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)

Wednesday, April 22, 2015

Afternoon Sitting

Volume 24, Number 1

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

WEDNESDAY, APRIL 22, 2015

The House met at 1:32 p.m.

[Madame Speaker in the chair.]

Routine Business

Prayers.

Introductions by Members

Hon. N. Letnick: It gives me great pleasure to introduce some hard-working public servants for the province of British Columbia in the gallery. We have our Deputy Minister of Agriculture, Derek Sturko, and Dr. Jane Pritchard. Dr. Jane Pritchard is the chief veterinary officer for the province of B.C. and the director of the Animal Health Centre veterinary diagnostic lab in Abbotsford. She's currently the chair of the Canadian Council of Chief Veterinary Officers and a member of the National Farmed Animal Health and Welfare Council as well.

We also have Dr. Gary Marty who is here with us today. Dr. Marty is one of Canada's foremost fish pathologists, diagnosing disease and certifying the health of wild fish and fish farms, aquaria and scientific laboratories. This one you'll like to hear. During his career Dr. Marty has analyzed tissues from 328 different fish species.

Would the House please make all of them feel very welcome.

N. Simons: It gives me great pleasure to welcome to the chamber the Association of Book Publishers. It's wonderful that they're here — Ruth Linka, the president, and Margaret Reynolds, executive director. What a wonderful event it was this morning in the rotunda on B.C. Book Day. I know that many MLAs and Madame Speaker were able to attend. I think it was a wonderful event for the second year in a row, and I'm pleased to hear that it is going to continue for years to come. May the House please make them welcome.

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L. Larson: It's my pleasure today to introduce two amazing young women from my riding. The B.C. ambassador program is an annual event that takes place in August each year. It recognizes young men and women between the ages of 17 and 24 who have previously held ambassador or royal titles in their communities. They earn scholarships and travel throughout the province promoting their mandate of education, motivation and self-esteem.

Today 2013 ambassador Lauren Sherwood from Osoyoos and current 2014-2015 ambassador Juliana Martine from Oliver are here in the House. Would the House please make these exceptional young women welcome.

J. Darcy: It's a great pleasure to welcome Tiana Major to the Legislature today. She's a student in political science at Simon Fraser University and is planning to move on to do her masters at UBC in the fall. According to her partner, who is a legislative intern in this House, Kevin Sage, she is the smartest person that he knows. Will the House please join me in making her very welcome.

J. Thornthwaite: In honour of Earth Day today and on behalf of our Minister of Environment, I'd like to welcome some very special guests in the House from the B.C. Bioenergy Network. B.C. Bioenergy Network is an initiative focused on promoting bioenergy development. Bioenergy is created by taking biowaste and transforming it into electricity, heat, biofuels and specialty chemicals.

Today I would like to introduce several bioenergy leaders of B.C.'s climate action work. Dr. Shahab Sokhansanj, adjunct professor of chemical and biological engineering, UBC; James Repenning, senior vice-president, western Canada, Harvest Power; Darcy Quinn, director of business development, Nexterra Systems Corp.; Michael Weedon, executive director of the B.C. Bioenergy Network; and Marnie Plant, B.C. Bioenergy Network.

I would ask the House to please make these guests welcome.

R. Chouhan: It gives me great pleasure to introduce a woman on a mission, Dr. Harshinder Kaur. By profession she is a medical doctor, but she is better known as a medical social worker whose work is focused on the plight of women. She has written 22 books and was awarded by the United Nations for her work to protect young girls in India. She is joined by her husband, Dr. Gurpal Singh, and their son Nanak.

Also with them is my dear friend Ajmer Rode. He has also written over 20 books of poetry, drama and prose. His latest book is called A Journey with the Endless Eye, the story of the Komagata Maru.

Please join me to give them a very warm welcome.

Hon. S. Bond: I'm delighted to introduce a group of individuals in the Legislature from the Coalition of B.C. Businesses. We have Jeff Quinard, James Chase, Jon Garson, Muneesh Sharma, Neil Moody, Mark von Schellwitz, Gord Stewart, David Lynn, Kate Dodd and George Higgins.

We have an excellent working relationship, and we look forward to a meeting later this afternoon. I'd ask all of my colleagues in the House to make them most welcome.

Hon. T. Wat: Joining us in the gallery today are Ray Schmalz from Creston and Wendy Stander from Port Alberni. They are the relatives of my chief of staff, and they are visiting the Legislature for the first time today. Please join me in giving them a warm welcome.

M. Dalton: I have a special guest in the gallery today, Lynne Gendron, from Alberta. She was my grade 4 teacher. She's been here before, visiting and keeping tabs on me. She was my teacher when I was in Holberg, and we also knew her as a family friend in Valcartier, Quebec. I found out today during lunch that she has lived in 4 Wing, Germany, where I lived and where I was born.

Would the House please make her feel welcome.

J. Tegart: I'd like to share with the House today that April 22, 2015, has been proclaimed as B.C. Book Day. Welcome to the publishers, authors and special guests who participated in the B.C. Book Day event in this precinct.

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G. Kyllo: This week is National Organ and Tissue Donor Awareness Week. Joining us in the gallery today are two very special guests. We have Shannon McCloskey, the B.C. Transplant in-hospital donation coordinator for Vancouver Island, and Kim Jordison, B.C. Transplant volunteer and B.C. government employee.

B.C. Transplant supports the needs of patients and families of donors and transplant recipients and reminds us of the need for organ donation. Would the House join me in welcoming Shannon and Kim to the House, and please make them feel very welcome.

Hon. B. Bennett: I'd like to introduce two people to the House today from the Canadian Home Builders Association, B.C. branch. First of all, Neil Moody is up there somewhere. He's the CEO. Secondly, the president, Simon Howse, whom I had lunch with today. Simon is from Fernie, so this is, I think, two weeks in a row that I've actually had the opportunity to introduce people from Kootenay East. Please help me to make them welcome.

D. Horne: It's with great pleasure that I introduce a group from SFU who is visiting today, led by André Gerolymatos, who is the head of the Stavros Niarchos Centre for Hellenic Studies at SFU. He's accompanied by Rob Gordon with the criminology department and Garth Davies, as well as Colleen Prescott. I'd hope that the House would make them truly welcome.

Madame Speaker: Hon. Members, please join me in welcoming a wonderful group of grade five students from Kathleen McNeely Elementary School in my riding and their teacher Gillian Ewart. Please welcome them all.

Statements
(Standing Order 25B)

CAPILANO RIVER SALMON

R. Sultan: Only a river pebble's throw from my constituency office flows an aquatic jewel, the Capilano River. Fed by snows on the peaks of Howe Sound, it trickles south, turns left at the paws of the lions and heads for the sea. It's trapped for a time behind Cleveland dam, where it's asked to contribute to Vancouver's drinking water. When it does rush over the spillway, it performs a 100-metre dive, which stuns the migrating juvenile fish.

It then races through a deep, dark canyon, million-dollar homes on one side and the remnants of forests which never felt the logger's axe on the other. As it exits to the sea, it salutes today's version of the Squamish Nation village on the beach, which was and still is a prime location for catching salmon.

Returning salmon must navigate a cluster of anglers guarding Capilano on the left and the insult of poorly treated sewage outflows on the right. But return they do, enhanced by over one million fingerlings released annually at the Capilano fish hatchery. Far fewer than 5 percent will survive ocean dangers and return.

Most steelhead smolts, hatched with care, don't even survive the few kilometres to Point Atkinson. Hatchery-raised juveniles are kind of dumb and are easy prey. Swimming in the sewage does not help, but giving them a larger share of Capilano water surely would.

INDIAN RESIDENTIAL SCHOOL
SURVIVORS SOCIETY

S. Simpson: I'm pleased to recognize the 20th anniversary of the Indian Residential School Survivors Society. Established two decades ago, the society responds to the needs of those who suffered the impacts of residential schools. Residential schools are a sad fact of our history, a notorious strategy to rip aboriginal children away from their families and institutionalize them, to extinguish their language and culture — a scheme aimed at, essentially, ending First Nations as a people by assimilating their children.

We know that too often physical and sexual abuse was a reality for the children in these schools. Yet today B.C.'s identity is inherently linked to First Nations. When we celebrate British Columbia, it is almost always defined by our natural beauty and First Peoples culture.

First Nations refuse to be extinguished by residential schools, refuse to be assimilated, refuse to lose their identity. In fact, First Nations have strengthened their place in B.C. Sadly, that doesn't diminish the damage done to school survivors — mental health challenges, addictions and the struggle for identity that many still suffer today.

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The Indian Residential School Survivors Society was established to address these complex issues. Its mandate is to assist First Peoples in B.C. "to recognize and be holistically empowered from the primary and generational effects of residential schools by support, research, education, awareness, establishing partnerships and advocating for justice and healing. The society assists survivors with
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crisis counselling, court support, information, referrals, workshops and more."

For 20 years the society has played a critical role. However, their work, which remains important today, is clouded with uncertainty, as funding is only committed till March 2016.

Let us join today to celebrate the valuable work of this society. Let us tell them that we know their work is not finished, that there is still a road to travel and that we will be with them to ensure that they get to finish this important journey.

ORGAN DONATION AND TRANSPLANTATION

G. Kyllo: This week is National Organ and Tissue Donation Awareness Week, and there is no greater gift than the gift of life. Did you know that one organ donor can save up to eight lives? I wanted to share with this House a very touching and inspirational story of one such donor: Carol Moulton, the mother of B.C. Transplant volunteer and government employee Kim Jordison.

Carol was a vibrant and caring mother and active volunteer in Langford who encouraged her family to register as organ donors. Carol, sadly, passed away on April 11, 2011, yet through her registration as an organ donor, she was able to give the ultimate gift to seven eternally grateful organ donor recipients.

I know that Carol would be so very proud of her daughter, Kim, for the volunteer work that she continues to do with B.C. Transplant. Just this week Kim initiated an effort to help raise organ donation awareness, with over 25,000 government employees across the province, through inclusion of key messaging posted on the B.C. government @Work Internet site.

Currently 465 people are waiting for life-saving organ transplants in B.C. Sadly, many of those waiting for a transplant will die before a suitable organ is available. Despite 95 percent of British Columbians supporting organ donation, less than less than 20 percent have registered on B.C.'s organ donor registry, resulting in a chronic shortage of organs.

B.C. Transplant supports the needs of patients and families of donors and transplant recipients and reminds us of the need for organ donation. By registering to give the gift of life, we can contribute to healthier, longer lives for those in need. It takes less than two minutes to register your decision on line. These two minutes could save a life.

I'd like to thank B.C. Transplant for joining us here today, and I encourage members on both sides of the House to register as an organ donor. Organ donors save lives.

GENERAL GORDON
PARENT ADVISORY COUNCIL

D. Eby: Friday morning last week I headed down to a construction site in my community. The construction site is the historic and the future site of General Gordon grade school. It's also the school bus stop for kids headed to Queen Elizabeth school, which is the swing site while the school is under construction.

Instead of a low-energy, boring wait for the bus, there was a tent. There was coffee. There was a fundraising drive underway. There was lots of energy. The bus stop had been turned into an early morning parent and student meet-and-greet festival by the General Gordon Parent Advisory Council and, of course, they invited their MLA.

That there was an early morning street party at the school bus stop would be no surprise to anybody familiar with the General Gordon PAC and their commitment to the school community. Co-chaired by Karen Wood and Jane Pike, the General Gordon PAC members are as diverse as they are active. PAC members at General Gordon work in all various careers in Vancouver. Some are business owners. Some are gardeners, volunteers, organizers. But they all share a commitment to our public education system and to General Gordon School.

When not holding bus stop street parties, they're fundraising hard for playground equipment at the new school, using the sale of bricks they thoughtfully had set aside during the demolition of the old building. They work closely with Principal Margaret Davidson and her staff to maintain a sense of connection for parents to the school community during this time of transition.

Co-chair Karen Wood says that the strength of the PAC comes from their diversity. She says: "What surprised me was not only the depth and the breadth of the community but also the myriad of perspectives and ideas. It's like being in the epicentre of society, where every nationality, learning and physical ability and disability, wealth polarity and any other reflection of society is present."

Though General Gordon's concrete foundation has been carried off in dump trucks, it's clear that the General Gordon's school community is as strong as ever, thanks to the General Gordon PAC. To all of the parents, teachers, staff and administrators at General Gordon: thank you so much for making our community better.

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GREAT BEAR PALEO BITES

L. Larson: I rise in the House today to tell you about a local business in my riding. Great Bear Paleo Bites is a small business. It started in Oliver back in 2008 as a home-based business company serving groups at the local owner's crossfit gym.

Inspired by crossfit and the paleo diet, Tracy Lydiatt embraced her love of baking to create a snack that all could enjoy. With a background in sustainability, the two-time TED talk speaker created these paleo bites which are vegan and organic, as well as gluten-, soy-, dairy-, nut- and egg-free.

In 2012 Tracy decided to widen her base and started selling them commercially. In the past couple of years her
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company has blossomed, selling not only to paleo dieters but also the allergy-friendly community. In 2014 the B.C. food producers awarded this business two awards — best product of the year award and Rising Star Award.

The company focuses on healthy, sustainable living and contributes to the local community. I am happy to say that, in January of this year, Thrifty's started stocking their shelves with these delicious cookies. Further to this, just last week they were featured in B.C. Job Makers, a website that highlights business success stories in B.C.

Congratulations to another successful young B.C. entrepreneur.

CULTURE AND HERITAGE AWARDS
IN NANAIMO

L. Krog: April 9 in Nanaimo — 2015 Culture and Heritage Awards, celebrating all the great culture that exists in my fair city. The venue — the premier performing arts centre in our city, the Port Theatre, built in the 1990s with federal, provincial and local contributions.

The evening kicked off with Bruce Williams, well known to all of us here in this chamber, the most energetic host on Vancouver Island, following a welcome from the Footprints of the Wolf, a local aboriginal dance group, followed by a poetry reading from Ms. Naomi Beth Wakan, Nanaimo's poet laureate, and finally, a welcome by newly elected mayor Bill McKay.

It was a great evening to celebrate Nanaimo's arts and culture. Kicking off, the Honour in Culture Award went to Arlene Blundell, one of the most active members of the theatre group in town for many, many years and a real leader in arts in our community.

Following that the Heritage Building Rehabilitation Award residential was given to Andrea Saam-Lawry and Mr. Tim Lawry, owners of the famous and ancient McCourt Residence. Following that we had the Excellence in Culture Award presented to Grant Leier and Nixie Barton, two very well-known — indeed internationally known — and successful artists.

Then the Heritage Building Rehabilitation Award institutional was presented to the Anglican diocese of British Columbia for their work at St. Paul's Anglican Church — I might add, where my grandparents were married.

Finally, the Emerging Cultural Leader Award went to a young woman who is operating The Vault restaurant in Nanaimo, a facility where she opens it up every evening, virtually, to local performing artists, all of whom do a great job celebrating arts and culture in Nanaimo.

I would be remiss if I didn't close mentioning that some years ago our flamboyant and famous mayor, Frank Ney, said that when it came to a choice between culture and corn, Nanaimo would chose corn every time. I am to happy to announce that with this significant celebration that has gone on for several years, culture in Nanaimo has conquered corn.

Madame Speaker: Hon. Members, the member for Coquitlam–Burke Mountain seeks leave to make an introduction.

Leave granted.

Introductions by Members

D. Horne: Visiting the chamber today is a delegation from the Nisga'a Lisims Government. They are spending the day to learn more about the work of this assembly and this House. We are honoured to have the opportunity to host Stephanie Lysyk, Debra Febril, Myrle Morven and Kristy White. I hope they've enjoyed their time here at the assembly and in Victoria. May the House make them truly welcome.

Oral Questions

GOVERNMENT ACTION ON
GUN VIOLENCE IN SURREY

J. Horgan: Last night I joined 700 people in an auditorium in Surrey to talk about the escalating gun violence in that community. I heard anger, I heard frustration, and most of all, I heard concern.

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I heard concern about how it could be that 23 shootings could take place in their community, in their hometown, over a 30-day period. What they were trying to understand — with representatives from the RCMP, with representatives from the school board and representatives from the Surrey council — is: what was the plan? What was the coordinated effort of multilayers of government to address the outbreak of gun violence in their community?

My question to the Premier is: just what is the Premier's plan to address the concerns and the fears of the people of Surrey?

Hon. C. Clark: I want to just add to the Leader of the Opposition's comments in this respect, and say to the people of Surrey how deeply concerned everyone in British Columbia is about what's happening in their community.

Surrey is a community that I know to be a thriving, friendly, open place to live, a great place to raise your kids and start a business and live out your life. That's the Surrey that I know. But the events that have been unfolding recently have been very disturbing to people in Surrey and to all of us across British Columbia.

We are working with the city of Surrey and with the RCMP, as we always do. But I want to say this. The chief of police in Surrey has been very clear. He said that this is not a problem of a lack of resources on the policing front in that city. This is a problem of people failing to come forward.

What I would do today is to join him and the mayor of Surrey in calling on anyone — any relative, any friend, any neighbour — who knows anything about these shootings in Surrey, and I would call on them to come forward, because by coming forward and speaking out, they could very well be saving lives.

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

PROGRAMS FOR PREVENTION OF GANG
INVOLVEMENT AMONG YOUTH

J. Horgan: What I heard again last night from the community and through the head of the RCMP in attendance, and also from the Attorney General some days ago, was that the public does have a role to play. There's no question of that.

But what I heard from the public last night is they're prepared to play that role. They want more than law enforcement, although that's critically important. They want to ensure that there are programs in place to make sure that kids don't go down that path.

One of the speakers last night was a gentleman named Jesse Sahota. Jesse Sahota, in 2005, was heading to the gang life. Jesse Sahota was concerned that his future rested with the allure of big cars and flashy clothing. But it was programs within the school system that took him in another direction, took him on another path. He's now a two-time Canadian wrestling champion, a graduate from Simon Fraser University and is employed by the Surrey school district to provide the same services that he got when he was going to choose the path of right or wrong.

It was that response from the public that I heard last night. It wasn't about snitch lines, as important as they are. It wasn't about families coming forward, as important as that is. It was a concern from the public that the programs for kids are not available.

They start in schools. They start with community efforts. They start with mentoring. Jesse Sahota is a symbol of the right path.

My question to the Premier is: can we make more Jesse Sahotas? I believe we can, and we do that by funding programs in schools. Will the Premier commit to do that today?

Hon. C. Clark: Both are necessary. Both are absolutely necessary. On the one hand, we need to deal with what's going on today. We need to put those folks in jail. We need to get them off the streets and end the threat that they pose to the people of Surrey and the citizens of British Columbia. That's the first part of it.

The second part is making sure that we're doing everything that we can to prevent young people from joining gangs in the first place, helping them find a way to a life that is different from the path that they might be going on or one that they see in their school — one that they think might be cool, one that might be the only place where they feel comfortable. Part of that, an important part of that, is making sure that our schools, our school districts, police, cities, the province and the federal government are all working together to make sure we support young people in finding the right path.

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About $60 million a year goes into the RCMP to support the Combined Forces Special Enforcement Unit. They work with anti-gang initiatives. They are doing that work now. They are going to continue to do that work. We are going to continue to evolve the work that we do and our approaches to anti-gang work in schools all across the province.

It's important work. Prevention is worth a pound of cure. And in answer to the member's question, we need both, and we are there to support the people of Surrey in making sure that we deliver on both.

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

J. Horgan: I've been a member of this Legislature for ten years now, coming on next month. During that ten-year period I have been witness to debates in this Legislature. I've been witness to events in communities that have seen an escalation in violence, an escalation in concern and fear in communities and an absence of public safety.

Do we need to put these people behind bars? Absolutely. Do we need more law enforcement? Absolutely. Do we need to stop the pipeline of kids to these gangs, most importantly? Yes, we do. How do we do that? By giving those kids options, and most importantly, giving those families options.

What I heard last night in Surrey was mothers and fathers standing up and saying: "If I need help, I've got nowhere to turn. If I see my children going down the wrong path, I don't know what to do, where to go, how to help them." That was the appeal from the community last night.

Were they concerned about an absence of police presence at certain times of the evening? Were they requiring more police so we can get these people behind bars? Most assuredly. But the concern from the families was there was an absence of services for them.

That starts with decisions that we make right here at budget time — the priorities we make as a society to help to lift kids up so they don't turn to the dark side. My question again to the Premier: will she commit today to provide the resources to the Surrey school board, and other school boards in the Lower Mainland that are affected by this violence, and stop it where it starts?

Hon. C. Clark: I should say, just to start with this, in terms of policing in Surrey, we have joined with the city
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of Surrey in calling on the federal government to address the request for 100 more officers as a priority for Surrey — so on the one side, making sure that there are more police available.

In this case, though, however, the police have been very clear. It is not a shortage of resources. It's a shortage of information, and I understand that family members, neighbours and friends are often reluctant to come forward and speak. I want to urge them to do so. It is time that we ended this terrible carnage that we have seen in Surrey and allow that community to reclaim what it knows about itself so well, which is its title as one of the greatest places to live anywhere in Canada.

When it comes to stopping kids going into gangs, there are a whole range of initiatives that we've been working on over the last decade and more to try to support that in schools, including the anti-bullying work that we do, including the work that we do in creating safe schools, in schools that have a safe and respectful culture.

Much of that is also focused at giving kids a safe place to go as an alternative to finding their way into gangs. The $60 million that I referenced — that is also being deployed on the ground. We need to continue to evolve this, absolutely.

What I heard from their MLA who was there yesterday — the member from Surrey-Tynehead, a former police officer in Surrey himself — is that the community is vitally engaged in trying to find solutions. So are we.

We want this to end, and I will repeat this one last time. The way to ensure that this ends is for people in Surrey who know something about this to come forward so that we can make sure that the people who are responsible find their way to jail.

WAIT TIMES FOR SURGERIES

J. Darcy: Last week a national report was released that shows that wait-lists for some surgeries in British Columbia are amongst the worst in the country. The minister tried to explain this away by throwing out numbers about how many surgeries have been performed.

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But according to this report, the CIHI report, provinces right across the country are providing "more procedures now than they did five years ago, yet wait times are remaining stable." They're remaining stable in other provinces, but not in British Columbia. In B.C. wait times are getting longer.

When will the minister stop downplaying this serious problem and commit to taking action to shorten wait-lists in this province?

Hon. T. Lake: When I rose in the House last week on this question, I used the large increase in the hip replacements and knee replacements in the province of British Columbia…. At a time when the population has increased 13.5 percent, those procedures have gone up 90 percent and 138 percent respectively — so a lot more procedures being done.

There are some inequities around the province. We see that on the Island, for instance, they've had some challenges. As they did more resources into colonoscopy screening programs, that came at a cost perhaps to some elective surgeries. They are addressing that with an RFP to make sure that the surgical services are performed.

We are working hard to make sure that British Columbians get timely access for elective surgeries in the province of British Columbia.

Madame Speaker: The member for New Westminster on a supplemental.

J. Darcy: The minister loves to throw out numbers. But Trevor Norsworthy is not a number. Trevor Norsworthy is a 72-year-old man who's already waited 21 months for a hip replacement at Royal Inland Hospital, in the minister's own community, and he still doesn't have a date for his surgery. That's 21 months on heavy-duty painkillers, with his condition getting worse all the time.

You know, the minister's tired old excuses are cold comfort. They're cold comfort to people like Trevor and thousands of other people like him across British Columbia. Trevor Norsworthy deserves better.

Madame Speaker: Question.

J. Darcy: Fourteen years in government, the problem is getting worse, and the minister just keeps throwing out numbers and platitudes. That's not good enough. When is this minister going to take action so that Trevor and thousands of others like him don't have to wait years and years in pain to get their surgeries?

Hon. T. Lake: In my tradition of throwing out numbers, how's this? Between 1996 and 2001, when the NDP were in power — hip replacements, a 74 percent increase in wait times; knee replacements increased by 69 percent in terms of wait times. This is a challenge as the population ages. We all recognize that. And there are certain areas of the province where there are inequities. For instance, there are some wait-lists that are longer than others — individual surgeons.

We want to make sure that the best available technology is available for booking surgeries. We want to make sure there are models looked at, like we have here in Victoria with the first available surgeon, so that that will speed up access to surgeries. We're working extremely hard to make sure people do get timely access.

If we want to talk about personal stories, we can talk about a 75-year-old skier who has had two hip replacements and three knee replacements and is still active. That's the system we have in British Columbia, and we'll continue to make things better for all British Columbians.

B.C. AMBULANCE SERVICE
RESPONSE TIMES

K. Corrigan: In February we asked about the B.C. Ambulance Service's refusal to release data on ambulance wait times. In fact, for a year and a half mayors across the Lower Mainland have been raising concerns about the risks associated with the downgrading of calls and longer wait times.

The minister insists this new ambulance regime is "good health care," but the minister's former colleague who is now the mayor of Mission, Randy Hawes, says at least two residents have died waiting for ambulances in his community.

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My question to the minister: what does the minister have to say to the mayor of Mission, and does he still insist that, despite the growing body of evidence to the contrary, this is good health care?

Hon. T. Lake: B.C. Ambulance is a provincial service that has served the province of British Columbia for 41 years. It is a unique model in Canada. It serves all of British Columbia, and it is the emergency room on wheels. It uses a dynamic deployment model to make sure that there are no borders. They don't recognize municipal boundaries. They go where they're needed to go.

If you look at the data, it will show that the average response times in Mission and in Maple Ridge are unchanged over the last three years. Now, if there are situations where first responders or local government officials know of cases where there is a concern about response times, we want to know about that. There is a critical incident review done every time there is a concern over that.

We are using information from Mission to follow up on the information provided by the mayor. We are committed to making sure that B.C. Ambulance provides a high-quality service, which they have done in British Columbia for 41 years.

Madame Speaker: Burnaby–Deer Lake on a supplemental.

K. Corrigan: Well, I'm glad the minister is inviting communities to contact him when there are incidents. In fact, the city of Burnaby has sent four letters to the VP of health at B.C. emergency health services about dozens of serious incidents, including one death. There has been no response to any of the concerns. Communities across the Lower Mainland are raising similar serious incidences when ambulances simply are not responding adequately.

My question to the minister: why is the government refusing to respond to the serious concerns about failures of the Ambulance Service? Is it trying to hide something? And when is it going to fix these potentially deadly problems with ambulance wait times in the Lower Mainland?

Hon. T. Lake: B.C. Ambulance does, in fact, look into every incident that's reported to them. I have spoken with the chief medical officer for B.C. Ambulance, and they assure me that there have been no incidents as a result of the resource allocation plan changes that were made. In fact, what has happened is that the wait times — the response times for emergent calls — have actually decreased, which was the objective of the resource allocation plan.

Having said that, B.C. Ambulance Service is doing a Lower Mainland study to look at deployment and look at demand, because that's something that they always want to do to ensure they are providing the very best care for British Columbians.

INTERIOR TO LOWER MAINLAND
TRANSMISSION PROJECT

A. Dix: My question is to the Minister of Energy about the $725 million Interior to Lower Mainland transmission project. The main project, worth $384 million, was given to Liberal contributor Flatiron-Graham in 2011. The ILM project is more than a year late, costing taxpayers and ratepayers a bucket of money. The minister doesn't know what the final costs will be.

B.C. Hydro had to take back 20 kilometres, the most difficult 20 kilometres of the work, because of "failures by the contractor." There was major non-compliance with provincial laws. The steels in towers, according to the minister, brought in from India by the contractor were below standard and repeatedly failed.

The contractor, according to the minister, slowed down the work in order to extract more money from the Liberal government and B.C. Hydro. The whole issue is before an arbitrator. Doesn't this mess demonstrate the failures of B.C. Liberal and B.C. Hydro contracting policies?

Hon. B. Bennett: The NDP wouldn't know anything about the challenges of building things, because they didn't build anything during the 1990s.

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We're in the midst of the largest buildout of transmission here in B.C. in 30 years. The ILM, Interior–Lower Mainland transmission line, is intended to ensure that power from the Peace and the Columbia is reliably delivered to the Lower Mainland. In fact, when it is completed, it'll reduce transmission losses, saving about $23 million a year.

We're expecting demand to increase by about 40 percent over the next 20 years. That has made it necessary to invest $2.4 billion a year. That's a lot of money. That includes Site C, of course, but it also includes several transmission lines — a lot of generation.

Now, B.C. Hydro has 661 transmission and distribution projects that they have delivered over a five-year period. The total budget was about $31/3 billion. That's between
[ Page 7502 ]
fiscal '10 and fiscal '14. On those 661 projects, they have been about 4 percent, almost 5 percent, under budget.

I think that the record is clear that B.C. Hydro is doing a good job with its capital budget.

Madame Speaker: Member for Vancouver-Kingsway on a supplemental.

A. Dix: It's unbelievable. The minister is bragging — three major transmission projects under his leadership, five years late and hundreds of millions of dollars over budget. That's the record.

B.C. Hydro chose the contractor, a contributor to the Liberal Party, with limited experience in transmission projects. According to the minister, the contractor's source steel in towers that were below standard repeatedly failed. The project is delayed and a mess, and the ratepayers will have to pay for it. The minister is less managing the project than participating in an episode of Fawlty Towers.

How can the minister say, with this record of failure on this project, that his tendering process is anything other than a disaster?

Hon. B. Bennett: I think what would be a disaster would be to be in government for ten years and not invest any appreciable amount of money in the system. That's, in fact, what this group over here, many of them…. The Leader of the Opposition was actually the special adviser to the Energy minister. I can show the Leader of the Opposition the records, the annual reports from B.C. Hydro for the last 20 years. And I can show the hon. member or the critic that, in fact, when they had their opportunity — both of them — they failed to invest, in any meaningful way, in either transmission or generation or distribution.

It is true that it is necessary today to spend $2.4 billion a year on building out transmission and building out generation and building out distribution so that we can meet the demands of a growing population and a burgeoning economy.

PROPOSED NATIONAL PARK IN
SOUTH OKANAGAN AREA

S. Chandra Herbert: Happy Earth Day, hon. Speaker.

The South Okanagan–Similkameen hosts some of the most endangered landscapes and species in Canada. It also is the home of a proposed project that could generate millions of dollars, many jobs, while protecting those species. I speak, of course, of the proposed national park.

A recent survey shows, yet again, that the public supports discussions to get to that national park. That support is widespread. Local tourism associations, chambers of commerce, local leaders, the wine industry and, most importantly, residents support this — good for jobs, good for the environment.

My question to the Minister of Environment: why does her government refuse to act?

[1420]

Hon. M. Polak: May I also extend a Happy Earth Day to our colleagues across the way, and yourself, Madame Speaker.

There's no question that in the South Okanagan, the community, the First Nations, place huge value on their natural landscape and for many years have talked about the potential for a national park. However, a national park is one tool that, in fact, is fairly restrictive when it comes to some of the other many activities that people hold important in that region. So the member is wrong. It's not that we have not taken any action. In fact, we're taking what can be even more valuable action.

Together with the local MLA for the region I have already been to the area twice where we have met with community groups. We now have an ongoing discussion with the Okanagan Nation Alliance. In fact, we had a half-day meeting with the Okanagan Nation Alliance where we identified the kind of provincial tools that allow us to provide the types of protections that people want, while at the same time being able to allow the activities to take place that they also value.

Madame Speaker: Member for Vancouver–West End on a supplemental.

S. Chandra Herbert: Local leaders, the chambers of commerce, the tourism industry will tell you that you need a national park designation if you want to make the millions of dollars, if you want to create all the jobs. That's why they propose that we start discussions again.

Indeed, the public supports them. In the Boundary-Similkameen constituency 65 percent of residents support the idea of a national park. In the Penticton constituency support is even higher at 75 percent. The Liberal MLA for Penticton has spoken support. The NDP has as well. Indeed, our all-party Finance Committee united to call for discussions to begin again.

Good for jobs, good for the environment. Why does this government refuse to act?

Hon. M. Polak: The fact is, if there's a jurisdiction in North America that leads with respect to protections on the environment and environmental values while still growing the economy and growing jobs, it's British Columbia.

I'm not sure. Perhaps the member has misplaced his memories around our extensive British Columbia park system. Those parks have millions of visitors each and every year. Wells Gray Park is not a national park. It's an extremely popular park.

The need here is to balance the interests in protecting the values on the land base while at the same time en-
[ Page 7503 ]
suring that activities of communities, businesses and also First Nations can continue. That is extremely difficult to achieve just with a national park. We have the range of tools to accomplish it. We're going to do that together with the community and the First Nations.

CHILD DEATH CASE AND
ACCESS TO INFORMATION

D. Donaldson: Isabella Wiens, 21 months old, died while in the care of the ministry, on March 16, 2013. A postmortem conducted three days after her death listed multiple bruises found on her chin, forehead and face, arms and legs; fractures in her upper and lower arm; swelling of the brain. A year later the coroner's office completed their report and found the cause of death undetermined.

We now know a decision was made by the designated director on the minister's staff to not conduct a case review into this tragic death. It's unbelievable that the minister refuses to answer basic process questions, citing privacy around this case, when the lack of transparency could put other children at risk.

There are also too many unanswered questions in this case for her not to comment. When and how did the injuries that were identified in the postmortem exam occur? What medical treatment was sought for her fractured bones? Why was the foster home she lived in shut down?

I have written a letter to the minister with these very questions and others and will release it directly after question period today.

So to the minister: you've repeatedly refused to answer questions in this House. So will you commit today to answering the questions in my letter that Isabella's mother deserves answers for?

[1425]

Hon. S. Cadieux: Once again, the circumstances the member references are, for the family, certainly tragic. Due to the privacy laws in the province and the CFCSA provisions, I'm not going to speak about the specifics of this case in the House. I have outlined in this House and in the media, and for the member, multiple times the thorough processes and oversight that exist in cases like this and how that procedure unfolds. I will be happy to respond to the member's letter.

[End of question period.]

Orders of the Day

Hon. M. de Jong: In Committee A, Committee of Supply — for the information of members, the estimates of the Ministry of Transportation — and, in this chamber, committee stage debate on Bill 24, the Societies Act.

Committee of the Whole House

BILL 24 — SOCIETIES ACT

The House in Committee of the Whole (Section B) on Bill 24; R. Chouhan in the chair.

The committee met at 2:29 p.m.

On section 1.

Hon. M. de Jong: Just by way of introduction to the topic, first of all, very pleased that we are joined today by Jill Sinkwich, Tona Hetherington and Marcus Gill.

[1430]

The hon. member opposite generously, in her second reading remarks, referred to the tireless efforts of many people within government and outside of government. Today we will have the benefits of those who have toiled on this project many years from within government.

In acknowledging their presence and contribution, I also want to highlight the contribution of those who are perhaps watching but have certainly made a contribution to the statutory product before us.

I also want to alert the committee and the hon. member that when we get to section 289, there is a one-digit floor amendment relating to an error that appeared in the final bill. I will certainly highlight it when we get there.

Section 1 approved.

On section 2.

C. James: Thank you to the minister, and thank you to staff. As the minister has said in the opening of this bill when we went through second reading, it was important to acknowledge the years of consultation that have occurred on this bill. I think the fact is that most not-for-profits, most societies, have been very pleased with the changes that were made and the work that was done. I want to pass along my appreciation, as well, to the minister and staff for that good work.

Under the purposes section, subsection 2(3), there is a mention that: "The registrar may, in writing and giving reasons, order a society to alter its purposes if the registrar considers one or more of those purposes to be contrary to this Act or otherwise unlawful." Does the registrar have the power to issue penalties for contravention of this section?

Hon. M. de Jong: No specific power per se to issue a fine for disregarding an order of this sort. There is an ultimate power relating to the registrar's ability to dissolve a society but no specific fine attached to enforcement of this provision.

C. James: So no stepped-up — or stepped-down pro-
[ Page 7504 ]
cess, depending on how you take a look at it — for a society if there is a contravention? There is no distinction between which issues will withdraw and which won't. Basically, you have the right to withdraw the society from the Societies Act if there is contravention?

Hon. M. de Jong: Two things come to mind. One, to serve as a practical matter. Whereas there may be areas in the 300-plus sections of the act that occasionally create friction between the registrar and a society, generally, at the formation stage, the incorporation stage, societies want to ensure that they are in compliance. As a practical matter, they are inclined to want to ensure that their formative documentation is in good order.

Secondly, with respect to the penalty that is available, the sin in this case has less to do with the actual circumstance than with the failure to abide by the order of the registrar. It is to that issue that the penalty applies.

Sections 2 and 3 approved.

On section 4.

[1435]

C. James: Speaking to section 4, "Restrictions on distributions," subsection (a). It says: "A society must not distribute any of its money or other property other than (a) for full and valuable consideration."

I wonder if the minister could just speak to the use of that language — "a full and valuable consideration." What does that entail, and what type of consideration would be considered full and valuable?

Hon. M. de Jong: Two things. It is essentially language designed to ensure and encourage the receipt of market value for the distribution of assets or property. It is also that phrase drawn from the existing act. It is a phrase that already exists in the existing statute.

C. James: It was just an odd use of language, which was why I was curious whether there was something more than just market value in that.

The second piece in this same section, subsection 4(c), speaks to a qualified recipient. I wonder if the minister could give a description around what or who would be a qualified recipient when they're talking about how a society must not distribute any of its money other than to a qualified recipient.

Hon. M. de Jong: In fact, it's an appropriate question. Assistance can be derived from the definition section, section 1. It's a defined term. I won't read the definition into the record, but it is on the second page of definitions, under "qualified recipient." There are five subsections, and if there is a particular one that engages the member's interests, I'll expand on the answer.

Sections 4 to 6 inclusive approved.

On section 7.

C. James: Section 7 talks about restricted activities and powers. It says: "A society must not…." And then goes through to talk about various activities. Subsection 7(2) then says: "An act of society…is not invalid merely because the act is contrary to subsection (1)."

It appears to contradict itself. I'm sure there's an explanation from the minister. Subsection (1) and subsection (2) appear to contradict themselves, with one saying the society does something and the other saying they won't be in contravention if don't do it. I wonder if the minister could go through that.

Hon. M. de Jong: I'll begin here, if this is helpful. The hon. member has referred to the specific subsection which within its provisions includes reference to a specific type of transaction. It extends beyond that, but I think it's instructive to focus on the type of transaction as contemplated specifically in the section, a transfer of property.

I'm advised that two things have occurred here with respect to the amendment. One is an attempt to incorporate what is standard corporate law language, and the objective there is to create legal certainty, particularly with respect to and on behalf of a third party.

In a circumstance where, for example, a society had effected a disposition of real property…. We, for this example, presume that I represent the society and that I have purported to transfer real property to the member and, for a reason I won't try to enunciate here, am acting contrary to the provisions of my society but the member, as the purchaser of that property, is acting in good faith and receives, in exchange for fair consideration, title in that property.

The rationale is that the member — in this case, the third party — should be able to rely on that transaction and not have to worry about whether or not the society has conducted itself in accordance with its own internal processes — which, in this case, the purchaser may have no access to.

[1440]

C. James: The minister mentioned land, and I think that's the easiest and clearest way of looking at it. But are there any other circumstances that the minister would see, then, where the act of a society isn't merely invalid? Are there other examples other than land sales?

Hon. M. de Jong: I don't believe it is meant to be restrictive. It may be a contract for services. It could be an employment contract, for that matter, I suppose, where the third party who is relying on the fact that they have entered into an agreement in good faith need not con-
[ Page 7505 ]
cern themselves with whether or not the society has carried on an activity or exercised a power inconsistent with what is authorized by its bylaws. It could be just about any kind of contractual relationship that a third party would have with the society.

Sections 7 and 8 approved.

On section 9.

C. James: This section speaks to reserving a name for the purposes of the act and talks about requirements to reserve a name for the society. It also says under subsection 9(5) that the registrar "may, in writing and giving reasons, order a society to change its name" if it's contrary to the requirements or if "the registrar, for good and valid reasons, disapproves of the name." I wonder if the minister could just give an explanation around what might be good reasons to disapprove of a name by a registrar.

Hon. M. de Jong: There is a whole, I'm advised, broad range of policies that govern the exercise of this admittedly discretionary authority on the part of the registrar. Trademark infringement, profanity, use of or reference or allusion to the monarchy, the royal family…. There is, apparently, a broad range of policy. This may not be at the top of the member's hit parade today or even tomorrow, but if she would like to have that information, it is readily available.

C. James: Very much summer reading, perhaps, Minister.

Is it appealable? Are there appeals to the registrar if a society feels that there's a valid reason for the name to be there? Is there a process for that?

Hon. M. de Jong: The short answer is that there is. It's a rather drastic step insofar as, under the Business Corporations Act, which is incorporated here, it is an appeal to the court. I don't want to leave the impression that there is some administrative mechanism short of that. It's a rather drastic step that would need to be taken to appeal the exercise of the discretionary authority.

Section 9 approved.

On section 10.

C. James: In section 10 — just a curiosity question, perhaps. It says in the section: "A society must not have a constitution that contains provisions in addition to the name and purposes of the society." Again, I'm just curious why it would limit a constitution to not include more information than those provisions — than the name and purpose of the society.

[1445]

Hon. M. de Jong: I'm reminded that there is a fairly practical imperative operating here. But it also relates to a change around this notion of unalterable provisions. What we have now, I'm advised, is a circumstance where a society would have these formative provisions, many times contained within their constitution and others contained within their bylaws.

The purpose is, candidly, I think, to strip down the constitution and have all of the provisions that would be relevant to determining the purpose for which a society exists, the rules by which it must operate…. And whilst there are no longer unalterable provisions, there may be provisions that require 100 percent of membership support, unanimity amongst the members, to change.

The objective here is to have those all in one place in the bylaws. It becomes particularly important with respect to electronic filing and the notion that a third party or member, for that matter — let's start with a member — could go to a single site, a single place, and know that the description of how this society has determined to operate is contained fully within those provisions. I think that lies at the heart of the rather curious language that the member has identified.

Sections 10 and 11 approved.

On section 12.

C. James: Again, I appreciate the minister's responses. I think it's important to remember — and I think that section identified it — that a large portion of the work that was done with this act is around modernization, around making sure that it fits what happens now with societies. I appreciate that.

I wonder if this is similar when we're talking about section 12, where it talks about the full names and addresses of the directors of a society. I think that's pretty straightforward. I think most people would see that. But in subsection 2(a) it mentions the director's residential address. I just wondered, around protection of privacy issues, whether there are any concerns that were raised there, and why the director's residential address would be listed.

Hon. M. de Jong: Thanks to the member for the question. I think it would be troubling if the requirement was for the residential address, but what the drafters have endeavoured to do here is provide an option.

The key objective here is to create a mechanism by which a director is obliged to disclose where they can be found. It might be…. Well, (b) of course provides an option, but if a director is not in a position to or wishes not to provide a daytime, if I can use that term, address, then they are obliged…. Meaning a precondition, if we take to this to its logical extension, to serving as a director is disclosing where you can be located as a director on a reasonably regular basis for the purpose of receiving documentation or requests.

C. James: I appreciate that. I just wonder about the number of directors of not-for-profit societies who are retired, who don't have a workplace. That's a large portion, I think. A lot of our not-for-profits continue to go because of retirees.

[1450]

Are these documents — just to remember from other clauses in the bill — accessible by members of the society? Are they accessible by members of the public? I'm just curious where that director's residential address will be. Would that be accessible by members of the public or members of the society?

Hon. M. de Jong: I think the key part of the member's question was where that information would be available. I think it would be available in terms of a search of the registry that would…. The person would need to list. It's an improvement to this extent: apparently the existing provision only has sub (a). So there's been an option.

I'll be careful how I say this, because I don't want to in any way belittle or diminish, but the member said something that's very practical about societies in which there are many seniors, and this might apply to societies that do not include seniors. But I suppose sub (b) would allow, if someone were a regular attendee on a daily basis at a seniors centre, that that, too, could qualify as an address. Although I think, as a practical matter, most people will opt for something other.

Section 12 approved.

On section 13.

C. James: Just a quick question on section 13. This talks about the incorporation of a society by filing with the registrar, and it talks about the information that's required — so the name, the constitution, the bylaws and a statement of directors.

I wondered whether, when information is varied or changed in the future, that would impact the incorporation of the society. As directors change, etc., are there requirements? Perhaps it comes up later as we go through the bill — requirements around how soon that change has to happen. Would that impact the incorporation of a society?

Hon. M. de Jong: I may not have properly understood the question, and the member will correct me. Where there are changes along the way, as there inevitably are, with the directors and bylaws and addresses and registered offices and so on and so forth, there is an obligation to file. Now, we're hoping, through the advent and the statutory accommodation of the use of technology, that that will be a task more easily performed.

I suspect that the member and I, in having the conversation we are having and will continue to have about the provisions, are tending to think a lot not necessarily about the societies that exist with vast staffing levels and layers of expertise and complexities but the myriad of societies that operate on the strength of volunteers exclusively.

The big change in this section, I think, relates to the fact that now one or more persons can incorporate. I believe under the previous provision it required a minimum of five. That's the significant change here, but there are, to be sure, obligations to keep the records up to date through the passage of time.

[1455]

L. Krog: The minister raises a point I wish to ask a couple of questions around, and that is with respect to the number of persons required to incorporate a society. This is a significant shift in law, and I'd appreciate some explanation from the minister why this particular change has been brought forward, particularly given the number of scandals and issues that have arisen around certain societies in the province, how they've been managed and handled.

As I've mentioned in this chamber myself, there was a local society in Nanaimo that was responsible for ensuring that immigrant families got settled. They received all sorts of funding and had one employee and one family to look after. I think the word on the street was that that person was paid about $50,000 a year to handle the settlement of one immigrant family.

What happens in societies is somewhat important, so I'm curious to know: why the reduction to one, and is there any further requirement beyond having one member? The section, I do know, talks about a statement of directors, so I presume the presumption is that there will be more than one director. I'd appreciate hearing from the Finance Minister why we are doing this this way now.

Hon. M. de Jong: A few relevant bits of information to convey to the member. The first part does not necessarily qualify as an ultimate rationale for the change except to point out factually that the Business Corporations Act has made this shift in favour of allowing incorporation by as few as one person, as well as the federal, Ontario and Saskatchewan not-for-profit acts. So this is not unprecedented nationally in terms of either corporate or societal provisions.

I take it the problem that arose with the existing provisions was that whilst they required five members for the purpose of incorporating, there was no prohibition on a reduction in those members over time. A society could begin with five and in short order end up with one. There is a requirement, which we will get to later in these ample provisions, that three directors be maintained. The member referred to that in his question — the fact that there will be a requirement for more than one director.

The final thing I might say in response to the question — two things, actually — is that this will assist with re-
[ Page 7507 ]
spect to the provision of the on-line registration application process. But none of the other provisions — call them safeguard accountability provisions — that govern a society that incorporates with one person…. They all apply. Now, there's that distinction between self-funded and otherwise. But all of the provisions that apply will continue to apply to societies, notwithstanding the fact they may have been incorporated on the strength of one member, including the need to maintain three directors.

[1500]

L. Krog: I don't purport to be an expert on the new bill or an expert on societies. But from a historical perspective, we're now shifting from a society to the two types of society — I understand that — self-funded and those which receive funding from government sources. I suppose the issue becomes one of the public interest and public scrutiny, really, if you have a society that has one member and its three directors — and yes, there are reporting qualifications, etc.

But it seems to me that one of the benefits of having at least a minimum number of members — the old Society Act was deficient in that; I get that — is that there is a greater opportunity for scrutiny of the behaviour of those members of the society or the society in general, because surely there are special privileges attached, from tax and other perspectives, and presumptions about value and all sorts of things relating to someone being able to say, "Well, I'm the president of the Good Earth Fellowship Society" or whatever the case may be.

My concern is that even though there may be provisions respecting scrutiny, as the minister has outlined, which we'll come to later during the course of committee stage…. Nevertheless, one person being able to incorporate a society — is there a societal interest in allowing any one of us to incorporate a society? Is there some benefit to the community? Is there something to be presumed of some value?

It's not like a corporation. If you incorporate a corporation, your intent is to make money, presumably. No one incorporates a company just because they want to have a corp. Well, some people might, I suppose, but most people are doing it because there are advantages from a tax perspective, from a liability perspective, from a number of perspectives.

Again, I want to ask this question. What interest is there in society in general that is being promoted by allowing one person to incorporate a society?

Hon. M. de Jong: First of all, I think it's a legitimate question to pose. My philosophical response to it relates to the fact that in dealing with the desire that people have on a not-for-profit basis to engage in certain activities and to engage the attention of fellow citizens, by definition, it seems to me, there is generally an interest in attracting colleagues and like-minded people, whatever the area of interest may be.

At the same time, though, I suppose it is conceivable that an individual may decide that they have a particular focus for an activity in mind and wish to create a mechanism by which they can present those ideas, or engage in that activity, to others.

I say this not to be glib. Is it appropriate to require that person, before they are able to avail themselves of this vehicle — as a prerequisite to that — to have to convince even one other person that it is a good idea? I don't have a good example. People that engage in this work are generally surrounded by like-minded people and have a passion and share that passion with others.

Conceptually, at least, should we be saying to someone: "As a prerequisite to utilizing this instrument, you have to be able to convince at least X number of other people that your cause is a worthy one"? You can make it a question. We tell people who want to run for public offices that they have to convince X number of people before they can engage in that activity.

[1505]

The choice that is made here is to say: "No, although you must have directors. So I guess you'll have to convince at least three other people that your idea is worth pursuing."

L. Krog: I appreciate I may be carrying this point further than there may be interest in it, but it just strikes me that it's a privilege given by law. It's not a right. The constitution doesn't recognize to incorporate yourself as a society, but essentially, this act provides that privilege to you. One person can incorporate themselves as a society, receive the benefits of that, as long as, as the minister has pointed out, you can persuade three directors.

Then, arguably, as a self-funded society, it might help…. Perhaps the minister can answer this a little earlier than he might have had to in the course of committee stage. A self-funded society — does that mean you put the money in yourself, or does that mean you're entitled to go out and collect money from others?

Mr. Smith incorporates his Happy Society and says, "I'm going to go out and look after" — I don't know — "stray deer in Oak Bay," as a local example. "I'm going to take my tin cup around, and I'm going to collect a whole pile of money. There's me and there are the three directors who watch me. I'm a self-funded society. I've managed to collect $50,000. I decide that I work really hard at this, and as the directors approve my salary at $49,900…."

Is that rather silly scenario that I've just created possible with this statute? Apart from the three directors, who'd be there to criticize it if I'm wandering around Oak Bay collecting the money for this worthy cause of looking after the stray deer?

Hon. M. de Jong: I don't think it's a ridiculous question. Later in the provisions, though, to answer the specific question or concern that's been raised, the collection
[ Page 7508 ]
of public donations, and we haven't…. The amount will be specified in regulation. The collection of public donations beyond that amount would preclude the kind of scenario from developing that the member has alluded to.

We have not stipulated the amount in regulation thus far, and I actually don't have an answer if the member's next question is: what do I think the appropriate amount is? I don't have a ready response for him yet, but hopefully, that in part provides some comfort to the member that the kind of scenario he has described would not occur.

Sections 13 to 20 inclusive approved.

On section 21.

C. James: If we get big sections without questions, we'll make sure we pass them along.

Section 21 speaks to the issue of records and the keeping of records and the disposal of records. I wonder if the minister could tell us: have there been changes from the previous act? This talks about ten years since the record was created. Is that consistent? And why ten years? Is that consistent with the previous act? Just to add, as well: who decides which records are relevant? Where is the description of "relevant"? Is that in definitions somewhere, or is that something that the society determines or the registrar?

[1510]

Hon. M. de Jong: If I can endeavour to answer the question in this way, in terms of the question of relevance, I think we derive some guidance from section 20 in terms of the types of records that would be covered. It's worth pointing out and reminding ourselves that through the electronic filing mechanism, some of the key documents will now be available for those who are entitled to see them on line. There will be — from my experience with volunteer-driven societies, at least — a great benefit there.

The ultimate relief, I think, the section provides relates to the fact that there was no limitation period previously. My guess is that the hon. member, in her days of volunteerism, has been confronted by the shoebox or the archive box full of stuff that makes its way from one secretary-treasurer to the other over the years. At least this will limit that shoebox or archive box to ten years.

Hopefully, section 20 will provide some guidance — and the fact that documents are available for viewing on line and kept current on line.

C. James: I appreciate the minister's answer. I had the largest house in the neighbourhood, so often those boxes were kept at my house for many societies. I completely understand. I think it's important to have a timeline, which is why I asked around the ten years.

I think, similar to other sections that we'll talk about as we move on through committee stage…. I think the minister alluded to it earlier when he mentioned the difference in societies — the difference in size, in capacity, in staff abilities, any staff or simply volunteers.

I think there will be sections of this act that are going to need a strong education component to go with them, particularly, as I said, for those very small societies. I could see societies wondering: "What is no longer relevant? What don't we need to keep?" Or: "What do we need to keep?"

I think the fact that they can be guided by the previous section…. But perhaps some education will be necessary as we go through this, just to provide that support and end up with some consistency for societies. I think, certainly, different boards of directors in different years are going have a very different view around what's relevant to the activities of the society as it changes over the years.

Hon. M. de Jong: I agree entirely with the hon. member. We're in the midst of working through a transition plan: educational, documentation programming; website availability to assist with the transition. But I agree entirely with the hon. member.

Sections 21 and 22 approved.

On section 23.

C. James: Section 23 deals with the different methods in which records can be kept, precautions around keeping records, keeping those records in a complete state. It talks about avoiding loss or destruction to those documents, falsification, etc.

I wondered with this section and a couple of other sections, but this section in particular: are there penalties that are in place anywhere around contraventions of this section? And who inspects, or who checks? How will there ever be any checks to know whether societies are starting to follow this or even contravening the act?

[1515]

Hon. M. de Jong: The act — this section of the act, to be specific — is largely instructive, as opposed to including sanction. It would allow — again, in a case where the extraordinary step or the extraordinary proceedings involving a court were undertaken — for a court to intervene and, I suppose, render an order consistent with the section.

I don't want to, again, leave the impression that were a society to find itself wanting, there is a fine in the range of X to Y that is available for the registrar to impose. That is not the case. But in a situation where things had escalated to judicial involvement, it does provide a mechanism for the court to provide an order.

C. James: I appreciate the minister's response. I don't think at this stage — particularly with the new act and
[ Page 7509 ]
with the major changes that are occurring here, supported by most societies — that looking at fines or looking at that kind of penalty is going to be helpful for societies, which are going to have some major changes, for very small societies, to have to start following and paying attention to. That's a plus, from my perspective, to hear.

Section 23 approved.

On section 24.

C. James: Section 24 and section 25. One talks about access to records; one talks about restriction of access to records. So the two clauses kind of go together. Section 24 speaks about a member of a society inspecting records of the society that they are required to keep.

I just wondered whether the minister, in his consultations or the ministry consultations or the round table, foresaw any challenges or any issues around access to records in this section. I think, again, when you create legislation that covers all societies…. Often we talk about the exceptions, where there may be challenges or there may be a member who wants to access documents over and over and over again for, perhaps, not positive purposes for the society or the act.

This certainly isn't something that I think would happen with all societies. I think it's those rare cases, but I wondered whether there had been any discussion in the consultations that the minister had gone through about any kinds of challenges that societies saw around the inspection of records section.

Hon. M. de Jong: To the member, because she zeroed in on an area, I wouldn't say there was a raging controversy around this, but there was interest. I'm trying to recall if it came up in the large session that we had. It may have, peripherally.

In effect, here is the change. I was asking to be reminded about a circumstance under the Business Corporations Act. It's really a question of the presumptions. In the Business Corporations Act model, there is a presumption that shareholders do not have access to certain things.

[1520]

The model here is to enshrine, statutorily, a presumption in favour of members and directors having access to basic societal records and documentation but also creating, within these provisions, a mechanism by which, through the bylaws, there can be certain restrictions placed. For example, restrictions that restrict a member's access to minutes of directors meetings and society accounts.

The presumption, the default, is in favour of access, and then in certain circumstances, creates a mechanism by which societies can provide for some restrictions. The provision, the alteration engaged…. It did engage attention from certain quarters within the family of societies. I would describe that as interest — in a couple of instances, perhaps, disagreement. But I wouldn't say that it registered as a raging controversy.

C. James: I've heard some of that concern, but I would agree with the minister. It certainly isn't people saying: "Don't pass the act because there are huge concerns."

I think this one may be one where staff may be wanting to take a look at the bylaws that are passed around access to information, because that may give an idea of whether there's potential to come up later on if societies are passing lots of bylaws around access to information. It may raise a red flag or it may raise some issues to be looked at as the act is implemented over the years. That may be an interesting piece just from a research perspective, to be able to gather and take a look at how that's implemented.

Section 24 approved.

On section 25.

C. James: Again, I think a similar kind of question, and it may be the same kind of answer around restrictions of information.

This section, section 25, talks about that the inspection of register of members may be restricted. This is access to the society's register of members. But it appears that, by default, members are allowed to see that registry of members unless they pass a bylaw. Have I got that correct? The access is open unless the society determines through a bylaw that there has to be a change there around members.

Hon. M. de Jong: What the member says, I think, is a correct analysis. There is a presumption in favour of access to the register of members. That can be altered by a director's resolution that would restrict that.

I am advised that the federal, Ontario and Saskatchewan not-for-profit statutes do not provide a mechanism by which access to the register of members could be restricted. The act here is different to that extent.

There is a presumption in favour of access but a mechanism by which the directors of the society could choose to limit that access.

C. James: Around restrictions of the use of the information. There's a mention there in the restriction of the use of the information. I just wondered if…. Again, back to the penalties issue. Would it be a matter of the person whose information was used incorrectly bringing forward a concern to the society? Is that how, I guess, a concern or a charge or a worry to the society would be brought forward if that information was misused?

[1525]

Hon. M. de Jong: No specific remedy…. Well, the possibility of injunctive relief to prevent an ongoing trans-
[ Page 7510 ]
gression of the act is one remedy. I was going to say, "No remedy," but I suppose that is a remedy. No specific monetary sanction or remedy enunciated within the provisions. I suppose, in a worst-case scenario where damages had been suffered by an individual as a result of a failure to abide by these provisions, the possibility of a civil action that included pleadings to the extent that these provisions hadn't been followed would be a possibility.

V. Huntington: I note that section 25 in the draft of the bill contained a clause that allowed the members to inspect the register for other matters related to the internal affairs of the society. That has been deleted from the final bill. I'm wondering if the minister could explain why they felt that was unnecessary or why they felt it should be a restriction to the members.

So "matters related to…the internal affairs of the society" — I notice that that phrase pops up in section 26. Whether that's considered a redundancy or a mistake, I'm not sure.

Hon. M. de Jong: I'm reminded that in the submissions we received from agencies within the family of societies was a concern that that language was simply too broad in terms of what it specifically was intended to convey or what that meant members were to have access to.

I think this member's specific question was: what gave rise to the decision to delete it from the final draft? At the end of the day, we were convinced that the objectives around providing reasonable access to societal documentation and records could be achieved without this sort of broad, ill-defined notion that was included in the white paper.

V. Huntington: I can understand that that's the purpose behind the deletion. I guess where I'm concerned is that if you look at sub 25(1), the directors can restrict access if they feel that "the inspection would be harmful to the society or to the interests of one or more of its members." If the need to inspect the register had to do with a concern about activities within the society that might be considered improper, then, can the directors forestall any inspection of the register that might be necessary in an attempt to find out improper activities or something of that nature?

[1530]

Hon. M. de Jong: I apologize. I was trying to follow very closely the member's question, and I can probably prattle on, but it won't help the member get an answer. Maybe she could take another crack at helping me to understand the question.

V. Huntington: I often have to repeat my questions. I think you intimidate me, Minister.

I'm worried that when you delete the clause or the phrase "other matters related to the internal affairs," then if a member was genuinely concerned and wanted to inspect the register because he thought there was something happening within the society and yet….

What my concern is, is that with the deletion of that ability, 25(1) enables the directors to restrict an inspection if they think that it might be harmful to a member of the society or to the society. If that restriction was self-motivated or self-interested, there would be no ability to access the register if you were concerned about improper motives and that restriction was put in place.

Is that a concern or am I…? I'm looking only at a narrow issue here, but I'm worried that the restrictions might prevent somebody from an inspection that would be worthwhile.

Hon. M. de Jong: I'll take this crack at it and, hopefully, lurch towards an appropriate and comprehensible answer. The first thing I would say is this. And I think the member knows this. It's as much for my benefit as hers. We are dealing with inspection of a specific document here within the societal file of documents, and that is the register of members.

The second thing is that for reasons contemplated within 25(1), the directors quite clearly have the ability to restrict a member's access or ability to review that document, that register of members. What they do not have the right to do, notwithstanding their determination of what is harmful or in the interests of the society or one of the members, is contained in sub (7) of this section, where a member for those purposes is, in all instances, entitled to review the register of members.

The balance, I believe, that is being sought here relates to circumstances where, for example, someone might seek membership in a society for no other reason than to garner information for marketing purposes. So with respect to the legitimate and important functions contemplated within subsection (7), a member does have access to the register of members.

[1535]

But quite clearly, the act would preserve or create a mechanism by which directors, for other reasons, could restrict a member's right of access to that one document, to that register, that one file, the register of members. It represents an attempt to find a balance between the desire to preserve access and enhance access but also protect the interests of the society and the members who are within that society.

Section 25 approved.

On section 26.

V. Huntington: Just quickly, then, section 26 says that a member must not use the information he obtains from the inspection of the register of directors "except in connection with matters related to the activities or internal
[ Page 7511 ]
affairs of the society." Has that been left in deliberately? Or is it an oversight, seeing as how it was removed from the draft in 25?

I just wanted to add that I'm not totally familiar with section 20, and I recognize that 26 refers to the register of directors, but I'm presuming that the internal affair clause is not in section 20 also.

Hon. M. de Jong: I think what the drafters and the government are endeavouring to acknowledge here is that there is different information contained in two different places. The registry will contain the name of directors, and there are to my knowledge no restrictions that apply to the use of the information — that basic information that one receives from a perusal of the registry.

Conversely, the register of directors will contain other information and contact information, and therefore, there is a test that is applied in an attempt to ensure that that information, that additional information, is only used for specific purposes as enunciated. The discrepancy, if you will, or the difference — maybe that's a better word — relates to the fact that between the registry and the register there is different information available.

Sections 26 to 33 inclusive approved.

On section 34.

C. James: Section 34 talks about borrowing and issuance of securities. I just wondered if the minister could talk about whether there are any limits on the amount or the amounts that societies could borrow or loan, in this section. Any limitations or anything coming in regulations?

[1540]

Hon. M. de Jong: One of the issues that arose during the various stages of consultation was the concern that at the moment, absent specific authority, there were limits on a society. This kind of turns that on its head and says that the presumption is in favour of an authority to, an ability to, issue debt obligations unless there are bylaw restrictions.

It may be my nature, but I see some…. Notwithstanding the desire to create some freedom of choice, I could say that as a member of a society, I would probably want to create some bylaw-level restrictions on the borrowing power of the organization.

The member is quite correct. This represents a change insofar as it will be for the members, via the bylaws, to determine what those restrictions are.

C. James: I can understand the change. I think it does put the onus on the society and the members of the society to be sure that they're doing those checks and balances and are paying attention. Again, as we talked about earlier, with the variety of kinds of societies, I think this is probably a piece that will be important around the education piece, not simply for the directors in the society but for members of the society to pay attention to as well.

Hon. M. de Jong: I agree.

Section 34 approved.

On section 35.

C. James: On section 35. This talks about financial statements. It talks about end of a fiscal year and getting financial statements in. It just has a piece in subsection (2)(b) that talks about ending not more than six months before the annual general meeting, which, if I read it correctly, could actually leave people with a six-month financial statement. If you're talking about the financial statements beginning at a fiscal year-end and, at most, being provided six months before the annual general meeting, you could in fact end up with a six-month financial statement.

Does the minister foresee the six months being any kind of challenge?

Hon. M. de Jong: The timing around this is carried forward, I'm advised, from the existing legislation, so no change there. What is contemplated, though, is the possibility, by a regulation, to create an option for simplified financial statements for smaller societies, and there will need to be a test for what qualifies as a smaller society.

The idea is to try and create a mechanism by which…. It's for some of the organizations with less capacity and less sophistication — when I say that, I don't mean that in a pejorative way — to be able to present easily understood material that reveals the state of their fiscal situation but is somewhat short of what we might expect of a large, complex organization.

Timeframes unchanged. The possibility of a mechanism by which the burden smaller societies face…. Having some options is probably the biggest change in this section.

Section 35 approved.

On section 36.

[1545]

V. Huntington: Section 36, I find quite interesting. If I'm reading it correctly, the government will determine a threshold above which employees and directors and even contractors have to publish their remuneration. The society has to publish the remuneration.

I find it somewhat peculiar that it can say that some employees, up to a number of ten employees, should have their remuneration published, whereas if there are more
[ Page 7512 ]
than ten, we don't have to publish that. So, firstly, I'd like to ask: if there are more than ten, does the society that is receiving, say…? The white paper, I think, noted $75,000 a year. If there are more than ten employees receiving $75,000 a year, yet only ten have to be made public, does the society have to at least say how many others receive more than $75,000 a year?

Hon. M. de Jong: Here's the scenario that I put to staff. If the scenario I put is not consistent with the member's question, then she'll alert me to it.

I think what the member is asking for is a…. And by the way, we have not finalized what the threshold would be, but for the purpose of the conversation here in the committee, let us assume that it is $75,000. It may or may not be, but for this purpose, let us assume it is.

With a society that had 15 people making in excess of $75,000, the act requires that the top ten be disclosed. I think the member's question is: what about the other five? What would the obligations be there?

The first thing is that the number ten is an arbitrary number. The regulation could do — and it hasn't been finalized — what the member has suggested, which says to disclose with specificity the top ten and the number of employees beyond that that are making in excess of the threshold amount. I think that kind of a regulation would be consistent with the act. It would not run afoul of the act.

I haven't thought about it, so the member has raised something that we'll have to think about when it comes time to finalizing the regulations. But I'm not aware of a statutory impediment in the wording that would preclude dealing with that kind of a situation in the way that the member has suggested.

V. Huntington: At a minimum, I would suggest that that would be the way to go. Surely, if a threshold requires disclosure, then everyone at that threshold should require the remuneration to be disclosed. Picking an arbitrary number of disclosures is rather meaningless if somebody is concerned about what the remuneration and the numbers receiving a certain level of remuneration are in a society. So either use a number over, or use them all. I don't understand why it wouldn't be all or none or at least the total number.

[1550]

One of my other concerns is the rationale for setting thresholds for transparency. For instance, why would a society — it's similar to the earlier question — with 20 employees earning $74,000 each not have to disclose, when a company or a society with one employee earning $75,000 would have to disclose? The arbitrariness of the numbers and whatever regulatory threshold is set — it's a strange beast. If it's going to be done properly, to alert individuals about remuneration and levels of that, then, it should it be very carefully considered in an all-or-nothing approach, I would think.

Hon. M. de Jong: I may not have a convincing response for the member. I note that the Business Corporations Act, with respect to community contribution companies, uses the threshold that we have been discussing: $75,000. I think the reality is that at any point, whether $40,000, $50,000, $75,000 or $100,000, there are going to be agencies and individuals we are talking to — directors' and executive pay — that are captured by that and others that aren't. So I don't think I have a convincing answer.

We clearly stopped short of requiring societies to disclose all of the remuneration they pay to everyone and created a regulatory power to set a threshold. When you do that, as the member correctly identifies, there will be a society that falls just above it and a society that inevitably falls just below it, and I'm not sure how we would prevent that arbitrariness from revealing itself.

Section 36 approved.

On section 37.

C. James: This section talks about reporting on financial assistance. That's financial assistance "by means of a loan, a guarantee, an indemnity, the provision of security or another transaction" for the society. I think, speaking about financial assistance for the society, this section seems to make sense. It also appears fairly open-ended.

The section I'm looking at is subsection (2), where it talks about the need to put that information into a statement. It says that "the note need not identify the recipient by name." That leads me to believe that it isn't just a loan or a guarantee to the society — that it could be to a director, that it could be to a staff member.

I just wonder why it talks about identifying the recipient by name. Is this fairly open-ended? Does this leave the opportunity for someone to provide a loan or guarantee to a director of a society, for example?

Hon. M. de Jong: I believe, in this case, and would suggest to the member and the committee, that the balance we are endeavouring to establish is between ensuring that members or directors — those who might be paying attention to the affairs of the society — have a clear indication of when a loan or a benefit or a guarantee has been extended to someone or some agency, but at the same time respecting the fact that there are privacy considerations.

[1555]

I'm trying to think of a practical example. Some of the societies — and the member may have personal experience in this…. A philanthropic society dealing with families who are in difficult circumstances might extend a loan or a guarantee. It might be part of the….Well, they may do that, and there's a definition for what is outside of the ordinary course of the society's activities, but the members may come together and decide they want to provide that special assistance.

The balancing act — was it necessary in all cases, or appropriate in all cases, to require the identification of that in the financial documentation? Where we've clearly landed is to say that the member is entitled to know when the society has assumed a liability. It may not always be necessary or appropriate to disclose the nature of that liability, but they should know that it exists. It may give rise to a demand for further information at a meeting or an AGM.

C. James: I appreciate that, and I appreciate the issue around the recipient not being named or that that may be a possibility. I'm just wondering about the timing. It talks about the need to put that information into a financial statement so that all of the members can see it. As the minister said, perhaps they might want to do a follow-up.

But that's the annual general meeting. It says it's "required under section 35," which is an annual general meeting. So it could be, in fact, 11 months until that information comes forward for the society members.

I just wonder whether the minister felt that there were any concerns there. Again, not talking about most societies, but I could see potential, without any limitations, for a director to receive a loan from the society and that information doesn't go forward for 11 months. Are there some kinds of concerns around the checks and balances being in place for that society?

Hon. M. de Jong: I think the member has raised a legitimate point. There are two areas, relevant areas, that impact upon this, although they're not an absolute answer to the concern that the member has raised. One is the general fiduciary duty that is contained within the provisions of the act for the directors to act in accord with the interests of the society.

The other is perhaps more specific, if the members chose to act upon it. Again, I recognize that, especially in the transition, this will not be top of mind for many small groups. But there is always the opportunity to impose additional requirements on the directors and/or management of the society by creating specific bylaws that would require a more timely disclosure to the members of the types of obligations that we are discussing here.

Sections 37 to 39 inclusive approved.

On section 40.

C. James: Section 40. Just a quick question, again, out of curiosity more than anything else. It mentions that "A society must have at least 3 directors and at least one of the directors must be ordinarily resident in British Columbia."

I'm just curious why that specific piece is put in there.

[1600]

Hon. M. de Jong: The first thing I can tell the member is that section 40 replicates, I am advised, an existing section 24(4) and (5) of the Society Act. We haven't changed it. That's clear.

I also won't pretend to the member or the committee that I turned my mind specifically to the question of the one director being a resident of British Columbia. The member now has happily obligated me to do so, which is fine. That's why we have the committee debate.

I'm probably speculating about the original intention. If I were, as I have now been, asked to rationalize its ongoing existence, it would be to offer that societies, by definition, represent organizations designed to address societal needs, societal objectives. Asking that or, in this case, requiring that one of those minimum number of directors actually be resident, within that society, strikes me as something defensible at least.

[D. Horne in the chair.]

Section 40 approved.

On section 41.

C. James: A question around this section — section 41. This talks about the "majority of the directors of a society must not receive or be entitled to receive remuneration from the society under contracts of employment or contracts for services…." But it still allows, in this section, for directors to actually be employees or to be contracted and to receive remuneration.

I wondered if the minister could talk a little bit about conflict, about concerns in this section. I think there are a lot of societies that are very concerned about people playing dual roles — both a staff person as well as a director on the society — and this section, although it limits it, appears to legitimize the opportunity for people to be able to do that in societies.

I wondered if the minister could both talk about the checks and balances but also any concerns that may have been raised during the consultation on this section.

[1605]

Hon. M. de Jong: This is one of those areas of the act that did engage some submissions and attention and where, again, we've tried to accommodate a fairly broad range of opinions.

I can tell the member and the committee that under the Business Corporations Act there are no similar restrictions on board composition. The federal, Ontario and Saskatchewan not-for-profit statutes restrict board composition by prohibiting more than one-third of the board from being employees, so there is similarity there.

I think the member may be aware that the B.C. Law Institute recommended against any director being affiliated or an employee or a contractor. I think there is a certain attraction to the purity of that position. We got feedback from societies and agencies who felt that was
[ Page 7514 ]
going to inhibit, and very negatively inhibit, their ability to operate and their ability to engage the people they wanted to, both as an employee and to draw on that expertise for directorial guidance.

This represents a compromise. This says that in circumstances where…. You need to have a majority of the board, who, after people who are…. Let's take the budget — where those employees have a clear interest in a certain budget. After they have taken the appropriate step and absented themselves from those discussions, you still have to have the majority of the board who can — in a dispassionate way, free from any self-interest — have the discussion. So we have stopped short of the purity advocated by the B.C. Law Institute and arrived, again, in this case, at a compromise.

C. James: I appreciate the minister's answer. I think this may be one of the ones, again, that we'll want to keep track of and just see how the implementation occurs. I think if we go back to the earlier questions around one member incorporating as a society and three directors, the challenge that that could create if two of those people were working for the society…. That could be a real issue when you're talking about conflict of interest and the opportunity for who gets to make a decision about salaries or who gets to make a decision about the budget.

That's where I could see some issues occurring. I appreciate the minister's comments that things have changed and that some people would want the opportunity to be able to have some of their directors as employees, but I think that may continue to be a challenge, so one to watch, I believe.

Hon. M. de Jong: I agree with the wisdom of maintaining a watch on this. In the example the member gave, the three-directors example, under this provision only one of those directors would be entitled to be an employee or a contractor.

L. Krog: I very much appreciate the hard work of the B.C. Law Institute and Jim Emmerton and his team. I mentioned that in remarks earlier with respect to this bill. I think the wisdom of their approach, with great respect to what the minister has had to say, is indeed the wisdom that should be followed. Pardon me for putting it so bluntly. It's "you're either a virgin, or you're not."

Candidly, the concept that you would have, potentially, the managing director, if you will, the executive director of a society, sitting on the board is just so contrary to common sense and to practice. I'm not aware now of any major boards of societies in British Columbia where the executive director, for instance — and presumably that's the kind of person you're going to want to have on the board — sits on the board of the society.

[1610]

I'm not positive, but indeed the existing act may prohibit it. But certainly, common practices prohibit it, and that's not the way most societies operate.

I wonder if the minister can point to an example that exists in the existing act, where an employee or someone who is receiving significant remuneration or other services, just as the wording of the section is, is actually sitting on the board of a society.

Hon. M. de Jong: I, as always, appreciate the certainty of the member's convictions around this. There are no restrictions that I'm aware of in the existing legislation, so this is a step towards that purity, if you will.

I'm not going to try and describe or offer up how many societies might be captured, but I will say this. We're talking about employees, and we're talking about contractual relationships. Again, this comes back to something the member's colleague and I were discussing. Are there small societies out there that engage in community-based activity that have a director to whom they contract with at a much-reduced price for certain services? My guess is there are.

To create an absolute ban…. Whilst, undoubtedly, that would make sense for some of the larger, more complex organizations, the feedback we heard tended to come from those smaller agencies who were saying: "You may find that there are some unintended consequences."

I get and endorse 100 percent the wisdom of the member's submission around basic governance. The challenge in going from where we are to there is that along the way we may discover that a lot of small, unsophisticated organizations that are just trying to do good work get caught in the transition.

Now, I am reminded again that there is nothing to prevent a society from, in addition to the requirements here, including bylaw provisions that establish the purity that the member — and I, for that matter — might favour, but they would need to take that step beyond what is in the act.

L. Krog: The minister will be familiar with the name of Peter Ramsay, Q.C. — Ramsay Lampman Rhodes, Nanaimo, the largest law firm in central Vancouver Island. Peter, I think, could legitimately take credit for a great deal of the work done on the Wills, Estates and Succession Act. The wills variation aspects of that are particularly an area of his expertise. He's certainly made his wisdom available to government, and I remember him saying years ago around the issue of boards: "We lay the tracks, but we don't play with the trains."

I must say, in my community experience — and I'm not suggesting for a moment it's any greater than any other member's of this chamber — I have never run across a community board where you sat on the board of directors and got paid as an employee in any way, shape or form with the community board. And I'm not talking about massive boards. Although Mid Island Co-op in its
[ Page 7515 ]
heyday…. When I was on it — and we had, I think, $50 million a year in sales and 100-plus employees — it never would have crossed our minds.

No reasonable lawyer or counsel that I am aware of would ever advise a society to have someone on the board who is an employee. It is just the most basic and obvious conflict. If a lawyer…. I mean, the rules of the Law Society would prevent this in a heartbeat if it was anything related to that. The concept that we would allow this simply because some other provinces have engaged in it, I think, is patently ridiculous.

If there's a member in this chamber who can stand up in this debate today and tell me of a board they're aware of in this province where an employee or someone receiving remuneration actually sits on the board of directors, then I will sit down and be quiet in a heartbeat. But I suspect that there's not a person in this chamber today who can tell me that, and I don't see any of the members twitching in their seats to jump up and tell me to the contrary.

[1615]

What possible public value, what philosophical basis is there, for the concept that you're going to allow societies — particularly societies that may be small, where it's even more important that you have an independent board, where the relationship between the board and their only employee is so much closer and more significant than a larger society…?

What possible public interest and what philosophical basis is there for the concept that you would allow societies to do this? Particularly when it appears that with the scrutiny that's provided for in the act, which the minister has talked about — those sections which we'll come to….

Yes, there will be reporting requirements, but the fact that it's out in the open doesn't make it any less of a conflict, with great respect. And it doesn't mean any less that boards, which often switch and change their membership because of various difficulties, will be in any less of a vulnerable position than the executive director, for instance, the manager of the office, whatever, who will be sitting on the board and instinctively and perhaps even unconsciously promoting their own interests.

I'd like to hear from the minister a little more on this. I appreciate he treats this as: "You know, we'll monitor this, and this is something to look at." But this wasn't recommended by the very people who prepared this legislation, an institute that is without blemish, that has significant public support and a high reputation in the legal community, the B.C. Law Institute, just as, indeed, the minister wisely listened to their recommendations around the proposed section 99, which wasn't recommended by the B.C. Law Institute.

I'd like to hear a little more from the minister as to why we're including this section. It sends a message to the public around conflict of interest. When every member of this chamber is covered by significant conflict-of-interest guidelines, where public servants, where all kinds of people in every walk of public life are covered by guidelines and rules and law around the issue of conflict of interest, this legislation is going in exactly the opposite direction for the 27,000 societies that I understand exist in British Columbia today.

Hon. M. de Jong: The member, with gusto and passion, has articulated his concern, and it is, conceptually, one that I am alive to. But let me draw a different scenario, because the member has challenged members of the committee to stand and describe the situation. He has chosen to zero in on but one aspect of this section. The section speaks to other potential scenarios as well.

The organization that exists in order to build a trail network through a particular community has existed for a period of time and has a board of directors. One of those directors is in the aggregate business and in a position, at a fraction of the cost that would otherwise accrue to the society, to provide that product.

Now, the question is this. Do you force that society to…? The individual may have been a member of the society and felt passionate about that local endeavour for years, for decades. You could say: "Too bad." You do what good governance dictates and go to an unaffiliated third party and pay market value to acquire that good or service, or you obligate that director, because of that instance, to resign. That is purity. And that is the kind of purity that societies reacted to when the draft was presented.

I hope the member appreciates. I am not challenging his description of what represents ideal governance. But I am also….

[1620]

This piece of legislation is the product of an attempt to take into account the very wide diversity that exists amongst those 27,000 societies and the fact that there are circumstances where it may be legitimate to capitalize on the expertise, the experience of a director.

The alternative is clear — simply to say no. We have chosen a different path. I understand that the member disagrees with that. I understand that he, as I do, has great regard for some of the individuals that have assisted greatly in crafting this legislation. That's why we did the white paper. That's why we put it out there and solicited views and responses.

I understand that the member's view was that in this case we should ignore — absolutely ignore — the views of those societies that articulated a view and opt for the purity of what has been advocated by the B.C. Law Institute.

We have chosen not to do so and, in embedding a restriction that doesn't exist today, opted for a compromise that hopefully will afford the protection that we're seeking and, coupled with steps that societies themselves can take by their bylaws, avoid circumstances or — as the member said; I'll use his term — avoid basic conflicts
[ Page 7516 ]
that have arisen in the past and, hopefully, won't arise as regularly in the future.

L. Krog: I appreciate the minister's example and the minister's response and comments. But I come back to my point that I'm trying to make. Even now without the prohibition in place, I'm not conscious of — and again, if the members of the committee are, let them stand up and say so — any board that I'm aware of, of a society, that has its employee or employees, or anyone making money off it or from it, sitting on the board of directors. It's just absolutely basic. It is absolutely basic.

No reasonable lawyer is going to advise in a situation any society where they sit on the board: "Oh, let's have the executive director or the manager of programs sit on the society's board." It just doesn't happen in practice.

By passing this section, the message from government is very simply that it is legitimate to do so because it's not prohibited. The section says: "A majority of the directors of a society must not receive or be entitled to receive remuneration from the society under contracts of employment or contracts for services, other than remuneration for being a director." A majority. The message is that it must be okay, then, to have some people do that.

The minister's response is: "Oh well, societies can pass bylaws and do that — prohibit it and stop the practice." But the message is still the same to the general public — that it is acceptable. Frankly, I haven't heard, certainly, a convincing argument from the minister or a public outcry in my community, I can assure the minister, about allowing persons to sit in this obviously conflicted role.

With great respect to the minister, I think this is a situation where the advice of the B.C. Law Institute was good advice. It should have been taken. This is not going to enhance the operation of societies who already, in practice, don't do this and who will now be encouraged, quite frankly, I think, by this provision to engage in this practice, which is in violation of common sense.

I'm not going to repeat myself any further, but I cannot and will not support this section of the bill. It is simply bad public policy. It will not enhance the operation of societies, and it sends the absolutely incorrect and wrong message to people who want to engage in community activities for the benefit of the community as a whole.

Section 41 approved on division.

Sections 42 and 43 approved.

On section 44.

[1625]

C. James: To the minister, we had some of this discussion in second reading around a process that's going to be looked at for the age of members, the age of directors of a society. The minister mentioned that he'd hoped that there was going to be a future discussion on that before it was finalized. I wonder if the minister could talk a little bit about that process for age of directors.

Hon. M. de Jong: I'm actually glad we stopped here briefly to maybe articulate and exchange views on the wisdom of this or ideas around how it might have some life breathed into it. Again, I want to pay tribute to the younger folks who took advantage of the opportunity to provide submissions and argue for the possibility of creating an exception to the general rule.

The general rule is one that makes sense. It is that with the rights come responsibilities and that there is still magic in the age of majority. The Business Corporations Act makes that clear. Other statutes do as well. Yet there are clearly circumstances in which people below the age of 18 have more than a passing interest. In some instances, they are asked to contribute financially to societies, student organizations, and are obliged to do so, and the right for those societies to claim that contribution has been upheld. So what to do?

There are those circumstances where the activities of the society are by definition geared towards advancing the interests of young people, and then there are other organizations that are philanthropic in nature that — I think the member and I agree — you would want to encourage young people to be involved. That is what gave rise to the notion of creating a regulatory power to create a circumstance in which someone under the age of 18 could sit as a director.

I should say to the member that I don't have a draft copy of what the regulation would look like. But here are some thoughts, and then the member can disabuse me of the thoughts here in the committee.

I am thinking about young people aged 16 and 17. I'm not actually contemplating an open-ended provision. It would be specifically for younger people aged 16 and 17. I also am hesitant about allowing a circumstance in which a majority of the directors on a society would be below the age of majority. Those are two biases, if you will, that I acknowledge I am taking into the process of developing a regulation.

C. James: I would certainly agree with those biases that the minister has mentioned. When it comes to legalities around directors and voting and budgets, etc., I think there is some rationale around having a legal age there. But I think the opportunity for young people who are keen and eager and want to get involved in societies….

After all, one of the great strengths of not-for-profits and societies is that they come in all shapes and sizes. They cover all issues. I think we all want to encourage young people to get involved and engaged in their community. What better way to start their involvement than with a not-for-profit society as a member but to have an opportunity, if they're responsible and they want that re-
[ Page 7517 ]
sponsibility, to be able to sit as a director?

To me, I would certainly encourage the opportunity for those discussions. I would encourage the minister to have that discussion for regulations. I think looking at limitations around the numbers on a board would be something perfectly reasonable, but I think we want to encourage, not discourage, those young people who want to be involved.

V. Huntington: I certainly agree with the comments of my colleague. But I am also interested in how the government intends to account for the general legal liabilities that a director normally has and how they expect to handle those directors who are below the age of majority.

[1630]

Hon. M. de Jong: The member has correctly identified a question that I put as well. I am told that through the advent and evolution of jurisprudence, a director, notwithstanding the fact that they are below the age of majority, may, in fact, attract liability.

I won't go beyond that and offer a legal dissertation on the case law that supports that proposition, but there will be responsibilities assumed by a 16- or 17-year-old that accepts a posting as a director.

V. Huntington: Without, then, going into the case law, would those responsibilities devolve onto a family, to parents, or are they just limited to the director who is not of age, specifically?

Hon. M. de Jong: I'm hesitant to try and offer a definitive position. I think it's a valid point and something that a parent or parents would want to have a definitive answer to in discussing whether or not their child accepted that opportunity to serve as a director.

Sections 44 to 46 inclusive approved.

On section 47.

C. James: I just wonder if the minister could explain this section, because it appears to invalidate all of the other sections in the legislation, and I'm sure there's a rationale around it. But it says: "(1) An act of a director is not invalid merely because of a defect in the director's designation, election or appointment…(2) An act of a society is not invalid merely because (a) fewer than the required number of directors…elected or appointed.…or (c) a majority of the directors, contrary to section 41…receive remuneration…."

It just seems to, basically, give an out to the society. As I said, I'm sure that's not the intent, but I wonder if the minister could just explain the intent of this section.

Hon. M. de Jong: A three-part response to the member's question. The first thing I can tell the member is that it is a new provision. It is based on section 143 of the Business Corporation Act so that corporate law knows this remedy.

We talked earlier in a slightly different context about protection to third parties. That is equally applicable here. In a circumstance where, for example, approval to enter into a contract involved a director who, it was subsequently determined, had not been properly appointed, that would not be grounds to declare the contract void, to the detriment of the third party.

Also, protection for the society itself, were a third party to allege, "No, no. I am not obligated to follow through"— on whatever — "because one of your directors acted beyond their capacity…." Actually, we were just talking about conflict. The society itself would have protection from an argument that says that the provisions you are relying upon are void, or the agreement you are relying upon is void, because one of your directors acted outside of their authority or was not duly constituted.

It's third-party protection, but it's also protection for the society.

[1635]

Sections 47 to 57 inclusive approved.

On section 58.

C. James: This talks about contracts. It mentions penalty here. This does say: "….the court may, on the application of the society or another person whom the court considers to be an appropriate person to make an application…to do one…of the following…." And then it mentions a number of pieces.

I wonder if the minister could tell me whom the court would consider to be an appropriate person, why that wording is in there. I think people understand "on the application of the society." But another person "whom the court considers to be an appropriate person" — who might that be?

Hon. M. de Jong: Two things. The short answer is…. There are always exceptions, but the common example would be a member of the society — in circumstances where a member went: "Wait a minute. That whole conflict of interest discussion we had a few moments ago. Something terrible has gone on here." So that would be another person whom the court considered appropriate.

I'm also reminded that the section pretty much replicates what is in the Society Act now. This, unlike some of the other sections we've been dealing with, does not represent a substantially new provision.

Sections 58 to 68 inclusive approved.

On section 69.

K. Corrigan: I do have some concerns about section 69. The reason I am raising these concerns is that there are concerns that have been raised by several graduate societies of individual universities as well as by the Alliance of B.C. Students with regard to section 69.

Section 69 talks about the termination of membership and provides that a member's "membership in a society terminates when (a) the member's term of membership, if any, expires, (b) the membership terminates in accordance with the bylaws, (c) the member resigns…." I think subsection (c) is the one that is of particular concern to many students.

[1640]

I mentioned the Alliance of B.C. Students. That includes the Northern Undergraduate Student Society, the Capilano Students Union. They represent many organizations. Certainly, I know the Graduate Student Society at Simon Fraser University has expressed concerns, as well as the student society that represents undergraduates at Simon Fraser University. What they are concerned about is whether or not…. I guess my first question to the minister is: does this section allow students to terminate their membership in a student society?

Hon. M. de Jong: I hope the member and the committee will forgive me if I attempt to anticipate where I think the line of questioning is going. It did come up in the course of the consultation. It came up at the large consultation meeting we had.

I am advised as follows. The act we are dealing with here is a statute of general application with respect to statutes. I am further advised that specific post-secondary acts, specific acts dealing with post-secondary institutions — the University Act, for example — provide specifically for the mandatory collection of fees from students and the remission of those fees to designated student societies.

The reason I've answered the question in that way is because the member's question related to the ability to resign from the student union or student society. I wouldn't presume to speak for societies, but I think, from what I've heard, the essence of the concern is less about membership in the society than having the ability to collect the fees that relate to that membership. The information that I have been provided with indicates that the ability to collect those fees is not compromised by the section or the act that we're dealing with.

K. Corrigan: The minister has correctly anticipated the area of concern. But I would be concerned, and I know these student societies are concerned, not only about the collection of fees — that is important, and I'll ask some more questions about that — but mandatory membership as well.

Maybe I'll just quote from the Graduate Student Society at Simon Fraser University. A letter dated October 14, 2014, a submission signed by Devon Cass, the external relations officer for the Graduate Student Society at Simon Fraser, said: "Mandatory membership, including fees, is fundamental to the successful operation of our Graduate Student Society. We would be unable to resource our staff and activities, meet overhead costs and function in our current capacity if not for mandatory membership and related levies."

That largely relates to fees. But I think there is also — I certainly understand from the information I've received — a real concern that if the membership itself is not mandatory, the ability to win, I guess — I'm paraphrasing — the hearts and minds of the students and to feel that they are representing those students could be lost.

The Graduate Student Society at Simon Fraser says section 66 — it was then section 66 in the paper; now it's 69 in the bill — "draws alarming parallels to the higher education bill of 2005 in Australia, which failed to deliver its promise of self-sustaining student organizations able to survive off voluntary membership, investments and trading operations."

I do want to stick with the first question then. Does section 69 mean that students in student societies in post-secondary institutions in British Columbia…? Will students therefore be able to withdraw from those student societies?

[1645]

Hon. M. de Jong: If I have a moment, and I probably won't, I'll grab the University Act from behind me to ascertain more authoritatively whether or not that act…. The advice I have authorizes the mandatory collection of fees. I'm not certain that it requires mandatory membership, but we would look to that legislation for guidance on this matter.

The general societal provisions contained within this act are going to allow for resignation from a society. I'm happy to pull the University Act off the shelf and determine the specific wording of the section relating to mandatory payment of fees versus mandatory membership. That is where we will need to look to answer the question that the member has asked.

The Chair: The member for Powell River–Sunshine Coast seeks leave to make an introduction, if leave be granted.

Leave granted.

The Chair: Proceed.

Introductions by Members

N. Simons: It's a real pleasure of mine to be able to introduce some folks visiting from California. I heard some beautiful music from the rotunda this afternoon. It
[ Page 7519 ]
was the Bellflower High School Vocal Ensemble who are visiting on a tour of British Columbia and Washington. I'd like to introduce them: Director Carolyn Kelley — thank you for being here — Jan Hopp, assistant principal of the high school; Lin Thompson, the social studies teacher. The choir members are Elizabeth Afu, Amanda Castro, Alyssa Duran, Cristian Luevano, Ian Backer, Lashea Childs, Christian Gatica, Ariel Thompson, Floyd Bell, Stephanie Deslate, Kayla LeBaron and Elden Villarin.

Will the House please join me in welcoming them to British Columbia.

Debate Continued

K. Corrigan: I just want to be clear. The way it would work with graduate student societies — and I'm not sure how their boards are…. I haven't seen all the bylaws, of course. But student membership is now mandatory. If the membership was mandatory in the bylaws of a student society or graduate student society, then I would presume that that membership would continue to be mandatory until such time as they chose to resign. Is that correct?

Hon. M. de Jong: Sorry, I'm not trying to be argumentative here. I'm not sure that I'm in a position to offer an authoritative position. When I say speculative, the hon. member is referring to institutions, and I'm not certain to what extent they may have specific provisions that a student agrees upon when they enter that institution. I'm trying to find it on the fly here in the University Act. I haven't been able to so far.

The member will know, as counsel, that in terms of statutory interpretation, where there are specific provisions versus more general provisions of the sort that we're dealing with here, the specific will apply. I'm just — (a) I don't want to provide incorrect information, and (b) I'm just not in a position to offer an authoritative view on that.

[1650]

K. Corrigan: The Graduate Student Society at Simon Fraser University, as well as the student society of the university, as well as the Alliance of B.C. Students and its member organizations made submissions.

Whether or not membership is mandatory — and then the separate but related question of whether or not student fees would continue to be mandatory — is of crucial concern to those organizations. Those organizations talk, for example, about some of the fundraising that has gone on which would be decimated and would be impossible if there was not mandatory, certainly, financing or fees.

I'm sorry, but I find it quite incredible that the minister has not thoroughly considered what the implications are for student societies and is not ready to answer that right now, particularly considering that this has been brought to the minister's attention.

I'll give you some examples. This presentation, this submission that was made, says:

"In 2008, through a democratically approved student society fee, the Alma Mater Society of UBC made the largest single donation to UBC in the history of the institution: $85 million towards the building of a new student union building….

"In 2009 Kwantlen Polytechnic University voted to establish a student society fee to fund the construction of a new $15-million student union building. Millions of dollars have already been raised for this project."

It goes on to talk about how Simon Fraser University has voted to raise $65 million through a student society and the University of Victoria students voted to raise over $2 million through a student union fee.

We are talking millions of dollars, and we are talking something that the universities and the students rely on. I find it very disconcerting to hear the minister say that he doesn't know what the bylaws are or what the implications are.

I think students across this province should be very concerned. It will fundamentally change the ability of student unions to do the good things — we're talking about U-Passes; we're talking about lots of different things — if, in fact, the result of this change in the legislation is to mean (1) that memberships can be terminated, which has all sorts of implications all by itself, but (2) that possibly student societies are not going to have the ability to have mandatory funds raised through votes. All of these things are done through votes. That could imperil hundreds of millions of dollars.

I guess I want to go back to section 69 specifically. I just want to clarify, then. The minister is confirming through the earlier answer that membership in a student society, whether or not it is mandatory at the beginning, would end up being something that would not be mandatory. The student could resign from the membership under the operations of section 69(1)(c).

Hon. M. de Jong: I'm wondering if in raising the issue the member is also asking me to render an opinion with respect to section 27.1 of the University Act.

K. Corrigan: I don't have section 27.1 of the University Act in front of me. If the minister could let me know what that section says, if it's what the minister was referring to earlier. If the minister is talking about the mandatory fees, not at this point.

What I'm asking about right now is whether or not membership will be voluntary or mandatory — period. Apart from the fundraising, will membership be voluntarily or mandatory under the operation of this new section?

Hon. M. de Jong: The member just spent some time alerting the committee to her concern around the funding implications that may exist for a student society.

[1655]

I hope, by virtue of some of the other changes that we have just discussed in this House, she will accept that the
[ Page 7520 ]
government and I took very seriously the interests of students and their societies, to the extent that we changed provisions of the white paper. The suggestion that somehow we have been, and I have been, blind or indifferent to this issue I reject. There are provisions within the University Act. The member has just admonished me for, as she characterized it, somehow being unprepared or indifferent to the issue.

The issue, as I understand it, is this. The issue that was brought to us during an extensive consultation period was to ensure that new provisions of the Societies Act do not interrupt or adversely impact the right of student societies to collect fees. They do rely on the levying of fees to students attending all post-secondary institutions. I think that generally is the case. The information I have been provided with, the information I have conveyed to the member, the information I have conveyed to the committee is that that is so — that the provisions of the Societies Act do not interfere with the right to collect those fees.

Now, the provisions contained within the act with respect to membership in a society and the ability to resign from a society are clear. How they would apply with respect to the provisions, and combined with the provisions of the University Act, is not something I am in a position to offer an extensive legal opinion on, except to say that the information we have and are relying upon is that the financial position of a student society, insofar as the University Act provides the specific authority to render and collect fees, is not adversely impacted by the provisions we are dealing with.

K. Corrigan: I know that a part of the concern of the student societies was certainly the finances. Certainly, that would be the major concern that was considered in the submission that was made by the Alliance of B.C. Students on October 15, 2014, in its commentary on the Societies Act White Paper.

I'm clear from the submissions that I have — for example, from the Simon Fraser Student Society — that while that is one of the implications they're particularly concerned about, they are also concerned, and I am concerned, about the implications for the future of student societies if students can, in fact, resign from the societies, whether or not the fundraising can happen. That's certainly clear from the quotations that I received from the Simon Fraser Student Society.

Finally, on this section I want it to be clear. What the minister is saying, then, is that under section 69, students will have the right to resign, in spite of a bylaw at a student society. This would supersede a bylaw at a university society that says you have to be a member of the society. Is that correct?

Hon. M. de Jong: No.

K. Corrigan: Okay, so then I misinterpreted what the minister has said. Just for final clarity, then, if the authority for having a society at the university says that student membership is mandatory, that membership will continue to be mandatory, despite subsection (c) of the act. Is that correct?

[1700]

Hon. M. de Jong: What I am saying is that there are statutory provisions which ensure that a student society is in a position to collect fees from students whether they are a member of that society or not. And those provisions continue.

K. Corrigan: That is not the answer that I just got. What I want to know is at this point…. I understand what the minister has just said. Finally, what I would like to understand is if membership — not collection of fees — in a student society is mandatory, then once the provisions of this act come into being, will the membership in that student society continue to be mandatory? I'm not talking about the fees. I'm talking about the membership.

Hon. M. de Jong: I'm not aware of any statute that makes membership mandatory.

K. Corrigan: Well, the students — and I'm sorry that I haven't looked at the act — at Simon Fraser University say that membership is mandatory. Is the minister now saying that membership in student societies is not mandatory at this point?

Hon. M. de Jong: I will repeat what I said. I'm not aware of any statute that makes membership in a society of the sort the member has described mandatory.

K. Corrigan: I don't know why I get the sense that the minister is trying to not answer the question that I want answered. But I will try one more time.

If there is a bylaw or some governing piece of policy or document or practice or legislation that covers universities that provides that membership in a student society is mandatory, would this piece of legislation, section 69(1)(c), overrule, supersede that provision, if it exists? There may not be an act, but there is something, and whatever that is — bylaw or whatever — if that exists, would section 69(1)(c) supersede that provision?

Hon. M. de Jong: The member has just asked me to render a legal opinion on something that she describes as "if there was this" and in very general terms "if there was that." I'm sorry that the member didn't read the University Act before coming in to participate in this debate. But I have rendered the honest responses that I am in a position to provide and will repeat the answer if necessary.

K. Corrigan: I know that we have to continue on with this act, so I am not going to continue on any longer. But I would have thought that the minister, knowing this was an important question and an important issue…. The minister may think it just has to do with money. Money is certainly a part of it. But the issue of mandatory membership is also important, and that was clear from the correspondence that I received.

I would have thought that if the minister is so prepared and has read the acts and has three staff sitting there with him, the minister would have been able to answer that question. But apparently that is not possible, and I will leave it at that.

Sections 69 to 90 inclusive approved.

On section 91.

C. James: Just a straightforward question around whether this is a new section — I'm guessing it is — around amalgamating with another corporation to form a corporation in a jurisdiction other than British Columbia. There is discussion around links across Canada that societies may have or corporations may have with each other, and this seems restrictive. So I just wanted the rationale on section 91 around amalgamation.

[1705]

Hon. M. de Jong: Hon. Chair, I apologize. I was on the wrong section, which would have made for an interesting answer.

Essentially, a provision…. It's a new provision. It doesn't currently exist. It is designed to ensure that there are public protections in place that, through an amalgamation with an entity governed by statutory provisions outside of B.C., wouldn't be in a position…. It wouldn't assume the ability or acquire the ability to, for example, distribute assets in a way not authorized or contemplated by B.C. legislation.

Sections 91 to 101 inclusive approved.

On section 102.

C. James: This section is the new section to replace the section that was removed, as we talked about at the opening of our discussion on this bill — the rationale for section 99. Again, I appreciate that section being gone. I wonder if the minister could talk about the changes, what the rationale is for section 99 being removed and, with this section 102, what the complaint process is based on to replace section 99.

Hon. M. de Jong: Let me deal firstly, if I may, with the provision that is not here, section 99. I don't, also, want to leave the impression or characterize section 102 as a replacement for that. They deal with separate circumstances. I may take a moment to refresh my memory about section 102 specifically.

In the case of section 99, though — we talked a little bit about this in second reading — it was a specific provision. It drew on some of the evolving approaches to corporate governance. But it did create and use language that obviously attracted the attention of the societal community. The motivation for providing an additional level of scrutiny and accountability, I would say, is what motivated its inclusion in the white paper in the first place.

[1710]

Why is it gone? I think, at the end of the day, two reasons account for that: the articulation of the concern and the nervousness and the apprehension weighed against the benefit of the section in the first place.

There are 27,000 societies. The vast majority of them move along and do good things, good societal purposes. Are there problems? Yes, there are. But at a certain point I think you have to weigh the anxiety that one particular provision was causing and whether or not, at the end of the day, I or the government shared the concern around the potential for misuse or abuse. In my view, it became less important than the measure of anxiety it was causing in the first place.

The objective, through the years that people have toiled on this project, was to create an updated legal instrument that would assist and guide and ease the burden, to the extent that we could, for not-for-profit agencies, societies. That particular provision seemed to have the opposite effect and seemed to colour the overall regard and colour the overall tenor of the engagement between societies and government.

At the end of the day, the decision one made, I made, was that that was causing more distress than any benefit that was going to accrue from its inclusion. I can advise the member and the committee that the assessment or the calculation or the consideration, the decision, at the end of the day, was very much influenced by the result — the nature of the submissions.

I will say this. In the opportunities I had for face-to-face discussions, the submissions from people were respectful. I think they were genuine. It struck me that the positive relationship that both assisted in the development of this statutory instrument and will be necessary particularly through the transitional period was being compromised by a single provision that, as defensible as it might have been, was compromising that overall objective. That, at the end of the day, is what gave rise to the decision to delete it.

K. Corrigan: This section also concerned many of the students. I think it would be helpful, perhaps, if I just read from the letter of October 14, 2014, to the minister about their concerns about the white paper. What it says about this section…. It was section 98 in the white paper.

They say: "In addition, we worry that the threats posed by section 66," which is renumbered as the section we were talking about previously, "are compounded by section 98," which is now 102, "which opens student societies to vexatious litigation. This could be the case, for instance, if mandatory memberships and fees or other activities of the society were considered" — and I'm quoting the legislation now within their letter — 'oppressive to one or more interested persons, including the applicant, or unfairly prejudicial to one or more interested persons, including the applicant.'"

Now, I understand there was a change made to this section so that it has to be a member of a society that would apply to a court. I've talked to the Graduate Student Society at Simon Fraser. They are still concerned because they think that the membership, obviously, of a student society of a university — at least, up until now — is very large and that this section could make it very difficult.

[1715]

The letter says: "Members may not always find consensus, and we believe that the diversity of the society across 37 academic programs at three different campuses is not adequately protected in section 98."

I'm wondering if the minister could respond to the concerns that I've raised now on behalf of the students with regard to this section.

Hon. M. de Jong: To be specific, I am not particularly sympathetic. The argument seems to be "we want mandatory membership, but we don't want a general remedial provision that provides members with basic review rights."

There is still a test here. The member, in fairness to her, has identified a change that was made. But you can't, on the one hand, say "I want mandatory membership" and on the other hand say: "But I don't want those members to have basic rights for which there is a test." So I guess the short answer is: I'm not particularly sympathetic.

K. Corrigan: The minister has already said that membership is probably not going to be mandatory at all anymore. We couldn't get an answer to that particular question.

This raises a higher standard. Standards are fine, but the students are very concerned that this could be used frivolously. That's the word. There could be vexatious litigation which they may not be in a position to oppose.

So I am simply reflecting a concern that they have, and I think it is a legitimate concern that they have expressed — that they as a society that is representing the students…. There is a diversity of interests, and there could be vexatious litigation. It's very subjective what is oppressive, getting tied up in court. Perhaps if there is a particular group at the campus that has very strong views with regard to any number of areas…. And, of course, student societies and universities are ripe with discussion and debate and so on, which is a good thing, but to take that to the courts is another thing.

I'm not going to ask a question again but simply reflect the great concern that students do have about the possible use — and the fact that the minister changed the legislation and recognized that there could be oppressive types of legal cases. At least, I think…. You know, there was discussion about SLAPP cases. The fact that the minister recognized that there could be abuse by others, certainly, I would say, almost implies some understanding that there could be abusive lawsuits brought or difficult lawsuits brought under this particular section.

Sections 102 to 169 inclusive approved.

On section 170.

C. James: In section 170, it's just a question. It speaks to extraprovincial non-share corporations, and it talks about requirements for those corporations. It says that the EPNS corporation must have an attorney in the head office if the corporation is not in B.C., but the society only "may have" an attorney if the corporation is within B.C. So there's a "may" and a "shall." I just wondered why those requirements are different.

[1720]

Hon. M. de Jong: The objective is to ensure that there's a local presence or domestic presence for the purpose of serving documents, and I believe this section replicates an existing section 77 of the Society Act.

Sections 170 to 190 inclusive approved.

On section 191.

C. James: It think because this is a change in the act, and we talked about it earlier in definitions, I wonder if the minister wants to just take a minute to talk about the distinction in this act between member-funded societies and publicly funded societies. I think it is an important distinction that's brought forward in this act. This talks about the constitution and the fact that societies will have to declare themselves. I think it's just worth hearing the rationale around the two distinctions.

Hon. M. de Jong: Thanks to the member for the opportunity to enunciate the distinction here.

The first thing I would say is that, with respect to a member-funded society, that is a distinction that is not imposed on any society. It is self-declaratory, and it's the constitution for that society from which the designation derives. Member-funded societies are, I think, essentially equivalent to societies without any, if I can say this, charitable purpose referenced in the sections 74 and 134 of the current act.

The approach here, and hopefully we're successful, is intended to alleviate the confusion that presently exists about what constitutes a charitable purpose. A society that receives government funding or public donations above the threshold that we were discussing earlier, which has not yet been set, is precluded from being a member-funded society, as is a society that receives taxes or other revenue that government collects as its agent.

As well, I should point out that certain types of society — registered charities and qualified donees under the federal Income Tax Act, student societies and hospital societies — are not permitted under the provisions to be member-funded societies. There's a structural answer to the distinction.

Sections 191 to 288 inclusive approved.

On section 289.

Hon. M. de Jong: The amendment that I am tabling refers, in section 289 — I'll provide it to the member — to sub (a.1), section (i) and (ii). The last line is: "…the articles referred to in subparagraph (ii) of this paragraph take effect under section…." And it's written "267 (b)". The reference to sub (b) is incorrect. The reference should be to section 267 period. If I can table that, and perhaps the hon. member could have a look.

I move:

[SECTION 289, by deleting the text shown as struck out:

289 Section 433 (2) is amended by striking out "and" at the end of paragraph (a) and by adding the following paragraph:

(a.1) in the case of pre-existing reporting company that

(i) is a special Act corporation that has applied to be converted into a company under Division 2 of Part 9, and

(ii) has, under section 266 (2) (b), included in the articles referred to in section 266 (1) (a) (ii) some or all of the Statutory Reporting Company Provisions,

the articles referred to in subparagraph (ii) of this paragraph take effect under section 267 (b), and.]

Amendment approved.

Section 289 as amended approved.

Sections 290 to 363 inclusive approved.

On section 364.

[1725]

K. Corrigan: Section 364 deals with the consequential amendment to the World Trade University Canada Establishment Act. It's a section that says…. The act itself says: "The Business Corporations Act and the Society Act do not apply to the university, except as provided in this Act." And that changes that reference to the Society Act to the Societies Act.

My question for the minister is…. The World Trade University Canada Establishment Act came about because the government, about a decade ago, got very excited about a world trade university and basically got duped and was later embarrassed about the fact that there was a United Nations–related World Trade University that was going to have a campus in British Columbia. This has never happened. There's no building. There is no council. There is no organization. It has never happened.

I'm just wondering. I know that a colleague of mine, the member for Victoria–Swan Lake, brought in a private member's bill in 2008, suggesting that it would probably do this province well to actually simply rescind the World Trade University Canada Establishment Act. He brought in a private member's bill to do that to help us all forget the embarrassment that that whole endeavour was for this government.

I'm wondering why we continue on with this charade when there never was, never will be or never would have been a world trade university. Why do we keep amending? Particularly, I'm interested because the section that's being amended says: "The Business Corporations Act and the Society Act do not apply to the university, except as provided in this Act." And there are no provisions in the act with relation to the Society Act, anyway. I'm wondering if the minister could explain why we continue on with this.

Hon. M. de Jong: Well, the member has expressed, and I'm sure will continue to express, her views about the legislation in question. I think she knows the answer, though, from a technical point of view. To the extent that the legislation remains on the books and makes reference to the act, it is appropriate and necessary to make the change. I shall take her admonishment with respect to the future of that act under advisement.

Sections 364 to 366 inclusive approved.

Title approved.

Hon. M. de Jong: With thanks to all members who participated in the discussion, I move the committee rise and report the bill complete with amendment.

Motion approved.

The committee rose at 5:29 p.m.

The House resumed; Madame Speaker in the chair.

[1730]

Reporting of Bills

BILL 24 — SOCIETIES ACT

Bill 24, Societies Act, reported complete with amendment.

Madame Speaker: When shall the bill be considered as read?

Hon. M. de Jong: By leave now, Madame Speaker.

Leave granted.

Third Reading of Bills

BILL 24 — SOCIETIES ACT

Bill 24, Societies Act, read a third time and passed.

Hon. M. de Jong: Madame Speaker, second reading on Bill 22, Special Wine Store Licence Auction Act.

Second Reading of Bills

BILL 22 — SPECIAL WINE STORE
LICENCE AUCTION ACT

(continued)

D. Eby: This is a very short bill, just 20 sections, and yet there are so many contradictions of the Attorney General's media releases, statements in this House, commitments to industry and promises to the public.

[D. Horne in the chair.]

I read to this House not one, not two, not three but ten different quotations from the Attorney General, from her speeches and answers in this House, promising a level playing field for licence holders. These quotes came not two years ago, not one year ago but as recently as 15 days before this bill was introduced.

Another example of her abandoning her so-called principle of the level playing field through this bill is her abandoning of the one-kilometre rule for the deep-pocketed grocery store chains that can afford to buy the new licences proposed by this bill.

For those who don't know, the one-kilometre rule says you can't move your public or private liquor store within one kilometre of an existing store. All liquor stores are subject to this rule across the province — all liquor stores except for a handful of VQA licences held by wineries, who needed this competitive advantage to break into the very difficult wine market internationally.

It was a level playing field across B.C. except where there's a principled reason to move from that — until this bill. This remarkable contradiction of the so-called level playing field policy up until this bill was introduced is best demonstrated by the fact that the Attorney General sent out a press release that she was holding a fair and square lottery to see who would get to move their licence into a grocery store in the province. Everyone would have an equal chance to participate. As she said, if you had a licence you were in pretty good shape because there would be no more locations.

She said the sleeves of the person drawing the names for the lottery would be rolled up so that there would be no cheating. That was part of the rules that went out in the press release, evidence about how fair this process would be.

I'll read to you from this press release, and the Attorney General, hopefully, can explain to us where it said that she would be issuing new licences with special privileges, not subject to the one-kilometre rule, that could locate, as soon as they were issued and purchased, right beside an existing liquor store. Keep in mind that this fair and square, level playing field licence relocation lottery press release was issued by the Attorney General on February 26, 2015, just 23 days before this bill was introduced, with its very special licences that don't need to follow the one-kilometre rule.

[R. Chouhan in the chair.]

"Liquor stores throughout B.C. will have an opportunity to enter a lottery to determine the queue for relocations, moves to other communities or into grocery stores….

"The lottery system is set up to ensure fairness. Each applicant will be given an equal chance at qualifying to relocate, understanding that the one-kilometre rule will continue to play a large role in the assessment and approval of applications. If more than one store wants to relocate its licence within the same one-kilometre radius, the first applicant chosen is given priority."

The lottery system is set up to ensure fairness — fairness, indeed — except for the completely unfair fact that the Attorney General didn't mention in her media event that she planned to sell, had staff writing legislation to sell, new licences that would be significantly more fair than any other licences held by retail business owners in the province.

[1735]

She excluded from her press release that just 23 days later she would introduce this bill, guaranteeing that these very special wine store licence privileges exempting their holders from the one-kilometre rule would be sold to the richest and the deepest-pocketed grocery store chain owners, and tough luck for everyone else.

Here's the minister in this House, speaking on March 11, 2015, just 15 days before she introduced this bill, promising a level playing field for locating licences inside grocery stores, without a single word that she would be creating new licences that didn't have to respect the one-kilometre buffer rule.

"Let me talk about a few more of the level playing field pieces that we have coming on the first of April. We've got store within a store. In other words, private liquor stores can now move inside grocery stores so that people can do their shopping all at the same time. B.C. wine stores are going to be able to move into grocery stores — again, so that you can buy your B.C. wine with your things that you're taking home to dinner."

Now, this bill makes it clear that there is no level playing field around relocating into a grocery store. One set
[ Page 7525 ]
of licences has to be at least a kilometre away from an existing store. The other set of licences created by this bill can be right next door to an existing store. Not even famous television contractor Mike Holmes could level the playing field renovated by this minister.

To summarize, the licences issued under this bill let the holders of these licences buy their product at a discount on advantageous terms and locate immediately beside an existing small business or public liquor store that doesn't get the same discounted prices or favourable buying terms.

For all of these reasons, the minister's bill is a sad joke for business owners across the province. It is grossly unfair to many family businesses in the grocery world and in the liquor retail world. It will close small business across the province. It hands huge advantages to some of the biggest businesses in B.C. at the expense of some of the smallest. It gives discounts to these big businesses who don't need them while the Attorney General refuses discounts to B.C. restaurants, who have to buy at full retail.

It breaks promises made by the Attorney General to the public and to industry — not once, not twice but dozens of times, and not years ago but a mere 15 days before this bill was introduced. The only apparent motivation for the province issuing these unfair licences is that it's just one more way to bring in some quick cash at the expense of small business in the province.

The number of licences the Attorney General plans on issuing — unknown. She says this edition of licences will be "limited." But there's nothing in this bill that limits the number of licences to anything but the largest number the Attorney General can dream up. These licences could be as limited edition as an upside-down airplane stamp or as limited edition as the McRib sandwich. The term "limited" is meaningless, but the impacts on small B.C. businesses are well known, and the minister is well aware.

I received an e-mail from another small liquor retailer this morning. He wrote to me: "If I could sell my stores today, I would, but no one is sure of the value of their business in this state of chaos. Scary. I'm 46 and now looking at starting over to prepare for retirement."

For all of these reasons, this side of the House will not be supporting the minister's bill. And for all of these reasons, the members on the other side of the House should look themselves in the mirror carefully when they consider what they're doing by passing this very unfair legislation.

N. Simons: It's my privilege to speak to Bill 22 at second reading. I will echo the considered comments of my friend, who has roundly and, I think, forcefully and eloquently stated the reasons for our principled opposition to this bill.

I would prefer to suggest, instead of simply and correctly stating that we'll be vociferously voting against this — if we can stand up vociferously…. I would also suggest to the minister that perhaps an opportunity should be taken to reconsider some of the provisions of this legislation. In fact, perhaps withhold it for now until the proper corrections can be made to a bill which….

[1740]

You know, as a former social worker, I'm sure that the minister has some good intention with this legislation, somewhere. It might be just difficult to find beneath all the words. But the legislation as it stands right now is very problematic. It's problematic for liquor outlets. It's problematic for grocery store owners. It's problematic for wine stores. It's problematic for small businesses throughout this province, rural and urban alike.

I find it remarkable to consider that so much talk has gone into the presentation of liquor reform by this government. Whenever there was something bad in the news, they'd announce something that would make us all get distracted and see something shiny.

I understand that tactic. I understand that effort on government's part to distract people from things that are going to cause them concern, but using liquor legislation and liquor reform as that shiny object seems to fall flat here, because this is nothing that is going to make anybody excited or interested in changing the subject. This in itself is so contrary to what the people of the province were promised over the last two years, I would suggest.

I know that people from all political stripes look at this bill and are searching for where there is fairness. Where is this level playing field? Now, I'm not sure if maybe the minister was referring to a level playing field for the big grocery chains and a level playing field for the independent, smaller grocery chains. That's two level playing fields.

Maybe the minister was talking about…. The minister wants to create two level playing fields, which just happen not to be at the same level. I'm not sure that's how we usually use that kind of terminology — maybe in this House, when we kind of weasel words sometimes just to get around the actual, factual reality of the legislation.

I think when you say a level playing field, it's supposed to mean level. I think what we have is multileveled — a multileveled playing field. Maybe that's what was just missing — a word in the press release: "We're creating a multileveled playing field for people in the liquor industry in British Columbia." Who doesn't like a multilevel playing field? You can watch many sports at once, if we think of it in the literal sense.

This particular legislation is creating hardship. It will create hardship. It probably has created hardship, listening to my colleague, for folks who are now sitting on a licence that is of unknown value. It's unknown value.

You have, suddenly, these grocery stores in rural parts of our province who are going to be subject to an auction, and that auction is likely to include bidding as high as you can for a licence, I'm presuming. That's what an auction sounds like to me. People don't usually go ten, 20, 30,
[ Page 7526 ]
20, ten. They go higher and higher. Those with the deepest pockets, as has been mentioned already, are going to be at a great advantage over those who don't have those same deep pockets.

So there's a level playing field for the people with the deep pockets, and there's a level playing field for those with less-deep pockets. I have to say, I'm doubtful that even this government could construe, or could pull this one out of a hat, without thinking that folks are going to have a problem with it.

We have a situation where the rules that have generally governed liquor licences in our province seem to be almost…. Maybe they're being ripped up. They're certainly being heavily amended and with an incredible impact on the purveyors of goods in this province.

I'm concerned about the fact that there doesn't seem to be any restriction on location. In my communities that I represent, I can see a number of severe conflicts potentially arising from this legislation.

[1745]

Not just conflicts over the fact that people are not going to be able to bid for in-store or wine-on-the-shelf licences, but just the fact that they could be located next to existing government stores and next to existing liquor retail outlets. Who knows? It's possible, I suppose, that even in our rural areas, where there are rural agency stores, there might be some impact there. We don't actually know.

You know, my worry is not that I don't necessarily know. It's that it's clear that the minister doesn't know what the impact of this legislation is going to be. And if the minister actually does know the impact of this legislation, then I'm kind of shocked. I'm kind of shocked that the minister would actually contemplate pursuing this legislation and pushing this legislation through the Legislature if she really did understand the impact.

It's possible, very possible — in fact, may I suggest it's even likely — that not all consequences of this legislation have been thought through. Evidence of that would be in the fact that answers were given two weeks ago to questions about changes in liquor legislation that don't coincide with the reality of this legislation — not just two weeks ago but two months ago and six months ago.

There were quotes from the minister about what the people of the province could expect from legislation. There were hints. There were little bread crumbs spread along the trail that people followed. People did things with their licences. People contemplated purchasing locations. They thought about shelf space in their grocery stores.

For the previous regime which involved a lottery system…. Well, we go from lottery to auction. What happened to good governance, applications, changing of policy that meets the needs of the communities, meets the expectations of communities?

Now, what sometimes inflames the argument is the suggestion that the minister made that there are members of this side of the House who support this kind of legislation. There are elements, obviously, in the legislation, in the changes that the minister has brought about in British Columbia that are beneficial to the people of the province. Let's not pretend that everything that the government always does is always negative.

There are things about the liquor changes that have met with satisfaction from the public and from craft breweries and from distillers and from…. [Applause.]

That was the sound of one hand clapping. [Applause.]

That's the sound of six hands clapping.

I think that the minister's attempt at humour is pleasant, but it is kind of distracting from the fact that really what we're talking about here is legislation that's unsupportable. I think that if any of the backbench members of the Legislature on the government side read this legislation, they would see the failure, really, of the minister to accomplish the goals that she promised the people of the province.

Just the promises that were made. I don't know what…. Maybe I'm misunderstanding the words when the minister says that nobody has to worry. There won't be new licences. The one-kilometre rule will remain. The discounts will be the same for everyone. Maybe when I hear that from the minister, I think she's telling us what she means. Clearly, the minister is saying something she doesn't mean. What is that? How are we supposed to…?

How is anyone supposed to know what the minister means when she changes what she means? She says one thing one day, another thing the next — like that. I don't hear her clapping anymore. I don't hear her smiling. I don't even hear her rolling her eyes.

This is the reality. We've got a situation where….

Interjection.

N. Simons: Yeah, it's possible.

My concern is for constituents. My concern is for those people in my communities who are going to be negatively impacted by this legislation. Whether the minister wants to joke about it or not, I think she has to realize that this is not a good piece of legislation, and it's going to result in problems for our communities.

She can ignore me when she feels like it, and she can listen when she feels like it. That's her prerogative. But when she tells people of this province one thing and does the absolute opposite the next day, I think the rest of the province has to realize we have a problem with this minister.

[1750]

Yesterday my colleague gave her the benefit of the doubt. Yeah, maybe she had nothing to do with writing the legislation. Very, very possible. Maybe she wasn't properly briefed on the legislation. Entirely possible. Maybe she doesn't understand the legislation. Very likely.

Maybe she hasn't contemplated the negative impact
[ Page 7527 ]
on constituents of hers and of mine. That is unfortunate, because it's her duty. It is the minister's duty to reflect the interests of her community, and her community includes all of British Columbia — rural British Columbia, urban British Columbia. You know, it's kind of maddening when a minister thinks that it's a joke that she changes her policy day to day to day.

I don't believe that those who are in the business of selling alcohol are going to be pleased with this minister. I think they've already expressed their concern. I don't understand the intransigence of a minister who says one thing and then presents a bill like this, within two weeks of saying the opposite of what the legislation holds.

I'm troubled by that, because it further brings the process that we're engaged in here into disrepute. To me, sometimes it's not even the content. Sometimes it's just the attitude of government that is so offensive. You know, the government said there would be no new outlets. Oh, except for the new outlets. I don't get that.

Dormant licences. Well, they're going to be woken up. Those are kind of like new. Maybe they're not new. Maybe the minister can get away with saying there are no new licences. They were dormant. Like, how many kids do you have? You don't just talk about the ones that are asleep or the ones that are awake. This is a minister trying to get away, squeeze out from underneath the words she gave us a month ago. It's an explicit contradiction of the minister's previous comments in the media. Say one thing to the people outside, everyone claps. She thinks that that's the way to bring legislation to this chamber.

I don't understand how the minister thinks that an auction is going to be fair. Maybe she has a different definition of "fair." Maybe it's, like, fair for some people and not fair for other people, or a different kind of fair — really extra fair, major fair, super fair and, then, almost fair. I mean that's fair. Maybe that's all fair. The minister probably doesn't want to have to address that, probably needs to read the legislation again to recognize it.

I'm not trying to be insulting, but when she responds in such a dismissive way to legitimate concerns, what are you left with in this place? What are you left with when ministers say one thing one day and another thing the next day? What are you left with when the Minister of Education promises something to the teachers of the province and then, a few months later, decides to completely ignore his ethical statements about talking to teachers, about communicating with teachers?

This is what this minister is doing with the liquor industry. I think the minister should be considering that maybe this is a trend. You know, it's the special wine store licences, exempt from the one-kilometre-radius rule. It's not only that but buying their product at a lower rate and then grocery stores not having to pay the supplier until they've sold.

Everywhere you look, there's a different level. I mean, if I was playing on the minister's level playing field, we would all be like, you know, hurting ourselves pretty badly. I mean, I've played on some unlevel playing fields, by the way, that haven't been properly flattened out. It's not fair. It's not fair for anyone. You're the lucky one with the pothole on your end of the field, or you're the unlucky one with the big huge ant hill next to the goal. That's not a level playing field. I wonder if the minister knows what a level playing field is.

[1755]

Who supports this, Mr. Speaker? Who supports this? I don't know. Clearly, it's a failure of the legislative drafting process. And if not the minister responsible, who's responsible? Like, here we are again, you know, shuffling it off to someone else. Is the minister going to blame someone else for the failure of this legislation? Is the minister going to blame someone else for completely misleading the people of the province? Who's responsible? I think the minister should be accountable for this.

Does the minister agree that she has said one thing and done something completely different? Not just once, not twice — at least six times. And more were mentioned by my colleague from Vancouver–Point Grey.

I mean, it's quite clear to anyone who has a look at this that this is going to be bad for business. Bad management and bad for business — wow, a hallmark of the Liberal Party. Bad for business, bad planning, bad management. Incompetence, perhaps? Maybe. Maybe it's incompetence.

In December of 2014 the government said: "A limited number of new licences will…be made available specifically for the '100 percent B.C. wine on shelves' model." A limited number. But on February 17: "We are not increasing the number of liquor outlets in B.C., so anybody with a licence is in pretty good shape." Maybe "pretty good shape" is one of those things — pretty good shape, good shape, really good shape, excellent shape, pretty good shape, bad shape, no shape. That would be bad.

Maybe this is where we have to figure out that the Attorney General has a different scale, a different thermometer, sort of like maybe metric and Celsius or something. "Pretty good shape" — for me, that means pretty good shape. But "pretty good shape" for her means, like: "Oh, you're about to go under." I don't know. It's hard to tell. We have example after example of using words that we used to know. You know, "fair" — it'll be fair. We're leveling the playing field. Everyone is going to be in pretty good shape. Well, it's unfair. There are a bunch of different level playing fields, and I don't think anyone is going to be in pretty good shape.

There are so many problems in this legislation. This is from Hansard, February 19: "A change that is not coming is the number of liquor outlets." I wonder if "not" was just thrown in, because it's not usually written that way: a change that's not coming. I'll tell you something else that's not coming. Whoa, just remarkable, really.

We have a moratorium until 2022. What's that moratorium for? "Everything else. We weren't talking about that."
[ Page 7528 ]
It's like…. I don't know. I'm thinking there are probably people in this province who felt misled, I would suggest. I wonder if the minister minds that people in this province felt misled by her ministry. I wonder if she has a problem that people listening to her talking were misled. I wonder if she is concerned about the fact that the people in this province, who have a government that's supposed to reflect the needs of the province, were looking out there and going: "Were we just misled? Were we purposely misled? Or were we just misled? Did we not understand it?"

I wonder if the minister thinks about the people who are selling in LRSs or, you know, in grocery stores. I wonder if she wonders if they…? Did she check: "Do you feel misled by what I said two weeks ago, compared to what legislation I tabled?" That would be a good check. I would suggest that any time you want to write a piece of legislation, check with some people to see if it's what you said you were going to do.

And if it isn't…. Oh, a bit of percussion there.

Deputy Speaker: Member, be careful about the equipment in the House. I'm just cautioning you about the equipment in the House.

N. Simons: Thank you, hon. Speaker. I should really have my hearing assistance thing on, but I will be cautious about everything that I do right now just in case I missed what the caution was about. I think it was about hitting my microphone with the paper.

Interjection.

N. Simons: Oh, no. I suppose the word I was using….

Yeah, I understand, Mr. Speaker.

I just wonder what people in the province are thinking when they're being told one thing for at least six months to a year. They've been hearing the same thing over. "No more outlets. Everyone's in pretty good shape. Level playing field. Fair." And we find out it's pretty much the opposite. I find it difficult to have to tell grocers in my area — grocers who don't have the pockets that maybe the minister is pandering to — to compete in these auctions. I worry about the people who aren't best buddies with the minister, who haven't maybe had the clearest line to the people writing the legislation.

[1800]

Maybe I think about the independent grocers in my area. I know that if they were ever asked about this, they would say quite clearly: "This isn't going to be good. This is not a good idea. In fact, it's a bad idea."

Until there's some sort of…. Maybe it's too late. Maybe everybody knows now that you can't really trust what the government is going to say because they're not going to do it anyway, or if they do it, they're going to excuse it by saying: "Well, that's not what we meant." Those definitions that we've all agreed to since time immemorial are no longer in the definition, like "fair" and "level." You know, "level," to me, is not like the side of a pyramid. That's not level.

I don't understand. I don't understand how the minister thinks this is going to…. It's not just that it's bad legislation; it's not what the minister promised. That, on the face of it, is enough reason to say: "Well, what the heck is this government doing?" What are they doing? This? Whoever said anything about this? Nobody knew this was coming. You know, they're going to be able to buy the product at 26 percent below the price paid by other stores.

I don't understand why the minister thinks that the people of the province are going to be pleased with this. People like to have access to alcohol, but at the same time, there needs to be some process that folks can count on — due process, for example. Wouldn't that be nice — due process?

To wrap it up, I guess, is to say that we will vote against it. We will do what we can in opposition to support the liquor outlets, to support grocery chains and independent grocers and wine stores and the rest of the industry. We will stand here and vote. We'll do our part for the people of the province. We'll do our part for the small businesses that they always claim to be best buddies with.

I think everyone is seeing the falseness of that claim. They see the falseness of their claim to be good managers. That's just false. That's just talk. It's talk about "no new licences." That's just talk. You know what? There's a word. There's a colloquial expression for that, which I can't use in the House, but it's just talk. We just call it "just talk." The government's really good at just talking, but when you see what they write, and you see the kind of proposals they put forward, it's just obvious that there's no connection between what they say and what they do.

That's fundamentally the problem with this legislation. The government said one thing, and they're doing something else. It's going to hurt constituents in my area, and it's going to hurt British Columbian businesses. For that reason, I hope the minister withdraws the bill. If she chooses not to, well, we'll stand in opposition against it and wish for a day when there's a government that respects business and communities.

L. Krog: Whether the member who spoke before me, the member for Powell River–Sunshine Coast, who always speaks passionately on issues, realized it, he gave me a bit of an opening when he talked about wrapping it up. For those of us of a certain generation, we remember when you didn't go into the liquor store, which was a government liquor store, and leave without having the item you'd purchased wrapped up. It was not to be seen by the public for fear it might excite some increased consumption of alcohol or because the labels weren't attractive. I was never entirely sure, but that was the policy.

The only place you could buy alcohol, apart from off-licence sales at a beer parlour, as we used to call them —
[ Page 7529 ]
I see the member for West Vancouver–Capilano smiling, because I think he might remember those days as well — would be a case of beer at a beer parlour.

Now, we've come a long way. I'm not suggesting for a moment that we're going to turn the clock back or that the opposition expects to turn the clock back, but I must state right at the start that, notwithstanding I'm a consumer of alcoholic beverages like most British Columbians are, I have never supported philosophically the concept of the expansion of the availability of alcohol through liquor stores around the province.

[1805]

We have had antiquated laws related to consumption in restaurants and food. We've had antiquated laws with respect to families being allowed to have a drink at dinner with children present, all those kinds of things which in other countries — I will call them older countries, perhaps more advanced nations in some respects — have become the norm and have been the norm for a very long time.

Once we started down the road, however, of allowing the proliferation of private liquor sales or private wine sales, we took a major step away from a system that, in my view, probably provided better social control for the distribution of alcoholic beverages.

Now, many will disagree with that. Others will say that the member for Nanaimo is an old fogey. But I come from a community which in historic times, at the height of the coal-mining era, I think had 17 breweries supplying beer to slake the thirst of the miners working in coal in Nanaimo.

It has changed somewhat over time — whereby you could purchase alcoholic beverages other than, as I say, beer at the beer parlour, at off-licence sales. When that system was set up, it obviously went into competition with government liquor stores, which were a significant source of revenue for provincial governments for a very long time.

I speak with some experience in that, not that anyone's terribly interested. It was working in a government liquor store — two locations in my time — that provided a great deal of the funding that supported me through post-secondary education. So I have a certain fondness for and a certain memory of what it was like.

I also understood the significant controls and the level of control that was provided by that system. If you showed a sign of impairment coming into a government liquor store, you were not going to be served. Any employee who so served would face discipline and potentially being fired. Now, that may be a more puritan era. But what has happened, in my view, with the proliferation of the availability of alcohol is that now a police officer in a small community can't even pick off the pigeons, so to speak, leaving the government liquor store because chances are that person has been able to go to a possible multitude of private liquor stores around any given community or a government liquor store, working in competition together.

For a police officer who is anxious to perhaps track people who tend to drink and drive — and it's not uncommon to go in at least with some level of impairment, not noticeable or detectable — it makes the job of policing alcohol consumption, people who drive on our roads, that much more difficult. So there's another social cost of the proliferation of liquor stores and private stores that sell alcoholic beverages.

Coming from that position, however, I accept the reality that we are not going to roll the clock back. I accept that. But in setting up a system for licences for these stores that become valuable — where significant investments have been made, where people have mortgaged their homes, where investors have invested in companies in order to operate the private distribution of wine and alcoholic beverages generally — you cannot simply ignore that, which is what this legislation purports to do, and pretend now that we have, in the words of the government, of the B.C. Liberals, some dormant licences.

It conjures up a vision of, I don't know, Alien or something, where we're seeing these things suspended in little cocoons, dormant licences hanging, waiting to be sent off to some uncolonized part of the universe. Except that we're going to pay a great deal of money for those, and we're going to put them in competition with small business people in this province who've already put their necks out, mortgaged their homes, invested their money, perhaps, and employed people in their local communities.

They face losing their businesses because this government didn't have either the decency or the foresight to think about this problem or, alternatively, have deliberately chosen to proceed with a policy that will have the impact of driving out of business legitimate business people in this province who've played by the rules.

[1810]

Whatever they may be and whatever I think of them, they played by the rules, and now they face potential ruin with a system that is absolutely designed — and I cannot believe otherwise — to ensure that if this goes to a high-bid process….

That's the only sensible thing a government could do, because otherwise, I don't know how you're going to engage in the distribution of these dormant licences. That process will mean only people or corporations with significant resources will be in a position to purchase these dormant licences.

What is that going to do? Well, it essentially means that the mom-and-pop operation, the people — some of whom I had the privilege and pleasure to meet a few weeks ago — who operate specialty stores, who have developed expertise, who have a customer base that trusts them and likes them, are now going to face competition which, based on the discount rate, is going to be absolutely unfair, unreasonable and will have the effect of potentially destroying these existing businesses.

For what? So that we can have even more opportunities to purchase a substance, which…. Anybody who works in the family law practice in this province as a lawyer or as a counsellor or a drug counsellor or an addiction counsellor or works with people in the health care system will tell you that alcohol is still the most destructive drug in our society.

The government is not only going to commit the sin, arguably, from my perspective, of expanding so that it's available, I won't say quite anywhere but practically, where you have a multiplicity of operations available; you're now in the process of doing it, going to kick sand in the face of those very small business people that the B.C. Liberals always pretend that they represent.

To the advantage of who? Major corporate interests. People with extreme wealth who will be in a position to buy those — I love that phrase — dormant licences. They'll be able to pack them up and take them home and cuddle them and then open them up at their whim with all the capital resources that they have and turn to mom and pop down the street and kind of laugh and say goodbye.

Notwithstanding what the government says about B.C. prosperity, there are a lot of British Columbians who aren't making $100,000 a year or $200,000 a year or half a million dollars a year. There are a lot of British Columbians who don't spend $5 without looking at it three or four times. They're going to be driven by one thing only — price. Arguably convenience — I accept that — but price.

The large stores will be in a position with this discount, having purchased these dormant licences, to operate with a better bottom line. It is absolutely unfair competition to those people, as I say, who've already paid their dues, played by the rules in the existing system, set up their businesses and made their investments.

Now, it would have been one thing if this had been the result of a true consultation process. We know we had this on-line consultation process. Well, you know what? I suspect, like many processes that don't have a high public profile, we didn't perhaps get the full impression of what British Columbians really think. Of course, the people who want alcohol more available are going to make their views known. But the temperance union is gone, so I suspect that we didn't hear from them.

[1815]

If the government was going to go through this process and then come to conclusions and then announce what the public policy was, wouldn't it have been at least sporting, let alone fair or honest, if they had indicated very clearly to those people over the last months, year, two, three — this has been talked about for a while — who have been making conscious investments in the sale of wine and alcoholic beverages in their stores, perhaps expanding their facilities, purchasing an existing outlet, whatever the case may be…. Wouldn't it have been fair and appropriate to let them know: "By the way, we're going to expand the field. We're going to provide new licences"?

The member for Vancouver–Point Grey quoted the other day the Attorney General. It's in the Vancouver Sun, February 17, 2015. It's not a millennium ago. It's a few months. "We are not increasing the number of liquor outlets in B.C. so anybody who has a licence is in pretty good shape." I don't think we've seen that much confidence expressed since the captain set sail on the Titanic and said: "This ship is unsinkable."

Thirty-five days before this bill was introduced — again, my thanks to the member — a quote from the Attorney General. A "change that is not coming" — I love the double negative — "is the number of liquor outlets. We have the moratorium until 2022."

I get it that in politics we often make promises or commitments — during campaigns in particular — that when you, if you're lucky enough, become government, become impossible to implement because of change in fiscal circumstances, declining markets, collapses of industry. You know, the Japanese lumber market back in the '90s went in the toilet virtually overnight — significant impact to the forest industry, government had to respond.

Goodness knows I don't think we have to mention liquid natural gas in this chamber, do we? I mean, there was a great promise that has disappeared with the same rapidity as the sinking of the Titanic, if I can come back to my maritime example.

But 35 days before the bill was introduced? And it's not a campaign promise. It is not some piece of a platform that was created by some obscure candidate in a remote riding where nobody was listening. It was a publicly announced, widely reported promise. "We have the moratorium until 2022."

I don't know how the government and the Attorney General can look in the faces of all of those people working in the industry — I mean it in the broadest sense — and believe for a moment that anything they say hereafter around liquor policy in this province will ever be believed.

The damage that has been done to the credibility of this government with a sector of the economy — in particular, by that, I'm talking about the private sale of alcoholic beverages…. A sector of the economy they have promoted and supported and from whom they've received donations, substantial donations in many cases, has now been told that what the government says one day can't be relied on a few days after.

Now, as I say, we're getting used to that in British Columbia. Liquid natural gas. Won't sell B.C. Rail.

Interjections.

L. Krog: HST. Everything is good. All this technology is working just fine, just fine. Oh well, yes, that's true. But only — what is it? — one-third of it's actually in operation in the ministry.

I don't want to go through a long list and harangue too much today, but it's not impossible at this stage for the government to take what I've referred to many times, and what W.A.C. Bennett called it himself, God bless him, the famous second look.

[1820]

I don't think the world will collapse or British Columbians will wake up crying, terrified by the prospect that the government doesn't proceed with Bill 22. Would it really harm the legislative agenda or damage the government any more than it's already damaged itself by its introduction to simply pull this bill, and pull it now?

Firstly, go back and apologize to all of those British Columbians who have a keen interest in this and say: "Sorry, that was a mistake. We won't do it again. We will now sit down with this broadly based industry, which I acknowledge is a significant economic contributor to this province's bottom line."

Whether it's the grape grower in the Interior or the wine merchant in the West End or the clerk in the liquor store in Haida Gwaii, people have an interest in this debate. For the government to actually do some consultation now — with some live bodies, with great respect, as opposed to some electronic gathering — and to talk about people who are legitimately outraged by their behaviour around this issue, I would suggest, is a politically smart thing to do. You know, there's nothing like sitting around a table and having a negotiation and a discussion.

As I say, no harm will come from withdrawal. Indeed, the government might actually recover a little bit of its spent political capital around the community. I'm not getting any e-mails — and I'm sure that the critic who spoke so eloquently yesterday and today on this issue is getting a whack of e-mails — from a bunch of people saying, "How dare you oppose Bill 22. This is amazing legislation." "This is just the greatest thing since" — you know how the cliché goes — "sliced bread. This is going to really help everybody." "I'm just delighted to see my business disappear in order to support B.C. Liberal policy." I don't think so.

I don't think the member…. I've looked at him carefully, and he hasn't nodded his head in the correct manner to indicate that that information is being transmitted to his office. Not one.

Again, I come back to my point. We're only at second reading. This is really not that necessary. If the government wants to introduce legislation and believes it's necessary to do so and that there's such a public demand for this, then do what Gordon Campbell would have done: have a fall session. Oh my goodness, that would be the fixed legislative calendar. Wouldn't that be a novel concept?

We'll actually have a fall session, and we'll have it regularly. We'll deal with legislation which, when it was introduced in the spring — which was one of the concepts behind the fixed legislative calendar — created significant public controversy. The government thereby would be given an opportunity to reconsider its position. The opposition could decide whether or not their position was, in fact, a logical or a sensible or a correct one. It would give everybody a cooling off period. What's wrong with that? What possible loss can be suffered?

The government has to accept that its credibility on this issue, let alone others, is gone. It is absolutely gone. And all of the quotes from the Attorney General, all of the comments from government make that absolutely clear.

As tempted as I am to gild the lily, there's no need to repeat over and over again what's happened here. This government has entered down a policy path that is going to damage the economy, benefit only a few and create disruption in an area of the economy where people were looking for progress, for a modern approach — for an ability to take British Columbia's alcohol consumption patterns in distribution and sale and habits into the 21st century so that instead of thinking they were coming to some primitive backwater, international travellers could say: "This kind of looks like home. It feels comfortable. These people have a civilized attitude towards it."

Instead, we've thrown this whole industry, to some extent, into a form of chaos — not everybody but enough.

[1825]

My darkest suspicion, the way they've structured it, is that this is essentially, over the longer haul, about ensuring that the government liquor store revenue starts to drop off. Then the whole system will be ripe for privatization. The government can then sell it to its friends, and they will be their major donors, not their minor donors.

You'll see that stream of revenue gone forever, and the taxpayers of this province — I don't really like that phrase, but I'll use it tonight — the citizens of British Columbia who will bear the health care and social costs of the wider and greater distribution of alcoholic beverages, are going to be the ones to feel the pain.

What we will have achieved with this eventually will be the elimination of union jobs, which aren't that well paid, if you actually talk to people who work in the government liquor stores now. It's not a career, like it used to be for many folks. It's not a family-supporting job. They will disappear. We'll see the further increase in lower-wage jobs. The government will have gotten out of this industry entirely. We'll see greater public consumption and greater social costs.

It's bad policy, so I urge the government — it's not too late — to simply withdraw the bill. Try and save yourselves. You're being thrown a lifeline. The opposition is giving you a lifeline. The public is already furious.

Your only possibility of reducing the public anger, for those who are extremely and keenly interested in this, is to step back, go out, consult, do the right thing, figure it out and understand that the present course will mean the concentration of the distribution in fewer and smaller hands. It will mean the destruction of family- and local-
[ Page 7532 ]
ly owned businesses. It will mean, potentially, the loss of a level of expertise.

I predict this as well, because it's no different than in the grocery industry. Items that don't sell, items that have a smaller market, tend to disappear off the shelves of the big operators, and so, ultimately, selection will suffer and consumers will suffer.

We'll see a less vibrant industry and an industry that, candidly, will probably only be able to attract investment for the largest and most profitable corporations, because if you lose a little money in British Columbia, you can make it up in Alberta. Maybe you'll make it up in Saskatchewan. But that locally owned wine shop in the West End or downtown Victoria catering to tourists, those smaller operations, can't take that risk. No one, no right-thinking small business person, is going to be prepared to take that risk.

On every level, it's bad public policy. It is a bad bill. It needs to be withdrawn. I urge the government to do so.

A. Weaver: I, too, would like to join members of the official opposition and rise and speak against this bill. Bill 22, the Special Wine Store Licence Auction Act, is a bill which, in my view, is again following a similar pattern that we're seeing emerging with the government legislation. It's a pattern that is putting more and more power in the hands of the minister to do whatever he or she wants to do, with no accountability.

Herein, again, the problem with Bill 22 — one of the problems with Bill 22; there are so many of them — lies in section 15, where the Lieutenant-Governor-in-Council can essentially make regulations to do anything. That, to me, defeats the purpose of this bill.

We have the government bringing in legislation last year that British Columbians were excited about. British Columbians were excited about the modernization of our liquor laws in the province. There is no question that this was an incredibly comprehensive and consultative process that led to the introduction of legislation that British Columbians wanted.

[1830]

It's mind-boggling to see how the government could mess up so badly a good-news bill over the subsequent months. It starts off with liquor pricing — the number of outraged business owners, etc., who got involved in the liquor pricing problems. There's media story after media story I've got here in my files, where people are expressing concern over the regulations that came in after the legislation was brought in last year.

Then we have this piece of legislation. I simply cannot understand why it would be brought in. We talk about dormant licences. You know, I start to think about volcanoes. I'm wondering if there are explosive licences over here as opposed to the dormant ones. We're told that there will be no new licences, but then we're told, at some point, that there will be a limited number.

Really, it doesn't matter what we're told because the regulations grant the minister to prescribe "the number of special wine store licences in respect of which bids may be accepted under this Act." So whatever has been said doesn't really matter, because the minister can put however many permits he or she wants at any time he or she wants.

It talks about wine in this bill. Again, this is why I'm beginning to wonder about the speed at which this legislation is brought in. Whose needs are trying to be met? Well, I think I know whose needs are trying to be met.

It talks about wine being plant products grown in British Columbia — "…to sell wine in respect of which the naturally occurring sugar used in the fermentation process comes from only (i) plant products grown in British Columbia." Does that mean blackberry wine? Perhaps. That's a plant product, but it's a fruit.

My question would then be: why are you saying plant products instead of fruits if you wanted to include other wines? As soon as you say plant products, you're starting to include corn wine. You mean corn wine here? I don't know. Some might argue that beer is actually wine. It's distilled, but….

What about juniper berries being used in gin? The member for Saanich South might be interested to hear on that. The definitions of what wine is here are very odd.

I have a grocery store in my riding. It's an iconic grocery store in greater Victoria. It's a grocery store called Pepper's. The original owner of that is widely recognized for his contributions and his philanthropy in the area, but Pepper's now has a new owner.

This new owner pointed out to me recently that his store has 7,500 square feet. Now 7,500 square feet is not…. It's under 929 square metres. I love it when we hear legislation pretending to be actually metric introduced, but when you actually convert 929 square metres, it's exactly 10,000 square feet. In actual fact, this is 10,000 square feet here.

It's less than that. This means that Pepper's is ineligible to be considered a grocery store. Pepper's is one of the highest-grossing grocery stores per square foot in all of greater Victoria. They have a steady stream of traffic in there because they offer a unique product. They offer locally grown products. They cater specifically to the local residents. They are an iconic institution in this region, but they don't happen to be 10,000 square feet. Their owner is outraged.

There are liquor stores, wine stores, that have specifically grown up and developed next to grocery stores. Metro Liquor in Victoria. In Tuscany Village Metro Liquor specializes in wine. You can get a bottle of gin there if you want, but they have targeted their community. Their community wants the wine, so they specifically target their liquor store to wine, near a supermarket.

But guess what. That supermarket doesn't have to worry about the fact that somebody has invested their
[ Page 7533 ]
future in developing a small business right next door to them, because they're exempt from the one-kilometre rule, and they could have a B.C. distribution of wine on their shelves.

I also have questions as to whether or not this legislation would hold up under NAFTA. I suspect that California grape growers will be somewhat concerned about what some might view as protectionist policies being put forward from B.C.

I only ever buy B.C. wine. That's all. I have always supported our B.C. industry. I only ever buy B.C. craft beers, but that's not the point. We have international law. We have a free trade agreement.

[1835]

I would like to hear from the minister at some point whether or not they have sought and received legal advice as to this actually being acceptable under NAFTA. I don't see how it could be. You're essentially saying: "You are not allowed to sell your product, if it's from America, here in our grocery stores because we're putting in exclusive policies for a specific industry."

There are other concerns about this. The way in which auctions are set up and carried forward is unclear. Everything is in regulation again. My own opinion is that government was planning to do this, and then someone along the way said: "Oops, you cannot do this because when you do an auction, it's considered a tax. You've got to bring in legislation if you want to do what you wanted to do." So in a rush and a hurry and a fluster, rapid legislation is put forward. Again, the ramifications of this are not really well thought through.

We have a situation where a government that proposes and argues that it is there for business in B.C. is actually putting in legislation that hampers business in B.C. It's mind-boggling to me that this government has tried to argue, over the years, that it is there for small business. They're not there for small business.

They are there for vested corporate interests, the big supermarket chains that could buy these dormant permits, whatever that means, through outbidding any small local grocer — these large-scale stores that could realize there are neighbourhoods in our region where people drink more wine and people drink more beer.

There are different neighbourhoods around. They could target those particular neighbourhoods where there are existing, thriving businesses that have built up liquor stores, beer and wine stores, specifically focusing on niche wine markets. There are such stores. I outlined one earlier, in the Tuscany Village here in my riding in Victoria.

I just simply cannot understand why this government would bring in this legislation that is so punitive to small business in British Columbia. Again, as the member for Nanaimo pointed out, it simply behooves government to stand back and reflect upon this and say: "You know what? We made a mistake. There's outrage. Perhaps we should reflect upon this. Perhaps we should wait. Perhaps we should listen to those across the floor. Perhaps we should listen to those who've invested heavily in setting up small businesses and are now going to be undermined by this."

Members on this side of the House…. Dare I speak for the official opposition? I suspect they, too, support the B.C. wine industry. Who wouldn't support the B.C. wine industry?

This is not about supporting or not supporting the B.C. wine industry. Most of us would buy B.C. wine because it is B.C. wine, because it is first-rate wine, wins prizes internationally. This is about giving a large corporate sector vested interests, an unfair advantage over small businesses in B.C. that are struggling to make ends meet, struggling to pay those MSP premiums, struggling to meet payroll, struggling to pay the rent. Here, they can just be taken out by the big chains coming in and putting wine on the shelves and undermining these family investments.

We've seen a similar pattern here. We've seen guide-outfitters' vested interests being put ahead of resident hunters in British Columbia. We see big corporations being put ahead of small business. We see friends and relatives getting preferential treatment, in my interpretation of this, as opposed to hard-working…. I'm beginning to sound like I'm with the official opposition here. I do apologize — not to the official opposition.

I mean the hard-working British Columbians who have actually spent a lot of time putting these businesses in place, working to create small beer and wine stores that actually have niche markets and those grocery stores that just happen to be 9,962 square feet that are no longer able to compete in this auction process. It just isn't fair.

[1840]

It's just not fair, and ultimately, that's why I cannot support this bill. It is not fair, and bills that are not fair at a fundamental level should not be brought forward by government to be debated at the scale we are debating it here. They should be withdrawn. They should recognize that this is wrong. This is wrong for B.C. industry.

It probably wouldn't stand up under NAFTA anyway. I just can't wait until the government starts getting a formal complaint from California wine growers. I'm sure it's coming. Under NAFTA I don't think this will be supportable. Why are we doing this? And where would be the legal opinion that government has — perhaps they could table that and share it with us — that this actually does stand up to NAFTA scrutiny?

With that, I'll pass the floor. I will be voting against this, strongly voting against this. If you can vote strongly versus weakly, I will do that strongly. I would suggest and urge government to also just once, or maybe for a second time, allow a free vote. Allow members on the government side to actually vote in the interests of their constituents — not because some corporate backroom person has told a few inside staffers that they better get government to
[ Page 7534 ]
do this but because their constituents, those small business owners, recognize that this is the wrong thing to do, whether that be the Quality Foods in Parksville-Qualicum, whether that be the Pepper's Foods in the Cadboro Bay Village. These small business owners are concerned.

For that, I will vote against this, and I urge members opposite to do the same.

S. Simpson: I'm pleased to get an opportunity to stand and participate in debate on the Special Wine Store Licence Auction Act, Bill 22.

We've heard from a number of members here on this side who have raised a whole range of critical questions about fairness, a whole range of questions about how this legislation came to be, a whole range of questions about why the government would choose to put this piece of legislation in place. What we know…. Maybe we have to go back and reflect a little bit on how we got to this place.

We'll know that the government went and did its liquor review and produced a number of changes from that. It was a review that was not a consultation by any…. In any responsible way, it certainly wasn't a consultation. But a decision…. There were 700 or 800 people that responded to a blog, and that seemed to determine how the government would put a range of changes in place and a range of amendments in place.

A number of those amendments made sense. They made amendments around how food and beverage operators could function. Some of those changes — just commonsense changes that I think everybody is pretty comfortable with and pretty supportive of. But there were some fundamental changes put forward here that raised serious questions.

We know the issue around wholesale pricing, which was never part of that review…. That was a decision that got jammed, presumably, at the cabinet table. We know that there are senior ministers who have been encouraging that not just for years but for many years, looking for that change — even though I remember the member from Richmond, who was the parliamentary secretary who conducted the liquor review on behalf of the government, had on a number of occasions said: "Pricing is not part of my mandate, and I'm not looking at pricing." Lo and behold, of course, pricing and this change to a single wholesale price became one of the fundamental and core changes that was in the package. That happened for a range of reasons that I think most people who know this industry are pretty clear about.

It was a number of changes. It is going to lead, in time — and we will all see that over the next period of time — to higher prices. We're either going to have higher prices in government stores, or we're going to see those government stores not generating the kind of revenue that has been generated previously out of this sector for government. That's going to be a reality that we'll see. That's another matter.

The piece that the government and the minister hung their hat on in a pretty significant way was this notion of bringing liquor to grocery stores, bringing beer and wine and liquor into grocery stores — the store-within-a-store model. Now, there was a whole lot of concern raised about that, and quite rightly so, by the private industry.

[1845]

The private industry — hundreds and hundreds and hundreds of stores across this province, people who set up private liquor sales outlets, employed thousands and thousands of people across this province and invested, as other members have said, mostly as small businesses. Some of them have grown to be more significant but largely, in the scale of things, certainly small- to medium-sized businesses. They invested very heavily. They invested heavily, and they located their stores in places — some of them 5,000- to 10,000-square-foot stores — to be able to mostly take advantage of being close to food outlets and major food chains. That made a lot of sense if you were going to have a liquor store.

Now, I wasn't certain about this at the beginning, but we've now seen where we've got a couple of hundred government stores and many, many more — 1,200 or 1,300, whatever — of these private stores in total. This system actually has worked reasonably well in the province, and it has worked in an effective way.

What happens, though, is the government says they are essentially going to allow the large corporate supermarket chains to get into the liquor business. Now, they're not going to get into the business, of course, in the way that some of these larger private stores are, where you've got 8,000 or 9,000 square feet. You're going to have, at best, in some of these stores maybe 1,500 square feet. They have a limited amount of space — 1,500 or a couple of thousand square feet of space for liquor.

There is a great concern by the private stores that they're going to get jammed. The government says, and we know, that there's the one-kilometre rule. Now, the one-kilometre rule, for people who don't understand that, essentially says that if you have a liquor store in place, nobody else can locate a liquor store within one kilometre of that location where you are. There has to be some space, some area.

The government, the minister says that's not going to change, says we're going to keep the one-kilometre rule. Of course, as we know, you keep the one-kilometre rule in place and the government's proud announcement about putting liquor in grocery stores goes in the ditch pretty quickly.

I believe it was the Vancouver Sun. They did a story. They identified 58 or 59 major supermarkets, food stores in the Lower Mainland. I think they determined that out of those 58 or 59, only one of them would actually be able to open a liquor store inside, the store within a store, because every one of the other ones had a private or a government liquor store within a kilometre of that location.

Why is that? The reason that exists is because the government stores and the people who open the private stores are smart enough to know that the idea of locating, if you can, close to a major food outlet makes a lot of sense. When I go and buy my groceries, it doesn't seem like a bad idea to walk across the parking lot and pick up a bottle of wine and a case of beer if that's what I want to buy. That makes sense, so they located there.

That tells us two things. One is that it's certainly convenient. It is, though the minister doesn't seem to want to acknowledge this, about as convenient in many ways, particularly with the much broader selection in these larger stores, than a store within a store.

The problem is the minister and the government make this commitment that they're going to put liquor in grocery stores. Then all of a sudden they discover they can't do that without breaching the one-kilometre rule. They have stood up and told us, and the minister told us: "That's not going to happen. We have the moratorium in place. We're not going to breach that rule. Don't worry about it. It's going to be fine."

How do they get around this? We then have the specialty store. We have the idea of the special wine store, the VQA store or the B.C. wine, the B.C. product store. This all of a sudden becomes this great idea to do this, to do what we see, essentially, located in this legislation.

What we actually see in this legislation, I believe, is the government putting itself in a corner and in a box by making promises around liquor in those grocery stores, realizing they cannot do this without, in the most overt way, breaching every promise they made around the one-kilometre rule and throwing the one-kilometre rule out and not being prepared to do that. So they end-run the one-kilometre rule. That's what we're seeing here. You end-run the one-kilometre rule.

As we know in here, there is no commitment on: is this going to be 10 or 20 or 30, or is it going to be 100 or 200? How many of these stores are there going to be? We have no idea, and the minister won't tell us how many. So what is to say that this is the first opening of the door.

[1850]

What is to say that this is the government saying: "We promised you that store within a store, but we really couldn't deliver that without breaching a rule that, politically, we think is too tough for us to breach, so we're going to give you a better deal in some ways. You don't even have to do the store within a store. You can just put it on your shelves and sell it the same way you sell everything else. You don't have to set up another cash register system, another system of retail here. You can just do it this way. Trust us. If we can get away with doing this — we're not very far down the road — we'll be expanding this product line. It'll go bigger, and it'll go better."

I think that in a couple of years, that's where we'll be if this moves forward. I don't for a minute believe that this is about the limits that there are here.

What do we face? What's the situation we face? They've put in place this rule with some indeterminate amount of stores that they won't talk about. They talk about it being fair and balanced. We know that what's happening here….

The people at ABLE, the people in the private sector, I think to some degree were saying that as long as the one-kilometre rule stayed in place, they were prepared to talk about the grocery store model because, first of all, they had the protection of one kilometre. I'm sure that for some of them, they saw the opportunity to sell those licences for big, big money, to be able to have a windfall — sell their licence to that Safeway, to that Save-On, for millions, potentially — and to put themselves out of business, but to put a lot of dollars in their pocket as they did it.

Now, all of a sudden, they are quite opposed to Bill 22. They're opposed to this model. They're opposed to it because these are not dumb people. They understand exactly what this means. What this means is the government is doing exactly what it told them it wouldn't do. The government is setting up a liquor store in those grocery stores. They're going to set up a liquor store. It may, at the beginning, have some limited product, but I believe that's only a matter of time.

They're going to set up a store within the grocery store, and they're going to compete with those private liquor stores — those private liquor stores where those people set up a business. They took a chance on this. They invested their money. They set up shop. They grew their businesses. They hired local people. They have a successful small to medium-sized business. Now they are at risk, and they know they're at risk.

They're at risk, and then you have the small, independent wine stores. I know I have those in my constituency on Commercial Drive. I have one a block away from a government liquor store. Why is it a block away from a government liquor store with the one-kilometre rule? It's because their commitment is that they won't sell any product that's in that government liquor store. The government liquor store carries a particular wine; this store doesn't carry it. They carry B.C. wines, they carry wines from elsewhere in the world, and they specialize. They do well because they specialize, because they have extensive knowledge, and they have become a valuable asset in the community for those people who want to experience wine from around the world. They're pretty excited about it.

Well, those folks now are very concerned. They're not only concerned because these stores are going to pop up. They're concerned because they don't have the same pricing regime as those folks are going to have who open up a store under Bill 22 or open up in a Save-On or a Safeway. They are not going to have that. They're going to have a different pricing regime that is much more advantageous for them than what you've now done, particularly in eliminating the discount for the independent wine stores.

[Madame Speaker in the chair.]

Those stores are at risk. Again, those are small businesses. They committed investment. Their families committed. They grew those small businesses. Some of them have two or three outlets. It's a good thing in our community. People enjoy them. They are at risk because of Bill 22. That is the reality of the situation that we face at this time.

We've created a situation, as has been noted by a number of my colleagues, where there were promises made by the government around these liquor changes. The promises were that you wouldn't create unfair competition. You wouldn't put the private operators up against the megastores and the big money behind corporate food chains and that the protection was in the one-kilometre rule. Everybody was told: "Trust us. The protection is in the one-kilometre rule."

We now see with Bill 22 the steps to get around and erode that rule, to get around that rule, to get the foot in the door, and then we'll see where we go from there.

I do have a few more comments. I believe there are a couple of other members who will look forward to speaking to this when the bill comes back tomorrow. But for now, I will move adjournment of debate and reserve my right to finish my comments.

S. Simpson moved adjournment of debate.

Motion approved.

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

Hon. J. Rustad moved adjournment of the House.

Motion approved.

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

The House adjourned at 6:55 p.m.

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF
TRANSPORTATION AND INFRASTRUCTURE

(continued)

The House in Committee of Supply (Section A); M. Bernier in the chair.

The committee met at 2:34 p.m.

On Vote 43: ministry operations, $813,473,000 (continued).

[1435]

C. Trevena: I'm just going to start off this afternoon with a bit of discussion about B.C. Ferries and then move on — give the minister notice — about transit and then on to TransLink.

My first question — I hope it's a simple explanation — is on the government funding for ferries. There's been an increase 2014-15 to 2015-16 of 0.7 percent of government funds to B.C. Ferries, as I understand. There's been an increase, meanwhile, to the inland ferries of 11 percent. I wonder if the minister could explain the discrepancy.

Hon. T. Stone: In response to the member's question — unless the member is referencing a different line somewhere else in the budget, and she can point that out to me in a moment — the actual funding for coastal ferries is going up by about $1.4 million year over year. That's about a 1 percent increase year over year.

The budget for the expenditures for inland ferries is going up by about $200,000 year over year, which is actually a much smaller percentage increase. That's a 0.02 percent increase. I'm not certain where the member is drawing her numbers from but would be happy to dive into this further with her, if she would like to.

C. Trevena: I'm looking at figures that have…. These are from both estimates and the public accounts, which has the appropriation for coastal ferries at $192.6 million for 2014-15 and $194.015 million for 2015-16. Similarly, for inland ferries, the global figure is $21.903 million to $24.306 million, which is where we get the 0.7 percent and 11 per cent.

[1440]

Hon. T. Stone: First off, I previously indicated a total dollar increase for inland ferries of $200,000. I misspoke. I should have said $2,000 — so a very modest amount. That's the net allocation.

We're now looking at the same line here. The member is referring to the gross operations for inland ferries, which is the total cost to run inland ferries. The member's numbers are correct as she read them into the record a moment ago.

The increase in cost year over year here from an expenditure perspective relates to three key areas which are dealt with via the four service agreements, or contracts, that we have with the contractors who actually deliver the inland ferry services in different parts of the province. Those cost drivers are labour, fuel and maintenance costs. There have obviously been escalations in one or some of those three items in each of the four contracts.

This relationship is governed…. In terms of the use of a third party or a contractor, it's very similar to the coast-
[ Page 7537 ]
al ferries. As the member knows very well, we have the coastal ferry agreement between the ministry and B.C. Ferries, which governs the service levels and provides for a number of other provisions.

We have service agreements with four separate contractors for the provision of inland ferry services. Again, part of this is increases for negotiated union wage increases, for example, year over year as well as projected fuel costs and maintenance on the terminals and vessels that are part of the inland ferry system.

C. Trevena: We know there's a major difference between the inland and coastal ferries, although the administrative structure may be a little the same. We have this sort of quasi-private operation for the coastal ferries, whereas the inland ferries come under the Ministry of Transportation.

I just have a couple of…. Let's see how best to go on to this. I think I'll move a little bit onto some questions I've got about capital and then move back to some of the more operational ones.

[1445]

On the inland ferries, recently, last summer, there was a new ferry on the Arrow Lakes for Nakusp. WaterBridge Steel was very pleased to be able to launch it and built it, actually, on the lake. I was wondering if there was any provincial money that went into that capital build.

Hon. T. Stone: The inland ferry that the member is referencing is the M.V. Columbia, which is a success story. The member pointed out it was built in Nakusp. The all-in cost for the M.V. Columbia is about $30 million, and the cost was paid by the province of British Columbia.

C. Trevena: Does the province of British Columbia put any money into the new builds that are going ahead, either for the three intermediate vessels that are going to be built in Poland or the cable ferry that is presently being built in B.C. for the B.C. Ferries builds?

Hon. T. Stone: With respect to the replacement vessels — the three intermediate vessels which are being built and the cable ferry which is being built…. The cable ferry will be in service this summer.

[1450]

The province of British Columbia contributes toward these projects via the service fee that we actually provide B.C. Ferries, which is governed by the contract that we have with B.C. Ferries, the coastal ferry services contract. As the member knows well, that contract is renewed.

We anticipate…. Well, if we look back over the last four years, or through PT — performance term — 3, the average annual contribution or service fee investment from the province of British Columbia into our coastal ferries has averaged about $180,000 per year. We expect and intend to maintain that level of funding on an average annual basis, moving forward. But it's within that service fee and that level of service fee that we provide the B.C. Ferries corporation — which, the member knows very well, is a quasi-separate, independent corporation from government — that level of funding on an annual basis.

The inland ferries are run from within the Ministry of Transportation and, obviously, have a much, much smaller footprint than the coastal ferries do. That being said, it's also important, I think, for British Columbians to know that last year, which was a pretty normal year in terms of funding levels of the inland system compared to the coastal ferry system, the average vehicle investment or subsidy that the province of British Columbia provided the inland ferry system was $19 per vehicle. The average per-vehicle investment or subsidy that the province provides to the coastal ferries is $23 per vehicle.

Overall, when you net it out on a vehicle basis, we actually provide a higher level of provincial investment in our coastal ferry system than we do in our inland ferry system.

C. Trevena: I'm very pleased to hear the minister talk about investments rather than subsidies, because we are talking about investing in our marine infrastructure. I think that if we can keep on that language, we might actually be able to move on.

Much of the capital investment is the service fee, and much of the operating cost actually comes from the users of B.C. Ferries. I think the minister would agree on that. I just wanted to see whether the minister does agree that, effectively, it is the users, particularly of the major routes, who will pay the operating costs. Operating costs are including, when we talk about operating costs, fuel and labour, because that is all part of operating costs.

[1455]

Hon. T. Stone: The quick answer to the member is yes, of course the users cover a good chunk of the cost to operate the coastal ferry system known as B.C. Ferries in this province. I don't think that has ever been in dispute.

I do want to reinforce, though, the point that I make many times on this. If really where the member is going here…. I can maybe shorten the distance from A to B if she's contrasting the inland ferry system with the coastal ferry system and the level of investment that the province makes in the two systems and so forth.

I remind people often on this that they're completely different systems. This is like comparing apples and oranges. As I said a moment ago, the inland ferry system receives an investment by the province of British Columbia to the tune of $19 per vehicle. The coastal ferry system receives an investment of about $23 per vehicle from the taxpayers of British Columbia.

The operating cost of the inland ferry system runs in the range of about $20 million per year. Again, it's a very, very small system, all fresh water, very minimal labour
[ Page 7538 ]
costs because there are very few crew. A lot of these ferries have one or two crew members. Some have none. They involve reaction ferries, cable-type ferries. Very insignificant fuel is consumed, obviously. They operate on fresh water, not salt water.

It's $20 million, roughly, to operate the entire inland ferry system, compared to the coastal ferry system, which costs around $750 million per year to operate. It has some of the longest ferry routes of comparable ferry systems in the world. It's obviously all salt water, very significant labour costs involved due to the required crewing levels from Transport Canada. Again, a very different ferry system — $750 million versus $20 million.

The third piece of this discussion, which I'm certain the member will raise as well, is highways in this province. The annual cost to maintain our highway system is about $540 million. We maintain 47,000 kilometres of highway in British Columbia for several hundred million dollars less than it costs to operate coastal ferries — very different transportation systems, completely different.

This is why I often push back at the suggestion that simply declaring coastal ferries part of the highway system solves anything. It solves nothing. The underlying structural financial challenges of B.C. Ferries, because of the cost structure involved, is very different, very unique compared to our highway system in this province and certainly in comparison to inland ferries.

C. Trevena: I don't want to get caught up in a debate over highways, ferries and the sort of system. I have a number of other questions. I just wanted to pick up, though, on the per-vehicle investment in inland ferries, coastal ferries.

We always have to remember it's not just vehicles. There are a lot of people walking onto the ferries, particularly on many of our routes now, because they can't afford the fares, which I will get onto a little later on.

I want to keep focused for a short time on the capital program, because there are a number of things that are happening in the capital program with B.C. Ferries. I'd like some clarity from the minister, particularly since the province…. The service fee is its contribution to the capital program.

At present we've got the intermediate-class ferries being built in Poland. Two previous ferries were built in Germany. I have two questions. One is whether the minister has to hand the fuel consumption of the German ferries. If he doesn't, that's fine. I can find it from B.C. Ferries, I'm sure.

[1500]

Secondly, as the intermediate ferry build has progressed, has the ministry done any economic impact analysis, both positive to Poland and negative to B.C. — the person-hours of building these three ferries and the impact on the Polish economy versus the lack of impact on B.C.? If there has been no study, just a no will do fine.

Hon. T. Stone: On the member's first question with respect to fuel consumption, we'd be more than happy to get that information for her. We don't have it at our fingertips here today, but we'll get that for her. And with respect to the second question, relating to, if I heard it correctly, economic impact in Poland versus British Columbia, no, there wasn't an economic impact analysis done.

It was a procurement process where there was an RFP put out for the three intermediate vessels. No British Columbia firms bid on the work, and B.C. Ferries needs three intermediate vessels. The shipyards in British Columbia indicated — Seaspan in particular — that they did not bid on the project because they're too busy. They have no capacity at the moment, largely due to the federal contracts that they won a couple of years ago. They have no additional capacity to take on these projects. That was disappointing. I would love for those ships to have been built here in British Columbia.

What is happening through those federal contracts, which British Columbia was instrumental in helping secure for Seaspan, is that we are seeing that capacity in B.C.'s shipyards is growing. The expertise and the wherewithal at our shipyards are increasing week by week. That's very, very exciting. That's going to position Seaspan and other companies here in British Columbia very well, very strongly to compete on a world scale for shipbuilding contracts that will be tendered, not just by B.C. Ferries in the future but by companies worldwide.

C. Trevena: I think it's very disappointing that the ministry hasn't done any economic analysis of the impact. We had the discussion back in the fall about the economic impact on B.C. Ferries of changing fares, which, again, I'll hopefully have time to reference later on this afternoon. But when the government is talking about investing in jobs and investing in the future, not to have done that sort of study is disappointing, I think.

I also understand that the RFP structure was organized in a way that didn't allow shipyards to work together, to put together collaborative processes that they used to do when you're building ferries. That did limit the ability of B.C. shipyards to bid on it. That being said, these are now being built in Poland, and let's hope that the next major projects are built in B.C. I'm sure the minister wants to see that, too, and will work with the opposition to ensure that.

One of the next projects is going to be the refit of the Spirit-class vessels. I'd like to ask the minister if he knows when this is going to be, whether he can say that it's going to be in B.C. and if he can give me an estimate of the cost of these refits.

[1505]

Hon. T. Stone: The Spirit-class vessels, as the member has just referenced, consume the most fuel in the
[ Page 7539 ]
fleet, obviously. They are huge. About 20 percent of all the fuel consumed by B.C. Ferries on an annual basis is consumed by these two vessels.

B.C. Ferries did identify and announce recently that they do believe there is a tremendous opportunity in light of the need to do a refit, to do refit work on these two ships, which is normally scheduled work that takes place on vessels, no matter what size. This would be a good opportunity to also include, as part of this refit work, a conversion of the fuel system. As the member knows, B.C. Ferries has announced that they are moving forward with dual-fuel capabilities on the two Spirit-class vessels.

The savings will be enormous. B.C. Ferries is projecting about $9 million per year of fuel savings between those two vessels alone for 27 years. When you roll in the three intermediate vessels being built in Poland as well, which will be LNG-diesel dual fuel, that's an additional $3 million per year in savings between those three vessels for a combined $12 million per year over 27 years — very significant savings.

The member, I'm sure, agrees with me that anything that could be done to reduce the cost at B.C. Ferries and apply downward pressure on fares is a good thing. This is exactly going to do that.

In terms of what we anticipate the cost of the actual conversion work to be, we don't know. B.C. Ferries, at this moment…. The reason is that B.C. Ferries is in the midst of an RFP procurement process. Even if I did know the number, I would not want to put it out there so as to potentially compromise B.C. Ferries's efforts at obtaining the absolute best value for dollar on behalf of those who pay the bills.

The last point on this would be the timeline. I think the member was inquiring about when we would expect to see these refit dual-fuel Spirit-class vessels to be back in service. Our understanding is that B.C. Ferries would be doing one ship at a time. One ship would be converted in 2016, and one ship would be converted in 2017.

I don't, again, have exact dates to provide the member. Again, a lot more of the details will be fleshed out on this once B.C. Ferries concludes their competitive procurement process, which they're in the middle of at the moment.

C. Trevena: The minister obviously can't use his suasion to make sure that a B.C. yard wins the bid.

Like everybody, as the minister says…. Save money. Let's hope that those millions of dollars that are being saved in changing the fuel or having the opportunity of dual fuel will relate in lower fares, because I think that is very clearly one of the main problems with B.C. Ferries from the users' point of view, from the economic point of view and from the community point of view.

Continuing with some questions on the capital plans. We just talked about the Spirit-class refits, major refits — going to be very important. We had a refit which began just five years ago and lasted for two years, a refit of the Queen of Chilliwack. The minister, I'm sure, is well aware of the Queen of Chilliwack. This is the one that was used on some of the Sunshine Coast runs as a backup ferry and was used in what was then route 40. As I understand it, this was $15 million.

[1510]

The refit, completed by 2012, included a new car deck, watertight doors, new propeller seals, a new instrumentation control system, new sewage treatment, holding tank, pump-out system and life-saving systems. The second phase, which began in 2012, was the installation of three new generators, electrical and HVAC system upgrades and a renewal of the propulsion control system.

This upgrade meant that the ferry was going to have a significant increase in its life. Yet last year, in 2014, just two years after this money was put into the ferry, it was taken out of service. I now believe it's just sitting at Deas dock. I wondered if the minister could explain why all this money was invested for the ferry simply to sit at Deas dock.

Hon. T. Stone: Really quickly, back on the refit work for the Spirit-class vessels and just to provide a little bit of a tighter time frame for the member. On one of the vessels the refit work will be done between the fall of 2016 and will be back in service at some point in the spring of 2017. Then the other one will be done in the fall of 2017 and will be back in service in the spring of 2018. I just wanted to provide those details to the member.

With respect to the Queen of Chilliwack, the member is correct. There was some refit work that was done in 2012 and a little bit in 2013. That refit work extended the useful life of the Queen of Chilliwack by five years, which means — coming up in 2017. This is a vessel that has been quite useful at providing relief on other routes — most notably route 17 to Powell River — and has been used for relief purposes quite often over recent years.

Again, part of its former life was to service what was previously known as route 40, as the member knows well. We canvassed this really thoroughly last year, and I'm happy to go into a lot more detail if the member wants me to. It was going to cost $100 million at minimum to replace this vessel for that route, which made it a very difficult decision based on the utilization rates, the loads that the vessel had.

[1515]

A year and a half ago when the decision was made to end route 40 as part of a broader strategy to wrestle fare increases down, this was probably right up there as one of the toughest decisions that I had to make as the minister. But the vessel is still available to this day for use on a relief basis as B.C. Ferries requires.

C. Trevena: As the minister says, he's extended the life to at least 2017. Yet the decision was, despite major
[ Page 7540 ]
investment in upgrades…. I mean, we're not talking of a light investment. We're talking about new engines, new instruments, new control systems. This is all serious investment. Despite that, it was pulled from the route, and it isn't actually being used as a replacement. It's just sitting in Deas dock.

I wondered if the minister could explain the financial logic of investing this money in this vessel and then just allowing it to sit at Deas dock, not being used as a replacement vessel.

Hon. T. Stone: Those are operational decisions to B.C. Ferries. The decision that was the government's to make, and as the minister responsible was largely my responsibility to make, was related to the service levels as provided for in the contract that the government has with B.C. Ferries.

Route 40 was a route that had been losing well over $7 million per year. That's $7 million that was going into a route that was only serving the communities on that particular route for a very small fraction of the time, just a matter of months.

The decision that was taken, which I stand by to this day, was that those dollars were of much more impact to continue to maintain service elsewhere in the B.C. Ferries network than to be going towards a route that was losing $7.35 million per year, that was going to subsequently also require a new vessel by 2017.

B.C. Ferries would have had to have initiated a procurement process a year and a half ago in order to have that vessel built and ready to launch in time for pulling the Queen of Chilliwack out of service. That was going to cost B.C. Ferries upwards of $100 million for a replacement vessel — again, for a route that was seasonal, had very low utilization and was losing $7.35 million per year.

As for the Queen of Chilliwack, it's not like when it wasn't in use serving the old route 40…. It's not like it hasn't been used on many occasions as a critical relief vessel in the ferries network. It's been pulled into service on a number of occasions, particularly to service a route into Powell River, as the member knows. And thank goodness B.C. Ferries had some flexibility in terms of their vessel complement in order to be able to rely on and use the Queen of Chilliwack on other routes.

Again, very important to reinforce why that decision was made and to indicate, yet again, that we stand 100 percent behind the decision that was taken when it was taken a year and a half ago.

C. Trevena: I think people will still question the financial acumen of investing this money in a refit and then deciding to pull the vessel.

The minister and B.C. Ferries have the very convenient approach of sometimes working very closely so that one can't tell one from the other. Sometimes it's: "Well, it's not my fault; it's their fault." And on this one it's: "It's their fault. It's their operational decision to have it sitting in Deas dock. It was our decision to allow the refit to go ahead." I find that it's very difficult for the minister to square this circle.

We also now have the Nimpkish on the route. We've had lots of discussion in the House about whether the Nimpkish is the appropriate vessel or not. I'm not going to go into that at this moment. However, the minister has recently had a briefing about the anticipated retirement of the Nimpkish. I wondered if he could tell me when the Nimpkish is going to be retired and what's going to replace it.

[1520]

Hon. T. Stone: With respect to the Nimpkish, I won't regale the member with my experience, unless she would like me to. She's saying no.

First off, the date that it would likely need to be either substantially refitted or replaced would be 2017. That was always the date that, I think, has been understood. It was first understood in the context of the Queen of Chilliwack decision that we made.

There are two sides to this, as the member knows. First, with respect to capital decisions at B.C. Ferries, those are decisions that are B.C. Ferries' to make. They don't seek my approval on how they go about procuring vessels, what vessels they feel they need to procure, in what order they need to procure them. Those are decisions that are taken by the independent corporation that B.C. Ferries is.

That being said, there is a check and a balance in place — a very important one, one which was, I think, reaffirmed very recently. That is the role of the B.C. Ferry Commissioner, Gord Macatee, and his deputy.

As a government, we amended the Coastal Ferry Act, as the member knows, a number of years ago, providing responsibility for the Ferry Commissioner to approve the global capital plan at B.C. Ferries, as well as to ensure that the Ferry Commissioner is required to actually sign off or approve specific capital investments, capital projects. Whether they involve terminals, whether they involve vessels, the Ferry Commissioner has to sign off on those.

I would point out that the other side of this relates to service levels. That's the piece that is fully within the control of the province, and as the minister responsible, that's where my role comes in. That's governed though the coastal ferries agreement that the ministry has with B.C. Ferries.

In that agreement, we indicate on which routes we desire service and what levels of service we desire on each of those routes. I can say unequivocally that it is our government's intention to see that the service and the level of service that's currently in place continues on those two combined routes from Port Hardy to Bella Bella, Bella Bella to Shearwater, Ocean Falls and into Bella Coola.

[1525]

C. Trevena: While we're on this — I have a couple more capital questions to ask — very interesting on the ending of route 40 — not on the economics, not on the social aspects but on the way that it happened under the Coastal Ferry Act. As I understand it — and please correct me if I'm not right on this — the route was deregulated. It wasn't decommissioned. That allowed it to be taken out of service without the Ferry Commissioner's approval. I just want to confirm that was the case.

If that is the case — by ministerial decision that it could be deregulated — is there any thought of deregulating any other route? Because this would, obviously, allow other interested parties to come in and operate those routes without any consultation or without the Ferry Commissioner's approval.

[M. Hunt in the chair.]

Hon. T. Stone: I'll address the question in this manner. The legislation provides for the following: the service provider — being B.C. Ferries — cannot unilaterally cancel or change any services on routes without the explicit permission of the B.C. Ferry Commissioner, first and foremost.

If, however — and this is governed through the agreement that the ministry has with B.C. Ferries — there is mutual agreement between the two parties on a discontinuation of a route or a service level change on a particular route…. If there's mutual agreement to amend a contract in midstream of that contract, then the Ferry Commissioner doesn't need to approve that.

The province can also, when we set out to renegotiate the contract on an ongoing basis, determine at that point, as we did recently, that we're not going to continue to provide service on a particular route or we would like to change the hours, the levels of service, on a route. Now, that's at the high level.

Specific to the old route 40, that was a route that was discontinued. It wasn't deregulated. It was discontinued.

[1530]

I think it's important. Maybe this is where the member was really going with her question. The services that remain in terms of the service between Port Hardy, Bella Bella, Shearwater, Ocean Falls and Bella Coola are regulated. They haven't been deregulated in any way. They continue to be regulated under the auspices of the coastal ferry services act.

I do have a list of a number of unregulated routes in the province, if the member would like me, in subsequent questions, to read those into the record.

C. Trevena: Just for clarity, then, the unregulated routes could be closed off at any specific stage? Is that what the minister is saying? If so, yes, I would like to know what they are, because I think people would like to know where their routes are in the greater framework of those that would definitely have to continue under the Coastal Ferry Act and those that just could be lost in any attempt for trying to rein back money.

The Chair: Mr. Minister.

Hon. T. Stone: How are you today, Chair?

The Chair: Very good, sir.

Hon. T. Stone: With respect to unregulated routes, there are a number of unregulated ferry routes in British Columbia. Just so that everyone understands how these work, I'll provide a couple of very general comments initially, and then I'll dive into a little bit more detail about the specific routes.

These unregulated routes are routes where the province has determined that it would like to see ferry service provided. Many of these unregulated routes involve First Nations. Obviously, in each and every case there was a commitment made by government to ensure that ferry service is provided.

The way this works is B.C. Ferries actually negotiates and signs the contracts with each of these contractors or third parties that provide the unregulated routes. The province of British Columbia, through the Ministry of Transportation, provides the funding. The funding is provided to B.C. Ferries and through B.C. Ferries to cover the cost of the unregulated routes.

[1535]

Each of these unregulated routes has a contract, as I said, with B.C. Ferries. The terms of the contracts are tied to the performance terms, which I think makes sense. The renewal of these contracts kind of comes up at the same time as consideration of the renewal of the coastal ferry agreement takes place. I should point out that each and every one of these regulated routes meets Transport Canada's safety requirements, which is important as well.

The specific routes are as follows. Route 25u is a route from Alert Bay to Sointula and Port McNeill. Route 51 is Ahousat to Hot Springs Cove to Tofino. Route 53 is Kyuquot to Tahsis and Gold River. Route 54 is Dodge Cove to Prince Rupert. Route 55 is Lasqueti Island to French Creek. Route 59 is Bamfield to Barkley Sound to Port Alberni. Route 60 isHartley Bay to Kitkatla to Oona River to Metlakatla to Prince Rupert. Then there's a separate charter agreement between Prince Rupert and Tuck Inlet.

The budget for the unregulated routes at the present time is $3.3 million annually. That includes the Ahousat. I should point out that that contract — Route 51, Ahousat to Hot Springs Cove to Tofino — actually expired. B.C. Ferries actually terminated the contract, effective February 14, 2011. That being said, it's in the process of being reinstated or coming back, so we'll have more details on that coming up.

The final one is the Tuck Inlet service. This is a bit of a unique provision in that it actually provides for…. Under the charter agreement, B.C. Ferries provides the Lax Kw'alaams band with a vessel. Via the contract, the band pays annual maintenance costs of the vessel, and B.C. Ferries covers the refit costs every four years on that particular vessel — a bit of an outlier situation but one that's very important to the Lax Kw'alaams.

C. Trevena: The minister has been talking about safety — number of crew and impact on safety. One of the areas where this has been highlighted is the new cable ferry that's coming into operation — Buckley Bay to Denman.

I have one very quick question on the cable ferry itself — whether the minister is aware of any time overruns. It was understood that this ferry was going to be in operation at the beginning of summer. It's now understood that it's going to be the end of summer. That's just a very short question.

My other question is that the minister has been talking about safety and talking to Transport Canada about crew levels. Is this one of the ferries where he is looking to see a reduction of crew levels? Secondly, at what state is his approach? He had mentioned in the House just yesterday that he's been talking to the Transportation Minister, federally, about this. Where are his conversations at?

[1540]

Hon. T. Stone: The cable ferry to Denman Island is expected to be in operation, actually carrying passengers and vehicles, this summer. We don't know if it's early summer or late summer. Staff inform me that they're not hearing late summer, so I'm not sure if the tune has changed there within B.C. Ferries. Maybe the member has picked up on that. We haven't. The summer of 2015 it will be in the water.

Obviously, working backwards from that, there will be rigorous tests to ensure that it's safe, that it works and all the rest of it. In terms of Transport Canada or the crewing levels…. It is B.C. Ferries' intention to have three crew on board. Now, that's B.C. Ferries' intention. The final decision on the crewing level will be made by Transport Canada, and Transport Canada doesn't make that type of a determination until after they've actually looked at the results of all the water testing and have, therefore, provided their certificate of operation and their safe manning document. It's in that final piece that will specify three…. It might even specify two. What B.C. Ferries has said is that even if Transport Canada provides for a lower number than three, B.C. Ferries' commitment is to have three crew on board at all times.

In terms of the other part of the member's question around crewing levels, just generally, and discussions that are taking place with the federal government, this would not be one of the routes that I would have in mind for reductions in crewing levels to achieve some savings.

We do believe that when we look at, broadly, B.C. Ferries' entire network and we compare the Transport Canada crewing levels that are mandated, we contrast a lot of those routes with very similar routes in other comparable ferry systems, notably in Washington state and Alaska, the Transport Canada crewing levels, in many cases, are significantly higher. Three, sometimes four times more crew is required on B.C. Ferries than on comparable ferry systems.

We think that there's an opportunity here, while first and foremost ensuring safety. Reductions in crewing levels on the route from Prince Rupert through to Haida Gwaii…. We're not likely to see any changes there, nor do we want to see any changes in crewing levels in a wide-open ocean route. But on a number of other routes, where you might….

In Washington state a comparable route might only require 15 crew on board. On a similar route in British Columbia, Transport Canada requires 45 to 50 crew on board. What we're saying is, even if that 45 or 50 were brought down to 30, that there is still considerably more crew on board than, say, a comparable route in Washington state, but significantly less than is currently required, which, as the member knows well, second to…. Fuel and labour are the two most significant cost drivers at B.C. Ferries.

We want to make sure we cover off safety first and foremost, but if there is an opportunity where it practically makes sense to reduce, modestly, crewing levels, then we would like to see consideration of that on the part of Transport Canada. In terms of those discussions, I have had a number of conversations with the federal Transport Minister, including quite recently, where she has confirmed that she has directed staff in Transport Canada to continue the discussion with staff in our ministry.

[1545]

Those conversations are taking place now. This is not something that I expect a resolution on in a couple weeks from now. It's going to take some time and some diligence and so forth. But I am happy to report that staff in both levels of government are actively engaged on this particular file.

C. Trevena: I'm sure the minister is very well aware that there's going to be a lot of consternation about this because of safety issues.

It's interesting how we all compare to other jurisdictions. While I've compared Washington State Ferries to B.C. Ferries on a number of issues, such as the cost and the use, one of the great differences between the two operations is that Washington state has the Coast Guard there. They keep their crewing levels down because the Coast Guard is used for safety in Puget Sound, whereas here we don't have that same structure of safety backup. That's why B.C. Ferries is very proud of its safety record and has the crew on board to ensure that safety record.

If the minister is pushing this, I'm sure that there's going to be quite a lot of concern from the people who are operating the ferries, not just B.C. Ferries the corporation but B.C. Ferries workers who are highly concerned about diminution of numbers. They're already concerned that it's only going to be, possibly, three on the cable ferry. But on any other area….

I don't know whether the minister has ever done this. You're trying to get on the ferry, and the car deck is partly empty. You still can't get on because there are so many passengers on board. There are only enough crew for a certain number of passengers, and that is because of the structures that we have. So I would be very interested to hear the end results of the minister's conversation.

I have one quick last question on capital work. I think it's capital work. Then I have a couple of other questions. Unfortunately, you're going to have to move on to transit — not unfortunately for transit. But I have so many questions on B.C. Ferries.

My final question. I put it down to capital. We discussed in the Legislature…. My colleague from Nanaimo–North Cowichan and I presented a petition from people on Gabriola Island who are concerned about the feasibility study for the bridge that has been put together by the ministry, the feasibility study that was commissioned by the ministry.

We were representing Islanders who are concerned that this feasibility study and the idea of a bridge contravene Islands Trust policy and the official community plan. Islands Trust has, obviously, got a very special mandate, and it specifically precludes linking the island with the main island with bridges. So there is both the trust nature and the fact of the local government official community plan.

That being said, we understand the feasibility study is complete. It was going to be complete at the end of February but wasn't going to be released till the summer. I wonder if the minister would be in a position to release this earlier or at least explain why that study cannot be released until an earlier time.

Hon. T. Stone: I will answer the question in one moment.

Again, just to provide the member with a couple more details from her last question. The Denman cable ferry — the construction is almost done. It's expected to be towed up into its place this May. The three cables are actually being installed as we speak, and that work will continue. There will be rigorous…. The sea trials are anticipated to take place through the months of May and into June. Then there will be the actual training of the crew through June and July.

Somewhere in that kind of June-July period is when we would anticipate the certification to be provided by Transport Canada, which would then dictate the minimum crewing level. Once those certificates are in place, then the service could begin. Realistically, I would say the service could be up and running and in operation as early as July, but it could be later depending on Transport Canada certification.

[1550]

Now, on to Gabriola Island and the fixed-link feasibility study. The consultants are still actually working on it. It isn't finished. We haven't received a final copy. We, as the member is, are eagerly awaiting its provision to us. I do believe that we should have it — and have it provided to the public, released publicly — certainly, by this summer. I'm hoping early summer, but we'll see how that goes.

I just wanted to highlight, again, that the intent here is to do a feasibility analysis. Nothing is going to be imposed on the people of Gabriola Island. What we want to do here is based on the fact that we received a tremendous amount of requests from people on Gabriola Island to at least understand what it would cost. What would the cost of a fixed link look like compared to the cost of the provision of continued ferry service?

We determined…. Again, in our effort, consistent with our strategy to embrace every initiative that we possibly can to drive down fares at B.C. Ferries…. If indeed the independent consultants come back and they are able to provide analysis that demonstrates that a fixed-link cost — which would truly be highway, would truly provide highway access to the folks of Gabriola Island — was less expensive over a comparable life between a highway and a ferry, then why would it not be responsible to have that on the table as part of the overall discussion?

There have been a number of suggestions and ideas provided over the last number of years in terms of driving down pressure on fares. Some have been rejected. Some have been explored and then rejected. This is yet another potential initiative that could help us in our effort — I would say our mutual goal here — of actually driving fares down at B.C. Ferries.

Once we have the report — hopefully, by this summer — we will make that report public. I hope it plays some role in helping to inform the broader discussion. As I said a moment ago, there will be no forcing a fixed link upon the people of Gabriola Island, if that is not what the folks of the island want. But we do think it's important to have those facts out on the table, and that will inform the discussion likewise.

C. Trevena: It's very interesting that the minister is so quick to act on a petition of 600 names, when there have been many petitions with thousands of names concerned about the direction B.C. Ferries is going and the cost of B.C. Ferries.

The minister talks very often about driving down fares and making it sustainable. There are ways of increasing usership of B.C. Ferries, which would fill the vessels to capacity, all the vessels to capacity. That would be just by the unilateral reduction or freezing of fares to get more
[ Page 7544 ]
people using the ferries, and the revenues of B.C. Ferries would go up. If there was also greater government investment in B.C. Ferries, that would also be able to reduce the costs on those people and those businesses that are reliant on B.C. Ferries.

I have been speaking for nearly an hour and a half and have not gone into the real economic impact on communities. We've had this discussion many times about the need to be investing in B.C. Ferries and ensuring that people can afford to use them, that the fares are reasonable.

I just wanted to raise a couple more points before moving on, one of which might be a way of saving some money for B.C. Ferries and saving some money to help, though minuscule, reduce the rates. That is the arm's-length relationship that the government has with B.C. Ferries. I mean, it's quasi-private, quasi-public, whatever it is. I don't think anybody knows quite what it is, but it does have, I believe, two boards.

It has at least one active board of directors. The chairman of the board gets $100,000, and other board members get some recompense for being members of the board. They all get, I understand, $1,200 for every meeting that they attend.

[1555]

And if I am not wrong, they and their families get "a ferry travel pass provided to directors, including the chair of the board, and eligible members of their respective immediate families that provides for complimentary vehicle and personal travel on B.C. Ferries."

I wondered if the minister, in his arm's-length discussion with the CEO of B.C. Ferries and with the chairman of the board, had any discussions about perhaps reducing remuneration for the board of directors, saying: if seniors can't get free ferry passes, why can the board members get free ferry passes?

Hon. T. Stone: Yes, I've had a number of conversations in the past couple of years with the CEO of B.C. Ferries and, more importantly, with the board chair of the B.C. Ferry Services board, Donald Hayes. Certainly, one of the very first things I did on this file a year and a half ago, in meeting with the chair of the board, was to express the concern that the government had and that I had as minister with the issue of executive bonuses, which up to that point had been a part of the compensation structure at B.C. Ferries.

Now, we strongly encouraged Donald Hayes and the board at B.C. Ferries to bring their executive and management compensation practices in line with the executive compensation guidelines that we had established provincially, which are applicable across the provincial government as well as within Crown corporations.

Very important, again, to remind folks that B.C. Ferries did the right thing here in bringing their compensation practices in line with Crown policy. They did so voluntarily. At the end of the day, it was their decision to make. I applied as much moral suasion as I could. It was their decision to make at the end of the day. Thankfully, they did what I believe to be the right thing, and they phased out bonuses.

The discontinuation of their executive bonus plan actually saved $900,000. Those are dollars that go right back into the bottom line at B.C. Ferries. It was one of a number of initiatives that have helped apply downward pressure on fares.

I would point out — and the member knows very well; it was only a matter of weeks ago — the B.C. Ferry Commissioner, the independent Ferry Commissioner, looked more broadly at the cost structure at B.C. Ferries, particularly related to administrative costs. He looked at management levels. He looked at overall compensation levels.

I know she's read Gord Macatee's reports, like I have. His finding was that, in his opinion, B.C. Ferries has done a very good job at bringing the cost of management down and that their management levels, their compensation levels, are very much in line with what one would expect in a corporation of their size.

This is one piece of the overall discussion around operational savings. The member also knows fully well — she doesn't talk about this much — that B.C. Ferries has achieved over $54 million in operational savings. They're doing a lot of things much smarter at B.C. Ferries, which is saving significant dollars.

[1600]

All of this has been mandated by the Ferry Commissioner and signed off by the Ferry Commissioner. As Gord Macatee outlined in his recent preliminary price-cap decision for the next performance term, tremendous progress has been made. B.C. Ferries is doing its part in terms of driving down cost, in terms of efficiencies and being much smarter in how they spend their dollars.

The British Columbia government has done its part in terms of maintaining a record high level of funding in B.C. Ferries — I mentioned earlier, approximately, on average, $180 million per year. We made some tough decisions, as well, relating to underutilization and service levels, cutting the seniors discount in half. I also went to great lengths to acknowledge folks in coastal communities and the sacrifices that have been made there to largely adjust to these new service levels.

All of the above, in the opinion of the Ferry Commissioner — and his opinion is the one that really matters in this; he's independent — is that we've made tremendous progress towards our goal of driving down pressure with respect to fares. Are we where we want to be? No. But we're making good progress as we continue this multifaceted approach.

We're about four years ahead of schedule, we believe, at getting fares roughly in line with inflation, 1.9 percent per year through the next performance term, which is very, very significant — as I said, arguably four years ahead
[ Page 7545 ]
of schedule. I'm going to continue to work hard so that we can, hopefully, get to a place where we can actually see those percentage increases come down and perhaps ultimately get to a place where we can actually see price reductions in terms of fares.

The last piece to all of this is actually ferry traffic and volumes. The member knows well that traffic volumes have been steadily increasing over the last number of months. We've had some very good months — December, January, February, March. The numbers are up, and they're up largely on the majors, but it would appear that volumes have stabilized across the entire system. That's part of the solution as well. We're very hopeful that those numbers are going to continue to increase, particularly with the summer months coming up in front of us here.

C. Trevena: I find it very frustrating — I think many people in the opposition find it frustrating — when a minister takes the opportunity to give the spin and not just not answer the question but completely ignore the question.

I had one question for the minister, and this is my last question on B.C. Ferries, as I mentioned. That is, effectively: how can the minister justify the $1,200-a-day meeting fee for the board of directors, the $100,000 retainer for the board chair and, on top of that, free ferry passes — for directors, the chair of the board, eligible members of their respective immediate families — that provide complimentary vehicle and personal travel on B.C. Ferries vessels?

We have had in this last year fares go up, we've had seniors discounts disappear, and we see the board of directors getting their gold pass, that they can ride on B.C. Ferries and their families can ride on B.C. Ferries freely. That was my question to the minister. I don't expect a response.

I'm going to move on to B.C. Transit now, so if the minister would like to change his staff around, that's just fine.

Hon. T. Stone: If the member doesn't want me to actually provide the facts, then that's not my issue. I'm providing the facts.

Interjection.

Hon. T. Stone: I'm providing the facts.

The interesting piece on the employee pass program….

Interjection.

Hon. T. Stone: Let me finish.

The Chair: Through the Chair, please.

Hon. T. Stone: Thank you, Chair. When the member asks questions about free passes for directors, she should also understand and be intellectually honest here with British Columbians that there is an employee pass program as well. If she's going to stand here and say that there should be no passes provided for directors, she should also stand up and say that she has an issue with the employee pass program. I wonder if she's had that conversation with her union friends at the B.C. Ferries union.

[1605]

The fact of the matter is that I have actually made very clear to B.C. Ferries. At a time when government is tightening its belt and we've made service changes that have impacted coastal communities, would it be my choice to see a pass program for directors and, for that matter, employees at B.C. Ferries? No, it would not. But these are decisions that are operational to B.C. Ferries. They're for B.C. Ferries to make.

Again, if you want to have an honest discussion about it, you need to look at the entire pass program — directors, management and, indeed, the employees of B.C. Ferries. For reasons that B.C. Ferries defends to this day, they have opted to maintain the pass program that they have. That is their decision to make.

C. Trevena: I have one last comment on this. This is not a question. It is a response to the minister.

Yes, there is a taxable benefit for B.C. Ferries staff, including the CEO, Mr. Corrigan. It's a taxable benefit. It's very clearly laid out.

What the concern is that we have is this board of directors that gets paid very well — I'm not quite sure what — for their meetings and gets not a benefit but, literally, a free ferry pass for themselves and their immediate families.

I think at this point it's not going to be particularly productive for either of us to continue in this debate. In the interest of ensuring that we have a productive rest of our estimates debate on B.C. Transit, I would suggest that we move on. But I thank the minister for his vigorous honesty on this one.

We're moving from B.C. Ferries to B.C. Transit, and our next line after this will be TransLink.

Very recently the government announced it's going to be doing a review of B.C. Transit to examine and make recommendations about "all aspects of B.C. Transit's operations, planning, forecasting, financial performances…human resources, partner agreements, procurement, fiscal forecasting, service level planning — including ridership, scheduling and capacity — and revenue debt, cost mitigation, capital assets and other financial performance aspects." This is going to be finished next year.

There was an independent review of B.C. Transit just three years ago, Modernizing the Partnership. Very thorough. It had 18 recommendations in it.

My first question is to the minister. Why do another review so quickly, when a number of the recommendations in the first review have still not been acted upon?

Hon. T. Stone: The review that the member is referencing was a review of governance, primarily. It was a re-
[ Page 7546 ]
view that looked into a number of governance issues. It looked into relationships, partner-community relationships and so forth. It was not a cost review. It was not a financial review.

The Crown review which was announced recently, which the member referenced, is exactly that. It's a standard review which…. Frankly, most other Crowns in government have actually been through this Crown review process over the last two to three years, including ICBC and B.C. Hydro and B.C. Lotteries and so forth. It is now B.C. Transit's turn to have this review.

[1610]

It's a review that's conducted by the Ministry of Finance, which I know the member is probably aware of. It's intended to be a review that is quite collaborative in its nature. In fact, B.C. Transit has indicated very clearly to me, in meetings I've had, that they welcome the assistance that they think will come from this review to help them identify any potential efficiencies that may exist within B.C. Transit.

C. Trevena: So we still, then, have the outstanding 2012 review, with a number of recommendations which require legislative change. We still haven't seen any of those come forward.

These are item 2, which is increasing the board of directors; item 3.2, that we should revise the appointment process to allow local government to directly appoint representatives to the board. Again, another local government one: including elected officials. Appointment should be made on the basis of staggered terms, for continuity. The government should amend the Transit Act to allow local government to appoint members. The provincial government should amend the Transit Act to enable multi-year operating agreements, should amend the Transit Act to require one agreement between local governments and transit and should develop a policy framework for intercity routes.

There's been nothing on any of these coming forward, and I'm wondering if the minister can give a bit of explanation of when that's going to happen.

Hon. T. Stone: The recommendations from the review that the member has referenced — all of the recommendations have been implemented, except for the ones that require legislation. I think the member acknowledged that in her question.

It is still our intent to implement the balance of recommendations that haven't yet been implemented through legislation. We're just assessing the details of each one. Of course, through this legislative session we have a full legislative calendar, so we won't be addressing those legislative items this particular session. But we'll be assessing these items and considering them for potential action in subsequent legislative sessions.

[1615]

C. Trevena: So the minister is still considering them. He's not actually guaranteeing that these recommendations are going to be followed. There are some — for instance, the appointment process to the board of directors to allow local government to directly appoint representatives to the board…. I know that there has been some anticipation of this.

The fact that we're talking already…. It's usually unlikely that we have the fall session, so we're possibly talking next spring. We're talking yet another year out. I'm interested in the minister's somewhat, I think, equivocal answer, saying they're just considering this.

Hon. T. Stone: Just to reiterate my previous response, most of the recommendations are in place. There are a number that require legislative action. We are still reviewing those particular items. No final decisions have been taken on them. But it would be our intent to follow through on those actions that we do decide to proceed with. It would be our intent to move those forward at some point in the future.

I will say, though, that there are a few of them that we're already kind of respecting the intent beyond the recommendation, even though we haven't made the legislative change.

For example, the recommendation around ensuring more local participation on the board of locally elected representatives. That is pretty much the practice today. We put out a call to mayors and councillors around the province to gauge interest in participating on the board and have been selecting members of the board from interested parties.

While that's not enshrined in the legislation, it is something that we, through practice, are following through on in relation to the specific recommendation that was made on that in the report.

C. Trevena: In light of that, is the ministry also looking at the staggered terms? I understand that can be done through policy. It doesn't have to be automatically through legislation. It will be through legislation, but initially it can be done through regulation.

I just wondered if the minister could enumerate exactly which ones there is some movement on, out of these ones, and which ones we're still just going to have to wait for regulation.

[1620]

Hon. T. Stone: In terms of which of the remaining recommendations have not been implemented via the legislation that would be required to implement them — however, we're maybe doing in practice anyway…. Obviously, legislation is required to increase the board of directors from seven to nine. That one requires legislation.

The next one: "The provincial government should revise the appointment process for the board to allow lo-
[ Page 7547 ]
cal governments to directly appoint representatives to the board." That one we're pretty much doing in practice today. Again, a good example: the last couple of appointments. We put the call out to locally elected officials or to councils. We are only selecting candidates for B.C. Transit's board from those candidates that come forward. I think, in practice, we're kind of already doing that.

The next one would be, "Provincial government and local government board appointments should be made on the basis of staggered terms," which the member referenced in her previous question. That is a best practice. If you look at the current terms for existing board members, we have not done this one yet in practice. But it is one that, frankly, wouldn't need legislation in order to begin to do.

I appreciate the member's question on this, because it's drawn my attention to this particular one that, I think, as a matter of just good board governance practice…. Whether it's B.C. Transit or any board, staggered terms are always a better way to go. That one I'll take a look at moving forward. I think I can probably, practically, cover that one off without requiring legislation.

The last one would be: "The provincial government should amend the B.C. Transit Act to allow local governments to appoint all members of a transit commission and allow the transit commission to hire its own clerical and technical staff." In practice, this is happening today as well.

The greater Victoria transit commission forwarded a…. As a result of the municipal elections recently, there were some mayors who were not successful and some new ones that were elected. That resulted in the need to replace an individual representing the greater Victoria area — one of the mayors, one of the regions within greater Victoria — on the transit commission in greater Victoria. We did appoint the individual whose name was put forward by the region, so I think in practice we're largely doing this one.

The last one that would require legislation, which we wouldn't be able to do in practice, is recommendation 11: "The provincial government should amend the B.C. Transit Act and regulation to require only one agreement between local governments and B.C. Transit and one operating agreement between B.C. Transit and a transit operating company for one transit service area." That one is a fundamental question of how the…. I mean, it relates to partner funding and how that's all structured and managed. So this one would require a legislative amendment.

C. Trevena: If I'm not mistaken, there are also the intercity routes, developing the policy there. That would be a policy one, as I understand it, rather than a legislative change. I'm wondering whether that is outstanding or whether there is still movement on it — item 18.

[1625]

Hon. T. Stone: That one is strictly a matter of policy. It does not require any legislative amendment. This recommendation has already been factored into B.C. Transit's policy with respect to intercity transit.

C. Trevena: While still talking globally, I have a few local questions to ask as we move on. Talking globally, I just wanted to go through the service plan — a little piece — because I find it very interesting.

The budget for B.C. Transit is actually lowered, as I read it, by $1.1 million this coming year. The acknowledgment in the service plan is that while they want to investigate new technologies, ensure service and reliable routes are designed to meet travel demand, that buses are clean and so on, customer demands for transit exceed available funding levels. I wonder if the minister could explain how that circle is going to be squared.

[1630]

[S. Hamilton in the chair.]

Hon. T. Stone: For the member's benefit, I want to point to page 14 of the service plan. The number that represents the dollar value of the actual grant being provided from the province to B.C. Transit to provide service is indicated here again on page 14, under government transfers. The projection in funding is going up, actually, from $103.862 million last fiscal year to $104.112 million this year.

I think the numbers that the member was referencing include the ministry's view, which includes the recoveries to the BCTFA. So that's a slightly different perspective. If we're strictly looking at what is the total dollar value of the service that is funded through the grant that's provided from the province to B.C. Transit, on page 14 this is the number that indicates that. In fact, fiscal year over fiscal year we're actually increasing the total dollars that we're flowing to B.C. Transit for the provision of service hours.

C. Trevena: However, the plan does note that demands do exceed the funding level. So there is clearly a desire to increase this. Given the arguments that everybody has seen for transit as a good alternative, I'm wondering if the minister can explain how we're going to make sure that if we have this demand and we have a public service of transit, we're going to actually serve the public who are wanting the transit.

Hon. T. Stone: The most general comment I would make in response to the member's question, and I'm sure the member would agree with me on this, is the demand for transit always exceeds the budget that's available. There's no question.

The balance that is struck within a particular community between the level of service that's provided to serve
[ Page 7548 ]
the different needs in the community — for example, the transit needs that are very much related to students, serving universities and colleges, versus handyDART service, which is largely there to serve seniors, versus providing for an increase in a service that covers off the broader network in a particular community, more frequency on all routes…. I mean, those are really challenging discussions of balance that are largely up to the local government in question to determine.

Now, I will say that we're…. The member has heard me say this in the House and elsewhere. British Columbia is a real leader in terms of the level of funding that's provided to transit service. We've seen a dramatic increase in dollars that are provided from the province to B.C. Transit over the last ten years. As a result of that, one would expect there to have been…. I know there's a direct correlation between the level of funding that's provided and matched with partner funding from local governments. That's an important piece of this as well.

There has been a very significant increase in the service hours that are provided provincewide and the ridership. Just to read it into the record, the ridership in the last ten years on B.C. Transit…. This is a tremendous success story that I think we're all proud of. In 2004 there were 38.6 million rides on B.C. Transit systems around the province. In 2014 it was 51.9 million rides. That's a 34 percent increase in the total number of rides that are provided across the system.

Of course, there's always a demand for more, and that's where I think this Crown review is so important. It's a good opportunity to take stock of how transit does what it does and to take a look at the contracts that are in place with partners and with suppliers, their fuel procurement strategies, every facet of transit's operations to ensure that transit is as efficient as it possibly can be and that every dollar that is currently being invested in transit is actually going towards the provision of front-line service hours in communities around the province.

There will continue to be significant demands on transit systems as people want more hours. Our tough challenge here is to balance that with the resources that are available. But we're very proud of the very significant increase in ridership and service hours that we have seen in our province over the last ten years.

[1635]

C. Trevena: One of the ways of dealing with revenue for B.C. Transit is, obviously, fares and farebox recovery. Unlike B.C. Ferries, it's much lower. Is there any suasion by the government on B.C. Transit to increase that farebox recovery and see in different jurisdictions that fares increase?

Hon. T. Stone: The responsibility relating to fares is the responsibility of the local community in question. Each community comes at that discussion from a different perspective. That's why in any given year we will see some communities keep fares flat and others increase them. From time to time there's even consideration given to a reduction in fares.

As the member would know, in an effort to increase ridership, certainly lowering the fare would potentially help with that. One of the unintended consequences of lowering fares is that even if you're increasing the result — you see an increase in the number of riders — you could actually see the overall revenues available to the system decline, and that means fewer dollars available for the actual service levels that are provided.

It's a bit of a catch-22, one that I know that B.C. Transit's partner communities don't take lightly. It's one that I think local governments struggle with each and every year, to strike that balance just right between affordability — recognizing many people really rely on transit to get to their places of employment, to get to school, to get to their jobs, their doctor appointments affordably — all the while ensuring that there's the service that people expect — the frequency of service, handyDART hours and so forth.

It's a very, very difficult balance to strike, but it's one that's the responsibility of the local government in communities.

C. Trevena: The service plan does say there is going to be a fare structure strategy underway to look at opportunities to improve revenue yields. I wonder if the minister could explain that in English.

[1640]

Hon. T. Stone: The fare structure strategy is a conversation that's taking place between B.C. Transit and partner communities right now. It's a conversation that…. Actually, in the context of the Crown review, which is about striving for efficiencies, this is one area where B.C. Transit really believes there is an opportunity to potentially save hundreds of thousands of dollars.

B.C. Transit currently spends about $1 million per year printing tickets, transfers and passes. Those printed products, obviously, are costly, and the overall cost of printing actually goes up in direct correlation to the number of different products that have to be printed. For example, if a community had — and some communities do — a two-day pass, a five-day pass and a ten-day pass, reduce the number of products that they have, which thus requires far less paper to be printed, and you're actually going to save some money there.

Likewise, communities are gradually moving to a flat-cash system. Kamloops is actually moving in this direction, as one recent community, whereby the same fare will be charged to everyone. There won't be a student rate and a regular passenger rate and a senior rate. What that does is it reduces conflict at the fare box and reduces the conflict that comes with a transit driver having to discern
[ Page 7549 ]
whether this person is a senior or not. It keeps the wheels on the bus moving more frequently.

There are a number of opportunities as part of this discussion, again, which largely involves reducing the number of products that are available within each particular community. Also, standardizing between communities — moving to a system where, for example, a monthly pass looks the same in Whistler and looks the same in Kamloops because there's no mention of a dollar number on it, so it's just standard, almost like postage stamps. There's no dollar number on it, so you actually, technically, can use the thing for years and years from now, as opposed to the way they used to do it at Canada Post.

The long and short of it is B.C. Transit believes that there's an opportunity here to actually save some dollars. Even if they can save $100,000 or $200,000 with this one strategy over time, those are dollars that will go right back into providing service hours in communities across the province.

C. Trevena: Well, talking about service hours that are around the province, I just wanted to raise for the minister a couple of communities where there have been problems with access to service, before we come back to a couple more specifics on the service plan.

One is in Squamish, where they've apparently had a good increase in ridership. They've seen their ridership go up, I believe, 23 percent, which is great news. And they've been looking at broadening their service through the community but now are very concerned that they're going to possibly, because of contraction in the provincial budget, have their service cut over the next three years. I wonder if the minister could explain how that's going to happen.

Hon. T. Stone: Squamish is one of the more successful transit systems in the province. I think they're very proud of that — rightfully so. We're proud of having been a partner with them in their growth. Squamish has actually seen a 59 percent increase in their service hours over the last ten years — that's 59 percent — and a 67 percent increase in ridership as a result of those increased service hours in the last ten years.

[1645]

A lot of that was predicated on a very significant increase in dollars, grants, from the province of British Columbia — a 194 percent increase in the level of government funding in the last ten years. There's no question that every dollar you put into transit has a direct correlation to an expansion in hours and an expansion in the number of riders. That all being said, we're very aware of Squamish's ambitions, their intent and desire on continuing to expand their transit service. We want to work with them on that — no question about that.

We're working our way through this Crown review now. Again, every dollar that's identified as efficiencies will be plowed right back into providing service hours, across the system but in communities like Squamish, where there's a high demand for continued expansion.

C. Trevena: As I understand it, though, it means that for this year there is no money on the table for Squamish. It's going to be trying to find money through efficiencies that are identified or through cuts that are identified with the review.

Hon. T. Stone: Again, with respect to the Squamish transit system, a huge success story in the province — no question about that. I'm very pleased that, moving forward, I've protected funding. There's not going to be a reduction in funding in terms of the service hours that Squamish is able to provide their citizens in terms of the transit system there.

As I said earlier, there have been very steady increases year over year to B.C. Transit's budget. I think it's a good point to put this on the record. It's one of the few departments in the Ministry of Transportation over the last six years that has actually increased every single year. It was 10 percent of MOT's budget six years ago; it's 13 percent of our budget today. That growth in grants is reflected directly in the increase in service hours and ridership, which I've mentioned previously.

We've protected funding. There isn't a cut here. There's not going to be a reduction in service hours. But we're moving into a period over the next number of months through this Crown review, working really closely with partner communities. B.C. Transit is getting under the hood of their operations and looking for every opportunity to achieve some efficiency and plow those dollars back into providing additional service in the months ahead.

C. Trevena: In other words, they can't expand the services they're wishing to this year. Likewise, I understand that in the minister's own community of Kamloops there is a desire to increase hours by about 6,000 hours, and that won't be going ahead because of a freeze in funding. I just wondered if the minister could confirm that.

Hon. T. Stone: I've said this on the public record a number of times now. I'm not prepared to concede that there is no opportunity to add some additional hours in any of the transit systems around the province at this point. I think it's highly premature.

[1650]

We are working collaboratively with B.C. Transit, who is working collaboratively with their partner communities, as I said a moment ago, to get under the hood of the operations through this Crown review process, which we think will be very useful to helping identify areas for cost savings. We talked about the fare structure strategy a moment ago as one of a number of pieces to this.

I'm very confident that coming out of this process there will be identified efficiencies. Those will be dollars
[ Page 7550 ]
that will be allocated towards additional service, not protecting current service. We're protecting current service levels. This is about additional service.

For everything I just said about Squamish, the same applies in my home community of Kamloops — again, right up there as one of the more successful transit systems in the province. I've said to my constituents in Kamloops that I think it's highly premature to just automatically suggest that people should brace for, certainly, reductions. We're maintaining the funding levels moving forward. But there might not be opportunities for some expansion.

I certainly would like to see that in my own home community. I mentioned it's a success story. The ridership in Kamloops is up 28 percent in the last ten years. The total number of service hours is up 27 percent in the last ten years. Again, that's because the city of Kamloops has stepped up to the plate in a big way with their partner funding, as has the provincial government. Our grants to the city of Kamloops for transit service have increased 89 percent in the last ten years.

We would certainly like to continue to work with Kamloops, with Squamish, Nanaimo, Vernon, Prince George and all the other partner communities around the province to not just protect service levels but to grow them in the years ahead. We think it's really important, out of respect for the taxpayers of the province, that we take this opportunity, through this Crown review process, to ensure that for every single dollar that Transit expends, every dollar possible is focused on the provision of service hours.

C. Trevena: But just to clarify, there will be no expansion this year, although both communities had hoped for an expansion this year.

I'd like to just quickly move on to Victoria and the Regional Transit Commission's application for a gas tax. I wondered if the minister could tell me: when did the Victoria transit commission first make the request to him for the gas tax?

Hon. T. Stone: I will have to get back to the member with the specific date that the request was first made from the greater Victoria transit commission with respect to the increase in the gas tax. We don't have that with us here today, but I'll endeavour to get that for the member as quickly as possible.

C. Trevena: I was really just wondering about the length of time the process has taken, because I understand it's not actually going to be coming into effect until about 2016 now. I'm a little concerned about how long it's taken to get from a request to practicality there. If the minister could clarify, that would be great.

Hon. T. Stone: I do appreciate the member's question related to timing and process moving forward. At the end of the day, we have not made a decision whether to actually enable an increase in the gas tax. Now, again, we'll get the specific dates for the member, but I believe it was shortly…. It might have been three to six months after the last election. It was probably in the fall of 2013, early 2014. I'm expecting that's probably the date that we received the initial request.

[1655]

I also had a meeting with the chair of the commission at the time, and we talked through the request. We then went back and indicated to the transit commission that we would not be able to consider such a request unless there was a business plan to support, or that outlined, the request and so forth. There was quite a period of back-and-forth with the transit commission. Simply put, the opportunity to address the increase in the gas tax for greater Victoria…. The window of opportunity to do that, as part of the last budget process, closed.

The latest contact or communication that we've had with the transit commission is that…. We were not able to deal with it as part of the last budget process for the current fiscal year. However, it is something that we are prepared to discuss with them once we get into the budget deliberations with respect to next year's budget.

C. Trevena: I thank the minister for that. Obviously, it's going to take some time for the initial request.

My last question. I hope it will be quite quick in response, because my colleague from Vancouver-Fairview is going to be moving on to questions about TransLink. Again, in the service plan there is a reference to investigating new technologies for transit and specifically saying automatic voice enunciators. I know that this is an issue in the Victoria area about the adoption of this or whether the driver should read out the stops.

I know that there are other jurisdictions that have these enunciators. I guess my question is: why is this one so difficult to sort out — that we can't have a simple, cost-effective one transit-wide that we see in other transit systems?

Hon. T. Stone: With respect to automatic voice enunciators, as the member knows well, the Human Rights Tribunal made the ruling that they did. Transit has been collaboratively working with the drivers union to come up with an interim solution that involves drivers calling out the stops. The union has representation on an IT committee that is charged with the responsibility of assessing the different technology options that are out there.

[1700]

Frankly, a lot of the technology that's in use in other jurisdictions is extremely expensive, so the concern that B.C. Transit is trying to balance here is implementing an automated solution as quickly as possible but implementing a solution that's cost-effective — so as to ensure, again, that the maximum dollars are actually going into service provision for the customers as opposed to technology in buses.

That all being said, there's an invitation to quote that's out, which I believe will be closing on May 5. B.C. Transit, anticipates that a number of vendors will indicate, as part of that process, their intentions to provide a quote.

Again, the goal here is to really challenge industry to come up with creative but cost-effective technology solutions that could then be implemented in transit buses, not just in the Victoria region. B.C. Transit's got to cover off the entire non-TransLink region of the province with whichever solution they come up with.

G. Heyman: I see so many people at the bus stop with the minister. I'm a little worried that the 99 B-line is going to sail by a couple of times before we finish the questions.

Does the minister want a short break before we begin?

The Chair: I will turn that to the minister.

Minister, would you like to proceed right away, or would you like a short break?

Hon. T. Stone: Could we just take a one-minute break?

The Chair: Yes. The committee stands recessed for one minute.

The committee recessed from 5:02 p.m. to 5:05 p.m.

[S. Hamilton in the chair.]

G. Heyman: I'm going to start with some questions around the Compass card — a little bit of history of the card. Back in November, 2007, former Transportation Minister Kevin Falcon, following a trip to Europe in which he was pretty impressed with turnstiles and cards, stated that they would be installed at the SkyTrain stations and expected them to be up and running sometime in 2008.

In 2009 B.C. committed $40 million and the Canadian government committed $30 million for the project. Later in '09 the first budget came in at $171 million, which was about double the cost estimate of then Minister Falcon. The project was expected to be operational by 2013, following commencement in 2010.

The second Compass budget, which I believe is still the operational budget, came in at $194 million in 2013, about $23 million over the original budget. We now see that the initial target dates have come and gone. In July 2014 TransLink says they won't know until October when the system will be functional and, later that year, said they expect Compass to be up and running by the end of 2015.

Now, I appreciate, as the minister does, that there's no point in starting a system in which the bugs remain and have not yet been worked out by the contractor. We have a system that was imposed on TransLink by the provincial government through Transportation Minister Kevin Falcon.

The contractor, Cubic, was retained to implement the system. Part of the rationale for the system, a big part of the rationale, was that TransLink users were sick of people they perceived to be fare cheats or fare evaders and that this system would stop that and save the whole system money.

Unfortunately, TransLink itself says that they'll be paying Cubic, once the system is finally up and running, $12 million a year to operate but only expect to recoup about $5 million to $7 million a year from fare evaders.

It's still worthwhile implementing measures to stop fare evasion, and we have a system on which much money has been spent, so clearly we're going to go ahead with it. Unfortunately, the delays — the gates and the Compass tap card readers on buses and at SkyTrain stations — have turned into kind of a visual image for people who are being asked to consider a half percentage point increase in their sales tax, an image that tells them that they believe TransLink doesn't use money wisely.

I would dispute that with them if it's possible to have a rational argument, because this actually wasn't TransLink's choice.

Let me ask the minister. TransLink says they expect Compass to be up and running by the end of 2015. I'm not aware of what conversations the minister has had or not had with TransLink executives or the board. But does the Transportation Minister have confidence that this project will actually be done by the end of 2015?

[1710]

Hon. T. Stone: Welcome to the member for Vancouver-Fairview for this discussion — the TransLink portion of the estimates.

In terms of the Compass card program, you know, it's not going to come as any surprise to the member…. I certainly have indicated many times that I share the frustration that I think he shares and that the people of the Lower Mainland have expressed in terms of the delays that have been realized through this program up to this point.

I've expressed on numerous occasions my concerns to the board chair at TransLink about just how important it is for them to get this project on track. I know the member shares, I think, the position that most in the region have, and that is that once implemented, the benefits of this program will be significant.

The fare gates, complemented with the Compass card, is a system that's in use on transit systems in many parts of the world. It's demonstrated to reduce fare evasion, which, again, is instrumental in ensuring that dollars that should be in the system to fund the system at current levels and expansion are there. Fare evasion is a challenge, and these systems will help with that challenge.

These systems make transit systems safe. I certainly know that any effort that can be made to enhance safety on TransLink's operations is something that I think is worthwhile pursuing.

As for where TransLink is at with the program today and what we can expect in the months ahead, the member knows well that TransLink is under new leadership. There's a new interim CEO who's in place, Mr. Doug Allen.

He, by all accounts, is highly respected and is really sinking his teeth into this particular project, as I understand it. Certainly, based on his track record, I've got a high degree of confidence that under his leadership we will see the Compass card program finally get pushed over the finish line.

So at the end of the day, those benefits that I mentioned a moment ago — safety, fare evasion, as well as having usage statistics…. They will be instrumental for TransLink in the future being able to better calibrate its fares and understand who its users are and what their travel patterns are, better match service to those travel patterns and so forth.

Those benefits are really, really important, and they are going to be instrumental to TransLink in the months and the years ahead.

G. Heyman: I, in fact, don't entirely share the minister's view on the utility of fare gates. I don't necessarily think they add to safety at all.

I know that TransLink didn't come up with this idea on their own. It was foisted on them by then minister Falcon.

It's over budget. The amount of money that it will cost TransLink to have Cubic operate the system will exceed, by some $5 million a year, the amount of money that will be recouped from foiled fare evasion.

Frankly, the issue of safety at SkyTrain stations, in particular, is critical. There's a record of assaults, both on trains…. Sexual harassment and, in some cases, sexual assaults. There have been incidents at a number of stations.

[1715]

It seems to me, and I suspect it seems to the public, that an investment of not even that same amount of money in enhancing TransLink security with real people would both deal with the issue of fare evasion and deal with the issue of the public's safety at stations and on SkyTrains as well as on buses, but we are stuck with this very costly system. So let me ask the minister if he has any information on the request-for-proposal process that selected Cubic to run the Compass system.

I ask this because Cubic hired Ken Dobell — a former adviser to Gordon Campbell — who was charged with failing to register under the Lobbyists Registration Act and somehow managed to escape any meaningful penalty for that. Does the minister have any information on the request for proposal, and can the minister say whether the former minister directed TransLink to implement the Smartcard system and/or to use Cubic as the contractor?

Hon. T. Stone: I know that the member knows well that TransLink is an independent corporation. It is not a Crown corporation. It does not report to the Minister of Transportation or any other facet of the provincial government. It's an independent corporation. It has its own board of directors.

As such, the province of British Columbia has no input into or influence over the operations of TransLink, past, future or present, including any of the operational details relating to the selection of Cubic as the vendor in this particular project. All details of procurement are operational to TransLink. We don't have any visibility into those details.

The member is welcome to reach out to TransLink directly, though, if he would like to follow up on those detailed questions he has.

G. Heyman: It would be an interesting exercise to know what the result would have been. I know what the result was when the former board of TransLink wasn't interested in the then Richmond-Airport-Vancouver line that Minister Falcon was so intent on putting in place. I wonder what the reaction would have been had the minister given his clear indication that he wanted fare gates in place and the executive chose not to do that.

In any event, having said that, I would like to ask the minister whether the government or TransLink ever completed a cost-benefit analysis before announcing that fare gates would be installed. If not, why was the system installed?

[1720]

Hon. T. Stone: Yes, there was a business case or a cost benefit that was done back in 2009. It was done under the direction of the TransLink board. It was used as a reference point for the province's confirmation of our funding contribution.

As the member knows well, the province is nothing more than a funding partner insofar as this particular project is concerned. The business case, the cost benefit, was done. It was a process that was completely managed and overseen by the TransLink board back in 2009.

G. Heyman: I would ask the minister if he would be willing to obtain that cost-benefit analysis and business case and share it with me — not today, obviously, but at some point in the future.

Let me move on to the referendum itself — or the plebiscite, as it is now called. Before I begin, I think the minister knows well that I have been quite outspoken in supporting a yes vote. I'm a bit at a loss to explain why the minister regularly in the House says that there's some confusion about what my position actually is. He seems to be confusing my criticism of holding a referendum/plebiscite at all on a matter of such significance to B.C.'s economy with whether or not I actually want to see a yes vote, faced with the fact that it's going ahead.

Putting that aside, I know the minister…. At least, I take the minister at his word, and I assume the minister
[ Page 7553 ]
has enough of a handle on the implications of congestion in Metro Vancouver for the entire provincial economy that he wants to see a yes vote proceed, if only because I believe it will be a significant challenge for government to deal with the issue if it were to fail.

I've been supporting it as well. I've been going door to door campaigning for it. I don't know if the minister has, but I hope he'd consider it. I think it would be a good sign to the people of Metro Vancouver that he has faith in TransLink and he recognizes how important the investment in transit is.

It's heartening that the…. I think the vote is now up to about 31 percent return with five weeks to go. There's no particular reason to expect a big influx of ballots in the last five weeks, but that may happen. I think the minister is checking that. I think there's 21 percent verified, but there's another 10 percent waiting to be verified. So there has been about a 31 percent return, unless I'm mistaken. That was information that was relayed by the Chief Electoral Officer this morning.

[1725]

I think it is important to plan ahead. The consequences of a no vote would be, I think, quite devastating for the region. People would have to regroup and figure out what to do next. There are ongoing implications for the provincial economy that have been estimated at, at least, $1 billion dollars a year by the failure of trucks carrying goods and commodities from around the province to quickly and expeditiously get to port, lost productivity by people limiting the hours in which they will work because of certain periods of intense traffic congestion, the difficulty of delivery vans and service people making their way around the region and the productivity costs of that.

Let me ask the minister a series of questions. There was a memorandum of understanding signed in 2010 between the government and the mayors that committed to work collaboratively on finding and identifying funding options for the needed investment in transit. Then-Premier Gordon Campbell trumpeted the memorandum of understanding as something very important.

Let me ask the minister quite simply: in the event of a no vote, is the memorandum of understanding from 2010 still operative, and will the minister work with the mayors to identify funding options so we can relieve congestion in Metro Vancouver without waiting for who knows how many years for a plan B?

Hon. T. Stone: I certainly agree with a fair amount of what the member from Fairview just said in his question — or in the statement that preceded his question — in terms of just how critically important it is to continue to see investment in transit and transportation in the Lower Mainland. I think on that we have consistently agreed. It's very important to continue to invest in the rapid transit projects and a replacement for the Pattullo Bridge.

I've said, and I know the member says this as well, it's critically important to the economy not just of the Lower Mainland but the entire province of British Columbia. It's critical to the environment, reducing greenhouse gas emissions in particular, and it's really critical to the quality of life in the Lower Mainland as well. It's critical from a goods-movement perspective and recognizing the importance, as the member mentioned in his comments, of an efficient transportation network that can move goods in and out of the province quickly and cost-effectively.

This is why we, as a province, have said very clearly that the province stands ready to invest our one-third — one-third in the major rapid transit projects and one-third in the replacement of the Pattullo Bridge. We're ready to do that. We're ready to do that tomorrow.

The decision that is in front of the people of the region is how the region is going to cover its one-third. Now, there were some, I thought, very honest remarks made this morning, or that were at least reported today, from the mayor of Vancouver that really attest to what I've just said. He said very clearly in a range of media outlets, or media outlets reported very clearly that he said: "It's really important that, through this vote, the region determine how it's going to come up with its third. How is the region going to pay its third?"

[1730]

[G. Kyllo in the chair.]

We are proud — I'm particularly proud, personally — of the collaboration that we have seen develop with local government in the region over the last year and a half. When I took over as minister responsible, I think the relationship to that point, in some respects, was at a bit of a low point. But I set about really reaching out to the mayors and councillors of the region and getting to know them.

While they made it very clear to me consistently — and I've never suggested otherwise — that this was not a policy choice of theirs and they didn't necessarily support the decision to hold a plebiscite, slowly but surely some of the trust in the relationship has developed.

They came together through this process, and they put a good plan together. We challenged them to suggest a funding source. They suggested an increase in the sales tax regionally, which we've said we're prepared to enable if the voters say yes. They asked for the same exemptions to apply to this 0.5 percent as applied to the existing sales tax for simplicity, particularly from a small business perspective. We've said yes to that. We'll make that happen if there's a yes vote.

They were also concerned about leakage, largely in relation to the purchase of automobiles. We said we will ensure that there's the same tax treatment on the purchase of a vehicle, that the tax will be applied based on where the individual lives, not where they purchased the vehicle. That will address the issue of leakage.

There's a tremendous amount of collaboration, I think, up to this point. We're certainly all focused on a yes vote. We're all focused on planning for this thing to be successful. The member is correct. Roughly speaking, I think, in terms of the numbers that the member mentioned in terms of the percentage of ballots that have been received by Elections B.C., he is correct. It's about 32 percent, including those that have been verified and those that remain to be verified.

We're seeing a steady stream of ballots come in. We're at the halfway point now in this process. It's been a vigorous debate. Both sides are out there having the conversations they feel they need to have with the people who live in the region.

While I haven't been out door-knocking, I certainly have delivered a number of speeches in the region. I've had countless meetings with organizations. In every encounter that I have in the Lower Mainland, I make sure to make very clear the province's position in terms of not just supporting this process but also supporting a yes vote and why that's so critically important.

You know, the member and I both went through the last provincial election. There were ups and downs and surprises and all the rest, but I think the common lesson we all learned is that elections matter. Actually, people going through the process of voting and not coming to any conclusions until the votes have been cast is really important.

I would not count the yes side out in this thing. I think there's a tremendous organizational advantage that's playing out across the region as those 140-plus organizations that support a yes vote have rallied to the side of the mayors, who really have assumed the leadership that one expects of them in terms of not just having come up with the plan but getting out there and selling their plan to the people of the region.

We're focused on a successful yes vote. I still remain optimistic that we're going to see that, once all the ballots have been counted.

G. Heyman: Notwithstanding the minister correctly pointing out that elections are important, I hope that nothing about this plebiscite or referendum exercise leads him to think that it would be good policy in the future, particularly on the government's pet projects.

Let me, in the interest of time, clump the odd question together. Let me ask the minister what conversations he's had with the federal government about their third of funding for the capital projects that will be involved in the mayors' transit plan.

[1735]

Hon. T. Stone: The federal government is obviously going to be an important funding partner in terms of the major rapid transit projects in the Lower Mainland. There's no question about that. I would point out, the member knows well, that the federal government has been a very good funding partner on a wide range of infrastructure projects that we've seen built in British Columbia, covering many different facets of transportation. We certainly expect that that will continue to be the case.

The federal government launched their new Building Canada fund a couple of years ago to great fanfare. We're appreciative of the dollars that are available to British Columbia in that fund. There is a provincial and territorial component that has, as the member I'm sure knows well, a small communities component of about $100 million. There's about $900 million additional dollars that are available in the national and regional components of the provincial-territorial fund that is available to British Columbia.

One of the challenges we have with the overall dollars available is that they are earmarked for a ten-year time frame. And they are a bit back-end loaded in terms of when the dollars are available. But we are appreciative of the funding that the federal government has earmarked for British Columbia.

There is also a national component which is strictly merit based. The national component of the Building Canada fund…. I believe there's $4 billion in that fund and those are earmarked for projects that the federal government deems of national interest. They've allocated dollars from that fund to transit in Toronto, to a bridge in Montreal and to the bridge in Windsor. One can make a compelling case, and we certainly are, that our transit needs in the Lower Mainland would be no less important to this country than transit in Toronto.

Of course, the federal government introduced its budget yesterday. One of the items that we had strongly indicated to the federal government that would be of high interest and high value to the people of British Columbia would be more infrastructure dollars specifically earmarked for public transit.

So I was very pleased, on behalf of the province of British Columbia, to see in the budget that the federal government brought down yesterday an additional $750 million per year for two years, starting in '17 and '18, and then growing to $1 billion a year for years beyond that. That's going to provide additional opportunity for funding public transit across Canada, and we certainly expect and will certainly ensure that British Columbia receives its fair share.

We're committed to our one-third. As I've said consistently, this plebiscite is about the region determining how it's going to pay for its third. We're going to do everything that we can to ensure that the federal government is there at the table, as well, with their third.

G. Heyman: Has the ministry calculated how much congestion is costing the B.C. economy, in terms of the effects of both gridlock on the movement of goods, ser-
[ Page 7555 ]
vice people, delivery vans, etc., as well as increased greenhouse gas emissions? And has the ministry done any calculations about how that cost may increase if there's any further delay in implementing the proposals in the Mayors Council plan to relieve congestion?

I also am wondering what ideas the ministry has with respect to how transportation infrastructure can be built, both from a service frequency level as well as new capital projects, if this referendum does not pass. How can these things be adequately funded with an expected growth of one million people over the next two to three decades?

[1740]

The minister has previously suggested property taxes are the answer, which the mayors have rejected. The minister has rejected a number of other proposals made by the mayors. Is the minister willing to put options that he has previously rejected back on the table if this referendum were not to pass?

Hon. T. Stone: There were three questions there. First off, with respect to greenhouse gas emissions. Through the Ministry of Environment, the province conducts a greenhouse gas emission inventory every year. Certainly, transportation is I think one of the largest components of that process. There's no question one of the areas we can continue to make a very significant impact on, and in reducing, greenhouse gas emissions is through transportation policy and transportation choices.

Giving the member one example. Over the last ten years we've seen a 34 percent reduction in emissions from transit buses in the province of British Columbia because of cleaner-burning fuel and the technology improvements and so forth. Obviously, every vehicle that we're able to get off the road, because more people are using transit, is going to have a huge impact on our carbon footprint.

This is why we're so rigorously pursuing CNG buses across the province. We will have 50. Twenty-five are in operation in Nanaimo at the time. The first two were delivered in Kamloops the other day. The other 23 will be arriving shortly. There are a number of transit communities that have put their names on a list and want these CNG buses. TransLink has a number of CNG buses as well. The overall cost of CNG bus technology has come way down in recent years.

[1745]

Then when you look at the savings from fuel and the reduction in the emissions — they're quieter — it's definitely the way to go. It's why we're going to continue to vigorously pursue dual fuel on ferries — a huge opportunity to reduce emissions there, as well as natural gas in commercial trucks.

With respect to the last point, on the emissions, obviously, if there were to be a stop in investments in continued transit capacity in the Lower Mainland, that will have an impact on emissions growth. The opportunity to continue to reduce emissions is probably the more appropriate way of looking at that. That's why we say — and the member said it, as well, earlier — a yes vote is really critical to the environment — so we can continue to be driving down greenhouse gas emissions that come from the transportation sector.

We know there are going to be a million more people coming to the region in the next 20 to 30 years. That's going to mean a heck of a lot more vehicles on our roadways if we don't have the transit capacity to help accommodate some of that additional growth.

That leads me to the second part of the member's question. I believe it was in relation to cost-benefit analysis. In terms of the current costs and future costs of congestion if no continuation of investment is seen, there have been a number of studies done on this — the impacts of the cost of congestion.

The most recent cost-benefit analysis that was done — again, that looked at this globally across the whole Lower Mainland region — was actually done by the Mayors Council, as I'm sure the member is aware. It projected that current congestion costs are estimated at $487 million worth of delays, vehicle operating and related costs; $592 million in lost business revenue; and $340 million in lost regional GDP. Very dramatic costs of congestion with the network today.

Then, of course, when you overlay a million more people and the growth that everyone anticipates in the region, the congestion challenges and the costs related to those challenges are just going to continue to increase if there is not to be continued investment.

Now, in terms of the ministry's approach to assessing the cost benefit of congestion and the overall question of cost benefit, more appropriately, we look at that on a project-by-project basis. When you look at a major new piece of infrastructure or a significant improvement to an existing piece of infrastructure, one of the critical components to the decision to go or no go on that particular investment is the cost-benefit ratio analysis that's undertaken, which includes looking at the impact of congestion.

The third part of the member's question was: if there were to be a no vote and through that a rejection by the voters of the region of an increase in the provincial sales tax on a regional basis, then what other funding sources would the province be willing to consider? I'm not going to speculate on that today. What I am going to say is that we would be willing to sit down with the mayors and have that conversation with them immediately following the vote.

The region is going to have to come up with one-third. If it's not the regional sales tax, it will have to be something else. The member knows well that many other ideas — taxes, levies and so forth — have been discussed over the years. We would have to see what the next preferred funding source would be that the mayors would want to
[ Page 7556 ]
put forward and assess that funding source on its merits at that particular point in time.

G. Heyman: In January 2013 the then Transportation Minister and the now Environment Minister stated that there were some principles around funding for transit, and they were in the TransLink jurisdiction.

[1750]

There were four of them. The funding options must be affordable for families, they must be regionally sourced, they must avoid negative effects on the provincial economy, and they must include land value capture.

I have a couple of questions for the minister. Land value capture appears to now be somewhat optional and left to the mayors, in that it's not currently part of the referendum question.

Second question is: at what point did the referendum become a principle? Was it some point prior to the election platform being put together in 2013 or some other point? Is the referendum now an immutable part of the principles — in other words, a fifth principle, or perhaps a fourth principle, replacing land value capture?

A corollary to that question. If other funding sources need to be considered, I know that it is possible for cabinet to waive, under the legislation, if my memory serves me well, the need for a second referendum or plebiscite. Or will the minister make this an immutable principle?

Hon. T. Stone: First, with respect to land value capture, the position of the province is this. We believe that land value capture presents a tremendous opportunity to generate a sizeable amount of revenue, particularly as transit expands — a good amount of revenue that, increasingly, should be going back into expanding transit.

Now, that's a conversation that is ongoing, that we're having with municipalities across the region. But there's no question that…. I mean, land value capture is taking place today. It's debatable how many dollars from land value capture are actually going back into expanding transit. Our position is that more dollars should be. That's a subject that we raise in our discussions with the mayors, and we will continue to do so in the months ahead.

[1755]

With respect to the member's question relating to the requirement for a referendum — or a plebiscite, as it's now referred to — this is more than just a principle. It's actually the law in the province. There is no mechanism to waive the requirement for a referendum, or a plebiscite, to ensure that, if the mayors were to want to introduce a new funding source for the expansion of transit and transportation, that that funding source has not first been approved by the people in the region. That is not a matter of policy. That is the law of the province of British Columbia. It was brought through the Legislature last year.

In terms of the origins of this law, this was — again, going back to the 2013 shareholders meeting that we had with the people of British Columbia in May of 2013 — a very specific commitment that we included in our platform. We said it in an effort to end what had up to that point become a logjam in terms of coming to a place of agreement between the province and local government about what that source of funding was going to be for the region's one-third, but also to come up with a different process within which the region itself could achieve consensus on funding sources as well as priorities.

We made a determination that the people of the region are going to have a say. They're going to have the final say. They're going to approve through a referendum, a plebiscite, any new taxes or fees that the mayors believe are necessary to invest in expansion of transit and transportation — i.e., to cover the region's one-third.

Through this process the mayors, despite a tremendous amount of angst and, I would suggest, displeasure on their part with the process, pulled together, and I give them full credit for that. They pulled together as a region. They put one heck of a plan together. They were challenged to identify a single funding source. They did that with the sales tax. We've challenged them to get out there and sell their plan, which they have been doing.

At the end of the day, the people of Metro Vancouver are going to make the final decision in the weeks ahead.

G. Heyman: My final question in this section has to do with the provincial tolling policy review. We're going to have a new Pattullo Bridge. The government says we're going to have a bridge to replace the Massey Tunnel. The mayors' plan considers looking down the road at some form of road pricing or mobility pricing.

Can the minister say whether the tolling policy review is underway and at what stage it is? If it hasn't yet commenced or it's at a very early stage, why is there a delay?

Hon. T. Stone: I made a commitment to the region about a year ago with respect to the tolling policy. I said there will come a point in time whereby this tolling policy will need to be reviewed. Fundamentally, there will come a point in time where it will be an issue of equity and fairness related to those who live south of the Fraser.

As the member knows well, today there is a toll on the Golden Ears Bridge, and there is a toll on the Port Mann Bridge. The member's quite correct in pointing out that the mayors are proposing a tolled replacement for the Pattullo Bridge, and we have moved forward with a project plan for the George Massey replacement. One potential option for the George Massey funding could be a tolled option.

In terms of reviewing the tolling policy, the tolling policy becomes problematic once Pattullo is built and tolled and once George Massey is built and potentially tolled. It's not problematic today because there are non-tolled options. The current tolling policy is being respected today. There are alternative, non-tolled routes for people to choose.

[1800]

I've said that that review of the tolling policy will need to take place once we cross two — pardon the pun — bridges on this: one being the decision of the people of the region on the mayors' plan in this plebiscite — i.e., Pattullo. If it's a yes vote, they're moving forward with a tolled replacement for Pattullo. The second key decision point is on George Massey.

Now, we are just in the midst of putting the final refinements on what the George Massey Tunnel is actually going to constitute — how high, how long, how many lanes, as well as how much road work is going to take place on either side of the bridge. Once we are able to put a tight fence around the scope of the George Massey project, we then move into the next phase, which is the funding discussion. Once we have that price tag, what are the options for actually financing it?

One of those options, as I said a moment ago, could be to toll it. If a decision is made to toll the George Massey replacement and if the Mayors Council vision is successfully endorsed by the people of the region, there will come that point in time — sooner, not later — whereby every crossing to south of the Fraser will be tolled, with the exception of the Alex Fraser Bridge. It would be at that point that the tolling policy, as currently written, would be no longer valid.

G. Heyman: I'm about to sit down for a moment while my colleague from Esquimalt–Royal Roads asks some questions of the minister.

It wasn't my understanding when the minister announced a tolling policy review that it was a tolling policy review that would take place after a number of other things happened.

There was an announcement of a tolling policy review. There are a number of people who think the current tolling policy needs review, not just because there's a question of whether untolled options will remain but for a whole bunch of other reasons, not the least of which is why some people who may drive from just over the bridge in Surrey to Coquitlam are paying a toll and other people who drive for tens or hundreds of kilometres throughout the region pay no toll whatsoever.

I'm going to take the minister's answer to mean, unless he corrects me, that the tolling policy review has not commenced and that the reasons he gave are, in fact, reasons for the delay.

Hon. T. Stone: Really briefly in response, the member is correct. The review of the tolling policy has not commenced to this point, and it hasn't for the reasons that I stated in my previous response.

To review the policy in advance of knowing whether or not the region of Metro Van is moving forward with the Mayors Council plan as it's currently constituted, which includes a tolled replacement for Pattullo, would be premature. Likewise, we need to make a final decision on George Massey in terms of which options we're going to consider — and ultimately, an option we're going to select to finance the George Massey replacement as well.

M. Karagianis: May I first say a great thanks to my colleague for allowing me this time. I'd like to ask just a couple of questions about Highway 16.

The minister knows we have canvassed this in question period and other opportunities. As we all clearly know, in December, 2012, the Missing Women Inquiry and Wally Oppal called on the government to commit to developing an enhanced public transit system along this highway and provide safer transportation options for these communities.

This was again reiterated by the 2015 Inter-American Commission on Human Rights report and the 2006 Highway of Tears Symposium, and, of course, it has been reiterated often since then. The government has rejected the call for this kind of transportation option but undertook a consultation process.

Although we have been frustrated with our ability to get some of that information, there were a couple of clear things that emerged from the consultation process and what we could glean of it — that meetings were focused on interconnectivity between communities, not safer options for women, and that it was declared that hitchhiking was not the issue, despite the fact that anyone else who has experienced that highway…. I went and travelled it myself with my colleagues to experience it firsthand.

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Experts like Dr. Jacqueline Haller, who is doing a complete thesis on hitchhiking, were all aware of the fact that people hitchhike there every single day. Consultations were done with about 76 people, but only four of them were aboriginal women.

I just wanted to set the context here for a couple of questions about this. The Smithers and Moricetown communities have said that they want substantive improvements to public transportation. I know this firsthand from these communities as well. The provincial government has refused to partner with them. The Ministry of Transportation officials stated in December 2014 that these municipalities and the municipalities in this area would have to pay for any improvements to public transportation themselves.

However, other B.C. communities get to partner with government for public transit. I'm not sure why the communities along Highway 16 would be denied that. We know from the experience elsewhere in British Columbia that the ministry is a partner, a happy partner, with municipalities. But apparently, it's not prepared to do that with Smithers, Moricetown or some of these other communities.

Hon. T. Stone: First off, I want to just acknowledge the efforts of the member from Esquimalt in relation to
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Highway 16. I know how much work she's done on this file and how important it is to her.

She's quite correct that the recommendation that was made was to develop safer transportation options along the corridor, and so we've certainly endeavoured to try and do that. There are no easy, quick fixes to this. There just aren't. I know the member knows that well.

We did conduct an extensive consultation meeting with about 80 leaders — municipal, First Nations and so forth — last summer. While I know there were some initial challenges in obtaining records in relation to those meetings, my understanding is that they were subsequently provided — those records and so forth.

As easy, as desirable as it would be in some respects to simply commit to a shuttle bus type of service up and down this corridor, we have ruled that out. We didn't rule that out lightly, and it's frankly not strictly a matter of budget. These are people's lives that we're talking about. I take to heart the method by which and the manner in which the member frames this particular issue. It's not just about budgets. It's about people's lives.

That being said, it's a 718-kilometre stretch of road from Prince Rupert to Prince George. When we look at, from every possible angle, how one could possibly provide a shuttle-type service across that length of road that would be viable, that would actually meet the needs of people along that corridor, it's very difficult to get to a conclusion that says a shuttle bus would work. This is similar to the driving distance between Vancouver and, almost, Revelstoke. Telling someone in a particular spot along this road that a shuttle bus will be there at three o'clock in the afternoon every other day, or every day for that matter, is I'm not sure going to meet the needs of that individual when they actually need transportation. That's the bigger challenge that we've encountered with respect to the concept of a shuttle bus.

What we are doing is we did provide $75,000 in funding to support increased training for access to driver education, safe driver and driver licensing programs for First Nations. This was identified as a priority by a good number of First Nations leaders that we met with.

We also heard loud and clear that there was a tremendous lack of cohesion in terms of people knowing what resources are actually available today. There are gaps, no question about that, but there are resources available today. We endeavoured to pull all that together into one place via the web portal that we've established. We've received positive feedback on that piece.

We also do partner with communities up and down the corridor. There's the Northern Health bus. I appreciate that we've had a difference of opinion on its relevance in this discussion, but it is there to serve. We also have partner agreements in place through B.C. Transit with a number of communities, some of which provide service between their communities. That is available — I believe about $1.5 million per year.

[1810]

Transit services between Smithers and Telkwa, between the Hazeltons and both Smithers and Kispiox, between Terrace and Kitimat and between Prince Rupert and Port Edward — those services are in place today.

We've also worked really hard to expand cell coverage, which I think, in fairness, is part of this discussion. Cell coverage, in and of itself, is obviously not transportation, but ensuring that people are able to use their phones, especially in moments of crisis and emergency and need, is an important part of the solution. We've made pretty good progress at expanding cell coverage through the network. We're not going to rest on that front either until we've got cell coverage up and down every inch of that particular corridor.

More work to do. I want the member to really hear me on this. I, by no means, believe that this file is closed and that we've done what we can do and it's time to move on. The discussion with First Nations, with local governments, continues. We're very much focused on continuing to enhance service as best and as fast as we can through this corridor for the safety of everyone who lives along this particular route.

M. Karagianis: Well, certainly, the minister will appreciate the fact that, for people living in these communities, they need some assurance that even an expansion of service is something that the government is considering. Certainly, I agree, there are little pockets where there is some service, but in the case of Smithers, they have asked for partner dollars to expand that. Moricetown has done that as well. I know every community that I met with along that corridor between Prince Rupert and Prince George seemed very willing to come to the table and try and look for some solutions that worked in their particular area.

The reality is that far too many people are hitchhiking. Even today, if you live in a remote area and you have to go into town to get a loaf of bread, a quart of milk, see your social worker, take your child to a doctor because they have a sore throat, you have to hitchhike because the service is inadequate.

Frankly, I know that the minister alluded to the portal that talks about the other services that are available. Limousine service is listed there. For poor people living in these communities on very fixed and minimal incomes, a limousine service certainly can't be a replacement for a shuttle bus service that's affordable and accessible and regular. For aboriginal women who are hitchhiking today to take their children to the doctor because they have a sore throat, they can't afford a limousine service. For even the sporadic services that are available in some of these communities, they're not affordable for people on fixed and minimal incomes.

It's hard not to become very irritated with the government's inability to at least come to these communities
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and say: "We do understand that these things are happening." For the government to be dismissive that hitchhiking is not an issue…. Of course it's an issue. You can't drive the highway without seeing people hitchhiking. It would seem to me that the government needs to do a better job of saying: "Yes, we recognize that there do need to be expanded services."

All of these communities know that there is huge resource extraction going on along this entire corridor. Lots of money is being put into government revenue from these communities, and a social contract of at least returning some of it in public transportation systems, I think, is apropos.

Now, because I know that time is very tight here and my colleague has lent me some time, I'd like to just say, without belabouring the point that I and others have made very clearly about the impracticality of the government's approach on some of this…. The July 11 briefing note to the minister states: "Participants were told that the Ministry of Transportation would be creating a summary and further discussions with ministry partners and that this would be distributed to those communities."

I don't know. Has that summary been done? Has it been distributed? Has the summary been prepared and released to the public in any way, or is it going to be? That is one part of a question.

[1815]

The second part of that same question. The government talked about discussions with ministry partners after the consultation. What ministry partners are those? What has taken place? What is the progress on that consultation? I guess last is: what next steps is the ministry planning coming out of these consultations?

A limousine service and just saying, "Yeah, we know it's a serious situation up there, but we have no clear declaration for the community that we are going to expand service, that we do see the need for this, that whatever barriers you think are up there to doing this will be resolved…." You can provide a transportation system in much more complicated areas than along Highway 16 in communities that want to cooperate with the government.

If the government can answer those questions, that would be great.

Hon. T. Stone: First off, I want to acknowledge the member's comments about hitchhiking. Certainly, I've never said that hitchhiking is not an issue. I don't think she was implying that I had said that. I certainly share the concerns that the member has expressed around the prevalence of hitchhiking along this corridor.

I will say, however, that one of the key themes we heard from a good number of the mayors that we met with in the initial consultation was that the Ministry of Justice and MCFD have been dedicated, previously, to awareness and education related to hitchhiking and resources to help reduce the practice of hitchhiking. The resources that have been provided have actually had a desired impact and have helped reduce the prevalence of hitchhiking.

When you talk to law enforcement up and down the corridor, the prevalence of hitchhiking today, compared to five or ten years ago, is going down. There's progress being made. I'm not suggesting, by any stretch of the imagination, that it's time to start celebrating or to, again, declare "mission accomplished" on this. There's a lot more work to do, but I think we're making progress.

The partner ministries that we're working with on this…. The member is very correct in characterizing the solutions to these very complex problems as very much cross-ministry or requiring cross-ministry collaboration.

[1820]

The Ministry of Transportation works very closely with the Ministry of Aboriginal Relations and Reconciliation, the Ministry of Justice, the Ministry of Children and Family, for certain, as well as the First Nations Health Authority, which has been a very important partner at the table in these discussions as well.

The member has mentioned a couple times now the inclusion of a limo company on the web portal. I very much regretted the fact that that was included. I had hoped the member would ask the question in question period one day so I could really clearly set the record straight on that. That was a mistake. No question about it.

The direction that staff were given was go and pull together a comprehensive a list of transportation options that are currently in place along the corridor and include them in this portal. In their fervent effort to deliver on that directive, inadvertently, a link to an airport limo service was included. It shouldn't have been. That was a mistake. It was immediately taken off the moment it was brought to my attention.

The last piece is the member's question around the summary of actions and next steps. Where do we go from here? We certainly circled back with a number of the organizations. We've had ongoing conversations with a lot of the municipalities and with a lot of the First Nations. The Carrier Sekani, for example — it was the First Nation that we provided the $75,000 to — have been a very important partner, working with us on potential solutions and bringing other First Nations to the table as well.

We went back and actually met with the North Central Local Government Association, which represents 41 local governments in this region of the province. So we circled back with them in terms of the items that we were confident we would be able to implement and those actions which we were still considering.

I'll end on this note. As I've said a few times now, our work is far from being done on this. The discussions with all of these First Nations, with local governments and with other agencies are very much ongoing. We're going to continue to identify additional initiatives that would represent practical solutions to the very real challenges that are encountered throughout this corridor.

G. Heyman: I want to return to a question I asked the minister earlier about whether the requirement for a referendum — or referenda — for additional funding sources had now become a fifth immutable principle, further to the principles enunciated by the former Transportation Minister. The response of the minister was that there was no choice because the law stated referenda must be held.

That was not my memory, so I went back and looked at the bill, now an act. What section 2 actually says is: "The Lieutenant Governor in Council may, by regulation, order that referenda respecting funding for the regional transportation system be conducted." The act then goes on to state what will take place in the event that a referendum is ordered.

There are consequential amendments to the South Coast British Columbia Transportation Authority Act in section 34, which defines "additional funding sources" and says: "The mayors' council on regional transportation must demonstrate to the minister's satisfaction that a majority of the electors in the transportation service region supports the proposal referred to in subsection (2)." However, subsection 4 says: "The Lieutenant Governor in Council may repeal this section by regulation."

It appears to me that, in fact, the act allows referenda and prescribes the conditions under which they will take place and what's required of whom if they are to take place, but it doesn't make them mandatory.

Again, I would ask the minister: if this referendum fails, is it the minister's position that referenda are now an immutable condition for additional funding sources?

[1825]

[P. Pimm in the chair.]

Hon. T. Stone: In terms of the member's question of whether or not the requirement to hold a vote — a referendum, plebiscite, call it what you will — is an immutable principle moving forward, the answer would be yes.

We made the commitment to the people in the region in the last election that a vote would be required demonstrating majority support within the region, should the mayors decide that a new tax or fee is required to expand transit and transportation. We followed through with that commitment, actually turned that policy into law in the legislative session last year. So that's the policy today, and that's the law today.

Now, of course, this government and subsequent governments reserve the right to change any policy of government or to change any of the laws as is seen fit at that particular point in time. But I can say, again, to the member from Fairview that the policy of this government today and, in fact, the law that is on the books today provides for a requirement for the majority support to be clearly demonstrable to the Minister of Transportation with respect to any new tax or fee that the Mayors Council deems is necessary to fund transit and transportation expansion.

[1830]

G. Heyman: I'd simply remind the minister again that when an act says that the Lieutenant-Governor-in-Council may, it also implies that the Lieutenant-Governor-in-Council may not. And when an act is specifically written to give cabinet the ability to repeal the section of the act that refers to demonstration…. In that instance, the Transportation Authority Act doesn't refer specifically to a referendum but just refers to demonstrating support. One presumes it was written for a reason.

Let me move on to governance. I had some lengthy debate with the minister about the TransLink board when the amendment act was introduced at the same time as the referendum act was introduced. The minister knows well, as I do, that the mayors have called for quite some time that they have majority control over the board and specifically that they have the ability to approve budgets. But that was not contained in the act.

The mayors commissioned a report on last year's changes to the governance structure through Bill 22. The report indicated that the act did not go far enough to address the problems that had been previously identified by a review of the governance structure commissioned by the Mayors Council.

The review compared the governance structure to leading model governance structures for transit organizations throughout the world and found that this governance structure was, I think, "precisely unique, and not in a good way." The report stated that the changes would only take the region part of the way to a structure that is fully analogous to those in place in leader regions.

Especially considering that the whole issue of transparency of TransLink has become a major issue in this referendum, a major issue for the public….

The public, in stating that it doesn't have faith in TransLink, has also often articulated that as not trusting how decisions are made or knowing how decisions are made and not actually being able to reach and hold accountable those people who are making the decisions — which they could, if they were the people who are elected to local government, who can be either re-elected or thrown out every four years.

Will the minister consider further changes to the governance structure, taking into account that the issues the mayors have requested be addressed, the reports that they have commissioned and the feelings of the public? For instance, will the minister consider changes that give the mayors legislative authority to review and approve annual plans and budgets, such as contained with the Victoria Regional Transit Commission?

Will the minister review the governance structure with a view to including a greater number of representatives
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— ideally a majority of representatives — from elected officials in the region?

Hon. T. Stone: There is no question that during the plebiscite process that has been unfolding over the last number of weeks, particularly at the front end of the process, there was a significant amount of discussion within the region — not just amongst mayors but, I think it would be fair to say, broadly across many who live in the region — with respect to the effectiveness of the current governance model at TransLink. No question about that.

Right or wrong, the TransLink board decided, in the earlier stages of this plebiscite campaign, to bring in a new interim CEO. I think by all accounts, when you talk to the mayors, when you talk to residents, when you talk to many of organizations that make up the "yes" coalition in this plebiscite campaign, the common theme that I hear is one of improving confidence in TransLink under the new leadership that is in place in the CEO's office.

[1835]

As the member knows well, we did expand or significantly enhance the authority of Mayors Council last year in the spring legislative session in 2014. Those legislative changes to governance provided the Mayors Council with more authority related to customer service and complaints, asset disposition, the responsibility for the long-term vision, the ten-year investment plans. It provided them with enhanced responsibilities relating to the approval of compensation, not just of the board but of the executive at TransLink.

The member knows well that it's actually…. With the exception of two appointees that the province now makes to the board and the two that are there as the chair and vice-chair of the Mayors Council, the rest of the current board at TransLink are all people that were actually appointed by the Mayors Council.

The member knows well that there's a selection committee that consists of representatives of the Mayors Council and the province and other organizations that actually pull together a list of potential candidates for board positions. At the end of the day, it's the Mayors Council that selects from that list and approves the appointments of individuals to the board.

There has been a tremendous amount of enhanced authority transitioned to the Mayors Council over the last year. On the one hand, I would argue that, perhaps, not enough time has gone by yet. It hasn't fully been a year since those enhanced governance changes were made. It might be a bit premature to judge them as successful or not at this point.

On the other hand, I think you could equally argue that this enhanced authority for the Mayors Council played some role, not the entire…. I don't take 100 percent credit for it, but it played a role in the mayors being able to pull together and achieve consensus on a long-term plan that is not just detailed in terms of investments, but it's also detailed in terms of costing. I've said many times that the mayors did a great job in pulling this plan together. I think that some of that credit goes to the process, which was enhanced through the governance improvements that we made last year.

The final piece I'll say on this is we don't hear much about governance at the moment in this plebiscite campaign. The person you hear a lot about governance is Jordan Bateman. On and off through this campaign, he has done a masterful job, much like a circus conductor creating little flashes of light here and there to distract people's attention from what the fundamental issue is in this plebiscite campaign.

To the extent that Jordan Bateman can continue to make this about governance versus the need to continue to invest in transit and transportation in the Lower Mainland — do you support the mayors' plan or not? — let's hope Jordan Bateman isn't successful at accomplishing his goal. I think to some extent, in the early part of the campaign, he was more successful than many of us would have liked, having defined the campaign to be about governance.

I don't hear as much talk about governance today. I hear a lot of good talk from mayors about the benefits of their plan. I hear a lot of talk about the challenges of congestion, as the member and I spoke about moments ago. I hear a lot about the need to continue to invest. People are actually talking about the merits of the plan. That's what they should be talking about.

That's what gives me hope and gives me a sense of confidence. A lot of people may be surprised, at the end of the day, when the results are actually determined, when all the votes are counted and the results are known and people wake up and realize that the people of the region have actually voted to support the mayors' plan. I get a lot of hope and feel confident about the conversation and the discourse that I see taking place in the region at the present time.

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We feel that we've taken great strides at enhancing governance, providing a number of additional tools to the mayors which they have embraced and which helped them pull together a really good plan. Now it's up to the voters to decide whether or not they can get behind this plan.

G. Heyman: In response to the minister saying that governance isn't really an issue, I'd simply say that the core of what people who are saying they're voting no are saying is that they don't believe TransLink is accountable. Whether they would frame that as governance, that's ultimately what it's about.

I have a question that I hope the minister can answer, and then I have one more question which he won't have time to answer, but I'm hoping I can read it into the record so that he can provide an answer.

My next question has to do with party buses. The minister recently announced that he was changing the Passenger Transportation Board control of the party bus industry from general authorization to special authorization but made no further changes. My question is: why did it take the minister so long to act at all, given that this has been an issue since 2008 and many members of the public have called for action and other jurisdictions have taken action?

The minister knows well that I introduced a private member's bill with a number of provisions that included requiring chaperones on trips; safety training for operators; giving instructions to passengers respecting legal and safety requirements; requiring safe drop-off provisions, because in many cases young people were simply being dumped in parking lots; and penalties for advertising activity that is illegal — for instance, ads that show people standing around with glasses of alcohol in their hands on buses, which we all know is illegal.

None of these were introduced, but there is perhaps a possibility. The Passenger Transportation Board can't regulate, but it can impose terms and conditions on licensees, even though it must do so individually.

I would also add that on April 16 Washington state passed a bill that requires a number of things, including that somebody other than the driver be responsible for enforcing licence holder requirements on a party bus; that someone other than the driver is available to monitor and control party activities, to prevent the driver from being distracted and to ensure that unsafe conditions are dealt with. So other jurisdictions are moving further.

My question for the minister is: has he or anyone in the ministry had discussions either directing the Passenger Transportation Board or asking the Passenger Transportation Board to use their section 28(2)(a) powers to impose terms and conditions reflecting any or all of the safety requirements that have been suggested or implemented in other jurisdictions?

Or is he simply going to wait and see what the Passenger Transportation Board does, or perhaps wait to see if there are future incidents before suggesting the Passenger Transportation Board actually implement more stringent terms and conditions, which they will now be empowered to do by dint of the special authorization permit?

Hon. T. Stone: Let me begin by just acknowledging the interest and the good work that the member for Vancouver-Fairview has clearly demonstrated on this particular file. It is an issue that he has asked a number of questions of me over the last year and a half and I know has put a tremendous amount of work and effort into coming up with solutions.

I think we all want the same thing. We want people who use these services, which is predominantly young people, to be able to use these services and to do so in a safe manner.

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I think everyone has an expectation, rightfully placed, that if you send your sons and daughters off to graduations and other moments of celebration in one's life, you're sending your child off with a reputable operator, and at the end of the evening, your son or daughter is going to come home.

This is a file that we have been working on for a good year or so. It has been important to try and identify a solution here to this challenge that would not necessarily automatically, right out of the gates, represent a whole bunch of new regulation.

We can debate the merits of regulation. I tend to come from a place, as a default, that regulation is not the answer to every single challenge that we have in society. In fact, only after we've demonstrated that we've first exercised every alternative and not come up with a viable solution, should regulation be considered at that point.

We spent a fair bit of time consulting with the families. The member knows the Raymond family quite well. We had very extensive discussions with the Raymonds. We're very pleased that they welcomed the solution that we did come up with, and they participated in the announcement of that solution.

Where we landed on this was to require all vehicles that have predominantly perimeter seating, which are vehicles that we colloquially refer to as party buses…. These vehicles would be required to have a special authorization licence, as opposed to the general authorization that they had. That was going to do two things. One, it was going to improve the safety of the passengers who are transported in these vehicles by making the vehicles more accountable. Secondly, it was going to ensure that law enforcement would more easily be able to track these vehicles, track the operators and enforce the law.

The special authorization licence, as I'm sure the member knows, in contrast to the general authorization licence, provides far less flexibility on a number of fronts: the ability to set rates, the ability to work anywhere in the province, the ability to add vehicles to their fleet at any time. The general authorization licence provides maximum flexibility in all of the above. The special authorization doesn't. It provides much tighter control over the number of vehicles that an operator can have.

Each vehicle has to be individually plated and therefore can be individually tracked. The hours of operation are not just at the whim of the operator. It must be approved by the passenger transportation branch. In fact, the communities within which the operator can operate have to be approved. There are much tighter controls in place.

The last point that I will make is in relation to Washington state. The member references Washington state's approach to this industry. The fundamental difference between Washington and British Columbia is that in Washington state it's legal to have alcohol in a vehicle
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if you obtain the equivalent of a liquor permit to have that liquor in that vehicle. We don't have that provision here in British Columbia. It is not legal to have alcohol in any type of vehicle — period. There's no special permit that you can obtain in order to have alcohol in a vehicle.

As a starting point, we believe that we already have a much more strict and rigid regulatory environment within which operators must operate. That all being said, the passenger transportation branch is working very closely with the operators. The existing operators of party-bus vehicles that would like to continue to operate under the new specialization licence have until May 1 in order to register themselves and meet all of the fitness requirements and the other requirements of the special authorization licence.

My understanding is that the passenger transportation branch is quite pleased with the uptake. They are working their way through all of the applications from the different companies, and everything is progressing at the pace that we expected.

We're going to continue to monitor this file very closely. At the end of the day, the goal here is to ensure the safe transport of passengers in these vehicles. We're going to keep a close eye on this, and we're hopeful that the changes that we've made through these regulatory amendments have made the industry safer. We'll be keeping a close eye on that in the months ahead.

With that, I move that the committee rise, report progress and ask leave to sit again.

Motion approved.

The committee rose at 6:50 p.m.

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