2015 Legislative Session: Fourth Session, 40th Parliament
HANSARD
The following electronic version is for informational purposes only.
The printed version remains the official version.
official report of
Debates of the Legislative Assembly
(hansard)
Tuesday, May 5, 2015
Afternoon Sitting
Volume 25, Number 6
ISSN 0709-1281 (Print)
ISSN 1499-2175 (Online)
CONTENTS |
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Page |
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Routine Business |
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Introductions by Members |
8039 |
Orders of the Day |
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Committee of the Whole House |
8039 |
Bill 23 — Miscellaneous Statutes Amendment Act, 2015 (continued) |
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L. Popham |
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Hon. N. Letnick |
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V. Huntington |
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Hon. S. Anton |
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D. Eby |
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L. Krog |
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Hon. R. Coleman |
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B. Ralston |
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A. Weaver |
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M. Karagianis |
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Proceedings in the Douglas Fir Room |
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Committee of Supply |
8070 |
Estimates: Ministry of Community, Sport and Cultural Development (continued) |
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S. Robinson |
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Hon. C. Oakes |
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L. Popham |
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D. Eby |
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S. Chandra Herbert |
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D. Donaldson |
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TUESDAY, MAY 5, 2015
The House met at 1:31 p.m.
[Madame Speaker in the chair.]
Routine Business
Introductions by Members
D. McRae: I seek leave to make an introduction. Since we’re in introductions, I don’t need to actually seek leave now that I just said that, do I? I’m excited.
Madame Speaker: Proceed.
D. McRae: There are a number of schools across British Columbia that are amazing, but my favourite by far is G.P. Vanier. Why is it my favourite? Not only did I actually have my father teach there for over 30 years, not only did I teach there for 15 years, but I went to preschool there, and I graduated from G.P. Vanier.
Today in the House we have six students and one teacher visiting us from, arguably, the greatest school in British Columbia and my favourite. And I used to work there for….
Interjection.
D. McRae: I’m on leave. This is the worst introduction ever. I’ll keep going.
From Heidi Zirkel’s tourism 12 class in the Chamber today, we are joined by her students. We have, of course, teacher Heidi Zirkel, who recently just became a Canadian citizen last November. We have Robert Allison, Andrea Newman, Aurora Chang, Jennifer Kurt, Ian McLean and Christian Mitchell. Would the House make them and G.P. Vanier very welcome.
Orders of the Day
Hon. T. Stone: In the chamber of the assembly I call continued committee stage of Bill 23; and in the Douglas Fir Committee Room, the continued estimates of the Ministry of Community, Sport and Cultural Development.
Committee of the Whole House
BILL 23 — MISCELLANEOUS STATUTES
AMENDMENT ACT, 2015
(continued)
The House in Committee of the Whole (Section B) on Bill 23; R. Chouhan in the chair.
The committee met at 1:34 p.m.
On section 2 (continued).
L. Popham: Before we were rudely interrupted by lunch, the minister was answering a question that I had asked, and I’m wondering if he could repeat that answer.
My question was regarding the possible implications of delaying this legislation with regard to the avian flu outbreak in December.
Hon. N. Letnick: Thank you to the member opposite for the question. I’ve made a few additions to the comments I made just before lunch. Apparently, my stomach limited the length of the answer before we left.
First, I would like to say there was no delay in bringing the legislation forward. We did our due diligence during last year. The program is something that…. The scope we’ve been looking at is a work in progress for a number of years.
If you recall, back in the early 2000s we had a major outbreak, which resulted in millions of birds being lost. The learnings from that were applied in other outbreaks since. Of course, we had a major one in 2014, whereby we lost about 250,000 birds. But when you put that into comparison with what’s going on in the States right now, where they’ve lost 25 million layers already, it pales in comparison to what’s going on down there.
Also, I have to say that by all accounts from the industry and from CFIA and our ministry folks, the response to the AI outbreak in last year’s episode was extremely well done. It was within 12 hours. We had the movement shut down. We had our quarantines up very nearly after that.
Since then, the applications for AgriRecovery have started. CFIA has started to pay for lost birds. I believe we’ve seen a great amount of success last year, done by people who worked for all of us in B.C. and all of us across the country through CFIA. I of course look forward to a debrief at some point, after the payments have gone through to our farmers, to talk with staff and see what learnings we can have from this episode that we can apply to help in the future.
L. Popham: Yes, and I look forward to a report on lessons learned from this last outbreak as well. I believe there will be some very important lessons learned. I understand that one of the problems was that there may not have been access to CO2 at the time that it was needed. I think that’s part of the process that needs to be looked at.
Getting back to what I believe is a delay in the legislation, I think that given the situation that happened at Christmas and the financial implications for some of the growers — although you can apply for reimbursement
[ Page 8040 ]
through AgriRecovery, etc. — the idea of having an industry insurance program is something that the growers have been very interested in.
It’s my understanding that possibly there was a breakdown in the process of getting this moving forward. I’ll just say on the record that I believe that we need to expedite this legislation as quickly as possible, because I think it’s really important for the industry. But I do also believe that there may have been a problem with moving that forward. From what I’ve been told — and the minister can correct me if I’m wrong — the feet-dragging came from the Farm Industry Review Board. Is that true?
Hon. N. Letnick: Again, thank you to the member opposite for the question.
Nothing currently, because this legislation hasn’t passed yet, is stopping the industry from instituting their own insurance program. They, of course, wanted FIRB, the B.C. Farm Industry Review Board, to make it mandatory. When B.C. FIRB, I’ve been advised, looked at the options, they didn’t believe that they had clear jurisdiction without the legislation saying so. That’s why we’re bringing forward the legislation today for the members’ consideration.
L. Popham: Thank you for that answer.
Does the minister believe that the chair of the Farm Industry Review Board may have had a conflict in bringing this legislation in?
Hon. N. Letnick: I’m not too sure what that question has to do with the legislation, but I’ll answer it anyway. No, I don’t believe the chair had any conflict of interest. It is a board decision. The chair is one member of the board, and there are rules governing conduct of all members of boards throughout B.C. — all our boards. I’m sure that the chair would have abided by those commonly held rules.
L. Popham: Well, I guess what I’m thinking about is that this legislation would have been good for the industry. The Farm Industry Review Board, in my view, is supposed to make the right choices for the industry. I believe in this case there was feet-dragging. I am under the understanding that it possibly had to do with maybe the chair of the Farm Industry Review Board not having the same passion around this legislation that he might have.
I guess I’m mostly just putting this on the record, because I think that there are implications to not bringing this in sooner. It’s unfortunate, because probably much like the minister, I have been in discussions with producers that have suffered because of that. I know that the conversation around bringing the legislation in has been conflicted. So I guess I just wanted to make sure that the minister knew that I know that and that I think it’s imperative that we move this ahead as soon as possible.
Can the minister tell me anything about…? As far as the requirement for producers to have mandatory insurance, at this point is there any idea about when that will kick in?
Hon. N. Letnick: I would also like to put something on the record. I’ve met many people in my life as an elected official, and I have every confidence in the integrity of the chair of the B.C. Farm Industry Review Board. So I’ll just put that on the record as well.
The question is when, if the legislation passes, we would inform the marketing boards of the passage of the legislation and invite them, if they wish, to submit new applications. I imagine they’ll want to update their applications. They would do that through the B.C. Farm Industry Review Board. Then — being quasi-judicial, independent, arm’s length from government — it would be up to them to decide, based on their workplan, when they would hear those applications and make their determination.
I would expect it would be in the near future. But that would be really up to the boards themselves to submit their applications.
L. Popham: If the minister sees that the Farm Industry Review Board isn’t moving quickly enough, is the minister willing to make a move to speed that up?
Hon. N. Letnick: Again, thank you to the member opposite for her question.
Under the taxpayer accountability principles that the Premier announced last year, a new relationship between the chair of the Agricultural Land Commission and the chair of the B.C. Farm Industry Review Board where…. Just like I as a minister have a mandate letter to the Premier, they will now, at some point, have a mandate letter to the minister.
In that list of principles will be one about moving on this file. Again, it would still be up to the industry themselves to do their due diligence to provide their application to the board. But it will be one of the items on the list that the minister would like to see the B.C. FIRB and the industry move forward on.
L. Popham: Well, I understand that. But I guess my question is directly to the minister. Would the minister be in a position to override FIRB in order to speed it up?
Hon. N. Letnick: No.
L. Popham: Can the minister explain why?
Hon. N. Letnick: The legislation gives the power to BCFIRB to make those decisions. As the minister, I cannot override BCFIRB or the legislation, and I don’t think the member opposite would want the minister to do so either.
[ Page 8041 ]
L. Popham: Yeah, I think that is what I believe. But I think the minister and I both understand that if the government wants to override a quasi-judicial board, they can. It’s their discretion. Is this a case where that would happen?
Hon. N. Letnick: Thank you to the member opposite for the hypothetical question. Yes, it’s true that cabinet could override BCFIRB if it wished to.
I think there are a lot of things that need to happen here. One is that the legislation needs to pass. We can never assume anything. Two, the industry needs to do their due diligence and make their application to BCFIRB.
BCFIRB has already heard the previous application and saw a lot of merit in the previous application but didn’t feel it had the legislative authority to make that decision. Assuming the legislation passes, they’ll now have the legislative authority, so I don’t see, in this hypothetical situation, a case where cabinet would need that opportunity that the member opposite is talking about.
L. Popham: Well, then, can the minister tell me what the timeline would be?
Hon. N. Letnick: That would be up to when the legislation, if it does pass, passes and how long it takes the industry to do their due diligence and submit a new application, should they choose to do so. Then it would be up to BCFIRB to look at that application within their workplan.
As I’ve stated before, my best ballpark is sometime this year, but I couldn’t tell you whether it’ll be in summer, fall, winter. It all depends on both the industry and BCFIRB to get their ducks — no pun intended — in a row.
L. Popham: I guess that’s exactly what I’m trying to do is get my ducks in a row here. I don’t think this is as hypothetical as the minister is implying because we’re talking about legislation being brought in.
We’re talking about the requirement for the industry to have, basically, independent insurance — independent of the province. The cost to the province when we have an avian flu outbreak is quite heavy. This would fit, I’m sure, with the general idea that a core review looking for efficiencies, which is a lot of what the government talks about…. This would be one of the efficiencies.
The hypothetical part, to me, that the minister is implying is not hypothetical, and it’s because we would override a quasi-judicial board, I expect. I’ve never sat in cabinet before. I’m not sure how the decisions are made. You would, possibly, look at the good of the province. Whether this legislation takes a year or two years makes a big difference. At what point does the minister and cabinet put their foot down and override the quasi-judicial board?
Hon. N. Letnick: Thank you to the member opposite for the question. Maybe in my communication I’ve misled the member opposite. Let me just clarify here, just in case I did that unintentionally.
The legislation does not require a producer to participate in any particular insurance program. However, it does enable marketing boards to require producers to have insurance. In other words, the legislation does not give the power to the government to set up and enforce a mandatory insurance program. All it does is allow the BCFIRB to then allow the industry to set up or purchase their own insurance program. I just wanted to be clear that this is not the government doing this.
On the question of if cabinet should step in within a year or two years or whatever the question is, again, I don’t think it’s going to be necessary. We have willing partners in this. The industry is very willing to move forward on this. They’ve been fully consulted on it. BCFIRB has also indicated willingness to move forward on this. The government is obviously willing to move forward on it. It’s bringing in this legislation and using up very valuable chamber time and staff resources on it. I believe the opposition wants us to move on it.
I don’t know who out there is saying no to this. I haven’t heard it. Therefore, I would expect — given the right amount of time for the industry to do its due diligence and provide a new application, should it wish to, to BCFIRB — that BCFIRB will do their due diligence. At the end of the day the legislation, should it pass, will enable them to come up with a reasonable decision.
L. Popham: Then let me clarify my understanding. The government won’t require producers to have insurance, but the marketing boards can require producers to have insurance, or it may be the producers’ choice. If the producers choose not to sign onto the insurance program, are they still able to come to the province for recovery money if an avian flu outbreak were to happen?
Hon. N. Letnick: The question is: if someone doesn’t subscribe to the insurance program, would they still have the other programs available to them? Again, I can’t tell you what will happen down the road. As it is right now, let’s say this legislation passes and let’s say BCFIRB and the boards come to an agreement as to the authority of the boards to implement a mandatory insurance program; it would depend on what insurance program the boards decide to go with.
It could be that the insurance programs cover chicks or disinfecting, or it could be a whole range of things. The answer today, if this was in place: it would just give the ability to the boards to then make insurance mandatory for their members. AgriStability, AgriRecovery, the program from CFIA — they’re all still there. Right now they’re not changing. But who’s to say what’ll happen in the future? We have no crystal ball on that.
[ Page 8042 ]
L. Popham: Can the minister tell me why the definition of “biosecurity” was added to the legislation?
Hon. N. Letnick: Like some of our legislation in B.C., since we have been around for a while, this piece of legislation is old — somewhere around 80 years old. Back 80 years ago they didn’t contemplate biosecurity as we currently define it now. So we have made that clearer in the legislation.
L. Popham: Is this bringing it in line with the Animal Health Act?
Hon. N. Letnick: The answer is: yes, it is.
L. Popham: “In the definition of ‘marketing’ by striking out ‘producing, buying, selling,’ and substituting ‘producing, packing, buying, selling, storing’” — can the minister tell me why packing and storing are added to the legislation?
Hon. N. Letnick: Packing and storing have not been added. They were there before. They’ve just been shifted around. It’s just to provide clarity.
L. Popham: So it’s included in the definition of “marketing” now.
Hon. N. Letnick: It used to be under “Marketing schemes, boards and commissions,” 2(1). Now it has been moved over into marketing.
L. Popham: Why was that done?
Hon. N. Letnick: It’s consistent throughout the act.
L. Popham: Okay, that’s it for that section.
V. Huntington: I wonder if the minister could advise whether section 2, the definition of “biosecurity program,” anticipates self-regulation within the industry of that definition and those requirements.
Hon. N. Letnick: Thank you to the member opposite for the question. Yes, this anticipates that the industry will be self-regulating on biosecurity, but they are ultimately accountable to B.C. Farm Industry Review Board.
V. Huntington: I take it, then, because these seem to be so specific in the definition, that it requires one or more of the following to be undertaken. Is it the board — and which board specifically — or the ministry that would be pinpointing to a particular producer one or more of these requirements under the definition?
Hon. N. Letnick: The way it’s crafted right now, it gives flexibility, because we have a number of commodity groups, as the member knows. The boards themselves, then, would adopt the measures that they deem appropriate for their particular commodity group, and then, of course, they are accountable to BCFIRB.
V. Huntington: Do I understand, then, that this is not triggering one or more of the following conditions or restrictions just because of a biosecurity hazard? It is giving commissions the flexibility to require this of a commodity group — one or more of the following of a commodity group? When is this triggered?
Hon. N. Letnick: Thank you to the member opposite for the question. Maybe the best way to do this is through an example.
In the case of 2(a)(a), it says: “establishes standards or certification programs.” For example, the industry could establish a standard whereby you had to put your feet into a pail or a container of liquid before you walk into the barn. Then under (b) here is how that standard would actually be applied — what the standard is, who does it, etc.
Then the board would be able to use that, through the legislation, to enforce that biosecurity standard for the industry. And then, of course, BCFIRB, being the umbrella over the boards, would have the ability to help the board enforce that.
V. Huntington: Not to belabour it, but in (a)(b)(iv) the permissive word “or” is just to make the requirements quite discrete in their nature? A commodity producer wouldn’t be required to follow each of these requirements. It’s just a very discrete requirement that can be defined company by company on the basis of what it is that they’re producing or what problems they’ve had in the past. Is it all very permissive in how the board might establish the requirements?
Hon. N. Letnick: If we’re looking at the first “or” in the sentence versus the last “or” in the sentence — there are two ors; it’s good for a rowboat — the answer is that the “implements best-by procedures” is generic, versus the “or procedures for specified purposes,” which would be specific.
Is it discrete in nature? I guess what we’re trying to do here is provide the industry and the boards the most discretion they can, the more comprehensive language we can, so they can trap all the different parts of the biosecurity that they would like to engage in.
V. Huntington: Just one last question, then, Mr. Chair. That means that the boards, commodity by commodity,
[ Page 8043 ]
have a choice of actions they can take but that within a commodity the definitions would be the same? I just want to make sure.
Hon. N. Letnick: Yes.
Section 2 approved.
On section 3.
L. Popham: Can the minister tell me the purpose of section 3?
Hon. N. Letnick: The rationale is to amend the purpose of the act to include biosecurity programs and imposition of requirements related to insurance.
L. Popham: Why was this direction taken?
Hon. N. Letnick: In large part, clarification for some of the act, in 2(b), 2(c) — basically clarification of language. This section states the purpose of the act, which is “to provide promotion, control and regulation” of marketing; the reference to the ability to impose requirements in relation to insurance programs and the establishment of biosecurity programs. It provides explicit authority for marketing boards and commissions to act under the new sections of the act.
Without this amendment, the new sections related to insurance programs and biosecurity could be seen as inconsistent with the purposes of the act.
L. Popham: Are there going to be minimum standards of insurance that are needed to be purchased?
Hon. N. Letnick: No.
L. Popham: Why not?
Hon. N. Letnick: The intent here is that it’s not up to the government to determine what’s in the best interest of the industries; it’s up to them to determine that. This legislation gives them the framework to do so.
L. Popham: I’ve probably already asked this, but I’m going to ask it again. So the government has no oversight on the decisions that are being made around the types of insurance programs that are going to be investigated and possibly used.
I guess my question is: does the minister have any concern that if some error is made and something is left out of an insurance program, there are going to be financial implications for the industry?
Hon. N. Letnick: Again, we are asking, if the legislation passes, for the industry to do its due diligence, determine what it really wants, go to BCFIRB, make its case. We have very excellent panel members on BCFIRB supported by great staff that will review the applications on a case-by-case basis.
They will then, if they deem it appropriate, allow the different industries to compel their members to an insurance program. They will decide whether or not the right package of insurance is being purchased or is being dictated to their members.
At the end of the day, the government has confidence in the process and in the industry purchasing — again, should this all pass and pass by BCFIRB — the right package that meets their needs.
L. Popham: That sounds like quite a lot of work for the Farm Industry Review Board to undertake. Is the minister confident that they have enough resources to do that work?
Hon. N. Letnick: I think, if I remember correctly, through estimates, we had increased the budget for BCFIRB by a third. So yes, on the resource side. Again, what we’re doing here is we’re empowering FIRB with the ability to say yes or no to the industry’s request to make insurance compulsory.
A lot of the work — I would say most of the work — is going to be on the industry making their application, on the industry deciding which insurance package to buy, if at all, or which insurance to mandate as compulsory for the members, if they wish to do so.
Again, it is a caveat emptor kind of situation.
L. Popham: Well, just a comment on the budget increase to FIRB. I think some of that was to cover off some of the expenses regarding the changes to the SPCA, as far as I know. Is that correct?
Hon. N. Letnick: The member is right. I did bring it up because she asked the question. But $300,000 for the BCFIRB — that includes all the work that they do, including work for the SPCA. And since I did bring it up, I’d just like to remind the member that we also contributed $5 million to the BCSPCA for their capital project.
L. Popham: Okay. Well, the minister has made it very clear how the situation is working and how the legislation is working, and I appreciate that. The concern that I have is that if the industry signs on to an insurance program and a disaster happens and for some reason there’s a problem with the insurance program and people don’t qualify for what they thought they were going to qualify for, or there’s something that wasn’t considered…. How does the Ministry of Agriculture approach something like that if the insurance program fails?
[ Page 8044 ]
Hon. N. Letnick: As we discussed before, BCFIRB has asked the industry, when they made their application prior, to do their due diligence, to make sure they understood what the insurance packages were going to be that they were going to sign up for.
Without the legislations to backstop them — I don’t know if “backstop” is the right word — or to empower them, they didn’t believe that they had the authority to do so. With the legislation, if it passes, they will have that. It’d still be up to the industry to do their due diligence to make sure that whatever insurance they want to purchase covers the risks that they believe should be covered, and at the end of the day, a lot of that responsibility will go onto the industry.
V. Huntington: We have just passed the previous subsection, 1(b), with the definition of “marketing” as “producing, packing, buying, selling, storing.”
I’m sorry. Did the act itself include the word “transportation,” and we’re just adding these? Or has section 2(b), wherein we’re substituting “of the marketing”…? We’re excluding the word “transportation.” Now, is that an oversight, or was transportation part of the previous act?
Hon. N. Letnick: Yes, transportation has been removed from there. But now it’s in the definitions of marketing. So in “marketing” it says including: “packing, buying, selling, storing, shipping for sale, offering for sale or storage, and in respect of a natural products includes its transportation in any manner by any person.” So that way it’s consistent throughout the whole act. Transportation is still there.
V. Huntington: Just to be clear, then, the definition of marketing that was substituted in section 1(b) was in addition to the language that included “transportation” and “shipping.”
Hon. N. Letnick: I understand the question, and it’s always difficult when you look at one piece of the legislation. I always prefer the red-lined version because everything is all in one place.
In 2(b) it says: “in the definition of ‘marketing’ by striking out ‘producing, buying, selling’ and substituting ‘producing, packing, buying selling, storing.’” That doesn’t give you the flavour of the whole clause, because when you look at marketing in the definitions, it includes transportation still in there. So the member can have confidence that transportation is still part of marketing.
Section 3 approved.
On section 4.
L. Popham: Section 4. It looks like a minor change, and maybe the minister can explain the reason.
Hon. N. Letnick: Section 4 amends section 6, “Delegation.” The rationale is to clarify that “board” actually refers to the marketing board.
L. Popham: I didn’t quite understand the minister’s answer. Could he explain it again?
Hon. N. Letnick: “Board” is not a defined term in the act, so the amendment clarifies this section refers to a marketing board.
Section 4 approved.
On section 5.
L. Popham: Can the minister explain section 5?
Hon. N. Letnick: Similarly, the commodity board is not a defined term in the act, so the amendment clarifies that the section refers to a marketing board.
Section 5 approved.
On section 6.
L. Popham: Can the minister explain section 6?
Hon. N. Letnick: It amends the language so it’s consistent with section 2. The wording of each of these sections is not the same as the wording of section 2, which are linked.
These sections enable the LGIC to establish marketing boards and commissions, and the powers that the boards and commissions may exercise must be consistent with the purposes of the act.
L. Popham: Can the minister explain the difference between a marketing board and a marketing commission?
Hon. N. Letnick: Yes is the answer to the question: can I explain? So that we can save time, so I don’t get the question as to “well, go ahead and explain,” I’ll just explain.
Boards came first. Commissions were more of promotional tools, but over time they basically started doing each other’s work. That’s why they’ve been put together.
L. Popham: Do they have the same powers?
Hon. N. Letnick: Yes is the answer to that one.
Section 6 approved.
On section 7.
[ Page 8045 ]
L. Popham: Can the minister explain section 7?
Hon. N. Letnick: It’s a clarification section, making sure the language is consistent with the amended definition of “marketing.”
V. Huntington: I just want to confirm. In subsection 11(f), really what we’re doing throughout this is changing even the production of a commodity to be the marketing of a commodity. So the entire operation of farming, producing and creating that commodity is now considered part of the marketing of it? Is that really what we’re doing here?
Hon. N. Letnick: Again, it’s the same situation we were in last time. We’re taking out a bite, but if you look at the definition of “marketing,” the definition of “marketing” still includes producing. Just for the record again: “‘marketing’ includes producing” — the first one — “packing, buying, selling, storing, shipping for sale, offering for sale or storage, and in respect of a natural product includes its transportation in any manner by any person.” So it’s still all there. It’s just that now it’s consistent throughout the act.
V. Huntington: Yes, I understand that. I’m not meaning to catch anybody on anything. But what I’m commenting on is that it’s an interesting redefinition of producing a commodity. I mean, my family has been in the packaging business of foods for years and years and years, and I wouldn’t have thought the production of the food or even the transporting of the food to the packing facility would have been part of a definition of “marketing.”
Yes, the packing; yes, the selling; yes, the storage of the packaged item might be part of a marketing effort. But producing it? It’s just an interesting way of including that terminology within the definition of “marketing.” I would have thought they were two different elements. Just a comment on the definition.
Section 7 approved.
On section 8.
L. Popham: Can the minister please explain section 8?
Hon. N. Letnick: This section enables the LGIC to amend marketing schemes operated by commissions. The section should apply to both marketing boards and commissions. Marketing boards are established under section 10, and marketing commissions are established under section 12. That’s for (a). For (b), it is unclear whether “objects” applies to the objects of the scheme or the objects of the order, so the language has been amended to clarify that “objects” refers to schemes. And (c), the production and processing are included in marketing and are therefore duplicative.
Section 8 approved.
On section 9.
L. Popham: Can the minister explain section 9?
Hon. N. Letnick: I see a trend.
Section 9 — renumbering for the big part. Renumbering is required, as the section is being expanded. That’s for (a). For (b), this section applies equally to marketing boards and commissions. And (c), the section describes powers, in addition to those in section 11, that may be exercised by a marketing board or a commission. These new powers do not require LGIC approval. The insurance requirements specifically relate to production losses, either from disease outbreak or from other interruption of production.
V. Huntington: Here we’re going to go back to my comments with regard to the new definition of “marketing.” Why then, if marketing includes production, are you using the word “production” in subsection 14(c)(a.1) and (a.2)? Why do we use the word “production” and not “marketing”?
[D. Horne in the chair.]
Hon. N. Letnick: I just want to be specific that the intent here is to insure people involved in the production of a natural product. That’s why we specifically say in here “production,” as opposed to production as a part of the marketing format.
V. Huntington: Well, I agree that it’s very specific to the production of the natural product, but does that mean you’re now excluding all the other definitions that apply to marketing? If you’re specifying production, are you then excluding the other components of marketing that you’ve been so careful to define?
Hon. N. Letnick: Yes. This is specific to production only.
V. Huntington: Elsewhere in the act does it carry through, then, requiring those who are transporting, those who are packaging, those who are selling…? It goes through many different operations to get to the end user — at least many products and distribution systems do. So if here you’re specifying production, do you then have other sections that are specifying those who transport, those who package, those who sell? Or are they no longer necessarily required to implement or comply with the biosecurity program?
[ Page 8046 ]
Hon. N. Letnick: Good question. The act does apply to everyone. But specifically, biosecurity measures and compulsory insurance only apply to those people who are in the production of the goods.
Section 9 approved.
On section 10.
L. Popham: Can the minister explain section 10?
Hon. N. Letnick: Subsections (a) and (b) are a clarification of language, (c) is to add provincial boards to sections 16(2)(a) and (c), and (d) is also a clarification of language.
Section 10 approved.
On section 11.
L. Popham: Can the minister explain section 11?
Hon. N. Letnick: Here’s where we have a new section that empowers marketing boards and commissions to impose the requirements to enable monitoring of compliance with biosecurity programs.
L. Popham: What sorts of qualifications are the people investigating to have?
Hon. N. Letnick: A lot of the boards have trained field staff that go out and do the work. Some, I understand, are even ex–police officers.
L. Popham: But the qualifications wouldn’t be defined?
Hon. N. Letnick: Boards determine the qualifications. It’s not in the legislation.
V. Huntington: Section 16.1 says the commission “may…require a person.” I wonder: does this involve a class of persons — all those involved in the production of or the transporting of or the marketing of? Or is this a very discretionary, discrete authority that the board can exercise?
Hon. N. Letnick: In law, a person is more than just one person. It could be a person. It could be groups, all of whom are subject to the biosecurity program, so it’s not just one.
Section 11 approved.
On section 12.
L. Popham: Could the minister explain section 12?
Hon. N. Letnick: Here we’re empowering marketing boards and commissions to apply an administrative penalty system for contravention of biosecurity program requirements. We’re also providing authority to BCFIRB to oversee the manner of serving the penalties and any other procedures that must be followed and were prescribed in conditions that must be applied by the marketing boards and commissions to determine the amount of the penalty prior to the amendments.
It was either you lose your ability…. This way, with the administrative penalties, there could be some progressive discipline and much better opportunity for the boards to change behaviour.
L. Popham: Can the minister explain what sort of penalties could be faced?
Hon. N. Letnick: The maximum is $10,000. It would be a graduated amount, but up to the discretion of BCFIRB to institute.
L. Popham: So FIRB would enforce the penalty?
Hon. N. Letnick: The whole system won’t come into force, the penalty system, without cabinet approval, so it will have to come through regulation. The regulations would be worked on between the boards and BCFIRB. Once that happens, the boards would be responsible for administering the penalties. Then the subject of the penalties could appeal, if they wished, to BCFIRB.
L. Popham: So the commissions would see that the penalties would always be a monetary penalty?
Hon. N. Letnick: It could be monetary. You can still suspend or cancel a licence as well.
L. Popham: I guess I’m trying to establish if it would be something other than monetary, like jail time.
Hon. N. Letnick: Not changing the provision under 18(2), which says: “A person who commits an offence under subsection (1) is liable on conviction (a) to a fine of not more than $20 000, (b) to imprisonment not longer than 6 months, or (c) to both a fine and imprisonment.” So that’s still available on conviction.
L. Popham: Did the minister say that this would be up to cabinet to decide on the penalty structure then?
Hon. N. Letnick: This is the only section that requires the regulations. Those come through cabinet, so cabinet would have to see something being proposed and approve of some.
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L. Popham: When it comes to the point where cabinet is deciding on that, will cabinet be consulting with the industry?
Hon. N. Letnick: The consultation with the industry will happen before it comes to cabinet.
L. Popham: FIRB consults with the industry and brings the recommendations to cabinet?
The Chair: I believe the answer was yes, prior to that.
V. Huntington: I was somewhat concerned about the phrase “if satisfied on a balance of probabilities” that the person who is subject has failed to comply. I’m assuming then — or am I correctly assuming? — that subsection (3) then becomes the definition of “on a balance of probabilities.” Is that correct?
Hon. N. Letnick: I’m not too sure this will answer the question, but I’ll give it a try and we can confirm. There are two legal tests. One is the balance of probability test, which is “more likely than not.” The second standard is a reasonable doubt standard. This is a higher threshold usually applied in criminal offences.
V. Huntington: Well, it’s going to be my next question. Is there a legal understanding or definition of “on a balance of probabilities”? If it’s “more likely than not,” then does subsection (3) guide the issue of “more likely than not”? Where is the evidentiary value to issuing the administrative fine?
Hon. N. Letnick: When we look at section 3, we’re still talking about “more likely than not,” based on a case-by-case situation. The boards would be the ones adjudicating that — subject to BCFIRB, of course, if someone wants to appeal the result of the boards. But they would have to look at all of these and then consider, on a balance of probabilities, whether or not a penalty should be applied.
V. Huntington: I wonder if the minister could just discuss subsection (6) a little bit. Given that I have not pored through the act in its entirety, what are the other fines, penalties, orders, rules, determinations or decisions that could be imposed under this act on a biosecurities program marketer?
Hon. N. Letnick: First, I’d like to compliment staff for having all these answers laid out for me in advance. It makes the job a lot easier.
Explanation for (6) is that administrative penalties may be imposed in addition to any other action that might be taken under the act. For example, for a very egregious act, a person could receive an administrative penalty and have a licence terminated as well.
Section 12 approved.
On section 13.
L. Popham: Can the minister explain section 13?
Hon. N. Letnick: These amendments are made for consistency with previous related amendments to the act. It’s clarification of language.
Section 13 approved.
On section 14.
L. Popham: Can the minister explain section 14?
Hon. N. Letnick: Clarification of language, one more time.
Section 14 approved.
On section 15.
L. Popham: Section 15 has to do with the Prevention of Cruelty to Animals Act, and from my consultations I understand that the BCSPCA is in favour of this change and looks forward to that happening. From my understanding it adds that registered veterinarians can destroy an animal in critical distress in addition to authorized agents. I’m just wondering why this change is taking place and who requested this change.
Hon. N. Letnick: Both the college and the BCSPCA requested the change. The change right now is to allow a vet to put down an animal. Before, it was very difficult. The BCSPCA, of course, had to be called in. This way the veterinarians could actually take some action themselves.
L. Popham: In what circumstances was it a problem to put an animal under distress down? What part of the legislation was stopping that from happening?
Hon. N. Letnick: Previously you had to wait for the BCSPCA to give the authorization to put an animal down. Clearly, you don’t want to have an animal that is going to be put down to suffer for hours while you wait for BCSPCA to give that authority. So with this change in the legislation, supported by the veterinarians as well as the BCSPCA, the veterinarians would have the ability to make that decision themselves, without waiting for the SPCA.
L. Popham: These are unowned animals? These are
[ Page 8048 ]
stray animals? Which animals are these that would have required the BCSPCA?
Hon. N. Letnick: Any critically distressed animal. The ownership is not a part of the legislation.
Section 15 approved.
On section 16.
L. Popham: Can the minister explain section 16?
Hon. N. Letnick: This extends the statutory immunity that is provided to agents of the SPCA to veterinarians where decisions are made to destroy animals in critical distress.
L. Popham: The BCSPCA is also in support of this change?
Hon. N. Letnick: Yes.
Section 16 approved.
On section 17.
L. Popham: Can the minister explain section 17?
Hon. N. Letnick: This section provides for certain transition measures to retroactively authorize biosecurity programs, retroactively authorize requirements imposed by marketing boards or commissions in respect of those biosecurity programs and extends the retroactivity under (1) and (2) as necessary to ensure that the programs’ requirements are lawful.
L. Popham: Why was this change made?
Hon. N. Letnick: Some marketing boards have already required members to participate in biosecurity programs without the clear authority to do so in statute, so this section retroactively makes such actions legal.
L. Popham: Would the new act make any decisions previously invalid?
Hon. N. Letnick: It’s actually the other way around. It’s validating previous decisions.
Section 17 approved.
The Chair: The committee will stand down on sections 18 through 23, and we’ll resume at section 24 when the Attorney General gets her staff.
Sections 18 to 23 inclusive stood down.
On section 24.
Hon. S. Anton: I’m joined by Toby Louie, Anita Nadziejko and Gina Henley.
The Chair: Is the member for Nanaimo ready to proceed?
L. Krog: I wonder if we might have a short recess, perhaps five minutes, just to get our critic present.
The Chair: The committee will take a very short recess.
The committee recessed from 3:03 p.m. to 3:06 p.m.
[D. Horne in the chair.]
Hon. S. Anton: I’m joined by Toby Louie, the executive director of policy and planning; Anita Nadziejko, senior policy adviser to Justice; and Gina Henley, who is general counsel for the Liquor Distribution Branch.
D. Eby: Could the minister please give an explanation of the intent of these amendments?
Hon. S. Anton: The amendments provide for B.C. Liquor Stores to operate under rules available to other liquor retailers. They will clarify and simplify administrative processes in the statute, including removing outdated provisions regarding advertising and purchasing liquor products by B.C. Liquor Stores as well as simplifying how government store operating hours are set. This contributes to continuing the modernization of the B.C. liquor industry in response to our liquor policy review.
D. Eby: One of the concerns that I’ve heard, particularly from small craft brewers, is that they cannot get their products listed by government stores. They talk about SKUs that they can’t get from the government stores. For example, a small brewery on the North Shore can’t get a SKU with the government store so that the manager of the local store can order his product and stock the North Shore beer in the North Shore government store.
Will these amendments address that issue for craft brewers, making it easier for them to get SKUs to sell their local products in their local government store?
Hon. S. Anton: None of the changes proposed today in these amendments relate to the issue raised by the member.
D. Eby: I just see in section 24 the elimination of something called the “listing committee.” There’s a staff member that does the listing within the government liquor stores right now.
Perhaps the minister can explain…? Maybe this is one
[ Page 8049 ]
of the outdated provisions, but when I read that we were getting rid of the listing committee, I thought that meant that craft brewers would now be able to get their products listed as a right. If you have a product — it’s an alcohol product, and it’s licensed in B.C. — sure, we’ll list it. If the local store wants to order it, they can.
What’s the connection between the listing committee and actually getting a listing?
Hon. S. Anton: Most products that wish to be on the market in British Columbia can be registered. There are some restrictions, but generally, products can get registered.
I think the point that the member is raising is whether or not they would be listed in individual stores. That is up to the Liquor Distribution Branch to decide in the case of government stores. Of course, in the private stores it’s up to them to decide.
Section 1 is a listing…. It takes out the definition of “listing committee.” It is made redundant by the proposed repeal of section 15, which is found in section 26 of the Miscellaneous Statutes Amendment Act.
D. Eby: I wish that I could have followed — and I tried — the minister’s explanation of how a product can be listed.
The system, as I understand it, is this. If I am a brewer of a small craft beer, I need to apply to the LDB to have my product listed in a catalogue that would be available for any government store to order from. The problem is that they’re not getting listed in the catalogue. If you’re not listed in the catalogue, then your local store can’t order the product. It can only order products that are listed in the LDB catalogue.
When I read — the minister talked about section 15, which is being repealed, and section 24, which is a consequential amendment — about the listing committee, I thought: “Great. They’re getting rid of the listing committee. Every brewer that qualifies will be able to have their product listed in the catalogue. It will be able to be ordered equally by government stores, private stores, restaurants and so on.”
Can the minister clarify for me whether this understanding of how the system works is correct and, if so, how these amendments relate to that, if at all? The listing committee seems pretty self-explanatory. I’m missing something here.
Hon. S. Anton: A manufacturer of a product, a brewery, can apply to the Liquor Distribution Branch to be registered in the catalogue, and then they would wish to be listed in the stores. So it’s two separate decisions. One is to be registered so that they’re available for anyone in British Columbia to pick up. The listing is whether or not they’re actually going to be sold in a government liquor store. Then they are listed for the stores.
D. Eby: Thanks to the minister. That makes a lot more sense, now that I understand the difference between those two terms.
So, then, when the listing committee is being repealed by this section…. I assume section 27 is putting something in its place, which is giving the powers to the general manager to deal with registration of products. What functions do the listing committee serve, and where are those functions being distributed in these amendments? Or was the listing committee simply some sort of archaic thing that hasn’t existed for a long time?
Hon. S. Anton: Yes, it is correct. The listing committee is now redundant. It hasn’t actually operated for a few years now. The new products are simply registered by staff. For example, to give a sense of the proportion of these things, last year there were 8,687 new products registered and only 19 rejected, so the vast majority of things which are presented to be registered are, in fact, registered.
D. Eby: Well, certainly, I can advise the minister, having met with many craft brewers, that the vast majority of craft brewing products are not available for listing in government stores because they have not been registered. Those statistics are not reflective of the experience of craft brewers in British Columbia, so I’d encourage her to push her staff on that a little bit and get the true story from craft brewers.
Mr. Chair, those are all my questions on section 24.
Hon. S. Anton: I’d just like to respond to the last statement for craft breweries. They mainly are registered in British Columbia. If you can drink them in British Columbia, they are registered. The question I think the member is raising is whether or not they’re listed for sale in the government stores. They may not be listed, but they are definitely registered.
D. Eby: I thought we had cleared this up, but clearly, I didn’t understand.
When the minister says “registered,” she’s talking about the catalogue for public and private stores. When she says “listed,” that means whether or not a government store manager can actually order the product.
What I’m interested in is…. In my fictional scenario of a North Shore brewer and a North Shore government liquor store, I want the manager of the North Shore government liquor store to be able to order the product from the brewery that is, literally, just up the street. I want that to happen. I just need to understand from the minister….
In section 27 — we’re going to get to it — we’re going to talk about registering liquor products, and I want to really understand this before we pass this section. I want the government liquor store to be able to order from the brewery that’s just up the street. Right now I’m told by
[ Page 8050 ]
craft breweries across the province that they’re having a great deal of difficulty — and I want to use the minister’s term — getting listed in the local government store, which means actually getting stocked and being available for British Columbians to buy and take home.
I wonder if the minister can clarify for me what the issue is there about registration versus listing and the sections that we’re being asked to pass here?
Hon. S. Anton: As I said earlier, the products are registered. They then can be sold. A government store can pick them up. Private stores can pick them up. Once they’re registered, they can be sold. Hospitality can buy them and so on.
In terms of who carries the product, those are business decisions. For a private liquor store, it’s a decision of that store whether or not they’ll pick up that particular craft beer. Similarly, it is also a business decision of the Liquor Distribution Branch whether or not to put that product into the stores.
It is the case that those decisions, as to what products individual stores are carrying, will become more centralized over time. Up till now it has been up to the individual stores. But those decisions about which products will go into which stores will become more centralized.
Certainly, the branch itself does talk to the industry. Industry people will do what salespeople do on all of our products, which is persuade the stores that these are a good thing, or persuade the LDB that these are products that they should be carrying.
D. Eby: So it is a prerequisite for any restaurant or store that wishes to sell a particular alcohol product in British Columbia that you must be registered before the product can be sold. Is that correct?
Hon. S. Anton: That’s correct.
D. Eby: That’s all for section 24.
Section 24 approved.
On section 25.
D. Eby: Can the minister explain the intent of this section?
Hon. S. Anton: This is correcting an outdated reference. It was the Litter Act. Now it’s the Environmental Management Act.
Sections 25 and 26 approved.
On section 27.
D. Eby: Can the minister explain the intent of this section? I think I understand it, but I don’t understand why this is new. Why is this being added to the act? If you have to be registered to be sold in the province, why are we only adding now a power for the general manager to register products in B.C.?
Hon. S. Anton: The intent of this section is not different than what the previous intent was. It’s simply having the act match the nomenclature of the business. We had a listing committee. We used to list products. It is now registration of products.
D. Eby: And it’s now the general manager as opposed to a committee that’s responsible for what used to be called listing but is now called registering. Is that right?
Hon. S. Anton: The general manager always had the power. He or she used to do it through a committee. Now they do it through staff.
D. Eby: The proposed subsection 15.1(2) gives the general manager some direction about what to consider here. It says that the general manager “may consider the size, nature, form and capacity of containers and packages used for the liquor product.”
Can the minister clarify for us what the concerns are here? What would we be asking the general manager to look at? I can think of some very large product containers that are currently available in B.C. Is this about the materials the packaging is made of? I don’t understand what we’re asking the general manager to be careful about and to watch for, based on the wording of this section.
Hon. S. Anton: The terms and conditions by which a product might be rejected are the same as they were before. I’ll give some examples.
The containers need to be recyclable. The labels cannot be offensive. The products have to be socially responsible, so for example, alcohol freezies have been denied. They need to have proper documentation, so if they say they’re organic, they need to be able to demonstrate that. They can’t be counterfeit.
Those kind of things are things that the branch is looking at when it’s concluding whether or not to register a product.
D. Eby: The proposed subsection 15.1(3) says that a person must not sell or offer to sell a product that has not been registered. Where are the penalties contained for this section? In what manner will they be implemented? Are they within the act itself, or is that in the Offence Act? Can the minister clarify that?
Hon. S. Anton: The penalty section is section 35 of
[ Page 8051 ]
the current act. “A person who contravenes a provision of this Act or the regulations commits an offence, and if no other penalty is provided, is liable on conviction to the penalties provided in the Offence Act.”
Section 27 approved.
On section 28.
D. Eby: Can the minister explain the intent of this section?
Hon. S. Anton: It’s a lovely piece of bureaucracy that we’re getting rid of.
D. Eby: It’s a pithy answer, I’ll give the minister that. I don’t understand it.
I understand this repeals the section that describes the regulations that a general manager must comply with in purchasing liquor.
Can the minister explain why we’re repealing this and what the intent is in eliminating it?
Hon. S. Anton: I don’t know if this is nostalgia for the good old days or what. But the provision, section 17, says that “An order for the purchase of liquor by the government must be authorized and signed by the general manager” and that “A duplicate of every order under subsection (1) must be kept on file in the office of the general manager.” I hate to say it, but we’re just not doing that anymore. We’re just keeping these records electronically.
Section 28 approved.
On section 29.
D. Eby: The minister certainly had her afternoon coffee, and I appreciate a little humour in the answers.
Section 29. Can the minister explain the intent of amending section 18?
Hon. S. Anton: There are three things going on in this section.
One is in 18.1(c). This is the companion piece to registration. Earlier we were talking about registration of a product and then listing for sale in a store. This is the listing piece of that pair — registration and listing.
The second thing that’s happening is in (a). It is permissive now as to whether the general manager opens stores through British Columbia. I think it used to be thought that there were certain locations where they had to operate. Now it is permissive. The general manager can decide where to operate.
This is also a reflection of the fact that the stores, the government stores, will now be subject to the one-kilometre rule. So again, the general manager needs some flexibility.
The third thing that’s going on is in subsection (2). Having this section in suggested that the only advertising the general manager could do was advertising to the public of the opening of a store.
Taking this away, we are now freeing up the advertising requirements so that the general manager can advertise like any other retailer.
D. Eby: Starting with subsection (a) of section 29, does this create the possibility that the general manager may not actually establish or maintain at all any government retail outlets? It seems to me that this would…. The mandatory section says there must be government retail liquor stores in British Columbia, and this amendment suggests that that is now an option, that the general manager doesn’t have to maintain stores. So the general manager could close every single government store in British Columbia or sell them or whatever. Is my understanding of that correct?
Hon. S. Anton: The intent of the section is that the general manager has discretion as to where he or she opens a store or operates a store. I would remind the member that we are under a collective agreement. There must, under the collective agreement, be 185 stores kept open.
D. Eby: Subsection (b). I lost the minister a little bit when she was talking about the advertising. Is that subsection (d) or is that subsection (b) that makes it possible to advertise something other than the hours of the store?
Interjection.
D. Eby: I understand that’s subsection (d).
Subsection (c), I think, is — I agree with the minister — where the rubber meets the road in terms of my interest that I’m bringing to this House from craft brewers in British Columbia, in smaller communities, in communities across the province. They would like to be available in their local government store. That makes sense to them. They can do the deliveries. They want the general manager of that store to be able to…. I shouldn’t use that term. They want the manager of that store to be able to order their product.
This subsection, (c), says: “may list liquor products that may be sold in a liquor store.” Why is it that the minister would have a section that registers everybody but has it that only certain products may be listed for sale in a government store? Why wouldn’t it be that all of the registered products are available for sale in the government liquor stores?
Hon. S. Anton: To give the general context, and then I’ll come back to the specific question, the general context is that there are about 33,000 products registered in the Liquor Distribution Branch system. They are not all, by any means, available in government stores. In fact, a number of them are specially imported.
For example, the member often talks about wine stores. Wine stores will bring in their own products from Italy or Spain or wherever, and they will have an exclusive on those products. They don’t necessarily want them to be sold anywhere else.
It is not at all the case that the products that are registered are all listed. In fact, there are about 8,000 products listed and about 33,000 products registered. I’m just going to check that number in a moment.
On the specific question as to the craft breweries, they’re customers like anyone else. They can and will and do persuade the branch that their products should be sold. If they have a market on the North Shore, to use the example that was mentioned a moment ago, then they will be able to persuade the branch that they do have that market, and the branch will list the products. They deal with customers every single day, all day long, who make similar kinds of requests. That’s what they are in the business of handling.
D. Eby: I have to note that the minister’s view of how craft brewers get their products into government stores is an optimistic one. That is probably how it should work.
In any event, with respect to subsection (c), then: “may list liquor products that may be sold in a liquor store.” It says “list” here, but actually we’re talking about registering products, aren’t we? We’re not talking about listing products. This is a companion to the registration power, not anything to do with listing a product for government store sale or stocking it?
The Chair: Could the member repeat the question for the minister?
D. Eby: Yes. I’m reading the proposed amendment here that says that the general manager “may list liquor products that may be sold in a liquor store.” When I read the word “list” now, I have the understanding that the minister gave me of a listing, which means that it’s actually stocked or available to be stocked in a government store. But what the amendment actually intends to say, or what it means by “list,” is the registration power — that the general manager may register liquor products that may be sold in a liquor store. Is that correct?
Hon. S. Anton: The registration section is 15.1, which is found under section 27 of the bill. The listing section under this section, 29, is the proposed change to section 18(1)(c), which says: “may list liquor products that may be sold in a liquor store.” That’s the listing. So everybody’s registered; 33,000 products are registered. Only some of them are listed. The ones that are listed are the ones which are available for sale in the government stores.
D. Eby: The craft brewers would like to have their products listed for sale in a liquor store. I note that the section says “list liquor products that may be sold in a liquor store.” It doesn’t say government liquor store. It doesn’t say LRS. It doesn’t say independent wine store. Is this a general power to make available across the province in any store no matter what — private, public, whatever…? The general manager may list liquor products for sale in all these stores? Or is this intended to be just government stores?
Hon. S. Anton: This act is dealing with “liquor store” as defined in the act, which means “a government liquor store, government beer store or government wine store, or an agency established by the general manager under this Act.” So this is dealing with the government stores. Once the product is registered, any private store may pick it up and choose to sell it.
D. Eby: I wonder if the minister, then, would consider taking this section back and saying: how can we empower — maybe not empower; maybe require — the general manager to list craft beer products in British Columbia so that they can be ordered by the local government store?
When I read this section, it reads just like the way the world works right now, which is that it’s really difficult for craft brewers to get listed for sale in government stores. All they want to do is have their name on the list so that the local store manager that wants their product can order it in. They’ll do the sales to the local store manager. That’s no problem. But they can’t get on the list centrally, so then they can’t be sold locally.
Is there a way that we can amend this section to put them on the list automatically? If you’re a craft brewer in B.C., you get a SKU and your local store can order you. Then they can go and do those sales. That’s all they’re asking for.
Is there an opportunity here for us to take this out, have a review of it and fix it so that the concerns of the craft brewers are addressed?
Hon. S. Anton: As I said earlier, this is a question of consumer demand and of sales. There’s no question that the local stores will support local products, because there is local demand for those products. If there’s a particular brewery that is near a store and there’s customer demand there, first of all, the product is likely going to be registered. To be sold at all, it needs to be registered. Will it be listed so that it can be sold in those particular stores? Yes. But that’s, again, an arrangement between the salespeople of the brewery and the Liquor Distribution Branch and the demand for the product in those particular stores.
[ Page 8053 ]
D. Eby: I can tell the minister that craft brewers know that their local government store manager wants to order the product, wants to bring it in, wants to support the local business, but because it’s not listed at the LDB, they are unable to do that. It is endlessly frustrating, because there is one staff member at the LDB that does the SKUs, and she is hugely backlogged. And one of the requirements of craft brewers is that you have to be able to supply the entire province. They don’t even want to supply the entire province. They want to supply one local store.
I’ll leave it at that and invite the minister if she has some response to that. But a fundamental misunderstanding of the frustrations of craft brewers with getting SKUs at government stores, to sell to their local store, is behind this section. I’m disappointed that we can’t address it.
I’m ready to move on to the next section.
The Chair: Would the minister like to respond, or shall we move on?
Hon. S. Anton: I’ll just make one comment, which is the comment on having to supply the entire province. That’s not correct. They do need to be able to supply the stores that they are proposing to go into, but they don’t need to have product for the entire province. There are products that are local and that are sold only in certain local areas.
Section 29 approved.
On section 30.
D. Eby: This removes a mandatory requirement that the general manager set store hours and creates a permissive power to do it. I don’t understand why we would do that. Frankly, I don’t understand why we’d have to require it. Maybe the minister can clarify the purpose of this section.
Hon. S. Anton: This is an outdated provision. We don’t do orders anymore. It gives the general manager, as it says right on the face of it, the ability to set the hours and days that the stores are open.
Section 30 approved.
On section 31.
D. Eby: It’s my understanding that this section — correct? — is just a consequential amendment, following the removal of the listing committee and the creation of section 15.1.
Hon. S. Anton: That’s correct.
I gave the number 33,000 products with about 8,000 listed. We think that that number is more or less correct, but I have not got confirmation on it. So it’s possible that I’ll come back to the member at a later time and correct that number. But that seems to be the order of magnitude.
D. Eby: I thank the minister for the clarification.
Section 31 approved.
On section 32.
The Chair: Are we ready to proceed?
I may be wrong, but perhaps we could pass section 32, which I believe is a punctuation error that’s being corrected.
L. Krog: I couldn’t possibly turn down an opportunity to ask the minister to explain this. I am sure this was a great problem getting this through the Legislation and Regulations Committee in cabinet. I am very interested to hear why, of all the keen energy and interest that is shown by government in legislative change, they would focus in on what I understand is the removal of a comma. I am just curious to hear the minister’s explanation.
Hon. S. Anton: I hate to say how many hours went into this comma. I know the member opposite will have spent hours contemplating the comma, as did I. After all that contemplation, the conclusion is drawn that we would be better off in section 173 if we did not have the comma, so we are proposing to remove it. With its removal, we can then bring this section into force. The Pension Benefits Standards Act will be better for it.
Section 32 approved.
On section 33.
L. Krog: I’m curious to know why we’re simply adding this title in section 12. Is that really necessary?
The Chair: The member’s question was the addition of “Division 1 — Order of British Columbia” and the necessity for such.
Hon. S. Anton: The act is being changed so that the two separate functions will be provided for — the Order of British Columbia and the British Columbia Medal of Good Citizenship. We’re simply adding a title to division 1.
Sections 33 and 34 approved.
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On section 35.
L. Krog: The reading of this section, which is an addition to 13, which provides for the Order of British Columbia, says: “(3) The Order is the highest honour of British Columbia and takes precedence over all other orders, decorations and medals conferred by Her Majesty in right of British Columbia.” I’m going to presume that it’s simply because we’re now allowing for the awarding of the Medal of Good Citizenship referred to in section 19. Is that essentially the only purpose for this — to distinguish between the two of them?
Hon. S. Anton: The Governor General of Canada is in charge of the Canadian honours system, which defines an order of precedence which must be adhered to in the wearing of orders, decorations and medals. An order is the highest form of recognition a country or a province can bestow on its citizens, so it’s important to make sure that the act reflects that distinction.
L. Krog: If I understand the Attorney General correctly, this is essentially to distinguish this, an awarding of the Order of British Columbia, as being higher than the medal of citizenship because of federal requirements that the Order of Canada is the highest award that the Canadian government can make to an individual.
It’s as opposed to, for instance, a medal awarded for bravery or valour on the battlefield, but in terms of what I will call a civil recognition, the Order of Canada is the highest. Therefore, the Order of British Columbia would take precedence next, and any other medals or awards below that.
Hon. S. Anton: There are national orders and provincial orders. The Canadian honours system does define the precedence. In terms of the provincial orders and decorations of one kind or another, it is the Order of British Columbia which will take precedence.
L. Krog: Is this section, then, based on the concept of the federal legislation, so to speak? I assume there’s legislative authority for the awarding of the Order of Canada. Is it so that we’re now going to mirror it in British Columbia? Do they, in fact, provide for a Medal of Good Citizenship as well?
Hon. S. Anton: I don’t want to go too far down the road of what the federal government does, because I don’t have those details here. What the federal government does define is that the order is the top of the hierarchy. In terms of the provincial distinctions, the order is on top of that list.
Section 35 approved.
On section 36.
[R. Chouhan in the chair.]
L. Krog: Whenever the Legislature passes a bill and the sections therein, it’s presumed that there is some reason for this.
I have to ask the question on adding this section to section 16, which now simply says: “Any person or organization may submit to the advisory council nominations for appointment to the Order.” By renumbering it, it’s making that (1) and this sub (2): “A person may not nominate themselves for appointment to the Order.” Has that been an issue in the past? Is that why we have this before us today?
Hon. S. Anton: It is something that happens occasionally, and it’s always a little bit awkward. So just to clarify, that is not the intent of the act. We are proposing changing it to make that clear.
L. Krog: Is it fair to say, then, that we haven’t had a plethora of people offering themselves up for awarding of the order?
Hon. S. Anton: Around ten times or so in the last 25 years, so not terribly frequent.
Sections 36 to 38 inclusive approved.
On section 39.
L. Krog: This is the meat of the change around this, and I have to ask: has the Medal of Good Citizenship been awarded to any British Columbian since its enactment?
Hon. S. Anton: It has never been awarded.
L. Krog: Perhaps the Attorney General could advise, given this section has been in existence for some time — and perhaps the Attorney General can advise how long that section has been in place — why it has never been awarded and why we are doing it now.
Hon. S. Anton: The old section 19 was a general section: “The Lieutenant Governor in Council may award the British Columbia Medal of Good Citizenship….” But it was actually never used. The section was never developed or fleshed out, and it has just sat there for many years without ever being awarded.
L. Krog: Again, my question to the Attorney General is: why are we doing it now? If British Columbia has managed to get by without an awarding of the Medal of Good Citizenship…. We’ve had the Order of British Columbia
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in place, and we’ve got the Community Achievement Awards as well, recognizing the contributions of British Columbians. Why in 2015 is it worthy of — how shall I say — as the minister said herself, fleshing out, so to speak, and being used?
Hon. S. Anton: The two sets of awards that the member mentioned are indeed well established: the Order of British Columbia and the B.C. Community Achievement Awards. The Order of British Columbia is a medal. The B.C. Community Achievement Awards are awards.
What this is, is a new medal, which I guess you might say sits between the two of those. But it is definitely a medal, an honour. It is something that we believe — that I believe and the government believes — will be very well received in British Columbia.
L. Krog: The proposed section 19.1 provides that the committee “is established consisting of the following: (a) a Chair appointed by the Lieutenant Governor in Council” — cabinet — “for a term not exceeding 4 years; (b) up to 6 additional members appointed by the Lieutenant Governor…for terms not exceeding 2 years.” I see “up to 6 additional members,” so what’s contemplated in terms of the makeup of the selection committee?
What sorts of British Columbians are we talking about? Are we going to have a representative from labour, for instance? Are we going to have a representative from the charitable community? Are we going to have senior public servants, a member of the judiciary? I’m sure the government has given a great deal of thought to this. I’d be very interested to hear exactly who they’re contemplating in terms of appointment.
Hon. S. Anton: The goal is to choose prominent citizens who may themselves be an inspiration to the community. They should reflect diversity of our province, both regional diversity and diversity of culture and background, and any other ways we do diversity in British Columbia, which is many different ways — but prominent individuals and people who will give the committee the sort of respect that it deserves.
L. Krog: With great respect to what the Attorney General has had to say, if that’s the contemplation, my concern is that section 19 says: “The Lieutenant Governor in Council may award the British Columbia Medal of Good Citizenship to recognize persons who have acted in a particularly generous, kind or self-sacrificing manner for the common good without expectation of reward.”
Now, with great respect, when some folks hand over millions of dollars to public institutions or make charitable donations in a very public way, it’s not quite as self-sacrificing as the volunteer who goes into the soup kitchen year after year, month after month giving of their time.
They are not going to be a prominent British Columbian, yet it strikes me that that’s the kind of person who is entirely altruistic that you might wish to have on the selection committee, who would not be tempted to award to people to whom life has already been very kind some medal in recognition, as opposed to those who selflessly make great general sacrifices.
It says “particularly generous” — which, obviously, I think means money — “kind or self-sacrificing manner for the common good without expectation of reward.” Again, I’m wondering: has the Attorney General given contemplation to the concept that maybe you appoint British Columbians who are not prominent, who are not in the public eye, who have not sought or received recognition themselves, potentially? In other words, perhaps someone from the faith community who has been recognized in a much less public way who is known to do good works.
Hon. S. Anton: I think we need to be careful not to mix up the selection committee with the recipients. The goal of the Order of B.C. is to award recipients who have got a provincial or national impact to their service to the community. The goal of this Medal of Good Citizenship would be for persons who have more of a local or a provincial impact.
L. Krog: Just to confirm, the medal is to be awarded, arguably, by the Lieutenant-Governor-in-Council. That’s cabinet. Is it contemplated how this medal will be presented and who will preside over that kind of ceremony?
Hon. S. Anton: It is, indeed, intended to be ceremonial. It is expected that the recipients would attend a ceremony where they would receive their medal, a lapel pin and a certificate signed by the Premier. Some provinces have the right to put prescribed letters after the recipient’s name. We’re not there yet in British Columbia. It does require approval by the secretariat of honours, in Ottawa.
L. Krog: I take it, then, it isn’t contemplated that this will be presented by the Lieutenant-Governor, for instance. This will, in fact, be presented by the Premier. Is that fair comment?
Hon. S. Anton: That’s not certain, who the presenter would be. I imagine, in different circumstances, it might be different people.
L. Krog: I do know what is contemplated in proposed section 19.5, that the medal “may be awarded by the Lieutenant Governor in Council on the recommendation of the selection committee.” In other words, it’s not mandatory. Even if the committee makes recommendations, they may in fact be overridden or disregarded by
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the Lieutenant-Governor-in-Council at any time. Is that correct?
Hon. S. Anton: Possibly.
L. Krog: So essentially, notwithstanding the good work of the selection committee, ultimately, who gets this award will be decided by the Lieutenant-Governor-in-Council — cabinet — presided over by the Premier. Is that correct?
Hon. S. Anton: On the recommendation of the selection committee.
L. Krog: I take it, then, that the Attorney General is saying that you have to be recommended by the selection committee. If you’re not, you won’t be eligible to receive the award from cabinet.
Hon. S. Anton: The intention is that this will be a public nomination process. In other words, members of the public may put forward their nominees. The selection committee will review those names, based on merit, and make recommendations to cabinet.
If cabinet members wish people to be nominated, they can add those names to the nomination list to be considered by the selection committee.
L. Krog: Just to clarify, then, notwithstanding that we have a selection committee in place, cabinet itself may award this medal to a person who hasn’t gone through the ordinary process, whose name wasn’t submitted by the selection committee.
Hon. S. Anton: That is not at all what I said, of course. I said it was a public nomination process. The selection committee would review the nominees, the names, based on merit and make their recommendations to cabinet.
L. Krog: Just so I’m clear, there is a selection committee. It’s a public process — got that. It’s the selection committee that makes recommendations. Will you be eligible to receive this award even though you didn’t proceed through the selection committee process? In other words, can cabinet independently give this award to someone who didn’t come through the selection committee process?
Hon. S. Anton: Section 19.5: “The Medal may be awarded by the Lieutenant Governor in Council on the recommendation of the selection committee.” The recommendations will come through the selection committee.
L. Krog: In other words, you can’t bypass this process. It can’t be a direct appointment by cabinet. You’ve got to come through the selection committee. The selection committee — appointed by cabinet, of course — will make these recommendations. Then the cabinet, essentially, will pick from that list. Is that the way the process is going to work?
Hon. S. Anton: I think it’s laid out pretty clearly in the act. The act says: “The selection committee must recommend each year to the Lieutenant Governor in Council persons who, in the opinion of the…committee deserve to be awarded the Medal.” They may make rules governing the conduct of their business, and the medal may be awarded by cabinet — the Lieutenant-Governor-in-Council, that is — “on the recommendation of the selection committee.”
L. Krog: Well, forgive the cynicism of the opposition. I think there’s a certain fear on this side of the House that this whole process will be used to reward prominent members supportive of the governing party and won’t be used to recognize those ordinary British Columbians who, as the section itself says as it reads now, “have acted in a particularly generous, kind or self-sacrificing manner for the common good without expectation of reward.”
In other words, when we have a selection committee comprised of prominent British Columbians, which is what the minister tells us, we will end up overlooking those people whose sacrifice, if you will, whose kind or generous self-sacrificing manner in relation to their own lives is a far greater and more impressive act of generosity than somebody who is a billionaire and gives $10 million to a university.
I’ll also suggest to the minister that we won’t see a whole pile of supporters of any party other than the governing party become eligible for this award. With some cynicism, we look forward to how this process will work. I’m sure the Attorney General’s confidence in the good work of the committee, once it’s appointed, will — who knows — come to fruition.
With that, I have no further questions on section 39.
Sections 39 and 40 approved.
On section 41.
Hon. S. Anton: I do have the correction to the numbers that I mentioned earlier. I’ve got to say, I wasn’t too far off. Chair, 28,760 products are registered in British Columbia, and 6,142 are listed for sale in British Columbia liquor stores. Those are the numbers from today. I imagine they change every single day.
D. Eby: The Liquor Distribution Act. This appears to be a transition provision, simply confirming previously registered products remain registered.
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Can the minister confirm if that’s the intent of this, and if not, what the intent of this section is?
Hon. S. Anton: This is transitional. Just to confirm that anything that has been listed is now deemed to be registered for sale in the province.
D. Eby: Back to our previous discussion about the change in language and the elimination of the listing committee, is that correct? Is section 15.1 a portion from the amendments to the previous act that we were looking at around section 24 of this?
Hon. S. Anton: This is a reflection of the change of language from products which are registered to be sold. As I said today, as of this minute, there are 28,760 products registered to be sold.
The terminology used to be “listed.” So it’s simply to confirm that things that were considered listed before are considered to be registered now. The term “listing” now means available for sale in B.C. liquor stores.
Sections 41 to 43 inclusive approved.
On section 44.
Hon. R. Coleman: Just before we get started, I’d like to introduce my staff that are here today. To my right is Ines Piccinino, ADM, upstream development division. Geoff Turner, the director of pricing, tenure and royalty policy, is behind me. To my left, over a number of ministries that I’ve worked with him, is Richard Grieve, the executive director of policy and royalty branch.
B. Ralston: Beginning with sections 44 and 45 — I’ll deal with 44 first — these are minor amendments. Most of the meat of the revisions here are in section 46.
Can the minister explain the purpose of the amendment proposed in section 44?
Hon. R. Coleman: The purpose of the amendment is to provide a definition of “royalty” that includes royalties that are established under regulation under an agreement provided for in sections 78 and 78.1 of the Petroleum and Natural Gas Act.
This is a new definition. The new definition will ensure that provisions of the Petroleum and Natural Gas Act dealing with royalties apply to royalties established under an agreement. This will reduce costs and burdens for producers and for the government, as existing administration mechanisms will be applicable to royalty agreements.
B. Ralston: So this change in definition relates to the proposed royalty agreements that are set out in section 46?
Hon. R. Coleman: That’s correct.
Sections 44 and 45 approved.
On section 46.
B. Ralston: This proposed section amends section 78 or adds a new section to the Petroleum and Natural Gas Act which gives the minister wide discretion to enter into royalty agreements. Can the minister, in section 78.1(1), explain what kinds of agreements are contemplated? What is the purpose for bringing these amendments at this time?
One can assume, I think, that it might be related to liquefied natural gas developments. There are some applicants or proponents who have upstream assets; that is, they own companies that are extracting gas. This is a mechanism that will enable the minister to enter into very long-term agreements with proponents. But beyond assuming that, I’d be interested in the minister’s explanation of why this is necessary at this time.
Hon. R. Coleman: I have a number of section notes, but I’ll just stick to the beginning of this, and we’ll work our way through it with the member opposite.
The member opposite will recall — or may not recall — that over the last number of decades one of the challenges of successive governments, ours and former governments before us, was always the uncertainty about what we call the ups and downs of the revenues relative to resources.
One of the ones that was most volatile in the 1990s and also in the 2000s was natural gas royalties, because you could have up and down years and these massive swings that affect budgets and planning. One of the things that this is intended to do is to provide a robust framework under which long-term agreements can be entered into that establish that royalties be paid by petroleum and natural gas producers.
This is a new section. Section 78 currently provides a limited ability to establish royalties by contract. The new section 78.1 will enable government to enter into long-term agreements, establishing royalties be paid by producers who are making investments. It will increase the demand for B.C. natural gas such as an LNG facility or gas-to-liquids plant.
Subsection (1) enables the minister, if authorized to do so by the Lieutenant-Governor-in-Council, to enter into an agreement establishing a royalty payable by a person on petroleum or natural gas produced in a location or class of locations.
B. Ralston: In subsection (2) in this proposed 78.1 it talks about a prescribed class of agreements. Is it intended that there would be any time limit on these agreements? The way it reads to me is that the agreements could be entered into for, perhaps, the amortization per-
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iod of an LNG plant — say, 30 or 35 years.
Is it intended to enter into royalty agreements that are of that length? If it’s not intended, would the minister agree that the section is sufficiently open-ended to permit that, should he so choose or should the cabinet so choose?
Hon. R. Coleman: The length would be established by regulation. But certainly, this is about having long-term certainty on both sides of an agreement, both on the royalty side for government and the ability to look long term on what revenues relative to the royalty would be, subject to that curve, which is the up and down, and the same thing with companies.
It gives stability. No money is lost, but it does give stability as to the money that would flow in such a way that government would be able to budget on it and so would companies be able to make long-term investment decisions that they’re going to make in the billions of dollars and to know what their royalty commitment and responsibilities would be so that it would be averaged over the term.
There is no term established in legislation. As negotiations go on, those terms will obviously come to the fore as we work on negotiations once somebody moves towards a final investment decision.
B. Ralston: In the Auditor General’s 2010 report there was a recommendation to divulge more information on the impact of royalty programs in relation to oil and gas activity in B.C. to the public. That’s a quote taken from the B.C. Oil and Gas Royalty Programs: Program Goals and Performance Measures — 2014 Report, from the policy and royalty branch, upstream development division, January 2015. That’s a report from the ministry that talks about better disclosure of royalty revenue.
We’ll get to the provisions that would appear to limit the disclosure of these agreements. But as a basic principle, can the minister explain how having these kinds of long-term agreements will advance the goal that the ministry appears to adopt from the Auditor General’s recommendations — more transparency and openness about royalty revenues? Given that the minister says it’s for budgeting purposes, there may be others than those in his ministry that want to determine what these royalty revenues might be at some point in the future.
Hon. R. Coleman: I think the member is referring to an Auditor General’s report with regards to royalty programs from about 2010. We have been making those reports public since that period of time.
This isn’t about royalty programs. This is about royalties that would be paid to government based on the revenue of royalties coming out of the gas that comes out of the ground to a long-term purchaser of gas or supplier of gas in B.C. through something like an LNG plant.
What the intent is, is to try and give some certainty to both sides of the equation, both the business investment to know over a period of years that curve or that ability to keep this thing shaped so that it’s understandable…. People would know what their costs are going to be rather than having these significant fluctuations in cost, both for the budgeting of government and also for the budgeting of industry.
I think what the member is talking about when he talks about programs…. He’s talking about things like the infrastructure royalty program, which is a program, for instance, where we do an investment off royalties to make sure we can build the roads, the bridges and the infrastructure with regards to the northeast part of the province and its infrastructure required.
Our payback on that — benefits of that program — is about 4 to 1. Some years they’ve been higher, as high as 7 to 1, on each one of those programs with regards to what government gave up in royalties and got back in the value of roads and infrastructure that we would have normally otherwise had to pay for.
B. Ralston: Well, I disagree. I think it is all about disclosure of future revenue. That’s what the minister is talking about.
One of the values that is talked about in the performance measure indicators in this ministry report, B.C. Oil and Gas Royalty Programs, performance measures, is striking the balance between incenting investment and providing a fair return to the province.
I can see from the point of view of a producer…. Certainly, the effort is on the part of the ministry and the minister to drive the costs of proposed LNG proponents down, whether it’s advocating for a reduction in the depreciation allowance, which the federal government has now granted; the proposed legislation to reduce the taxes on, for example, the Petronas plant by inviting an exemption agreement for municipal taxes; the reduction of corporate taxes down to 8 percent if a company establishes a permanent establishment in British Columbia.
The effort is to incent investment and drive all taxes across the board for these investments down in order to, presumably, encourage the investment.
The other side of that, as set out in the ministry’s own document, is providing a fair return to the province. I’m quoting again from the ministry’s own document, and this is the question. “If royalty rates are too high, investment will migrate to other jurisdictions. No drilling, no production equals no royalties. If royalties are too low, the Crown does not maximize value to the Crown from the oil and gas resource,” which is, of course, publicly owned.
Can the minister explain how, in an effort to drive down costs and to stabilize royalties at a very, I take it,
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advantageous level to companies, we will be maximizing here in British Columbia the value to the Crown from the oil and gas — or, in this case, the gas — resource?
Hon. R. Coleman: That’s incorrect. If you take a ten-year level of royalties, and the royalties are up at a certain level because the price is up, let’s say, in year five and goes way down in year six or seven and then goes back up in year eight or nine, what you have is you have fluctuation of costs, which makes it difficult for someone to actually budget, whether it be government or an industry that’s going to make a significant investment.
You can do the same thing, however, and get the same revenue over the same ten-year period by having a royalty curve established that says that within this range, we’re going to receive exactly the same revenues. It’s just that some years we will get more when we should have gotten less, and some years we’ll get less when we should have gotten more, because we actually average across the scheme, the total amount of money being relative to that.
The other questions in and around other aspects the member included in his questions are not included in this section of the act. They’d be more appropriate for estimates debates, which for this ministry, I believe, start on Monday.
B. Ralston: Well, none of that — the mechanism that the minister claims is thought of in this section — is actually set out in the section. It just says: “…enter…into an agreement establishing the royalty to be paid by the person to the government, and the method of calculating the royalty….”
Given that the justification, apparently, for this section is an internal calculation that I gather from the minister’s cursory description will average royalty payments over the life of an agreement — which could be as long as 20 or 25 years, or 30 years; that hasn’t been denied — and will even out the revenue, if I could put it that way, could the minister describe with more detail how that would work and, therefore, why he’s proposing this amendment?
Hon. R. Coleman: Basically, you’re wrong again. We’re not reducing royalty rates for any company that wants to do business in British Columbia. All we’re doing is getting to an effective royalty rate over a long period of time to actually establish the stability of the revenues by taking into account all our royalty agreements that exist on the ground. For instance, we have a deep-well credit in certain areas of the province. We have other ones.
As far as the issues in and around infrastructure, we have those royalty infrastructure things. They all go into a basket, along with the expected revenue and the percentage we would expect to get out of it. We take that into a curve. We put it over an effective period of time. We call that the effective rate of the royalties.
Probably the easiest example I can give to the member is…. I think it was in about 2006 or 2007 that the government saw in the neighbourhood of $4 billion or $5 billion in royalty revenue. In the last couple of years that could have been as low as $400 million.
If you took that same average across the last ten years and you were able to take an average that way, you’d be able to budget differently, from the perspective of government, as to what you can invest in — things like health care and education coming off that revenue. At the same time, you would have been able to provide some certainty in and around how the investments would look, and the industry would be stabilized.
Now, if you overlay that with somebody who wants to come into the province and make an investment in the neighbourhood of $30 billion…. They’re trying to do a budget for their business and their capital investment over a period of time, bringing into account the costs, when they go before their board and their financial people to make a final investment decision.
One of the things that became apparent as we’ve come through this cycle — and as I’ve learned as a minister and having been in government long enough to have seen the cycles — is that it would be more effective for everybody if there was actually a way to do a calculation and to protect government revenues over time but, at the same time, put it in such a way that you’d actually be able to budget realistically, particularly if you are either the government that has to deliver programs coming off those revenues or a company that’s having to make a decision to invest in the billions of dollars over a 25- or 30-year period. So this is only to, basically, try to get to an effective average across rate.
A. Weaver: My question to the minister, then, is: why doesn’t this legislation say that? You’ve just outlined a process by which you want to formulate an averaged royalty rate to protect against boom-and-bust cycles. Why doesn’t this legislation actually specify that, as opposed to specifying the ability to grant the minister powers to do whatever he or she wants at any time he or she wants without having to worry about disclosing it?
Hon. R. Coleman: This is enabling legislation that allows for us to use another tool in the toolbox that could advance the investment of billions of dollars in British Columbia by actually having the ability to stabilize what the revenues to government are and what the costs to companies are within a band that will cost the taxpayer no more money and that allows us to enter into discussion and negotiations to accomplish that.
B. Ralston: Well, as I recall, certainly there was a huge increase and run-up in the price of natural gas which led to increased royalties. In 2007 and 2008 the minister mentioned natural gas royalties at $4 billion or $5 billion,
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I believe it was. Certainly, that was when Carole Taylor was the Finance Minister. Budgeting was a good deal easier and more comfortable with that kind of revenue.
Is the minister saying that this is a hedging strategy against the future price of natural gas, that the companies will be agreeing to pay more royalties when the price is low and less when the price is high? There are many companies which have gone broke trying to predict the fluctuations in the price of natural gas. I really wonder: am I understanding that’s what the strategy is — to hedge against the future price of natural gas?
Hon. R. Coleman: It’s not a bad description from the member. Basically, the member is correct. When you do something like this, you look at the overall and you say…. Actually, Carole Taylor picked a perfect time to be Finance Minister in British Columbia.
Effectively, you end up with an effective rate across the picture, but when it goes way down, we get more money because we’re stabilized at a price, and then it goes across the curve. If it goes way up, it would go down slightly to average off against the back end, but there’s a hedging mechanism that says that once it reaches a point, it doesn’t go any lower or any higher so that you have an average across the board to protect revenues for government and also to have the stability of costs for the long-term investor in British Columbia.
B. Ralston: Well, I understand the advantage for the producer, in the sense that their cost would then be fixed over a lengthy period of time. That facilitates their budgeting process. I’m not certain of the advantage to government, particularly.
Why can’t that same reserve method or hedging against future declines in price…? Wouldn’t that be accomplished by the prosperity fund? Wasn’t it the intention of the prosperity fund to take the natural resource and the revenue earned from it, set it aside for the future and use it to smooth out the bumps in the price of the natural gas? Everyone knows, I think, that as a resource it has a cyclical price.
I’m not sure why the two mechanisms are being merged into one that seems to be more of a benefit to the company, given that they’re going to get that, and less of a benefit to government — other than, the minister says, stability of revenue. But that can be accomplished, I think, in other ways internal to the government that don’t involve unnecessarily fixing the price at a low level — which would certainly be the bargain that the companies would drive.
Certainly, their econometric modelling and their familiarity with the global natural gas market — as talented as public servants are here — I would think, would give them superior bargaining power in any agreement that would be reached.
Hon. R. Coleman: Again I will repeat the fact that there’s no price advantage to the company. They will pay the same amount of royalties over the piece as they would whether they went up and down like this or whether we had a royalty curve. Hedges are protections at both ends. Government actually gets more than perhaps the royalty price when the price is down, maybe a little less when the price is up. But then, at the same time, it allows government to take that revenue and budget it.
Out of that money that government is bringing in, it’s quite possible that there’d be excess of revenues to budget that would then go into a prosperity fund. That would build a prosperity fund over time, because you could actually, as any government, be able to budget that surplus to go somewhere and to build on it.
At the same time, when you’re trying to attract an investment in excess of $30 billion for a project in British Columbia to move gas that you have no market to send it to today, at a price that is so significantly depressed that there’s virtually hardly any revenue coming off the product….
To actually build a business case around making sure revenues are protected long term, that the stability is there for these companies to make an investment and making sure the taxpayer gets what they deserve out of the resource seemed to me, when we started looking at this, to be a pretty effective way to go about it.
B. Ralston: Is the minister saying that in any such agreement the royalty rate will be fixed for the life of the agreement? If there’s greater volume or the price goes up, then the take from royalties would be greater. But the royalty rate itself, if I’m following, would be no longer subject to any change. So the government, should it choose to raise the rate at some point in the future, would be forbidden by the terms of this agreement from doing so. Is that correct?
Hon. R. Coleman: I’ll try to explain this for the member without the use of a graph or a piece of paper. Let’s assume you have a price of natural gas here. And you have a price of natural gas here — over, let’s say, a ten-year period. It’s down here, up there. So you take a line across here, and you say: “When it’s down, we get more revenue than the royalty would normally give us. When it goes past here and it’s up, it would be down slightly before the revenue we would get….” But at a threshold, once it reaches a threshold, anything above that would be additional royalties to government, over and above the curve.
B. Ralston: But is it contemplated in that agreement and in setting those terms that there would be no possibility of increasing the royalty rate? I’m not talking about the revenue from the royalty that fluctuates, based on the price. I’m talking about the royalty that, regardless of the price, if it were raised, would generate more revenue at any price.
Hon. R. Coleman: The royalty rate that’s paid is based on percentage. It’s a percentage of the royalty. So all you’re doing is saying that when the price is down, the effective rate of the percentage across royalties is here. If the price is down, government could actually get additional dollars from what it would normally get, because that allows for the stability on the lower price. As you come across and the price goes up, it doesn’t go up as fast, but once it reaches a threshold, then it goes up, and the percentage continues to apply.
That is basically a formula that says you know you’re going to pay royalties based on this percentage on the price of gas over the life of an agreement, and as you pay that, the percentage is going to fluctuate, with some stability built in over the period of that agreement so government is always getting its percentage of royalties based on price.
B. Ralston: Well, I appreciate the further detail on the explanation, but my question is a different one, and I’ll pose it again. Let’s suppose the royalty rate is 10 percent. You enter into an agreement, and when the price is low, you receive a bit more, and when the price is higher, you receive a bit less in order to balance this out and achieve this effect that the minister thinks, for policy reasons, is desirable.
Does that forbid the…? By entering into such an agreement, is it intended that the royalty of 10 percent will be fixed for the life of the agreement? In other words, regardless of where the price of gas is, it will always be 10 percent, plus or minus, in accordance with this algorithm that seems to be developed here. That’s my question.
I strongly suspect that the ministry and the minister, in this agreement, will be locking in a royalty rate for the life of the agreement. That’s the advantage to the company. Is the minister prepared to confirm this or not?
Hon. R. Coleman: Inasmuch as a government can’t bind a future government. But the answer to that question is yes.
B. Ralston: In the recent report of the Auditor General, the Auditor General noted that the government had granted another $1.25 billion in subsidies to the industry to drill deep and shale gas wells this year — this will be 2014.
The Auditor General goes on to say that shale gas developers have “incurred expenditures that will qualify for $1.25 billion in incentive credits but have not yet produced enough oil or gas to claim these amounts.” A further quote: “When these producers claim their incentive credits, that money will be deducted from the royalties that they owe, thereby reducing the amount of money government will generate.”
These agreements will not, I take it, alter the ability of the producers to deduct those incentive credits from any future royalties that they might pay. Is that correct?
Hon. R. Coleman: I’ll take a minute with this particular answer for the member. I’m going to take it back with a little bit of history. In 2001 the member for Peace River North…. I believe he may have been the Minister of Energy and Mines, but certainly he brought proposals to government.
At the time, as the member may or may not remember, the oil and gas industry — it’s really a gas industry in British Columbia; we don’t have oil — was really, really cyclical. It was actually operating for a few months of the year. Then it would shut down. The rigs would move. It would come back. Cyclical.
The recommendation was: “Let’s start looking at some of our royalty programs to enhance some different activity on the land base.” Back in 2000 and 2001 we had about 15 years of known reserves of natural gas in British Columbia. We came up with some programs like the deep-well program and those things to offset royalties — money that would not have been spent or invested in the gas fields if we didn’t have some incentive for people to try to be innovative. As a result of that, we found the amount of gas that we have in British Columbia, which could sustain this industry for 150 years.
Baked into our royalty programs for a number of years now has been that incentive program to do this. Some of the deeper wells we’re now seeing — which would have never gotten drilled because they’re very, very expensive — have some significant outcomes. I can’t go into the outcomes and pressures on some of the wells because that is actually information that is trade confidential, but I can tell the member opposite that we have a number of fields.
Each field in B.C. has, basically, what you would call its benefits. The Montney has more liquids that come off, so you can actually get liquids also with the natural gas. You can pull those out and get a benefit for them. Others may have more pressure. Others may be drier, and they have other issues in and around how that gas can be produced.
The whole incentive around the infrastructure royalty program, which I mentioned earlier, was to build the roads and the bridges for the access into these fields, because we’re talking about a very remote area of British Columbia where there was none of that. That was an incentive to get people to build the roads and bridges and get the access.
The drilling programs were to incent industry to go and spend the money to invest and explore to find the gas that we have today. Those deep-well programs continue to exist and are allowed today, as they will be — I would imagine — as we look at different fields and new opportunities, because we do try and adapt those programs. Again, maybe that’s more of an estimates discussion on detail, but we do attempt to adapt those to where we think the next reserve or the opportunity is.
[ Page 8062 ]
Basically, the royalties is the royalty. The programs have been offsetting against these to incent the investment in British Columbia to be in a position, actually, where we now know we have a world-class resource that we can send to another marketplace. Obviously, not North America given the price and volume of gas in North America, but it has attracted, because of the world-class resource we’ve now identified, the people that want to invest in LNG in British Columbia for the long term. That’s part of the reason they’re there.
Without making the changes in the early 2000s, which were done by a minister long before me — and, evidently, quite inspirational — we wouldn’t be here today talking about LNG. We will continue to have live programs that would incent opportunities. We may get things that come at us in the future where somebody wants to do more liquids with regards to processing in British Columbia versus shipping them somewhere — liquids not being LNG but other ones like propane, butane and those sorts of things.
Those pieces would all come in to government under policy over time. This is really about saying to people who want to make significant investments in British Columbia: “You’re going to pay us 100 percent of our royalties. However, we are prepared to work with you to shape that program so that you have some stability in your planning to know what your costs are so that you can make that decision.” But at the end of the day, the taxpayers of British Columbia are going to get all the dollars that they’re due.
A. Weaver: Now, I recognize that government is rather desperate to land the $30 billion investment, and in so doing, we’re just seeing a $1 billion investment walk from Vancouver Island EDPR and TimberWest trying to put $1 billion wind farm investment…. Of course, government is not interested in that, because they’re desperate to fulfil this pipedream.
The concerns I have here…. I’ll ask a very direct one. In light of the fact that everything is up to the minister’s discretion, in essence, to enter into secret deals — presumably handed to him or her by a company, because this government has lost all credibility on this particular file — one of the things that they might do, for example, is work out a royalty rate that might actually be $1 billion less than it would otherwise be so that the company could then find $1 billion to perhaps give to the Lax Kw’alaams First Nation to get title over their land.
This is the kind of stuff that the public does not trust government on because of this legislation, where there’s nothing that precludes government working out a back deal to say: “Well done, Kw’alaams. Good for you to get your title rights recognized. Good for you to negotiate a cost. But we in the province of British Columbia will pay that cost, and we’ll pay that cost by changing this royalty rate in secrecy so that the company doesn’t actually pay it.” The province of British Columbia pays it.
My question to the minister is this: why does he need this level of secrecy here that he does not even need to give the Lieutenant-Governor-in-Council, his cabinet colleagues, notification as to what deals he is making? Does this minister honestly believe that the millions of people living in British Columbia trust him and only him to negotiate royalty rates for generations to come because somehow he knows what’s going on, and no one else does?
Hon. R. Coleman: I will walk past the ignorance of the question and just go to my answer. If the member would look and do some research with regards to the legislation, the power given to the minister to do this comes from Lieutenant-Governor-in-Council, which is cabinet — the ability to do this. And if there’s any change in revenues or things that have to be adjusted on a financial basis, the minister, as I know, with regards to my service plan, my letters of expectations, with my responsibility to government…. Anything that affects the government fiscally, I have to take back to Treasury Board.
I think it’s inappropriate for the member to think that it’s just the minister that’s making this decision. In addition to that, if the member would like to look at subsection 78.1(3), it also says that “The minister must, as soon as practicable, publish an agreement entered into under (1) but may withhold from publication anything in the agreement that could be refused to be disclosed under” — an act that governs us all — “the Freedom of Information and Protection of Privacy Act….”
The only thing that would be not disclosed in that, I believe, would be if there was something that was significantly different or something that was — technology or whatever — with regards to the design of a plant or something that may have an effect on the competitive side or the marketplace before it was disclosed by the company in the appropriate manner. If a request were made under that act, the disclosure of the agreement has to take place. It’s our full intent to make these agreements public.
A. Weaver: Well, in fact, I have read this legislation rather carefully. I’ve been following this file very carefully for the last two years. Frankly, what I’ve been saying for all that time is playing out here. Here’s another sellout.
In fact, if you read 78.1(2), it says the following: “The approval of the Lieutenant Governor in Council is not required for the minister to enter into an agreement under subsection (1)….” I don’t know what the minister doesn’t see about that, but it specifically says that “the Lieutenant Governor in Council is not required for the minister to enter into an agreement under subsection (1) (a) in the prescribed circumstances, or (b) in respect of a prescribed class of agreements.”
In essence, this is saying that the minister can essentially enter into an agreement. The province of British
[ Page 8063 ]
Columbia, all of us, believe that we have such confidence in this minister that we are going to let him — and only him — go into an agreement with a multinational corporation. This has got to be some kind of a joke.
What is the justification that the minister needs these exclusive powers to go and enter into agreements without his cabinet colleagues knowing, without the Premier having to even know, but giving him power under section 78.1(2) to do this? What gives him the right? This is not an autocracy. Why does the minister think it is?
Hon. R. Coleman: If you read the section, it says: “in the prescribed circumstances, or (b) in respect of a prescribed class of agreements.” These are determined by Lieutenant-Governor-in-Council and allow the minister to sign them as a delegated authority to do so.
The characteristics of these agreements — in prescribed circumstances and in a class of agreements — are dealt with long before they ever get to an agreement with regards to what’s in them and what the minister can sign or cannot sign.
So basically, what it effectively does…. It does what most pieces of legislation do and delegates authority, after certain prescriptions and outlines have been prescribed by government, to a minister that he can execute on behalf of government.
B. Ralston: Subsection 78.1(4) sets out a number of conditions or terms that may be included in any such agreement.
The first part of the subsection says “may be for a term the minister considers advisable, but not for a term exceeding the prescribed number of years.” Then it goes on to specify the charges, specification of locations, oil and gas, petroleum or natural gas production levels of certain locations, terms respecting investment in exploration, development or processing of the petroleum.
They seem to me to be, if I might, very similar to what is proposed in the project development agreements that we have spoken of earlier and the minister has said, in his view, should not be disclosed. But nothing in the recitation there of proposed terms makes any reference — that I can see, perhaps obliquely but nothing direct — about competitive or proprietary information.
The royalty which the Crown receives is a return on a public asset — that is, ownership of the gas, so the oil is publicly owned. The return by way of royalty is returned to the Crown. It’s on the return for the right to extract the asset and use it, and there’s a requirement of a price to be paid for the Crown.
On the minister’s website there’s a lengthy book, about 300 pages, that explains about how royalties are calculated and how they are paid, and there’s a whole series of regulations — all of which is public. So I don’t understand and I don’t accept the minister’s interpretation of sub 78.1(3) that any of this information should be withheld from the public.
It isn’t now, in the way that royalties are calculated. Unless an additional ingredient that transforms these royalty agreements into project development agreements of a type…. I understand the minister’s views on that. He’s made that very clear here in the Legislature in response to my questions that he doesn’t think project development agreements should be disclosed to the public ever. The Minister of Finance has a different view, but certainly, at this stage in the negotiations, the minister does not view those as something that should be disclosed to the public.
Negotiating with major multinational companies, locking up terms for lengthy periods of time and binding future governments for 25, 30, 35 years…. The Forrest Kerr agreement, for example, is a hydroelectric private power agreement which is 40 years. I expect that these agreements will be in that length and that range.
Why does the minister say that these agreements should not simply be made public?
Hon. R. Coleman: I actually think they should be made public. All I said is that section 3 says that they’re subject to FOIPPA, which is the Freedom of Information and Privacy Act. As the member knows, there’s a process in and around that with regards to disclosure.
I also disagree with the member’s context and description of project development agreements. I have said that during negotiations, as you’re working on commercial terms, those negotiations are subject to confidentiality agreements because there’s a number of proponents in a number of areas of the province.
Once a project development agreement is executed, Member, at FID, it becomes public. It will be made public.
But it’s during the time of negotiations when you actually have, as the member would know, because I know he’s probably done deals like this before…. During negotiations, the commercial terms and things that could affect markets or discussions and negotiations are usually subject to a confidentiality agreement until you get to final agreement.
In this case, final agreement will come when the company makes the final investment decision. The project development agreement would be executed at that point in its final form, and it would be made public.
B. Ralston: Well, the minister has refused to really answer the question. What competitive or proprietary aspects would there be to a proposed royalty agreement? That’s different from a project development agreement.
Let’s suppose for the moment that I accept, for the sake of argument, some of the minister’s assertions about project development agreements. That’s probably a discussion for another day in estimates. But given the recitation
[ Page 8064 ]
of proposed terms in subsection (4), which one would the minister point to and say: “This gives me the authority to refuse to disclose the agreement because it may contain proprietary or competitive terms in that agreement”?
It seems to me this is simply a taxation agreement, which should be public. It’s a return to the Crown for the taking of a public resource. I don’t understand. As a question of principle, it would seem to me it should be public.
Hon. R. Coleman: Every piece of legislation, I think, I’ve done in the last 14 years has had a clause in there that has something in reference to the Freedom of Information and Privacy Act. It’s not me saying I’m not going to disclose it. But there is an act in British Columbia that says freedom of information and privacy are protected under a piece of legislation. So when you’re going to release something to the public, you usually put it through a FOIPPA lens. That lens is done, as the member knows, on all kinds of agreements within government, because there’s a reason for confidential personal information.
Do I think, given this section and the list of things that we’re going to put in them, that any of that shouldn’t be made public? No. I think that it can all be made public. But I am not the person that would decide what couldn’t be disclosed if the Freedom of Information and Privacy Act came into play.
B. Ralston: Well, I don’t accept the minister’s logic, and he has yet to provide a tangible example of how this provision is required. On that basis, I move a proposed amendment to this subsection. I have a copy here for the Clerk and a copy for the minister and his staff and a copy for my independent friend.
[To amend Section 46, the Petroleum and Natural Gas Act, proposed subsection 78.1 subsection (3) by deleting the text shown as struck out.
SECTION 46 Royalty agreements (78.1)
(3) The minister must, as soon as practicable, publish an agreement entered into under subsection (1) but may withhold from publication anything in the agreement that could be refused to be disclosed under the Freedom of Information and Protection of Privacy Act, if a request were made under that Act for disclosure of the agreement.]
I’m simply moving that the words beyond “subsection (1) but may withhold from publication” to the end of that subsection be deleted. The reason for that is that the royalty agreements, in my view, given that they are a taxation statute that should be transparent…. There’s no reason why, and the minister has failed to demonstrate any reason why, this requirement is specifically required in this particular statute applying to these particular agreements. So I put that amendment forward.
On the amendment.
A. Weaver: I would very much like to speak in favour and support of this amendment, as I agree with the sentiments of the member for Surrey-Whalley. I have an amendment on notice that I will bring forward if this amendment does not pass. However, I do believe that this amendment is appropriate to be raised first, as it is, in fact, the spirit of what I have on the order paper. With that, I do strongly support the member’s amendment.
Amendment negatived on the following division:
YEAS — 31 |
||
Hammell |
Simpson |
Robinson |
Farnworth |
James |
Ralston |
Corrigan |
Fleming |
Popham |
Kwan |
Conroy |
Austin |
Chandra Herbert |
Huntington |
Macdonald |
Karagianis |
Eby |
Mungall |
Bains |
Shin |
Heyman |
Darcy |
Donaldson |
Krog |
D. Routley |
Simons |
Fraser |
Weaver |
Rice |
Holman |
|
B. Routley |
|
NAYS — 44 |
||
Horne |
Sturdy |
Bing |
Hogg |
Yamamoto |
Michelle Stilwell |
Stone |
Fassbender |
Oakes |
Wat |
Thomson |
Virk |
Rustad |
Wilkinson |
Pimm |
Sultan |
Hamilton |
Reimer |
Ashton |
Morris |
Hunt |
Sullivan |
Lake |
Polak |
Coleman |
Anton |
Bond |
Bennett |
Letnick |
Barnett |
Yap |
Thornthwaite |
Plecas |
Lee |
Kyllo |
Tegart |
Throness |
Bernier |
Larson |
Foster |
Dalton |
Martin |
Gibson |
|
Moira Stilwell |
A. Weaver: As discussed just prior to the previous amendment, I share the same sympathies as the member for Surrey-Whalley. I took a slightly different approach, which was to suggest that the amendment that I put on the order paper be added at this stage.
[SECTION 46, by adding the underlined text as shown:
(3.1) The minister must, as soon as practicable, submit any agreements entered into under subsections (1) or (2) to the Information and Privacy Commissioner, requesting a public determination as to what information should be published under subsection (3).]
On the amendment.
A. Weaver: The reason for doing this is that there clearly is a great deal of suspicion out there, not only within
[ Page 8065 ]
the opposition and the independent members but within the general public, as to the direction this government is heading on this file. Transparency and open government are important. What better way to do that than to actually, proactively, send the agreement to the freedom-of-information and privacy commissioner to get his or her assessment of what should or should not be redacted?
[D. Horne in the chair.]
The Chair: Shall section 46 pass?
A. Weaver: I moved an amendment that was on the order paper. I believe that now stands on the table for discussion.
The Chair: On the amendment, any further speakers?
B. Ralston: I want to rise to support the proposed amendment. This is a slightly more nuanced version than the amendment that I put forward, but it will have the effect of increasing the transparency of these agreements to the public. It’s for that reason…. Given the magnitude of royalty revenue that we’re talking about here, it’s important that the public know what’s going on. Therefore, I support this proposed amendment.
V. Huntington: I rise to support the amendment too, simply because I feel that it should not be in the hands of a minister, any minister, to determine what should and should not be released pursuant to the Freedom of Information and Protection of Privacy Act. I think it is more appropriate that the agreement be presented to the commissioner for their determination, rather than the minister’s sole decision.
The Chair: I understand that there is a member that has stepped out. Is unanimous consent available to waive the balance of the time?
Leave granted.
Amendment negatived on the following division:
YEAS — 32 |
||
Hammell |
Simpson |
Robinson |
Farnworth |
James |
Ralston |
Corrigan |
Fleming |
Popham |
Kwan |
Conroy |
Austin |
Chandra Herbert |
Huntington |
Macdonald |
Karagianis |
Eby |
Mungall |
Bains |
Shin |
Heyman |
Darcy |
Donaldson |
Krog |
D. Routley |
Simons |
Fraser |
Weaver |
Chouhan |
Rice |
Holman |
|
B. Routley |
NAYS — 43 |
||
Sturdy |
Bing |
Hogg |
Yamamoto |
Michelle Stilwell |
Stone |
Fassbender |
Oakes |
Wat |
Thomson |
Virk |
Rustad |
Wilkinson |
Pimm |
Sultan |
Hamilton |
Reimer |
Ashton |
Morris |
Hunt |
Sullivan |
Lake |
Polak |
Coleman |
Anton |
Bond |
Bennett |
Letnick |
Barnett |
Yap |
Thornthwaite |
Plecas |
Lee |
Kyllo |
Tegart |
Throness |
Bernier |
Larson |
Foster |
Dalton |
Martin |
Gibson |
|
Moira Stilwell |
|
The Chair: Shall section 46 pass?
A. Weaver: I have a number of further questions on this. I will not be calling division, but I do have another amendment. Might I, with leave, give them a couple of minutes to…? I know they’re riveted on what I have to say, but maybe a couple of minutes for them to leave.
The Chair: We’ll pause briefly for those members returning to other duties. We’ll recess for about five minutes.
The committee recessed from 5:46 p.m. to 5:49 p.m.
[D. Horne in the chair.]
A. Weaver: Coming back to section 46, section 78.1(2)(a) and (b), where it describes: “The approval of the Lieutenant Governor in Council is not required for the minister to enter into an agreement under subsection (1) (a) in the prescribed circumstances, or (b) in respect of a prescribed class of agreements.”
The minister recently said that the type of agreements that he or she or whoever the minister will be can enter into are controlled by cabinet. But we have no indication as to what “prescribed circumstances” are. We have no indication as to what “prescribed class of agreements” is.
It could be — and I seek confirmation from the minister — that a prescribed class of agreements could be any agreement to extract natural gas from the Montney region in British Columbia and export it anywhere in Asia. That’s one possible interpretation, and “under the prescribed circumstances,” that the minister has the time
[ Page 8066 ]
to do so. Essentially, this would grant the minister…. We have no sense of this.
Is what I just said precluded from that? What constraints are being placed on the minister to enter into these agreements without consulting, without the need for the Premier, without the need for cabinet, without the need for anyone, obviously, except the proponent to know about what the agreement is? This set of prescribed circumstances and agreements is so large and vague, it could include anything.
Hon. R. Coleman: It gives to the Lieutenant-Governor-in-Council, in prescribed circumstances or in respect of a prescribed class of agreements, to allow the minister to execute them. Those will be prescribed in regulation through Lieutenant-Governor-in-Council, not arbitrarily by the minister.
A. Weaver: I guess that’s my point. I reiterate what I said earlier. In light of the fact that this government is so desperate to sign agreements with, now, one company — it’s, I guess, given up on a number of others — there is a lack of trust. There’s a lack of trust that this section is not going to be anything more than “prescribed class of agreements” is with Petronas, for example, or with any company involved in the Montney play that wants to sell gas to Asia. So there is a great deal of uncertainty with this.
This amendment does simply not instil confidence in British Columbians that the government actually has any sense of direction or actual clue as to what they’re doing. They’re making it up as they go along, moving it from a generational to now, as my friend from Nanaimo–North Cowichan points out, a multigenerational sellout in a desperate attempt to try to land a company.
Let me just follow up with a direct question here. If the minister signs an agreement under subsection (2) and then, after giving it to the Lieutenant-Governor-in-Council — now it’s signed — the Lieutenant-Governor-in-Council receives this, and they then determine that they don’t like it, that the minister overstepped his or her bounds, my question is: what ability does the Lieutenant-Governor-in-Council have to overturn an agreement that was signed by a minister under section 78.1(2)?
Hon. R. Coleman: I know that the NDP and the independents in this House don’t support liquefied natural gas as an industry for the future of British Columbia. I know that. I know the member is clearly after that in his mind, and that’s fine.
But if the member will think about the legislation, it allows regulations to be developed that specify the circumstances or describe the types of agreements that the minister can enter into — don’t get to write the agreements. The Lieutenant-Governor-in-Council actually prescribes that in regulation.
By the way, every week the decisions by the Lieutenant-Governor-in-Council on regulations are published. That information, in and around the agreements, would be published, and the minister could only execute under those terms. If he went outside those terms, because of the regulation being in place, it wouldn’t be a legally enforced agreement.
A. Weaver: With respect, this has nothing to do with being against or for natural gas. This has to do with economic folly and irresponsible promises by this government in an election campaign that they cannot fulfil. Here we see desperation in legislation. We see one after another as they so desperately try to land a single contract.
The reality is…. I’m going to read this again. I have read this legislation. It says as follows: “The approval of the Lieutenant Governor in Council is not required for the minister to enter into an agreement under subsection (1) (a) in the prescribed circumstances, or (b) in respect of a prescribed class of agreements.” It doesn’t say “in respect to an agreement that has been reached and agreed to by cabinet already.” It says “in the prescribed circumstances” or “a prescribed class of agreements,” which is incredibly vague, no matter how you interpret that.
Again to the minister: if he believes that these circumstances or agreements really curtail or constrain what he is able to sign, why doesn’t he tell us what they are? Why doesn’t he table here today what is actually meant by prescribed circumstances or a prescribed class of agreements? Right now it can be anything. Will the minister table examples of what these are?
Hon. R. Coleman: I’ll reiterate it. I do know the member opposite doesn’t support liquefied natural gas as a new industry for British Columbia. Even in that case, this is actually a piece of the legislation that allows for regulations to be developed that specify the circumstances that the minister could actually enter into and sign an agreement on behalf of the province of British Columbia.
The regulation is a law, hon. Member. The minister has to follow that law in those prescribed circumstances and in respect of the prescribed class of agreements. He has to do that, because that is defined in regulation. The regulation is developed when legislation is passed.
A. Weaver: Again, to correct the record, I have never said I am against liquefied natural gas. In fact, if you go back to estimates, you will see that I have been arguing strongly for promoting domestic sector use, including the use of liquefied natural gas in our ferry systems in British Columbia, long before the government actually came up with that direction and idea.
This is not about liquefied natural gas. This is about irresponsible economic outlook — that the government is going in with no financial underscoring. They seem to
[ Page 8067 ]
be the only ones in the world that believe this is going to play out, and they’re desperate to do so.
Coming back to the question. The reality is, as the minister would like us to believe, that somehow he’s going to be constrained in entering into these agreements, that the regulations will be developed after the fact.
There is no trust on this file anymore. There is no trust. The government is simply not trusted to be acting in the best will of the people on this particular file. We’ve seen, time after time after time, broken promises, changing legislation. We bring in an act, an LNG act. We then completely change the LNG tax act only a few months later.
It’s for this reason that I have a second amendment that I wish to put here to actually add another check in place. This is on the order paper. It’s adding a section (8) to 78. So it’s 78.1(8), which says the following:
[SECTION 46, by adding the underlined text as shown:
(8) The Lieutenant Governor in Council may, without penalty, pull out of an agreement entered into under subsection (2) within six months of the time at which the minister provided the Lieutenant Governor in Council with the full text of the agreement.]
On the amendment.
A. Weaver: The reason why I’m doing this is I don’t trust the minister. The opposition doesn’t trust the minister. The people of B.C. don’t trust the minister. International companies don’t trust the minister. The minister has no trust on this file.
Hon. R. Coleman: I guess he will have to understand what the law means with regards to regulation.
I should tell the member opposite that I spent eight years in the RCMP. You can’t throw an insult at me that’s going to bother me. So try as you must, it just isn’t going to work.
On the other side, the flip side, I know the member opposite doesn’t think that we have opportunities on liquefied natural gas in British Columbia. Like I said to him in debates of a while ago, I want to be invited to the dinner when he has to eat those words. It will happen in the not too distant future, I believe.
Over the next year or two, you’ll see a number of these projects go ahead. They’ll go ahead not because the international community mistrusts the minister. It’s because the minister has built a relationship with the industry across the world and with financiers to the fact that they actually believe this government will deliver on what it says it will do and, therefore, will come to B.C. and invest.
B. Ralston: In section 78.1(4)(d)….
The Chair: Unfortunately, the amendment is still on the floor. So the question is the amendment proposed by the member for Oak Bay–Gordon Head.
Amendment negatived on division.
B. Ralston: Looking at section 78.1(4)(d), which reads: “terms respecting investments in the exploration, development or processing of petroleum or natural gas, or both.” Those are terms that could be included in any proposed royalty agreement.
One might expect, as part of a negotiation process, that in return for agreeing in the agreement to making certain investments, the resulting royalty rate would be negotiable. Therefore, in return for an investment, the royalty rate might be dropped below the prevailing rate. One can see that that might be a likely or possible term of the agreement.
If that were the case…. I know Petronas has already bought Progress Energy, but let’s say that another company agreed to buy an upstream company and supply a certain volume of natural gas over a lengthy period to an LNG plant on the coast. In return for making that commitment, would the minister agree that this term would provide him with the power to say: “We will give you a royalty rate that is lower than the prevailing rate”?
If so, would he consider that to be a commercial or proprietary term that would have to be hidden from the public so that other firms would not know that and therefore not weaken, arguably, the government’s bargaining position? I could foresee that happening. But I’m just interested in….
The minister uses the terms “commercial” or “proprietary” — terms that would forbid the disclosure of terms of the agreement — very loosely. I’m wondering whether in that circumstance this would qualify as a commercial or proprietary secret that would not be disclosed publicly?
Hon. R. Coleman: I’ll try and answer the member’s question this way. First of all, no, we wouldn’t do that. You can’t do that because the royalties are set. As I described, the royalty even in the curve is still set on the percentage of the royalties and doesn’t change. There’s nowhere in British Columbia where we have a different royalty paid by one producer versus another that’s different.
Now, having said that, at the same time, as we come through this discussion, the existing programs are in place; the royalty is the same. We do not, just so the member opposite…. There’s nothing in this act that says I’m holding anything back. It actually only makes reference to if there’s something under freedom of information and privacy. We do not believe that the rate of the royalty is subject to that, so we would be disclosing it in the agreement.
The only thing that would be freedom of information would be personal information, like there is under the act, that would be required not to be disclosed. We put that in acts so that we make sure everybody knows that we’re governed by the Freedom of Information and Protection
[ Page 8068 ]
of Privacy Act from one act to another. We put that in every piece of legislation I’ve ever debated in this House.
If there’s a royalty agreement made, the royalty will be made public.
B. Ralston: Would the minister agree that subsection 78.1(4)(g), “any other terms and conditions the minister considers necessary or advisable…?” Obviously, that’s a very open-ended provision that would give the minister and his staff discretion to include any term he thought fit into such an agreement.
Would the minister agree that in the case of some proponents, they might very well seek — and the minister could agree to this under the terms of this amendment — certain levels of temporary foreign workers, for example, to work in the operation of any of the plants or locations that are referred to? Again, the language is very general and all-encompassing.
Would there be a labour aspect to these agreements? Or would the minister not agree that it’s certainly possible to read that into these provisions.
Hon. R. Coleman: This legislation, 78.1, clearly says: “…an agreement establishing the royalty be paid by a person to the government, and the method of calculating the royalty….”
This legislation doesn’t allow for somebody to decide that they’re going to provide, in a royalty agreement, a mix of temporary foreign workers or skilled labour that comes in from outside the country. It’s really not in the purview of this legislation. This is strictly about the royalty agreements and nothing else.
B. Ralston: The minister says that’s his personal intention. I accept that.
But would the minister not agree that the language in sub-subsection 71.1(4)(g) is very broad indeed? Or even in (f): “a specification of regulations under this Act that apply to the person with respect of the agreement.”
The reason I say this is because other terms, such as (d), which says, “terms respecting investments in the exploration, development or processing of petroleum or natural gas, or both” are very broad. It’s not talking about simply the extraction process. This is talking about investment, development and processing. Obviously, that involves labour to do those things.
The minister said that’s not his personal intention. But would he not agree that these provisions, drafted so broadly, could very well encompass that as an aspect of any agreement that’s contemplated under section 78.1?
Hon. R. Coleman: The member knows, because he is a member of the bar, that subsection 78.1 is what puts the parameters around this agreement and what we’re talking about — an agreement establishing royalties to be paid.
The section that the member refers to is a section that’s no different than anything else. We do have royalty programs — deep-well royalty programs, infrastructure royalty programs — and those are the things that could affect investment with regards to that.
They only have to do with the natural gas royalty. They do not have anything else to do with any of the other provisions that the people would be doing with regards to it. This is about royalties. It is about the payment of royalties and royalty programs. Royalty programs. Not labour programs, not other programs like that. Just the royalties.
Section 46 approved on the following division:
YEAS — 43 |
||
Sturdy |
Bing |
Hogg |
Yamamoto |
Michelle Stilwell |
Stone |
Fassbender |
Oakes |
Wat |
Thomson |
Virk |
Rustad |
Wilkinson |
Pimm |
Sultan |
Hamilton |
Reimer |
Ashton |
Morris |
Hunt |
Sullivan |
Lake |
Polak |
Coleman |
Anton |
Bond |
Bennett |
Letnick |
Barnett |
Yap |
Thornthwaite |
Plecas |
Lee |
Kyllo |
Tegart |
Throness |
Bernier |
Larson |
Foster |
Dalton |
Martin |
Gibson |
|
Moira Stilwell |
|
NAYS — 32 |
||
Hammell |
Simpson |
Robinson |
Farnworth |
James |
Ralston |
Corrigan |
Fleming |
Popham |
Kwan |
Conroy |
Austin |
Chandra Herbert |
Huntington |
Macdonald |
Karagianis |
Eby |
Mungall |
Bains |
Shin |
Heyman |
Darcy |
Donaldson |
Krog |
D. Routley |
Simons |
Fraser |
Weaver |
Chouhan |
Rice |
Holman |
|
B. Routley |
Section 47 approved.
On section 48.
The Chair: If we could wait one moment for staff.
A. Weaver: I would be delighted to wait.
The Chair: Those members going to other duties….
[ Page 8069 ]
If we could hear the member for Oak Bay–Gordon Head, that would be great.
A. Weaver: I was wondering. This revises the Oil and Gas Activities Act to allow two types of different inclusions. My first question is: does the minister envision that under (e.1), this would include, say, methanol production, by chance?
Hon. R. Coleman: That’s correct.
A. Weaver: Would this mean that, say, a proposal that would allow a methanol facility to be built and piped to the coast…? Would this include all of the activities from the construction of a methanol factory, through to the pipe, through to the terminal at the coast?
Hon. R. Coleman: Yes.
Sections 48 and 49 approved.
The Chair: Minister, the next sections are housing, I believe. So we’re fine…?
Interjections.
The Chair: So we’ll stand 50 down, and we’ll move to 51.
Section 50 stood down.
Section 51 approved.
On section 50.
M. Karagianis: I’d like to ask the minister what, in fact, this repealing of the shelter aid means and the repealing of the regulation, as well, under the act.
The minister will know that there has been recently been some concern voiced by the B.C. advocate for seniors on the low number of seniors who seemed aware of the SAFER program and the uptake on the SAFER program, although it’s direly needed by many seniors. It concerns me greatly that we’re now repealing this and the regulations, and I’d like to know what the government is thinking on this. What will be the actual implications to this shelter program and to those receiving it right now?
Hon. R. Coleman: This actually fixes something that’s been, for lack of a better description, broken for a couple of decades. Basically, the Shelter Aid For Elderly Renters program regulations are being repealed as they’re not necessary for the administration of the Shelter Aid For Elderly Renters program.
The reason for that is that the act is not required for the administration of the Shelter Aid For Elderly Renters program because B.C. Housing has the authority to administer rent supplement programs under section 3(f) of the British Columbia Housing Commission regulation and will continue to administer SAFER as it does now.
The act, when it was written, was written for ministries which previously administered SAFER but became redundant when the administration of the program was transferred to B.C. Housing in 1997. Basically, what we’re doing is fixing something that’s been out there…. It’s been managed by B.C. Housing over that period of time under their act. This act basically was for other ministries that no longer do the program.
M. Karagianis: What are the implications around the actual application of the shelter program itself? What will change with this repealing of the act in this particular clause?
Hon. R. Coleman: Nothing. For 18 years this piece of legislation has been there for a program that was redundant when its administration was transferred to B.C. Housing in 1997.
Section 50 approved.
On section 52.
M. Karagianis: In this particular section, 52, it provides for the continued application of the act and regulation for two years after the act is repealed in relation to payments of shelter aid made under the act and the continuation of the eligibility committee established under the act for the same period.
Can the minister explain why this is only being continued for two years, and, again, what are the implications to those individuals who are receiving this shelter funding?
Hon. R. Coleman: The ability to appeal under the act previously could take up to 18 months to complete all business authorized under the act while it was in effect and fully administer the program under the authority of the B.C. Housing Management Commission.
The transition period is set at two years in case there’s an extra margin of time needed for somebody that may be in the appeal process as we put this back where it’s supposed to be.
M. Karagianis: This does not mean that in two years there will be a significant rethink of this program or this program will be in jeopardy? I think it’s unclear that if B.C. Housing is now going to be managing the program…. Will there be any decreases? Can B.C. Housing decide two years from now to change this program?
Could there be a decrease or the program be cancelled without notice? I mean, this is pretty vital to many individuals. I guess, given the fact that the seniors advocate is now promoting this to the vast number of individuals who were unaware of the program, we can expect to see huge subscription of that program in the coming months as that gets promoted.
I am concerned about those two aspects: what happens after the two-year period, and once this goes inside B.C. Housing, is there any way for us to judge what the long-term viability of this program is or the security of that? And how would we be able to verify that? Maybe the minister can assure us that there will be some mechanism at B.C. Housing where we can be assured that the program won’t be altered or changed or reduced or cancelled.
Hon. R. Coleman: It has nothing to do with the delivery of the program. This is, if people are in an appeal process, to give them time to complete the appeal process during the period while we’ve made this change. If somebody’s in an appeal process today, they’ll get their appeal process. It has nothing to do with the program whatsoever.
Shelter Aid For Elderly Renters has been in place in British Columbia for, I think, about 30 years. We actually expanded the program dramatically starting in about 2006-2007, have continued to expand the program and continued…. We went to the RAP program, as well, as the member knows — the rental assistance program — and now we have a similar rental assistance program for people that are homeless in shelters and other aspects of housing in B.C.
Programs in the future are decided on by government, not by the B.C. Housing Management Commission, who have a mandate to deliver this program, and their budgetary process goes through the normal budgetary process. If you want to know the timelines and the background history of SAFER, you’d be able to get that in estimates next week. But there really is no intention to do anything with SAFER except hope people come on it and they use it.
Sections 52 and 53 approved.
Hon. R. Coleman: Noting the hour, I move the committee rise, report progress and seek leave to sit again.
Motion approved.
The committee rose at 6:27 p.m.
The House resumed; Madame Speaker in the chair.
Committee of the Whole (Section B), having reported progress, was granted leave to sit again.
Committee of Supply (Section A), having reported progress, was granted leave to sit again.
Hon. M. Polak moved adjournment of the House.
Motion approved.
Madame Speaker: This House, at its rising, stands adjourned until 1:30 tomorrow afternoon.
The House adjourned at 6:28 p.m.
PROCEEDINGS IN THE
DOUGLAS FIR ROOM
Committee of Supply
ESTIMATES: MINISTRY OF
COMMUNITY, SPORT AND
CULTURAL DEVELOPMENT
(continued)
The House in Committee of Supply (Section A); D. McRae in the chair.
The committee met at 1:35 p.m.
On Vote 18: ministry operations, $215,828,000 (continued).
The Chair: After a disjointed start — my apologies — I now recognize the member for Coquitlam-Maillardville.
S. Robinson: Thank you, Mr. Chair. I appreciate the recognition.
I have a number of questions related to sport. I’m going to ask a few questions about ViaSport and Hosting B.C., then about some of the marquee events over the past year and what’s coming up with some questions about the B.C. Games Society, and then finish up with some questions on the athletic commissioner, so I can allow staff to be a little bit prepared and find the right spots in the binders.
The first question I have is about ViaSport. I would really appreciate hearing from the minister about what the total budget is for ViaSport. If we could start with that, and then my next questions after the response.
Hon. C. Oakes: If you’ll kindly permit me, to the member opposite, I would like to introduce…. We’ve got new staff with us today. We’ve got Margo Ross here from the sports branch and Melanie — we introduced the ADM yesterday — and we have Kelly Mann from the B.C. Games Society. It’s great that we have our sport team here with us.
If I may, just a quick overview. ViaSport is government’s primary funding partner and is responsible for ensuring government’s objectives are obtained. Roughly, we have a $17 million budget for ViaSport. How that’s al-
[ Page 8071 ]
located is that provincial sport organizations receive $9 million, multisport organizations receive $3 million, and grant recipients receive $3 million as well.
ViaSport is divided into key priorities. We’ve got sport participation, which is intended to increase the number of British Columbians active in sport. We’ve got a high performance sector, maintaining programming with British Columbia that helps develop both British Columbia’s and Canada’s top athletes. And we have event hosting, supporting economic and community development through sport event hosting. If I may, the current board consists of the chair, Caley Denton, Loreen Barnett, Peter Lawless, Janine North, Lauren Woolstencroft and Todd Kobus.
S. Robinson: I appreciate the minister’s full answer and got, certainly, lots of details from that.
I’m very curious, and the minister likely knows this, about how we measure outcomes in this particular case and very much interested in the resources that get put into encouraging people to be active in their communities, given that that’s where we’re going to get, I would imagine, the biggest bang for our buck.
I would very much be interested to find out how ViaSport measures those outcomes.
Hon. C. Oakes: Some of the outcomes that ViaSport and our government are proud to recognize are that, since 2008-2009, we’ve seen 52,702 more British Columbians participate in organized sports, so we have seen an 8 percent increase from the baseline. As well, we currently have 11,582 coaches and 13,724 officials trained through the provincial sport organizations.
We also are proud to say that we’ve reached more than 149,000 participants that have trained over 6,500 coaches in 110 communities through a sport participation bilateral, and 78 percent of these projects are outside the Lower Mainland. We’ve secured an additional one-time federal contribution of $118,000 for travel support for Team B.C. competing in the 2014 North America Indigenous Games.
We’ve also expanded KidSport programming chapters to assist children from low-income families to participate in sport. Our goal is to expand the number of KidSport chapters to 45 by 2015 and help 5,000 low-income children participate in sport.
We are very proud to say that 6,633 children have been reached — fifth consecutive year of growth in KidSport. Each dollar that the provincial investment…. We were able to leverage $3.47 in community donations, and we signed an agreement with Canada West Universities Athletic to make KidSport charity of their choice. We have a pilot partnership currently with Basketball B.C.
We’ve got lots of other key indicators and objectives. We do have a lot of information that describes each of the components and how they’re growing.
S. Robinson: I’m pleased to see that there are certainly some measurements. The initial number, the 52,000 more people participating in sports since 2008 with an 8 percent increase…. I’m going to guess that the population has grown more than that, so I’m not sure that that’s an actual true increase, given our population growth, but I’ll let it go at that.
I do also want to comment on KidSport. While I appreciate that we have KidSport and it provides value, I think a poverty reduction strategy would be a far better solution than having to raise money. I certainly participate in my community helping KidSport raise money. I’ve also actually written letters of support for families that have asked for grants. That’s a pretty difficult thing for families to do — to ask for $200 so that their kid can play a sport. While I appreciate it, I’m not sure that that’s the best way to support families.
I’d like to move on and ask another question about ViaSport. One of the goals is to generate and grow awareness of granting programs with a focus on underserviced and rural regions of British Columbia. I’d like to know what specific measures, marketing or otherwise, ViaSport is taking in order to address awareness about these grants.
Hon. C. Oakes: Some of the ways around how ViaSport ensures that communities across British Columbia and sport organizations know about the granting programs that they’re offered….
First of all, I encourage people to go onto their website. As well, the provincial sport organizations distribute the information throughout their membership. As well, we’ve got the PacificSport regional centres throughout British Columbia that also distribute that out to members.
I would also like to remind the member opposite that, additionally, in Budget 2015 we announced two new tax credits that will help people participate more actively in sport. We provided the child fitness equipment credit, a non-refundable tax credit equal to 50 percent of the child fitness credit, to start in 2015.
As well, we’re proud to announce the B.C. education coaching tax credit for the 2015-2017 tax years. This is a non-refundable tax credit of $500 for teachers and teaching assistants who carry out at least ten hours of extracurricular coaching activity in the year.
S. Robinson: I just want to get back to the communities that are underserviced, particularly in the rural regions, in terms of how to do outreach.
While I appreciate that there are umbrella organizations and they have members, there are communities where there is nothing, or they haven’t established that seed group that could actually start to mobilize whatever resources they have and then start to apply for the grants. I’m just curious what sort of outreach there is where there currently is not much happening.
[ Page 8072 ]
Hon. C. Oakes: Well, we do have zone distribution. So the number of communities: in the Kootenays, 19 communities are served; in zone 2, the Thompson-Okanagan, 16 communities are served; in zone 3, the Fraser Valley, 13; Fraser River delta, four; Vancouver-Squamish, seven communities are served; Vancouver Island Central Coast, 28 communities are served; zone 7, northwest, 11 communities are served; and zone 8, the Cariboo northeast, 12 communities are served.
I’d also, perhaps, like to get into a little bit more detail. This is probably a question that we’ll see, but maybe I’ll be pre-emptive of it. To talk about maybe the fun participation of the…. We have an aboriginal sports sector strategy, and our goal, of course, is for kids who face barriers to sport — to expose them to sporting opportunities for aboriginal communities.
We’re extremely proud that B.C. placed number one at the 2014 North American Indigenous Games. There was a young man from Quesnel that had the opportunity to participate, and I talked to him after the games, and what a significant impact having the opportunity to compete in these games made.
As well, we’ve offered 84 coach clinics — 638 aboriginal coaches are trained in British Columbia. Over 13,000 aboriginal youth are reached at 284 sport camps throughout British Columbia. We have 116 equipment grants that provided over 68 percent of grants to communities, again, outside the Lower Mainland. There were six regional committee workshops with attendance of 242. Again, we go out. We do the outreach in communities to ensure that they have the ability to participate.
Finally, 76 life-saving and scuba certificates awarded to 28 participants, and 12 youth and staff are directly employed or actively volunteer year-round in aquatic scuba industries.
That’s just a little piece of how we’re supporting our aboriginal sports strategy and getting the word out to communities across British Columbia.
S. Robinson: I appreciate the list of activities that are going on, but it didn’t quite answer the question that I was asking. What I was asking is: how are you doing the outreach? That there’s some outreach I have no doubt. But what activity? Is it advertising? Is it newspaper? Is it word of mouth and going up and helping groups get started?
It’s more fine-tuned than that — not so much “this is what we have accomplished.” I’m looking for what efforts, what specific strategies, are being undertaken where there are no organized sports and where, perhaps, there could be or there ought to be, and what steps are taken to promote that there are some resources here that this government has so that they could take advantage.
Hon. C. Oakes: We’ve had the ability to canvass, as I mentioned earlier, around the aboriginal sports strategy. We talked about how we hold regional workshops to support communities on getting the word out. We talked about how we have on-the-ground people to help communities with funding through provincial sport organizations.
We also have the local sport program development fund. This program runs between April and July, and people are now eligible to apply. The local sport program development fund makes community sport more accessible to people of all abilities by providing funding to sport programs delivered by non-profit organizations such as local sport organizations, municipalities and aboriginal communities. Grants from the fund are available to isolated rural communities where sport opportunities are fewer as well as to large urban populations where low sport participation exists.
The goal of the fund is to develop ongoing sport programs and support things such as recruiting and training coaches, instructors and officials; purchasing or refurbishing equipment; or offering adaptive sport opportunities and programs to meet the needs of persons with disabilities, low-income families, new immigrants, seniors, females and/or aboriginals. Eligible applicants are invited to apply for funding. That information you can access through ViaSport.
Hon. Chair, if I may, I would also like to read a letter that we received from the Cortes Community Health Association.
“Dear Hon. Oakes:
“The Cortes Community Health Association and the youth of Cortes Island, B.C., are very pleased to thank you as the funder of the ViaSport grant of $1,200 we’ve been awarded for a new curling program this year. We are using this grant to pay for the equipment needed for this program as well as for coaching development. We are a small, rural island community, and this grant is providing opportunities that children in this community would not otherwise have the access to.
“Thank you for funding this exciting new sporting opportunity.
“Miranda Cross”
S. Robinson: I haven’t read the letter, but I appreciate that there are many letters from people who are grateful.
Perhaps the minister still doesn’t quite understand the question that I’m asking. It’s not what funds are available. I have read about that fund on the Internet. It’s easy to find, if you know what to look for.
My question is: how would an isolated rural community know that that even existed? How would they know that there are resources that would allow them to build on this opportunity? Again, I’m asking the question. Are letters sent out to municipalities? Are letters sent out to service clubs that say that there are these funds available? How is it…?
One of the goals is to generate and grow awareness of granting programs. What specific activities are undertaken to facilitate the awareness of these granting opportunities?
Hon. C. Oakes: I’m proud to continue to talk about the great work that we’re doing with sport. We talked about how we communicate. Obviously, the letter from Cortes Island suggests that the word is getting out. Folks from across British Columbia are applying for the terrific grant opportunities that we have. It’s making an impact on the ground.
Government continues to maintain the highest level of annual investment in sport programming in B.C.’s history. Over $50 million is transferred annually to support programs, and the return on these investments is significant.
More British Columbians are now playing sport, which has helped push B.C. to become one of the most physically active provinces in Canada. The Canadian Fitness and Lifestyle Research Institute estimates that sport participation rates in B.C. increased from 31 percent in 2008 to 36 percent in 2011, and we had an Ipsos-Reid Fitness and Sport Participation report that identified B.C. as the most active province in Canada.
The word is getting out. The programs are meeting the needs of citizens across British Columbia, and we’re identified as the top in Canada.
S. Robinson: Clearly, I’m going to take from the non-answer that there really aren’t any specific strategies that are being used, that the activities being undertaken to achieve this goal…. There probably just aren’t any. That’s a little bit disappointing, because…. Well, if we have this whole list but there’s no way to demonstrate exactly what specific activities are being taken to make sure that these underserviced communities are getting service, then I’m not quite sure how the minister reconciles that.
But I’ll move along because I don’t think I could bear another list of all the great things that are going on that don’t provide an answer to the question. I’ll move along to ask some questions about some of the marquee events.
In last year’s estimates the minister said that funding for major sporting events such as the Women’s World Cup and the Canada Winter Games is determined through an analysis on the return of investment to B.C. Can the minister detail how this analysis is done? Is it done in the ministry or contracted out? And how does the ministry decide which event proposals will receive this cost-benefit analysis?
Hon. C. Oakes: The ministry currently provides an average of $7 million annually for sport and arts hosting events. The Hosting B.C. program provides funding for mid-size sport events, including the B.C. Games, the B.C. Arts Council and gaming grants for arts festivals and other events. The $7 million does not include the marquee events, such as the 2015 FIFA Women’s World Cup or the 2015 Canada Winter Games, which are one-time investments that are outside of our ministry.
We all know that sport tourism in British Columbia is valued at $300 million annually and is the fastest-growing segment of the tourism industry. I’m happy to read into the record, as well, in response to the member opposite’s question around the Hosting B.C. program guidelines…. Currently there is an intake in place between April 1 and June 30, and that, again, is the Hosting B.C. program through ViaSport.
The goals of the B.C. Hosting program include:
“strengthen sport, economic and community impacts in alignment with one of the provincial priorities of high-performance sport excellence; generate economic and tourism impacts in a host community; help communities, organizations and volunteers enhance their event-hosting capacity to attract larger, more prestigious events; build on B.C.’s international profile and reputation as an exceptional major-event host; and support the high-performance development pathways for B.C.’s athletes, based on the Canadian Sport for Life framework.
The Hosting B.C. program was originally launched leading up to the 2010 Olympic and Paralympic Winter Games. Since 2004 over $4.7 million has been invested in 637 sport events in over 78 communities across British Columbia.
Again, it’s an external expert panel that decides the applications for that. Applications may be submitted by not-for profit organizations that operate as a national sport organization or a provincial sport organization registered in B.C., community organizations, clubs, associations, B.C. municipalities, regional districts, other local governments, aboriginal bands or community associations, or federally or provincially registered societies.
Applications for the grant will be used for event operating costs. Additionally, of course, the event must take place in British Columbia.
S. Robinson: I certainly, again, appreciate that the minister is reading stuff into the record, but I didn’t even ask about hosting anything. Perhaps we’ll try asking the question this way, and the minister might hear it a little bit differently.
Speaking about marquee events, not hosting — in particular, the FIFA Women’s World Cup and the Canada Winter Games…. Last year in estimates the minister said that there’s an analysis on the return on investment to B.C. that is done before determining whether or not to step up to the plate and host these marquee events.
I’m just asking the minister if she can detail how these analyses are done, if it’s done in-house or contracted out. How does the ministry decide which event proposals will receive this cost-benefit analysis?
Hon. C. Oakes: There is a rigorous process for determining the economic impact for marquee events. It goes through our ministry as well as the Ministry of Finance. They look at things such as the legacy, the indirect and direct impact of the funds, the cultural aspects, the social development aspects, the development and performance of our athletes. Of course, we have to look at the econom-
[ Page 8074 ]
ic return of that, and we measure the historic record of the organization.
I would like to take the opportunity to talk about a few of the marquee events and the significance that they’ve had. In 2015 the Canada Winter Games in Prince George — a huge success. While the figures are still not fully in, we estimate a $70 million lasting legacy of trained volunteers, new and improved facilities, sport development and community pride. The games brought together 15,000 visitors, 4,800 volunteers and over 3,400 participants from across the nation to compete in the largest multisport cultural event held in northern British Columbia. I can say that this will have a lasting legacy and impact on northern British Columbia for years to come.
As well, we talked about the women’s FIFA soccer and how the determinant of where these types of marquee events gets decided. We know that there are going to be over 500 participants from 24 countries, 52 matches in six Canadian venues. Nine matches planned for B.C. Place alone will include an audience of 60 million people. As well, there are over 6,000 hours planned of international broadcasting and webcasting.
Another significant marquee event that the province was extremely proud to support last year was the 2014 Special Olympics Canada Summer Games. It was the largest Canadian Special Olympic Games — over 1,800 participants from across Canada, over 1,000 volunteers, attracted over 18,000 viewers from 81 countries through ViaSport Television, with an impact of $1 million to the provincial GDP. That was identified through the Sauder School of Business, through UBC. It qualified many of our athletes for the 2015 Special Olympics World Summer Games.
S. Robinson: While I appreciate the minister reading this information into the record, she’s more than welcome to just send me these documents. I’m aware of our time, and I have a whole host of questions that I hope we can get through.
I do have a question around the Canada Winter Games. The minister mentioned it. I understand there was a total investment of just over $11 million. I’d like to know if that was the total budget or if additional funds were needed to host those games.
Hon. C. Oakes: The province invested $11.12 million in the games — $3 million in capital and $8.12 million in operating funds, which were matched by the federal government. The city of Prince George and the 2015 host society were responsible for the remaining $24 million. So the total games budget was $46 million in operating and capital.
Additionally, the province provided $416,000 through the community recreation grant for upgrades to the Otway Nordic Ski Centre. I will add that the upgrades have now allowed them to host international events at this centre.
So $540,000 for the northern sport strategy aimed at increasing participation in coaches and athlete development, equipment for northern communities and access to sport schools. The member opposite asked: “How are we reaching those rural communities? How are we reaching those communities to get access to funds?” This is one of the ways that we do that.
And $125,000 to support games test events. These test events not only support the Canada Winter Games, but they support the communities in the north to be able to attract these types of international events that bring so much economic opportunities into these communities.
As well, $151,000 to showcase B.C.’s First Nations artists at the games and the cultural festival, as well as $220,000 to fund the involvement of the Lheidli T’enneh as the first-ever official host First Nation. I’m so proud that when we hosted all the federal, provincial and territorial ministers, they were so impressed with the work and the partnership that the First Nations had with these Canada Winter Games.
And $290,000 for the Northern Sport Accessibility 2015 will enhance sport opportunities for individuals with different abilities — a significant impact on how we are trying to make a difference and reach our targets and goals around accessibility in the province of British Columbia, so critically important, including vibrant lives across British Columbia.
The total government investment from all sources was $12.8 million. The games, like I said, are going to bring significant social and economic benefits to the north. At this time, we’re estimating the economic impact of $70 million to $90 million in the north.
S. Robinson: Can the minister answer how they’re going to be measuring those numbers?
Hon. C. Oakes: The Canada Games Council does the economic impact study and will be reporting out to us on those economic impacts.
S. Robinson: Does the minister have a timeline for that?
Hon. C. Oakes: Again, it’s an external organization, the Canada Games Council, but we are expecting that report and the analysis to be done by September.
S. Robinson: I look forward to reading the document. Seeing how successful the games were when they were put on, I imagine that there will be, certainly, some spinoff that these communities will certainly benefit from.
I now have a couple of questions about the B.C. Games Society. I’m going to read a couple of questions because I think it will be just more efficient. Just for the record, how many staff work for the society? How many of the
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employees are hired on a permanent basis, and how many are hired specifically to prepare for a specific games event?
Hon. C. Oakes: The B.C. Games Society organization has ten permanent staff. They currently have one intern that will be working for three months. Then the host communities are the ones that hire staff for their separate games.
S. Robinson: I thank the minister for a very succinct response to a very simple question. I appreciate that. I have just another question that has to do with the VolWeb program. Last year it was expected that both VolWeb and Hosting B.C. would be moved out of the purview of the Games Society.
While Hosting B.C. has moved to ViaSport, it appears, from what I can tell, that VolWeb is still run by B.C. Games Society. Is that the case?
Hon. C. Oakes: As part of the work that we’re doing around our event host program, our cultural sector and our creative economy mandate to the province, we’re looking at a new approach to how we look at engaging volunteers. We are looking at modernizing that. The VolWeb program is a little out of date. We’re looking at modernizing a new system to ensure that we’re reaching volunteers, and we have an exciting announcement coming up on Friday.
S. Robinson: That’s helpful information.
How much budget is currently allocated to run VolWeb’s website and services?
Hon. C. Oakes: Zero.
S. Robinson: That was easy. Thank you.
Those are all the questions that I have. Well, actually, there’s one more. I just made a note.
This actually has to do with the B.C. Ferries sport experience program that the minister listed in the number of funds that exist. I’m looking at goal 4 of the service plan, which talks about promoting “opportunities for British Columbians to participate…in organized sport.”
I just want to know if her ministry has noticed, with the reduction of ferry services, how that has impacted on the ability of these more remote and island communities to participate in sport events and if there’s been more uptake on the financial support, given the increasing costs of ferry service.
Hon. C. Oakes: We have a couple of programs. We were talking about the ViaSport, which is an independent non-profit organization. They negotiate an agreement, annually, with B.C. Ferries on that particular program.
I will say we also have a program to support communities with transportation. The Sport on the Move travel grants also help high schools with travel. The communities that are funded to the greatest extent are the ones that have some requirement for ferries.
S. Robinson: That’s great. I’m glad we have those resources to support those communities.
Perhaps the minister can address the second half of the question. Has there been a noticeable uptake on these resources or have there been some specific challenges, given the increasing cost of ferries and the reduction of services on some routes?
Hon. C. Oakes: I’d remind the member opposite that on the ferry questions…. The Ministry of Transportation is responsible for ferries. But on the specific question on the uptake, it has not been brought…. We’ve not heard that. We continue to support the communities that require support, and we’ve not heard otherwise.
S. Robinson: I would certainly encourage the minister and her staff to perhaps do a little bit of an analysis so that we can get a sense of how it is impacting on some of those goals around making sure that our young people can fully participate in sport activities. We’ve certainly heard that some communities, particularly up in Sechelt, for example, can’t access their hockey games because the ferry service time changes have made it very difficult for them to participate. I would encourage the minister to take a look how that’s impacting on some of her goals.
Those are all the questions I have around the general sports files. I just have questions about the athletic commissioner. In particular, I just wanted to confirm that the annual budget for the commissioner’s office remains at $250,000, with a staff complement of two people.
Hon. C. Oakes: I would like to take this opportunity to introduce our new athletic commissioner, Wayne Willows, who is here with us today. It’s great to have Wayne on board with us.
The commission currently has two full-time staff, and their budget is $400,000.
S. Robinson: So $400,000. I thought it was $250,000. I think last year that’s what it was. If the minister can explain what the added budget is, what it’s for, that would be very helpful.
Hon. C. Oakes: It’s a notional number, because we don’t…. Currently it’s demand-driven on the amount of events that we have. You’ve got the contracts that go out to put on those events. It’s cost recovery — a significant portion of that. And it also ties in with the software for event registration.
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S. Robinson: I thank the minister for the response.
She says it’s cost recovery, the majority of it. How much of it actually comes out — is provincial dollars — and what portion is cost recovery?
Hon. C. Oakes: Again, because it is demand-driven and the number of events…. We’ll have a better understanding when we go through public accounts, but a perfect example is that we receive 5 percent of the gate, and the UFC fight that was here in British Columbia brought us in $55,000.
S. Robinson: If I understand correctly, then, we sort of give them a pot of money, and then we sort of recuperate as fights are, I guess, signed on. Just to understand the model, the most it would cost B.C. taxpayers is $400,000, but the idea is to recoup as much of that as possible. I just want to make….
The nods sort of indicate that that’s the model. Thank you very much. That’s helpful.
The website of the B.C. athletic commissioner shows that no updates have been posted since April of 2014 — more than a year ago. Can the minister provide an update on what work has been done by the commissioner over the past year?
Hon. C. Oakes: Again, part of the increase in the budget was to ensure that the new on-line registration and event component was included, as well as a refresh of the website. We’ve got new amateur fight rules that will be included in that, and that new website and event registration will be up at the end of May.
A little bit more information. The B.C. athletic commission has been involved in two to five events per month to date, and there have been approximately 380 amateur athletes and 190 professional athletes who’ve participated in over 30 events throughout the province, including Victoria, Nanaimo, Vancouver, Fort St. John and Kamloops.
S. Robinson: I appreciate the minister reading out that list. I was trying to do three things at once. I’m wondering if she could just slow down and read that out again.
Hon. C. Oakes: There have been two to five events per month to date, and there have been approximately 380 amateur athletes, 190 professional athletes, who have participated in over 30 events throughout British Columbia, including Victoria, Nanaimo, Vancouver, Fort St. John and Kamloops.
S. Robinson: Last year in estimates the minister said that no money is provided to attract marquee combat events, because “the ability to attract….” Actually, this quote doesn’t work, but it’s that having a professional commissioner ensures that these organizations are able to put that on through their organization.
I think I understand it right — that just having a professional athletic commissioner means that government doesn’t have to spend any money to attract marquee events. They will come because we have an athletic commissioner. I guess I’m asking: how many marquee combat events has the commissioner been able to attract over the last year?
[J. Martin in the chair.]
Hon. C. Oakes: Again, the BCAC was established to regulate professional boxing and MMA events in the province and to promote safety. That is their main focus. But as far as attracting marquee events, they’re doing a great job. The Battlefield league of mixed martial arts…. Every two months there is a marquee event.
S. Robinson: Can the office explain why the UFC is not considering Vancouver for an event in 2015, targeting instead only Montreal, Toronto and Calgary?
Hon. C. Oakes: There is currently no statement that suggests that they aren’t considering coming to British Columbia to hold a marquee event. They were here recently, and we continue to stay in regular contact with them.
The Chair: Member.
S. Robinson: Thank you. You do that so well, Mr. Chair.
I would like to also welcome the new athletic commissioner. Welcome. It’s great to have you here.
Perhaps the minister can explain what happened with the previous athletic commissioner — I know that there was a changeover in January — and if there was any additional cost to this office given the changeover.
Hon. C. Oakes: The previous athletic commissioner did get promoted within government, and there was no additional cost to this budget.
S. Robinson: I’d like to thank the minister and her staff on the Sport file for answering and more — answering questions and adding a lot of detail to what’s going on in this ministry regarding sport and a whole bunch of marquee events. I think the marquee events are a fabulous contributor to our economy and to community identity. That’s all the questions I have for Sport file.
I thought now, given that the Auditor General is here, that we would perhaps move on to that file so that he can get back to his day.
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Hon. C. Oakes: It is truly my honour to introduce the acting Auditor General for Local Government at this time. Arn van Iersel is with us today.
S. Robinson: Welcome. I’m really glad to see the acting Auditor General for Local Government here.
Perhaps the minister could tell us right now what the current budget for this office is and how much of that budget is designated for contracted services.
Hon. C. Oakes: The current budget of this office is $2.6 million, and $670,000 is contract.
S. Robinson: Thank you for those numbers. I appreciate it. Has the budget for this office been impacted in any way by the firing of the Auditor General for Local Government?
Hon. C. Oakes: No.
S. Robinson: Through the month of March we certainly asked lots of questions in the Legislature about the operation of the Auditor General for Local Government, pointing out that over two years and $5.2 million, only one report had been released. Certainly, those of us on the opposition side of the House saw that as problematic. There was some back and forth about whether or not that really was problematic, and the minister took steps to rectify the situation that was going on.
There had been some internal challenges. I would like to hear from the minister what steps she has taken in order to rectify those challenges.
Hon. C. Oakes: The leadership steps that have been taken forward. We have a new acting Auditor General for Local Government. Under the mandate the new acting Auditor General for Local Government is looking at new efficiencies, looking at the timetables to ensure that we are working hard to ensure we are completing the identified audits. We had the Sechelt community. That audit was released last week, a great job done by the entire team. There are four other audits that are close to completion and will be coming out shortly.
I think it’s important to maybe provide a little bit of background on this. When we first looked at setting up the Office of the Auditor General for Local Government, the first year it was identified that we were looking at three audits and then, thereafter, five audits per year. So understand that within the budget allocation and the expectation when we first set up this important office, we were looking at five audits per year.
S. Robinson: The 18 audits that were part of the initial report, in the first annual report — that number seems to have disappeared. That was certainly the expectation that was set out to local governments, that there would be 18 audits a year.
It’s interesting now that it’s going to be five audits a year. It’s what the expectation is, if I’m understanding correctly.
Just to go back to budget for just a second. I did ask if the budget was impacted in any way by the firing of the Auditor General for Local Government. I want to ask one other question that tags on to that. How much is set aside for legal costs that would be associated with the firing of the previous Auditor General for Local Government?
Hon. C. Oakes: Thank you to the member opposite for the question. I would like to offer a clarification from the previous question.
The acting Auditor General for Local Government is still looking at those 18 audits. I was just highlighting that when the office was first put in place, the original intent was looking at three and five. The current…. Three and five was when we first put that out till when we were doing the consultation across the province. That’s what we were looking at as a mandated item. It was overly ambitious, and we had shared that with the previous office.
As far as the budget question, again, at this point there may be legal proceedings associated with the removal of Ms. Ruta. Accordingly, it’s inappropriate, as there may be legal proceedings, to make any comment.
S. Robinson: I guess I’m still really confused. If I understand correctly, the minister had insisted that this office was independent, for the longest time. So government thought three audits in the first year and then five audits thereafter would be appropriate. It was the Auditor General for Local Government who insisted on 18 audits, and that’s what government went with? Or the audit council went with and supported?
I just want to make sure I understand. It’s a very big difference in those numbers.
Hon. C. Oakes: When the province of British Columbia was looking at setting up the office for the Auditor General for Local Government, the budget that was set, the $2.5 million, was based on the idea of five audits a year. Again, it is up to the Auditor General for Local Government to make the determination of evaluating their budget and how many audits can be produced.
The former Auditor General for Local Government had identified a very ambitious plan. Also, one of the challenges is that they set forth to do 18 audits at once. And so the Acting Auditor General for Local Government is looking at how we move forward to ensure that we’re able to move forward in an efficient manner.
S. Robinson: Even when we take a look at, certainly, the government’s expectation…. If it was three and five,
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that would be eight audits over two years, and only one was completed. So even with modest numbers, it was certainly very problematic. I look forward to seeing further audits as they come forward.
I do understand that Mr. Trumpy has been involved in taking a look at doing a review, and I just wanted to ask the minister what the status was on that review.
Hon. C. Oakes: The Trumpy review did go to the audit council, and the audit council did pass that report on to the Acting Auditor General for Local Government. He is comfortable with that report. It is currently being reviewed by government but is under cabinet confidentiality.
S. Robinson: I want to ask the minister if the UBCM was consulted in this report as was promised, and what did that consultation look like?
Hon. C. Oakes: It is a little bit premature around consultation. We fully intend to work with the Union of British Columbia Municipalities as we move through the next steps in looking at the office, ensuring that we’re supporting them on moving forward.
I did have an initial conversation with the Union of British Columbia Municipalities. I met with them in April just to provide them with a little bit of an update as well as a new form of understanding. As these reports come out, we ensured that UBCM had the opportunity to know. As per standard, they receive copies of the report, but we were extra vigilant on ensuring that communications are open and that we are in regular contact with UBCM as we go through this process.
S. Robinson: Maybe I misheard, but I believe, in the House, that there was a commitment. It was either in the House, or maybe it was media. It all blends together. There was a commitment made that UBCM would be consulted as part of Mr. Trumpy’s review. It sounds like that actually did not happen. It sounds like the UBCM was not consulted prior to Mr. Trumpy completing his review. Is that correct?
Hon. C. Oakes: Again, the review was done, hired by the audit council, an independent body. It’s an independent body. So on our side, with the province, as we are working on having the reports come out, we’re ensuring that we are maintaining our correspondence and talking with the Union of British Columbia Municipalities.
S. Robinson: So this independent body that is picked by the ministry…. We’ve certainly had this debate about really how independent it is. It’s not really clear, because it’s this quasi-funny relationship. But it certainly sounds clear that the UBCM was not consulted prior to Mr. Trumpy completing his report. Mr. Trumpy didn’t consult with them.
Perhaps I’ll just move on to a different question. When will the public have an expectation of seeing the Trumpy report?
Hon. C. Oakes: The acting Auditor General for Local Government…. We’re eager to have the report out. It’s going through the formal process currently of going through cabinet. We’re eager, once it goes through that process, to release. There are positive steps coming out of that.
At that time, too, we’re also open to having that conversation with organizations such as UBCM once that report gets released.
S. Robinson: It sounds like the minister’s next steps once the Trumpy report is released would be to sit down with the UBCM and, I’m assuming, review it and get some input from them. There was never any input that was incorporated when this office was first being considered. I have some documentation they were actually not particularly happy. Well, they provided input, but they certainly weren’t heard. At least, they certainly didn’t feel like they were heard in terms of what they were looking for.
I guess I’m going to ask the minister: how would things be different going forward in her relationship with the UBCM as it relates to the Office of the Auditor General for Local Government?
Hon. C. Oakes: I would remind the member opposite that considerable consultation happened when the Auditor General for Local Government office was set up. I would remind the member opposite, as well, that if you look at the makeup of the audit council, stakeholders have a representative, including the Union of British Columbia Municipalities. They selected their representative to sit on the audit council, as did a variety of other stakeholders. They do have a stakeholder that actually sits on the audit council.
S. Robinson: Perhaps I might shift my next question a little bit and ask the minister how she understands how the audit council is independent, given that the ministry actually makes the recommendations for those to sit on the audit council. It’s very different than any of the other independent offices that exist. If she can explain how she understands that is independent, I would appreciate that.
Hon. C. Oakes: Again, I would remind the member opposite that the process that was in place when this office was set up is that stakeholder groups from across British Columbia had the opportunity — including the Union of British Columbia Municipalities — to put forward names to sit on the audit council. In fact, I was in local government at the time when this office was set up, and it was an extensive process to ensure that we were engaging in stakeholder engagement from throughout
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British Columbia so that groups had the opportunity provide input and recommendations on who they wanted to represent them on the audit council.
S. Robinson: That’s actually not the question I asked. The question I asked was how the minister understands this to be an independent office, given the role her ministry plays with this office. It’s not quite like Elections B.C. or any of the other truly independent offices. I’m just trying to get a grip on how the minister understands being an independent office versus being a quasi- or a semi-independent office.
Hon. C. Oakes: It is a professional body that sits on the audit council. Again, we canvassed that it was selected by stakeholders from across British Columbia who put forward names for the selection.
I don’t see their minutes. I don’t know when they meet. I have no ability to influence anything on their minutes, when they meet. They are there to provide professional advice to the Auditor General for Local Government, and that is what happens.
S. Robinson: Well, I do beg to differ a bit, given that it’s the province that determines who sits on the audit council, which suggests that there is opportunity for influence. That, to me, suggests that it’s not truly an independent office.
However, I don’t want to spend any more time debating that. I have a whole raft of other questions and would prefer, at this point, if the minister would be willing, that we could go back to the questions that we had at the end of the day yesterday around infrastructure — if that would be possible to do that.
I appreciate this jumping around of staff. The bells rang last night right in the middle of what I thought was one of my best questions. So I’ve really been waiting for the answer, and there’s been lots of time.
I just thought I’d read back into the record what the question was so that it would be a full response. My question was: what is the current infrastructure funding gap for British Columbia communities?
Hon. C. Oakes: Mr. Chair, if I possibly may, I’d like to also introduce new staff, because I’m not sure if I introduced them yesterday. We have Gary Paget, keeper of all knowledge in our ministry; Jay Schlosar, assistant deputy minister; and Liam Edwards. They do a fantastic job in our ministry.
We’ve seen various measures of what some call…. Well, it is the infrastructure deficit. We are aware, as the member opposite is from our time with local government, that the Federation of Canadian Municipalities produces reports. In 2007 they did release a report that identified infrastructure gaps.
Quantifying that gap is challenging, because every community has a high level of discretion in defining what their appropriate level of services is, even when it comes to meeting regulations. For example, to meet regulations, a community can go with an affordable low-pressure sewer collection system or a gravity system that may be five times more expensive. Both meet the regulation but represent a very different level of service.
Regardless of how you measure the gap, we all recognize the need to deliver predictable, long-term funding for local infrastructure. Since 2001 we’ve certainly seen record levels of senior government funding provided to local government infrastructure investments: the Canada-B.C. infrastructure program, $272 million. Build Canada fund, including the top-up, was $176 million plus $25 million for flooding.
We’ve got the infrastructure stimulus fund — $100 million for that program; the municipal rural infrastructure program — $75 million to support infrastructure investments; B.C. community water improvement program — $80 million for that. I could possibly go on, but I’ll hold back from that.
We are also looking at putting resources into asset management planning. That’s a $1.5 million grant with UBCM; and infrastructure planning grants — $500,000 a year.
We certainly know that, with local governments, one of the challenges with the infrastructure gaps or deficits we have…. We recognize that we need to work more closely with local governments and provide them with that support. Asset management and ensuring that communities across British Columbia have that ability to look at what their long-term infrastructure needs are is critically important.
We’ll continue to make that investment with the communities, both on the grant side and on the planning side, and ensure that our staff are available to support them.
S. Robinson: Does the government keep track — I’m going to assume the answer is no, but I’m going to ask the question because I think it’s one that we ought to be thinking about it — of the needs of our communities, the infrastructure needs, and our collective ability to support the funding of these projects so that we can identify what the infrastructure funding gap is, so that we can strategize collectively, all three levels of government, so that we could actually start taking care of that gap?
Hon. C. Oakes: A really good question that the member opposite asked. It kind of is how we canvassed the question yesterday, when we were looking at regional growth strategies.
We know that local governments have the autonomy and that we have elections. With elections come new officials in local government that set their priorities. They
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go through an annual priority-setting program, and for some, those priorities change. What the local government puts forward as their major priority does change.
We work closely with communities. We certainly, through an outstanding public service sector, engage with communities. They certainly understand and know what the projects are around infrastructure requirements. But again, it requires the local government setting the particular item as a priority and bringing that forward.
S. Robinson: While I do appreciate that governments change, it’s still helpful to have some understanding of what the infrastructure funding gap is. Certainly, the federal government started to take a look at that, recognizing that provincial governments change, federal governments change and local governments change. But it still doesn’t change the fact that we need to upgrade our sewer systems, our wastewater treatment, our drinking water, our roads. That still stays the same.
I guess I’m just checking in if, out of this ministry, there is any appetite or any interest to start taking a look at inventory, given that local governments usually can’t fund any of these things on their own. They’re going to have to come to the province and, ideally and probably, to the federal government to help fund some of these projects. In terms of long-term planning provincially, is that something that this government is doing?
Hon. C. Oakes: To reiterate what I said in two questions answered before, again, there is a high level of discretion with local governments. A water system, a sewer system, a landfill — all of these programs are not all created equally. One local government, like I said…. We’ve certainly seen them canvassed across British Columbia.
One regulation…. A community might want an affordable, low-pressure sewer collection system, or another local government that comes in and gets elected decides that it needs to be a gravity system that’s five times more expensive. We’ve seen this in communities.
I’m not sure if what the member opposite is suggesting is that we take away the autonomy from local governments or their ability to set priorities or their ability to really say what meets their community’s requirements at that time. I’m not sure if that’s what the member opposite is trying to suggest. But we certainly respect the autonomy of local governments and the elected citizens to make those decisions.
S. Robinson: What it suggests to me is that this ministry actually doesn’t prepare for what the demands are going to be over the long term. They don’t look over the long term, because — heck — every four years you can get a new local government. So we’re not going to prepare for some of what the infrastructure needs, because they’re going to make all kinds of decisions all over the place, not really trusting that when they put together their five-year plans, that they actually are a valid document that spells out into the future what their demands are going to be.
Even though they might change over time, there certainly needs to be some better long-term planning.
I’d like to acknowledge or ask the minister if she could respond to a letter — I received a copy from Sav Dhaliwal — from the UBCM. He’s the UBCM president. He wrote a letter to the minister on December 1, 2014, asking about the New Building Canada fund. Certainly, his members are disconcerted that those local governments in B.C. with a population greater than 100,000 would be ineligible, of course, to apply for the small communities fund — and the frustration that they’re having about just accessing any of the New Building Canada fund, given that it doesn’t seem to have some sort of equivalent component for large communities.
If the minister could, I guess, share with me what her response was to Councillor Dhaliwal.
Hon. C. Oakes: Thank you to the member opposite for the question. Again, the small communities fund represents 10 percent of the New Build Canada portion. The nine communities across British Columbia that have populations over 100,000 are the ones that do not qualify for the 10 percent of the New Build Canada fund. The 90 percent of the New Build Canada fund, as we canvassed yesterday, goes through the Ministry of Transportation. The Ministry of Transportation has to look at how you balance out needs of local governments wanting transit to local governments wanting individual projects.
S. Robinson: What I find really interesting is that when we talk about autonomy, if you’re a small community, there’s some autonomy to identify your priorities, but if you’re a large community, you don’t have the autonomy. You have to go through a completely different process that’s actually based on the provincial government’s priorities rather than those of larger communities.
I think, from what I can read in that letter, there’s certainly an imbalance in terms of where autonomy lies around some of these major infrastructure projects. I think the minister agrees it’s very, very expensive, even for large communities, to fund wastewater treatment. That’s certainly a challenge in Metro Vancouver.
I have a number of other questions that have come to me through some of the regional districts. What I’d like to be able to do is to read some of them. They’re a little bit scattered. If I could just go through them and then we can get a bunch of answers back, that would be helpful.
One of them is from the Powell River regional district. They have some concerns about their wastewater initiative that has an approximate cost of $510,000. They just want to know what the status of the grant application is. The challenge is: they don’t know if their application
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is tracking well or not tracking well, and they’re in this holding pattern. They don’t even know when they can expect final word.
I received this on April 9, so if things have changed, that would be helpful.
Is the ministry ever going to consider ramping up a special grant pool for potable water? That’s one of the issues that’s coming up there.
Certainly wants to know…. What’s interesting is that this regional district was very interested in the infrastructure deficit that I had canvassed earlier. So I suppose you don’t have to worry about that one.
The last question is the province’s appetite for funding and promoting the Green Shores for Homes initiative, and if there’s any appetite to do anything around that.
Hon. C. Oakes: I’m happy to review what was canvassed yesterday. Obviously, perhaps, it wasn’t clear enough for the member opposite, so I will go through it again.
Again, the New Build Canada fund for small communities fund. We launched this program in the fall to local governments. The application process closed February 18, and 160 applications were received for a total estimated project cost of $900 million.
Again, I’ll go through it so that she clearly understands the multi-step assessment process that’s in place and so she can take that message back to the community.
There’s an initial review of projects, such as the Powell River wastewater status or the potable water, the regional district applications that she mentioned. So — is the project eligible? Is the project type eligible? Have they completed the application? Was the certificate form submitted?
Then it goes into a technical review process. Does the project meet the goals and objectives of the program? Does the project benefit and support best practices? Does the project meet category-specific outcomes? Is there a rationale for the project — asset management practices? Does it address regulatory requirements? What is their budget? What is the timeline? What is the risk, and what is the scope?
Then it goes into a financial review, and there is a scoring that is in place for each of these projects. Does it meet financial requirements of the program? Is it sustainable? Is there stability in the applicant? Does the project cost implications for a per-capita basis…? Does the applicant demonstrate their third of funding?
Currently our ministry is going through the analysis on the technical side of this multi-step assessment process. I can’t speak to the specifics of how each of these individual projects are being scored, because they are currently going through this multi-step assessment process.
From there, we talked about the joint panel yesterday. We described how there’s a joint panel that is made up of two federal representatives: the ADM from Infrastructure Canada and their ED as well. We have two panel members from the province who review based on the assessment process — that is, the assistant deputy minister and the executive director work on that.
Then we also have the Union of British Columbia Municipalities. UBCM has a role in this process as well, and that is the president of UBCM and the executive director.
I’ve gone through this process twice. Hopefully, that is clear enough, over yesterday and today, for any of those folks that have questions. There is a multi-stepped assessment process for all of the 160 applications that have come in for the new Build Canada process. We will do the analysis. The public service does the analysis of these programs, and then it goes to a panel. The panel decides the scope based on the technical assessment process that I have identified.
S. Robinson: The minister could have just said: “It’s in process.” They will find out shortly, I’m assuming. But I’m sure they would like to have, at least, some sort of sense of when they are likely to hear about whether or not they were successful, so if the minister could let us know. I’m not looking for a specific date. Something that would say this spring, this summer or in the fall would be a sufficient general ballpark.
Hon. C. Oakes: We did lay out this in the public document, that the local governments had the opportunity…. When they went to actually put the application in, it did identify that we would be making announcements and they would be hearing about that in the summer of 2015.
S. Robinson: Thank you for that response, Minister.
Another question I have came from the small community of Greenwood. This is a particularly interesting challenge. In terms of preparing budgets for 2015, they are struggling with understanding their ability to receive small community grants because they are such a small community. They have been a beneficiary in the past. They put a call in, in November wanting to know what they would receive so that they could budget appropriately.
They got sort of a ballpark number but are just frustrated. They like to do their budgets and have them ready at the beginning of the year so that they know what their spending is throughout the entire calendar year. Even though the deadline is May 15, they like to get it done earlier. They are curious if there is any possibility of taking a look at how the timing works.
I realize that there’s a different budget process on this end. But for small communities that really do live cheque to cheque, is there a possibility of doing that differently, doing that funding block a little differently for small communities?
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Hon. C. Oakes: Actually, I met with Greenwood at the Union of British Columbia Municipalities and walked them through some of that. As well, we sent them a letter in March that outlined what they’d be financially receiving. My mom grew up in Greenwood, so it’s always a community that remains close to my heart. I was looking for them, to see if they had put in anything for the new Build Canada fund. They hadn’t put an application forward for that fund.
As far as the question of communication, we did send out a letter and communicated with them back in March.
S. Robinson: I appreciate the response from the minister. I have some other questions for the minister.
This comes from the Central Coast regional district. They are particularly interested in the challenges that local governments have around dike management and emergency management. I’d like to know from the minister if this is something that she’s hearing from other local governments and what she’s doing to help them with some of those added costs.
Hon. C. Oakes: Thank you to the member opposite for the question. We have heard from local governments — the challenges that they have around flood mitigation.
[D. Plecas in the chair.]
The federal government just recently announced that they have a disaster mitigation program, and we’ll be partnering with them on that through emergency B.C. Of course, that’s in a different ministry, but we continue to work closely with those to support our local governments.
The Chair: Member.
S. Robinson: Welcome. We always take for granted who is sitting in the chair, and sometimes it changes. You sort of get this little surprise, and you take a look and thank them for recognizing you.
The Central Coast regional district, the minister might be aware, is a very unique part of the province, given that it’s a regional district that actually doesn’t have any municipalities in its borders. So of course, it struggles. It tries to offer services, and the residents of the regional district want services that you might get in a municipality, but it doesn’t have the same financial capacity that you might find if there had been a municipality in the regional district.
The question is: does the ministry recognize that this is a unique challenge? What does the minister think about that? Does she recognize that some of these regional districts that don’t have those opportunities, that tax base, in order to generate revenues to provide some of these services might be in a unique position and might need some additional support from the province?
Hon. C. Oakes: We certainly are keenly aware of the unique governance structure with the regional district. Our staff was commenting that’s really what provides the uniqueness of British Columbia, in the sense that we do have regional districts, and we have the ability to provide governance and support even to areas that don’t have municipalities within other jurisdictions.
Staff are keenly aware. They meet face to face with these communities to help support them. They actually have one of the highest supports for their grant applications, for how they’re set up, and take good advantage of the infrastructure planning grants that we have available.
With that, hon. Chair, could I kindly ask for a five-minute break? Would that be appropriate?
The Chair: Yes. Thank you, Minister. This committee stands recessed for five minutes.
The committee recessed from 3:31 p.m. to 3:43 p.m.
[D. Plecas in the chair.]
S. Robinson: I appreciate the minister recognizing the need for a break, and the timing was excellent.
I have some questions about the Strong Fiscal Futures, if we could shift over to that. The Strong Fiscal Futures was proposed by the UBCM in 2013. The UBCM strongly — I think unanimously, but definitely strongly — supported the strong fiscal futures resolution at the last UBCM. I’d like to know what meetings the minister has had with the UBCM about the Strong Fiscal Futures report.
Hon. C. Oakes: Thank you to the member opposite for the question.
We started meeting with the Union of British Columbia Municipalities last summer. The chair, Al Richmond — we met with him. He came to my community in Quesnel, and then later on we met in the summer at their executive meeting. We continue to have….
We offered an MOU with the UBCM in September. Then we continued discussions and most recently met with him in April to discuss what the terms of reference would be for working towards success in the Strong Fiscal Futures.
One of the recommendations that we’ve worked together on is identifying elements in the Strong Fiscal Futures so that at each meeting we have, we can check off the list and ensure that we’re completing the items. A plan is only as good as the action that is taken, and it’s critically important for me that it’s not just a document that gathers dust — that we have a plan, as government, to ensure that we’re moving forward on the items.
For example, the recommendations that we have to date, moving forward, are…. We’ve launched the new Build Canada program, which was identified in the
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Strong Fiscal Futures. We accelerated applications under the small communities fund, which was identified in the Strong Fiscal Futures. We ensured greater public control over TransLink, which was identified in the Strong Fiscal Futures.
We committed to the continuation of the small community grants, which will deliver $74 million in unconditional grants alone this year. That was identified in the Strong Fiscal Futures. Moving forward, we’re looking at moving forward and checking off the boxes on the other items that were identified in the Strong Fiscal Futures.
S. Robinson: I appreciate the minister going through the various steps of what she’s doing. If she could just say a few more words about what it’s going to look like from here on out? She’s described sort of what they’ve done historically. If I might borrow from her leader the “low-hanging fruit,” some of those things were the low-hanging fruit.
I think there is some hard work ahead in terms of what’s been proposed in this document — and some challenging ones — and would like to hear what the plan is for perhaps the next year to move forward on this document, and what the expectation is going to be around what the next steps are going to bring to local governments.
Hon. C. Oakes: Thank you to the member opposite for the question. We look at this report, really, as a blueprint for strengthening B.C. local governments.
We continue to look at how we’ll work with local governments and the UBCM on a variety of the items that are identified here. It’s certainly not a short-termism response to this. It’s: how do we ensure that we’re preparing local governments for long-term success? That’s why previously we talked about asset management planning. We’ve talked about how we can ensure that the array of grants that we provide to local governments — that we’re continuing with that.
As well, we have considerable resources. In fact, one significant resource from our office…. We’re working directly on the Strong Fiscal Futures around benchmarking and some of the information that was identified in the report. So as we move forward, there will be items, again, that I look forward to being able to demonstrate success on.
S. Robinson: I appreciate the minister’s response, recognizing that it is a pretty dense document with lots of stuff in it for consideration. But I think there’s a philosophical one that’s underlying all of this.
We’ve certainly talked yesterday and today about the autonomy of local governments and wanting to respect that. But the reality is that when everything is a grant program — everything is a grant — that means that they don’t have autonomy. That means that they always have to turn to the provincial government and beg and compete with each other to get limited dollars. That makes it very difficult for them to be autonomous, because they rely on the graces of the ministry to award them, to deem them worthy, their grant-writing abilities worthy of whatever it is that they’re asking for because they need infrastructure.
I recognize that the ministry will have to make choices, because the demand is going to be greater than the capacity to fund everything. But this document talks a little bit more about autonomy from a value perspective and what it could look like so that local governments can make those decisions because they will have access to the resources that they need in order to make those decisions.
I would really find it valuable to hear from the minister if those are the kinds of conversations that we’ll be having in the coming months.
Hon. C. Oakes: We just had a conversation with staff about…. It’s a little misleading to talk just specifically about the grants, because local governments bring in $10 billion a year through taxes, fees collected. I guess this is the question…. We certainly recognize that there is only one taxpayer. There are only the citizens across British Columbia.
It’s not always about new resources, with the consideration of only having one taxpayer, but how they use that $10 billion in addition to the wide array of grants that the province provides — $10 billion provided to local governments through taxes and fees that they are able to collect.
I would also add, and this is an interesting piece of information, that local governments in British Columbia are the most autonomous in North America. They have the greatest ability, when you look at collecting their taxes and fees, to create that $10 billion — only one taxpayer, most autonomous in North America. Again, for our government, respecting that there is only one taxpayer.
S. Robinson: I’m not sure I would necessarily agree that they have the most autonomy in North America, but I don’t want to get into that debate right now. That could be over a glass of wine or a cup of coffee. That’s a much better venue for that conversation.
Given this perspective of…. The minister just made a statement, something to the effect that it depends on how they spend that money, because they do generate revenue from property taxes. Was this the reason why her government undertook the report by Ernst and Young that was released at the UBCM? Was it based on that sort of assumption?
Hon. C. Oakes: The Ernst and Young report that was produced last year by the provincial government was really looking at the entire wide public sector array. It was a report that was done, an analysis of public service sec-
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tors and comparing compensation rates. What was identified is that local government compensation rates are at a much more significant rate than other public service sectors. It’s interesting to note that other provinces are currently doing similar types of information.
We’ve entered into a dialogue with the Union of British Columbia Municipalities, and working with local governments, to understand better data, to understand how we can use a collection of data so that decisions and best practices can be supported in local governments.
S. Robinson: Can the minister explain how she’s had this different perspective of working collaboratively with the UBCM, given that — I know she mentioned it yesterday — we’re talking about this now? I would like to understand.
She’s mentioning working collaboratively with the UBCM, entering into dialogue, but last summer when this report was being undertaken, no one heard anything or knew it was even happening. UBCM wasn’t consulted.
I want to understand how the UBCM can feel confident this time, going forward, that there is actually going to be a true collaboration and recognition of what they do and what they contribute.
Hon. C. Oakes: Thank you to the member opposite.
We received a letter on April 28, 2015 — the UBCM executive thanking us for attending their meeting and, during the conversation we had, dialogue around potential mutual work on compensation and items out of the Strong Fiscal Futures.
The UBCM executive convened and expressed support for a collaborative approach to addressing our respective priorities of compensation, elements of Strong Fiscal Futures and the review of the Auditor General for Local Government. We look forward to working with UBCM with that dialogue on these topics.
S. Robinson: I appreciate hearing that the UBCM is being consulted and that they are communicating with the minister. Can the minister categorically say that they won’t do another Ernst and Young–style report again, given that it really threw folks for a loop at the last UBCM?
Hon. C. Oakes: Part of the work that we are doing with the Union of British Columbia Municipalities is to ensure that we have a collaborative report that we’ll be presenting around compensation and Strong Fiscal Futures coming forward — this UBCM in September.
S. Robinson: That’s great. I’m glad to see that things are moving forward, and I’m going to assume that the answer to my question, I would hope, would be, “Yes, we’re not going to do that again to our community partners” — that there’s enough respect to acknowledge that, when a report is going to be about a partnership at a group like the UBCM, they wouldn’t do a report without letting them know that some research was being undertaken that might affect them. So I’m assuming that that’s a yes.
I do have another question about the UBCM. They’ve made rounds earlier. Well, I guess it was just last month. I know that they went to the minister. They certainly came and visited with me and some of my colleagues. And they were asking for some very specific feedback from government.
One was around the new Building Canada fund, and we certainly canvassed in here a whole lot about that. But two other areas that they’re particularly interested in are mental health and policing — that there are certainly some challenges in local governments that are responsible for their policing contracts. They pay for that out of their tax portion, given that there really is only one taxpayer. But local governments are finding that they’re responsible for more and more and more in terms of service delivery, and that’s certainly frustrating to them.
One of them is that their police officers are now becoming de facto social workers. In fact, I believe it was Maple Ridge that just hired out of their tax dollars support for mental health workers. They felt that the provincial government wasn’t doing its share in making sure that people’s mental health needs were being addressed, and it was becoming a policing issue, which is what they’re responsible for.
I’m sure the minister can appreciate how each order of government might have its responsibilities, but if one order of government isn’t doing the most it can, it often falls to another order of government to pick up the pieces. Certainly, local governments are complaining about that.
I’d like to hear from the minister what she has been able to do, in terms of talking with her colleagues, around addressing this particular issue.
Hon. C. Oakes: Thank you for the question.
When we look at communities and the cost of mental health and policing, I think it’s…. The member brought forward a valid concern.
One of the approaches…. There are multiple ministries that support local governments, and she would probably be better served to canvass some of those ministries — around victim services, Social Development on the funding that they have.
But I can talk a little bit about something that I’m…. I certainly understand the challenges. That’s why we provide 100 percent of the traffic-fine revenues. So that’s $61 million, to local governments to support them, on top of everything else, with these initiatives. But we don’t…. Again, respecting the autonomy of local governments, I know local governments choose how they distribute that money. The intent was, when we provide that money,
[ Page 8085 ]
that while we don’t direct them how they use it, that the traffic-fine revenue always, at least when I was in local government, was put towards policing in the community.
S. Robinson: Well, I’m sure that the minister sort of recognizes that the needs of local governments are far greater than their capacity to provide for all the needs. Whether it’s a new rec centre, an updated swimming pool, a new set of sidewalks or roads, it’s a never-ending list. I am pretty confident that if mental health were properly taken care of, if people with mental illness had the resources that they needed, then policing wouldn’t be as expensive and that those funds that are transferred — those traffic-fine revenues — would be used for the new rink or the new sidewalks or the other things that local governments recognize are on their lists.
I’ll be sure to, certainly, canvass some of the minister’s colleagues, but I would hope that the minister would be advocating on behalf of local governments and reminding her colleagues that there really is only one taxpayer. And why should those who pay their property taxes have to, at that level, pay for mental health support?
The other issue that the UBCM brought forward is the B.C. land-based spill preparedness and response regime. Again, there are certainly some concerns for local government around that they would be burdened should there be a land oil spill or a water oil spill — that they would be on the hook for some of the immediate responses.
They are on the ground. They are right there, and there’s not a lot of oversight, certainly, from what we saw with the spill in English Bay. The federal government wasn’t around. That was certainly problematic. There are concerns at local governments that they will be on the hook.
I would like to hear from the minister how she is thinking about and preparing for that inevitability, because it will happen. Who will be responsible and making sure that local governments aren’t on the hook at all for any of those costs?
Hon. C. Oakes: Thank you to the member opposite for the question. I will certainly commit to being an advocate for local governments. Being in a community that recently had a disaster, I certainly understand this.
What I can say is that I will, of course, be a strong advocate. This does fall under the Ministry of Environment. We need to have the most rigorous standards, and it is our commitment to do that. You have my commitment that I’ll be a strong advocate for local governments.
S. Robinson: I appreciate hearing that from the minister. I, too, believe myself to be a strong advocate for local government, so I’ll support the minister in that.
That’s all the questions I have for Strong Fiscal Futures and UBCM. I have a number of questions now about the Fair Share agreement and the northwest community readiness initiative.
I think people have to change binders. I don’t know if people actually have to change, but there might be different binders.
My question for the minister. She had mentioned back in the middle of March, when the decision was to tear up the agreement, that concerns had been raised that a lack of certainty on the existing MOU beyond 2019-20 was impacting the ability for some communities to adequately plan for future needs. I’d like to know who actually raised these concerns.
Hon. C. Oakes: If I may, may I kindly introduce Meggin Messenger, who is executive director and has worked tirelessly on the northwest readiness project.
When we started to…. Again, when you look at the Fair Share communities, the northeast communities, it consists of Dawson Creek, Pouce Coupe, Tumbler Ridge, Chetwynd, Taylor, Hudson’s Hope, Fort St. John and the Peace River regional district.
After the natural resource conference that happened in January of this year and we opened up the intake for the Build Canada, I did notice that not a lot of the communities up in that area were putting in applications, and I started to ask the questions.
I went up, and I met with the mayors of Dawson Creek, Pouce Coupe, Tumbler Ridge, Chetwynd, Taylor and Hudson’s Hope, and I later met with Fort St. John and the Peace River regional district via the phone, just to ask about what their infrastructure requirements were in their communities and did they have any intent of putting in applications to the Build Canada program.
As well, I reminded them about the gas tax intake that was open through the Union of British Columbia Municipalities in April and really canvassed that dialogue — knowing and understanding that there is growth that’s happening in those communities. I know that there are lagoons, there’s water, there’s water treatment, there’s short rail — a variety of items that were brought forward by these communities.
We also looked at when they were putting in some of the processes, and we canvassed it a little bit earlier on the Build Canada — that part of one of the assessment things was the fiscal plan and do they have a solid fiscal plan going forward.
We understand, through debt financing, that there are limitations, based on how much money — the long-term validity of that. Staff had done analysis for that, and it was identified that some of those communities were at risk of being able to put applications in without having that long-term fiscal security in place.
S. Robinson: Was that the point — I guess it was January, in terms of timing — when she decided that the
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Fair Share agreement was no longer sustainable? Is that sort of the timeline? Or was there, perhaps, a later date that the minister decided it was no longer sustainable?
Hon. C. Oakes: It’s not that we said…. It was the community’s concern around sustainability. So as they’re putting in applications, with only having funding to 2020…. I think we canvassed, actually with the last question, that we take our support of local governments very seriously.
When I met with those communities and was looking at what the projects that were required…. They significantly need long-term sustainability in their communities. They need to know, and the province had made that commitment, that we would be with those communities to 2030 or whatever their needs are.
Absolutely, I take that extremely seriously and started to have that dialogue with those local governments of what long-term stability would be for their region. We are in negotiations currently.
S. Robinson: I appreciate that there has been an extension, and I understand today there was an announcement that there’s been a real negotiation, which is a good sign. But I’m still very curious about the process that was undertaken. April 30 was the deadline for renegotiation. I’m very curious about why April 30 rather than June 30 or August 1 or September 30?
Hon. C. Oakes: It was clearly in alignment with when their next payment was. We can confirm, and as the press release announced, that $46.3 million was the gauge of looking at long-term stability for those communities. I can confirm that we have issued that cheque.
S. Robinson: I’m certainly glad to hear that the cheque has been issued, because when you’re looking at long-term stability, you don’t create short-term instability in order to make something happen. I’m glad to see that the minister has come around and recognizes the importance of that, but certainly not without creating angst for a fair number of people. We certainly heard a lot about it.
Going forward. I just want to quote the minister during last year’s estimates, when I asked her about developing a revenue-sharing agreement with the northwest. The minister said:
“Our first step…. Let me reiterate. We need to assess and understand exactly what the needs are in the community. It would be extremely irresponsible if we were to earmark an amount of money without knowing what the needs are.
“We are doing that very important assessment of roads and bridges and health services to understand exactly the amount of money or support that will be required and the types of partners that we need to put in place. Again, it would be premature for us to set an amount and say, ‘I think that they should get X amount on this,’ without understanding clearly what the needs are.”
How does the minister, in thinking about how things are playing out around the Fair Share agreement, reconcile recognizing that communities need to have a real solid plan before we determine exactly how much money they’re going to get, on the one hand, with what transpired around this Fair Share agreement, where there are still five years left in the agreement
Rather than saying, “Gee, we need to be looking ten years out,” let’s start the conversation now, and perhaps in the next year or two we’ll have something. Or even shorter term — the next six months. But not six weeks. “Let’s see how we can extend it, what it would look like. Let’s base it on what your needs are.”
That actually wasn’t the process. I want to know how the minister reconciles that.
Hon. C. Oakes: I hope I don’t have to go through and read for a third time the Build Canada technical information. Again, those communities that want to put in an application to the Build Canada had to demonstrate the sustainability of their fiscal plan. For these communities, as the member opposite will understand, if you’re following the Fair Share around capital in these communities, the Fair Share plays a critical component of that. In ensuring that for this round….
That was part of the reason, as well, that we looked at making sure that those communities had every single opportunity to have their Build Canada and their gas tax applications reviewed and processed with the technical analysis — and scored as high as possible to ensure that these communities are supported.
Surely the member opposite isn’t suggesting that these communities shouldn’t have every single fair opportunity to apply for Build Canada and gas tax that every other community across British Columbia has.
S. Robinson: I think the minister misunderstood my question, which wasn’t about whether or not they ought to apply for these. It’s whether or not…. The decision to tear up an agreement really, I think, caught everyone by surprise. At least, certainly, I heard from communities that were quite surprised, so it caught some of them by surprise — maybe not all of them. I didn’t hear from all of them. But they were quite shocked.
Last year the minister talked about the importance of understanding what these communities’ needs are, because the pressure is enormous, before committing to an amount that they would get out of their agreement — in this case, the Fair Share agreement. Suddenly there was a renegotiation on the table for a number, without really, I don’t think, understanding exactly what the needs are, unless perhaps the minister has some sort of reports or documentation or analysis of what their needs are. If she does, I would really welcome seeing what those might be.
Hon. C. Oakes: The member opposite is talking about two very distinct and different agreements that we have with local governments. The Fair Share agreement was
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an agreement that was put in place, and we’ve had three iterations of that. But it is a transfer for the province of rural, industrial taxation for those communities, because if you look at the oil and gas royalties…. When we looked at those communities, when the oil wells were put in place, were we going to do satellite boundary expansions in those communities, or were we going to give them access to the industrial tax base? We have done that.
In fact, if I may, the industrial tax base last year was $16.8 million, and yet we’ve provided grant-in-lieu transfers to these communities to the tune of $43 million. As well, I should note that in 2005, when we did the renewed agreement…. We have done three iterations of the Fair Share agreement. On three different occasions we’ve looked at what the needs are.
In 2005 — a reminder that there was a $30 million insertion into that Fair Share agreement to help those communities understand and get ready for opportunity, but looking at, as well, the rural property tax transfer to them.
The northwest is a completely different agreement. The northwest is a new agreement, and it’s set up on ensuring for communities that they are ready. We went through our first partnership with Port Edward.
One of the opportunities that we have had because of the support of this team, because of the support of investing over $1 million in asset management and planning and ensuring that we were providing the critical support for the northwest communities on understanding what their needs are….
When the companies come in, and they’re are working with the communities to put in that investment, we’ve got companies now that said: “Look, what are the needs? I’m going to help you with your sewer. I’m going to help you with the water.” These become part of the critical agreements — two separately different agreements formed.
The member well knows that local governments across British Columbia are unique and distinct, and every single agreement that we have is different.
S. Robinson: Earlier the minister had said that the Fair Share agreement…. One of the reasons why she decided that it was time to take some action — and it needed to be imminent — was because, looking at long-term access to funds, they needed assurance. That’s sort of the explanation that she has provided.
I have another quote from the minister where she talked about how we need to renegotiate a more affordable solution but still meet the growing needs of the region. I’m wondering if the minister can explain how that fits and jibes with the idea that they needed more long-term assurance and that’s different from renegotiating a more affordable solution. More affordable for whom?
Hon. C. Oakes: I did answer this question. The question was that the Fair Share agreement was set up to be in lieu of the rural property taxes. The rate of the rural property taxes collected from those communities this past year was $16.8 million, and we currently provide them $43.6 million.
So when we talk about looking at affordability, the gap — that $23 million — comes out of all local governments. It’s out of our budget, so we need to reflect on the sustainability of our ministry and all local governments. Is it fair?
On the question of long-term sustainability, when we talked with the mayor of Dawson Creek, when we talked with the mayor of Pouce Coupe, when we talked with the mayor from Tumbler Ridge — when we talked with mayors from those communities — they identified that they have critical projects that they wanted to put in the Build Canada process. They wanted to put in the gas tax.
In order to do that and to go through the technical process that we put on our website, and people were advised of in October, they knew they needed to have long-term, secure funding in place in order to meet the technical requirements of those processes.
S. Robinson: So I have one other question about the Fair Share process and the current negotiations. It’s a bit subtle. I’ve certainly been talking with the mayor of Fort St. John and some of our councillors.
We’re talking about a subtle change in language, and I’m wondering if the minister can speak to why it’s now shifted to grant language. Historically, it hasn’t been talked about as a grant, and now it’s being talked about as a grant. If the minister can explain why the change in language….
[M. Hunt in the chair.]
Hon. C. Oakes: Hello, hon. Chair and welcome. It’s nice to see you here this afternoon. Thank you for joining us.
To the member opposite, on the question of the subtlety of the language: actually, it’s based on a formula that goes to the regional district. The Fort St. John community actually sent in a letter that uses the similar types of language to us.
They’ve used the same kind of language. Perhaps this will pre-empt any further questions around this. We do have the news release that was issued yesterday from Fort St. John that they are pleased and honoured to work with us in negotiating the Fair Share MOU.
The Chair: Member.
S. Robinson: Thank you, Mr. Chair, and welcome. It seems that the Chairs rotate, and we don’t. We just stay here.
I see the news release, and I think it’s unfortunate, the way in which things played out. The amount of angst that
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was created among these local governments was unnecessary. But this is just from Fort St. John, and I want to ask the minister if Taylor is on board as well.
Hon. C. Oakes: Taylor is part of the discussions, as are all the communities.
S. Robinson: I recognize that Taylor is part of the discussion, but, like I said, the news release that we have before us is with Fort St. John. Have they come on board and agreed to the current conditions? I understand that it’s to allow the existing payments to play out for 2015 and to move forward with the rest of the negotiations.
Hon. C. Oakes: It’s interesting. You know, I canvassed at the house. I’m going to recognize that there is angst up in the communities, and it doesn’t help when the member opposite talks about one community but doesn’t talk about the feelings of some of the other communities in the southern part of the Peace through that process.
Obviously, they have significant needs, and I expressed that earlier. They came to us, the South Peace, and said, “Look, we need to put in applications for Build Canada and gas tax,” and I take that incredibly seriously. And I hope the member opposite, when she says that she supports local governments, takes that seriously as well.
I can tell you that negotiations are currently happening and that Taylor is represented at that table.
S. Robinson: I do take it seriously, but to have seven or eight communities who all have to sign on, only to have a minister then say: “Well this isn’t working any more; we’re going to take the next six weeks to renegotiate a new one….” Certainly, if I quote the mayor of Fort St. John, who said it was like a slap in the face, that really is problematic. So there needs to be another way to actually address some of these challenges rather than just sort of blindsiding local government.
Clearly, there were some issues for some local governments. I’ve been asking around and trying to find out what some of those issues were. Based on what I can find out, that has to do, in some ways, with how they choose to spend their fair share of revenues. Different communities make different choices and lead some to problems, and others seem to manage just fine.
I want to note that in the news release it says, “The District of Taylor council will be meeting this evening,” which was yesterday. So I don’t know if the minister has heard anything in terms of: are they on board? You know, a simple “Yes, they’re on board. They met, and they agreed to participate” would be really helpful. Or are they sort of at the table, but…? I just want to hear what the outcome was of their discussion.
Hon. C. Oakes: I thought I was clear in the last one that Taylor is at the table, as we speak, in negotiations. I would assume they wouldn’t be sitting at the table in negotiations if they weren’t part of the process.
S. Robinson: I have a series of questions about the northwest community readiness initiative, and I’m wondering if the minister can describe the status of this program as it sits right now.
Hon. C. Oakes: Thank you to the member opposite for the question. One of the things that we’re really proud of is the experience through the northwest readiness project. It’s really changed and shifted how this ministry works directly with communities. We’ve certainly seen significant results in the communities.
One of the steps that we do have is dedicated staff that are working on the ground with the communities. We’re also pleased to announce that we did have an intern program, in partnership with NDI Trust, and we are extending that partnership. Really, what that does is it takes planning students, graduates of UNBC, and we put them up into these small communities. Some of the planning requirements of these smaller communities can really…. So to support them.
As well, we have an ADM–executive director working group across ministries. We recognize that the needs in the northwest are going to affect a wide variety of ministries, so they work closely and collaboratively together to identify the opportunities up in the area.
I would also note that things are extremely dynamic up in that area. So we meet regularly with the CAOs and with the folks on the ground up there.
Some of the recent announcements. Prince Rupert had a GIS study done for housing. There’s a neighbourhood study done in Terrace. There are OCP and asset management updates as part of that $1 million that we contributed to these communities. A transportation study was completed for Port Edward, to ensure their support. A governance study is currently looked at for Thornhill, to look at how affordable housing and some of the opportunities to ensure that we’ve got…. You know, people to house.
We also announced that communities are receiving grants and undertaking initiatives such as housing assessment and action plans. Kitimat completed their housing action plan, so together we’re determining how to capitalize on the economic opportunities and look at how our ministry can support them.
Again, most recently, we’re working with Port Edward with their agreement that they had. How do we ensure that we’re supporting them to ensure that some of the supports they require…? We’re looking at the companies to help support that.
S. Robinson: Thank you for that response. It was very helpful to get a feel for what activities are going on. Can
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the minister just identify which communities are participating in this initiative?
Hon. C. Oakes: The communities that are participating in that are Kitimat, Prince Rupert, Port Edward and Terrace, as well as the two regional districts, Kitimat-Stikine and Skeena–Queen Charlotte.
S. Robinson: That was very helpful.
How does the ministry see its role? A lot of information-gathering is really what’s happening, which I think is a good place to start. What are the needs, and what are the gaps? Going forward, they’re going to identify, I think, a whole bunch of gaps in terms of housing, in terms of some of the infrastructure.
I know that Prince Rupert still has a wood water pipe, which I think they should keep for posterity, just to say: “Wow, that’s really how water used to come to this community.” Port Edward has, I think, two roads, maybe three. So there’s certainly some recognition that there are going to be some challenges, some infrastructure needs and housing needs.
I want to just understand how the province sees its role. Once those needs are identified, then what? We know what we need. Then who’s going to pay for it? I think, ultimately, that’s going to be the question. Did the government see its role as facilitator, as broker, as funder, as all of the above? I just want to get a sense of where this program is headed.
Hon. C. Oakes: It’s a good question, because what we’re doing in this ministry is really new. I like to think that it’s…. I’m extremely proud of the team and what they’re accomplishing. Actually, we do a little bit of all of the items that the member mentioned. We work cross-ministry, and in many respects we are a broker between ministries to look at what the….
As the population and growth change and those needs are identified, we work cross-ministry to ensure that we’re looking at how we’re supporting that. As well, if you look at the EA applications of the companies — specifically, the one that we’re most familiar with right now is Pacific NorthWest LNG — part of the EA applications is to ensure that they’re upgrading the water, the sewer, the roads — things that were identified when we did the analysis.
I think it’s a great opportunity for us to be industrial brokers, as well, to ensure that we have a clear understanding of what the needs are of those communities. We are partnering and making sure that those conversations, where those needs are in those communities — that we’re able to broker those conversations as well.
As infrastructure needs are identified…. For example, Port Edward — Wampler Way. We have an application in for Build Canada. It’s multifaceted. We have a cross-ministry approach. We work at how, as the province, we can continue to support those communities through programs that we have, but as well, we’re working with industry, because we have those partnerships and those relationships to ensure that those communities are ready for the significant growth that’s going to happen because of LNG.
S. Robinson: I guess I want to put on the record that I do have some concern about the risk that these needs will be identified and activity will start to happen before the infrastructure can be properly put in place. So I want to know what the minister’s plan is around helping these communities, whether it’s front-loading so that they can actually put in some of the infrastructure that is going to be required in order for some of that other industrial activity to take place….
The truth is those local governments don’t have the capacity to put in that infrastructure. They’re going to need some secured financing that’s going to come from elsewhere in order to make those things happen. Is that part of what the minister is looking at doing?
Hon. C. Oakes: We do share your concerns. We want to ensure that…. You know, there are two facets to this. We need to look at distinguishing between the needs of the construction phase in these communities and separate that from the long-term needs, kind of the legacy systems. One of the pieces that we are doing right now is we’re really focused on what the immediate needs are.
That’s why what is new to our ministry is that we are heavily engaged in the EA process for these companies that are coming in, ensuring that there is a clear understanding and a partnership with our ministry on the needs of those communities and that the EA processes are reflecting that.
S. Robinson: It’s interesting. I have a number of resolutions that I wanted to ask the minister about and was planning on doing it after. Is there somebody here from B.C. Assessment we could ask some questions of? One of my colleagues also wants to ask.
Because you talked about the EA, I’m just going to talk about one of these resolutions and ask some clarifying questions. Then if we can go to B.C. Assessment, they can get on with their life — their kids, their family and things that they do outside of the workday.
Because the minister raised the EA process, I thought I would just ask this question about worker camp permitting. The ministry responded to one of the UBCM resolutions, A4. It’s brought forward by the Peace River regional district. The ministry response noted that “in response to concerns raised by local governments, in particular around the larger-scale projects that necessitate an EA certificate and the resulting socioeconomic impacts, the ministry is taking a lead role,” which is great. If the
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minister can just specify what steps have been taken that would suggest that that’s in fact happening.
Hon. C. Oakes: Thank you to the member opposite for raising that question. Actually, when I sat on the North Central Local Government Association, the former chair, Karen Goodings, brought forward the work camp resolution. It’s something that I share critical concerns about. That’s why I’ve directed staff to take this particular one on.
The two actual items that we are working on are — if you look, attached to each of the EA certificates, for both LNG and for pipelines — that socioeconomic effects have to be identified, and that includes work through identification around work camps. As well, we have a secondary project that’s working specifically around work camps.
One the things that we did identify when we were doing the analysis in the review was that work camps cover a wide array of ministries, whether it’s Health or Justice or what have you. What we’ve formed….
Part of the discussion, when we talked about having a cross-ministry approach when it comes to supporting these communities, is that there is work done through this, cross-ministry, to prepare an information-sharing report on work camps — and, specifically, the actual items and responses that each ministry is to take — and to have one collection of all the cross-ministry files around work camps. We are taking the lead on that.
S. Robinson: I thank the minister for that answer, and I look forward to seeing how things play out. Given that my colleague has questions for B.C. Assessment, I’m wondering if we could canvass those questions. I have a couple, and she has a couple. Then we can move that one along and then come back to some of these resolutions.
Perhaps I’ll ask my question. I know the minister will likely want to introduce the folks from B.C. Assessment and get their names into the record, so perhaps, I’ll ask the question, and then she can, as part of her response, do that.
My question has to do with the NavCan properties and the challenges that we’re certainly hearing from the North Saanich mayor. Just to get onto the record and to bring the minister up to speed on what the question is, there was a Property Assessment Appeal Board decision to grant the $20 assessments for ferry terminals where the minister of the day took action and came to a resolution that would meet the needs of both of the municipalities.
I think it was West Vancouver. They were going to take a $1 million hit to their budget, so they came up with, I guess, a mediated amount. But Nav Canada has now similarly appealed, and North Saanich, among other communities, is facing a major property tax hit.
There’s been a call for a legislative solution to this, and I understand that the Supreme Court has said the same thing. I’m wanting to know what the minister is doing about this situation.
Hon. C. Oakes: If I may, I would like to introduce…. Connie Fair is the CEO of the B.C. Assessment Authority, and Rob Fraser is the executive director through the province.
We’re certainly aware of the decision and share your concerns about the impacts of local government. B.C. Assessment has informed us at the province that they have appealed this decision to the B.C. court. We are looking at, obviously, staying actively engaged in this process, and we’re currently looking at all our options.
S. Robinson: Is there a sense of timeline on this, or is this….? I mean, I know that we can’t predict when the courts will act, but is this something that we can expect to have some sort of resolution on in the next year, or is this a three-to-five-year window? Just a general ballpark.
Hon. C. Oakes: While we can’t predict court decisions, we certainly expect it to be in by the end of the year, and we will continue to monitor that and ensure that we provide you with those updates.
L. Popham: My question is regarding properties that are possibly receiving farm tax status, but they’re planting trees for carbon offsetting.
My specific questions are within the Nechako Valley and the farms there that have been converted to carbon offset farms. I’m just wondering if these owners are receiving farm tax status or if they’re receiving, because… The trees cannot be cut for 100 years, so it’s a little bit different than active forestry that’s happening there. I just would like to know where B.C. Assessment stands on that issue.
Hon. C. Oakes: Thank you very much for the question. I’m certainly aware of what the member opposite has brought forward. The member opposite also recognizes, though, that in order to meet the threshold for taxation purposes and farm class, they need to, at minimum, produce at least $2,500 a year in order to maintain that.
As the member opposite is aware that what is currently happening in these communities around the acres and the type of tree…. The type of species of tree that is being planted is not on the qualifying agricultural product list.
L. Popham: Just to confirm, they are paying regular rural tax rates?
Hon. C. Oakes: Yes.
L. Popham: I wrote a letter to B.C. Assessment asking for a list of properties that would have covenants on them registered with B.C. Assessment. The letter indicated that that was a difficult question to answer and that it wouldn’t necessarily be easy to find out.
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The problem is that B.C. Assessment has the information if it’s there. I’m wondering how it is that I can obtain that information.
Hon. C. Oakes: If you have a list of properties that you would like us to provide you with information on, we can look up those properties and identify if there’s a covenant on those properties. There isn’t the ability through the database to just do that as a qualifier. But if you have a list of properties, we’d be able to identify that for you.
L. Popham: I’m actually a bit surprised that that isn’t something that you would be able to search on its own. Applying for a covenant on a piece of property is a pretty specific thing. Can the minister tell me why covenants wouldn’t be searchable in the database?
Hon. C. Oakes: Covenants are registered through the land title office and not through B.C. Assessment. It’s an independent office through FLNRO.
L. Popham: I’ll just make a comment. I won’t follow this line of questioning any longer. I did hear the minister say there was a lot of cross-ministry work that goes on, so that doesn’t make sense to me. But fine, I’ll let it go.
The other question I had…. It’s just going to be one question, because I don’t have any more time left.
Up in the Peace River area there was quite a massive exclusion of land that fell under the agricultural land reserve. I guess my question is around assessing these properties. Will there be any active work being done, going through the properties and the lot numbers, to see, on ones that used to qualify as farms or farm tax, if there’s anything that’s going to change with their property tax rate?
The other part of my question is that up in the Peace River area there are farms that are actively supplying the oil and gas industry with water. They might be qualified for farm tax status, but they’re also actively participating in heavy and light industry activity. I’m wondering if these farms are being split and assessed that way.
Hon. C. Oakes: Property in the agricultural land reserve is entitled to a 50 percent exemption of school tax, and if it’s removed from that, they lose that particular exemption. Tax rates, of course, are taxable through the taxing authority, which is local government.
The question around the farm oil and gas, the split with heavy and light industry — there is split farm classification that happens. If there’s non-farm use that is in production on agricultural land, there will be a split farm classification. Connie would be happy to meet with you on any specific property where you have that question.
S. Robinson: I thank the B.C. Assessment Authority for all the work that they do. I wanted to say that I had a tour of the facility and got to see how it operates and was quite fascinated by the technology that’s used to help in the job of doing all those properties, the entire property roll. So I thank them for their hard work and for being available today to answer any questions that we might have.
I have a number of questions for the minister that have to do with some of the resolutions that came out of UBCM. I’ve had a chance to take a look at the responses that the ministry provided. I am just looking for clarification on some of them. I thought I would just read out which resolutions they are and, rather than go through the entire resolution, just the piece of the response that I would appreciate some clarity on.
Resolution B1 is about municipality boundary extensions. The minister’s response notes: “Under the Local Government Act the minister has the authority to order an assent vote of the electors in the proposed boundary extension area, which is done when the area’s population is significant or the proposal is controversial.” I would like to get some clarity on how “significant” is defined.
Hon. C. Oakes: Thank you to the member opposite for the question in response to B1 of the policy resolution around municipal boundaries. It is a policy, not legislative, and the discretion that is reviewed is the size of the area and the population, in conjunction with what their infrastructure requirements are — their water and their sewer and if it’s meeting the needs for the size of the community. The most recent example is that there was a vote called in Campbell River, but it wasn’t supported.
S. Robinson: What I take, to understand, is that depending on all of these factors, the minister then makes a decision at her discretion — that’s how I’m understanding it — once all these factors are looked at.
I’m aware of the time, and so I’m just trying to move on some of these. B37 was a resolution on intergovernmental communication. There was certainly some concern expressed — this came out of West Kelowna — about the provincial government reviewing its communication policy procedures to foster more timely and more cooperative partnership with local governments. The response from the ministry was that consultation is important.
I’m curious about what the benchmark is for ministry staff on the turnaround time regarding responses to local government questions and communications.
Hon. C. Oakes: If I may, may I also introduce Nicola Marotz, who is executive director in this.
In response to B37, the intergovernmental communications resolution, I can tell you that our staff take every opportunity to work closely with local governments. It’s difficult to gauge because every single question that comes forward is different.
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When we look at consultation or we look at communication, it really depends on the type of question. Sometimes it’s just a quick phone call around a procedural or governance type of question, but sometimes it’s more around negotiations that are happening with other ministries. The scope of it is very varied, and it’s complex.
Our staff take every single opportunity and effort that they can to meet the needs of local governments. Can we always do a better job in communication? Absolutely, and we’re always looking at ways on how we can improve that.
S. Robinson: I appreciate the response. I don’t know what it was that brought West Kelowna to bring that forward, but certainly, given that it was supported at the UBCM, it suggests that that’s an ongoing challenge for local governments when dealing with the ministry.
This next one caught my attention. It’s the Communities in Bloom, B58. Clinton brought this forward, so it’s one that I thought was very interesting. First of all, they recognize the value of this program. It’s really important to them. But the concern is that it might cease to exist.
The ministry’s response was that funding decisions for this program are made on an annual basis. But other decisions are made over a three-year period or a five-year period or a longer period of time. Of course, local governments are always thinking ahead. This one, for some reason, is on an annual basis.
Is there a particular reason why there can’t be a commitment to this program over a longer period of time so that communities can build on their successes year after year?
Hon. C. Oakes: When I was in local government, we participated in Communities in Bloom. Certainly, I understand it’s a great opportunity to get communities engaged and excited and proud of their community. Clinton, who has won Communities in Bloom — they do an outstanding job. Hats off to them.
If anyone is looking for a summer vacation, I highly recommend travelling to Clinton, perhaps on the Gold Rush Trail exhibit route that’s coming up on May 13. Again, everyone should participate in that. It’s going to be an outstanding exhibit through the RBCM, and we’re really, really proud of that.
One of the things we do look at — our government — is we do have to prioritize resources on an annual basis. That is one of the ways we do look at that.
I will mention to the member opposite, because I just recently saw an application come through the community gaming program for Communities in Bloom, that if it’s attached to a non-profit, that’s an avenue, as well, that can be looked at for that.
We always look at a variety of different options for local governments to ensure…. Thank you for bringing that forward. It’s a good program.
S. Robinson: I thank the minister for sort of recognizing that while it’s not a large amount of money, it certainly has great meaning to many communities. They want to certainly expand on their successes.
The next one is B68, which is the progress report on regional district governance. I’ve certainly been hearing from a lot of regional district leadership about what’s happening in terms of refining the Community Charter to improve their ability to function as regional districts.
The resolution asks the province to “provide a progress report and evaluation of the recommendations from the 2010 Regional District Task Force report.” The ministry provides a response but doesn’t identify whether a progress report and evaluation is forthcoming. I just ask if the minister has any more information on that.
Hon. C. Oakes: Thank you to the member opposite for the question around B68 and governance, specifically around regional districts.
One of the things that we are looking at within our ministry is: how do we modernize local governments and ensure that we’re providing the support of governance to meet the needs of current citizens in societies?
Some of the things that we’ve done legislatively for regional districts is we looked at streamlining their land use bylaw so they no longer have to come to the ministry for approval. They’re now voting in referendums. They can now borrow internally between services, and then we provide problem-solving opportunities with them.
I will also say that that report…. I’ve been reflecting, and over my Christmas reading break I went over a number of the reports and looked at…. Really, as we move forward on modernizing local governments, and some of the opportunities that we see in various regions across British Columbia, one of the things I identified is looking at pilots — pilots around regional districts and governance and how that might look.
I’m really intrigued by that and would certainly invite the member opposite at any time to come and have that conversation on how we can look at what modernization within local governments and regional districts could really look like.
S. Robinson: I thank the minister for sharing some of the reading that she’s been doing over her Christmas break. I take it at this point that there isn’t a progress report that’s going to be forthcoming and that this activity isn’t on the workplan. I haven’t seen it anywhere on the workplan.
I think, should I be asked about that, I will certainly let them know that I’ve canvassed the minister for this and that at this point there is no activity on this file except doing some thinking about it and what that might look like, and certainly some bits and pieces of legislation to modernize it. I thank the minister for that.
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There’s another one, B103, which was “Equitable penalty and sentencing powers for regional districts.” I’m just going to read it into the record, but I’m going to assume the answer given the previous response, because the request was that there ought to be an opportunity for the regional districts to set fines and the power to set up maximum fines. I don’t know if this is something that the minister…. Well, perhaps I won’t assume anything and let the minister answer.
[M. Morris in the chair.]
What regional districts are asking for is the opportunity to have additional powers that right now they don’t have around fining. Is that part of the legislative changes that the minister is looking at doing?
The Chair: Minister.
Hon. C. Oakes: Thank you, hon. Chair, and welcome. Nice to see you here. I see that you just moved from one side to the other. It’s great to see you.
Thank you to the member opposite for the question in regards to B103 of the policy resolution book around additional powers for regional districts. By regulation, regional districts can come to the ministry and bring up their particular circumstance. They do, for additional powers. For example, there was a feral cat regulation through the capital regional district that we reviewed and supported them on. If there is a regional district that…. We are open to working with the regional districts on looking at what additional powers may be for circumstances.
[The bells were rung.]
The Chair: We’ll take a short recess.
The committee recessed from 5:30 p.m. to 5:48 p.m.
[M. Morris in the chair.]
S. Robinson: I have one last question that has to do with resolutions. Then — I’m sure the minister can see that I’m very popular this afternoon — I have a number of my colleagues who have some questions. We’re going to try to move them through so that we can get through as many of them as possible.
My last one is from LR9, which is the local authority for animals in critical distress. It was a resolution that asked specifically if the Community Charter would be opened, giving local governments the ability to seize animals suffering from heat exposure, and to allow local governments to give powers to their bylaw officers, more specifically.
Now, the response, of course, was from the Ministry of Agriculture, but the request was really about asking if local government would be given the authority to actually act on that. I’m just checking in to see if the minister is in conversation with the Minister of Agriculture to see if there is a way to support moving that resolution forward.
Hon. C. Oakes: We were just discussing that under local government and under the Community Charter, local governments do in fact have the ability to regulate bylaws and standards for enforcement when it comes to animals. I was discussing how when I was in local government they passed a resolution that you can only have two dogs and two cats. I’m an animal lover, and I thought: “As a local government, how dare we go in and regulate to citizens.” But again, that’s what elected bodies do.
As far as the seizure and breaking into a vehicle, that does fall under the Ministry of Agriculture.
D. Eby: I’m sure the minister knows exactly what I’m going to ask her about. In November 2013 the University Endowment Lands Community Advisory Council dropped a proposal for an incorporation study on the minister’s desk, metaphorically speaking. On March 24, 2014, I was in this place, and I asked the minister for an update.
She said she was gathering the facts about the current state of the UEL. She said the ministry was doing fact-finding, information-gathering, to look at service relationships, that she had people on the ground “right now” gathering the information so they could start to really move forward.
That was more than a year ago. As far as the Community Advisory Council knows, no action. Can the minister give an update on where we’re at here?
Hon. C. Oakes: I appreciate the member being engaged in this particular file.
I agree that…. One of the things we canvassed earlier was: how do we modernize local governments and ensure that we’re meeting the needs of the citizens of today? When you look at the Point Grey peninsula, arrangements have evolved over the past 107 years. We significantly need to ensure that we are supporting a new, modern approach to supporting these communities to provide the services to their citizens.
We continue to focus our efforts. As you can well imagine, over the last 107 years there are a lot of service agreements in place — whether it’s pipes in the ground, sewer, water systems, transportation, whether it’s working with the university. We are looking at gathering that information.
We continue to work on that. I remain committed to ensuring that we find a modern approach to how we address the governance opportunities for the University Endowment Lands.
D. Eby: The minister may be aware that we did a
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freedom-of-information request for the work done by consultants that the minister had hired to go to the University Endowment Lands and collect this information. It seemed that they consulted with everybody except for the people who live in the University Endowments Lands, the Community Advisory Committee.
If the minister had asked about what was happening at the UEL, she would have heard — her staff would have heard or her consultants would have heard — that there’s no official community plan, even though there’s a massive new development happening at block F; that there’s no development cost charge policy, even though there’s a massive new development going in place; that there are neglected motions about spending the capital reserve fund to actually improve the infrastructure amenities in the community — streets, lights, pipes.
The money has been saved. The money can’t be spent, though, because there’s no action. They’re looking for any advocate to step forward and say: “Well, what’s the allocation of things like firefighting costs between us and UBC?” They’re saying: “Who’s going to step up and fight for the restoration of the $60,000 community grant that we used to receive?”
I would say that there is a very urgent crisis here in governance in this peninsula, and 107 years of binding that 107-year-old pipe is not the core issue that the community has. The issue the community has is that they make motions, and there is no response.
Can the minister assure the community that that will stop? When they make a motion and say, “Will you deal with the infrastructure problem? Will you spend money we have here on infrastructure? Will you issue the tenders?” that that will happen. This is critically important.
Whether or not there is governance reform, I think the minister knows the community’s feelings about that. There needs to be an investigation, and it needs to happen. But when they make motions, can the minister assure the community that they’ll actually be acted on?
Hon. C. Oakes: I have examples of how, in fact, the administration through the UEL has been very responsive to the groups. For example, a motion came forward that has been acted upon about having access to the Vancouver Public Library. This was a request by the CAC, and that is now in place.
As well, we’ve been very responsive around infrastructure, and $600,000 has been spent in a capital plan. I’m pleased to say that $3.5 million in infrastructure upgrades will be happening over the next three years.
In response, as well, the CAC was consulted on the budget, as they are every year, and they did endorse the budget this year. They also sit on the working group and provide feedback on block F. There are a number of examples of how we are very responsive to the needs of the CAC.
D. Eby: My final question.
The minister clearly is having some trouble believing the message that I’m bringing to her from the community — that there is a disconnect between the motions being passed by the CAC and action being taken by the administration, whether because of understaffing or some other issue that needs to be addressed.
I would like to invite the minister to come to the University Endowment Lands. I’d like to invite her again, because I invited her to a community meeting. She didn’t attend and didn’t send any staff.
I’d like to invite her to set aside some money in this budget, to come down and meet with the people that she is the mayor for and listen to them firsthand instead of listening to me, because clearly, I have a credibility issue with the member, and that’s fine. But the community members will not have that issue. I encourage her to come down and hear from them firsthand.
Will she make a commitment to do that, on the record?
Hon. C. Oakes: Again, I would remind the member opposite that there is a unique governance structure, through the UEL. The administration and the day-to-day operation is delegated to a UEL manager who exercises the authority and supports of the small number of provincial public servants that are in the area. The UEL manager keeps the ministry and myself informed and up to date on what is happening with the UEL. I assure you that I am provided with regular briefings on the UEL.
We are laying the groundwork, which I’ve identified to the member opposite. We want to understand the complexity of the relationships, as well as the shared services, and we’ll continue to work on that.
S. Chandra Herbert: Communities like Victoria have raised the issue of ethical investing, of sustainable investments. Socially responsible investments, they’ve been called. In a number of ways, I understand that they wanted to move in that direction as a city but that they believe there are challenges and potential legislative barriers in the way of them being able to take a more socially responsible investment strategy to support their community.
I’m just wondering if the minister has considered this issue and if she’s willing to work with communities that want to find a way to ensure that they can put their investments in places that align with their values.
Hon. C. Oakes: Thank you to the member opposite for the question.
I think that when we look at supporting local governments and when we talk about modernizing, we need to always be paying attention to: what does that mean in current society?
Within the Community Charter we do look at a num-
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ber of things. We look at the viability of an investment — is it low risk? — and sustainability for the entire network. Currently local governments work through the MFA, and really, that’s the strength of all of the local governments. Putting investments into the MFA creates the whole structure and creates that strength.
There is a little bit of flexibility within the Community Charter. It’s under section 183 of the Community Charter, and it talks about:
“(c) securities of Canada or of a province; (d) securities guaranteed for principal and interest by Canada or by a province; (e) securities of a municipality, regional district or greater board; (f) investments guaranteed by a chartered bank; (g) deposits in a savings institution, or non-equity or membership shares of a credit union; (h) other investments specifically authorized under this or another Act.
It does outline that, but we’re always looking at how we can have those conversations. I welcome the opportunity to sit down with the member opposite to canvass this more fully.
D. Donaldson: My question has to do with the Capital for Kids travel subsidy program that is used by many remote, rural and northern schools to help fund their trips to the capital.
That program was part of the Provincial Capital Commission that was dissolved by the minister’s government in 2013. At that time the minister is quoted as saying: “We will ensure that outreach activities connecting British Columbians to their provincial capital and their democratic heritage continue as usual.”
I’ve had a school group contact me who has been fundraising for this once-in-a-lifetime trip. They are unable to take the trip unless the Capital for Kids program support is there. They were told, when they tried to apply for that funding for this fall, that the program is currently under review — this is the word she got back from the minister’s ministry — and may not be available for the fall.
I’m just asking the minister for…. It kind of flies in the face of what she said back in 2013 — that “these programs continue as usual.” When will the decision be made about whether that program will be available for this fall, how much is allocated for that program in this budget year, and how much was allocated last budget year?
Hon. C. Oakes: To the member opposite, thank you very much for the question, and thank you for bringing that forward because there have been no changes to the Capital for Kids program. If you would follow up with us on the community, we’d be happy to work with you on that.
But if I may, we also added an additional program — $50,000 for youth in democracy, and that was put on last year. Youth in democracy — again, we’re trying to ensure that kids across British Columbia, especially the rural communities, have the opportunity to come down and participate in the democratic process.
Last year, we were so proud. You know, we looked at partnerships with the RBCM 100th anniversary of World War I to really explore and provide good citizenship to youth across British Columbia through a partnership with Rotary.
We’re going to do that program again. I’ll make sure you have that information as well. We’ll follow up, also, on the Capital for Kids, because that funding hasn’t changed. We might just have to loop back in to figure out how we can support that community.
I move that the committee rise, report progress and ask leave to sit again.
Motion approved.
The committee rose at 6:10 p.m.
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