian Chamber of Commerce estimates that direct trade in renminbi could save Canadian firms up to $6.2 billion in transaction costs over ten years and increase the value of exports by as much as $32 billion. The Canadian chamber also predicts that B.C., as the leading exporter to China, will be the big winner among provinces, with an additional $9.4 billion in exports over the next decade.

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The lion’s share of these export gains are expected to be in the forestry sector because it is an industry with highly competitive prices in which the use of the RMB could make a significant difference to competitive bids. A recent HSBC survey found that 55 percent of Chinese businesses will offer discounts of up to 5 percent to their trading partners for RMB-denominated transactions. Doing business in RMB also positions B.C. companies to increase their market share in China and build stronger relations with their customers.

Consider this at a practical level: a forestry company in B.C. exporting $250 million a year in B.C. wood products to China. Applying HSBC’s expectation that, on average, exporters who trade in RMB derive benefits in the order of 3 percent, there is potential for additional revenues to this forest company of about $8 million, plus the benefits that can be afforded from a stronger business relationship.

Apply that same formula more broadly. A 3 percent benefit on the $1.8 billion worth of wood product sales to China in 2014 would equal $54 million, money that the industry can put to work as it becomes more productive, more competitive and employs more people.

B.C. advocated strongly for the hub, and we applaud the federal government for making it a reality. It is, to quote the Canadian Chamber of Commerce, a “unique, once-in-a-generation opportunity for Canada’s businesses and banks to leap ahead of competitors and become early adopters” of the world’s fastest-growing currency. This year the government will work with partners like Advantage B.C. and contribute modest funds to ensure that B.C. businesses are equipped to understand this new tool and put it to work on behalf of their employees.

Why is it important to manage spending and support economic growth? I think it’s mostly important because it allows us to continue investing in the services that British Columbians need. Of these, health care is by far the most expensive and continues to account for the single largest share of our expenditures. In the next three years funding increases for the Ministry of Health will total $3 billion. That’s a lot of money. But behind those numbers, two very positive stories are emerging.

First of all, we’ve achieved what few provinces have done and fewer pundits and critics thought we could do. We’ve reduced the growth rate of health care spending to an annual average of 2.9 percent, down from nearly 8 percent in the mid-2000s. Is a slower rate of growth for our health care budget sustainable? I believe it is, particularly if we are prepared to be innovative and explore new ways of delivering services within our publicly funded health care system. In B.C. we’ve proven it’s possible, and now other provinces, confronted by tough fiscal choices, are coming to the same conclusion.

Second, even as we bend down the cost curve, B.C. continues to have some of the best health outcomes anywhere. For example, we continue to have the longest life expectancy in Canada, and according to the most recent data from the Canadian Institute for Health Information, B.C. continues to have the country’s best survival rates for cancer and heart disease.

Those results, I think, are due, in part, to our ongoing efforts to help British Columbians get and stay healthier by highlighting disease prevention and health promotion activities, including our partnership with the national ParticipACTION organization to promote healthy living and physical activity; the Informed Dining program, where participating restaurants provide nutritional information on menu items; and the B.C. smoking cessation program, which continues to help us retain our title, for the 14th consecutive year, as the province with the lowest smoking rate in Canada.

With this budget, we are building on our progress to date with a new investment in cancer prevention. Today I can confirm that the province intends to provide up to $12.5 million to the Canadian Cancer Society toward the establishment of a world-class cancer prevention centre based right here in Vancouver.

Recognizing that roughly 50 percent of all cancers are preventable, the centre will focus on research that has the potential to significantly improve health outcomes and, by extension, reduce health care expenditures. By working together with the Cancer Society, other cancer agencies and other governments, the goal of ultimately preventing this insidious disease can be achieved.

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As promised, we are also providing new funding for hospice, palliative and end-of-life care, recognizing that most people, when they have the choice, prefer to receive this kind of care in their own home or a homelike setting. It’s better for them, better for their families and, frankly, much more cost-effective than providing care in a hospital.

In 2013-14, as part of our end-of-life-care action plan, we provided $2 million in one-time funding towards a new B.C. Centre for Palliative Care, providing leadership and promoting excellence in palliative and end-of-life care. We also provided over $8 million to support hospice organizations in Vancouver, White Rock, Qualicum, Clearwater and Comox. Today I can confirm that the government will provide additional funding to support
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hospice services for children and adults as part of our work towards doubling the number of beds by 2020.

For the Ministry of Education, we are providing additional funding of $106.5 million in 2015-16, $200 million in ’16-17 and $257.5 million in ’17-18. Our investment in public school instruction will fund the recently negotiated long-term collective agreement with teachers and support staff, including a 33 percent increase to the learning improvement fund.

Budget 2015 also continues the government’s commitment to ensuring British Columbians get the best value from their education tax dollars. Since 2012 we’ve been working with school districts to find savings from efficiencies outside of the classroom. Districts are on the right path. With this budget, we are targeting ongoing administrative savings of $29 million in ’15-16 and $25 million the following year.

We’re also investing in the health and wellness of students, with $1 million in additional funding for the B.C. school fruit and vegetable nutritional program, which now benefits close to half a million children. This new funding will ensure that milk continues to be provided free of charge to participating schools, along with fruits and vegetables, and that the program will be available to First Nations band schools across British Columbia.

With this budget, we are also introducing a new B.C. education coaching tax credit, recognizing the value of extracurricular opportunities in our schools. Starting this tax year, teachers engaged in extracurricular sports and arts activities will be eligible for a $500 education coaching tax credit.

Building on the children’s fitness and arts tax credits, which were introduced in 2012, we are also investing $3 million in Budget 2015 to provide an additional $250 children’s fitness equipment tax credit. This measure recognizes that whether it’s soccer, hockey or tennis or any in a long list of fitness activities, parents are often out of pocket for equipment costs. We want to help just a little bit where we can.

This latter credit will be set at 50 percent of the amount claimed for the existing B.C. children’s fitness credit so parents won’t have to keep receipts for the equipment.

Budget 2015 also supports the skills-for-jobs blueprint, the government’s plan for re-engineering education and training. It provides a seamless path from school to the workplace to help ensure British Columbians are first in line for the approximately one million job openings expected by 2022.

As part of that plan, Budget 2015 extends the training tax credit, which benefits both employers and apprentices, to the end of 2017. We are also extending the enhanced credit, which provides an additional 50 percent for First Nations individuals, people with disabilities and their employers.

Since the program’s inception in 2007, thousands of apprentices have enrolled and gone on to secure stable, well-paying jobs throughout B.C., building our homes, our infrastructure and our economy.

Extending the credit will keep those benefits flowing to British Columbians, building on the B.C. access grant the government announced last fall. It supports students with financial need who are studying in-demand trades at our public post-secondary institutions. Over the course of a four-year apprenticeship program, eligible students may receive up to $44,600 in financial support from the federal and provincial governments. Students with dependents can receive even more.

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By way of example, a student supporting a partner and two children may be eligible for up to $55,700 to help them get the skills they need to build their careers and to meet the needs of employers.

Meanwhile, with more and more growth taking place in rural and remote communities, we are taking steps to ensure that everyone in British Columbia has access to high-speed broadband Internet for learning, training, doing business, finding services and staying connected.

The government had set a goal to expand high-speed Internet access to all British Columbians by 2021. Today I can tell the House that we remain committed to achieving that outcome, but we don’t want to make people wait quite so long. With this budget, we will pledge up to $10 million over two years to match partner contributions and finish that project well before 2021.

Continuing investments in health care, education, skills training and connectivity are fundamental to our quality of life. They provide a solid foundation for growth and opportunity and help to attract the families and businesses that every year come from around the world to make their homes in British Columbia.

Our income tax structure is another contributor. We’ve worked hard since our first day in office to keep rates as low as possible. B.C. families generally have the amongst the lowest overall tax burdens in Canada, including income taxes, consumption taxes, property taxes, health care premiums and payroll taxes. British Columbia has the lowest provincial personal income taxes in Canada for individuals earning up to $122,000 a year. That is a big improvement over 2001.

Compared to 14 years ago, a senior couple earning $40,000 a year pays $774 less in provincial income taxes. An individual earning $50,000 a year pays $1,334 less. A family of four earning $70,000 a year pays $2,027 less. Overall, most British Columbians have had their provincial personal income taxes reduced by 37 percent or more since 2001. And when we can afford to lower rates even more, we will.

For 2015 we are providing a small enhancement to the B.C. tax reduction. This will mean that a single individual can earn more than $19,000 a year before paying any provincial personal income tax. Modest as it is, this measure will benefit roughly half a million taxpayers,
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letting them keep just a little more of their hard-earned income. The annual cost to government is estimated to be $5 million.

With this budget, we’re also providing additional dollars to support those individuals and families who are most in need. That includes an additional $106 million over the next three years to Community Living B.C. to support people with developmental disabilities and an additional $20 million for income assistance programs.

I’m also announcing today a significant change for parents receiving both income assistance and child support payments from a non-custodial parent. Effective September 1, 2015, child support payments will be fully exempted from income assistance calculations.

In other words, custodial parents will be able to keep every dollar they receive in child support over and above what they receive in assistance. This means an estimated additional $32 million over three years for some of the neediest children and families in British Columbia.

Madame Speaker, if you’ll permit me. Although he no longer occupies the ministerial post, I hope members will join me in acknowledging the tireless efforts of the member for Comox Valley in advancing this — and other members who have dedicated themselves.

At the same time, the government will ensure that resources continue to be made available to parents on income assistance to assist them in pursuing support orders from non-custodial fathers and mothers, consistent with our belief that looking after their children should be every parent’s first priority.

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Approximately 180,000 families will also begin receiving the B.C. early childhood tax benefit, starting April 1 of this year. It provides up to $660 a year for each child under the age of six to help offset the cost of child care. When combined with federal benefits for families with children, a couple earning $60,000 with two children under six stand to receive an annual benefit of $7,500, and lower-income families will receive additional benefits beyond that.

Also coming on line this year is the training and education savings grant, a one-time payment of $1,200 for every child resident in British Columbia who was born since January 1, 2007. Applications will be available at participating financial institutions this summer, and grants will be received by as many as 40,000 children every year once they turn six.

With this budget, we will partner with an agency that for decades has protected those who cannot protect themselves. The B.C. Society for the Prevention of Cruelty to Animals has a physical presence and serves a vital role in most of our communities. They have done so without the benefit of funding from the province.

Many of the society’s facilities are aging. They need significant repair and updating. We recognize the magnitude and the importance of the work the society does and the importance of their capital program. Therefore, the government will provide $5 million towards the replacement or renovation of SPCA facilities in the Lower Mainland, Vancouver Island, Kootenay and Okanagan regions.

This commitment is a show of support for the efforts of SPCA officials and the countless volunteers who are dedicated to ensuring that all creatures, great and small, are protected from abuse and neglect.

Finally, members will know that in a year when we are marking the centenary of the first war to end all wars, we also mark the 70th anniversary of the ending of the Second World War. Through the Ministry of Cultural Development, the government intends to recognize the immense contributions of our World War II veterans. The value of their courage, their sacrifice, their service to this country can never be overstated.

In honouring their remarkable service, we will partner with the federal government to ensure that British Columbia veterans wishing to participate in commemoration ceremonies receive the funding support that they require. And we will work with B.C.’s post-secondary institutions and governments overseas, including the government of the Kingdom of the Netherlands, to ensure that the friendships born of battle are preserved and that students’ opportunities to learn about this chapter in our history are enhanced.

To recap, for the next three years we are projecting surpluses of over $1 billion. In light of that, some may ask — will ask — why not spend more? Why not loosen up the purse strings and lavish money on this, that or the other thing? Why plan for surpluses? Why be so careful? Because it’s the key to our success. It’s the reason that today we stand probably alone amongst the provinces in Canada as being able to balance our budget.

The global economy remains uncertain. Governments everywhere are still struggling with the aftermath of the Great Recession, and even as we deliver this, our third consecutive balanced budget, I want to emphasize to the House that notwithstanding our projected surpluses, we cannot become complacent. As a comparatively small, open trading economy, we can never take anything for granted.

I was reminded of something a few weeks ago while watching a small, obscure American sporting event, the Super Bowl. There is always the unexpected. Sometimes, when you’re absolutely sure the other guys are going to run the ball, they decide to pass. The trick is to put yourself in a position to take advantage of the unexpected.

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If you look back at our province’s more recent fiscal history, you’ll discover a very revealing truth. It surprised me, and it would certainly surprise most people, I think, to learn that in the quarter-century that passed between 1980 and 2005, the province recorded only four actual balanced budgets.
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Now, lest people interpret that as an attempt at a partisan shot, I should remind everyone that over that period B.C. was governed by three different political parties. But it does serve as a poignant reminder that even when times are good, balancing the budget for a multi-billion-dollar enterprise isn’t easy. It’s a huge challenge. It requires vision, prudence and discipline.

It demands the kind of game plan that leverages our strengths, builds on our successes and guards against the impacts of unforeseen events. That is exactly what we’re tabling today with Budget 2015.

It provides, for the next three years, $3.7 billion in additional funding for health care and education, $31 million in measures to strengthen economic growth and job creation, and $150 million to make life a little easier for families and those in need.

And so as we drop the puck on a new fiscal season, we have every reason to be optimistic. We are the fiscally healthiest team in the league. Our bench is strong in British Columbia. We’ve already got the most talented players in the league, and more are on the way.

In 2014 an estimated 43,000 people came to British Columbia, including a net gain of 9,500 people moving here from other provinces. That trend is continuing. People are coming home to B.C. They’re staying home to build their lives and raise their families, and that is the ultimate vote of confidence and a winning recipe for a winning team.

With this budget, we are reaffirming our commitment to keep our province on the right track of expanded growth, opportunity and prosperity. This is our financial game plan for British Columbia, and for the third year in a row I say with pride that it is a game plan for Team B.C. that is balanced.

C. James: I’m pleased to rise and respond to Budget 2015. Just like the budget that the government tabled last year, Budget 2015 once again makes hard-working British Columbia families pay more and get less.

Families who have been asking for a break after years of increases to hidden taxes, fees and fares are going to see in this budget more fee hikes, more fare hikes, more rate hikes and more premium hikes. Any small investments in programs for families are more than eaten up by these hikes.

Government put only $5 million towards tax relief for the very lowest earners in British Columbia, but the wealthiest 2 percent saw an astounding $230 million in a tax break. If you’re in the wealthiest 2 percent income bracket and you earn over $150,000, you’re going to share in a $230 million tax cut by the year-end without even asking for it.

And who pays for that tax cut? Middle- and modest-income families. This budget says everything about this government’s lack of support for modest- and middle-income families.

While the B.C. Liberal government is making hard-working families pay more, the median wage in B.C. has been going down. Families are paying more and getting less.

It isn’t the wealthiest 2 percent who need a break. It’s low- and middle-income earners who should have a break in British Columbia.

So where are people paying? Budget 2015 shows that medical premiums will go up another 4 percent, just as they did on January 1. In fact, MSP premiums have gone up 100 percent, or over $864, since the Liberals formed government in 2001.

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While families are paying more for health services, this government has failed on their commitments for a doctor for every family. Hallway medicine has become the norm, not the exception.

B.C. Hydro rates will also go up, by another 6 percent this year, even though the B.C. Liberal government told voters ahead of the last election that they might not go up at all. In fact, hydro rates have shot up 74 percent since 2001, or $524 per family per year. And they’re going to continue to go up in 2016, in 2017 and in 2018.

Basic ICBC rates will go up between 3.7 percent and 6.7 percent this year, after going up 41 percent since 2001, or $230 for the average customer.

What about ferry fares? They’re going up another 3.9 percent in April, while sailings have been cut by 10 percent. Some routes have actually doubled in cost since 2001. A round trip for a family between Vancouver Island and the Mainland costs $75 more than it did in 2001.

Daily commuters who cross the Golden Ears or Port Mann bridges are going to pay an extra $1,500 per year.

Tuition has doubled. Since 2001 it’s gone up $2,300 per year for an undergrad degree.

That’s just a short list.

There’s even a new fee hike this year. Park fees are going to go up another $5, even though the facilities and trails at many of our parks have deteriorated since the last fee hike.

Family budgets are already stretched too thin, and the Liberal Budget 2015 is going to ensure that family debt increases.

Now, I have to say that we are happy to see the end of this government’s callous clawback policy that never should have been there in the first place. The credit for that goes entirely to the families who stepped forward and shared their stories. Some of them are here today, and we thank them for their courage in coming forward.

Budget 2015 shows that families are paying more, but sadly, they’re also getting less. B.C. has fewer home care hours, lower standards in nursing homes, overcrowded hospitals. People can’t find a family doctor, and schools are underfunded.

Three years ago the Premier made grandiose promises of jobs and outlandish promises about what potential
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LNG could bring us all in British Columbia — a fantasy fund of $1 trillion, an entirely debt-free British Columbia, the elimination of the PST forever and much more. We were also told we’d see the first LNG plant this year. Well, those promises have come up empty.

There’s been a real cost to that singular focus of the Liberal government over the last three years, and that’s neglect, because every time issues were raised that were important, issues raised here in this Legislature, the answer was always LNG. Well, the result of that singular focus is clear in Budget 2015 — more bad news for B.C. families. Virtually every other sector, other than LNG, was neglected by this government.

Now, I suppose there’s one good thing about the Liberals failing on LNG so far, and that is that they’ve been forced to talk about other sectors that they’ve neglected here in British Columbia. The B.C. Liberals have transformed our forest industry into one that relies much on the export of raw logs. That’s at the expense of manufacturing jobs in wood right here in our province. Again, under the B.C. Liberals, we get less and less — fewer jobs and less revenue from every tree that we cut, a resource that belongs to British Columbians.

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Half the companies in the competitive value-added forest sector have gone out of business since 2002. Employment in the sector fell by 40 percent, and sales fell by 60 percent. B.C. lost 2,006 forestry mills between 2001 and 2013 — and 21,000 wood and paper manufacturing jobs. Yet we have seen an increase. We’ve seen an increase in raw log exports by 500 percent.

The B.C. Liberals also cut staffing at resource ministries by 1,900 people between 2002 and 2010, when they actually stopped publishing the staffing numbers. Lacking geologists and other technical experts in government, the permitting process slowed down. It also allowed major environmental oversights, like the Mount Polley disaster. Yet Budget 2015 actually cuts the budget for environmental protection.

Now, the B.C. Liberals have shown some focus on agriculture, but unfortunately, it’s been looking for ways to open agricultural land for other purposes, like parking lots, instead of protecting it for agricultural use.

Despite the great potential for growth in tourism, the B.C. Liberals shut down Tourism B.C. in 2009. They’ve made other decisions without any concern about the effect on regional tourist operators, like dismantling the Discovery ferry route in the north.

Now, when it comes to high tech, B.C. continues to trail the performance of other provinces and states. Per-capita employment in B.C.’s technology sector is also lower than other provinces with significant technology sectors.

While the top 2 percent of income earners in B.C. will see a $230 million tax break they didn’t ask for, B.C. families are going to go further into debt thanks to Budget 2015, and the Liberal government will struggle to make up for the neglect they’ve shown B.C. families and sectors while they failed to meet every one of their timelines on LNG.

I will have much more to say about this budget at the next sitting. I reserve my right to continue, and I move adjournment of the debate.

C. James moved adjournment of debate.

Motion approved.

Presentation of Estimates

ESTIMATES OF SUMS REQUIRED
FOR THE SERVICE OF THE PROVINCE

Hon. M. de Jong presented a message from Her Honour the Lieutenant-Governor: Estimates of Sums Required for the Service of the Province for the fiscal year ending March 31, 2016, and a supplement to the estimates for the fiscal year ending March 31, 2016, recommending the same to the Legislative Assembly.

Madame Speaker: The Lieutenant-Governor transmits herewith estimates fiscal year ending March 31, 2016, supplement to the estimates fiscal year ending March 31, 2016 and recommends the same to the Legislative Assembly.

Introduction and
First Reading of Bills

BILL 10 — BUDGET MEASURES
IMPLEMENTATION ACT, 2015

Hon. M. de Jong: Madame Speaker, having previously tabled Bill 10, I now move first reading of Bill 10, the Budget Measures Implementation Act, 2015.

Motion approved.

Hon. M. de Jong: I move first reading of Bill 10, which I’ve just done.

Bill 10 consists of two parts. Part 1 includes one provision that will enable government management of the 2015-16 budget. Part 2 amends eight statutes in order to implement many of the tax measures in the ’15-16 budget.

In part 1 the Financial Administration Act is amended to add a provision that enables the payment of liabilities resulting from retroactive accounting changes.

In part 2 of Bill 10 the Income Tax Act is amended to enhance the B.C. tax reduction. The act is also amended to provide new supports for children and teachers. This includes a new children’s fitness equipment credit and a new B.C. education coaching credit.
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The act is also amended to extend several tax credits — the mining flow-through share tax credit for one year, the training tax credit for three years and the interactive digital media tax credit for three years. The act is also amended to support B.C.’s film industry by expanding the digital animation or visual effects tax credit to include post-production activities.

The Small Business Venture Capital Act is amended to increase the small business venture capital tax credit budget by $3 million for one year. Building on the changes made in Budget 2012, the Carbon Tax Act and the Motor Fuel Tax Act are amended to further streamline obligations related to large volumes of fuel imported into B.C. by ship.

The Motor Fuel Tax Act is also amended to enhance deterrents for unauthorized use of coloured fuel by imposing additional requirements on certain purchases of coloured fuel and by imposing an additional penalty for the unauthorized use of coloured fuel. The authorized uses of coloured fuel under the act are expanded to include using coloured fuel to operate a locomotive.

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The act is also amended to move the due date for tax returns in respect of motor fuel tax payable on natural gas used in a stationary combustion engine to be consistent with the due date for returns under the Provincial Sales Tax Act.

The Provincial Sales Tax Act is amended to ensure consistency in the tax treatment of goods acquired to make other goods that are then used to improve real property outside of B.C. The act is also amended to extend registration obligations to businesses located outside of B.C. that, in the ordinary course of business, sell goods to a person located in B.C. and hold those goods in inventory in B.C. at the time of sale.

The act is also amended to clarify the calculation of the multi-jurisdictional vehicle tax, consistent with the full reciprocity under the international registration plan. The act is further amended to adjust the maximum allowable tax rate under the municipal and regional district tax program.

The Tobacco Tax Act is amended to clarify that security is payable on tobacco that a wholesale dealer brings or sends into B.C. The Tobacco Tax Act is also amended to ensure that the security scheme operates as intended.

Finally, there are consequential amendments to the Small Business and Revenue Statutes Amendment Act, 2007, and the Vancouver Tourism Levy Enabling Act.

I move that Bill 10 be placed on orders of the day for second reading at the next sitting of the House after today.

Bill 10, Budget Measures Implementation Act, 2015, 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.

Tabling Documents

Hon. M. de Jong: I have the pleasure to rise and table the government’s overall strategic plan and the Budget and Fiscal Plan 2015-16–2017-18, which together fulfil the requirements of sections 7 and 12 of the Budget Transparency and Accountability Act. The Budget and Fiscal Plan also contains the carbon tax plan required under section 3 of the Carbon Tax Act and other documents required under section 4 of the same act.

I also table, on behalf of the ministers responsible, the service plans as required under section 13 of the Budget Transparency and Accountability Act. The service plan documents are presented in two binders. The first binder contains service plans for the Office of the Premier and 18 ministries. The second binder contains service plans for 26 Crown corporations.

The second binder also includes a list of organizations that are exempted from the service plan requirements under section 13 of the Budget Transparency and Accountability Act. One organization has been added to the list this year — the Private Career Training Institution Agency — as this organization will be wound up during 2015-16.

Hon. M. de Jong moved adjournment of the House.

Motion approved.

Madame Speaker: This House, at its rising, stands adjourned till 1:30 tomorrow afternoon.

The House adjourned at 2:48 p.m.

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