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, September 29, 2015

Morning Sitting

Volume 28, Number 10

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

TUESDAY, SEPTEMBER 29, 2015

The House met at 10:02 a.m.

[Madame Speaker in the chair.]

Routine Business

Prayers.

Tributes

JOYCE SECKER

G. Hogg: For as long as my poor memory can recall, when I looked over into this part of the Legislature, I saw a woman who was keeping the Sergeant-at-Arms alive and awake and involved. She was busy taking care of us. She brought us podiums, messages, petitions and gathered the legislation. She even brought us water. In fact, in May of 2011, she presented me with a certificate that read: “For outstanding contributions in the field of water spillage in the legislative chamber.” She claimed that I’d set some kind of record. I’m sure someone else had bumped my desk.

Some two years ago, whilst replacing the golden rod after the Speaker’s procession came in, she accidentally, I’m sure, swung it around and hit me. I went onto Hansard in search of evidence but was unable to find it, and the Sergeant-at-Arms was, again, of not much use in being able to pursue that.

Her smile, her reserved manner and her demeanour all made this place a little bit more sane for some of us and a little bit easier to take for many of us. She was always there in a positive and friendly manner. In fact, when somebody on this end was speaking, she would get out of the way. She’d come and hide somewhere because she didn’t want to be seen to be on television.

[1005]

I hope that this House will extend their gratitude and best wishes to a woman who made this place a little bit easier for all of us and wish Joyce Secker all the very best.

Introductions by Members

K. Conroy: I’d like to introduce a friend of our party, of the labour movement, of our own family and progressive international governments throughout the world, the international president of the United Steelworkers, Leo Gerard.

Introduction and
First Reading of Bills

BILL 32 — FAMILY MAINTENANCE
ENFORCEMENT AMENDMENT ACT, 2015

Hon. S. Anton presented a message from Her Honour the Lieutenant-Governor: a bill intituled Family Maintenance Enforcement Amendment Act, 2015.

Hon. S. Anton: I move that Bill 32 be introduced and read a first time now.

Motion approved.

Hon. S. Anton: I’m pleased to introduce the Family Maintenance Enforcement Amendment Act. This bill makes needed amendments to the Family Maintenance Enforcement Act, principal of which are amendments to improve the government’s ability to collect default fees imposed on persons who have neglected to pay child or spousal support.

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

Bill 32, Family Maintenance Enforcement Amendment Act, 2015, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Statements
(Standing Order 25B)

MOHAMED FAHMY AND
IMPRISONED JOURNALISTS

D. Eby: On December 29, 2013, Canadian Mohamed Fahmy and two other Al Jazeera journalists were arrested by Egyptian authorities in Cairo. During his 21-month ordeal, Mr. Fahmy would serve more than 400 days in an Egyptian prison. He was formally pardoned last week. Mr. Fahmy reported for CNN and covered the Iraq war for the L.A. Times. He won a Peabody Award for his Arab Spring coverage.

When arrested, he was Al Jazeera’s international English language bureau chief. The recent Amnesty International report on Egypt reads as follows: “The government severely restricted freedoms of expression, association and assembly. Thousands were arrested and detained as part of a sweeping crackdown on dissent. Hundreds were sentenced to prison terms or to death after grossly unfair trials.”

In this context, Mr. Fahmy was sentenced to three years in prison for not registering with the Egyptian Ministry of Culture, for using his hotel room as a broadcasting point without government permission and for spreading false news. Amazingly, at the same time as he was being persecuted and jailed in Egypt, Mr. Fahmy established a new foundation for press freedom in Vancouver, but not to help himself. The Fahmy Foundation is advocating for the release of Egyptian photojournalist Shawkan. Shawkan has been in prison in Egypt since August 2013 and has not been charged with a crime.

From Egypt, Mr. Fahmy told the Georgia Straight about his new foundation: “Too many journalists are being wrongly thrown into prison, effectively silencing their
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voices. Hundreds of support letters lifted my morale in prison, yet equally important was the money donated from honourable people and media defence organizations alike. Only then was I able to pay the majority of my legal fees. Our mission is to give back, advocate for and financially support imprisoned journalists and their families.”

Mr. Fahmy, on his return to Canada, is planning on settling in Vancouver with his fiancée, Marwa Omara. Please join me in welcoming Mr. Fahmy home to Canada, to British Columbia, to Vancouver and to his new job at UBC. We are thrilled that you are finally safe and sound.

TSAWWASSEN FIRST NATION AND
OPEN FOR BUSINESS AWARDS

S. Hamilton: Earlier this month I was thrilled to learn that the Tsawwassen First Nation had been nominated as a finalist for the Open for Business Award. This year competition was tight, with more communities joining in, and submissions were received from all eight B.C. economic regions. The finalists included Abbotsford, the city of Langley, the Nisga’a Nation, Prince Rupert, Sidney, Surrey and the Tsawwassen First Nation.

These awards are issued by the Small Business Roundtable, which comprises small business owners from across British Columbia. Established in 2005 as a voice for small business to government, the round table promotes business-friendly communities and advises on where best to slash unnecessary red tape. Originally conceived as the most small business–friendly community award in 2011, the Open for Business Award now recognizes the initiatives by local governments and First Nations. Last week the winners were announced at the UBCM’s annual convention, and I was delighted to learn that the Tsawwassen First Nation had won, despite very stiff competition.

[1010]

Upon winning the award, Chief Bryce Williams said: “Supporting our small business entrepreneurs is one way in which we are building our sustainable community. Receiving the Open for Business Award is an important signal that our initiatives are on the right track. We’re building a bright future not only for our nation but also for our surrounding British Columbia communities.”

I’m sure that all members of this House will join me in congratulating the Tsawwassen First Nation. In addition, I would also like to acknowledge the efforts of all First Nations who are adopting similar business-friendly practices across the province. It benefits First Nations communities and, at the same time, makes British Columbia a far more prosperous province for everyone.

HARINDER MAHIL

R. Chouhan: Last Saturday our family and our friends got together to celebrate the 65th birthday of my very dear friend and brother-in-law, Harinder Mahil. Harinder came to Canada in 1970. He became very active in the IWA, International Woodworkers of America. Shortly after he joined the union he became the editor of the newspaper called Chipper.

He was very active. When I came to Canada in 1973, he was the one who guided me, to teach me how to work in the Canadian labour movement, and he introduced me to many other friends.

In 1973, he married my sister, so he became my brother-in-law. We went to college together. We played together. Harinder, after working in the community, played a very important role in the formation of the Canadian Farmworkers Union and the B.C. Organization to Fight Racism.

In 1982, he was appointed as industrial relations officer. In 1992, he became the chair of the B.C. Council of Human Rights. In ’97, Harinder became deputy chief commissioner of the Human Rights Council, and in 2001, he was the acting chief commissioner of Human Rights. Since 2003, Harinder has been working in the Professional Institute of the Public Service of Canada.

Every day he is helping people in the community, participating in progressive causes and providing leadership. He writes columns in the local newspapers.

I want to say to Harinder: “Very, very happy birthday, and many more.”

50th ANNIVERSARY OF
SIMON FRASER UNIVERSITY

D. Bing: I rise today to recognize the 50th anniversary of Simon Fraser University. I had the pleasure of attending the anniversary celebration earlier this month.

Named after an early explorer, Simon Fraser University opened on September 9, 1965, with 2,500 students. SFU, as it’s known, has grown to be the second largest public post-secondary institution in B.C. More than 35,000 students attended in 2014-15. Thanks to 50 years of success, SFU now has more than 135,000 alumni in 140 countries. Currently, there are three distinctive and vibrant campuses in Burnaby, Surrey and Vancouver.

SFU is consistently rated among the top universities in the country. Allow me to list a few of the impressive achievements SFU has been recognized for.

SFU was the first Canadian university accepted into the National Collegiate Athletic Association in 2009, the world’s largest college sports association.

The university has consistently topped the Maclean’s magazine annual rankings of top comprehensive universities in Canada. They have topped the list 11 times over the last 24 years, including 2015.

SFU’s current vision is to be Canada’s most community-engaged university.

The school has deep roots in partner communities throughout the province and around the world. Students,
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faculty, staff and alumni are making a difference around the world.

Congratulations once again to students, faculty and staff at SFU. May you continue to contribute to B.C.’s post-secondary system with many more years of outstanding academic achievement.

PORT HARDY AND
BEAR SMART COMMUNITY PROGRAM

C. Trevena: It’s that time of year again. The bears are out fishing and finding the joys of our fruit trees.

[1015]

But as everyone knows, problems come when bears get too close to humans — getting into garbage, into freezers or even into people’s homes. Earlier this year a problem bear was shot in Port Hardy because it was scavenging at someone’s property. There was a lot of fallout, but there was a positive outcome. It pushed the community towards being bear-smart.

There are already a number of bear-smart garbage cans around Port Hardy, and there has been mapping of green belts, drainage and waterways. But it’s education that really makes the difference, encouraging people to understand the dangers of allowing bears to become habituated to human foods and trash.

Becoming a bear-smart community does take some work. There needs to be a bear-hazard assessment, mapping the areas which are high-use bear habitat and those trails which are also bear travel corridors. It means marking the berry patches and salmon streams, as well as the orchards and dumpsters around the community.

There also has to be a bear-human conflict management plan, and there needs to be continuing education for everyone in the community. We all think we know how to be bear smart, but as you look at loaded apple and pear trees, are we really that smart? And of course, communities need to be able to invest in bear-proof garbage disposal.

On Vancouver Island, only Port Alberni is designated bear-smart. The designation comes from a partnership of the government, the B.C. Conservation Foundation and the Union of British Columbia Municipalities, and there are only a handful provincewide.

We see more than $1 million being spent by the conservation service relocating or destroying bears. This is a sensible and cost-effective approach. It also reduces problems like those seen in Port Hardy this summer.

It’s also sensible. We live in their territory. Let’s make sure we’re smart about it and prevent unnecessary interactions and unnecessary bear deaths.

MICHAEL SABULSKY

J. Martin: It is with great pleasure that I take this moment to extend my sincere congratulations to Chilliwack RCMP Const. Michael Sabulsky, who was honoured in Toronto this past weekend with the Terry Ryan Memorial Award for Excellence in Police Service.

Constable Sabulsky is the first police officer in British Columbia to win this award since it was established. Mothers Against Drunk Driving created the award in memory of Const. Terry Ryan, who was tragically killed in a two-car, alcohol-related collision in 2002. The award recognizes exemplary police service that significantly reduces the incidence of impaired driving.

Constable Sabulsky has been with the RCMP since 2008 and has been posted in Chilliwack since 2011, where he serves in the traffic services unit. He is passionately dedicated to preventing impaired driving and as such, trained as a drug-recognition expert, an Alco-Sensor FST master instructor and an Intoximeter operator. He maintains all roadside screening devices within the Chilliwack office and is available to assist other officers when they require his expertise.

On behalf of my constituents in Chilliwack, I would ask that the House please join me in thanking Const. Michael Sabulsky for his continued service and congratulate this fine officer on being the first recipient from British Columbia to be honoured with this MADD Canada’s Terry Ryan Memorial Award for exemplary police service.

Oral Questions

EDUCATION MINISTRY DATA BREACH

J. Horgan: Last week we learned from the Minister of Citizens’ Services, the minister responsible for protecting the privacy of citizens in British Columbia, that he had hit a grand slam. He had allowed the information of 3.5 million students to be lost somehow, on an unencrypted hard drive.

Now that’s bad enough, 3. 5 million people’s private information. That’s students’ private information, whether they were special needs, whether they had individual education plans, whether there was financial hardship, whether there were disciplinary problems. All of that information that was supposed to be in the protection and care of the government of British Columbia appears to have been lost.

My question to the Minister of Education is quite a simple one. Does he have an explanation to the 3.5 million students and their families who have now had their personal and private information lost by the government that was supposed to care for it?

[1020]

Hon. M. Bernier: Government takes the management of information and the collection of information data and protection of that information very seriously. When I heard about this, I have to say I had regrets and concerns as well.
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I want to apologize to all the students, the parents, the residents of British Columbia and the residents of the Yukon for this. This is something as a ministry that we’ve now turned over to the Ministry of Technology, Innovation and Citizens’ Services, who will be doing a thorough review.

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

J. Horgan: I’m grateful that the Minister of Education is sitting in for the Minister of Citizens’ Services. So 3.5 million individuals — 3.5 million students — between 1986 and 2009 have had their information lost by their government. It’s a recurring theme: “It’s under review.”

We’re trying to keep track of all the reviews that are underway over on that side of the House, but it’s extremely difficult. And the challenge I have in this instance is the new minister has said he’s concerned and he’s grateful that there’s another teachable moment coming down the pipe for the B.C. Liberal cabinet. But that teachable moment has put at risk the personal information of 3.5 million British Columbians.

Again, my question to the Minister of Education, in lieu of the minister responsible for protecting information: what have you got to say to the students that are coming after these 3.5 million? What steps are you taking today to protect that information?

Hon. M. Bernier: As I mentioned, we take very seriously the role on this side of the House in government anytime we’re collecting personal information that belongs to people. Out of an abundance of caution, that’s why we’ve reported to the public that we are unable to find this information.

With that, I think it’s important to stress also that we’re not aware of any issues out there, any breach of the data. Based on the type of data that is out there, we don’t feel that there’s any risk to identity theft.

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

J. Horgan: We’ve had a moment here when B.C. Liberal backbenchers didn’t clap after an answer. That’s a shame. It’s only your second response, but it’s the first time I’ve missed it in ten years. It’s almost a knee-jerk response that clapping happens regardless of what comes out of ministers’ mouths.

In this instance, I’d like to move to last spring, when the….

Interjections.

Madame Speaker: Members. [Applause.]

Thank you all for your participation. Please continue.

J. Horgan: A day late and a dollar short. Typical for B.C. Liberals.

Last spring, we were debating Bill 11 in this House. That bill was required, according to the then Minister of Education, to gather more information — more information — about students in British Columbia. And at the time, my colleague from Victoria–Swan Lake asked the minister some questions about what steps the minister and the ministry and the government were going to take to protect that private information.

This is what the minister said at the time: “Very clearly, individual student data is highly protected and is only shared ever when other ministries are requiring it in the interest of the student.”

My question to the Minister of Education today: in light of the comments of his predecessor about the importance of protecting private information, what can he say to those new students under Bill 11, who are going to be having more information collected? What tangible concrete steps are you and your ministry taking to protect that information so that you don’t leave it in an unencrypted hard drive somewhere in a warehouse, somewhere in British Columbia?

Hon. M. Bernier: Parents understand and parents expect the fact that we do collect some information on their child.

In order for a teacher to do their job, that information is really important. That information is used to track trends in student achievement, to evaluate effectiveness of programs and to support research through formal agreements that we have here.

As I mentioned, there is a thorough investigation that’s going on, into this particular incident. Government takes the management of information and protection of the people’s privacy very seriously.

[1025]

D. Routley: The Minister of Education just said that he and the government take very seriously the management and protection of student information, eerily echoing a quote from the minister responsible for data security. “Protection of British Columbians’ private and personal information is a top priority for this government. We are committed to improving the system, and we have put the policies and education programs in place to do that.”

Unfortunately, that was six ministers responsible for data security back. He said that in 2010, a full year before this unencrypted hard drive that is missing was even created. But you can cut and paste those remarks to any of the six ministers responsible for data security who have repeated those remarks after repeated data breaches by this government.

Either the programs aren’t working or the ministers just don’t care. Can the minister tell the House what guarantees he can provide to students and parents that other
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unencrypted, personal records aren’t sitting in warehouses or even worse locations?

Madame Speaker: Minister of Education. [Applause.]

Hon. M. Bernier: I’d like start off by thanking my colleagues on the opposite side of the House for, before I even stood up, clapping for me. I appreciate that.

Really, when it comes to this issue, I said at the onset that we take this very seriously. I also said at the onset that there’s an investigation going on with the Ministry of Technology, Innovation and Citizen Services.

There’s also an investigation going on that’s been launched by the office of the chief information officer as well as the Privacy Commissioner, who’s also looking into this in a formal investigation. I’m not going to prejudge the outcomes of those, and I’m looking forward to seeing how that transpires.

Madame Speaker: The member for Nanaimo–North Cowichan on a supplemental.

D. Routley: Time and again this government loses sensitive data, apologizes and says they will do better. All six of those data security ministers and the Minister of Education have promised to do whatever it takes to see that this never happens again, and still British Columbians are left to worry that their private information has been compromised.

This government’s response is to amend the legislation in the spring to remove penalties for those who mishandle sensitive government information.

Government knew the hard drive was missing in mid-August, yet B.C.’s Information and Privacy Commissioner wasn’t notified until September 18. Given the magnitude of this information breach and the risk posed for so many British Columbians, why did it take nearly a month to inform B.C.’s Information and Privacy Commissioner of this breach?

Hon. M. Bernier: Within the ministry, when we went looking for this, we were unable to find it. It was really important from our standpoint that we did a thorough look, and we wanted to make sure we followed all the proper agreements that are in place under the Freedom of Information Act, which we actually did. The ministry has and is cooperating with all the investigations taking place right now into this incident.

R. Fleming: The new minister said, just a couple of minutes ago, that the missing data files pose no risk to individuals. Now that’s something that even his now AWOL — on the second day of the session — colleague was unwilling to say last week.

Madame Speaker: The member knows you do not comment on the absence or presence of members.

R. Fleming: One of the files on the missing hard drive includes information about several hundred individuals who left school. The data exposure for these individuals goes far beyond names and addresses.

[1030]

The lost information contains highly specific, highly personal details around why children left school. Mental health issues, substance abuse, police involvement, medical histories, psychiatric assessments were all included in these files. This information was entrusted to government, and this minister, this government, allowed it to be compiled and stuck on a shelf in a warehouse unencrypted.

It’s hard to imagine a government being more careless about highly sensitive information about people’s lives. I would ask the Minister of Education this. What is he doing to ensure that this sensitive information won’t be used to harm these individuals that his government has so utterly failed to protect?

Hon. M. Bernier: First to clarify what I said, which was that there’d be little risk of identity theft because of this data breach. But I think it’s also important to note, as a parent, when we look back at what information teachers need in the classroom, what principals need in the classroom, what I as a parent expect teachers to have in order to give a proper education for my child…. I think what’s important to note is under the School Act, student records are kept for 55 years at a minimum.

This is not new. This is something…. As a parent, we’ve always made sure we fill out the forms and we contribute information to help in our student’s success and help, also, teachers to do their jobs.

Madame Speaker: Victoria–Swan Lake on a supplemental.

R. Fleming: I hope the minister will understand this. This is information that individuals never gave their consent to the government to compile. It was compiled anyway. That brings a special obligation for the government to protect it. They let it be unencrypted in an unsecured location in British Columbia for millions of people and citizens.

The lost information about these students who left school extends beyond the students themselves. Personal information about their families was also included on the hard drive. Details around family problems and foster home placements are lost now too. The government response to this breach so far has been to advertise a phone number on a website. I’m sorry. Telling people to call 1-800-FIND-MY-DATA is not good enough. It’s not good enough.

My question to the Minister of Education is this. He is entrusted with data security in the second-largest ministry in government. What is he doing to protect people’s
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private information? How was it that he allowed, in the first place, these records to be created, let alone be lost or stolen in the province of British Columbia?

Hon. M. Bernier: As I said at the very beginning of question period today on this topic, government takes the collection and the protection of people’s information and their privacy very seriously. To that point, that is why our ministry is cooperating fully with the investigation.

C. James: I’d like to say to the Minister of Education that it’s very clear the government does not take the information data seriously enough, obviously, when we take a look at what we’re seeing right now.

Tuition costs have steadily increased, and many students have to apply for loans if they want to go to college or university. To receive a student loan, you must prove “your financial need.” This means showing that your parents can’t afford to help you. That’s not an easy thing to admit when you are a parent. You want to do everything you can to support your child. But because of this government’s neglect, family and personal student financial aid information for a quarter of a million students has been lost — information that those students were required to share with government.

My question is to the Minister of Advanced Education. How does he expect students and parents to ever trust him and his government with their personal information?

[1035]

Hon. A. Wilkinson: I think the people of British Columbia have a great deal of faith in our system. We run 25 post-secondary institutions, and 430,000 students benefit from those institutions. Of course, their information has to be transmitted from the K-to-12 system using high school transcripts into the advanced education system.

I’m pleased to say that happens seamlessly and through the fine system that this government set up known as the British Columbia Council on Admissions and Transfer. That information also travels smoothly between the 25 post-secondary institutions providing excellent services for British Columbians who want to improve their skills and abilities, raise their autonomy, build the economy and lead a life of autonomy and prosperity.

Madame Speaker: Victoria–Beacon Hill on a supplemental.

C. James: Wow. Wow — really, really something. Here we are talking about missing information. We’re talking about students who can’t afford to go to college and university and are having to take out loans, and the minister talks about prosperity? He thinks that’s the response to families — a quarter of a million who have had their data lost?

This government says they’re doing a review. Well, we know that this government’s failure to protect our personal information could have been avoided if this government wasn’t so indifferent to repeated warnings about data security. This is not the first time or the second time or the third time this government has been warned about how frivolously they treat personal data.

This missing hard drive contained information about a quarter of a million students who applied for financial aid. These lost records include specific details about a student’s assessed financial need, unmet need and how that money was provided. These students and these parents trusted the government would look after this information.

How is the Minister of Advanced Education going to apologize to these quarter of a million British Columbians for breaking their trust?

Hon. A. Wilkinson: In typical form, the opposition, in their enthusiasm to find a scandal where none exists, have embellished the facts. And now they seek…

Interjections.

Madame Speaker: Members.

Hon. A. Wilkinson: …to consume the important time with nattering.

Interjections.

Madame Speaker: Members will come to order.

Hon. A. Wilkinson: You can always tell when you hit the sore spot.

Nonetheless, the drive in question is a duplicate. The information has not been lost. The drive has been misplaced. It may be found.

Interjections.

Madame Speaker: Order.

The members will come to order.

Interjection.

Madame Speaker: Surrey-Whalley.

Hon. A. Wilkinson: Just as the members opposite have misplaced their enthusiasm for the result of the federal election, I’m pleased to be able to tell the members opposite that every year we’re able to provide financial aid to 42,000 students in this province, about a quarter of those eligible. Seventy-five percent of eligible students do not turn to the province for financial aid. We have the fourth-lowest tuition in Canada, with a 2 percent cap on
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tuition growth. Our students get excellent value at our 25 public institutions.

[1040]

S. Hammell: Really. Losing personal data is not a scandal? And it’s not lost; it’s misplaced?

It’s not just student loan information that went missing. The hard drive contained personal information on more than half a million British Columbians who attended public post-secondary institutions between 2002 and 2009. Half a million university students trusted this government to protect their information, and this government has failed them.

What steps is the minister going to take to contact and reassure those British Columbians that their information will not be used to compromise their identity?

Hon. A. Wilkinson: I’m actually glad to be able to draw on my prior experience in this ministry, which my colleague now occupies, in Technology, Innovation and Citizens’ Service.

The members opposite know full well that this government takes very seriously the collection and retention of information. That’s why we have a Privacy Commissioner, and that’s why the Privacy Commissioner is consulted every time there is a misplacement or breach of data protocols. That’s why the Privacy Commissioner is being consulted in this case, to determine what level of activity is required to deal with the particular issue that has arisen here.

That’s why the members opposite will always get the answer from this side of the House that we take the protection of private information very seriously.

MYEDUCATION B.C. INFORMATION SYSTEM

M. Mungall: Not only are the Liberals losing data, despite the bizarre commentary from the Minister of Advanced Education, but they can’t even manage the data that they have.

Picture this. At the beginning of the school year, kids head into class, and teachers head into class to teach them. But at L.V. Rogers in Nelson, kids, parents and teachers experienced quite the shock this year, all thanks to the Liberals’ MyEd B.C. program, the $100 million computer system meant to replace the failed $100 million computer system by the same company. Kids can’t get into the classes that they need to graduate. This is the problem, and the reason they can’t is because the new computer system failed to handle information properly. Parents are furious. Kids are frustrated again.

To the Minister of Education: why can’t the Liberals get this right? How much more money are they going to have to throw at failed computer systems before they do?

Hon. M. Bernier: I am acknowledging that MyEd B.C. is a brand-new system and that it was running slowly, initially, slower than planned when we initially put it in at the beginning of this school year. That’s why we contacted the vendor, the supplier, who’s been working around the clock with ministry staff to ensure that we can speed up the system. We have, throughout that same time, been communicating with teachers, with school districts. They have been cooperative as we have been working through this process.

Madame Speaker: The member for Nelson-Creston on a supplemental.

M. Mungall: Well, it took local administrators in my area and throughout the province to let the ministry know that this system is inefficient and it causes gridlock. Of course, in Nelson, the gridlock is so bad that kids are not able to get into the classes that they need to graduate this year.

This is happening on top of inadequate funding levels that are already leaving students without the resources that they need to ultimately succeed. That’s because of this Liberal government’s record when it comes to public education.

Again to the minister. We’re at $200 million already. How much more is it going to take before you finally get it right and kids can get into the classes that they need?

[1045]

Hon. M. Bernier: As I said, our ministry has been working closely, very collaboratively, with the school districts in every area, every corner, of this province. We heard that the program was running slower than initially planned. Again, that’s why we contacted the vendor. That’s why we’ve been working around the clock with ministry staff and the supplier to ensure that we can speed up the process.

We’ve been working very closely and very collaboratively with the school districts. When we heard that there were challenges faced, we reached out to them right away. We’ve had great discussions, and we have a great partnership with not only the school districts but with the teachers in this province.

When I look at yesterday, being able to stand with the president of the BCTF…. We talk about the cooperation we have now as we move forward in the province of British Columbia, collectively. Those are the kinds of days that I like to highlight.

S. Robinson: This September the Maple Ridge–Pitt Meadows school district was very pleased to see faster-than-expected growth in student enrolment. But there was a huge problem: the new student information system is painfully slow. It can’t handle the information school staff are trying to enter into it.

It gets worse. The school will not be able to take attendance with the new system across the district until
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October. An entire month has gone by without them being able to track attendance, a situation that could put students at risk.

My question is to the Minister of Education. Why did the B.C. Liberals replace a flawed $100 million computer system with another $100 million computer system that can’t even track attendance?

Hon. M. Bernier: As I said at the onset here, we recognized that it wasn’t running to the speed that we anticipated when we originally put in this new system. It is a brand-new system. That’s why we’re working with vendors to ensure, around the clock, that we can actually pick up the speed on this. We want to ensure that as we go forward, the students get the education they deserve here in British Columbia, that students are working with the teachers. That’s why we have this new system, and that’s why we’re working with the vendor to ensure that it gets to the speed that we anticipate.

Madame Speaker: Coquitlam-Maillardville on a supplemental.

S. Robinson: Perhaps the Minister of Education can explain how their partnership is working to the director of K-to-12 education in Maple Ridge. He told trustees on Wednesday that the problem with MyEducation B.C. lies in lagging processing time. He says: “It’s a very lethargic system.”

He explained that it might take 15 minutes for an administrator to simply search for a student’s file in the system — 15 minutes. It takes less time to communicate with Mars.

To the Minister of Education, this is the exact same problem that plagued the original system. Why would you scrap one $100 million system to buy yet another $100 million system that has the exact same problems?

Hon. M. Bernier: Unlike the members opposite, who, for some reason, want to communicate with Mars, we like to communicate with the parents of British Columbia. One of the ways we’re doing that…. I look at just another announcement I made.

Interjections.

Madame Speaker: Members. Members.

Hon. M. Bernier: The way we’re communicating with parents here in British Columbia is in another announcement I made just a couple of weeks ago, and that’s around the RESP — $1,200 going in, anybody who is six years old or more. That’s $40 million. These are the ways that we reach out to the families of British Columbia. This is how we reach out to the children in British Columbia, and they like this.

[End of question period.]

Madame Speaker: Hon. Members, we’ve been joined by the first-year law class of the University of Victoria, accompanied by their professor Mrs. Donna Greschner. This is the second half of Mrs. Greschner’s class. The first half visited the assembly last week.

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Please note that the students are spending the day learning about the Legislative Assembly and are observing our proceedings this morning. Would the House please make our guests welcome.

Orders of the Day

Hon. M. de Jong: Committee stage on Bill 29.

Committee of the Whole House

BILL 29 — PROPERTY TAXATION
(EXEMPTIONS) STATUTES
AMENDMENT ACT, 2015

The House in Committee of the Whole (Section B) on Bill 29; R. Chouhan in the chair.

The committee met at 10:52 a.m.

On section 1.

The Chair: Minister of Finance, do you want to introduce the staff?

Hon. M. de Jong: To the members of the committee, Steve Hawkshaw is to my immediate left, and in a moment, I expect Paul Flanagan to be to my immediate right to assist us as we move through this bill in committee stage.

R. Fleming: I would like to ask a few questions on this section and maybe at the outset just ask the permissive indulgence of the minister on maybe jumping around a few sections, because it is a short bill. We’ll just do it that way, if it’s okay with him.

On section 1, I wonder if we could begin maybe with the minister quantifying the size of the exemption. Yesterday at second reading, we had a lot of debate on both sides of the House about this long-standing practice in municipalities to essentially do what this legislation contemplates. That’s the current practice.

I think maybe just for the knowledge of those in local government as well as in the education sector, it might be helpful to get an idea of the magnitude of what will become no longer a permissive exemption, although it is rarely utilized, to something that is required of the province.

[1055]

Hon. M. de Jong: I wanted to make sure I was giving the member and the committee information that is helpful and relevant to the question that was asked.

Here is what I can tell the member and the committee at this point. This is according to the 2013 B.C. Assessment report, which is what we rely upon for this data. There are 313 independent school properties located in 75 municipalities and three rural areas. The total assessed value of those properties was $1.7 billion — 60 percent land, 40 percent improvement. Then the taxable status, again, on that 2013 assessment report — 81 percent of that total assessment was statutorily exempt, and 19 percent of the total assessment is potentially taxable and eligible for a permissive exemption at the discretion of councils.

So that’s what I can tell the member at this point in terms of the order of magnitude.

R. Fleming: I think I can gather what 19 percent of $1.7 billion is, then, because that is what will be new and additional. To my understanding, B.C. Assessment obviously calculated the land underneath the building which was not able to be taxed, but I’ll let the minister further explain.

Hon. M. de Jong: I probably should have said one more thing.

That 19 percent of the total assessment area is eligible for a permissive exemption, and in virtually all cases, that permissive exemption existed. They were receiving the benefit of that permissive exemption, so it would be incorrect for me to leave the impression that the passage of this legislation will change the taxation treatment that most of that 19 percent receives.

R. Fleming: I want to ask just a couple of questions about the 19 percent. I understand what the minister is saying. It’s a hypothetical revenue source for most municipalities because they do not use it. I’m aware that some municipalities of the 75 that host independent schools actually have bylaws in place where the exemption for the playing grounds and the parking lots and all of the ancillary buildings are exempted in perpetuity. So essentially, the bylaws are very closely aligned with the contents of this bill.

I guess the question would be: within the 19 percent of land and buildings and other things that are not statutorily exempt today, what is the percentage in total value of taxes collected from things that would be non-taxable should this bill become law?

[1100]

Hon. M. de Jong: If I understand the member’s question correctly, I believe the answer is as follows. Of that 19 percent, if we take that as a subset of the overall taxable value, 17 percent is exempt, and 2 percent is presently taxable. So I can try to do the math for the member. But of that 19 percent — 17 percent exempt, 2 percent being taxable at the moment.

R. Fleming: Yesterday, we had the members on both sides talking about, I think, the very modest, minimal impact, in terms of municipalities that do not permissively give a tax exemption to all of the education-related properties for independent schools. I think, historically, there have been four. Currently, there are only two — so a very small percentage.

I’m just wondering, though, within that statistic…. How many schools does that represent, currently, that do not get exemptions that they will now be eligible to get?

Hon. M. de Jong: Again, hopefully I’m answering the essence of the member’s question. I’m advised that there are, we believe, seven independent schools that will receive a benefit of reduced taxation as the result of passage of this legislation.

R. Fleming: So seven out of…. I believe the current list is around 333. I’m aware of Aspengrove in Lantzville, just because there has been some scrutiny, I suppose, around the media attention around the municipal tax regime there and the mayor and council’s deliberations.

In the other municipality, which I believe is the city of Victoria…. I understand that the balance of schools are there. I’m just wondering if the minister can read into the record which schools will have an expanded tax exemption.

Hon. M. de Jong: I’m not meaning to be uncooperative here. I’m going to confirm for the member the municipality, but I’m going to stop short of reading the name of the individual taxpayers into the record, because I’m not sure I’m permitted to do so. I think there are constraints around my ability to identify individual taxpayers.

R. Fleming: I retract the question, because I actually have a FISA directory that is organized by municipality, so I don’t need to have an answer. The minister has advised caution on that, in any event.

I wanted to ask the minister just a couple of questions about what presumably started as a policy-making process and then moved on to the legislative drafting stage, to where we are now.

Government has had a number of evolving policies, although they haven’t changed too much in the last 25 to 40 years, quite frankly, around funding formulas and direct FTE amounts that are attached to students that go to independent schools.

There are a number, though, of categories of independent schools. Government makes a distinction between for-profit, for example, and non-profit. They look at what types of students are served, whether they’re primarily offshore international students.
[ Page 9226 ]

There are a number of distinctions about what level of public support, if any…. Some independent schools, it must be said, do not receive any public financing. There are four groups, for example. But in this bill before us, there is no distinction at all. It’s essentially a 100 percent property tax exemption.

[1105]

I’m just wondering how, for example, a group 4 school, which receives no public subsidy currently…. If I have the definition of a group 4 school before me, I’ll elaborate on why that’s the case.

It receives no per-student funding but will now receive 100 percent property tax exemption. Now that is forgone revenue, if you will, that comes from municipal government. So government is unwilling to give any direct subsidy per FTE from its own treasury but is now creating a policy that will give 100 percent for group 4 schools. Admittedly, that’s a very small category of what we’re talking about.

I’m just wondering, in the policy-making process that led to the legislation before us, why no distinction was made in this case but there have been long-standing, decades-old distinctions made in terms of their funding.

Hon. M. de Jong: I think the short answer to the member’s observation, which is a valid one, is it’s because, historically in British Columbia, no distinction has been made amongst the categories of schools, and the practice has been for the exemptions that heretofore have been discretionary to apply across the fold irrespective of the category.

I think the determining factor in the development of the policy — which derives, I should say, from a submission that was received regarding the emerging issue, an examination of what the practice has been with respect to the application of property taxation policy in the province — is that no distinction has been made, and we, through this legislation, seek to maintain that.

R. Fleming: Let me just read what a group 4 school is and why they receive no public financing.

According to the Ministry of Education, group 4 schools are not funded because they are for profit and mainly enrol international or out-of-province students. These schools meet the same requirements as group 1 and 2 schools and are bonded. Currently there are 12 group 4 schools with 958 FTEs.

It’s a very small part of the sector. I don’t know where the 12 group 4 schools are, but, very clearly, they are seen as distinct, because most of the students are international or out of province. So their parents do not pay property taxes here that go to support the school system, the education system writ large, both independent and public. Therefore, they do not receive a subsidy.

They’re also categorized as for-profit businesses. They’re in the business of generating revenue and providing a service. There are 12 of these schools. The recruitment efforts, as acknowledged by the ministry, are not aimed at British Columbians.

I’m just wondering why the government would eliminate the potential for municipalities to draw a distinction that the Ministry of Education apparently draws.

Hon. M. de Jong: As the member has pointed out, and because I don’t know by memory or by rota all of the institutions that comprise the category…. Given what we said earlier about where the exemption has been applied, one may surmise that in the overwhelming majority of cases, those institutions received the benefit of the exemption, the determination of which fell within the jurisdiction of the municipality.

What we were seeking to do and are seeking to do through this legislation is preserve — as I think one of the member’s colleagues said — and maintain the status quo, standardize as between public schools and independent schools, and particularly standardize amongst independent schools located across the province.

I don’t quarrel with the member that as you…. He may wish to make a case. I’m not sure he is; he’s asking a question. But one might attempt to make the case for dealing differently with different types of independent schools.

[1110]

We clearly, by virtue of this legislation, are seeking to preserve what has been the practice in British Columbia through the years.

R. Fleming: Thank you to the minister for that answer.

I wanted to ask just a question around group 2 schools. I’m sure, in consideration of this legislation, all of this was considered. Group 2 schools receive a 35 percent per FTE subsidy based on the operating grant that’s provided for public school students.

That is in recognition, I believe, historically because they charge fees that are very much higher in some cases than the per-FTE amount that is allocated to school districts. There’s a recognition there that their revenue sources are higher; therefore, the 50 percent received per FTE in the group 1 category is placed at 35 percent for group 2 schools.

This is a fairly large group of schools — about 15,000 students, as I understand, out of the 75,000 or 80,000 independent school students. This is where the university prep schools would be found. But within the remaining group 2 schools, it’s interesting. Again, I’m reading from ministry briefing note. The remaining group 2 schools are largely First Nations band–operated independent schools.

I want to ask about that because First Nations education, obviously, constitutionally has a shared responsibility with the federal government. There is a lot of attention on this area right now, especially in the wake of the Truth and Reconciliation Commission report, where there are
[ Page 9227 ]
expanded recommendations that government, I think, is obliged to take very seriously indeed around providing new programming that is not offered to retain languages that are at risk of being lost, to deepen the curriculum attachment to the role of First Nations in the development of our culture and our development as a country and a province.

There are costs attached to that. I’m just wondering if there has been any discussion between the provincial government, which is, I think, moving ahead with at least helping secure tax exemptions that First Nations band–operated schools currently have…. I’m just wondering if this is part of a broader discussion, where the federal and provincial governments will have more to announce around First Nations education, and this would be seen as a provincial contribution that could perhaps leverage more attention from federal schools.

I would direct the minister’s report to a lot of media attention over the last two years about the appalling state of federally funded schools, on-reserve schools, that have peeling paint, poor heating systems, subpar gymnasiums, mould problems — all of those things. A huge W5 exposé that I can remember reading, but something that became the subject of a House of Commons inquiry.

I’m just wondering if we could show that by helping secure a permanent tax exemption here, we might help Ottawa do the right thing around the state of some of their facilities that educate First Nations people in our province.

Hon. M. de Jong: Two points come to mind, and I thank the member for his observations. I don’t want to leave the impression with the member or the committee that this policy was driven by the issue that the member has raised, although it is a very relevant issue to identify in the larger sense.

The member will get no quarrel from me about the need and the advantages associated with ensuring that our First Nations and aboriginal communities are receiving the support they need with respect to the development of education and skills training options for their students.

[1115]

Much work has been done — my colleague is in the House at the moment who can testify to that effect — but I think the member raises a point. This represents an expression of public policy that is beneficial in a minor way at least, and it is worth ensuring that the federal officials and department are aware of that.

I also notice the member and our colleague from Oak Bay conversing, and I am aware of the proposed amendment standing on the order paper. Hopefully we can all decide on where the appropriate…. We cannot forget about that, if the member is proposing to bring it forward. I can’t remember which section it relates to. I think section 2.

R. Fleming: Hopefully the minister will give a nice, long answer to a further question here, and then we can consult on what section and how this will fit into this stage of debate.

I just want to go to the text of the changes and ask a couple of questions about future oversight of the exemption. There may be disputes that arise down the road about the new definition that replaces section 224 of the Community Charter. Previously, and I’ll just read it out, this section of the bill read that “a building owned by an incorporated institution of learning that is regularly giving children instruction accepted as equivalent to that given in a public school, in actual occupation by the institution and wholly in use for the purpose of giving the instruction, together with (i) the land on which the building stands.” That was the major definition in that section of what an independent school is and what they’re entitled to in terms of exemption.

Now it will read largely the same in the initial part. It will be an incorporated institution “for the purpose of giving the instruction together with” — and here’s the new language — “(i) the land on which the building stands, and (ii) an area of the land surrounding the land referred to in subparagraph (i) or improvements on the area of land, or both, that are owned by the incorporated institution and that are reasonably necessary for the purposes of the incorporated institution” — I highlight “reasonably necessary” — “including, without limiting this, the following areas of land and improvements: (A) playing fields, athletic grounds and facilities, playgrounds and improvements related to any of them; (B) storage, maintenance and administrative facilities; (C) dormitories for students; (D) parking lots, walkways and roads.”

I guess the first question would be: what would be the mechanism to resolve a dispute if a municipality felt that the definition of reasonably necessary wasn’t being met by the sum total of exemptions that a particular institution sought — in other words, if the municipality thought that some of the land was being used outside the definitions and purposes outlined here?

Hon. M. de Jong: I’m afraid this is a short answer. It is the assessment authority, and there is an appeal mechanism. Once there is an initial determination by the assessment authority, there is an appeal mechanism that flows from that, and I believe, ultimately, the option of judicial review exists. But it is generally the assessment authority and then the appeal mechanism provided from the assessment authority.

R. Fleming: Thank you to the minister for the answer. Is there a role in this legislation that’s retained by the minister to set out what the exemptions may look like that was highlighted in the previous act? I’m just wondering if there is a role for the minister over and above that of the assessment authority in a dispute.

[1120]

Hon. M. de Jong: No — I’ll answer the question in two parts — no reference in these provisions to either the creation or maintenance of a ministerial authority. Under the Taxation (Rural Area) Act, which is one of the acts amended, there is a broad power for the minister.

That has not been eliminated, so it’s maintained. There’s no additional power created in the provisions, and the ministerial authority does not, I’m advised, extend to the Community Charter.

R. Fleming: Thank you, to the minister, for that answer.

I wanted to ask, again, in a sort of hypothetical situation, where there might be a dispute…. Of course, we do that because we want to make sure that legislation is as airtight as possible and can avoid interpretations that would give rise to differences that would have to be resolved in this way.

The new addition to the Community Charter, the subsection (ii)(C) that relates to dormitories for students…. It’s interesting that it makes that distinction — presumably, that it’s not dormitories for staff. There are some institutions that I’m aware of in my own community where they recruit international employees as part of their staff team and provide housing, I believe. It seems to me that this legislation is making a distinction between student and staff dormitories even though they could be attached or contained within the same building.

I’m just wondering if there was a complaint, for example, that a municipality was saying there was staff housing within their lands that was receiving an exemption that was not permissive because it’s now legislated and required of them. How would government or B.C. Assessment respond to a dispute that would be specific like that?

Hon. M. de Jong: I’ll try to describe two scenarios and alert the member and the committee to what the intention is to capture here. I’m always cautious not to substitute my views on these matters for the adjudicative panel’s.

In a circumstance where there’s a dormitory housing students and there is provision made within the dormitory for a headmaster or supervisor, the intention would be that the facility in its entirety would be captured by the exemption. In other circumstances where, on a campus, separate housing is provided for faculty, the intention would be that that not be captured.

That’s the distinction between separate adult faculty housing versus a dormitory, which may well include a facility for supervisory purposes.

R. Fleming: Okay. I would ask the minister, then, about a further amendment here in a new paragraph which allows permissive exemptions of more lands surrounding schools, which presumably would not be captured under the new mandatory exemption.

[1125]

I’m just wondering about the reason for the new paragraph, because my understanding is that all of the lands necessary for the running and administration and provision of an independent school education would be captured by the previous amendment.

I’m just wondering if he could explain why there’s an expansion or a creation of a permissive exemption category that presumably is a catch-all for almost any kind of land or building or real estate that an independent school could acquire.

Hon. M. de Jong: No intention to create anything too new here. Maybe I misunderstood the question, but the intention here is to leave with the municipalities the jurisdictional authority, if they wish, to extend an exemption beyond the land and buildings that are covered under the act. If, for some reason, a municipality determined that it wished to exempt from the property tax obligation land that did not fit within one of these definitions, they would continue to have that power, as they do today.

R. Fleming: I did warn the minister we might be jumping around a bit, and I appreciate him answering a question on section 3 here that does relate back to the section we’re debating right now.

Yes, it’s the Taxation (Rural Area) Act which “expands the exemption for independent schools to include areas of the land surrounding the land on which the school stands or improvements on the areas if the land and improvements are used for school purposes.” My reading of it, though, is that this amendment to that legislation…. It adds that the minister may, by order, exempt land surrounding the exempt property. It adds a permissive category for the municipality to determine and decide for themselves, but is it also the case that the minister may, by order, exempt further lands that surround the exempt property?

Hon. M. de Jong: This is a good segue from the earlier conversation that we had.

The distinction between the two acts we’re dealing with is that the ministerial authority exists under the Taxation (Rural Area) Act, and it’s a fairly broad authority. We’re maintaining that authority.

The member’s next question might be: in what circumstances can one image that authority being exercised? I can’t think of one, actually, in light of the amendments contained within this act which stipulate the application of the exemptions.

[1130]

We thought preserving as a matter of policy, I suppose, is a question of not the circumstances you can think of but the ones you can’t. We thought it wise to preserve that discretionary authority as it exists today in the legislation.

That’s probably the best answer I can give to the member and the committee.
[ Page 9229 ]

R. Fleming: Further to the minister’s answer there, is the distinction that we’re talking about here unincorporated areas versus municipalities in the Community Charter?

Hon. M. de Jong: That is correct.

R. Fleming: Again, hypothetical examples. You could have an independent school that wished to purchase properties that are included in the tax rules currently. For example, in an unincorporated area where they wish to….

For-profit independent schools that have revenue-making activities and presumably pay dividends as one of their purposes may wish to buy working farms or ranches and have students in some way attached to an enterprise like that. Would it be, then, up to the minister solely to decide whether the acquisition of potentially hundreds or thousands of hectares….? They would not be playgrounds and parking lots and ancillary fields around the school itself but a completely different property.

Is it my reading, then, and interpretation of his answer that in a scenario like that, it would be up to him and him alone to determine whether adjacent or even separate properties that could be deemed by the proponent wanting further exemptions to be related to the provision of education…?

Hon. M. de Jong: I think I would answer the question this way. In the large land-owning scenario that the member has described, first and foremost, unless land fit within the definitions, the exemption does not apply. There is no presumed exemption.

I think the second part of the member’s question is: does the minister of the day possess the authority to step in and grant an extended exemption? Yes, under the Taxation (Rural Area) Act that is so, as it is today.

I’ve been trying to think of circumstances, and any example I can think of would be captured by the definition. Riding stables in an outdoors-type school would be captured, I think, by the definition if it was ancillary to the activities of the school.

The authority exists today. It hasn’t, to my knowledge, been exercised. It would exist in the future. But the primary starting point for the determination of the exemption would be that the land falls within the definition contained within the provisions that we’re dealing with.

R. Fleming: Maybe I’ll give an example that I think might actually occur after Bill 29 is passed through this House. It would be under the Community Charter, so any dispute between the municipality would, as the minister described earlier, be heard by B.C. Assessment.

[1135]

There are some schools that own athletic facilities that are rowing clubs, where essentially they’re partnered with either a private or a community-based organization, and they share facilities. They pay taxes on those in some cases and maybe not in others. Again, that’s the permissive purview of the municipality.

Could we see applications where the independent school may say: “Our portion of the rowing club” — which is maybe many miles from where the school site is — “should be 35, 55 or whatever percentage tax exempt”? They may apply just for what they see as a usage, their usage of it, and not apply for the other private, community membership–based part of a shared facility. I’m just wondering how it would be that either B.C. Assessment or the ministry would make that determination. These may be things that the municipality is unaware of and hasn’t contemplated.

Some of these rowing clubs, by the way, are on quite valuable real estate — obviously, waterfront — and they have values that are growing over time. They may not be aware that there could be some revenue they enjoy now that would be lost.

Hon. M. de Jong: Again, one is always cautious about presupposing outcomes. Here are two reasons, though, that we believe the scenario described by the member would not attract the exemption.

The test for qualifying for an exemption isn’t changing. The independent school must own the building, occupy that building. The building must be wholly used to provide instruction. The key is that it’s the building and the area surrounding the qualifying building. I think in the scenario that the member has described, the rowing club is likely to be some distance away from the school. So on that basis alone…. And it must be wholly used to provide instruction for the school.

We think on two bases, the nature of the test not having changed, that the exemption would not extend to the example the member has given, as best I understand it.

R. Fleming: We heard some debate yesterday at second reading of the bill that endowed properties — anything that provides a return to an independent school or institution — that would be in a real estate portfolio and that may have guidelines about protecting the principal and realizing funds that may potentially go towards instruction or the operation of the school would not be included by the expansion of required mandatory tax exemptions.

[1140]

I’m just wondering if the minister can outline how it is the case that property owned wherever, but not adjacent lands to the school and building that we’re talking about, could not be successfully argued by an independent institution that it, too, should receive a mandatory exemption as ordered by the province onto the municipality. I’m just wondering if you can sort of explain how that would not be accepted.

Hon. M. de Jong: The really short answer is that we are guided — we and the institutions, municipalities and,
[ Page 9230 ]
ultimately, the assessment authority — by the provisions of subsection 220(1)(l) and the provisions of sub (l), as amended, which really does restrict where the exemption applies in each one of those words.

I’m not going to read it. I don’t mind, by the way, if the member wants to take a moment, read through and pose particular questions about specific subsections. But the authority for granting the exemption is contained within those provisions, and anything falling outside of those provisions, notwithstanding the good intentions that may exist or the good uses to which revenue generated by a building or land might be put, would not qualify unless it is captured by those provisions.

R. Fleming: I just want to go back to the dormitories question. I’ll have to look at the minister’s answer. I heard it, but… So just where there was a dispute between student and staff usages, where the staff may be essentially getting a housing benefit from their employer, an independent school, that isn’t available to other groups of employees or to low-income persons in the community, etc., or even some long-term-care facilities that I’m aware of.

I’m just wondering how the ministry, if he could outline that again, would enforce a distinction between student and staff housing or different types of staff housing. I think the minister had mentioned things like headmasters and administrative staff. I’m just wondering where, potentially, the definition could be stretched, where there might be a provision to come down on the side of reasonableness and not unnecessarily deprive the municipality of its opportunity to make a case that this housing in fact should be paying taxes to them.

Hon. M. de Jong: I think the member has really identified two taxation issues here in the scenario he’s described. I think that with respect to the question of a headmaster or a faculty member who’s receiving a housing benefit, there’s probably an income tax issue there.

[1145]

Is that person receiving a taxable benefit, and what are the obligations for them with respect to quantifying that and remitting the appropriate amount of tax?

With respect to the application of this property tax–related legislation, I again believe that to the extent there were ever a dispute, the assessment authority would examine the primary purpose for the building. If it is a student dormitory that includes a room or two for supervisory personnel, my sense is that they would probably come to the conclusion that it qualifies under the definition. Conversely, a separate building constructed exclusively for the benefit of adult faculty members, in my view, probably does not qualify under the terms of the definition.

A. Weaver: I have a number of specific examples that I’m hoping to get clarification on.

Let’s suppose, hypothetically, that there is an independent school that is leasing property from a commercial property or some other property. They pay a net lease, so they’re paying a fixed rent plus a property tax component, where that property tax is as determined by the commercial entity or private entity that owns the building they’re leasing.

Is this school that is now leasing the project able to say to the entity that’s leasing the property to them that they no longer have to pay the property tax component of this in their net lease?

Hon. M. de Jong: Two things. I certainly understand, I think, the essence of the member’s question. But the first thing I would say is that, as a property owner or one who incurs liability around property tax, ultimately, the authority to ask is both the municipality and the assessment authority. I wouldn’t rely on the views of a lessor.

I think the essence of the member’s question is this. In a circumstance where an independent school who would otherwise qualify within the meanings of the definition is leasing a building and perhaps some adjoining land from the owner of that land for the purpose of delivering an educational program…. As a result of that contractual arrangement between the owner and independent school, does the owner attract the property exemption on the land?

The answer, I’m advised, is no, they do not. This, I am also reminded, has become something of an issue in a few cases where, for example, churches have provided property on a leased basis to an independent school. But the exemption that they attract as a church does not flow through to that school under these provisions, nor would it under these amendments.

[1150]

A. Weaver: That, actually, was a follow-on question I was going to ask, but I’ll take it slightly to the side.

Let’s suppose, hypothetically, that there is an independent school that normally would fall under the category, would do operations as per this bill here, and all of its property would not be subject to the municipal property taxation. And then that independent school subsequently leases to another independent school a portion of its land and/or playing fields. An independent school with excess property goes into a financial arrangement through leasing out a component of its property to another independent school. Does that other independent school then have to pay property tax on the portion that’s actually leased out by the first one?

The reason why I ask this question is that it flows into the minister’s answer to my previous question. The minister suggested that if there’s a commercial entity, that commercial entity would still be subject to…. In the net lease that it offers to the independent school, they would still have to pay the property tax. Is this also the case if an independent school subleases some of its excess property
[ Page 9231 ]
to another independent school? Would they have to pay property tax on the leased component of that?

Hon. M. de Jong: I understand the member’s question. I’m going to summarize the question just to be sure that I’m responding to the correct one.

The scenario, as I understand it, goes like this. An independent school that otherwise attracts the benefit of the exemption — isn’t paying property tax on its building and the adjoining land — decides to lease a portion of the building and land or just a portion of the land. The crux of the question is: do they lose the exemption, because they maintain the liability for…? Whatever property tax liability there is rests with the owner. I mean, they can collect from others if they want, but the ultimate liability rests with the owner.

I don’t have a definitive answer for the member. On the one hand, if one applies the test that is here, the independent school still owns the land. The activity being undertaken on the land in the example is still consistent with the delivery of an education program. In that circumstance, I think an argument can be made that the exemption would be maintained.

I probably should think about…. If the member has a specific example, he doesn’t have to raise it here. But if he wants to pass that along…. I suppose it may come up in circumstances where a larger enterprise creates a subsidiary education and leases out on that basis. It’s an interesting question that I don’t have a definitive answer for, for the committee.

A. Weaver: One of the reasons why I raised that is that I think it is patently unfair to religious schools that happen to lease property from church property, here. The example I brought forward with an independent school leasing some land and some buildings, say, from an existing independent school would, under the interpretation I heard, perhaps — there’s no legal definition here or legal certainty — not be subject to property tax, whereas a Christian school or a Catholic school, for example, that may have some leasing arrangement with the church would still be subject to property tax in some of the playgrounds and other areas.

[1155]

It seems that it’s not fair to some of the churches. I know the intent of this legislation, but it doesn’t seem the practice is going to be fair to those independent schools that are associated and/or lease land and/or reside, including their playing fields and parking lot, on church property. I wonder if the minister might comment further — if there are additional steps down the road to ensure that such schools are not subject to the property taxation that could be applied to them.

Hon. M. de Jong: I think the most forthright thing I can say is to acknowledge that there’s a bit of a structural conundrum here. As I understand it, there are examples of churches who have, for logical liability reasons, sought to create a firewall between themselves as a spiritual organization and their educational institution, which then means that the independent school is operating on land they don’t own and the test doesn’t apply.

Easy for me to say: “Oh well, restructure yourself in a way that….” But I don’t think that’s a very practical answer, because there are other considerations at play. It’s a matter that has come to our attention. I don’t want to leave the committee…. I think the members would agree that this doesn’t solve that issue.

I guess in fairness I could say that it also doesn’t eliminate the ability for, in some cases, a permissive exemption. But it doesn’t solve that issue in the way that we’re solving other issues with this legislation.

I move the committee rise, report progress and seek leave to sit again.

Motion approved.

The committee rose at 11:58 a.m.

The House resumed; Madame Speaker in the chair.

Committee of the Whole (Section B), having reported progress, was granted leave to sit again.

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

Motion approved.

Madame Speaker: This House, at its rising, stands adjourned until 1:30 this afternoon.

The House adjourned at 11:59 a.m.

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