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)

Thursday, March 12, 2015

Afternoon Sitting

Volume 21, Number 10

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

THURSDAY, MARCH 12, 2015

The House met at 1:32 p.m.

[Madame Speaker in the chair.]

Routine Business

Introduction and
First Reading of Bills

BILL M210 — OPEN GOVERNMENT ACT, 2015

D. Routley presented a bill intituled Open Government Act, 2015.

D. Routley: I am pleased to introduce the Open Government Act. This is the second time I have brought forward a bill to improve British Columbians’ access to information and provide much-needed transparency and accountability from this government.

This bill creates a positive duty to document government decisions and actions in conjunction with the inappropriate destruction of documents, and government’s failure to create records of its activities and policies as a threat to good governance and a functioning, well-informed democracy.

Inadequate record management and archiving over the past decade has, as the former Information Commissioner David Loukidelis said, “put the province’s historical record at risk.”

This bill requires that key government decisions be documented and maintained for easy access to the public — in particular, when records relate to an investigation — and makes disposal of transitory records reviewable by the Information Commissioner.

Secondly, this bill calls for routine disclosure of executive calendars. The Information Commissioner has identified calendar requests as a significant cause of this government’s inability to meet its legislated time limits and recommended proactive disclosure, stating this one change would result in significant administrative efficiencies that would reduce pressure on staff. But the government has not seen fit to enact this recommendation from the Information Commissioner.

This bill calls for the executive council members and senior staff to disclose their calendars on a monthly basis. This bill also brings under purview of the Freedom of Information and Protection of Privacy Act subsidiaries and corporations of public bodies. As the government continues to outsource services, this change allows for information in the custody of these parties that are fulfilling public sector functions to be available to the public.

Lastly, the bill strengthens public interest provisions, ensuring that public interest truly is paramount and also makes changes to fees associated with FOI requests to make fees more reasonable and expand general public access to information.

This bill follows many of the recommendations made by the Office of the Information and Privacy Commissioner in her 2010 report.

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

[1335]

Madame Speaker: Hon. Members, two questions. First is first reading.

Motion approved.

Madame Speaker: Second, referral to orders of the day.

Bill M210, Open Government 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.

Orders of the Day

Hon. J. Rustad: In this House I call continued committee stage of Bill 7, and in Committee A, the estimates of the Ministry of International Trade.

Committee of the Whole House

BILL 7 — PRIVATE TRAINING ACT

(continued)

The House in Committee of the Whole (Section B) on Bill 7; D. Horne in the chair.

The committee met at 1:38 p.m.

Section 25 approved.

On section 26.

K. Corrigan: I did have a question about section 26 of the Private Training Act, which deals with private training colleges or institutes and some language schools. This section has to do with repayment of money received by a claimant, and it says: “If money is paid from the fund to a claimant, the trustee may require the claimant to pay to the fund any money received by the claimant from another source in respect to the claim, up to the amount paid from the fund to the claimant.”

I’m wondering if the minister could explain. Is this student loans or that kind of student grants? Is it that kind of thing? Or what other things could…?

Hon. A. Wilkinson: This, like so many other circumstances in life, refers to a mechanism to avoid double
[ Page 6718 ]
recovery by a claimant. We see this in many other judicial-related issues.

[1340]

In this circumstance, it’s in the unlikely circumstance that the individual has some kind of insurance policy that would pay them in addition to the funds they receive from the tuition protection fund, which, as I say, would amount to double recovery.

K. Corrigan: Just to be clear. If it was a travelling student…. Many of the students that will be covered by this act could be travelling from either other provinces or other countries. If they had an insurance policy covering that travel, presumably that insurance policy could cover things like cancellation of travel and so on.

I’m not clear. Would that be that they had insurance that was particularly related to the cost of tuition? Or how would that be teased out and figured out?

Hon. A. Wilkinson: This is solely related to double recovery of tuition. As we say, it’s an unlikely circumstance, but one can contemplate that there could be an insurance policy that a student had purchased that would amount to them being compensated in both insurance and from the tuition protection fund. This provides a statutory basis for recovery in those circumstances.

K. Corrigan: The trustee, then, has a cause of action against the claimant for the amount unpaid if the claimant fails to comply with subsection (1).

There are a couple of sections which create a cause of action. But is there any cause of action that a student has access to with regard to anything that happens under this act?

Hon. A. Wilkinson: The design of the statute is such that students can make a claim for tuition in a simple and expedited fashion by making their claim in written format to the trustee.

In addition to that, the student would have a cause of action, conceivably, for breach of contract or deceit or fraud or any of a number of other reasons. That could encompass their entire experience and their entire expenditures. That would be up to small claims or, conceivably, superior courts in a class action. But the statutory framework is designed to provide a simple, expedited process for claims against the tuition protection fund.

K. Corrigan: I’ve got just a little scenario. If a student was to file a claim against the fund and was not successful and then also filed a small claims action and was successful in the small claims action and the judge found…. I mean, this is a scenario. I’m just trying to think of things that could happen. If the judge found in the small claims action that they should be reimbursed for their tuition, would the fund have any claim against the student who got that money in small claims court under this act?

Hon. A. Wilkinson: In the event that the student had been paid out by the trustee under the tuition protection fund, that would invoke section 26(1). The premise would be that to avoid double recovery, the student would have the obligation to pay back the tuition protection fund, under section 26(2), to the extent that they had recovered elsewhere for the same claim.

In other words, this is designed to protect the fund from a situation where the student is effectively being paid twice for a single claim.

Section 26 approved.

On section 27.

[1345]

K. Corrigan: Section 27 enables the trustee to essentially recover money or get repayment of money from an institution after a payment has been made out from the student tuition protection fund. In other words, a student has been successful. The trustee can then go back and try to recover the money that was paid out of the fund from the institution that was involved.

First of all, I’m wondering what is expected. It says it can “require the institution in relation to which the payment was made to pay to the fund, in the manner and at the times prescribed by regulation of the Lieutenant Governor in Council, the amount of the payment made from the fund.”

Is there some idea of what those regulations would look like?

Hon. A. Wilkinson: The regulations contemplated in section 27(1)(a) are to deal with issues such as the time frame for required repayment. For instance, it might be three months. That will have to be developed as the regulations are developed. And “in the manner” obviously refers to the process of making a claim — whether it’s delivery of the demand or whether it’s deemed to be a demand delivered by e-mail, that sort of thing.

K. Corrigan: Subsection (b) says that the trustee can get the fund to compensate by realizing “the security held under this Act in relation to the institution, up to the amount paid from the fund.” What kind of levels are we talking about in terms of security? This is a security that’s up front when the institution is registered, correct? I’m just trying to get a sense of the magnitude. I know it will vary but just some kind of idea.

Hon. A. Wilkinson: The amount of the security on registration, as the member points out, will be proportionate to the revenue stream of the organization — which, of course, is related to the enrolment and the tuition levels. This is, of course, designed to manage risk.
[ Page 6719 ]

Clearly, section 27 is designed to create the necessary vehicles to recover from the institution. First is a demand, in section 27(1)(a). Second, if that’s obviously not working out, then 27(1)(b) provides for the security to be called upon. Then lastly is the possibility of a lawsuit, in sub 27(2).

K. Corrigan: Maybe just by way of example…. I don’t want to spend a lot of time on this, but if the information is readily available…. For some of the large private training institutions, what kind of level of security would they have? I mean, are we talking hundreds of thousands of dollars, millions of dollars, a few thousand dollars? I’m not going to quote the minister on this. I’m just trying to get a sense.

[1350]

Hon. A. Wilkinson: The amount of security to be posted will be risk-adjusted. An institution with a strong financial basis that’s been in operation for a lengthy period of time will have a lower adjusted risk and pay a lower security. Security has not been required to date. It will be required going forward. As I say, the quantum of the security fund for an individual institution will vary depending on their risk profile, their enrolment, their revenue and so forth.

K. Corrigan: I have another question about another subsection. Subsection (3) provides that if the trustee is seeking repayment to the fund and there is an institution that has been operated through an “individual, corporation, firm, syndicate or association, or any combination of them under common control or direction,” they are jointly and separately liable.

Of course, that means that every single one of those individuals, including an individual who might be on a board of directors…. I’m just trying to get the sense of the liability that somebody is taking on. If there was an individual who was on the board of directors of a corporation, they could be liable for the whole of the claim. That can be not just the claim for tuition but also the things that were talked about under section 25 — the costs of investigating and processing claims against the fund or “recovering money paid in respect of an approved claim, including actual legal costs.”

Just to be clear, maybe the minister could confirm that as little as one individual sitting on a board of directors could be liable for the claim, including all of those extra costs, like legal costs. Is that correct?

Hon. A. Wilkinson: The statute refers to the operating entities, whether it be individuals, corporations, firms, syndicates, associations or any combination thereof — the premise being here that the ownership pool operating the institution is liable for the payments that are required under section 27(1). If a school is created that turns out to have no assets but the investor owner-operators behind it do have assets, then this would be designed to attach their assets.

K. Corrigan: Of course, joint and several liability means that even if nobody else has assets, any one person, say, on a board — or a director, I guess…. Each and every one of those individuals would be fully liable if there’s nobody else that the liability can be shared among. Is that correct?

[1355]

Hon. A. Wilkinson: This is properly a legal question. But the member opposite has the same understanding of joint and several liability that I have, the modern term being “jointly and separately liable,” so that any one of the debtors can be held accountable for the sum owed by all of them. That, of course, provides for that debtor who is obliged to pay to then make their own claim against the other debtors.

K. Corrigan: That was my understanding, and thank you for the reminder about the change in the term. It’s habit from many years ago.

With regard to subsection (b), I’m wondering what the necessity of subsection (b) is. I’m not sure what that adds and what is different in subsection (b) that is not covered by the joint and separate liability under subsection (a).

Hon. A. Wilkinson: This is part of a modern drafting strategy, I gather, to make sure that a defendant doesn’t come along later and say: “Well, the phrasing of the section and of this act does not actually invoke the process of this act to this particular recovery from” — as it says — “any or all of them.” My understanding is that this a drafting tool used to avoid a slippery defence.

K. Corrigan: That’s interesting. Thank you to the minister.

Then just to be clear, under subsection (6) it says a “payment under this section” — in other words, a payment back into the fund by the institution that is subject to the payment — “is in addition to any payment made under section 22,” which deals with certified institution payments to the fund.

Is that something that’s existed before? Is it that institutions are required to pay into the fund and then when there’s a payment out of the fund, the fund will cover the student but the institution nevertheless will be required to pay back the amount of tuition, even though they’ve paid into the fund, and add on top of that any other costs, like legal costs? Is that new?

Hon. A. Wilkinson: Similar provisions do exist now. This is obviously designed for a circumstance where there is a major failure of an institution and a substantial claim
[ Page 6720 ]
against the fund. Section 27(1) specifically makes it discretionary on the part of the trustee.

One can imagine if that there’s a claim against the tuition protection fund for a change in the size of a classroom that is considered to be a significant aspect and it ends up in a $200 payout, the trustee is almost certainly not going to pursue that particular institution for that, because the cost of adjudicating and moving that claim through against the institution for recovery would not be worth the bother. However, if a particular institution incurs $200,000 in costs, then it’s only fair that the other compliant institutions are not asked to pick that up through a mutual defence fund.

This provides for the trustee to protect the fund, which is, at the end of the day, designed to protect students. This is a way of replenishing the fund from a bad actor.

K. Corrigan: I’m interested to hear that that existed before. So it’s not really an insurance fund. It’s an insurance fund to the degree it provides insurance that the students can be made whole — with regard to their tuition, not other costs — but it’s certainly not as far as the institutions are concerned.

[1400]

That’s interesting. It’s interesting. I mean, I’m thinking of, for example, a lawyer under the Law Society — which is different; different types of obligations. If a lawyer is paying their fees every month and part of that goes into a fund to pay out claims, big lawsuits against that lawyer, does the minister know…? I’m just trying to get the sense of whether this is a usual or unusual type of setup.

Would the Law Society then be able to claim against a lawyer that had successfully been sued, and then the claim had been made against the fund for the Law Society? I’m not sure.

Hon. A. Wilkinson: I know we’re getting somewhat off topic here. This is not an insurance fund. The Insurance Act is not invoked. The various rights that arise in insurance, such as subrogation and rights of relief against forfeiture, are not invoked here. This is a statutory compensation fund that is solely described within the terms of this statute.

K. Corrigan: It is, but I guess the challenge I have with this section is that it doesn’t have the protections of the court in any way. If an institution had been paying into the fund — and I’m certainly not suggesting that we don’t want to protect against the bad apples or bad actors that the minister referred to — and then there is a major default…. There can be a claim, and it’s up to the trustee to make the decision about whether or not that person has to pay back or how much that person or institution has to pay back.

I don’t believe there’s any…. Is there any recourse in terms of appealing that? I mean, especially if the minister is saying that we’re talking about big defaults…. We’re talking, potentially, claims that could be hundreds of thousands of dollars. There’s no recourse. Is that correct?

Hon. A. Wilkinson: The statute does not provide within its framework an appeal process for the discretionary decision of the trustee in section 27(1), but one can readily assume that if an institution feels that it’s being badly treated or disagrees with the valuation or the necessity for this claim against the institution, they could simply not pay.

Their security may be realized at that point, but under section 27(2) they would then be in a position where they would be the defendant in a claim by the trustee in a superior court, and the judge would be left to decide on the merits of the claim by the trustee.

K. Corrigan: I wanted to ask specifically about — I don’t think I asked this — joint and separate liability. Was that principle included in the previous legislation?

The Chair: I’ll recognize the minister even though he’s not in his place, given the fact that his place is currently taken.

Hon. A. Virk: I seek leave to make an introduction.

Leave granted.

Introductions by Members

Hon. A. Virk: It gives me great pleasure to make an introduction. We have visiting the precinct today 33 grade 5 students from Surrey Christian elementary with their teacher Mrs. Kay and all their dedicated parents who are with them up there. They just spent the last 15 or 20 minutes in my office asking wonderful questions. These are future leaders in Canada and perhaps future parliamentarians. Would the House please make them welcome.

Debate Continued

Hon. A. Wilkinson: The provision for joint and separate liability found in this section is not in the existing regime.

[1405]

K. Corrigan: I’m wondering if…. Was there any feedback from stakeholders on this particular point? If there was, what was that feedback?

Hon. A. Wilkinson: This particular section, providing for recovery of funds by the trustee against the institutions, is part of the process of working this out with the legislative counsel in the Attorney General’s office.
[ Page 6721 ]
Although institutions may be aware of it, they are not actually consulted about the process of recovering from them in the event of a default.

Section 27 approved.

On section 28.

K. Corrigan: Section 28 deals with inspectors and says the registrar “may appoint persons or a class of persons as inspectors” and then “may impose restrictions on the powers and duties that an inspector may exercise or perform under this Act.” My question is: do we have any sense…? We talked about this before as part of other discussion. First of all, how many inspectors are there now? Is it expected under the act that there will be the same or more inspectors once this act comes into place?

Hon. A. Wilkinson: I believe this came up two days ago, when the current complement of six inspectors was described and the concept that that number will continue. Of course, it will be risk-adjusted over time. If there turns out to be more work, there’ll be a need for more inspectors. Conversely, if things are going very well, then we would probably shrink the number of inspectors.

K. Corrigan: I do recall that. Thank you for reminding me of the number of inspectors. Is it the minister’s consideration that the number of inspectors that have been in place to date is sufficient?

Hon. A. Wilkinson: The answer is yes.

K. Corrigan: I know there could be some changes under this act about how many institutions will fall under this act, considering that we don’t know yet exactly what type of organizations are going to have to be registered and under what category and also the whole area of language schools. That will be a voluntary registration. I’m wondering, perhaps as a base point: do we know how many institutions are regulated at this time?

Hon. A. Wilkinson: Currently there are 325 institutions that fall under the current regulatory regime. Just to clarify a point the member made, registration for language schools is only voluntary if they are non-designated.

K. Corrigan: I appreciate that. But just to be clear, language schools don’t have to be designated unless they want to have the protection for foreign students studying and the protections that are associated with that. Is that correct?

Hon. A. Wilkinson: As we covered two days ago at some length, language schools are required to be registered and designated if they are to be eligible for the federal student visa program.

K. Corrigan: Just to confirm also, if they decide they don’t want to be eligible for the student visa program, they can be any size. They don’t fall under the same kind of requirements as a private training institution. Is that correct?

Hon. A. Wilkinson: As we’ve noted over the last couple of days, if a language school seeks federal student visa eligibility, they must be designated. Otherwise, they are not required to register.

Section 28 approved.

On section 29.

K. Corrigan: An inspector under this act, the Private Training Act, “may conduct an inspection for the following purposes: (a) assessing an applicant for a registration certificate or designation certificate; (b) determining compliance with (i) this Act or the regulations, or (ii) the requirements of other government programs prescribed by regulation; (c) determining whether it is appropriate to suspend or cancel a certificate.”

[1410]

Those sound like reasonable reasons for an inspection. I’m wondering if this is any different than the existing act.

Hon. A. Wilkinson: The current section 12 of the PCTIA act is in significantly different wording, but the content is the same as section 29(a) and section 29(c). Of course, section 29(b) deals with the new act and new regulations. The reference to “requirements of other government programs” is primarily directed to the student loan program. This is a rewording and modernization and modification of the existing section to deal with the new regime.

K. Corrigan: But at the present time, does the inspector have the power to conduct an inspection — whether it’s worded differently or not — to determine compliance with the act or the regulations? Does that happen now?

Hon. A. Wilkinson: That is provided for in section 12 of the PCTIA act.

Section 29 approved.

On section 30.

K. Corrigan: Section 30 provides for inspection powers. It says: “For the purpose of an inspection, an inspector may, without a warrant, do any of the following, during business hours….” It gives a number of things
[ Page 6722 ]
that the inspector can do: entering the business premises; inspecting, auditing or examining a record; remove from the premises a record; make a video or audiotape or something digital, I guess; or question a person.

Now, can all of these things be done…? “It says: “without a warrant….” Is there any requirement that there has to be any kind of warning, or could these inspections just be snap inspections?

Hon. A. Wilkinson: As the section provides in the header of subsection 30(1), during business hours these inspections in subsections (a) through (g) can be conducted without a warrant, for obvious reasons, so that the inspector can arrive and see how many real students there are and what is really going on.

K. Corrigan: Then I see that under subsection (2), the inspector can’t go into “a private residence except with the consent of the occupant or with the authority of a warrant under section 31.” So perhaps, just looking ahead to 31, maybe a quick overview of when it is appropriate to go into a private residence for an inspection?

Hon. A. Wilkinson: I think the member wisely points to section 31, which provides a number of parameters for the inspection based on a warrant. It would be up to a justice to issue that warrant only if satisfied of the criteria in sections 31(1)(a) through (c).

This is obviously in recognition that some schools are home-based businesses. Yet at the same time, one wants to respect the sanctity of the home, and therefore, a warrant would be required.

K. Corrigan: Are the parameters of an inspector inspecting a business markedly different than the parameters that are under the present act?

[1415]

Hon. A. Wilkinson: The existing act, in section 12, provides very comparable language. For instance, subsection 30(1)(g) is exactly the same as the former section 12(2)(f). The language has been modernized and clarified and expanded, to a degree, to match the new statutory framework.

Section 30 approved.

On section 31.

K. Corrigan: This provides for an inspection under a warrant, and this would be if the inspector wanted to go into somebody’s private home or a business premises. Subsection 31(1)(b) — without limiting the authority under the Offence Act, a justice may issue warrants for the purposes of this Act as follows: "on being satisfied on evidence on oath or affirmation that a place is used as a business premises of an institution, the justice may issue a warrant authorizing an inspector to enter the place to conduct an inspection.”

I would assume this would be if the business premises for the institution are separate from the institution’s location itself. I’m just not sure what that section is envisioning.

Hon. A. Wilkinson: Referring back to section 30, the entry of the inspector without a warrant only occurs during business hours. So one can readily imagine that outside of business hours — for instance, on a weekend — in the event of an insolvency or allegations of fraud or mistreatment, the inspector may see the need to enter outside of business hours and, also, as we discussed earlier, in the event that the business is operated out of a private home, to enter a private home with a warrant.

Going back to subsection 30(2), the inspector must, of course, either obtain the consent of the occupant or get a warrant under section 31 to enter a private residence.

Clearly, this is designed to provide those comprehensive tools in the event that the inspector cannot get the necessary information during business hours from a business premises.

Section 31 approved.

On section 32.

K. Corrigan: This is division 2, dealing with compliance orders and administrative penalties. “If satisfied that an institution is contravening or has contravened a provision of” the Private Training Act “or the regulations, the registrar may order the institution to comply with this Act and the regulations.” In what kinds of circumstances would it be envisioned that this section would have to be used?

I’m sure there’s a long history, so I’m just trying to get a sense of: complying with what? Providing the appropriate programs? Providing the appropriate space? Can I just get a little bit of an overview from the minister?

Hon. A. Wilkinson: A couple of examples that I hope will suffice. They would include a failure to maintain student records as required, a failure to maintain instructor records as required, or perhaps a failure to train students on a continuous basis, in the event that the school runs out of steam.

K. Corrigan: This is one of the areas dealing with compliance orders and administrative penalties that I’ve had quite a bit of feedback on from some of the private training institutions and the language schools.

[1420]

They’re feeling that there’s a great deal of power with the registrar but with limited procedural fairness. I’m not going to get into all of the concerns, but I just think I
[ Page 6723 ]
would like to get it on the record that there is a real concern in this whole area of compliance orders and administrative penalties.

I’m wondering if the minister has anything to say about that.

Hon. A. Wilkinson: Of course, under any statutory regime, the courts can be called upon to decide whether the statutory authority exists to do anything that is provided for in the act. Most statutes now that provide for any kind of inspection do provide for compliance regimes and the mechanism that is to be followed by the inspectors and their supervisors as they go about their business. This is designed to explicitly lay out the obligations of both the institutions and of the registrar and of the inspectors working for the registrar.

Section 32 approved.

On section 33.

K. Corrigan: Section 33 deals with the determination of administrative penalties and says:

“If the registrar is satisfied on a balance of probabilities” — in other words, more likely than not — “that an institution has (a) contravened a provision of this Act or the regulations prescribed by the Lieutenant Governor in Council, or (b) failed to comply with a compliance order, the registrar may serve the institution with a determination requiring the institution to pay an administrative penalty in the amount and in the manner prescribed by regulation of the Lieutenant Governor in Council.”

Do we know what those administrative penalties are at this point?

Hon. A. Wilkinson: It’s helpful in this regard that Ontario has a series of penalties already laid out in its legislation. As we’re developing the regulations around this, we’ll obviously have that as a guide and be in consultation with the sector about appropriate levels of penalty.

Now, for example, in Ontario, the breach involving qualifications of instructional staff gives rise to a $1,000 penalty. A registrant’s failure to comply with conditions is a $750 penalty. A refusal to provide access to transcripts is a $750 penalty. And there are dozens of others.

K. Corrigan: Is there not, under the existing act, the ability to levy administrative penalties? I guess that’s the question.

Hon. A. Wilkinson: In the current regime there is no structure that provides for administrative penalties at all.

K. Corrigan: Has the minister, in the preparation of this legislation, consulted with the industry — the career institutes or the language schools — on the fact that (1) there would be administrative penalties and (2) getting a sense of what the magnitude of those penalties would be?

Hon. A. Wilkinson: The sector has been extensively consulted on this point. In fact, the sector is firmly approving the concept of graduated enforcement and compliance through graduated regime, rather than the current regime, which is all or nothing — either suspension of the certificate or carrying on business as usual.

K. Corrigan: Well, I’m pleased to hear that, because it certainly hasn’t been the feedback I’ve received from the industry — that anything they suggested about this act was actually included in the act. I’m pleased to hear that the minister has been able to find an exception to what they have said.

[1425]

With respect to subsection 33(4): “If an administrative penalty is imposed on an institution that is a corporation, an officer or a director of the corporation who directed, authorized, assented to, acquiesced in or participated in the contravention is also liable under this section for the administrative penalty if the corporation fails to pay the administrative penalty in accordance with section 34.”

This would be similar to the joint and separate liability that we talked about previously. I’m wondering why the same type of terminology would not be used — of joint and separate liability.

Hon. A. Wilkinson: The premise here, of course, is that administrative penalties are limited in scope. They tend to be, at most, in the $1,000 range. This provides a mechanism for recovery in the event that the school proves to have no assets or is resistant to payment. Not being of the scope and scale of the tuition protection fund claims, this is thought to be sufficient.

Section 33 approved.

On section 34.

K. Corrigan: Maybe if the minister could just confirm. My understanding from reading this section is that it essentially says institutions that have had an administrative penalty levied against them or imposed against them have 30 days to appeal, depending on what the situation is. Is that correct?

Hon. A. Wilkinson: As we can see on the face of this section, it provides for payment of administrative penalties within 30 days unless the institution requests a reconsideration under section 47. If that appellate process is exhausted, then in section 34(c) they must pay the administrative penalty within 30 days after a negative decision from the commissioner.

Section 34 approved.

On section 35.
[ Page 6724 ]

K. Corrigan: Section 35 provides for enforcement of administrative penalties and says that the penalty “constitutes a debt payable to the government.” Essentially, that sets the framework, then, or sets the table for being able to file in Supreme Court — is that correct? — in order to enforce that judgment. Is that the purpose of this section generally?

Hon. A. Wilkinson: This is more or less standard in terms of government collection of debts, in that section 35(1) characterizes it and in a statutory basis states it to be a debt payable to government. Then the collection regime arises as if it were a judgment of the Supreme Court of British Columbia.

Section 35 approved.

On section 36.

K. Corrigan: Division 3 deals with suspension and cancellations of certificate and says: “If the registrar is satisfied that a certified institution is contravening or has contravened a provision of this Act or the regulations, the registrar may suspend any or all of the institution’s certificates for a period” considered appropriate. But they may continue to provide a program of instruction. Perhaps the minister can just explain the operation of this section.

[1430]

Hon. A. Wilkinson: The structure of this section is that students enrolled in a course that is subject to suspension can complete that course, but the school cannot enrol the next batch of students. That’s in contrast to cancellation of a certificate, in which case, the school ceases to exist as an instructional entity on the day of cancellation. The idea of suspension is to protect the interest of the incumbent students so they can complete their course.

K. Corrigan: I’m just trying to get a sense of the operation of the act. Would it be expected that this would be a progressive set of remedies? Depending on the severity of the case, could the minister foresee that, first, possibly, a compliance order would be sought and then an administrative penalty and possibly, if that didn’t work, suspension and then cancellation? I mean, not necessarily, but is that a possibility?

Hon. A. Wilkinson: The graduated scaled enforcement regime starts with a warning and is followed by compliance orders. That can lead to an administrative penalty if the compliance orders aren’t followed. If the administrative penalty is insufficient, the school can be suspended, as provided in section 36. Then if more egregious events occur, section 37 provides for outright cancellation of their certificate.

K. Corrigan: In the past there were not administrative penalties, so that part is new. Is there anything about the suspension? And I guess I’ll ask about the cancellation certificate. Is there anything markedly different under the present act as compared to the coming act, the Private Training Act?

Hon. A. Wilkinson: The provisions for suspension and cancellation are, obviously with some modifications, similar to what happened under PCTIA. But the other enforcement opportunities, such as compliance orders and administered penalties, are new.

Section 36 approved.

On section 37.

K. Corrigan: Section 37 deals with cancellation of certificates or a certificate. It gives the registrar the ability to cancel a certificate if the institution is contravening or has contravened a provision of this act or the regulations. If they do, they have to give written reasons to the institution and (b) notice of the cancellation to the students who are enrolled in the institution on the date of the cancellation.

These provisions are essentially the same. There’s nothing particularly different. I think the minister has just said that. Then it says that the institution cannot apply “for a certificate during the 12-month period following the date of receipt of the registrar’s decision, and (b) must immediately return the certificate to the registrar.” Is that 12-month period the same as it has been to date?

Hon. A. Wilkinson: The answer is yes.

Section 37 approved.

On section 38.

K. Corrigan: Division 4, which includes sections 38 up to 43, deals with offences under the act. I don’t have anything on section 38.

Section 38 approved.

On section 39.

K. Corrigan: Perhaps we should deal with all these sections together. I do have a sort of general question. Perhaps the minister could explain what types of actions would constitute offences under the act. What types of things are included?

[1435]

Hon. A. Wilkinson: Division 4, being sections 38 through 43, is the offences section. It includes reference
[ Page 6725 ]
to selling credentials, false or misleading representations and so forth. We can itemize them, or they could simply be read.

K. Corrigan: Selling credentials. Granting credentials. Section 39 says: “An institution must not grant a career training credential on completion of a career training program that is required to be approved under this Act unless the career training program has been approved.” That could be an offence under this act, to do that. I guess I don’t have to ask for an answer or get confirmation on that.

The prohibitions on false or misleading representations and on false or misleading information — are these types of offences similar to what is under the present act?

Hon. A. Wilkinson: The existing act provides for a prohibition on conducting a career training operation unless the institution is registered, and a non-accredited institution must not represent itself as being accredited. There’s also an offence section dealing with obstructing an inspector. But that is the limit on the offences under the existing act. As one can see, there are a few more in the new act.

Sections 39 to 42 inclusive approved.

On section 43.

K. Corrigan: Section 43 provides some of the other provisions, apart from the ones we’ve talked about — more to do with the process, I guess. It says: “A person who contravenes any of the following commits an offence” — not having the certificates required to provide career training programs or the designation certificate required for some career training institutions.

That’s interesting, that particular one, 43(1)(b). Is that something new? It seems quite onerous. I’m not sure I disagree, necessarily, but it does seem quite onerous that if somebody doesn’t have a designation certificate, they have committed an offence under the act and are liable to a fine of up to $100,000. Is that new?

[1440]

Hon. A. Wilkinson: This harkens back to section 3 of the Private Training Act, which provides for certain thresholds above which an institution must be designated. Of course, section 43(1)(b) refers to the issue of it being an offence to conduct an institution as described in section 3(1)(a) and/or (b) without being designated.

K. Corrigan: But under the existing act it would be equivalent to accreditation. Is there something in the present act that says that it’s an offence if somebody doesn’t have an accreditation certificate if it’s required of them? Is that an offence under the present act?

Hon. A. Wilkinson: Accreditation under the current act is voluntary. This is a new provision.

K. Corrigan: Fair enough. Good point, Minister. Thank you for that reminder.

If somebody holds themselves out to be accredited under the present act and they’re not, would that presently be considered to be an offence?

Hon. A. Wilkinson: That’s what I referred to about ten minutes ago, under the existing section 7, which provides that there is an offence for purporting to be accredited when the institution is not.

K. Corrigan: Subsection (3) says: “A person who commits an offence under this section is liable to a fine of not more than $100 000.” Is that the same number as in the present act?

Hon. A. Wilkinson: The answer is yes.

K. Corrigan: Subsection (2): “If a corporation commits an offence under this Act, an officer or director of the corporation who directed, authorized, assented to, acquiesced in or participated in the offence commits the same offence whether or not the corporation has been prosecuted or convicted of the offence.” Is that also present in the existing act?

Hon. A. Wilkinson: The answer is yes.

Section 43 approved.

On section 44.

K. Corrigan: I’m wondering if the limitation periods are the same as previously, under this new act?

Hon. A. Wilkinson: There were no administrative penalties under the previous act, so there was no applicable limitation period for that, and there was also no ultimate limitation period.

Section 44 approved.

On section 45.

K. Corrigan: Section 45 provides for injunctions. The Supreme Court can grant an injunction to restrain, require compliance and other matters. What I’m interested in is subsection 45(4)(c), which says: “With respect to considering an interim injunction…the registrar need not establish that irreparable harm will be done if the interim injunction is not issued.”

Is it not a standard requirement when seeking interim injunctions that irreparable harm be established?
[ Page 6726 ]

Hon. A. Wilkinson: The member is probably recalling the jurisprudence in the 1970s — I think the case was American Cyanamid — where these two criteria were laid out, about the balance of convenience and the issue of irreparable harm. This subsection 45(4) serves to provide a new regime.

[1445]

K. Corrigan: Of course that was exactly what I was thinking about. I guess I would like to bring it forward a few years, past when I went to law school, and ask: is it not the case in British Columbia at this time, generally though, subject to a statute that says that irreparable harm does not have to be established…? Is it not standard in the legal field for irreparable harm having to be established in order for there to be an interim injunction granted?

Hon. A. Wilkinson: This would require some detailed legal argument about the current parameters of the American Cyanamid case and 40 years of jurisprudence since then, including the Supreme Court of Canada. We’re not in a position to do it today other than to read the section on its face.

K. Corrigan: The minister has brought the legislation forward. Surely, there’s an intent and there’s reason behind it. I’m just wondering why it is that this was included, from the minister’s perspective. Why would the normal test — my understanding of a normal test for granting an interim injunction, which is to establish irreparable harm — intentionally be removed in this situation? I’m not asking for a legal discussion. I’m just asking the minister why it was done.

Hon. A. Wilkinson: This came as a recommendation from the Attorney General’s capable legal team, given the circumstances that we operate in and the particular subject matter that we’re dealing with here.

Sections 45 and 46 approved.

On section 47.

K. Corrigan: It’s my understanding from briefings that I received and from reading the act that this part 5 dealing with reconsideration, appeal and review is largely new. I’m wondering if the minister could just give us a few minutes of an outline of what will happen with this section and why this was included — this section and the following few sections.

Hon. A. Wilkinson: Given that this is a statutory regime for a government agency to be involved in making decisions about the sector and that there are a variety of interests involved, it makes sense that there would be provision for reconsideration by the registrar and for an appeal to the commissioner for a review of that decision. This, of course, is a due process part of the act, part 5, which provides for that regime in a fashion which is commensurate to the size of the issues at play.

Understandably, there could be reputation risk. There could be monetary amounts that are in question. But nonetheless, it calls for a fairly crisp internal tribunal to bring this about, rather than an elaborate process with procedural safeguards of the kinds found in superior courts, so that everybody can get on with their business and get on with their lives.

K. Corrigan: This section deals with…. My understanding is that the registrar can reconsider a refusal to grant a certificate, imposition of an administrative penalty, suspension of a certificate. I can’t recall whether it also…. What are the grounds that there can be a reconsideration based on?

Hon. A. Wilkinson: We can see in section 47(3) that those are laid out.

[1450]

K. Corrigan: What about cancellation of a certificate? Is that included in this section?

Hon. A. Wilkinson: In the event of a cancellation of a certificate, the reconsideration step is skipped and it goes straight to an appeal to the commissioner.

Section 47 approved.

On section 48.

K. Corrigan: I just want to get it on the record that this whole process of reconsideration is another area that some of the private training institutions expressed concern about. There is a concern there, and I just wanted to specifically point that out.

Sections 48 and 49 approved.

On section 50.

K. Corrigan: Section 50 is the beginning of a division that talks about appeals to commissioners from registrar’s decisions. I’m just wondering about….

Maybe a little bit of an overview of this section about what the expectation is of how often there is going to have to be an appeal to a commissioner and who the commissioner is going to be. I know it’s in there, but it would probably be helpful and probably shorten the questions I have if we just get a little overview from the minister of what this part envisions.
[ Page 6727 ]

Hon. A. Wilkinson: The commissioner is to be an independent appointment from outside of government, and the volume of appeals to be heard by the commissioner is absolutely unforeseeable. It remains to be seen how the sector will be functioning and their behaviour in the face of an arrangement where there are administrative penalties and a process that deals with the registrar.

K. Corrigan: I was hoping that…. I thought it might be useful to have a bit more of an overview of exactly how it would operate. Nevertheless, I’ll ask a question about subsection 50(3): “If the commissioner receives a notice of appeal, the commissioner must acknowledge receipt of the notice of appeal.”

That actually wasn’t the subsection I wanted to ask about. Can the minister explain…? It seems to me that there is not a hearing. It’s on the record. Is that correct? What is the process, and how would it be conducted?

Hon. A. Wilkinson: As noted in subsection 50(4), as the member has effectively read out, “an appeal under this section is an appeal on the record.” As it says in subsection (4), it is subject to subsection (5), which says that the commissioner “may consider evidence that is not part of the record as the commissioner considers is reasonably required for full and fair disclosure of all matters related to the decision under appeal.”

K. Corrigan: Considering that this could be a process under which an institution could lose its ability to continue or be subject to severe penalties and very significant impacts, I’m wondering: is there any chance…?

It’s an appeal on the record, so that would be what is already there. Is there an opportunity under this section for someone who owns an institution, has a certificate, to have a hearing in any way? Can they ask for the ability to cross-examine or have a lawyer cross-examining? Are any of those kinds of protections in place under this process?

[1455]

Hon. A. Wilkinson: I won’t belabour the point by re-reading subsection 50(5), but that’s what it provides for.

K. Corrigan: Well, subsection (5) says the commissioner “may consider evidence that is not part of the record as the commissioner considers is reasonably required for a full and fair disclosure of all matters related to the decision under appeal.” Is the minister then saying we can interpret that as the commissioner has the ability to call a hearing? There’s no reference to it that I can find. It’s a fairly long act, and I may have missed it, but there’s no reference to a hearing.

So that gives the commissioner the power to have a hearing, to allow for cross-examination and other procedural elements that individuals might want. There’s nothing about that that would prohibit that, and that’s within the power of the commissioner. Is that correct?

Hon. A. Wilkinson: I would not want to presuppose the decision of the commissioner, nor would I want to presuppose the decision of a superior court interpreting this section, so I have to simply read it on its face.

K. Corrigan: The minister has invoked not wanting to presuppose. It’s important for us to know in this chamber what it is that the minister intends. The minister is the one that has brought this legislation to this House. I’m asking a pretty pertinent and fair question, I think. Does this legislation…? Would it include the possibility of having a hearing? I’m getting a circuitous answer, saying: “I don’t know. I wrote the legislation. I don’t know. Let’s wait and see what the Supreme Court says.”

To me, that’s unacceptable. Is the minister planning for the commissioner, which is being created by this legislation, to have the ability to hold a hearing or not?

Hon. A. Wilkinson: The commissioner obviously is bound by the rules of administrative law to make sure that there is fairness in the process. The section is designed to give the commissioner the discretion to decide what is reasonably required. That, of course, may extend to the form of the hearing and the form of the evidence. It’s in the hands of the commissioner.

K. Corrigan: That’s not the answer that I had a moment ago. It was, I think — I’ll go back and look at the record — essentially: “I don’t want to presuppose what the Supreme Court might say about that.” What I seem to be hearing now is that the commissioner could hold an appeal, does have the power to hold an appeal, under this act.

Did I interpret what the minister said correctly in this last answer?

[R. Chouhan in the chair.]

Hon. A. Wilkinson: The member opposite misheard me. I said that I would not want to presuppose the conclusion from the commissioner or a superior court asked to interpret this section. Perhaps we can start all over again.

Sections 50 to 62 inclusive approved.

On section 63.

K. Corrigan: Division 4, which is sections 63 and 64, deals with regulations. “The minister may make regulations referred to in section 41…of the Interpretation Act.” It says: “Without limiting subsection (1), the minister may make regulations as follows….” Then it’s regulations contemplated by this act; regulations prescribing
[ Page 6728 ]
occupations for the purposes of career occupation; prescribing compliance standards for certified institutions for the purpose of the definition of compliance standards.

[1500]

This section perhaps, to some degree…. It expresses one of the areas of real concern that I’ve heard from training schools and language schools about this act. There is a page of types of things that can be prescribed, that is going to come later, that the minister can make regulations about. This is exactly what the industry is concerned about in this case.

I’ve expressed a lot of concerns through the last couple of days, but this is certainly one of the major ones — in addition to the fact that there’s a whole group of language schools that are not going to be covered unless they decide they want to get designated. There’s concern about that as well.

This perhaps encapsulates to some degree the concerns that many schools had when they felt that they just couldn’t…. Schools and organizations, as well as people that were actually on the minister’s advisory board, said — even though they were part of the process and were supportive of regulation and transparency in their industry because they thought it would do everybody well — that they just can’t support it because of the amount of decisions, the meat on the bones — the way the minister himself described it — that would be decided later.

These include things like all these things that are going to be contained in regulations later. Those include prescribing the occupations for the purposes of the definition of career occupation; compliance standards for certified institutions; the information and records that need to be included in an application for registration — which might be appropriate to be later; requirements for a certificate, including requirements related to compliance standards; reporting requirements.

A whole manner. There’s a whole page of them there. All of this stuff is going to be decided later, and that creates a great deal of concern for the industry. It is not helpful to the public, I don’t believe, because students don’t know either what the requirements are going to be.

I have real concern about this section, and I think it does encapsulate a lot of the concerns. I don’t know if the minister wants to respond.

Sections 63 to 67 inclusive approved.

On section 68.

K. Corrigan: I have one question. The transition section says “all the assets and liabilities of the agency except the fund are transferred to the government.” Perhaps just a quick explanation as to why that wording is there.

Hon. A. Wilkinson: The exception for the fund is because the tuition protection fund, being a trust not within the government reporting entity, will be a freestanding entity, and the funds are to be transferred to the trust.

K. Corrigan: I’m actually going to refer to a further section, a later section, because other than that, I have no more questions.

Maybe with the minister’s approval, I will…. I just wanted to ask…. Once this is put back into government, I’m assuming that the department, or whatever it is — the information will be FOIable. Is that correct?

Hon. A. Wilkinson: The provisions of the Freedom of Information and Protection of Privacy Act will apply to this body.

Sections 68 to 90 inclusive approved.

Title approved.

Hon. A. Wilkinson: I move that the committee rise and report the bill complete without amendment.

Motion approved on division.

The committee rose at 3:05 p.m.

The House resumed; Madame Speaker in the chair.

Report and
Third Reading of Bills

BILL 7 — PRIVATE TRAINING ACT

Bill 7, Private Training Act, reported complete without amendment, read a third time and passed.

Hon. T. Lake: I now call committee stage, third reading, of Bill 6, the Justice Statutes Amendment Act.

Committee of the Whole House

BILL 6 — JUSTICE STATUTES
AMENDMENT ACT, 2015

The House in Committee of the Whole (Section B) on Bill 6; R. Chouhan in the chair.

The committee met at 3:07 p.m.

On section 1.

Hon. S. Anton: Supporting me today are Dustin Dunlop from Consumer Protection B.C. and ministry staff — Toby Louie and Kristina Ponce. I have others coming in later — Pat Cullinane, Shannan Knutson, Darryl Hrenyk, Neil Reimer and Peter Robinson.
[ Page 6729 ]

L. Krog: Welcome to the minister’s staff to assist her this afternoon. I understand we have a limited period of time, and we’ll certainly try to use it as wisely as the opposition always does, of course.

With respect to, in particular, the first sections of this act, dealing with the amendments to the Business Practices and Consumer Protection Authority Act, I’m looking for some general information to start before we get too heavily into the sections themselves. In particular, I’m wondering where the impetus for this legislation came from.

[1510]

Hon. S. Anton: The staff and government and Consumer Protection B.C. have been aware of certain predatory practices in the debt repayment issue. So seeing what other jurisdictions have been doing, following them and following industry concerns, the issue has been brought forward and is here before the House today.

L. Krog: I’m just curious to know a bit of the history, in terms of that interaction with government by Consumer Protection B.C. and others. When did these kinds of complaints start to come forward? What form did they take? Were there a significant number of advocacy groups involved who presented this issue to government?

Hon. S. Anton: The debt collection industry advisory group meeting in April of 2011 at Consumer Protection B.C. was the first time it was addressed at Consumer Protection B.C. in a formal way.

I can quote, actually, from the minutes of the meeting at that time, which said: “Following extensive discussion, it was determined that in the absence of knowing the magnitude of the problem, it was not possible to state whether a new regulatory regime was required or if consumer education would be sufficient in addressing the members’ concerns.”

That’s when the matter started to come forward and started to be thought about in a more formal way.

L. Krog: I wonder, for the benefit of the House and those watching at home, if the minister could explain what Consumer Protection B.C. is and how those concerns were in fact relayed to them, as opposed to what I asked for earlier, which is whether or not any advocacy groups in the province, particularly for the poor and the vulnerable, had raised this issue directly with government — i.e., to the ministry itself.

Hon. S. Anton: I’ll answer the second part first. Then I’ll come back with the first answer. At that time, in 2011, there were no advocacy groups coming forward at that time.

[1515]

Regarding Consumer Protection B.C., in 2004 the province delegated the administration of consumer protection legislation to the newly created Consumer Protection B.C., and Consumer Protection British Columbia has an administration agreement with the Ministry of Justice. It operates at arm’s length, and its job is to manage certain pieces of legislation on behalf of the province.

L. Krog: I want the minister, perhaps, to expand somewhat on the description of Consumer Protection B.C. It is a non-governmental, self-regulatory body, and it is in fact administering some aspects of the Business Practices and Consumer Protection Act. Is that fair to say? If so, when was it created, and why was that model chosen as opposed to direct regulation by government, by the public service?

Hon. S. Anton: As I mentioned a moment ago, it was set up in 2004. It was to consolidate the administration of various pieces of consumer protection legislation in the province. It was believed to be a structure that would be more responsive and flexible to deal with issues at arm’s length from government. They set their own fees. They make their own decisions, and over time they can take on, and have taken on, new responsibilities.

L. Krog: I assume these new responsibilities will include, obviously, the changes we’re making today. I’m going to assume — and I’m sure the minister will explain this further — that previously these functions were carried out by the government of British Columbia more directly through the ministry or the public service.

I’m curious to know. Were there, again, complaints from the industry or suggestions from the industry that this model would, in fact, be more effective as far as they were concerned?

[1520]

Hon. S. Anton: The acts which are administered now by Consumer Protection B.C. were administered in government prior to that. There was a consumer services division in the Ministry of Solicitor General, as it then was.

There are other jurisdictions in Canada that are moving to the delegated model, which seemed to be a model that worked well for consumer protection issues. It’s more flexible. People in Consumer Protection B.C. develop certain expertise that helps out the industries that they’re charged with managing.

L. Krog: It’s a non-governmental self-regulatory body. How is it created? Pursuant to what statutory authority? How is its management determined? How is it governed? How does it work?

The minister has indicated it’s more flexible. It’s supposedly for the benefit of consumers. Is that a model that is now in place in every other jurisdiction in Canada? Or is it a model in place in five, ten, whatever…? I’d be curious to hear from the minister.
[ Page 6730 ]

Hon. S. Anton: The act is the Business Practices and Consumer Protection Authority Act from 2004. That charges Consumer Protection B.C. with administering different forms of consumer protection laws. They are the operational arm of consumer protection. They do some investigation services, inquiries, consumer education, amongst other things.

L. Krog: I’m just wondering if the minister could answer my question with respect to how many jurisdictions operate with this kind of model.

[1525]

Hon. S. Anton: Consumer Protection B.C., as it is set up, does seem to have a broader mandate than other provinces. Ontario and Alberta both have motor vehicle sales authorities. However, in British Columbia we also have a Motor Vehicle Sales Authority. On top of that we have Consumer Protection British Columbia, which administers a number of other statutes.

L. Krog: My understanding is that Consumer Protection B.C. had, in fact, requested — much earlier, obviously, than 2015 — that government bring in the changes that we’re dealing with today. I’m curious to know — given that, as I understand it, the number of complaints against these debt companies started to rise fairly rapidly — why it has taken so long to bring forward these legislative changes.

Hon. S. Anton: Perhaps the member could clarify the 2008 piece. In terms of Consumer Protection B.C.’s records of minutes and so on, it shows up in 2011. It is good to have changes made as early as possible, but we need to ensure that they’re done correctly. That is what has been done here. At the same time as the legislation around debt collection, the predatory practices…. We’re also updating the act’s debt collection provisions generally to ensure that the law reflects current marketplace practices.

L. Krog: Forgive my very cursory reading of some of this. But perhaps the minister could explain to me…. Given that the intent of the legislation is to regulate the so-called debt settlement companies, without this legislation in place, is there any…? The authority itself that the minister has described earlier in her answers — does it have jurisdiction over them now in any way, shape or form? Or is this to deal with an entirely new practice in British Columbia?

In other words, have we had debt settlement companies in operation for 20 years or ten years, or is this legislative regime set up specifically to deal with that issue? And there is, in fact, no regulatory regime in place now.

[1530]

Hon. S. Anton: The predatory practices which are seen now are relatively new. They are exploiting a gap in the regulation which isn’t captured in the existing legislation. We regulate the sector itself, but this particular piece of it was a gap in the legislation.

There were some provisions that were helpful along the way, existing provisions relating to deceptive practices, and there were contractual provisions — both of which were captured by Consumer Protection B.C. But the people in this industry seemed to manage to just keep moving ahead of the regulations which were in place, so it was needed to bring down a proper, more complete regulatory regime so as to stop these practices.

L. Krog: If I can summarize it somewhat and maybe ask the minister to explain a little further. I take it that companies that provided this kind of service — and I use that term somewhat sarcastically and pejoratively — have in fact been operating and delivering this kind of service for some period of time in British Columbia. If so, can the minister perhaps enlighten me as to how long? Has this been a way of doing business for five or ten years?

I’m well conscious of the fact that trustees, in bankruptcy, for years in British Columbia have offered proposals to creditors under the Bankruptcy Act, consolidated debt payment programs. There’ve been other ways that consumers with significantly high personal debt have tried to deal with their debt issues. But in terms going to this kind of service, where someone is going to act as the go-between and presumably bring down the total debt to something you can handle, how long, in fact, have these companies delivered this kind of service?

Hon. S. Anton: There has been debt-pooling legislation in place, but the actual predatory practices which this legislation is dealing with were really first noticed in 2011 and only in a rather minor way prior to that.

L. Krog: I take it from that, that what the minister is saying is, given the establishment of the authority and this regime and previous consumer protection legislation that was formerly delivered by government — by the public service, by the government directly — this did not….

[Interruption.]

That would be a significant fine on our side of the House, not that I’d care to rat out a minister, of course. Solidarity exists in both caucuses. I’ll perhaps give the minister a minute before I continue with my question.

To come back to how this was delivered previously and this regime in place. It started to become a problem. Was the problem conveyed, as I suggested earlier, mainly to Consumer Protection B.C.? Has this always been an issue?

[1535]

Indeed, are these companies that are in fact now being accused of these predatory practices, indirectly, by the presentation of this legislation…? Are these predatory companies in fact members of…? Do they subscribe to, pay moneys to, the very authority which has requested this legislative change?

Hon. S. Anton: This particular group of companies carrying on these practices are not licensed at the moment. They’re not paying any fees to Consumer Protection B.C.

L. Krog: At present, then, these companies do not fall under the authority at all? They simply have to get a business licence in any given community, like any other business. They can set up shop and start delivering this — and I’ll use the term loosely again — service and, apart from that, paying their PST and GST, etc. That’s all they have to do?

Is there any other regulatory regime or any other direct government control or any other agency of government or something similar to Consumer Protection B.C. that might indeed provide any oversight of how these businesses conduct themselves?

Hon. S. Anton: As I mentioned earlier, the general application of consumer protection law applies — law relating to deceptive practices, to contracts. As these companies were not licensed by Consumer Protection B.C., there isn’t a general way of describing how they were licensed or where they were licensed or where they set up business, and Consumer Protection B.C. doesn’t have a record of them all. They might not even necessarily be within British Columbia, so I can’t answer that question with any specificity.

L. Krog: I take it from the minister’s answer that, in fact, these may be out-of-province corporations or out-of-country corporations operating within British Columbia that take out a business licence. It’s presumably at least that, but otherwise, there has been no regulatory regime in place that would govern their activities.

I take it that they operate entirely separately from existing companies that do, in fact, participate or are members of Consumer Protection B.C. I take it that we are the seventh province to enact legislation with respect to this. Is my understanding, as just stated, all accurate?

[1540]

Hon. S. Anton: The other companies operating in this world, so to speak, are sometimes out of province. A number of them do seem to be from Ontario. We’re not aware of any that are from out of the country.

There is a regulatory regime. As I’ve mentioned a couple of times now, they are subject to deceptive-practices legislation and contracts legislation. However, that hasn’t been enough to stop the certain predatory practices which have arisen.

The question was: are they separate from existing companies? We are not aware of them being a part of any of the currently licensed companies with Consumer Protection British Columbia.

The member asked whether there were seven provinces or we were the seventh. We think we are the sixth — with four provinces in force, one province not in force and ourselves as the sixth.

L. Krog: My understanding is that spokesperson Tatiana Chabeaux-Smith indicated that the complaints against these companies rose from eight in 2010 to 135 in 2013. She went on to say: “We are receiving complaints against some of the debt settlement companies. We are supportive of anything that strengthens the rules around them.” Those were her comments in the Province on January 15, 2014, as far as I’m aware.

My information may be inaccurate, but I’m curious to know. Can the minister advise how many complaints or specific cases have in fact been made in 2014 and/or in ’15, if that information is available?

Hon. S. Anton: The information the member is referring to, I believe, is this. That is the aggregation of the number of inquiries made to Consumer Protection B.C. They may have been complaints, or they may have been straight-up inquiries.

The numbers are these. In 2010 there were eight. In 2011 there were 157. In 2012 there were 52. In 2013 there were 137. In 2014 there were 71. And 2015 to date…. Except I’m not sure if I can tell you what the date was. I’ll look for that in a moment. But in this part of 2015, there are eight.

L. Krog: Now, dealing with some of the less general matters…. Dealing with section 1 specifically, perhaps the minister can explain the effect of section 1.

Hon. S. Anton: As I mentioned earlier, some of the work that is being done here is just general updating, as opposed to dealing with the predatory practices. This section 1, which deals with section 115 of the Business Practices and Consumer Protection Act, is an updating section. What it does is it relates to debt collectors.

[1545]

A debt collector used to be obliged to disclose only the original name of the creditor with whom the debt was incurred and the original amount of the debt owed. And of course, debts can be bought and sold, and amounts owed can change.

The emergence of debt buying as an increased component of the debt collection industry, along with changes to the total amount of debt owing, has been resulting in consumer confusion, because debtors are not always able
[ Page 6732 ]
to identify the debt as being owed by them when the collector comes calling. So this is to clarify those two things.

L. Krog: Again, in terms of where the request for this particular change came from, is it one that arose from Consumer Protection B.C.? Is it, again, from the public or any advocacy groups? And if so, are further changes contemplated? Is this seen as part of some longer-term strategy?

Hon. S. Anton: The second question: is this part of a broader strategy? No, except insofar as to say that whenever an act is open there’s a certain strategy, I think, of updating it. This is updating it as per Consumer Protection B.C.’s understanding and knowledge of the marketplace as it currently operates.

L. Krog: With respect to section 1(b) of the bill, it refers to, “Despite subsection (2), a collector may initiate verbal communication with a debtor, before sending to the debtor the written notice referred to in subsection (1), solely for the purpose of requesting the debtor’s home address or electronic mail address in order to send that written notice, if the collector does not have the debtor’s home address or electronic mail address…” etc.

Once received by that company — if, in fact, the debtor provides that e-mail address — is that, in fact, protected by the privacy legislation? Or is that information that can be passed on to another debt collection agency?

Hon. S. Anton: The collectors are obliged to follow the terms of what we call PIPA, the Personal Information Protection Act. So they need to comply with that when they initiate communication and so on.

L. Krog: Just so I’m clear, because I can’t pretend to be an expert, would that mean that that information cannot be shared with another creditor, for instance, or another collection agency or any other person or persons?

[1550]

Hon. S. Anton: I believe the question was whether a collector might pass on information that he or she acquires to the next collector. The answer is that they are bound by the provisions of PIPA, the Personal Information Protection Act. I don’t have all the details of that act at hand, but certainly these collectors would be bound by that.

L. Krog: I don’t suppose the minister would care to provide me with her commitment to deliver that answer at some future date or time, given that we have a limited amount of time to deal with this bill.

Hon. S. Anton: My staff will follow up with the appropriate officials and find an answer for the member opposite.

L. Krog: I take it, then, section 115 is merely updating the various sections as indicated and allowing for the addition of electronic addresses. Is that correct?

Hon. S. Anton: It has been an issue from time to time that a collector will send information to an address that they have on file and it may be the wrong address, an outdated address, in which case they’re actually sending personal information to someone who should not be receiving that personal information. The purpose of subsection (2.1) is to allow the collector to verbally communicate with a debtor to confirm the debtor’s address.

Section 1 approved.

On section 2.

L. Krog: Again, if the minister would explain the effect of section 2.

Hon. S. Anton: Section 116 adds e-mail to the place where the collector can attempt to communicate with the debtor.

L. Krog: Were there any other requests made by Consumer Protection B.C.? I assume this is a result of their communication with the ministry. Any other requests that might have affected this section which haven’t been answered appropriately?

[1555]

Hon. S. Anton: I’d just like to clarify 116. I think I misstated it when I spoke a moment ago. The provision in 116 is that a collector may not turn to a debtor’s place of employment unless they’ve tried to contact them. The ways that they have to try and contact them now include through their e-mail, should they know it. So that adds e-mail to the provisions of that section.

L. Krog: Again, was this change at the request of Consumer Protection, and/or is it a sufficient reply to what they’d asked for? Or were there any other agencies or advocacy groups that made a similar request to government?

Hon. S. Anton: This did not come from an external agency. I think the suggestion to update it actually came from inside government — a suggestion from inside Justice that it be updated at the time we’re updating the other parts of this legislation.

Section 2 approved.

On section 3.

L. Krog: My reading of section 117 is simply that, again, it’s adding electronic mail address to the information, and
[ Page 6733 ]
it allows for confirmation. I just wonder if the minister can confirm that my interpretation is in fact correct.

Hon. S. Anton: Again, this is adding e-mail to some provisions of the act. In the first section, 117(1), it adds e-mail to the information about a debtor that a collector can contact a person other than the debtor to obtain. So they can ask to get the e-mail.

The second part of this is they must not communicate with the employer, except for confirming the employment, but only if they’ve given notice to the debtor. So they can’t just phone and embarrass a person at their employment just for the sake of phoning and embarrassing them.

L. Krog: I take it that that doesn’t require that an employer in fact provide that information. Or is there indeed any other provision that requires an employer to provide that kind of information?

Hon. S. Anton: I wonder if the member could repeat that question, please.

L. Krog: My quick read of this is that this would not in fact require an employer ever to provide that information. Or is there some other provision in the act that requires that kind of information to be disclosed to a debt collector?

[1600]

Hon. S. Anton: The requirements in section 117 apply to the collector, not to the employer.

Section 3 approved.

On section 4.

L. Krog: Maybe it’s only because it’s Thursday afternoon, but in reading section 4, it says section 121 “is amended (a) in subsection (1) (a) by striking out ‘recovery of a debt’ and substituting ‘recovery of the debt.’” I’m rather reminded of what Dorothy Parker was reputed to have said about Lillian Hellman, that everything she said was a lie including “and” and “the.” I’m hopeful that the minister will be able to explain the legal importance of changing it from “a debt” to “the debt.”

Hon. S. Anton: I’m sure that the member opposite would have preferred if we had put “recovery of the said debt.” However, we refrained from putting in “the said debt.” I think the purpose is the same, though, which is just to refer to the particular debt, not to a general debt.

L. Krog: Thank you to the minister for an interesting explanation of this substantive legislative change that confronts us today.

Subsection (b) of section 4 says: “in subsection (1) (b) by striking out ‘legal proceeding’ and substituting ‘legal proceeding for the recovery of the debt.’” Again, if the minister could explain why that particular change is necessary.

Is there some judicial review of this or some case or some decision that would require this legislative amendment to change it from “legal proceeding” and to be so specific as to say “legal proceeding for the recovery of the debt,” as if somehow there might be some question as to what the debt collection company was in fact attempting to obtain?

Hon. S. Anton: It is simply to make it more specific.

L. Krog: Then I take it there hasn’t been a judicial interpretation. This is some very careful, studious, upright, honest and scholarly person reviewing this statute who has decided that we need to get somewhat more specific so that there will be no question. Is that a fair comment?

Hon. S. Anton: Yes, and I would agree with those descriptions of our staff: upright, scholarly, clever, honest and all-round good public servants.

L. Krog: It’s always a pleasing thing to see unanimity in the chamber, especially so late in the day.

With respect to subsection (c), “by adding the following subsection: (1.1) Subject to subsection (1), a collector must not bring a legal proceeding for the recovery of a debt unless the collector first gives notice to the debtor…” and brings the proceeding. What, again, is the purpose of adding that particular section?

[1605]

Hon. S. Anton: This section ensures that the debtor is notified in all circumstances where a collector intends to commence an action against the debtor. In the first subsection, subsection (1), that’s where a debt has been assigned. In subsection (2) it’s where the collector is collecting on their own debt. And in subsection (3) it’s where the collector is actually a collection agent.

So in all circumstances there has to be notice before a legal proceeding can be brought.

L. Krog: I think the minister, although maybe she represents a constituency of greater wealth than mine…. It’s not uncommon for constituents to come in and bring in threatening letters from debt collection agencies saying they’re going to commence legal proceedings within 15 days if they don’t receive — I’m exaggerating slightly — a pint of blood and your first-born. That kind of common threatening letter has been sent out on many occasions.

I’m just wondering: is this section designed to remedy that kind of activity? And as a follow-up, as well: does this section come out of work that the ministry itself has done, or is this something that Consumer Protection B.C. has requested or suggested?
[ Page 6734 ]

Hon. S. Anton: If the member’s constituents are getting threatening or harassing letters, they should bring that to the attention of Consumer Protection B.C.

The provisions here, again, were generated within the ministry as being a better practice, a more complete practice for collectors.

L. Krog: So contrasting it with section 121 as it exists, (2) says: “A collector must not recommend to a creditor that a legal proceeding be brought, unless the collector first gives notice to the debtor that the collector intends to recommend that a proceeding be brought.”

In other words, the collection agency, the debt collector, says to…. We’ll use, for the sake of argument, Canadian Tire. “We recommend that you sue.” But that can only happen if, in fact, they’ve already written to the debtor and said: “We are going to recommend to Canadian Tire that, in fact, action be commenced.”

That’s my interpretation of this section. I take it this addition will, in fact, mean that even after they’ve done that, they then have to…. They have to do that first before they’ll be in a position to then write to the debtor and say that the collector intends to bring the proceeding. Or have I got this backwards?

[1610]

Hon. S. Anton: When the debt has been assigned to a debt collection agency, it is generally the agency that would tell the debtor that the agency intends to recommend that a proceeding be brought.

L. Krog: Just again, so I’m understanding. This section says: “If a debt is assigned to a collector, the collector…must not recommend to a creditor” that legal proceedings being brought. What sort of a situation are we talking about? Are we talking about an assignment in the full sense that the debt becomes the property of the collector? Or are we talking about a situation where the collector is doing it on behalf of the creditor and therefore it can’t proceed because it’ll be up to that creditor, presumably, to front or pay for the cost of the legal proceeding?

Perhaps the minister could just explain, because I’m having a little trouble. The section, as she points out, says: “If a debt has been assigned….” What do we mean by “assigned” in this particular case?

Hon. S. Anton: In all cases the notice has to be given to the debtor that the collector intends to recommend the proceeding. The first of the three pieces is where the debt is fully assigned. The second is where the collector is collecting it on their own behalf. The third is the collection agent scenario, which I think was described by the member opposite.

Section 4 approved.

On section 5.

L. Krog: I take it that it’s just as straightforward as it appears. It’s simply changing the name in consequence of the repeal and replacement?

Hon. S. Anton: Yes. This and other changes in the act show the change in language from “debt pooler” and replaced with the words “debt repayment agent.”

Sections 5 and 6 approved.

On section 7.

L. Krog: Again, I take it that section 7 is simply consequential to section 6, which we’ve just passed, which broadened the definition of “debt pooler” and “debt pooling system” with the broader definition of “debt repayment agent.” The assumption is, then, that that will capture anyone engaged in the delivery of what I referred to earlier in the day’s debate as this kind of service?

Hon. S. Anton: The purpose of this section is to catch anyone who represents the debtor. This is consequential to the changes overall of the regime from the debt pooling system, so to speak, to the debt repayment agent system.

L. Krog: Just out of interest, I note the term “debt repayment agent” in section 6. It says that it means “a person who acts for or represents, or offers to act for or represent, a debtor in arrangements or negotiations with the debtor’s creditors, which arrangements or negotiations may include receiving money,” etc. I’m just curious. Given that we’ve changed an “an” to a “the,” and recovery of “a” debt is now “the” debt….

[1615]

I’m just wondering. Would it perhaps have been more appropriate to refer to, with respect to the debtor’s creditor or creditors…? I mean, I realize that most people who get into financial trouble have more than one creditor, but is the minister satisfied that the language “the debtor’s creditors” would, in fact, cover the situation where you only have one?

Maybe you’ve got — with great respect to the Canadian banking industry, which is supposed to be as solid as a rock — one rather silly bank that has loaned a great deal of money, unsecured, to one individual, and their debt is $100,000. Are they, in fact, captured by this section now, or is that a situation that the act wouldn’t extend to?

Hon. S. Anton: We are satisfied, I am satisfied, that the plural here encompasses all situations.

L. Krog: Well, the reason I raise it…. I want to go back to the section we’ve just changed. In section 121(1)(a) it
[ Page 6735 ]
says: “If a debt has been assigned to a collector….” It talks about recovery of “a debt” and then subsequently the recovery of “the debt.” It just strikes me that “the debtor’s creditors,” by implication, is most definitely plural.

I don’t wish to create unnecessary consternation with anybody, and maybe I’m being a bit obtuse here today, but it strikes me that language is supposed to have some meaning. There’s a difference between “a creditor” and “creditors.” One is singular, and one is plural. I’m somewhat concerned that this, in fact, may present a bit of an issue.

[1620]

Hon. S. Anton: We had Google versus paper, and paper won. The singular means plural and plural means singular — Interpretation Act of British Columbia.

L. Krog: I’m certainly glad we settled that issue. The fact that I raised it and it required that much work to get the answer tells me it was an issue worth raising.

I’m happy to see section 7 passed.

Section 7 approved.

On section 8.

L. Krog: With respect to section 8, which repeals section 127 as it exists and substitutes this new section 127. Again, can the minister explain the effect of this new section as proposed?

Hon. S. Anton: This section is the heart of the new debt settlement legislation. It adds new prescribed and prohibited practices for debt repayment agents.

L. Krog: It’s lovely to hear that language. If this is the heart, I’m wondering if she can explain what she means by describing it as the heart and why it is so important.

Hon. S. Anton: I’ll just read through the purposes of the different sections.

Subsection (1). This prohibits a debt repayment agent from acting for or representing a debtor before a contract has been signed by the debtor or from acting for or representing a debtor if the debt repayment agent is acting for or representing any of the creditors.

Subsection (2) prohibits debt repayment agents from including clauses in their contracts with the debtor which prohibit the debtor from communicating with their creditors. In other words, the debtor needs to be able to continue to talk to their own creditors. Regulations may prescribe the information or disclosure statements that must be included in the contract between a debtor and the debt repayment agent.

Sub (3) allows cabinet, or by regulation, to cap the fees a debt repayment agent can charge a debtor.

Sub (4). A debt repayment agent is prohibited from charging any fee to the debtor before a repayment proposal has been agreed to by both parties.

Sub (5) prohibits a debt repayment agent from offering gifts or enticements to a debtor for engaging the debt repayment agent’s services.

Sub (6) prohibits a debt repayment agent from lending money or providing further credit to their clients or indirectly collecting a fee for assisting their clients in obtaining additional credit from a lender.

Sub (7) requires debt repayment agents to inform the debtor within 30 days if a creditor has failed to respond or refuses to participate in a debt repayment proposal.

L. Krog: Just to be clear so that I understand this. When we use the term “debt repayment agent,” it means a person who acts or represents or offers to represent a debtor. I take it, then, that one of the issues which this is designed to address is that, in fact, in practice what’s been happening is that they have purported to act for both sides on occasion. Is that the issue that we’re trying to address quite specifically?

[1625]

Hon. S. Anton: It’s not the only issue, but it is certainly a potential issue.

L. Krog: The minister has described it as a potential issue. I guess I’m curious to know because…. Obviously, Consumer Protection B.C. isn’t sending me e-mails or my ministry e-mails every day. I don’t have one to be sent to.

In other words, has this issue been raised by them as a practice that has occurred, or are there specific cases where some of these folks who fall outside the present regulatory regime have, in fact, been candidly, to use a common term, playing both sides of the street?

Hon. S. Anton: Playing both sides of the street, as the member describes it, has been raised as a potential predatory practice which is being prohibited by this legislation. We don’t have actual examples. We’re just making sure we close off all the different ways that these laws can be circumvented.

L. Krog: We won’t argue about whether B.C. is the sixth or the seventh jurisdiction with respect to this kind of legislation.

Is this particular section and its intent modelled on existing legislation in other provinces where they’ve included this, and they actually had serious examples of this kind of practice occurring, where you’re essentially acting for both sides — which is prohibited, certainly, in the legal profession? Or is this simply the wisdom of the legislative drafters and ministry staff?

Hon. S. Anton: The advantage of being first is you can claim to be first. The advantage of being later is you can
[ Page 6736 ]
draw on the expertise of others.

Most of this section is drawn on the expertise of others or the experience in other provinces, except for sub (5), which was generated in the work done in this province and thought to be wise to include.

L. Krog: Given that much of this section was drawn from other jurisdictions, then, were they encountering this type of predatory practice, where, as we call them now, a debt repayment agent was in fact purporting to act for both sides or keeping secret from one side the fact that they were also getting paid by the other side?

[1630]

Hon. S. Anton: Sub (1) reflects the previous debt poolers legislation, where you could only represent one side of the transaction.

L. Krog: Specifically, with the proposed section, in (2) it says:

“A contract referred to in subsection (1) (a)

“(a) must be signed by the debt repayment agent and the debtor,

“(b) must not contain a term or condition that prohibits the debtor from communicating with the debtor’s creditors, and

“(c) must contain the prescribed terms, information and disclosure statements.”

Firstly, I’m curious to know why, given electronic communication and all of those things, the provision wasn’t made for the possibility of the simple exchange of e-mails, whether that was felt to be too dangerous or not safe enough in terms of ensuring that, in fact, a contract was entered into.

Secondly, what’s the purpose of “must not contain a term or condition that prohibits the debtor from communicating with the debtor’s creditors”?

Hon. S. Anton: The question, I think, was: why not allow the contract itself to be some form of electronic communication? It’s viewed to be a better practice that it be written, and one of the advantages of that is that Consumer Protection B.C. can actually review the contract and make sure that it’s compliant.

Why prohibit the communication? Well, it’s important that a debtor be able to communicate with their creditor and that the debt repayment agent should not get in the middle of that ability to communicate.

L. Krog: I’m thinking of the practice of law where, once you know a party is represented by counsel, it’s a breach of the rules for you to communicate directly with that party. The concept is that the counsel who has taken on their role as essentially practicing law is acting as an agent for a client. Why that would be prohibited in this case —”must not contain a term or condition that prohibits….”

Given the superior power of the debtor-creditor relationship in and of itself, I would have thought that this, which says you can’t prohibit that once you’ve taken on the job…. You’re presumably going to receive pay for doing it, which is as a debt repayment agent. Presumably, that debt repayment agent is bringing some skills, experience and knowledge to the table.

Why would we want to allow what is presumed to be the powerful creditor to be in a position to communicate with the weaker debtor that might, in fact, enter into an arrangement that would not be nearly as beneficial as an arrangement that they’re paying a debt repayment agent to secure on their behalf?

Hon. S. Anton: This is so the debtor can continue to connect with or speak to the creditor.

[1635]

To give an example from earlier, Canadian Tire has a debt owed to it. The debtor has a third-party debt repayment agent. The debtor starts to get suspicious that something is wrong with his debt, and maybe he doesn’t really owe that money to Canadian Tire. He should be able to go to Canadian Tire and ask: “Do I actually owe that money?” That’s the communication that we have to permit, not prohibit.

What we are preventing here is that the contract not be able to prohibit that kind of communication. In other words, the contract must allow that kind of communication.

L. Krog: My party is sometimes accused of being a party that pursues a problem because we have a solution. I’m not entirely sure I can envision the kinds of circumstances where this is likely to happen.

Surely by the time you are in such difficulty that you’re prepared to secure the services of a debt repayment agent, you would have satisfied yourself as a debtor that in fact you owed this money. After all, we’ve reviewed the other provisions, to some extent, of the act today. We already know that that information is something the debt collector has to provide to the debtor. Surely it behooves the debtor to satisfy themselves that in fact these moneys are owed.

I think the greater evil, if you will, that the legislation would attempt to remediate would be the one where you have an ignorant, terrified debtor who becomes frightened by the prospect of all of this and communicates directly with the creditor when, in fact, a debt repayment agent…. And we have assumed they’re the bad guy in all of this, because we’re trying to regulate them.

In fairness, assuming they are providing good service for the money and for the service they’ve taken on, why would we want to allow that poor, ignorant, pressured debtor to speak directly again — and I use the example — to the powerful creditor who potentially would have the services available of counsel and all sorts of other means to harass or attempt to obtain payment of their debt by the debtor?
[ Page 6737 ]

Hon. S. Anton: There are a couple of scenarios here. I don’t know why we’re picking on Canadian Tire, but I assume Canadian Tire does have debts that it needs to collect from time to time. They may have a debt that they want to collect, but they can’t understand why the debtor won’t connect with them. In fact, if the debtor would connect with them, they might even be able to come to some kind of agreement. If the debtor has committed to his debt repayment agent that he’s not going to commit to the creditor, then he’ll never find out.

It’s a strategy that has been used by debt repayment agencies to create a wall between and ensure that the creditor and debtor can’t continue to discuss alternative options for debt repayment. In other words, the options available to the debtor may be greater if they can talk to the creditor than they are if they cannot.

L. Krog: Let’s discuss the scenario where the debt repayment agent that you’ve hired is dealing with Canadian Tire and the Hudson’s Bay Co. and CIBC and RBC and is trying to put together a package that will in fact secure some benefit for the debtor which otherwise wouldn’t exist. The debtor may not…. Of course, I appreciate….

Step back a moment. There’s legislation around preferring one creditor over another and all of those sorts of things. But stepping away from that for a moment, surely the greater concern would be that this debtor may be influenced into making an arrangement that is not, arguably, in their best interest because the debt repayment agent has an expertise that they bring to the table, an understanding of what the potential legal remedies are that would be available to the creditor, which the debtor may not fully appreciate or understand.

[1640]

Having said that, I’m curious to hear the minister’s comments. I’m also curious to know quite specifically…. This particular provision about prohibiting communication — is that something Consumer Protection B.C. requested, and/or is it also something, that is to be found in the other provinces that have passed or are in the process of instituting this kind of regime? In other words, what’s the source of this, quite specifically? It just strikes me that it’s a somewhat potentially problematic section.

[D. Horne in the chair.]

Hon. S. Anton: This is a piece found in debt settlement legislation across the country. What has happened in the past is that a debt repayment agent will write into the contract that the debtor cannot contact the creditor. That limits the options available to the debtor and could cause significant harm to the debtor because they couldn’t find out the actual amount of their debt, and it just prevented any kind of settlement going on between the creditor and the debtor that might otherwise occur.

L. Krog: I believe it’s fair to say the Attorney General has already given me that answer once before, and I don’t mean that unkindly. But I think the situation that I’ve suggested will present, in practice in the real world, for some debtors a potential problem where they will be taken advantage of by the more powerful creditor.

I mean, the reality is that these relationships generally involve people who are in great difficulty. It’s not the image of somebody who’s very wealthy who’s avoiding paying their just debts. That’s not the kind of people we’re talking about who are going to secure the services of a debt repayment agent. It will, in fact, be the most vulnerable amongst people.

I raise this as a concern that in fact there is a great potential that by including this particular phrase — that you can’t put that in the contract — it is almost an encouragement for vulnerable debtors to try and secure arrangements with their creditors that will, in fact, be detrimental.

However, in terms of the actual effect of the section, I just want to be clear. Sub (4) says: “A debt repayment agent must not charge, require or accept any amount from the debtor before a repayment proposal is accepted, in writing, by the debtor and one or more of the debtor’s creditors.”

[1645]

I take it this is, in fact, contemplating — and I would say, by implication, almost saying — that it’s okay to enter into an arrangement with one creditor that could arguably be treated as a preference even though you’ve got other creditors out there who you haven’t entered into arrangements with. I suspect the Attorney General understands the point I’m trying to make here, and I’m curious to know what her comment is in response.

This section, I appreciate, deals with the fact that you can’t get paid unless you secure the deal, essentially, between the creditor and the debtor. But it does contemplate that, as it says, it’s “accepted, in writing, by the debtor and one or more of the debtor’s creditors.” By implication, it says that you have struck a deal with some but not all. I’m just curious about legal prohibitions — and I use that term broadly — that exist against that kind of arrangement.

Hon. S. Anton: The provision here is a similar provision to what we had in the debt pooling legislation, which did allow you to approach certain creditors but not necessarily all. We see no harm in allowing a debtor to pay off one debt but perhaps not all the debts that they have.

L. Krog: With respect specifically to section (3), just around the whole section still, as proposed, “A debt repayment agent must not charge fees or disbursements in excess of the prescribed amount” — that, obviously, is a matter to be set by regulation.

I’m sure people watching this debate and those work-
[ Page 6738 ]
ing in the industry are interested to know: what in fact does the government have in terms of contemplation? I am sure we didn’t get to this legislative juncture without consideration of what those fees would look like. Are we talking about specific amounts? Are we talking about percentages? Are we talking about a range of fees? In other words, what should the industry and people expect?

Candidly, that’s going to be set by a process which, I have said on many occasions in this House, is not subject to public scrutiny. It’s a decision made behind the closed doors of the cabinet chamber. It won’t be debated in this chamber. It won’t be discussed in this chamber. It can’t be attacked or supported in this chamber. So I’m curious to know: what is in the contemplation of the ministry, with respect to fees and disbursements by way of prescribed amounts?

Hon. S. Anton: There has been no decision made as to what the prescribed amount may look like, but we will be consulting with Consumer Protection B.C., industry stakeholders and other provinces before we bring forward any recommendations as to what that prescribed amount might be.

[1650]

L. Krog: I’m going to assume that, surely, Consumer Protection B.C., representing the industry components now, must have provided at least some idea of what sort of range of fees we are looking at in terms of practice now and whether or not those fees are reasonable. Also, if the minister has that information available, what, in fact, is the legislative regime in other provinces with respect to those fees?

Hon. S. Anton: I’m going to give an example, but it is only an example. It is often a formula — for example, 10 percent of the original amount. That is not to say at all that that’s the formula that we would land on in British Columbia, but that is the kind of formula that other jurisdictions are using.

L. Krog: I take it that’s 10 percent regardless of the amount of the debt involved. So if it’s a $1,000 debt, it’s going to be 10 percent in other jurisdictions, as the example given by the minister, or if it’s $100,000, it’s going to be 10 percent.

Hon. S. Anton: It’s one example of many possibilities. I don’t think there’s any point in going into the other hypotheticals. It’s a possibility amongst many possibilities.

L. Krog: I’ll try and be more specific in my question. I’m talking about the actual prescribed amounts as they exist in other jurisdictions in the country, information which may well be available to the minister. In other words, is it 10 percent in Ontario, or is there a sliding scale, or something of the like that I mentioned, where you have perhaps smaller fees on smaller amounts or larger fees or the reverse?

Hon. S. Anton: Alberta, for example, says that if a one-time payment is made to a creditor, or a successful settlement is negotiated, the agency can charge a maximum of 10 percent of the original debt or debts owing. That is an example. I cannot emphasize enough that these are only examples. We do not know where we will land in British Columbia.

L. Krog: Dealing quite specifically with section…. Well, it would be the new section 127(6). It says: “A debt repayment agent must not (a) lend money to the debtor, (b) provide credit to the debtor, (c) assist, offer to assist or attempt to assist the debtor to obtain a loan or credit from a lender, or (d) require, request or accept any amount for agreeing to assist or agreeing to attempt to assist the debtor to obtain a loan or credit from a lender.”

I’m just curious to know: what’s the purpose of this section, the point of it? Again, given what the minister said earlier, I take it this is brought in from other legislation across the country or practices or regulatory regimes. I am curious to know: what’s the experience there? Why was this brought forward in the way that it is?

[1655]

Hon. S. Anton: These debtors are in a vulnerable position and already in debt. The provisions of 127(6) prevent a debt repayment agent from putting them further into debt and digging a bigger hole for them.

L. Krog: Arguing it from the same side as I argued about the previous issues, if I have secured the services of a debt repayment agent who presumably, again, brings some expertise to the table, who has experience in dealing with creditors that I will not have because, presumably, I haven’t had to go through this process more than once in my life…. Maybe it’s my first experience. I’m young, I’m stupid, and I spend my money willfully and incur debts without common sense.

Why would we not allow some service provider in a community, who brings that expertise to the table, to perhaps in a difficult situation loan money to the debtor at what may be extremely favourable rates or provide some credit to the debtor, particularly with respect to payment of the fees? Perhaps I’m prepared to assist by saying: “Look, here’s my fee. It’s 10 percent — 5 percent on completion of the successful arrangement and 5 percent over time. As you’re paying off the debt to the creditor or creditors, you’re going to pay me off as well.”

Hon. S. Anton: The key is that the debt repayment agent should be helping you get out of debt, not putting you further into debt.
[ Page 6739 ]

L. Krog: I understand that’s the intent of the section. Again, my specific question is: if, in fact, it works to the benefit of someone who might otherwise face bankruptcy, which has significant consequences in terms of future borrowing and the ability to improve your life through the acquisition of assets on credit, and given that this act contemplates regulations of every nature and kind, why would we so specifically prevent some assistance that would indirectly enable someone to make that kind of a payment?

For practical purposes, if I’m that deep in debt, securing the money to pay the fees — to pay the debt repayment agent — may, in fact, in and of itself, prove a difficulty. But if the debt repayment agent is prepared to provide or have part of their fees deferred, essentially…. It talks about “to assist or attempt to assist” to obtain a loan from a creditor or to “provide credit to the debtor” — very specifically, provide credit. Is it better that I, as a debtor, be potentially forced into bankruptcy, or not be in a position to make a deal with my creditors, or not be in a position to secure the services of a debt repayment agent?

Is that, in fact, better than a situation where my debt repayment agent says: “Look, the fees I can charge are, we’ll say, for example, $2,000. We can sign the deal tomorrow. I know you can’t raise $2,000. I know you’ve got $1,000. Give me the $1,000, and pay me the next $1,000 to finish off my fees over the next 10 months.” I suspect that there won’t be a lot, in fairness, of debt repayment agents who’ll want to take that risk with somebody who’s already got themselves into debt. But what evil is there in that, that this legislation seeks to prevent?

[1700]

Hon. S. Anton: In addition to the answer I gave a moment ago, there is also a built-in conflict of interest which is a hazard here, that if the debt repayment agent increases the actual amount of debt owing, then they may have the potential of increasing their own fees payable.

L. Krog: I appreciate what the Attorney General has had to say, but…. We’re at the stage of our arrangements where I, as a debt repayment agent, have been able to negotiate down the debt or debts of the debtor I’m acting for. All that’s required to get me out of this mess, as a debtor, is the signing of the agreement contemplated by the legislation.

Obviously, as the debt repayment agent seeking to be paid…. I don’t get paid unless I have an agreement. But I know my customer — I won’t use the term “client”; the debtor I’m acting for — is up against it and in even worse circumstances, perhaps, than when we started this process. They’ve been laid off for a week, but I know they’re getting back to work in two weeks — whatever. I’m not trying to make this unnecessarily complex.

It’s a situation where the benefit to the debtor of being able to get this behind them is essentially going to be prevented by the offer of the kindly debt repayment agent, we’ll call him, who says: “I’ll take what you’ve got now. Here’s the deal I’ve secured for you. It’s a good deal, but you can’t pay me.”

What’s wrong with that?

Hon. S. Anton: There is no prohibition against the debtor seeking further credit, simply not from the debt repayment agent.

L. Krog: Let’s go back to sub (4). It says: “A debt repayment agent must not charge, require or accept any amount from the debtor before a repayment proposal is accepted, in writing, by the debtor and one or more of the debtor’s creditors.” The very section itself contemplates you’ve struck the deal for the amount of the repayment.

The evil the minister mentioned when she responded earlier — the conflict of interest that might exist between the debt repayment agent and the debtor in terms of a higher amount and, therefore, a higher fee — is already covered, as I read it, by this section.

What I’m saying is…. You’ve entered into the arrangement. You’ve secured the amount you’re going to pay your creditors, which is what section (4) contemplates. You’re not going to be in a position to do it, and the debt repayment agent says: “You know what? If the whole thing’s going to fall apart and I’m just going to get added to your list of creditors anyways, I’ll take the 1,000 bucks now” — in the $2,000 example I used — “and you can pay me 1,000 bucks later.”

This subsection (6) says I can’t do that, even though the work has been done. We’ve had to comply with subsection (4). What’s the problem here?

[1705]

Hon. S. Anton: Subsection (4) is a prohibition against upfront fees. Subsection (6) is a prohibition against lending more money to the debtor.

I have said what there is to say, and I don’t have anything more to add to my previous reasons given for that section.

L. Krog: I’m conscious of the fact that if you do the same thing the same way every time, you shouldn’t be surprised if you get the same result.

I’ll move on to sub (7). It says: “A debt repayment agent must inform the debtor within 30 days after a creditor of the debtor informs the debt repayment agent that the creditor refuses, or has ceased, to accept or negotiate a settlement….” I’m just curious why 30 days. Why not seven days? Why not 50 days? What’s the reasoning behind the 30-day notice?

Hon. S. Anton: We took that from Alberta’s legislation. Alberta has had its legislation for some time now. It seems to have worked reasonably well, so that’s the model that we chose.

Sections 8 to 10 inclusive approved.
[ Page 6740 ]

On section 11.

L. Krog: We’re adding to section 194(3), which is a very long section listing the provisions.

“The Lieutenant Governor in Council may make regulations as follows:

"(a) defining a word or expression used but not defined in this Act; (b) prescribing classes of unmarried persons as spouses; (c) exempting a person from the application of all or part of this Act or the regulations or establishing circumstances when all or part of this Act or the regulations do not apply; (d) prescribing information or records that must be submitted to the director; (e) respecting records, goods or things that are retained during an inspection and the detention or disposal of those records, goods or things; (f) respecting the disclosure of information and handling of money related to consignment sales of goods by suppliers.”

[1710]

Now we’re going to add (g), which says: “respecting any other matter for which regulations are contemplated by this Act.” What does that mean? That’s my question to the minister.

Hon. S. Anton: This is language which is used in current drafting practices. Specifically, in this case it allows for amendments to the debt collection industry regulation to cap the fees that the debt repayment agents can charge and also, to that same regulation, requires debt repayment agents to include mandatory disclosure statements in contracts to inform consumers of their contract rights and the risks of failing to repay their debts. This is consistent with mandatory disclosure statement provisions included in the payday loans regulation.

L. Krog: Perhaps it’s just my memory failing, but I don’t know that I have seen that language used in other statutes that I have had the pleasure to review with the Attorney General in the last little while. Perhaps if she can just confirm….

Part 14 of the existing act runs from sections 194 to 201, all saying: “The Lieutenant Governor in Council may make regulations as follows” and then going off and describing a series of regulations. It runs for literally nearly four pages of the existing act.

Does section 194(3), by adding (g)…? Is that going to just relate to the general powers? So that means it covers everything? The others are very specific, saying that you can go on to make regulations as follows, respecting, etc. I take it this is a significant expansion of the regulatory power under the existing act.

In other words, this says you can make regulations about anything in this statute, notwithstanding that the Legislature, in its wisdom, when it passed the existing act or revisions to it, went on to specify in four pages and seven sections what you could make regulations with respect to.

Hon. S. Anton: Subsection (g) is limited because the regulation itself has to be contemplated by this act.

[1715]

For example, a few moments ago we were discussing, in section 8, the proposed section 127(3), which says: “A debt repayment agent must not charge fees or disbursements in excess of the prescribed amount.” That is something contemplated by the act.

L. Krog: Conscious of the time, I’m not going to belabour it too much. But it strikes me that essentially what we’re saying is we’re going to open the barn door, and the horse gets to run out and run all over the field, wherever it wishes to go, with the addition of this particular section. Using the term “contemplated by this act” is a pretty broad stretch.

That means, I take it, that the power to make regulation with respect to what might arise out of any amendments that might be made to this act in the future will in fact be captured by this section, and you’re entitled to make regulations regardless. Is my interpretation correct?

Hon. S. Anton: Yes, if the act contemplates a regulation, such as I referred to a moment ago, then it could be done under this subsection (g).

Sections 11 to 13 inclusive approved.

On section 14.

L. Krog: I don’t know if the minister requires staff with respect to these particular amendments to the Coroners Act — if she wishes to take a moment to bring them in, if she thinks it appropriate, or I’ll simply ask her the questions.

The Chair: Proceed.

L. Krog: I took some time to take a look at the Coroners Act today, which has never actually defined the term “body,” interestingly enough. My understanding from the minister’s staff’s briefing of myself and my co-critic for this particular portfolio is that there have been issues arising with respect to parts of a body being the only thing that’s available for the coroner to examine, as opposed to the whole of the deceased. So we can deal with a bone. We can deal with an arm or a leg or whatever body part is contemplated.

I’m curious to know. Given that the Coroners Act has been around for a very long time — I’m sure the Attorney General’s staff might be able to tell me exactly when we first had a Coroners Act in B.C. — it strikes me as very odd that here we are in 2015 dealing with an issue that must have been an issue for a very long time.

I’m looking for some explanation as to why what one would have thought would have been an obvious historical problem is only the subject of a legislative change in 2015.
[ Page 6741 ]

Hon. S. Anton: I’m joined by Pat Cullinane, deputy chief coroner.

I was wondering if we had in our collective wisdom here the first time a coroner was mentioned, but it would have been many centuries ago. When did we have the first Coroners Act in British Columbia? I don’t have an answer to that either, although I could probably get it fairly quickly.

It seemed wise to clarify this particular provision that “body” included a part of the body of the deceased person.

L. Krog: I’m just curious to know: are there a significant number of cases that involve the coroner’s office in a given year where in fact a body part has been brought in, as opposed to leaving it in situ, so that the coroner could in fact do their job in a much more effective, and hopefully successful, manner?

[1720]

Hon. S. Anton: It’s something that happens from time to time. People may pick up the part of the body and bring it in to the police or to the coroner. In fact, I’m told even the police themselves might be inclined to pick up the body part and move it. This clarifies that one should leave that body part in place so that the coroner can come and do a proper investigation.

Sections 14 to 16 inclusive approved.

On section 17.

L. Krog: Again, if the minister wishes me to start, I will, before any staff are available to her. I’m in her hands.

Hon. S. Anton: I’m joined by Shannan Knutson and Darryl Hrenyk.

L. Krog: Just to confirm what will probably be obvious, I understand that this is necessary in order to allow arbitration awards in family law matters, which is contemplated by the thrust of the new Family Law Act, hopefully to become a very common process, where people will be settling their affairs through this. I’m going to assume also that, particularly in Supreme Court but not Provincial Court, this will, of course, attract a fee payable to the provincial government. Is that correct?

Hon. S. Anton: We would expect that probably the majority of these might be filed in the Provincial Court, where there is no fee. However, they could be filed in the Supreme Court, where there would be a fee payable.

Section 17 approved.

On section 18.

L. Krog: Just to confirm that section 18 is exactly what it says. It’s taking into account….

Again, I’ll give the minister a moment for her staff to come in. We were welcome to note Mr. Reimer’s presence in the chamber this afternoon, which the Attorney General announced earlier in the day.

I take it that section 18 is just as obvious as it can be, that this is simply required in order to reflect the fact that we’re now eliminating one commission and reducing the number to one from two.

Hon. S. Anton: Yes, we’re amalgamating the two commissions into one.

Sections 18 and 19 approved.

On section 20.

[1725]

L. Krog: With respect to what is being proposed, section 20, is this the practice in other jurisdictions in Canada — to have one commission to deal with these kinds of matters? Or is, in fact, this something innovative in British Columbia?

Hon. S. Anton: This varies across the country. Not all provinces have judicial justices. Of those who do, most actually have two commissions. However, Quebec has one commission that manages three sets of judicial officers.

L. Krog: Noting the time and having to try and speed this along. With respect to this change, I do note — and the Attorney General can correct me if I’m wrong — that this comes into effect on the date of royal assent as opposed to by regulation at some date in the future contemplated by cabinet.

If I’m correct in that, I’m curious to know what sort of consultation, if any, occurred with the judiciary in British Columbia.

Hon. S. Anton: There is a proposed amendment as to the coming into force of these sections around the Judicial Compensation Act. I don’t know if the member opposite is aware of that. Perhaps he could give me a nod one way or the other. Yeah, okay.

L. Krog: I am aware of that amendment, and I’m curious. That’s why I asked the question. It’s a bit of a trick, I suppose, arguably. What sort of consultation did take place with the judiciary? And does that perhaps explain why it’s not going to come into effect by royal assent — assuming that section, of course, passes — as opposed to regulation, which is the usual manner?

Hon. S. Anton: That would be more or less correct. We have had some consultation with the chief judge, but we
[ Page 6742 ]
do need to have further conversations with the judiciary to go through the amendments as proposed here. If they are passed by the House, before royal assent…. Before they are brought into effect, we do need to have further conversations with the judiciary. That is why we are proposing the amendment on the last section.

L. Krog: With respect to that consultation, what sort of consultation is contemplated? Is this correspondence, meetings? Is this telecommunication? Is this e-mails? I mean, are we talking about a significant consultation? Are we talking about: “This is what it’s going to be like, and tough luck”? Or is there something further, given, as I say, the fact that it’s now going to be potentially by regulation and not royal assent when it comes into effect? And if so, do we have any timeline contemplated, as well, as to when this will take effect?

[1730]

Hon. S. Anton: We would propose that all of this be in effect before the next commission is due to begin in spring of 2016. The nature of the consultation is not yet settled, but it would encompass meetings with the chief judge and others to be determined.

Sections 20 to 23 inclusive approved.

On section 24.

L. Krog: This section changes the date of the preliminary report of the commission and sets out new criteria for recommendations. It might be helpful, with respect to dealing with this issue, to determine what are the present salaries paid to judges of our Provincial Court and judicial justices of the peace.

Hon. S. Anton: Judges get $236,000 a year, a full-time judicial justice gets $105,000 a year, and then there are per-diem rates, which are in the order of $750 per day — although I don’t have complete confirmation of that number.

L. Krog: From the general public’s perspective, it’s a pretty good gig. Having said that, with respect to section 24 as proposed and as a general question, will, in fact, this legislative change allow for — and I’m not suggesting it’s appropriate — a reduction in judicial compensation or a freezing?

Having regard to the new requirements with respect to the report, the matters that have to be considered…. In preparing a report, the commission has to be guided by a number of things. It goes on to outline those. I’m curious to know if, in fact, that is a possibility — either the freezing and/or reduction of judicial compensation.

Hon. S. Anton: A freeze has happened. We have never had a reduction in British Columbia. Although the courts have ruled that they can be frozen or, in fact, even reduced. So technically, it’s possible, but the changes in criteria which are proposed in this section should not have any impact on whether or not that would actually happen.

[1735]

L. Krog: I take it that the Attorney General is satisfied that up to today’s date the existing law allowed for a reduction in compensation of Provincial Court judges and judicial justices of the peace. Or is that too recent an invention, if you will, to contemplate?

Hon. S. Anton: The Supreme Court of Canada has ruled that judicial salaries can be reduced.

L. Krog: Then, confirming that — and I appreciate the minister’s answer — the existing provisions will be changed, obviously, by this. Subsection (5) talks about reporting with respect to remuneration and so on. But now this in fact, unless I’m mistaken, enumerates quite specifically what matters need to be taken into account — indeed, sections (a) to (f). Am I correct in that statement?

Hon. S. Anton: The current subsection 5(5) has five provisions. Now there are six. Some of them are repeated; some are new. The rationale is that the current factors are general and rather vague. There’s no requirement for commissions to demonstrate in their reports that they have fully considered each factor.

Most other provinces have more detailed and specific factors such as these, and the amendments include a list of six mandatory factors. Commissions may also consider other factors not listed but must explain the relevance of those other factors.

L. Krog: Just to confirm, for instance, it talks about “changes, if any, to the jurisdiction” etc., compensation in “similar judicial positions in Canada, having regard to the differences between those jurisdictions and British Columbia.” I take it that that is a new section, obviously.

That potentially could take into account, I suppose, the fact that if you live in the great city of Vancouver, you’re going to pay a lot more for housing than you will, perhaps, in Halifax, for instance — which is a fairly specific consideration — and “the generally accepted current and expected economic conditions in British Columbia.” And “changes in the compensation of others paid by provincial public funds” — that would include everyone in the public service.

Am I correct in making those statements?

[1740]

Hon. S. Anton: Subsections (d), (e) and (f) are all new, if that is the question of the member.

Sections 24 and 25 approved.
[ Page 6743 ]

On section 26.

L. Krog: If the minister could explain why this section is necessary and its purpose. I do note that the existing section 26 — the following is “added to Part 1” — is fairly specific and talks about the first $30,000 in costs, two-thirds, etc. Again, I’m just wondering if the minister can explain why we have this section and what’s occurred in the past that’s led us to this proposed change?

Hon. S. Anton: The advantage of this section is that it creates certainty in advance of the commission. To date there hasn’t been a structure respecting the costs incurred by the judiciary for participating in the process, so government and the judiciary have either come to a prior agreement about costs or, in the absence of an agreement, the matter has been submitted to the commission for a recommendation.

This leads to uncertainty. Government has no control over the legal fees or costs, and there may be experts retained. If the commission recommends that the government pay all of the costs, then government and the Legislative Assembly must either accept that recommendation or reject it after the fact, when the costs have already been incurred.

Sections 26 and 27 approved.

On section 28.

L. Krog: With respect to section 28, is there any contemplation that this would be used to see a reduction in what jurors would be paid?

Hon. S. Anton: I’m joined by Peter Robinson. I’m sorry. I’ll have to ask the member to repeat the question.

L. Krog: I just wanted to confirm. Is it in the contemplation of government that this section as proposed will, in fact, lead to a reduction in fees that are paid presently? Or is it going to be used to, in fact, potentially allow for an increase and allow for better and a more appropriate payment of necessary expenses for jurors?

Hon. S. Anton: The regulation is already in place as to the fees, so it’s really making the act consistent with the fact that the fees are in the regulations, so simply to refer to the prescribed allowance and the prescribed fee.

Section 28 approved.

On section 29.

[1745]

L. Krog: What’s the purpose of adding (c) in these circumstances? Is there some problem that’s arisen that’s led to the proposal of this section? I’d be very curious to know.

Hon. S. Anton: This is providing authority in the act to set conditions in the regulations that might, for example, require receipts. So you park. You get a receipt. That could be required, by the regulation, to demonstrate that you have paid the money.

L. Krog: I’m just curious to understand this. Has there been some issue in the past where people have requested reimbursement of expenses and receipts weren’t appropriately provided? Or, in other words, who is this designed to assist or protect — the provincial government or the jurors?

Hon. S. Anton: The regulation-making power was general but there. The regulation already exists, and it was thought wise to make the regulation-making power a little more specific, which is a practice followed by our drafters.

Sections 29 to 33 inclusive approved.

The Chair: On section 34, the minister has an amendment in her name. Does the minister wish to move the amendment?

On section 34.

Hon. S. Anton: I move the amendment to section 34 standing in my name on the orders of the day.

[SECTION 34, by deleting the text shown as struck out and adding the underlined text as shown:

This amendment is intended to change the timing of when sections 18 to 26, the Judicial Compensation Act provisions, come into force. The amendment provides that these sections come into force by regulation of the Lieutenant-Governor-in-Council rather than by royal assent. This change would assist us with further consultation with the judiciary following third reading.

On the amendment.

The Chair: The question is the amendment proposed by the Attorney General.

Amendment approved.

Section 34 as amended approved.

Title approved.

Hon. S. Anton: I move that the committee rise, report the bill complete with amendment.
[ Page 6744 ]

Motion approved.

The committee rose at 5:50 p.m.

The House resumed; Madame Speaker in the chair.

Reporting of Bills

BILL 6 — JUSTICE STATUTES
AMENDMENT ACT, 2015

Bill 6, Justice Statutes Amendment Act, 2015, reported complete with amendment.

Madame Speaker: When shall the bill be read for a third time?

Hon. S. Anton: With leave, now.

Leave granted.

Third Reading of Bills

BILL 6 — JUSTICE STATUTES
AMENDMENT ACT, 2015

Bill 6, Justice Statutes Amendment Act, 2015, read a third time and passed.

Committee of Supply (Section A), having reported resolution, was granted leave to sit again.

Hon. A. Wilkinson moved adjournment of the House.

Motion approved.

Madame Speaker: Safe travels returning to your ridings. This House, at its rising, shall reconvene at 10 a.m. on March 23, 2015.

The House adjourned at 5:51 p.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF
INTERNATIONAL TRADE

(continued)

The House in Committee of Supply (Section A); D. Plecas in the chair.

The committee met at 1:38 p.m.

On Vote 30: ministry operations, $48,521,000 (continued).

B. Ralston: Just continuing with a few more questions about Mr. Stewart.

The minister will know that a freedom-of-information request showed that Mr. Stewart, between October 29, 2013, and October 8, 2014, spent more time in British Columbia than he did in Asia.

In the special representative’s contract is there any requirement as to a minimum number of days or any direction on the time that he is to spend in Asia?

[1340]

Hon. T. Wat: The special representative’s role, as I said earlier, is to promote the linkages between government-to-government relationships. Not only is he doing that, not only is he required to be in our priority markets promoting British Columbia to potential investors and importers, but he will also have to return to British Columbia to support key initiatives in the province that involve high-level Asian participation from key clients in priority markets.

Since establishing in Beijing on March 1, 2014, the special representative has returned to B.C. on six occasions. Let me cite you the six occasions to let you know why he had to come back to British Columbia.

In March he came back for the GLOBE 2014 conference, attending with clean-tech delegations from China, Japan and Korea. In May he accompanied a Chinese delegation attending the LNG in B.C. conference. In August it was personal travel, although he took this opportunity to meet with agrifood, forestry and digital media companies to discuss their priorities in the China market.

In November he was on a personal trip for health reasons. In December, again, combining personal travel with meetings with key government and business leaders. Finally, during the Chinese lunar new year in February 2015, when I’m sure the member opposite is fully aware that no meetings could be possible in China during this holiday season, he came back here, and he also took the time to meet with business and with B.C. exporters as well.

B. Ralston: In last year’s estimates the minister stated that she would release the performance metrics agreements that were developed by the commissioner in consultation with the ministry. I’m advised by the research staff that we have yet to receive this performance agreement. Does it exist? And if so, why hasn’t it been produced?

[1345]

Hon. T. Wat: I’d just like to get further clarification — whether the member opposite is asking about the performance metrics for the special representative or for all the trade and investment representatives in our priority markets.
[ Page 6745 ]

B. Ralston: No. In this case, I’m just asking for the performance metrics for the special representative. There’s a separate issue about performance metrics for the trade offices, which we may get to a bit later.

Hon. T. Wat: Yes, we released the special representative mandate letter when he was appointed in October 2013. Then we released three quarterly reports on his key accomplishments through FOI. We are now compiling his annual report, and we will be proactively releasing that report as well. The special representative officially started his duties in Beijing in March 2014. We will be releasing from that month until the year-end of this fiscal year.

B. Ralston: Well, it’s clear from the documents that he was paid well in advance of officially starting, before there was any description of his position whatsoever — at least for, I think, three or four months. I could get the reference if the minister doesn’t have it at hand.

I guess what the minister seems to be saying here is that there is a retrospective compilation of what the special representative is doing. My question was directed to…. Prospectively, looking forward: what does the ministry expect him to accomplish, and is he being measured against those expectations?

[1350]

Now, I understand that he’s a figure somewhat like Gordon Wilson, where really all he has to worry about is whether he has the Premier’s confidence in him or not, and his salary is guaranteed. To some extent, the process we’re going through is a bit of a fiction. Nonetheless, to maintain the fiction, one would expect that there were performance metrics, there were some expectations, and there would be some measurements against those expectations.

Will the minister explain whether that is in place?

Hon. T. Wat: To answer the question from the member opposite: yes, we do have performance metrics for the special representative — the time that he started his official duties in Beijing in April.

[1355]

His key performance metrics have been developed in consultation with the Minister of International Trade and are in line with our ministry performance metrics.

The special representative tracks the key activities, meetings and outcomes in our ministry’s Salesforce CRM system. We review the performance of the special representative on a monthly, quarterly and annual basis to ensure performance objectives are achieved and provide updates on activities and results.

As I said earlier, right now we are compiling the annual report for the special representative, and we will be proactively releasing the annual report in April. So the member opposite can review all the achievements, all the outcomes made by the special representative during this fiscal year.

B. Ralston: I’m not sure we’re talking about the same thing.

I have a document that’s entitled Minister of International Trade B.C. Representative in Asia’s Strategic Plan Mandating Key Deliverables 2014-2015. It seems to be pretty basic. “Establish a permanent residence in Beijing. Establish strategic relations with senior officials of foreign governments in priority Asian markets.”

Generally, with metrics one sets specific targets that are numerical and perhaps, in some cases, qualitative and then tracks them. So is there such a document, and if so, will the minister table it now?

Hon. T. Wat: I guess I said it wrongly. I just want to put on record that the special representative was appointed in October 2013 and that he started his official duty in Beijing in March 2014. I thought I said 2014, but somehow I said 2013. So I apologize for that.

[1400]

As to the question raised by the member opposite, I just want to let the member opposite know the kinds of achievements the special representative has made. Since arriving in Asia in March 2014, he has conducted close to 100 high-level government and executive meetings with decision-makers and advanced a number of new government-to-government agreements and other collaborative agreements between B.C. and China.

He also played a role in supporting over $30 million in investment to B.C. and worked to support trade deals for B.C. companies in the areas of clean tech, LNG and agrifood. The special representative also participated in over 15 missions to market by B.C. government ministers and B.C. trade delegations, providing on-the-ground advice and introductions when meeting with Asian government officials.

Let me say some of the more specific examples of the special representative’s results. Among the investment decisions that the special representative had a role in supporting was the Cheung Kong holdings decision to pay $33.4 million to buy the Vancouver assets of off-airport car park operator, Park ’N Fly. The special representative and B.C. trade and investment office in Hong Kong met with Cheung Kong senior executives to discuss B.C. investment opportunities, Hong Kong–Canada tax treaty information and the updates on the B.C. economic outlook.

Another example is that the special representative met with the Chinese National Energy Administration, resulting in the finalization of a major agreement between B.C. and China on energy cooperation, advancing Chinese investment in LNG. Another one is — I talked about it in the House yesterday — that he was instrumental in the Guangdong provincial government’s decision to set up the first-ever North American trade and investment office in Vancouver.

B. Ralston: Once again, what I’m looking for is the
[ Page 6746 ]
plan. Presumably, the deputy minister or the senior team at the ministry would develop objectives and performance metrics for this particular official. What the minister has done, once again, is recite things that she claims the special representative was instrumental in achieving. Somehow, I must express a note of skepticism that it was entirely his doing. Be that as it may, what I’m looking for is the performance metrics, the plan going forward, what he is expected to do and how one would measure success.

As the minister knows, her budget has undergone a dramatic increase. Perhaps one should compliment the deputy minister or the minister herself in the sense of advocating within the budget process. This particular line item in Vote 30 has increased dramatically.

The question that arises — and this is what I’m attempting to probe and the minister is not really responding to — is what justifies this huge budget increase? If there’s no way to measure success, if there’s no performance metrics in this case or in others, what’s the justification for such a dramatic budget increase?

As the minister knows and as we hear repeatedly from government ministers and from the Premier, money is tight. Every expense is scrutinized very carefully. There’s not money for a lot of other things that people think might be necessary here in British Columbia for direct services to citizens. Yet for this ministry, dramatic increases — millions and millions of dollars.

That’s what I’m looking for. I’m giving this specific example of the special representative because he was kind of inserted at the top of the bureaucracy of the 25 or so staff in Beijing and is nominally in charge. If the person at the top in Beijing, with responsibility for the office in Seoul and responsibility for the office in Tokyo — and one assumes, the occasional side trip, as was discussed last year, to Taiwan…. How do we measure success?

[1405]

What justifies this dramatic increase of millions and millions of dollars in a time of budget scarcity and competing objectives? What justifies this dramatic increase? That’s what I’m asking for, and I hope the minister will want to respond — not particularly to me, necessarily, but to the public, who may have questions about this huge increase in expenditure.

[1410]

Hon. T. Wat: I just want to emphasize…. I want to let the member opposite and the public know that it’s not a dramatic increase — our ministry. I wish we had, but it’s not.

I am sure the member opposite remembers that in the last two fiscal year estimate debates you time and again pointed out that our overseas training investment office expenditure, the budget, was coming from the contingency budget. You did think that there’s something inappropriate there. Thank you for raising that one.

In the last two years that….

Interjection.

Hon. T. Wat: Well, you did raise that, right? I’m sure you remember. You did raise that in the last two fiscal year debates. After you raised that, we had a lot of discussions with my deputy minister. Then, we also have proven to the government that we have achieved a lot in our ministry. That’s why the Minister of Finance decided to switch the contingency budget into our base budget.

There’s no increase in our budget for international trade. The only increase is to fund multiculturalism. Yes, that will be $1 million every year for multiculturalism. The $250,000 is to fund the BCGEU’s negotiated salary increase. That’s the only budget increase.

As to the question raised by the member opposite about whether we have the performance measures. Yes, definitely, we have the performance metrics. In our service plan we have clear performance measures for the foreign direct investment influenced by our ministry, the new international offices and also the international business agreement facilitator. We have clear targets there, and I can state in this House how much we have exceeded the target that we set in our performance metrics.

B. Ralston: Well, it’s reassuring to see that $250,000 for the BCGEU agreement is accounted for in the budget. Clearly, you aren’t in the same position as boards of education across the province, where CUPE increases are not funded, and they have to find it out of their own budget. So you’re in that fortunate position as a ministry.

What I was referring to was the voted appropriation in the blue book, which is the Estimates. Last year it was $10,522,000. This year it’s $22,338,000. By most measures, that’s a pretty substantial increase — over 100 percent. That’s what I was referring to. The minister has already referred to the dramatic increase in the multiculturalism budget from $625,000 in the estimates last year to $1,628,000 — over $1 million. A dramatic increase in percentage, I would say — about 160 percent. Those are pretty huge increases.

The purpose of contingency, as the minister would say last year, was not a voted appropriation but was only, as the name implies, contingent. If I had anything to do with that becoming a permanent part of the budget, that certainly wasn’t my intention.

Be that as it may, I think the question remains, in the case of Mr. Stewart, as the special representative, what the performance metrics are. Although I listened carefully to the minister, I don’t believe I have an answer to that question yet.

[1415]

I do want to, though, move to another question related to his duties. The memorandum of understanding shows a number of overlapping government and private actors in Asia that he is to work with. He is to work with — and we’ll get to the headquarters in Vancouver
[ Page 6747 ]
— Yuen Pau Woo, Department of Foreign Affairs, Trade and Development Canada, the B.C. FII, Destination B.C., Advantage B.C., the Business Council and the already 64 — as of September 2014 — individuals employed overseas in the trade offices.

What increment is being added that all this panoply of officials and offices — all paid for by, if not the citizens of British Columbia, the citizens of Canada…? What added increment is he bringing, other than the fact that he can pick up the phone and call the Premier, which seems to be the most frequent justification for putting him in that position? What is he doing that none of the others can do?

[1420]

Hon. T. Wat: Again, I need to make a correction to the figure that I said earlier. The BCGEU staff salary increase is $25,000.

As to the question raised by the member opposite about the added value that the special representative has given to the overall trade and investment representatives office, he definitely has added value. I’ve been talking about that time and time again.

We need a senior government official’s presence in the priority markets given the business culture, the government culture in China, South Korea and Japan. He really contributes to our performance metrics that are clearly laid out in our service plan. We have a very clear target in our performance measure there. The member opposite can go there and take a look. With the special representative’s presence, he really has contributed a lot to it. That’s why we have achieved more than we expected.

His role, again, as I said, is to build and sustain relationships — that is, of course, including the government-to-government relationship. His appointment allows key decision-makers in Asia to have direct access to senior B.C. government officials. This is a critical part of successfully doing business in Asia. China, in particular, is a highly competitive marketplace.

When you look at what other jurisdictions are doing to increase their presence and attract new investment from Asia, we really need to up our game and to redouble our efforts. That is exactly what we are doing. I want to cite examples once again to see the value, the added value, the incremental value of our special representative in Asia.

The decision for the Guangdong provincial government to locate a first-ever North American trade and investment office in Vancouver is strictly a direct result of Mr. Ben Stewart’s meetings with the senior government official in the province. Without his presence, I don’t think we could get that office at all. The Guangdong governor came all the way to British Columbia to meet with our Premier to announce the opening of their office. Isn’t that good enough to justify his presence there? That will bring in millions and millions of dollars of investment from our sister province of Guangdong.

We are celebrating 20 years of our sister province relationship. The Premier and I are going to Guangdong in November, trying to further the economic relationship and bring more economic interests.

Another example is that because of Ben Stewart’s presence in China, he has been able to secure a meeting with the China Energy Administration. And because of the meeting that he had…. That’s why we’ve been able to get the three largest petroleum Chinese companies to decide to invest in our LNG industry.

Actually, there are lots and lots of examples, but I don’t want to take up the whole afternoon citing the kinds of achievements that Mr. Ben Stewart has. I’ll just stop there.

B. Ralston: The relationship between British Columbia and Guangdong province is something that existed even back in the days of the 1990s. The minister will remember, I’m sure, given her previous role in the 1990s, that there was a strong relationship with Guangdong as a sister province. I don’t think the fact that, after 25 years, they’ve decided to open an office could be fairly entirely laid at the feet of Mr. Stewart. But clearly, that’s the effort that’s being engaged in here.

I want to move off this topic, because I don’t think that I’m going to break through the minister’s mandatory defence of Mr. Stewart and the Premier’s appointment of him after he stepped aside to let her run in his seat.

[1425]

The terms of reference mentioned that the budget, including travel, hosting, gifting, office support and office space, will be researched and assessed. Can the minister confirm what the total support budget is for the office of the commissioner?

Hon. T. Wat: Before responding to the question raised by the member opposite, I just want to go back to the Guangdong trade and investment office in Vancouver. Yes, you’re right. It’s not 25 years but 20 years, this province’s relationship. All those 20 years we hadn’t been able to get the Guangdong government to decide to locate an office to further promote our trading relationship.

I have to say once again that it’s really because of Ben Stewart. We knew that they had decided actually to locate their office in Toronto. After shopping around for any good cities to locate, they decided to locate in Toronto. Ben Stewart interfered and sought a meeting with a senior government official, and that’s what’s turned it around. That’s how we got this office. I just want to put that on the record.

As to the question about the expenses for our special representative. I’m sure the member opposite remembers that in last year’s estimate debate he also questioned thoroughly on the expenses. I will refer you to the March 27, 2014, Hansard, pages 2541 and 2542. There I told you that the BCSRA’s total forecast expenses are $481,000 for 2015 and ’16.
[ Page 6748 ]

Since you’re asking the question again, I’m giving you the answer again that we are forecasting the expenditure, total expenses, for the office again at the same figure — $481,100. That includes total salary and benefits of about $200,000 annually; total operations, including travel and other operations, valued at $150,000; and also other expenses, including accommodation and transportation, amounting to $131,000. Again, the total is $481,100.

[1430]

B. Ralston: Clearly, the minister wasn’t able to secure an increase in that category, in any event.

I’m looking at the letter to the minister dated June 10, 2014, from the Premier. One of the areas where the Premier compliments the minister is to say that she “successfully concluded a memorandum of understanding with China to establish a strategic dialogue to build on a strong relationship between our two jurisdictions.”

There is an agreement. I guess my question would be…. This is an agreement with the central government, not with a state government. Ordinarily, in the principle of subsidiarity, a state government or a provincial government would deal with a state government; the federal government would deal with the central government. But this is an agreement with the central government of China, I gather.

In that cooperation framework what is said is that the participants have a “shared intent to engage in dialogue four times a year between B.C.’s Minister of International Trade and Minister Responsible for Asia Pacific Strategy and Multiculturalism and the consul general of the People’s Republic of China in Vancouver” and that the first dialogue meeting would be held within three months of the signing of this memorandum. I gather it was signed in early April 2014.

[D. Ashton in the chair.]

By my count, then, there should have been at least three meetings, if there was a meeting every three months. Can the minister give the times and dates when those meetings took place, any minutes that were kept of the meetings and a list of the invitees to those meetings?

[1435]

Hon. T. Wat: To respond to the member opposite, yes. Consul General Liu Fei of the People’s Republic of China and myself signed a MOU on April 14, 2014. The MOU is to commit to an ongoing strategic dialogue between the consulate and the province to continue to deepen the trade investment and cultural connections.

After that signing ceremony — actually, I can’t remember the exact date — I facilitated the Minister of Education to have a meeting with the consul for education, and I was present at that meeting to discuss how to promote a closer relationship between the international trade and all the university and post-secondary education.

Then our MIT China team also met with the consulate on three occasions — on September 18, 2014; January 20, 2015; and February 4, 2015, respectively. They discussed the action plan under the MOU, shared its business plan for the fiscal year ’14-15 and exchanged information on major trade events and inbound and outbound delegations. There are quite a few other actions that they have come to. If the member is interested, then I will relay those afterwards.

B. Ralston: Just judging from some of the language in the agreement, I had the impression that this was a dialogue between the minister and the consul general on a wide range of topics. What the minister has described seems to be more working out routine mechanics of visits and trade missions.

The minister in Vote 30 is responsible for international strategy and competitiveness. I’m wondering what thoughts she has to share about how the…. As we recognize, globally, economies are very competitive, and China is certainly a rising economic power. What is the competitive advantage or interest and the long-term strategy for British Columbia in engaging with China in this way?

There seems to be some language about people-to-people dialogue and business relationships. But is there any more strategic thinking about what the interests are of British Columbia and Canada in entering into this kind of a relationship? And what are the strategic goals of British Columbia, or of the minister on behalf of British Columbians and on behalf of Canadians?

[1440]

Hon. T. Wat: The member opposite is definitely correct. China is a very important market for us. It’s the second-largest economy, just after the United States, and it’s about to become the largest economy in the world. That’s why this government already knew in 2003 that, like any investment policy, we cannot put our eggs in one basket.

That’s why we started the Forestry Innovation Investment. We knew then that we cannot rely on the United States, even though the U.S.A. is still a very important export market for us and is really our good neighbour. In times of challenges we cannot just depend on one export market.

We are the most diversified province in Canada, and we are proud of that. That’s why we’ve been able to achieve the third consecutive balanced budget — because of our diversification in our economy and also in our export market. That’s why in 2007 this government came out with the Asia-Pacific initiative. Now, in 2003 I was appointed the Minister of International Trade and also the Minister Responsible for Asia Pacific Strategy.

[1445]

Even though we are the most diversified province in the whole of Canada, compared with other jurisdictions
[ Page 6749 ]
in Asia — for example, Australia, New Zealand — we are not as aggressive as they are. That’s why I’m also tasked with the mandate to study the Australian best practices.

We are pulling all this together, and now we are compiling an Asia-Pacific strategy. We feel that we really have to up our game in Asia.

One in five jobs in Canada and in B.C. is very much dependent upon export. Without export, we cannot continue our economic growth and we cannot continue to provide these kinds of services — social service, health service, education service — to British Columbians.

That’s why we signed the MOU with the Chinese consul general. The goal of the dialogue is to help with trying to promote our trading and economic relationship, trying to exchange ideas and trying to facilitate more inbound and outbound delegations and more investment into B.C. and promoting more exports to China.

For example, last year we managed, together with the federal government, to come up with a product-specific agreement, the cherry agreement, so we were be able to export our cherry products to China.

In my regular dialogue with the consul general…. Just now the member opposite said that I don’t seem to have any dialogue with the consul general. You’re wrong. I have been having regular dialogue with the consul general, and we have been exchanging a lot of ideas. She has been advising us on what areas in China we should aim at in trying to promote export and what kind of investment we should try to attract. On a working level, they follow up with the consul staff and try to get some action plans.

So there’s a lot that has been going on. We know that in order to grow our economy, in order to create more high-paying jobs for British Columbians, we definitely need to have a very comprehensive Asia-Pacific trade strategy. We are also trying to position British Columbia as the hub of Asia-Pacific trade in North America.

B. Ralston: Well, the way in which the agreement is drafted suggests that it’s slightly more formal than occasional meetings with the consul general.

I guess, just formally for the record, I’m asking for any minutes of the meetings that have taken place and a list of invitees at the meetings that have been mentioned. September 18, January 20 and February 4, 2015, I believe they were.

Finally on this topic, in the specific details of…. There’s a requirement that the participants will report annually on progress achieved under this memorandum of understanding.

I’d be asking when that report would be released and whether it will be released publicly, without the necessity to go through a torturous FOI process such as we’ve gone through with the trade offices. And 15 or 16 months later, there are still three offices that we don’t have even the most basic information on.

The minister talks about expanding trade opportunities, and I don’t think anyone disagrees with that. The focus does seem to be entirely upon economic matters in her answer. But the agreement speaks of cultural understanding, joint cultural programming, exchanges, knowledge and information-sharing in areas of common interest.

Some commentators — I don’t necessarily agree with them — see a difference in ability to have those kinds of relationships with China as opposed to, say, Japan or Korea, given the political system in China is very, very different.

Does the minister see any barriers to that? How are those challenges, if the minister sees them as challenges, being overcome?

Information exchange with China is a very different process, much more highly controlled than it would be in terms of community-to-community, agency-to-agency communication between agencies in Korea or Japan, which are both, of course, democracies.

[1450-1455]

Hon. T. Wat: Yes, to the member opposite. We will provide you with the minutes of the meeting. Also, we are now compiling that, anyway. Part 1 is ready. We are going to provide it to the member opposite.

Actually, I think if we have time, you and I should sit down together and try to exchange our ideas about the kind of challenges and the kind of opportunities we have in doing business with China. I understand the member opposite has visited China many times also. Being a minister of Chinese descent, I do understand a lot of challenges in doing business with China.

[D. McRae in the chair.]

Again, the challenges can become opportunities. That’s why I think the dialogue is so helpful. The consul general and myself, as well as my staff and her staff, sit down and talk all the time. We’ve brought up the kinds of challenges faced by our businesses, our entrepreneurs, our exporters. We can bring up the issues to them, and the consul general will, in turn, pass them on to the right authorities. We can sort out a lot of issues.

One of the biggest challenges in China is intellectual property. Let me tell you an example of why their challenges become opportunity. Maybe the member opposite is aware of the China Fiber Optic company listed in the Hong Kong Stock Exchange. It’s a Chinese company, but they got listed in Hong Kong. Last year they decided to set up an operation in Richmond to manufacture their fibre optics.

I did talk to the chairman, Mr. Zhao, asking him why he decided to come all the way to British Columbia and set up the operation. He told me, basically, three major reasons.

The first reason is because of our strict intellectual property law. China Fiber Optic has bought the intellec-
[ Page 6750 ]
tual property, the way of how to manufacture fiber optics in Japan. If they do it in China, they are worried that it will be copied very soon by the others. They feel that, by manufacturing here, they can be sure that it won’t be copied because we have strict intellectual property laws.

The second reason is because of our low-cost electricity. You need a lot of electricity to manufacture fibre optics.

The third reason is because of the talents that we have in British Columbia.

I’m citing this example to let the member opposite…. The kind of challenges that we see doing business in China become our opportunities. That’s why we need this kind of dialogue all the time.

B. Ralston: I want to move to another topic, given that our time is slipping away here.

One of the objectives that’s in the mandate letter and in the service plan, of which the minister has spoken of frequently, is head offices. I’m just looking at the service plan dated February 3, 2015, for 2015-16–’17-18. There’s a target in 2015-16, within the ambit of Vote 30, of course, of 15 offices. Yet in the text the minister said: “Our ministry has set a goal of securing five new Asian head offices in B.C. by 2020.” I’ve seen other literature where the minister reports on a number of head offices that have been attracted to British Columbia.

Perhaps there’s a problem of definition here. What the minister seems to be suggesting in the written text is a major company, rather than the Vancouver office of an import-export company that might have one or two people. I’m sure that’s what she’s intending.

[1500]

Again, what would be the definition in the plan of the kind of head office that this plan hopes to attract? Then we’ll perhaps be able to talk a little bit more about some of the other strategies that have been deployed.

Hon. T. Wat: Well, thank you, member opposite, for the question. That’s a very good question. Actually, a lot of people have some confusion, because we talk about us attracting so many offices from overseas. Some of those are international offices. Some of those are just branch offices. Now this particular HQ Vancouver is aimed at head offices.

Let me give you the definition of what we meant when we came up with this project for head offices. A head office basically is the mind and management overseeing their operations in North America and also, I’m hoping, overseeing their operations in South America, for the whole of the American continent. We are aiming at the major Asian corporations.

The definition is:

“We define head office as a separate operational unit that manages a corporation. They are distinguished by housing chief decision-makers in the corporation who have a mandate or are responsible for directing a company’s North American business decisions. The key activities that may distinguish a North American head office include strategic, organizational and business planning, communications, tax planning, legal services, marketing, finance, human resources and information technology services.”

Actually, we have been quite successful in attracting a number of head offices to our province, including the Bank of China, the Agricultural Bank of China and also the Indonesian company Paper Excellence. They bought four paper mills, and then they decided to locate their head office in Vancouver.

B. Ralston: As the minister knows, that’s certainly one of the objectives. The minister in her opening talked about a number of trade missions. Presumably, that is a topic on some of the trade missions, at least with some of the calls that are made by the minister and the Premier.

There is another agency, Advantage B.C., which the former Minister of Finance Colin Hansen now has landed in. That agency has been around for some time.

[1505]

The minister will know that Advantage B.C. offers to companies who locate in British Columbia — they have to have an actual physical presence in British Columbia — a substantial forgiveness of provincial income tax for key personnel. Indeed, on their website I think they say that the combined effect of all those income tax cuts is to have lower income tax than Hong Kong or Singapore.

Certainly, that seems to be, arguably, something that might attract business. Then, on top of that, we have Mr. Stewart, of course, who the minister has attributed great persuasive powers to, particularly in connection with the Guangdong office.

There are a number of agencies and a number of strategies pursuing head offices. Then, much to my surprise, the announcement was made to add in yet another agency: HQ Vancouver, a joint project with the federal government and the B.C. Business Council. The minister said in her opening that the provincial government was going to contribute $2.1 million cash and $1.3 million in kind. That’s the note I have.

Can the minister explain why these huge gobs of money are necessary for this project, given that a number of other agencies, including the talented Mr. Stewart, the minister herself, the Premier, the network of trade offices, foreign affairs, trade and investment Canada…? All this panoply of agencies presumably has this on their agenda, yet the province is now proposing to spend, in a time when we always hear about budget scarcity and hard choices, $2.1 million in cash — I assume that’s an annual budget — and $1.3 million in kind. Maybe the minister can explain why this decision was made and why this agency was created.

[1510]

Hon. T. Wat: I just want to clarify one thing. When I talk about $3 million altogether for cash and in-kind, it’s for the three-year period. It’s not annually.
[ Page 6751 ]

The reason why we have to set up this HQ Vancouver is exactly what the member opposite was saying, that we do have Advantage B.C. trying to attract companies to come here. We have the federal government and different organizations trying to do that, and the private sector as well. It’s exactly because of that. That’s why we have to pool them all together into one major organization, so that we can pool all our resources together and leverage our funding together.

We are leveraging the western diversification contribution, both financially and also their resources, as well as the private sector. The B.C. Business Council and Advantage B.C. are also part of this as well. Even though the member said that $3 million altogether in in-kind and cash is a lot of money, actually, compared with the return on the investment, this is really worth it. We are going to attract $100 million of investment and also 500 new jobs in the province. This is exactly the kind of metrics that we are putting on ourselves for this HQ Vancouver.

Although B.C. really has some strong growth in head office attracting in the last ten years, from 49 in 2004 to 95 in 2013, we have to face the reality that B.C. ranks significantly lower in the total number of head offices as compared to Toronto and Calgary. They had 254 and 132 respectively in 2013.

This is a very competitive global market. We really have to work diligently and really proactively and aggressively in order to attract the major Asian corporations to set up their head offices here. It’s not easy work. It’s not that they will come here on their own. If we don’t really work together and pool all the resources together, we cannot achieve what we want to achieve.

B. Ralston: The minister’s argument in defence of this expenditure seems to be that there’s a pooling of resources. Others might say needless duplication and a proliferation of entities that will conflict one with the other and not achieve the goal, particularly when the minister herself has it in her mandate letter and in her service plan that that is one of the specific duties that she is charged with.

Presumably, the orders go out. That sets the tone. That sets the objectives. The orders go out through the trade network to Mr. Stewart, to Advantage B.C. This is a goal.

[1515]

I’m not seeing how there isn’t a pooling of resources, assuming there’s leadership from the minister and the ministry on this issue. Why is it necessary to set up another agency? I mean, I know Mr. Yuen Pau Woo. He’s a pleasant guy, very capable. He became free. He left the Asia-Pacific Foundation. I understand the political necessity, perhaps, of the federal government, facing an election, to appear to be doing something on this file. That may be why we have an announcement at this point.

Generally, the B.C. Business Council is willing to support these initiatives, although one wonders how the B.C. Business Council, which is basically the organization that represents the largest companies and the biggest employers, would be willing to attract competitors in their own particular sector to British Columbia.

But leaving that aside, the minister has not provided a compelling justification for spending, on the provincial side, $2.1 million in cash and $1.3 million in kind nor the parallel commitment of the federal government, through the western diversification fund, of almost $2 million. That’s, by anyone’s standards, a lot of money.

I guess the question is, again: why is it a necessary expenditure — when the minister is in charge and can pool and coordinate that objective herself, with all the resources of the provincial government and an expanded ministry of foreign trade budget, and get the job done that way?

Hon. T. Wat: Why we all share a common goal of attracting head offices to B.C…. There is also an opportunity to grow collaboration, coordination and interaction, which will increase the benefits delivered for the province. To realize this, we developed the head office attraction project, which allows us to leverage our individual organizational strengths by working collaboratively towards a common goal of attracting anchor head offices.

[1520]

The government of Canada’s contributions include financial resources, market intelligence and strong government relations. At its core, this project represents a truly innovative and collaborative approach that can help us learn how to work more effectively together to leverage our strength, to share our resources and to develop more complete and comprehensive industry advantages.

Why do we need to do that? Because head offices drive our investment and drive our economic growth. National research has shown that in the Canadian context, for every 100 direct headquarters jobs, there will be 74 indirect jobs created. So for the five head offices targeted in this project, which is our performance metric, the goal is to attract foreign direct investment totalling $100 million and create 500 new jobs in the province.

Moreover, this project will create additional induced gains related to growing and strengthening industry sectors and attracting other companies to B.C. that are looking to enter a supply chain.

B. Ralston: Well, I read the press release too, so I’m familiar with the rhetoric. I’d have more confidence, I suppose, in the ability of the government to attract head offices if there wasn’t the glaring problem of head offices in Alberta.

The minister will be familiar with this. This was raised in question period some time ago. A note that was released through a freedom-of-information request said public servants wrote in a briefing note: “They confirm the diffi-
[ Page 6752 ]
culties they are experiencing as a result of Alberta’s trade barriers that require them to maintain an agent if they wish to operate in that province. This creates costs and operational difficulties and has encouraged companies to leave B.C. and set up their head offices in Alberta.”

Apparently, the provincial government, B.C. Liberals, have been at this for eight years, and nothing has happened. So what reasonable hope does one have that by spending a couple of million more bucks and going out 4,000 or 5,000 miles, the government will be more successful in attracting head offices, when they can’t even resolve the head office issue with Alberta, which has festered for some eight years?

It really does not inspire confidence. Further, I think it adds strength to the argument that this expenditure is not necessary and shows just how wasteful it is.

Hon. T. Wat: I’m glad that the member opposite asked this question. I’m pleased to say that it is now easier for oil and gas companies to operate in both provinces — in both B.C. and Alberta. By working together, British Columbia and Alberta have come to an agreement that reduces trade barriers and increases investment opportunities and labour mobility between the two provinces.

This agreement, I just want to emphasize, continues to ensure the protection of public safety, the environment and resource conservation. There’s no question — I agree with the member opposite — that it took longer than anyone expected, but the agreement we now have creates a fair playing field for our business.

Alberta and British Columbia share some of the strongest environmental protection regulations in the world. The two provinces are also committed to reducing trade barriers and increasing investment and labour mobility between provinces. This mutual recognition agreement, which we signed in February, allows for standards and regulations to be recognized as substantially equivalent, so that trade, investment and labour mobility are not restricted. This will allow more economic benefits for both provinces, including tax revenue and investment and employment opportunities.

B. Ralston: Well, I have not seen that agreement. I usually monitor the ministry website fairly closely, and I don’t recall that being announced. I’d be interested in that being tabled. Perhaps if it’s tabled now or I’m given a copy, I can ask some questions before we get to the end of this.

[1525]

Certainly, that has been a major problem. I know that at the time of some of the discussion of the LNG bill, there was some suggestion that through some legislative process contained in the LNG bill, oil and gas companies would be willing to establish headquarters here as opposed to in Calgary. I’ll believe it when I see it, frankly.

Let’s perhaps return to the issue at hand. HQ B.C. I notice that there are a couple of strategic advisers who are appointed to the project board. I did attend a lecture from Dominic Barton, who’s global managing director for McKinsey. Apparently he comes originally from, of all places, Abbotsford, and is now heading up McKinsey Global operations out of London, England.

I’m wondering why it was necessary to create this agency and spend $3 million of provincial money in order to get the advice of Mr. Barton. He seemed quite willing to give a lecture. I believe it was at the Vancouver Board of Trade. I can’t remember; it was a while ago. He provided a lengthy talk, a number of slides. When I contacted him afterwards and asked for his slides, he was more than willing to provide them.

One wonders — if having these strategic advisers is part of the justification for this expenditure — why that was necessary when he seemed quite willing, and I’m sure, if approached, that he would be glad to sit on a strategic panel advising the minister. Indeed, that’s just what he suggested.

There is a whole tier of medium-sized cities — by Chinese standards — in China and throughout Asia. He recommended focusing on individual cities as opposed to provincial or national governments and target Canada and B.C.’s effort that way. He gave some other examples, I think, of the city of Chicago and…. Anyway, he was a fountain of information.

I wouldn’t dispute that his advice is valuable. But why is it necessary to spend three million bucks to get that advice when it was forthcoming at a lecture which I attended in Vancouver for no cost and when he seemed quite willing to talk and engage with the province, with which he has some substantial personnel connection?

Hon. T. Wat: I am sorry that the member opposite missed this news release. In fact, the mutual recognition agreement was signed on February 11 this year. With the signing of this MRA, it delivers on a key B.C. government 2013 platform commitment.

[G. Kyllo in the chair.]

This MRA provides a way for B.C. companies to be exempt from Alberta’s requirement that companies operating in both provinces locate their head offices or an agent in Alberta. This is the first step in ensuring that Alberta fully meets its commitment under TILMA, and it will also facilitate B.C.’s ongoing work to extend the exemption to B.C. companies operating in other energy sectors.

The news release actually is dated February 23. If I can find a clean copy, I will…. We can table this one, actually, with a signed copy of the mutual recognition agreement as well so that the member opposite can review it.

As to the member’s question about Mr. Barton, yes, I fully agree with you. He is an extremely well-qualified and esteemed individual.

[1530]

Having access to the strategic advice of such an es-
[ Page 6753 ]
teemed and well-qualified adviser like Mr. Barton is a significant advantage to us. I just want to stress that Mr. Barton does not receive any remuneration from HQ Vancouver.

B. Ralston: I think that strengthens my argument that one didn’t need to create this agency to get the advice of Mr. Barton, given that he’s prepared to provide his advice for no fee.

The other person who seems to be involved in this is Mr. Emerson. Is that someone that the British Columbia government chose, or is that someone recommended by the federal government?

Hon. T. Wat: There is actually a project board established, comprised of representatives of the B.C. government, the BCBC and also the federal government, to choose the individuals. Mr. David Emerson was nominated by that board. As we all are aware, Mr. Emerson is a very successful business person. He is the CEO of Canfor and the president and CEO of YVR, and also, he’s a former federal Minister of International Trade.

B. Ralston: I didn’t understand the reference to the board that appointed Mr. Emerson. Is it B.C. business that appointed him? I didn’t quite understand what the minister was saying there.

Hon. T. Wat: I was saying that that’s a project board established with representatives from the B.C. provincial government, the federal government, as well as the B.C. Business Council.

B. Ralston: I’ve spotted the line in the news release. This is chaired by a Mr. D’Avignon, as the president and CEO of the B.C. Business Council, and then there are representatives from each of the three funding partners. Are Mr. Barton, Mr. Emerson and Eva Kwok the three representatives from each of the funding partners? Is that the structure?

[1535]

Hon. T. Wat: This board has representatives from the three partner organizations. The chair of this board is Greg D’Avignon. My DM, Shannon Baskerville, is the representative from the B.C. provincial government. Gerry Salembier is the representative from the federal government.

The individuals that the member opposite mentioned are the advisers that are nominated by this board. They will be giving advice on the specific headquarter attraction initiative. The CEO for this project is Yuen Pau Woo, and he will report to the board.

B. Ralston: The news release, which the minister is quoted from, says they will be operating as a small project team based in Vancouver. How many staff is this expected to hire, and will they be Canadian citizens?

Hon. T. Wat: Currently, there are four staff working for HQ Vancouver. The CEO, as I said earlier, is Mr. Yuen Pau Woo. All of the staff have been hired locally and are residents of British Columbia.

B. Ralston: In the objectives of attracting head offices, one of the strategic goals…. Besides establishing the head offices in British Columbia, is there any specific requirement about the number of Canadians or landed immigrants who would be required to be hired?

One appreciates that in some international companies there’s a desire that senior personnel, the CEO perhaps, might come from another jurisdiction, and that’s usually accommodated through the Immigration Act. I suppose the concern is…. Some of the recent companies that have established in Vancouver, such as Microsoft, have hired a raft of temporary foreign workers as opposed to a great number of Canadians or landed immigrants.

[1540]

Where in the objectives of this agency, which is going to cost $4 million or so to run over the next couple of years, is that concern dealt with?

Hon. T. Wat: Actually, Vancouver is the same as for any other businesses in British Columbia, in Canada. They are subject to the same kinds of rules and regulations in hiring their staff.

B. Ralston: No. Perhaps I didn’t make my question clear. In attracting these businesses, what objectives has this agency set in terms of jobs for Canadians as opposed to…? I understand there would be exceptions. Clearly, sometimes foreign companies like to hire someone from the head office in their own country to run the operation.

Leaving aside that exception — or sometimes key personnel might come from the head office — what targets are there in attracting these companies? What policy is there to impress upon them the wish of the B.C. government, at the very least, that they hire Canadians and landed immigrants and create jobs for people here as opposed to temporary foreign workers?

[1545]

Hon. T. Wat: Any headquarters that would be established in British Columbia would be subject to the same rules and regulations as any business established in British Columbia. Under the B.C. jobs plan this government has always said that we want to see British Columbia and Canadians be first in line for any job opening. That’s why this government is investing millions of dollars in the B.C. skills plan to ensure British Columbians have the skills they need to be first in line for any job openings.
[ Page 6754 ]

B. Ralston: That might be the stated policy, but the result, in the case of Microsoft…. I understand there’s a recent story about the Facebook office that’s opening in Vancouver — a number of temporary foreign workers hired there as well. I think the goal is that under the NAFTA, if they are resident and working in Canada for over a year, then they can be transferred to the United States, within the provisions of an intra-company — inside the company — transfer.

That appears to be the strategy. I suppose it’s legitimate for those businesses to act in that way, although I don’t think it particularly advances the career opportunities of Canadians who have training or landed immigrants who have training in those areas.

Be that as it may, the next question I had, if the minister could answer, was: just how was Yuen Pau Woo selected to lead headquarters in Vancouver? Was there a public job posting, a listing? Was there a search process? Were there interviews? How was he selected?

[1550]

Hon. T. Wat: It’s important to note that this project is led by BCBC, the B.C. business council. Any questions about the hiring of a CEO and staff should be directed to BCBC.

Having said that, as the member opposite just alluded to, Yuen Pau Woo is really an extremely well-qualified individual with years of private sector experience. He has extensive experience and also relationships in Asia. Our HQ Vancouver is strictly targeting the Asian corporations.

With his years of experience, with connections in Asia and also with his many years of experience working in the private sector, he is really well qualified for this position.

B. Ralston: I’m going to conclude — and the minister can disagree with me if she chooses — that there wasn’t a competition for this, that he was hired much in the manner that Mr. Stewart was hired. He was given the job without any kind of public competition or any process that one would normally go through, either in private business or in the public sector.

I find it surprising, given that the provincial government and the person seated immediately to your right, the deputy minister, is one of the three people on the project — what was it called? the project team? — that the overseeing representatives from each of the three funding partners wouldn’t have some say in who was hired. I think that’s just very hard to believe, that if you’re putting in $2.1 million in cash and $1.3 million in kind, you wouldn’t have some say over who was going to head up the organization.

What I conclude from this is that this is another inside job. However well-qualified Mr. Yuen Pau Woo may be, there was no public process to hire him.

Once again, it’s a question of not what you know, but who you know, in order to get a job where the provincial government is socking in couple of million bucks. The minister — certainly, I’d invite her comments on that statement that I’ve just made.

[1555]

Hon. T. Wat: Again, I want to say to the member opposite that BCBC ran the executive recruitment process. The board did participate in the review of the candidates brought forward by BCBC, and they fully support the hiring of Yuen Pau because of, as you said earlier, his experience and expertise.

B. Ralston: I’d be interested, because the big term “executive recruitment process” is used. What was that process? Was there any public advertising? Was there any recruitment? Sometimes a headhunting agency is used. Or was it simply a question of “he seems to be available, we like him, and we’re going to hire him”?

That, in different circumstances, is how Mr. Stewart got hired — in somewhat different circumstances. I wouldn’t want Mr. Yuen Pau to be compared with Mr. Stewart. But the same process, where a decision is made without any process to evaluate the suitability of the candidate for the job.

[1600]

Hon. T. Wat: I can confirm once again that the outreach for candidates was done by BCBC. It would be inappropriate for me to speak to another agency’s recruitment process. My inability to speak to another organization’s hiring practice should not be characterized as implying any flaw or lack of rigour in selecting the successful candidate, especially given the tremendous accomplishment of Yuen Pau. As I said earlier a couple of times, Yuen Pau was determined to be the best candidate due to his skills and experience.

B. Ralston: Thank you — although not really an answer to the question. “The project board, chaired by Mr. D’Avignon, consists of representatives from each of the three funding partners, and the project team will provide oversight for the project.”

The minister appears to be saying that although the provincial government is putting in $2.1 million, she had no voice or participation in the process of hiring. That’s what I understood her to say — that all of those awkward questions that I’m posing are golfed over to Mr. D’Avignon for another day. Is that really what we’re hearing here today?

[1605]

Hon. T. Wat: I already said that the project board reviewed the candidates brought forward by BCBC, and the project board supported the naming of Yuen Pau.
[ Page 6755 ]
Actually, we are fortunate to have somebody with the calibre and skills and experience of Yuen Pau leading this HQ Vancouver project.

B. Ralston: Well, I can see I’m not going to get an answer about what the process was to hire him, although the person sitting immediately to your right was apparently there. The minister is not prepared to provide an answer here publicly. It probably doesn’t surprise me that this is an inside job.

If I could move on to a question about the RMB hub. I understand from a recent article in either Bloomberg or Reuters, despite…. I think the member for West Vancouver–Capilano made a statement in the House about the importance of it. I think everyone understands that, so I don’t really need a long answer from the minister on the benefits of the trading hub.

I believe it was Bloomberg or Reuters that reported it is in fact going to Toronto, although there has been some effort up till now to suggest that it might come to Vancouver. Will the minister confirm that it will be established in Toronto? Apparently Mr. Stewart wasn’t able to persuade them to bring it to Vancouver. I understand the date is March 23, when there will be an official announcement. If I’m wrong, the minister, I’m sure, will set me straight, but that’s what I understand.

[1610]

Hon. T. Wat: The Canadian renminbi hub is a pan-Canadian settlement centre. B.C. will benefit mostly from this settlement centre because China is already a significant trading partner with B.C., representing up to 20 percent of our exports. So if all our businesses having trade with China are going to do their transactions in renminbi, they will save quite a lot of money — you know, exchanging into U.S. currency and then back to renminbi.

But the setting-up of the renminbi settlement centre actually is the responsibility of the Minister of Finance. If the member opposite would want to ask any further questions, I think it’s better to direct them to the Ministry of Finance.

B. Ralston: I’d like now to turn to the Immigrant Investment Fund. I have its service plan before me. I have some questions about that. As the minister will be aware, the source of funds for the Immigrant Investment Fund has changed dramatically, given change in the federal immigration rules. Certainly, there was a new strategic direction and a new mandate letter to the board promulgated, I believe, early in January of this year.

Can the minister explain what the transitional strategy is? The source of funds, the money previously put up by immigrant investors, was typically borrowed from Canadian financial institutions, placed at their disposal for five years and then returned to them in the same amount, without interest, after five years. Can the minister explain what the transitional strategy is, given the wind-down of that program? And what is envisaged for the future with this agency?

Hon. T. Wat: The federal termination of the immigrant investment program will not impact our current B.C. Immigrant Investment Fund or the B.C. Renaissance Capital Fund operations or obligations. The five-year repayment terms of the federal program will continue to be honoured by the BCIIF through 2020.

The B.C. government is right now undertaking a mandate review of the BCIIF and BCRCF to determine the future direction of the BCIIF and BCRCF as a result of the federal termination of the immigrant investment program. As the member is aware, the federal government announced in January 2015 that it will replace the IIP with a new immigrant investor initiative focused on venture capital in Canada.

B.C. is not expected to play an active role in managing the new program and is supportive of the initiative, as it will provide capital for promising technology business in B.C.

B. Ralston: Well, I’m not quite sure I follow the minister’s answer. I think what she’s saying is that the wind-down of the program will not be affected in the sense that the redemptions or the five-year horizon coming due, in the case of individual investors, will be honoured. But, clearly, that source of funds will no longer continue. As the minister will know or will be advised, this fund was the source of infrastructure funding for a number of public projects across the province.

[1615]

I’m wondering what the…. The minister has mentioned a mandate review. If it’s too early to comment, even though this has been in the works for some time, I suppose I’d have to accept that. But it does seem to present a challenge, given that in the past these funds — and I’ll get to the Renaissance Fund a bit later — seem to have been used to fund and capitalize public infrastructure projects here in the province.

Hon. T. Wat: The termination of the immigrant investor program will not affect the BCIIF’s investment. The infrastructure will continue to be honoured by BCIIF and guaranteed by the province. The Minister of Finance will continue to fund all public infrastructure projects that have been approved. The BCIIF is only one source of the funding for public infrastructure projects.

If the member was to have any other questions on the funding of public infrastructure projects, I would encourage you to direct them to the Ministry of Finance.

B. Ralston: With great respect, this is within the jurisdiction of the minister. It’s in the Estimates. I’m looking at Vote 30, international strategy and competitiveness,
[ Page 6756 ]
voted appropriation description: “This sub-vote provides for the delivery of investment capital and venture capital programming by acting as the lead in working with the B.C. Immigrant Investment Fund and the B.C. Renaissance Capital Fund.” So I don’t think this is something that can be fobbed off to the Minister of Finance.

The report of the operating environment in the service plan says: “BCIIF infrastructure investments are comprised of long-term loans to entities in the provincial public sector government reporting entity, or GRE, primarily to post-secondary institutions.”

This source…. And it was a cheap source of funds. It was provided by immigrant investors under the terms of the deal that they struck, interest-free. There was some attributed interest in the process — but basically a low-cost source of funds and a substantial one. Obviously, as the program phases out, this is going to ramp down.

Is this aspect of the immigrant investor fund, then, going to simply end, or is that part of the search for the new mandate that’s been described and that’s talked about at the front of the service plan?

[1620]

Hon. T. Wat: As I said earlier to the member opposite, the public sector–approved projects will continue to be funded by the Ministry of Finance. The BCIIF is only one source of the funding. Given the federal government’s decision to terminate this program, we are reviewing our mandate. Since we are doing that, the future direction at this stage is not yet determined.

B. Ralston: When does the minister ask the board to provide some answers to those questions?

Hon. T. Wat: The board of the Crown corporation is working with the ministry to review the mandate. Eventually, it’s up to the government to decide on the future of this Crown corporation.

B. Ralston: I suppose it’s like the municipal auditor accounting board — up to the government to decide its future.

I want to ask some questions about the Renaissance Fund. It’s described in the service plan as structured as a fund of funds. It started, I believe, in 2007. I think it’s close to $90 million was invested in it. There are a number of companies that received money from the Renaissance Fund, and I’ll have some specific questions about those funds.

What is mentioned in the report, and I think what the reality is, is that in these kinds of funds, there is an initial investment. Gradually, whether through initial public offerings or acquisitions, the investor reaps a profit. Typically, the horizon would be five to ten years or in that range — and, more likely, after five to eight years. The investment bears fruit, and there’s an exit strategy in the manner in which I’ve spoken of.

[1625]

This fund started in 2007. Can the minister tell us what successes have been achieved? What revenue did the government make by making these equity investments through these funds?

Hon. T. Wat: The B.C. Renaissance Fund attracts global venture capital partners to leverage our investments in key technology clusters — IT, digital media, clean technology and life science. As of December 2014 the BCRCF fund managers and their co-investors had invested over $305 million, creating over 900 jobs in B.C. With $64 million in capital contributed by BCRCF, this represents a leveraged investment of more than four to one.

B. Ralston: Well, that wasn’t my question. The mandate letter to Mr. Gordon MacDougall, who is chair of the board of B.C. Immigrant Investment Fund, under whose mandate this particular fund falls, says, on page 2 at paragraph 3, “monitor and report on its capital commitments of up to $90 million in venture capital investments.” That’s the letter signed by the minister and signed by all the board of directors.

There’s a clear direction to monitor and report. That’s what I’m asking for. What’s in the mandate letter — monitor and report, $90 million — and what have been the results of that since 2007? Just to help the minister in answering that question, these fund of funds…. There are eight of them, and I’ll go through some of them in a moment.

[J. Thornthwaite in the chair.]

In their agreements with the Renaissance Fund, they are to, by agreement, open offices in British Columbia in some cases — very few of them have; form strategic alliances with local venture capital firms; host and attend investor forums in British Columbia to establish networks of local shareholders and stakeholders and explore investment opportunities in the province; spend a specified number of days, at the partnership level, per quarter in British Columbia.

Given that the mandate letter says “monitor and report,” where is the report?

[1630-1635]

Hon. T. Wat: The 2013-14 annual service plan report is posted on our website. As for this fiscal year, the 2014-15 annual service plan report will be posted in June this year, with the public accounts. The annual report will provide details on the performance, goals and results for BCRCF. Some of the examples of the B.C. companies that have received investments from the BCRCF are Allocadia, Ostara, Delta-Q and NGRAIN. Over 30 B.C. companies have been supported through BCRCF. If the
[ Page 6757 ]
members would like, our staff can provide a more detailed briefing on the outcome of this BCRCF.

B. Ralston: I appreciate the minister’s offer of a briefing, but what I’m interested in is asking some questions on the public record because there is interest in what’s happening with $80 million in public investment to these firms. These are the firms that are listed on the website, and I have some questions about each one of them.

Azure Capital Partners, an office in Menlo Park, California, headquarters in San Francisco, according to CrunchBase, which is the authoritative website for this kind of data. Eighty investments. They specialize in venture capital in the regions, and it says simply “United States.”

Can the minister tell us how much money from the Renaissance Fund was given to Azure Capital Partners? And how much of that money, if any, is invested in British Columbia companies?

Hon. T. Wat: So far, we have invested $4 million to Azure Capital. I just want to note that every BCRCF fund manager except Azure has made investments in B.C. companies. The Azure fund is the most recent fund that BCRCF has invested in. They are only four years into our ten-year partnership, so there’s time for them to make B.C. investments.

Azure has a Canadian on the investment team, based in Calgary, who covers B.C. and Alberta. Azure is also actively renewing investment opportunities in B.C. They attend major venture capital investment forums and technology industry events in British Columbia — for example, the Canadian financial forum in Vancouver, the metabridge in Kelowna, the GROW digital media conference in Vancouver.

[1640]

During all these conferences, Azure investment professionals network with local investors and meet with B.C. companies for future prospective investment.

B. Ralston: They’ve had $4 million of money from British Columbia, and in four years they have not opened a B.C. office and they’ve not made a single investment in a British Columbia company. Is that what the minister is saying?

Hon. T. Wat: The member opposite is correct that so far, the Azure fund hasn’t made any investment in B.C., but it’s worthy to note that we have eight BCRC fund managers, and Azure is the only one that has not made an investment in a B.C. company.

It’s also worthy to note that they are only four years into a ten-year partnership, so there’s time for them to make a B.C. investment. Right now Azure, as we understand, is actively reviewing investment opportunities in B.C.

I want to state once again the value of BCRCF. As of December 2014 the BCRC fund managers and their co-investors have invested over $305 million, creating over 900 jobs in British Columbia, with $64 million in capital contributed by BCRCF, representing the leveraged investment of more than 4 to 1.

B. Ralston: Let me just better understand the business model. The fund invests $4 million in this Azure Capital Partners. They don’t open up an office here, although they come here, and in four years they haven’t found a suitable investment to make. Yet the minister says: “Well, they have another six years.” They get $4 million for ten years with, essentially, no conditions attached.

What’s the contractual relationship between Azure and the Renaissance Fund that might protect the interests of the taxpayers of British Columbia? Give them four million bucks, and they don’t do anything? They don’t make an investment in a single company in British Columbia, and that’s okay with the minister? I find it shocking, frankly.

[1645]

I know there’s a lot of money for friends of the government, so maybe this is just an example of more friends of the government getting money with no conditions. Is the minister not troubled by that?

Hon. T. Wat: The BCRCF is designed to achieve the best economic benefits and returns to B.C. It does this by not enforcing investment in B.C. We have a signed letter agreement with funds, including Azure, to commit time to B.C., to be reviewing investment opportunities, attending conferences, meeting with our local funds and accelerators, and speaking and lecturing in local university programs.

[1650]

B. Ralston: Is there a document that would coincide with the direction that the minister herself has given in a letter dated January 14, 2015, to the chair of the board “to monitor and report on its capital commitments of up to $90 million in venture capital investments”?

That’s what the minister told the board. And on the website, the public face of this fund, it says: “Each of the venture capital fund managers commits” — “commits” is the word — “to performing certain investment-related activities in British Columbia in order to increase the probability” of increased success in British Columbia.

Will the minister table the document signed between Azure and the Renaissance Fund and a report that monitors — as the minister has asked, has directed — the compliance with those commitments made by Azure when they got $4 million in public money?

The Chair: Minister, would you like to take a break before you answer the question?

All right. Why don’t we take a five-minute recess then.
[ Page 6758 ]

The committee recessed from 4:51 p.m. to 4:58 p.m.

[1700]

[J. Thornthwaite in the chair.]

Hon. T. Wat: To answer the member opposite’s question from before the break, no, we will not table the signed letter, because the signed letter is corporate confidential information. But I can say that all funds have met or exceeded their signed-letter obligation throughout the life of the fund.

As to the question about how to best leverage economic outcomes from government involvement in venture capital, this is part of our mandate review that is underway, and we will review that question as well.

B. Ralston: Just to recapitulate and so that I better understand and perhaps others might understand the business model here, Azure makes a deal with Renaissance and gets $4 million. They sign an agreement — which the minister will not disclose. For four years, so far, they don’t make a single investment in a British Columbia company.

There doesn’t appear to be any penalties, any contractual mechanisms for challenging that performance, and the minister is content that somehow, perhaps in the next six years, they’ll take the $4 million and maybe invest it in a British Columbia company — at least one. That seems to me to be a rather shocking state of affairs, and I’m surprised that the minister seems quite willing to accommodate it. With that being said, can the minister explain, then…?

Typically, in venture capital — and it’s even referred to in the material in the service plan — money is invested over the longer term. They call it a J-curve. The firm seeks investment at an early stage. There are different rounds of investment, and the payout can be down the road some five to seven years. But typically, one invests in a fund, and there’s a return to the investor. In this case the investor is the Renaissance Fund — that is, the British Columbia government, the taxpayers of British Columbia. They’ve invested $80 million in these various funds.

What I’m interested to know is over the life of the Renaissance Fund…. Every fund publishes statistics about their investments and their exit strategies. If you look at CrunchBase, that’s what they all do. Typically, the two standard ways are that the company is acquired by someone else and there’s a purchase price, or it goes to an initial public offering and the company takes in a bunch of new capital. The original investors may have shares, and they make some profit. That’s the theory of it.

I’m just wondering whether, in having put this $80 million at risk, any of those investments of $80 million have resulted in a return to the Renaissance Fund. Or is the money simply put in there, and there’s a kind of vague hope, unmonitored and undisclosed, that somehow maybe this $80 million will result in some jobs in B.C., but if it doesn’t, it doesn’t really matter because there are no consequences anyway? Is that the business model that is in play here?

[1705]

Hon. T. Wat: I want to clarify that once BCRCF commits funds, we are contractually obligated, but we don’t provide the money all at once. Rather, the funds call the capital when they find investment.

The member opposite seems to have a lot of knowledge about venture capital investment. I’m sure you are fully aware that consistent with industry standards, the BCRCF’s internal rate of return is not calculated at a single point in time for venture capital. We will not know the overall performance of a fund until the end of the investment period.

As most venture capital funds have an investment period of up to ten years, the BCRCF portfolio is still in an active investment phase, with the majority of returns expected in the next five to six years.

As I already stated, the BCRCF fund managers and their co-investors have invested over $305 million, creating over 900 jobs in B.C. With $64 million in capital contributed by BCRCF, this represents a leverage investment of more than 4 to 1. Over 30 B.C. companies have benefited from the BCRCF investment.

[1710]

B. Ralston: The fund has been in existence since 2007. That’s eight years. The minister is saying that it’s too early to calculate the rate of return on those investments. Typically, venture capital can turn over a lot faster than that in many cases.

The minister has never answered the question that I’ve posed now a number of times. I suppose she doesn’t have to. This is estimates, and the minister is not obliged to tell the public about this. But have any of the investments, the money that has been placed at risk by the Renaissance Fund…? Has it resulted in a return in the sense of an acquisition or initial public offering that provided a return to the taxpayers for the money that was invested? That’s my question.

I think the idea that, after eight years of the fund being in existence, it’s still too early to tell…. It really reminds me of a comment attributed to Zhou Enlai when he was asked about the French Revolution. Was it a good idea? He said: “It’s too early to tell.” Really, I think the answer is just preposterous, frankly, if I might say with respect, and I think the minister should go back and talk to her staff and come up with a better one.

Hon. T. Wat: I think it’s important to note that BCIIF started in 2007, just one year before the recession hit the world. That had a lot of impact on global investment as a whole.
[ Page 6759 ]

Not all the money was allocated to the fund managers all at once. Money was allocated in 2007, 2009 and 2011. We do this purposely to diversify and reduce risk. We are not at the end of the fund life, and we cannot provide final return information, which I already explained to the member opposite.

[1715]

B. Ralston: Just so it’s clear, I’m not asking for final return information. I’m asking for a progress report that the minister has asked for in the mandate letter that she herself signed. She herself signed that mandate letter. I’m not sure what the meaning of the mandate letter is, if the minister is not prepared to support the words that she signed in the mandate letter.

Let me read it again. The B.C. immigrant investor fund is directed to take the following specific strategic priority actions for 2015-16: No. 3, to “monitor and report on its capital commitments of up to $90 million in venture capital investments.” Apparently that’s not something that’s going to happen here publicly today.

The minister blames the slow economy, but what I’m advised is that data from the U.S. venture capital index says that returns have rebounded, so the idea that somehow the ghost of 2009 is to blame for returns that can’t be disclosed or aren’t that great is not borne out by the objective evidence.

Let me ask a few more questions about some of the other partners that have received funds from the B.C. Renaissance Fund. ARCH Venture Partners, headquartered in Chicago, Illinois, historically over its time raised $1.9 billion. It has 103 investments in 59 companies; of the number of exits, ten IPOs and six acquisitions. It specializes in venture capital, early-stage venture and private equity investments. On the description it says its regions are the United States.

Has ARCH Venture Partners, with its headquarters in Chicago, Illinois — no office here in British Columbia that’s disclosed, or indeed, in Canada — invested in any B.C. companies? If so, what are they? Secondly, how many millions did it receive from the Renaissance Fund?

[1720]

Hon. T. Wat: Yes, to answer the question from the member opposite, ARCH Venture did invest in B.C. companies. As I stated earlier, all fund managers, except Azure, have invested in B.C. companies.

Rather than waiting for our staff to give us the information on the B.C. company investors, we can provide the information to the member opposite later. Whether you want to move on to the next question is really up to the member opposite.

B. Ralston: Well, the difficulty I find in that…. Time is constrained here, but what I’m looking for are answers on the public record, not a private conversation between the minister and his office and myself. That sometimes get hidden away. There’s a suggestion that maybe the question wasn’t asked or that I didn’t care enough to ask it, so I’m interested in an answer on the public record.

Maybe what I can do, then, is I’ll ask a question about a number of these companies, and then the minister can provide that answer in writing. Then there will at least be a record of it.

The next company that’s listed on the Renaissance Fund website is iNovia, 101 investments in 68 companies; exits, 13 acquisitions; headquarters in Montreal. It’s a relatively small company in comparison to ARCH, which has raised $1.9 billion. This one has raised $229 million and has offices in New York and Calgary. A similar question. They don’t have an office here. What have they done here? How much money did they get? What are the companies they’ve invested it in?

Number 4, Kearny Venture Partners, 19 investments in seven companies, two exits by way of IPOs and two acquisitions, headquarters in San Francisco, no office in British Columbia or Canada.

Tandem, nine investments in seven companies, no exits. It’s a relatively new company. The founders are Charles Sirois and Brent Belzberg. Its headquarters is in Montreal. It has a Toronto office. And for the first time among the ones I’ve cited, it has a Vancouver office at 666 Burrard.

VantagePoint Capital Partners, 129 investments in 85 companies, and five IPOs and 21 acquisitions; more than $4.5 billion in capital; headquarters in San Bruno, California; an office in China. It invests in the United States, China, and it is said that it invests in Canada. Again, how much money did they receive? When did they receive it? What investments have they made in British Columbia?

The last two are probably the most active here in British Columbia, and in fact, Vanedge Capital has a number of people who are well known and are locally based — Howard Donaldson, Moe Kermani and Paul Lee. Paul Lee was a former senior executive with Electronic Arts. Howard Donaldson is the president of Digital Media B.C., who’s someone that members will be familiar with. They made 18 investments in 17 companies, three acquisitions, the headquarters in Vancouver. They’re relatively small; they’ve raised $135 million. They focus typically on digital media.

I think there’s a news release that I was able to find where they raised $100 million for a digital media fund, to which the Renaissance Fund was a contributor. I’d be interested in some data about returns that may have taken place.

The final one that’s on the website — Yaletown Venture Partners. Notwithstanding the name, they don’t have an office in Vancouver. They have an office in Seattle and in Calgary, although there is a Vancouver connection
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through the founders. Thirty-one investments in 25 companies and one IPO and three acquisition acquisitions. Again, I’d be interested in the B.C. companies they’ve invested in and how much capital they received.

[1725]

Finally, the suggestion that after eight years it’s too early to provide some returns. At this stage in the life of the Renaissance Fund, returns should be beginning to flow, unless the fund is completely and totally mismanaged, which may be the case. I don’t know. There should be some returns starting to flow by now, after eight years, particularly when the U.S. venture capital index indicates that there are a lot of returns flowing to venture capital investments.

Those are the questions in that area. Perhaps the minister can confirm here on the Hansard record that she and her staff will provide full answers to those questions.

Hon. T. Wat: I just got the information on ARCH. I am going to state that now for the member opposite. The BCRCF has committed $6.28 million to ARCH, and they have invested $18.6 million in two B.C. companies — Cooledge and Boreal Genomics. We are happy to provide the information requested by the member opposite on the fund that he mentioned.

I just want to put on record with regard to the member opposite on the management of the BCRCF. Both the BCIIF and BCRCF have a very experienced and well-qualified board of directors that was appointed in July 2012 and a qualified executive management team. The board chair, Gordon MacDougall, has over 40 years of experience in managing investment portfolios for leading investment management firms.

[P. Pimm in the chair.]

B. Ralston: Given that we’re now very near the end here, I have a couple of shorter questions. I may bundle some of them up together. First question is: can the minister say what…? She mentioned a trade mission to Guangdong in the fall of 2015. For this fiscal year, April 1, 2015, to March 31, 2016, can she tell us what trade missions she is leading, which ones the Premier is leading and what the budget is for each one of them?

[1730]

Hon. T. Wat: The only mission committed for 2015-16 is the Premier’s mission to Guangdong in the fall of 2015. As in the past, the mission will be announced once it’s confirmed. The total forecasted budget for the Premier’s and my mission for 2015 will be $500,000.

B. Ralston: Is that $500,000 for the Guangdong trip only, or is it envisaged that there will be other missions that have yet to be scheduled or that the minister is not prepared to announce here today?

Hon. T. Wat: No, it’s for all the missions undertaken by the Premier and myself.

B. Ralston: The Forestry Innovation Investment council falls under the minister’s jurisdiction. I understand that the Forestry Innovation council has undergone a review. Can the minister provide or table a copy of the review? Within what time frame can we expect to receive the review?

Hon. T. Wat: I would like the member opposite to clarify what review you are talking about. I know you’re talking about the FII review. What review are you referring to?

[1735]

B. Ralston: I’m told, simply, that there’s a review underway. Typically, they’re conducted by a unit in the Ministry of Finance. I think there’s a review of B.C. Lotteries — a variety of reviews. It’s a dedicated unit that does those kinds of reviews.

That was my understanding. If the minister is unaware that a review is taking place, then maybe it’s operating under the radar for a very good reason. So if the minister is not aware of it, would she undertake to find out and advise me in writing in the immediate future?

Hon. T. Wat: Yes, the ministry did conduct a mandate review of the FII in June 2014 as part of the government core review process. The directions from the review were provided by the FII board chair, so we are happy to provide a letter to the member opposite.

B. Ralston: We’re rapidly running out of time here, which is too bad because I have a lot of other questions.

I have a question about the Multicultural Advisory Council. Can the minister advise what the council’s plan is for the upcoming year? According to meeting minutes, it was proposed that the Multicultural Advisory Council initiate a round table on education issues. Will there be such a round table?

[1740]

Hon. T. Wat: MAC will submit its annual report to me — the annual report for 2014-15 — in June. At the same time they will submit their annual plan, in consultation with our ministry’s staff, to me also around June.

Many of the community activities that they will be undertaking will include round tables that we have in the past.

[1745]

The Chair: Member, noting the time, I’m now going to call the vote on Vote 30.

B. Ralston: Okay. Perhaps just before you do that, I
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just wanted to say I had a number of other questions in this area and in a number of other areas. I didn’t manage to touch on trade policy and trade agreements, the CIDA agreement and some other agreements that are under international negotiations in which the province has a keen interest.

I also didn’t get time to deal very much with trade offices, in particular, the Chandigarh office, where, thanks to the help of the minister, I was able to meet with someone there. I had some questions about that. Apparently, the office is vacant. A new person is due to be hired, but it’s been vacant for some time now.

I’ll attempt to address those questions to the minister in writing in the near future.

Regrettably, we are out of time, but I want to thank the minister and her staff for their forbearance in answering, or attempting to answer, my questions.

Vote 30: ministry operations, $48,521,000 — approved on division.

Hon. T. Wat: I move the committee rise, report resolution of Vote 30 of the Ministry of International Trade and ask leave to sit again.

Motion approved.

The committee rose at 5:46 p.m.

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