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, October 6, 2015
Afternoon Sitting
Volume 29, Number 4
ISSN 0709-1281 (Print)
ISSN 1499-2175 (Online)
CONTENTS |
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Page |
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Orders of the Day |
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Committee of the Whole House |
9447 |
Bill 32 — Family Maintenance Enforcement Amendment Act, 2015 |
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Hon. S. Anton |
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L. Krog |
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M. Farnworth |
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V. Huntington |
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Report and Third Reading of Bills |
9460 |
Bill 32 — Family Maintenance Enforcement Amendment Act, 2015 |
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Committee of the Whole House |
9461 |
Bill 36 — Auditor General for Local Government Amendment Act, 2015 |
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Hon. P. Fassbender |
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S. Robinson |
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V. Huntington |
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TUESDAY, OCTOBER 6, 2015
The House met at 1:32 p.m.
[Madame Speaker in the chair.]
Orders of the Day
Hon. T. Stone: I call committee stage for Bill 32, intituled Family Maintenance Enforcement Amendment Act, 2015.
Committee of the Whole House
BILL 32 — FAMILY MAINTENANCE
ENFORCEMENT AMENDMENT ACT, 2015
The House in Committee of the Whole (Section B) on Bill 32; R. Lee in the chair.
The committee met at 1:34 p.m.
On section 1.
Hon. S. Anton: Chair, I’m joined today by Chris Beresford, the director of maintenance enforcement, and by Darryl Hrenyk, legal counsel.
L. Krog: I wanted to say at the outset, as we begin committee stage of this bill this afternoon, that I take my role as critic in this particular matter very seriously, so I wouldn’t want anyone who’s involved with the family maintenance enforcement program to take any offence at the questions and comments I might raise today.
I might say that as a long-time practitioner in this province, the work of the family maintenance enforcement program is extremely important. I remember well when it was introduced and what a relief it was to the family law bar in this province, who, after vigorously working for their clients and charging them accordingly, would obtain orders that, practically speaking, were very difficult to enforce because of the personal expense involved to the litigants themselves, and how easy it was for those who’d been ordered to pay support to evade its payment.
So the institution of this program — and I’m going to shock all the members opposite, given it was introduced in the year of Bill Vander Zalm — was of enormous significance to the children and the spouses who received the benefit of orders in this province. It has been an important improvement in social and public policy.
Now, having said all that, of course, we are confronted — and I intend to take my time doing it — by a nine-section bill. I’m just very curious to know if the Attorney General can explain why we are debating this as a separate bill as opposed to simply including this in a miscellaneous statutes amendment act.
I understand from the introduction of a bill previously this morning, Miscellaneous Statutes Amendment Act (No. 2), that that’s going to be basically dealing with the Attorney General and my favourite topic, which is “ands” and “thes” and commas and question marks, so to speak. So why are we debating this in a separate bill as opposed to including it in a larger statute?
Hon. S. Anton: This was a bill, a series of amendments, that could have gone in a misc statutes bill or it could have gone on its own, and it was determined that it was appropriate to bring it in on its own.
L. Krog: I take it, from that answer, that clearly all the belief on the opposition that the government has no significant agenda for the fall session is, in fact, corroborated by the fact we’ve introduced a 2½-page bill that we’re going to debate now, and the other day we managed to get a whole half page on the Red Tape Reduction Day Act.
I take it we’re trying to fill time. I want the minister to be assured that I will do my best, as a member of the opposition, to fill the time for this session.
Interjection.
L. Krog: The Minister of Aboriginal Affairs is very concerned about process, I hear. That’s the only word I could actually hear, as he muttered across the chamber towards me. So if it’s going to be a process issue, let’s get into the process.
The present act does provide the definition of “creditor”: “(a) in relation to a maintenance order, except one referred to in paragraph (b), means the person entitled under the order to receive maintenance for himself or herself or another person, and, in the following provisions of this Act, includes any minister to whom the order is assigned, or deemed to have been assigned, under the Employment and Assistance Act or the Employment and Assistance for Persons with Disabilities Act,” etc.
I’m just curious to know why we are repealing the definition of “creditor.” What impact will it have on the remainder of the existing act, and what impact, if any, on the provisions of the bill we’re debating now, which is Bill 32?
Hon. S. Anton: The definition of “creditor” in section 1 of the original act refers to the following provisions of the act where the word “apparently” is referenced, but in fact, there is no word “creditor” in section 9(1), so therefore, that particular reference is being removed or is proposed to be removed.
L. Krog: I’m sorry. I thought I heard the minister say there is no reference to “creditor,” but section 9(1), as it
[ Page 9448 ]
reads says, that a debtor or creditor whose address has changed must inform the director. Then, sub (2) says that “a debtor or creditor,” etc.
Again, if one can explain to me the difference. Unless the copy of the statutes we have available in the chamber isn’t up to date, that’s what section 9.1(1) and (2) now says.
Hon. S. Anton: The member is referring to section 9.1, and this correction is in relation to sub 9(1).
L. Krog: I think I understand what the Attorney General is saying, but the definition of “creditor” is referred to in the part 1, section 1 of the existing act, “Definitions and interpretation.” Section 1 of Bill 32 says that “Section 1 of the Family Maintenance Enforcement Act…is amended in the definition of ‘creditor’ by repealing paragraph (a) (i).”
So the only place it’s of importance is in relation to section 9(1)?
Hon. S. Anton: I think it’s easier if you look at the original act, and the original act talks…. This is referring back to section, as I said, 9(1). It is taking out (a)(i), which takes out 9(1).
L. Krog: I’m not trying to be obtuse, but what we’re really doing is trying to correct the fact, I assume, that “creditor” isn’t referred to in 9(1) of the existing act. It is only referred to in 9.1(1) and (2) of the act. Is that what we’re doing?
Hon. S. Anton: That’s correct.
L. Krog: I’m just curious to know how long this has been an identified problem and why it has taken so long to correct. Have any court cases or issues arisen as a result of this?
Hon. S. Anton: It’s a housekeeping change.
L. Krog: Again, I simply ask of the Attorney General: how long has this section been in place? Based on the Attorney General’s explanation, it tells me it should have been corrected some time ago.
Hon. S. Anton: Changes like this come to the attention of government in a number of different ways. They can be identified by lawyers using the section. They can be identified by counsel who are thinking about the act. They can be identified by leg. counsel. When we are opening up the act to make other changes, then that’s an opportune time to make changes of this nature.
L. Krog: I didn’t think I was asking a particularly difficult question. I’m just curious to know. When did this come to the attention of the government — that this was an issue? I expect it’s not a state secret that can’t be revealed in the chamber.
Hon. S. Anton: I don’t have an answer to that question.
L. Krog: Then I’d be curious to know if the Attorney General could provide that information at a later date to me.
Hon. S. Anton: We will look for an answer, but I may not have an accurate answer. I’ll see if I have any information on that and forward it to the member.
Section 1 approved.
On section 2.
The Chair: The member for West Vancouver–Sea to Sky seeks leave to make an introduction.
Leave granted.
Introductions by Members
J. Sturdy: It is my pleasure to introduce the first of two grade 5 classes from West Bay Elementary up in the gallery today. This is the first of two groups of 30 students each. Chaperoning them are their teachers Morag Kelpin and Megan Kennedy.
Would the House please make them very welcome.
Debate Continued
L. Krog: Now, section 2 refers to section 10(4.1) of the existing act, which says: “The director may reallocate the amount of payments received from a debtor amongst the creditors of the debtor if the director considers that it is reasonable and just to do so.”
The proposed change is going to substitute this language: “The director may reallocate the amount of payments received in relation to a debtor among the creditors of the debtor if the director considers it is reasonable and just to do so.”
I’m just wondering. What’s the difference, and what’s the reason for the change?
Hon. S. Anton: Section 10(4.1) as it’s currently written applies to a situation where, let’s say, a dad owes money to two different families. That does happen from time to time.
The current authority in 4.1 allows the director to divide or to allocate the funds between the two families to whom funds were owed. A legal opinion suggested that that did not give the director the authority to take funds
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from a third party and allocate them to two different families.
Garnishment of wages, for instance — the business has the wages garnished. This now makes it crystal-clear that that garnishment can also be applied to two different families.
L. Krog: I think I understand the difference, but I’m a bit curious. It’s money received from a debtor. Surely, that language means “from a debtor.” It is, essentially, the debtor’s money, whether it’s his or her wages that have been garnished or a bank account or whatever. Was there any court decision in relation to this existing section that led to this change — in other words, something beyond a simple legal opinion?
Hon. S. Anton: The interpretation offered by the member for Nanaimo is not one that was applied by the director. It has been the director’s view that the authority was in relation directly to the debtor but not to a third party. So he has not considered that he has had the authority to divide it between two or possibly more recipients.
L. Krog: I certainly appreciate that the director is extremely knowledgable and, I might say, as a compliment in the chamber in the presence of all assembled, has done a fine job being director of the family maintenance enforcement program. But I did ask, apart from his view and, as the Attorney General has indicated, a view backed up by a legal opinion: has there in fact been any court decision reflecting on this particular section and the problem that the director believes is created by it in its present form?
Hon. S. Anton: There is no court decision. One of the reasons for that is likely that it has never been interpreted in the interpretation suggested by the member opposite. The interpretation has been that a garnished wage can go to one recipient but not more than one.
L. Krog: I just wonder if I can inquire: has the director received complaints and concerns raised by counsel involved in these matters? They are relatively rare — well, not as rare as they used to be, I might say — where you have a debtor paying to several children of different mothers or different spouses, etc. In other words, is it a fairly frequent issue that has arisen in the enforcement program?
Hon. S. Anton: The question is about frequency. It does not come up very often, but it does come up from time to time. It is thought that this is a fairer process as proposed in the amendment.
The Chair: Member for Port Coquitlam.
M. Farnworth: Thank you, hon. Chair. Before I ask my question, I will take this opportunity to congratulate you. I did in some earlier remarks, but unfortunately, you were not in the chair at that time. But I want to congratulate for coming to the chair. I know you’re going to do a terrific job.
My question is to the Attorney General, and it relates to this section in this particular way. It is about an actual case in my office. I’m not going to mention any names, but it is the principle in the events that took place. I want to find out if this section will deal with this and, in particular, in the ability for the director or the ministry to have some discretion in terms of these kinds of fees.
The individual has child support to pay. They fall into default with the spouse for a variety of reasons — you know, losing employment, what have you. They build up a series of arrears. At the same time, they accumulate the penalties for falling into arrears.
The individual in this case went to court, and the court ruling said: “Hang on a sec. Here’s what they owe.” The fee, the amount, was reduced. They got caught up with the arrears. The spouse is happy. Everything’s fine. Everything is caught up.
But their next spousal support payment that they make, they’ve been told, will not go to the spouse but, in fact, will be taken by the government to apply to the default payments that were assessed. The reality is the individual now goes into arrears again.
The way it was explained when we pursued this particular issue is that the legislation is very clear and does not have the ability or discretion to recognize individual circumstances.
I am talking about circumstances that don’t apply to everybody. But clearly, the spouse is happy that the payments are being made, the individual who may have lost their job is now employed again and the reality is the first thing that’s happening is they make the payment that they’re caught up, and that payment is being taken and applied to the debt to the province. It doesn’t even go to the spouse.
Will this change that? Can the minister offer comment to that?
Hon. S. Anton: The order of payments is described in section 32 of the act, the act as it currently exists. The order is this: first to the regular maintenance payments; next to any arrears; next to any other amount owing except interest — an NSF cheque fee, for example; next to any interest owing; and last to any annual default fees.
Normally, in a month, the more usual scenario is that it is the maintenance and, possibly, any arrears that are paid. The default fee does generally get deferred. But if there were to be a large sum of money given over in a
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single month, then all of those pieces might be collected.
M. Farnworth: I just want to be really clear on that.
We’ll just assign a number for the sake of discussion here. If the maintenance payment is $300 a month and the arrears have all been paid up and my next payment of that $300 for this coming month…. I make that payment. Will that go to the spouse, or will the government now say that payment is, in fact, going to go to either pay the arrears or the other default fees that may have been assessed? That’s what this individual has been told.
Hon. S. Anton: The regular maintenance payment of $300, in this example, will go directly to the spouse. It will not go to arrears. It goes directly to the spouse, if that’s the amount. It will not go to the default fee.
Of the pieces that I mentioned a moment ago — the maintenance, the arrears, the interest on the arrears — those do go to the spouse, the payments and moneys owing. The default fee is a fee owing to the government. That is only collected after the other pieces are all paid. In a month…. If the regular payment is $300 in January, $300 in February and $300 in March, it goes $300, $300, $300 to the spouse.
M. Farnworth: Now, the other issue that arises out of this and that causes concern for individuals is that…. If you fall into default, there are the letters of warning that an individual receives. That’s entirely appropriate. They range from the potential lien on a driver’s licence through ICBC, the issue of a lien on a passport. That applies to the money owing to the spouse.
Is there discretion? Is that also used, then, on the money owing to the government, to the penalties that have been put in place? Again, one of the issues that is of concern is….
I agree 100 percent with it applying to the arrears on the driver’s licence. But once that’s caught up, if now all you have is a situation where all that is owing are the fees that have been levied or the penalty that has been levied that just goes straight to the province, is there discretion on the ability there, in terms of putting a lien on the driver’s licence, if the individual is being consistent with their payments to the spouse? Or is that going to be an automatic?
Hon. S. Anton: I hope I get all the member’s questions addressed, but if I don’t, he can add to it.
On the $300 example, there’s money in the person’s bank account, and the bank account is garnished. We will, being the program, take $300 for the mom. If there are excess funds in the bank account, they can be applied to the default fee to government at that point. If there are no excess fees, if it is the $300, then that goes straight to the recipient mom in this case.
The question was whether or not we would put a hold on the driver’s licence in this case. Let me just give the more general scenario and a common way that the default fee plays out. You may owe maintenance for ten years, and the default fee may be collected at the end of that time. Always, the payments to the spouse come first. The purpose of this bill is to change the limitation period around collecting on the default fee. We’ll get to that in a moment.
In terms of the driver’s licence question, it is unlikely that we would keep a hold on the driver’s licence. In practice with the driver’s licence, there’s no hold put on it, generally, for a default fee only. It may be put on more for arrears and other moneys that are owed.
M. Farnworth: I want to thank the minister. She has given me some important clarification.
One of the common issues that we are seeing…. I’m seeing more of it in my constituency office around these cases. Again, this is what I’m saying. I don’t think there’s an argument…. In fact, I’d say there’s no argument in terms of those measures being required to get people to make their maintenance payments. I mean, those are strong tools, and they’re effective.
I think the issue that I want to raise, the point I’m trying to raise here, is that…. When those payments have been caught up and it’s demonstrated…. For example, the spouse is satisfied that the payments are being made and is receiving the money that they are supposed to be entitled to, but at the same time, there are still these default payments or these penalties that are in place.
The ability or, in essence, a lack of discretion or a sense that that can be applied to putting a lien on your driver’s licence, again, causes an awful lot of problems for people who may, for no fault of their own, have lost their job, fallen behind or had their licence taken away. It makes it extremely difficult to get back into the workforce, particularly when you’re out in rural British Columbia or out in the suburbs. You need a vehicle to get to work. The result is you create these really terrible family situations.
Once those payments are caught up, then the message is: “Look, if the individual is making those payments, then we’re not looking at putting a lien on the driver’s licence for those.” At some point, that fine may have to be paid off. My understanding is that a portion of it does drop off each year, if you’re keeping up to date on your maintenance payments.
If that’s the case and the minister can confirm that, then I think that’s an important clarification that I am looking for. I would thank the minister if she’s able to do that.
Hon. S. Anton: The member had a proposition, which I think is not correct, and that was: does the default fee fall off over time? The answer to that is no. If there’s a
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$400 default fee, it remains a $400 default fee. That remains at $400 until it’s collected.
Where there is discretion and where discretion is exercised is on the enforcement of the default fee. If there’s a default fee of $400, it could be collected now if there’s a sum of money in a bank account, or it could be delayed for some years and put off until the end of the maintenance order. The director shares the goal mentioned by the member, which is that you want the person, you want the payer, to be working. It’s good for everything, including the collection of the spousal support or the child support.
Generally, you’re not going to put any kind of enforcement on a driver’s licence when it stops somebody from working. The more common scenario is that the regular maintenance is collected. If there are still default fees remaining at the end of that time, then that will be collected at the end of the time. As I said, we’ll come back to that later on in this bill.
M. Farnworth: I appreciate that clarification. I think it assists a lot in the case and some cases like it.
My concern — this is something that I would like the minister to look into — is that then there are, I guess, within the ministry, on the front-line staff…. There seem to be, I think, people on maintenance, or who have been making maintenance payments, who are under the impression that in fact they will lose their licence. The lien will be put on those default fees or those penalties. And if it’s the policy and if it’s the practice that those will or can be collected after the maintenance enforcement program….
You know, many people don’t have bank accounts. But as long as they’re making their maintenance payments, as long as they are up to date and making those maintenance payments, those support payments, then the reality is that they don’t have to worry, as it were, that a lien is going to be placed on their driver’s licence or their passport that subsequently could force them to lose their job again, and you get back into this whole undesirable cycle that I think we’re all trying to avoid.
Hon. S. Anton: The member’s example is, really, a good argument and illustration for why we need these changes that we’re proposing. Perhaps I’ll just give some preliminary discussion on those. Up until now, the limitation period has been six years. Say if now, in the year 2015, you default and you owe $400, but your support payments go on for another ten years. So it’s now 2025; you still owe the $400. We’re limited, the government is limited, because of the limitation period, in collecting that $400. So there has been more impetus to try and collect it along the way.
If it’s not necessary that we collect it along the way, if there is a method for collecting it at the end of that ten-year support period, in this example, those are the proposed changes to the act that will allow government to do that.
M. Farnworth: As I said, I thank the minister for this clarification and the ability to discuss this particular case and this example, because it’s a real case affecting real people. So I thank the minister for those answers.
One final question. When it comes to the default fee, is the ministry able to work with the individual, for example, on a payment plan at the end of that time in terms of how that default fee — or the penalties that are owing — can in fact take place?
Hon. S. Anton: Two things. One is that the default fee will be collected along the way if it’s collectible. If there’s some kind of ICBC settlement or if somewhere there are extra funds, that fee…. It’s not always going to be put off to the end. This is the vehicle for allowing it to be put off to the end in the appropriate circumstances.
The question was could there be a payment plan. The answer is yes.
L. Krog: I have raised this issue at various times — around the issue of payments. Clearly, there are some debtors who, realistically, will probably never be in a position to pay — someone who’s enjoyed an active worklife and is now disabled, on provincial disability, Canada Pension Plan disability, an extremely limited income and not really in a position to pay anything. Substantial arrears build up because it’s a Supreme Court order. The Attorney General is familiar with this issue.
Say it’s an order under the Divorce Act. FMEP is vigorously working away to try and collect it. There’s no realistic possibility. The individual involved has no ability to go back to court because they lack the particular self-advocacy skills, the ability to deal with the paperwork to even get it back in front of the court even if it was virtually unopposed, which in some cases it might well be.
With respect to allocating payments, no payments are going to get allocated, because there’s no money to be had. I’m just wondering: what process, if any, has the ministry taken with respect to this ongoing and problematic issue? It’s problematic for a small number of people, but it’s a significant number of people.
I can’t speak for the experiences of other members of the assembly, but certainly in my office, this issue arises relatively frequently. We’re talking a dozen, half-dozen cases in any given year, year after year. These are individuals who realistically, based on their current circumstances, which may have existed for several years, will never be in a position to pay.
What steps, if any, have we taken in terms of dealing with the federal government around this issue, recognizing the jurisdictional difficulties and problems as between the Supreme Court and the provincial court?
Hon. S. Anton: Yes, they do…. If somebody has an order from a court to pay and they’re unable to pay, and it may well be that the court would change the order if it was presented with the circumstances, there are ways that people can access help. Certainly, in the member’s hometown of Nanaimo, in Vancouver and in Victoria there are the justice access centres. There are family justice centres around British Columbia. Legal services has forms on its website.
So there are ways that people can get help. But it is, obviously, much better for them to access that help and go and change their order, if it’s an order that they cannot possibly fulfil and they can persuade the court that that is indeed the case.
L. Krog: I appreciate that there are what I will call interim remedies such as existing section 21, where the court can order that a debtor pay less than the ordered amount regardless — and I believe I am in correct in saying this — of whether it’s a Supreme Court–ordered amount or a Provincial Court–ordered amount. The Provincial Court, during a default hearing, can say: “Right. You’re ordered to pay $500. In Supreme Court, we’re going to order you to pay $200.” The $300 a month difference between them continues to mount up.
I suppose, for me, it’s also an issue of public policy. Is there any sense in the family maintenance enforcement program continuing to monitor and maintain a file in a case which, for all practical circumstances, is never going to amount to much, particularly if you have an individual in their late 50s, early 60s or even into their 70s who is not employed, who is on pension, who is, clearly, never going to get out of their economic hole? Those cases do exist, and it tends, frankly, in my view and the view of others who have spoken to me about this issue, to bring the justice system into some disrepute in that sense because it becomes utterly meaningless.
Madam Justice McLachlin has made it clear, as have others, that access to the courts is a growing issue in our society. This is a fairly common problem. Many relationships do break up for whatever reason. People have children, end up separating. Children have to be supported, etc. Economic circumstances change.
There are a number of people who will be sitting around in various places in various communities raising this as a complaint. Logical people say: “Well, gosh. That just doesn’t make any sense. Why can’t you do something about this?”
“Well, I went to a lawyer. The lawyer told me it was going to cost me $3,000 or $5,000, and I can’t afford to do it.” In the meantime, the arrears continue to build up.
I think the Attorney General gets my point, and it’s why I’ve continued to raise that issue whenever we come up with a family maintenance enforcement amendment. It is public policy that is important. It is an aspect of the justice system that many people come into contact with over time because of the nature of society and changing relationships.
What I really want to hear from the Attorney General is: is this a topic for discussion with the federal Minister of Justice and the Ministers of Justice across this country? Is this something in which someone is actually paying some attention to these people?
It creates an incredible level of frustration for the recipients, I would argue, on one level, because there’s no finality to it. They hold out some fond hope that somebody’s going to pay them at the end of the day. In the meantime, there are thousands of individuals who are in this position who know they’re never going to get out of this debt, who have it hanging over their head for the rest of their days — ordered to pay some minuscule payment, perhaps, in some cases, if they’ve been able to get a good hearing in Provincial Court, and getting nowhere.
At the same time, the constant criticism: “Well, this just isn’t fair.” It doesn’t meet the fairness test, as the Attorney General will well remember, of the man on the Clapham omnibus. It doesn’t meet the fairness test: what does the average and reasonable person think of this?
Hon. S. Anton: There are, as the member has pointed out, cases where there is no money to collect, and one of the first parties that becomes well aware of that is the program itself. They know when there’s no money to collect.
[R. Chouhan in the chair.]
What they will do is two things. They will put a federal interception in place, should there be, for example, income tax returns. They will also review the case every few months to see if there’s any change in the circumstances. That review could include phoning the payer and seeing if they have become employed, for example.
The case is watched. They continue to look for funds. But as the member observes, if there are no funds to be had, there are no funds to be had.
L. Krog: With respect to this section, section 2, of the act — the reallocation of payments received in relation to a debtor among various creditors — I’d appreciate it if the Attorney General could outline what the practice is today.
For instance, you have an order for a child support payment to a child who’s seven. You have a spousal support payment to mother No. 2 and a child, No. 2, of a different relationship, or any combination thereof. In other words, where it’s a mixed bag and it includes both spousal and child support, what’s the practice in how one allocates money that they may be able to collect?
The Chair: The member for West Vancouver–Sea to Sky.
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Introductions by Members
J. Sturdy: I would like to note to the House that we have a class from West Bay Elementary here joining us today, with their teacher John Zaleski and chaperones Allan Kovacs and Behzard Behzad. Would the House please join me in making them welcome.
Debate Continued
Hon. S. Anton: I think the question is: when there’s a payer and there are two payees, how is it divided up? This would be in a case where the whole amount was not available. If only a lesser amount was available, it would be divided up in proportion to the amounts owing to the two persons owed the money.
L. Krog: For clarification, that existing practice: does that then likewise apply as between spousal versus child support? For example, you have a child from a first marriage — I’ll use the term “marriage” because it’s easier and everyone understands — entitled to child support of, say, $500 a month. You have a spouse from a second marriage who’s entitled to spousal support of, say, $500 a month. You’re managing to bring in $600 a month.
Is the Attorney General saying, then, it’s $300 each? Or does the child support take priority, and the child gets the $500 and the spouse gets the $100? How does it work?
Hon. S. Anton: As a general rule, as I said a moment ago, the amount is paid out in proportion to the amounts owing.
L. Krog: What I’m trying to ask — maybe I’m not making myself clear — is: so there’s no priority given to children, as opposed to spouses?
Hon. S. Anton: That’s correct. The director doesn’t choose between the parties. It just does a straightforward arithmetical calculation.
L. Krog: Just so I’m clear, because in practice one runs across these remarkable circumstances. If it’s three children and the amounts vary, for whatever reason — because one’s a somewhat older order, one’s a new order, and one was made somewhere in between those times — three differing amounts, then it will be all done proportionally as vis-à-vis children. Likewise, whether with those three orders, one of them was for a spouse, it would again be done proportionately on a monthly basis.
Hon. S. Anton: If I have the question correctly, I think the question was: is it divided up as per the number of members of a family? The answer to that is that it’s not; it is divided up per family.
Here’s an example. Family 1 is owed $500 a month, and family 2 is owed $1,000 a month. There is $600 available. The proportion is 2 to 1. Family 1 gets $200; family 2 gets $400. The number of children and recipients and so on is not counted up in there. It is simply divided up by family.
L. Krog: Just so I’m clear, we have child No. 1 from a first marriage. The order is $200 a month. For the child and spouse from a second marriage, the order is $800 per month.
Interjection.
L. Krog: The Attorney General is hinting that I should use her numbers, lest we confuse one another. So $500 a month to the first child and $1,000 a month to the spouse and child in the second relationship. Then it’s two to one. Regardless of whether or not there is any particular need or disadvantage as between those families….
For example, let’s flip it. You have one child from the first relationship. The order is $1,000 a month. You have a spouse and child from the second relationship, and the order is $500 a month. Is the Attorney General then saying that the child from the first marriage gets two-thirds of the amount and the spouse and child from the second relationship get one third?
Hon. S. Anton: Correct.
L. Krog: Now, I appreciate that guidelines have changed the practice of law enormously, and I don’t do much anymore so my ignorance is manifest here today and quite considerable, I’m sure.
But there was case law, historically, that essentially said there was some priority given to the first relationship or the children of the first relationship. The case law tended to follow that practice. If you, wisely or unwisely, became involved with someone who already had family responsibilities in terms of spousal or child support payments, then you would be taking the risk that your priority would certainly be secondary to the priority given to the child and/or spouse of the first relationship.
I take it that in fact that’s not the case, based on what the Attorney General has said, and I take it that there is no proposal to change the prioritization system in place now, as will be continued and reflected in section 2 of this act.
Hon. S. Anton: I will just remind the member that section 2, which we’re talking about here, is not a change to the order of events that the member was describing. What section 2 is doing is permitting that allocation, as we described, insofar as payments from a third party are concerned.
L. Krog: So I can be clear, in other words, payments from a third party — this only relates to…. This change
[ Page 9454 ]
is essentially an expansion to deal with moneys that are garnished from some other person, as opposed to moneys paid directly by the debtor. In other words, this is my voluntary payment, 500 bucks you get. This section only will apply if it is money garnished from the debtor’s bank account or from an employer or as a result of the seizure and sale of property. Is that fair to say?
Hon. S. Anton: As I said earlier, this expands the ability to divide the payment between the two families, a direct payment as opposed to a third-party payment.
L. Krog: To make it clear, then, the way I read “Payments,” under section 10, it says: “Despite the provisions…all payments required to be made by a debtor under a maintenance order that is filed….”
Is the Attorney General saying that the ability to reallocate the amount of payments received in relation to a debtor “amongst the creditors of the debtor if the director considers it reasonable and just to do so” only applies to third-party moneys?
I don’t think it says that. It applies to any and all moneys that are received, whether it’s a voluntary payment by the debtor or moneys received through garnishment or seizure and sale. Correct?
Hon. S. Anton: As I answered the member’s colleague earlier, the current authority is that direct payment can be divided proportionately between recipients, subject to different orders. This expands that authority to payments received from garnished wages, for example, from a third party.
L. Krog: Again, so I’m absolutely clear, up until the introduction of this section and, presumably, its passage — because we all want to ensure that maintenance gets paid — the director’s view was that if moneys were received from a third party, the director had no authority to allocate those funds, as opposed to the director’s authority to allocate funds which he — and I can use that directly — believed he had under the existing legislation with respect to voluntary or direct payments.
Hon. S. Anton: That’s correct.
L. Krog: Well, this has been a most satisfying exchange. I think I’m actually learning something today. And I see the members opposite are just as enthusiastic.
Just to be clear, it’s not contemplated as a result of changing this section that there’s going to be any change in the policy relating to how allocation occurs. But I take it, for practical purposes — and this is not a criticism; it’s just a question — that allocation policy is, in fact, policy out of the family maintenance enforcement program, as opposed to policy following regulation passed pursuant to the statute. Or is there a regulatory regime that suggests or promotes or directs the director to do this?
Hon. S. Anton: It’s policy in the program.
L. Krog: Just to be clear, that policy, I take it, is policy created by the program, as opposed to some direction from the minister or cabinet or whoever. Is that fair to say?
Hon. S. Anton: The answer is yes.
Section 2 approved.
On section 3.
L. Krog: My reading of subsection 14.4(4)(b) now says: “If a further default as described in subsection (3) occurs after a notice is given…the debtor was receiving income assistance under the Employment and Assistance Act or disability assistance under the Employment and Assistance for Persons with Disabilities Act at the time the further default occurred….”
All we’re doing is essentially adding that it now applies to income assistance under the Aboriginal Affairs and Northern Development Canada Income Assistance Program. Is that, in fact, the case? If so, what exactly is — with great deference, confessing my ignorance — the Aboriginal Affairs and Northern Development Canada Income Assistance Program?
Hon. S. Anton: The program has been that we do not collect default fees from people who are on income assistance. The proposed change here would expand income assistance to include people who are on the Aboriginal Affairs and Northern Development Canada Income Assistance Program. This is a program which is like provincial income assistance, and it is geared to status First Nations people who meet federal criteria.
L. Krog: Would I be correct in assuming that in order to receive that, one would have to be on reserve, so to speak? Notwithstanding jurisdictional issues, the province is in a position to…. Well, in this case it’s an exemption from it, so it’s not a collection. There is no provision that would allow the province to collect moneys received under that program, I take it. This is strictly a section relating to the concept that the default fee is not to be collected from people who are on that assistance program.
Hon. S. Anton: That’s correct.
Section 3 approved.
On section 4.
[ Page 9455 ]
L. Krog: The Limitation Act as amended was generally changed to reflect a two-year limitation period, more across the board than it has been historically. Historically, it applied to negligence claims and claims for trespasses, I recall, and various other kinds of claims. Yet this provision allows for a six-year default.
As I understood the Attorney General in some previous discussions with my colleague, that six-year period now would extend not from the date of the default per se — in other words, the default fee — but would extend from the conclusion — or am I wrong? — of the period in which maintenance payments were to be made and were in fact made?
Hon. S. Anton: The six years starts to run when both of the criteria listed in section 2 are met. The debtor is liable to pay the default fee and be “no amount is owing” in respect of any maintenance order applying to the debtor.
L. Krog: What I’m getting at is…. A straightforward example: I default in 2015, and there is a default fee assessed. The maintenance order runs till 2030 — quite possible with a young child. I finish up paying my child support in 2030, so the director then has until 2036 to make claim by way of a formal proceeding in court, I presume.
When I say “bring a proceeding,” in 2036, is it necessary to bring a proceeding in court, or is there some — how shall I say — less expensive or a declaratory method of the ministry saying, “Right. We’re entitled to the money,” and you can assess a judgment and start garnishing or whatever?
Hon. S. Anton: On the example given by the member, yes, it certainly is quite possible that an order starting this year, 2015, might easily run until 2030. There could be a default next year, in 2016.
First of all, the director will make efforts to collect that default fee along the way, so it may be collected long before 2030. If it is not collected along the way, the director then has a further six years to bring a proceeding to claim it. That will be the usual tools that the director uses — the usual tools of looking for garnishment of wages and so on.
L. Krog: Perhaps I’m stuck on the use of the term “proceeding,” which I think of as a court proceeding. Under 14.4(9) now, the “amount of a debtor’s liability under subsection (4) is a debt due to the government and may be recovered through any enforcement procedure under this Act as if the debt were payable under an order of the court.”
In other words, the default fee now can be collected as if it were an order of the court. When we use the…. You’ve got all of those tools, which presumably include garnishment and seizure and default hearings, to collect the default fee. Are we saying now that there is…?
Does the term “proceeding” have any real meaning here in the new section 4, where it says: “The government must not bring a proceeding for the recovery of a default fee”? Is the term “proceeding” in that context used as a legal proceeding, in other words, commenced in court under a separate claim, if you will, for accumulated default fees? Or does it simply mean the common usage — that you will take garnishment steps or you will take default process? In other words, it’s all of the process that exists now under the Family Maintenance Enforcement Act.
Hon. S. Anton: Yes. It’s the latter.
L. Krog: Out of curiosity, the language used in the proposed section is that the government “must” not, as opposed to “may” or “shall” and all of those things. I’m just curious to know. Why use “must” as opposed to using “shall”?
I believe that may be the new language — a little fancier, so to speak. But I’m just curious to know if there’s a substantive legal difference and why we’re using that language as opposed to “shall” not bring a proceeding.
Hon. S. Anton: In this instance — and, in fact, probably in many other instances — “must” and “shall” have the same meaning.
L. Krog: So what the Attorney General is saying is it’s all a question of style. That being the case, and being perhaps of a more conservative style, I’m curious to know why, given the great fanfare around the implementation of the new Limitation Act…. It essentially reduced most limitation periods to two years.
Given the extraordinary extension of the government’s power to collect default fees so that, in a sense, you could be talking — depending on the age of a child — a great length of time, why is it a six-year period after the earliest date when the debtor is liable to pay a default fee and no amount is owing in respect of any maintenance order?
I’ll give, again, a simple example. There is no relationship. There is intercourse, and there is a child born. That child is a bright, clever person and heads off to university. The order is made for support, and that support order continues until the child finishes their bachelor of education. They’re 23 years old.
You finally catch up. You make all your payments. At the age of 23 there are default fees. The government wants a further six years on top of the 23 years in order to collect the default fee, as opposed to two years, which is the limitation period most everyone else would be stuck with.
What’s the public policy argument behind that one? It just strikes me that the government is asking for a special extension for default fees, which is inconsistent with
[ Page 9456 ]
the public policy in the civil courts around every other kind of claim.
Hon. S. Anton: I know that the member will be familiar with section 86.1 of the Financial Administration Act. I won’t read the whole thing. But I will read subsection 2, which says “Subject to subsection (3), the Limitation Act applies to government claims, and, for that purpose,” part (b) says, “the references in section 6 of that act to 2 years and a 2 year limitation period are, when applied to the government claim, deemed to be references to 6 years and a 6 year limitation period respectively.”
What that says is that it is consistent across government that there is a six-year limitation period. Therefore, the six years proposed in the proposed amendments in this bill are consistent with what is applied across government.
L. Krog: I mean no personal reference when I say this, but isn’t consistency the hobgoblin of little minds?
What the Attorney General is essentially telling me is that the only reason we’re treating this this way and allowing for six years is simply because it is general government policy that they get an “exceptional” limitation period in order to recover. That, likewise, is going to extend to a situation where they are, in fact, arguably not really the creditor involved here.
They’re really the enforcer, so to speak, of orders and then will tack it on. I take it that I’m not going to be able to persuade the Attorney General to change the policy in light of the Financial Administration Act. Gosh knows, we want consistency.
Interjection.
L. Krog: Exactly — in accordance with section 86.1 of the Financial Administration Act.
Let me ask this question about default, as set out in proposed section 4 where it says: “This section applies to a claim by the government against a debtor for a default fee under section 14.4 if, on April 1, 2015, (a) the government had a claim against the debtor for the default fee, and (b) an amount was owing in respect of a maintenance order applying….” Then it goes on to say: “This section is retroactive to the extent necessary to give subsection (3) full force and effect.”
I had a default fee assessed ten years ago. Then what this section says is that now — instead of being able to walk away, so to speak — that default fee will be covered by the new section, and the limitation period on it will start to run when I finish making all my payments.
Hon. S. Anton: I’m going to go through a couple of examples. It might be a good time to take a five-minute break, and the member can decide whether he likes the examples or not and whether they work for him or not.
The examples are these. Both of them start with an order that starts in 2005 and a default in 2005 and $400 is owing.
Scenario 1. The order ran out in 2010. There’s nothing owing now. There hasn’t been for a few years. The limitation period on that order would expire in 2011.
Scenario 2. The order went from 2005 to 2015. Under the new provisions, there’s now a six-year limitation period starting in 2015.
Perhaps I can let the member mull that one over and suggest that this point would be a good time for a short break, if we may.
The committee recessed from 3:06 p.m. to 3:15 p.m.
[R. Chouhan in the chair.]
L. Krog: I think I understand and appreciate the Attorney General’s examples given just before the break. But for practical purposes….
If you have the claim as of April 1, that’s when the new regime begins. Of course, that order could go back a long way, and the default could have been some years before that. As long as they existed in conjunction with one another as at April 1, then the new regime commences April 1.
Hon. S. Anton: As long as there are receivables from the payer after April 1, 2015, that’s when the new limitation period comes in. Receivables may be the original support order, it may be arrears, and it may be interest. As long as that remains payable as of April 1, then the new limitation period comes in.
V. Huntington: A lot of the actions possible in this section, including the default fee itself, only matter if the enforcement is a good process to begin with. Could I ask, then, what levels of enforcement are taken before the limitation period arises on the default fee?
Hon. S. Anton: Up till now, about 70 percent of default fees have been collected and are collectible. The new limitation period will now apply to 100 percent. Not all 100 percent will be able to be collected, but the majority will be.
V. Huntington: Could the minister outline what the enforcement process is within the ministry?
Hon. S. Anton: The number one and most common way of receiving payment is through voluntary payment plans by the payer. Failing that, some of the common ways of receiving the money are through wage attachments, through attaching bank accounts, through making attachments against federal income tax and other
[ Page 9457 ]
federal payments.
Section 4 approved.
On section 5.
L. Krog: The existing section that we’re repealing says: “If the debtor has at any time defaulted in a payment required under a maintenance order, the director may serve a notice of attachment in the prescribed form on a person who is indebted or likely to become indebted to the debtor.”
The new section says, as proposed: “If the debtor has at any time defaulted in a payment required under a maintenance order, the director may serve a notice of attachment in the prescribed form on a person who (a) owes or is likely to owe money or a benefit to the debtor, or (b) is obligated to indemnify, in whole or in part, a person who owes or is likely to owe money to a debtor.”
I’m just wondering if the Attorney General can give me a nice constructive example or examples of how that works. What is the significant difference between existing subsection 15(1) and sub 15(1) as proposed?
Hon. S. Anton: When a person owes money directly, as a third party, to someone, the money owing can be attached. The money owing in the hands of the third party can be attached.
An argument which had a little bit of currency for a time was that ICBC did not owe money on behalf of a payee because it was an indemnifier rather than actually a representative of the debtor. If I don’t have that right, I’m going to stand up again, but I think I have….
The question was: ICBC — whether they actually were a representative of the payee or if they actually owed the money to someone else all together who was actually the debtor.
L. Krog: To put it in crass terms, having listened to the Attorney General, essentially we’re going to take the pain and suffering money, which hasn’t yet been quantified, from the injured party in a car accident who has a legitimate claim for personal injury, by serving notice of attachment on ICBC, perhaps within a day or two of the motor vehicle accident claim. And that attachment, laying in wait, so to speak, for…. Well, it could be several years, up to the date of trial, up to the time of settlement, whatever that might be after a proceeding is commenced. In other words, this can be hanging over someone’s head for a very long time.
ICBC is the example the Attorney General used, and I presume that was a purposeful example and used because that is one of the ways that the family maintenance enforcement program hasn’t been able to collect moneys. Is that the only example, ICBC personal injury claims, or are there other examples that might assist me in understanding the purpose of this new section as proposed?
Hon. S. Anton: I’m using ICBC as an obvious example and one that people are familiar with.
Let me just run through the scenario again. There’s a payer and a payee. The payer happens to be a plaintiff in a motor vehicle case. He gets an award. The argument he made was that ICBC shouldn’t give any of that up to the payee because ICBC wasn’t, in fact, the debtor; it was merely an indemnifier.
Interestingly enough and rather ironically, that case was appealed, and the Court of Appeal today decided that the practice, which has been the practice of the director for many years and the practice of ICBC, was in fact correct. That is, ICBC could pay over some of that money owing to the payee — could. The Court of Appeal has supported what was always the practice of the director but not the decision of a recent Supreme Court decision.
It is ironic that that decision was made today. We are proposing, however, to keep the new language in, as proposed in the amendment, because it does make it clear in these circumstances that what has been the practice for many years, what was confirmed today by the Court of Appeal…. It does make it now clear in the language of the act that that is indeed a perfectly acceptable, proper procedure.
L. Krog: For purposes of clarification of the existing practice — which has now been confirmed by the court and which will be continued under proposed section 5, which amends section 15 — the money we’re talking about: is it the net amount of recovery after payment back, for instance, to EI for lost unemployment insurance benefits they’ve paid?
Is it the net after legal fees? After all, the amount might not have been secured without the assistance of counsel. In other words, what’s the amount determined, and how is it determined? It’s one thing to say, “We want your ICBC settlement moneys and/or award of a court,” but what exactly is that amount and how is it determined?
Hon. S. Anton: I don’t purport to be an expert in ICBC and how settlements are divided up, but it would, presumably, be net of legal fees. Certainly at that point, the director can attach any arrears, any interest owing, any default fees if they are available out of the amount remaining in the payment through ICBC.
L. Krog: I don’t wish to appear cheeky, but if there’s any expert in the area, it would surely be the gentleman sitting to the right of the Attorney General, who, I’m sure, could instruct me on what the practice is with family maintenance enforcement with respect to that amount.
[ Page 9458 ]
Whether it does take into account legal fees…. Or is it a question for negotiation? Is it a question for policy? How does that process work?
Hon. S. Anton: As far as we know, it would only be the legal fees that are netted off the ICBC amount, but again, I don’t purport to be an expert, and there may be other exceptions. What is left, what is due to the plaintiff — in this case, also the payer — is the amount that can be attached by the director and paid through to the payee for, as I said, moneys owing — default fees, arrears, interest and so on.
L. Krog: I’m not wishing to be difficult, but surely there must be some common-practice understanding of the fact that people who owe money through the family maintenance enforcement program and happen to be the potential recipients or recipients of moneys for personal injury claims is not that uncommon. For practical purposes, who informs whom, and on what basis does the family maintenance enforcement program accept a statement with respect to those fees?
In other words, do you request a statement from ICBC saying: “The debtor got a $50,000 settlement, which we remitted to his lawyer, Mr. Smith. Mr. Smith took $15,000 for legal fees and disbursements, and now there’s $35,000. Therefore you can attach that”? Or do you accept a letter from the injured party’s counsel, for instance, or from the injured party themselves?
I mean, this doesn’t happen without some sort of practice, and surely it’s not a difficult question for the director to be able to answer in practical terms today.
Hon. S. Anton: The piece that the director is interested in is the moneys owing to the payee — and default fees, perhaps, to the director.
Supposing the total is $20,000 — arrears, default fees, interest, etc. ICBC will have been served with a notice of attachment long before, as soon as the lawsuit was in the works. ICBC, when it pays out proceeds from the action, pays that $20,000 to the director. The other pieces of the transaction between ICBC and the plaintiff, etc. — those are between ICBC and the plaintiff, and we don’t get terribly involved in that. What we look for is the $20,000 — in this example — that is owed.
L. Krog: Just so I can understand it, there may well be a case where in fact the amount that is claimed, I presume, will change over time. So if you served a notice of attachment for $20,000 and two years down the road the claim is settled, it’s $30,000 owing. Say the total settlement figure is $20,000. ICBC says to Mr. Smith, “Your claim is worth $20,000. That’s all you’re getting,” and in the meantime there’s a lawyer who’s worked prodigiously long and hard hours in order to obtain that $20,000 in a difficult case.
Is the Attorney General saying that in that circumstance, FMEP gets the whole amount and the poor injured party, who doesn’t get any money for their pain and suffering, in addition is without funds and the lawyer who worked so prodigiously hard on that case likewise goes unpaid?
Hon. S. Anton: I think it’s better to deal with this section of the act. This section of the act proposes, in this example we’ve been using, that ICBC…. It makes it clear that ICBC is obliged to pay when there is a notice of attachment. In practical matters, when the moneys are payable by ICBC at that time, it clarifies with the director what the total owing is. Insofar as the funds are available, it will pay them to the director.
L. Krog: We’ve been using ICBC as the example, and presumably that’s one of the more common forms or more common situations where in fact moneys may be owing.
Now, there are some people, highly sophisticated, fairly wealthy people, who are just difficult to deal with. They hide their moneys with the assistance of — no disrespect — accountants and lawyers and everybody else they are associated with in business. Would this potentially apply, for instance, to a situation where there were potential stock options or other things of value? Is that the view taken by the Attorney General with respect to this proposed change?
Hon. S. Anton: This section deals with notices of attachment. It deals with when a person directly owes money or, in the example that we’ve been using, is obligated to indemnify a person who owes money. That’s what the section is dealing with.
Section 5 approved.
On section 6.
L. Krog: I wonder if the Attorney General can explain the reason for the proposed new section, which shows 17 replacing the existing 17.
Hon. S. Anton: The most common source of notices of attachment from outside of British Columbia are Alberta, Saskatchewan and the state of Washington. That’s about 90 percent of them. What applies for those three provinces and state applies similarly across Canada, around the United States and, indeed, in other countries in the world.
Up until now, if we have received a notice of attachment from another entity — let’s say from Calgary — it has had to come here. It has had to be registered with the court. We’ve had to open a file. We’ve then had to create
[ Page 9459 ]
our own order and serve our own order.
This new provision allows the director to simply satisfy himself that the order is an order of a competent authority, take that order and serve it directly, likely with his own communication on the top of it, but serve it directly to the payer. It’s a notice of attachment — serve it directly on the attachee.
L. Krog: If I can use an example that I can understand, this is an attachment order, essentially a garnishing order, made in the province of Alberta. It is sent to the director. The director looks at it, satisfies himself that it’s an order of an Alberta court. He then, in turn, determines — what was formerly a judicial interpretation or determination — that it is, in fact, a legitimate order of a legitimate court in another jurisdiction. He then serves it on, for instance, the bank where we know the debtor has an account, and then it is honoured accordingly.
That’s the way I interpret it. So I’m going to be really cheeky and suggest, if you’re going to insist that the director take on judicial responsibilities, you should probably see an increase in pay, accordingly.
Hon. S. Anton: To be clear, the order is an attachment order. It’s not a court order. So the attachment order would be from an equivalent person to our director but the person, in that case, in Alberta.
L. Krog: Just to be clear then. The attachment order performs the same effect as a garnishee, however. It allows one to attach any assets. It’s issued by the director in response to a court order that has already been granted or, presumably, an agreement that provides for support.
There is, in fact, a determination process that determines and satisfies the director that legitimate payment is required, and it is in essence — and forgive me for trying to simplify this, but I’m trying to make it clear to people who might be interested in this — a form of a garnishment order. That’s what the director is really enforcing by determining that it is legitimate and therefore issues it in the same way as the director issues a B.C. attachment order, which is all based on either court orders that were granted or a separation agreement or agreement that provides for the payment of support.
Hon. S. Anton: That’s correct.
L. Krog: Apart from the fact that we’re now going to be able to skip some court steps, save some costs, is there any other benefit that flows from this new process? Are there other provinces that are doing the same to improve the processing of their orders originating from B.C.? In other words, are we riding the crest of the wave already established, or are we setting the new trend?
Hon. S. Anton: As to whether or not we’re the crest of the wave, we do like to be first in British Columbia, but I have to confess that in this case, we’re second. Alberta beat us to the punch. We are behind Alberta in this but following closely, and I gather that the other provinces are proposing similar changes to their legislation.
L. Krog: I’m very sorry to hear we’re only second. I’ve mentioned in this chamber before that as Richard Nixon said about politics, it is unlike the Olympics. There are no silver medals. There is only oblivion.
I take it that this is the growing trend — much as we followed Alberta’s legislation with respect to the Family Law Act as well — that we’re catching up to the province of Alberta.
With respect to this section, then, I take it there is going to be a significant processing delay eliminated by this. If the Attorney General could give me some idea of how much time it’s going to save and how much more efficiently an order will be enforced….
The reason I say that is because, again, in my constituency office, you have people from outside the jurisdiction who sometimes have some complaints or concerns around the enforcement of orders or don’t even understand it in the first place, and the MLA’s office may be the first point of contact. They’re saying, “Well, look. Somebody owes me some money. What do I do?” — understanding that.
So I’m just curious to know: how much time is this going to save? In other words, what’s the actual direct benefit?
Hon. S. Anton: Three to four weeks at a minimum.
V. Huntington: I’m just curious about the use of the word “purports.” It was in the previous legislation. I see that. However, the minister was just quoted as saying: “The director must satisfy himself.” If the director has to satisfy himself about the document’s authenticity, then why is the legislation using the word “purports?”
Hon. S. Anton: The word “purports” is put there out of caution. The director, of course, in the case we used, is not in Calgary to vouch for the fact that this actually came from his office. However, given the knowledge that the authorities have of each other, our director is satisfied with the attachment notices that do come from Calgary and that purport to be issued by the competent authority. But the word is there really only out of precaution.
It is the expectation that this will all flow fairly smoothly, particularly when the orders are from a jurisdiction with which we have a close relationship and work frequently.
V. Huntington: I take it, then, if…. Well, we’ll just leave it at that.
[ Page 9460 ]
I also notice the legislation now omits — the amendment omits — the requirement that there be a certified translation in English. If a document comes, for instance, from the province of Quebec, are we now required to have it translated in order that the director can satisfy himself as to its authenticity or purported authenticity?
Hon. S. Anton: The agreements between the Canadian provinces are that…. Let’s give the example of Quebec. If we have a notice of attachment that we would like to have served in Quebec, we will provide a translation into French.
Section 6 approved.
On section 7.
L. Krog: It looks like a fairly technical section and change. I just wonder if the Attorney General can explain what this is doing and why we’re doing it.
Hon. S. Anton: This takes care of a situation which arises, actually, rather frequently. A payer has a default hearing in front of a court. He’s told by the court to come back with some financial disclosure. He comes back before the court, but he hasn’t got the financial disclosure.
The section as it’s currently written requires him to be summoned or apprehended. In fact, he’d have to be sent away again, then summoned and then brought back into court. The change here will allow the court to deal with that person immediately, without that intermediate, time-consuming and rather unnecessary step of sending him away, summoning him and bringing him back again.
L. Krog: Just so I’m clear, when the debtor shows up to whine and hasn’t complied with what the judge has ordered, the judge doesn’t have to summon him back at any other time. The judge can deal with it right then and there, including the provisions that allow the judge, he or she, to order that he pay an amount not exceeding $5,000 for the benefit of the creditor or be imprisoned for a term not exceeding 30 days without benefit of a further hearing.
[R. Lee in the chair.]
Hon. S. Anton: The court may order that the debtor pay an amount not exceeding $5,000 or be imprisoned. But it is a “may.”
L. Krog: I appreciate it’s a “may.” But I presume, with the implementation of this section, that a judge would also be in a position, then, to say: “Without prejudging what I might do with you, Mr. Smith, I’m going to order this matter adjourned for a week, and you will come back. At that time, Mr. Smith, I need to inform you that my powers include the power to fine you $5,000 or imprison you for 30 days, and I’m sure you’ll think long and hard on that.”
Hon. S. Anton: That is correct.
Section 7 approved.
On section 8.
L. Krog: If the Attorney General can just explain the effect of this. It simply says, on the bald reading of it…. Section 33(1) now provides: “If a copy of a maintenance order made by or registered for enforcement with the Supreme Court is certified…and is filed with the Provincial Court, the order, including arrears that accrued…may be enforced,” etc.
Now it says: “A maintenance order made by or registered for enforcement with the Supreme Court, including arrears, may be filed with the Provincial Court and enforced under this Act as if it were an order of that court.” All we’re doing is skipping the certification process? Again, what sort of time savings would be involved, potentially, in terms of the enforcement?
Hon. S. Anton: Yes, this was a step that is really…. Maybe it was necessary in the past, but it’s certainly not needed now. It will save weeks on these orders.
Sections 8 and 9 approved.
Title approved.
Hon. S. Anton: I move that the committee rise and report the bill complete without amendment.
Motion approved.
The committee rose at 4:02 p.m.
The House resumed; Madame Speaker in the chair.
Report and
Third Reading of Bills
BILL 32 — FAMILY MAINTENANCE
ENFORCEMENT AMENDMENT ACT, 2015
Bill 32, Family Maintenance Enforcement Amendment Act, 2015, reported complete without amendment, read a third time and passed.
Hon. A. Wilkinson: I call now Bill 36, Auditor General for Local Government Amendment Act, 2015.
[ Page 9461 ]
Committee of the Whole House
BILL 36 — AUDITOR GENERAL FOR
LOCAL GOVERNMENT
AMENDMENT ACT, 2015
The House in Committee of the Whole (Section B) on Bill 36; R. Lee in the chair.
The committee met at 4:05 p.m.
Hon. P. Fassbender: I’d just like to introduce the staff that will support me through committee stage. I have my deputy minister, Jacquie Dawes. I have Heather Brazier and also Lydia Zucconi here with me. We are ready to proceed.
The Chair: Member for Coquitlam-Maillardville.
S. Robinson: Thank you, Mr. Chair, and welcome. It’s nice to see you sitting in that chair.
I guess I’d like to preface my questions by reiterating some concern about the message that the minister had mentioned when he was finishing his closing remarks when we were debating at second reading. He commented that they’d had a challenge with the staffing in this position.
I agree that they certainly had that challenge. But we’re spending a whole lot of time creating regulation and changing legislation when it was just a staffing issue. Having said that, I look forward to getting into the nitty-gritty of this bill. I have a number of questions.
On section 1.
S. Robinson: I notice in section 1 that there is a comment here about changing the language in the definitions. I would like to hear from the minister about what the rationale was behind amending the definition of “qualified individual” and turning it into “authorized to be an auditor of a company under section 205 of the Business Corporations Act.”
Hon. P. Fassbender: Clearly, through the process and through the evaluation of the challenges that the office had, it was felt that opening this up allowed the minister to appoint and to make recommendations on an individual who not only had local government experience, potentially, but also the business background. That’s why it was also clear that there needed to be a Deputy AGLG who was a certified auditor. The change was made to give us the flexibility.
What is obviously clear is that the appointment that I announced at UBCM was of an individual who is a certified auditor and has all of those credentials as well as having local government background and experience in the profession that very well suits him for the position.
S. Robinson: I appreciate the response from the minister, but I want to make sure I understand this. The idea was to expand beyond an auditor so the person that would be appropriate wouldn’t necessarily have to be an auditor but could be from some other profession?
Hon. P. Fassbender: That’s correct.
S. Robinson: If I’m understanding the minister correctly, in order to be an Auditor General for Local Government — I want to make sure I really understand this — one does not need to know anything about being an auditor. You could be a businessperson who happens to like auditing or doing performance reviews. You don’t actually necessarily have to have any qualifications or respond and report to any professional body that would then hold them accountable to certain practices and standards.
Hon. P. Fassbender: What was obvious is that one of the key roles of the Auditor General for Local Government is to have an office that had all of the skills and the capabilities.
But what was more important, in our view, in light of the experience, was that the individual could lead that office, develop strong relationships with local governments, with the Union of B.C. Municipalities and have the skill sets to ensure that that relationship and that communication with local governments and UBCM was one of the key focuses — and in knowing that the Office of the Auditor General for Local Government had the technical skill sets in the Deputy AGLG and also the other support staff that they have in the office.
Clearly, we wanted to have the flexibility. If the person had all of those qualities — to work with local governments, to interact, to be the leader of an office, who has all the skill sets — that was the key criteria, and the fact that they were or were not an auditor was not the primary concern. But indeed, the individual needed to understand local governments, understand performance reviews and the opportunities to support local government.
S. Robinson: If I understand correctly, the primary role of an Auditor General for Local Government is really not about being an auditor but about managing an office, which I think is an interesting perspective.
I want to follow up and ask the minister if the letter that the Premier received from the CFIB, from April 13, 2005, which asks that the government consult with the business community before any reforms are made, was part of the decision to change this definition.
Hon. P. Fassbender: No, there was no direct communication or consultation with the business community. However, there was lots of feedback, which is anecdotal and not necessarily categorized as formal consultation,
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about the importance of the office and the importance of honouring the one-taxpayer principle that this government has stood on and the business community supports.
S. Robinson: It’s an interesting comment on one taxpayer given that this office has spent $7 million at this point, and counting, and received…. I guess 17 reports are done, two of which were considered useful. If we’re going to talk about one taxpayer and talk about value for money, I think the minister and this government can use a little lesson on that when it comes to this office to date.
I want to get back to this definition, only because I have some serious concerns about a qualified individual and letting go of the requirement of an auditor being part of the office or at least leading the Office of the Auditor General for Local Government.
I want to know if the minister sees that there’s anything sort of problematic with having somebody running the office who is not an auditor and then is responsible for managing all these auditors who are doing audits — and they’re not an auditor.
Hon. P. Fassbender: I appreciate that the member doesn’t understand the office and is trying to come to grips with what the reality is. Here is the reality: this is not a financial audit function that you traditionally find in a financial process. What is important in this is that the Auditor General for Local Government is doing performance reviews, which are quite different than traditional financial audits.
There’s another provision in the act now, with the amendments, that it must comply with standards for audits by professional standards. The Auditor General for Local Government — if that person weren’t a certified auditor, which the appointment that I’ve made is — would then have the key staff. That’s why the requirement and the change was that the deputy auditor general be certified so that the auditor general could work with that qualified individual who has the certification to ensure that the standards are met.
There is no statutory reporting requirement of this office, as you might find in the Auditor General for the province of British Columbia. Again, the role that is critical here is to ensure that local governments are engaged with, that they are consulted moving forward, and that is indeed what the role of the office and the new Auditor General for Local Government will be.
S. Robinson: I’d like to let the minister know, because he might not be aware, that I am on the Public Accounts Committee and have been since I was elected. I’m fully, fully aware of what it is that auditors general do. I know full well what a performance audit is. I am very comfortable with performance audits, and I think I’m very good at performing on that committee.
I also am very proud of the role that I played when I was in local government of asking our staff to look at performance audits and to demonstrate to us not that they were busy but that they were effective. It’s something that I personally am very proud of. So I’m fully aware of what performance audits are and what they look like.
What I’m concerned about, and I think the minister needs to appreciate and understand, is accountability for the role of the Auditor General for Local Government. If they aren’t responsible to a professional body that demonstrates that they are accountable to another group, then I think that leaves it open to real problems. I think this is about a professional role. There should be a professional body they need to be accountable to.
If the minister can respond to how he thinks that’s going to play out, I’d appreciate that.
Hon. P. Fassbender: Again, I’ll reiterate what I said before.
This office’s role is to work with local governments to develop relationship, to ensure that local governments are engaged in the types of performance audits that are done, what best practices are reviewed.
The Auditor General for Local Government’s role is to build that relationship, which was missing in the past, as we move forward. Their requirement is clearly to ensure that they are consulted as we move forward as to how the performance audits are done, what reviews are being done.
The member is absolutely correct. I don’t think you have to be an auditor. I’m sure that the member was not an auditor when she was in local government and asked hard questions of the auditors, as I did when I was a mayor. I don’t have to be an auditor to ask the hard questions. I’m sure she didn’t either.
But here is the key. The professional staff in the office will ensure that the standards that are being used comply with industry standards, comply with third-party organizations. But it is not a requirement, through this office and the reviews, that local governments have to follow the recommendations. They are brought to them in the form of recommendations based on best practices.
That is why it is important that the individual who heads up the office, the Auditor General for Local Government, is a person that builds the relationship and works with local governments.
S. Robinson: I want to know if the minister sees how silly it sounds to have an Auditor General for Local Government who isn’t an auditor.
Hon. P. Fassbender: No, I don’t.
S. Robinson: That’s really very interesting, that the minister doesn’t see how silly that sounds — the fact that
[ Page 9463 ]
you’re giving someone the title of Auditor General for Local Government, and they aren’t an auditor whatsoever.
You could call them the manager of the audit office for local government. You can call them all kinds of things. But the Auditor General for Local Government, I would assume, would be an auditor, because that would be the most logical thing to think. That’s typically what we do. The auditors are auditors. In this case, we’re finding out that they’re a manager of an office. They’re a manager of a relationship. They’re not necessarily an auditor.
I’m out of questions on this one.
V. Huntington: Would I be correct, then, in asking the minister whether this sudden redefinition of what an auditor is, is a result of having come to the conclusion that the previous act ended in a total disaster and that they now realize the auditor general’s function just wasn’t what was presumed and expected to be?
I agree with the member. Here we are looking at an amendment to an act that is preparing to appoint an auditor general who isn’t an auditor. It’s the most nonsensical thing I’ve heard of, other than red-tape day, perhaps. It’s just absolutely unbelievable that the government is suddenly dancing around what is an obvious appointment that should be a qualified person.
This isn’t a PR exercise. This act is defining what an Auditor General for Local Government does. It is not a public relations exercise. I would like the minister to explain how this government feels it can redefine that function into a public relations, government relations function and leave the rest to a deputy.
Hon. P. Fassbender: I appreciate that the member perhaps doesn’t understand this. Let me try and explain it.
This is all about building relationships with local governments. The principles on which the office was first established…. It was brand-new. It is not a typical audit function, and I’ve said that. The other thing that is important is that it is the office of the auditor general. It is the collective work of that office and the expertise within it. The lead, the Auditor General for Local Government, is responsible for the good functioning of the office and good systems.
One of the most important things that I heard clearly and that government heard from local government was that they wanted a relationship where their sensitivities and their needs were understood and that the office and the Auditor General for Local Government would work with them. That is why it’s being done.
This is not typical of the Auditor General for the province of British Columbia in any way, shape or form. It is a brand-new approach. The principles are the same. We stand by the fact that what we are doing is developing a structure to work with and in cooperation with local governments, which they’ve asked for. The survey that they did asked for it. We are going to deliver that.
It is not a public relations exercise. It is a process by which we work in cooperation with local governments to the benefit of the taxpayers of this province.
V. Huntington: Here the minister goes again. This has never been the definition of what this act was supposed to be. This isn’t something that’s working with local government. For heaven’s sake, local government has wanted an auditor that understood local government.
Unless what the minister is saying is that now the appointment process can be much more open to the generosity of the government and their friends…. Gosh, we can appoint anybody that may have been a councillor, that may have been…. What is going to be the definition of an auditor that actually understands what local government is and how local government finances itself? But then, he doesn’t have to, does he? The deputy auditor general is the one that does that.
This government introduced the original Auditor General for Local Government Act by saying: “What we wanted to do was ensure that the taxpayer’s dollar was spent efficiently at the municipal level.” It had nothing to do with the minister’s brand-new interpretation of what the role seems to be. This is just ludicrous.
What we’re hearing here is…. I don’t know. This is a minister that obviously could put those thousand angels on the head of a pin and count them for the duration of his ministry. I have never heard anything like this. It’s just embarrassing to be a part of the House when we have to sit and listen to this type of nonsense.
Could the minister tell us if what he is telling this House is that the Auditor General for Local Government needs to have no understanding of the audit function for local government, of the finances for local government, even of performance audits? All he has to do is make everybody in his office happy, and the local government that the deputy is auditing.
Hon. P. Fassbender: Again, the member does not understand the function of the office. The team that works with the Auditor General for Local Government has the expertise, will do the work that needs to be done in accordance with industry standards when it comes to performance reviews and audit functions. The Auditor General for Local Government heads that office and works with a team. I clearly understand it. I’ve said it a number of times, and I don’t need to repeat myself again.
V. Huntington: Well, I’ll defend my understanding of what the audit function is, and I’ll defend my understanding of performance audits. I’m just wondering if the minister really understands them.
I’ve forgotten what else I was going to say. I’m just totally flabbergasted by this, and I think the minister ought to be ashamed of himself.
[ Page 9464 ]
S. Robinson: I’m flabbergasted as well, because the condescension from the other side is reprehensible and certainly not very conducive to collaboration. If this is the message that local governments are going to get for collaboration, I don’t think it’s going to work very well either.
I want to get back to the issue at hand, which is this definition. I want to make sure that the minister understands the concerns from this side of the House and from the independent member: that when the call goes out for a qualified individual, there’s nothing in here that says to this House or to British Columbians what that is.
“Qualified” can mean anything. It could be that they were a friend or a supporter of the Liberal government. It could be that they were a donor. It could be that they had once been a mayor 30 years ago, and then they were an MLA, and then they retired. They sat on the Public Accounts Committee, and now we’re just going to make them the Auditor General for Local Government.
I think this House deserves to have some idea of what qualified means. I understood qualified to mean that they would at least be an auditor, that that would be their professional body, that they came with something very specific, very clear and clearly written here. That’s not the case, and I’d like to understand from the minister what “qualified” means.
Hon. P. Fassbender: Let me, again, repeat somewhat what I have said already. It is the intent and the qualities of the office and its function that are the most important thing. There is an audit council, as well, which is the oversight body that has many qualified individuals in it who are going to ensure that the office meets the requirements that have been established and the function to work with local governments.
But it is clear that the way the act has been amended, the individual who is the Auditor General for Local Government does not need to be an auditor. I’ve said it. I will say it again. That person has to be someone who will work with local governments and who will also engage with the audit council, which is the oversight body as well, to ensure that it meets the criteria on which it was established.
S. Robinson: Well, then, it would mean that we could get somebody who doesn’t know anything about audits and is really good at making friends and really good at maybe managing an office and making sure that others are doing their job.
Would the minister agree that that would be considered a qualified individual in this case?
Hon. P. Fassbender: I’m not going to honour that kind of rhetoric with any response other than this. The audit council is responsible to do the search. The audit council is charged with understanding the purpose and the intent of the office, the criteria on which the office will operate, and the audit council will be the ones who bring forward recommendations on the individuals. There is no political interference with the audit council, in terms of its deliberations on who the Auditor General for Local Government would be. But I will clearly say, again, that it is the office that functions as an entire entity — not one individual.
S. Robinson: Given the response that we just heard from the minister, then, and given that it’s government that handpicks the audit council and then the audit council handpicks the Auditor General for Local Government, who doesn’t have to be an auditor, I would ask if the minister, perhaps, sees that the arm’s-length relationship is actually shortening right there?
Hon. P. Fassbender: I’ve answered that question. I am not going to get into anything else but to say this. We learned what was wrong with the office. We listened to local governments. We listened to UBCM. We have made these changes in response to that, to make sure that the principles of the office are met, moving forward. That is our intent, and that is what we are going to do.
S. Robinson: I’d like to hear from the minister if the UBCM said that there didn’t need to be an auditor in order to fill the office of Auditor General for Local Government.
Hon. P. Fassbender: UBCM did not comment on that particular aspect of the amendments. What they did say, clearly, is that it is the relationship with UBCM and local governments that was the key priority for them. That’s why these changes are being made.
S. Robinson: I wanted to know if the minister can anticipate any challenges, given his emphaticness about how great this is. There was certainly a lot of emphatic belief, when Bill 20 was being debated in this House several years ago, about how great this was going to be, and we saw that it didn’t turn out quite all right.
I think I can anticipate the minister’s response, but I want to make sure and get it on record. At this point, does the minister anticipate that there could be some gaps in the way that’s currently listed — that the Auditor General for Local Government doesn’t, in fact, need to be actually an auditor?
Hon. P. Fassbender: Well, answering the same question in a different way, no, I do not anticipate any gaps whatsoever.
Section 1 approved.
[ Page 9465 ]
On section 2.
S. Robinson: In section 2, I have some questions. This section of the act already states that the AGLG is an appointment of the Lieutenant-Governor-in-Council. Other parts of the current act also state that the Lieutenant-Governor-in-Council determines the AGLG remuneration. Can the minister explain the purpose of this amendment?
Hon. P. Fassbender: This change is clearly to strengthen the accountability of the office and to ensure that the individual is hired under the Public Service Act so that that accountability framework is in place.
S. Robinson: There is a note here that says the minister must consider the audit council’s recommendation. Can the minister explain what “must consider” looks like and how the rest of us here in the House will know that the minister has, in fact, considered it?
Hon. P. Fassbender: That current provision is in the existing act, and it’s very clear. The audit council’s function is to make recommendations to the minister, and the minister must consider those recommendations.
S. Robinson: What happens if the minister doesn’t like those recommendations?
Hon. P. Fassbender: Well, it’s very obvious. I must consider it. If I don’t agree with it, it’s ultimately the minister’s responsibility to make the final decision.
S. Robinson: From a performance review perspective, when someone must consider something, there has to be evidence that a consideration was made. Otherwise, how do we know it actually happened? I mean, that’s part of performance review that we talk about all the time. I’d like to know how we would know that the minister has considered the options presented to him by the audit council.
Hon. P. Fassbender: What is obvious through the process that we’ve been in with the office is that there needed to be a higher degree of accountability. That accountability comes in a number of ways.
The audit council, which is responsible to oversee and to make recommendations to the minister, is a process that’s very open and transparent with them. They make resolutions. They provide those to the minister, would provide the minister with a letter. All of that could be eventually open to the public and to the members of this House.
The key here is that the minister has a responsibility under the act to follow the process that’s outlined and to consider the recommendations of the audit council. Quite honestly, if the minister didn’t do that, I suspect that most of the members of the audit council wouldn’t want to be a part of it.
The minister has a responsibility to honour their role and to take their advice very seriously, and that is a commitment that the minister makes. And I think it’s important, as a member of government, for any minister to hear from the agencies that have been appointed to provide that kind of concrete advice.
S. Robinson: I’m wondering if the minister can explain to this House…. What was the motivation behind this change in the hiring practice for the AGLG?
Hon. P. Fassbender: Again, there is no change to the hiring practice. That has stayed the same. What is different is that the Auditor General for Local Government is hired under the Public Service Act, which was not the case previously. We’ve made it very clear that the individual is hired under that. Their terms of employment and any actions taken with that office fall under the Public Service Act, but the process of hiring, with the audit council and so on, has not changed at all.
S. Robinson: Does the minister see that this change — being hired under the Public Service Act — has any implications for the independence of the office?
Hon. P. Fassbender: None whatsoever.
S. Robinson: These changes are being introduced against the backdrop of a government settling with the first AGLG, who was suing government for wrongful termination. Is the fallout from the legal action informing this amendment at all?
Hon. P. Fassbender: I’m going to repeat what I said. Government has learned a number of lessons, as have local governments, in terms of how we got to where we are today. The changes are being made in the spirit of ensuring that we move forward in a positive and collaborative fashion. I’m not going to speak about any other circumstances that may be before the courts.
S. Robinson: My understanding is that, actually, it’s no longer before the courts — that this case has been settled. So I don’t think that there’s any problem for the minister. I think this was actually settled on August 11. I’m wondering if the minister might like to reconsider, given that it’s not before the courts.
Hon. P. Fassbender: Again, I will say that the changes here and the employment of the new AGLG have nothing to do with the previous situation. It is all about mov-
[ Page 9466 ]
ing forward. It is all about working together with local governments. I’ve answered that, and I think that is the answer.
S. Robinson: Well, I can certainly appreciate the minister wanting to move forward, because looking backward is certainly ugly when it comes to this file.
Let’s be really clear. These amendments are as a result of a colossal failure. There was an attempt to do something that the Premier had wanted, when she was going through her leadership, without consulting with anybody. It was just an idea. Or perhaps she consulted with the CFIB, because my understanding is that it was at their urging.
The process that went forward was to act on something without really thinking it through. Now they’re stuck here three years later, $7 million spent, with really not much to show for it. And now they’re looking to amend a bad idea and trying to fix it. It’s like putting lipstick on a pig.
So here we are. I’m asking questions, trying to understand what the changes are, and the minister says, very comfortably, over there: “We don’t want to look back. That’s really not important. Let’s just look forward.” Well, looking back helps to inform going forward, and I want to understand what the changes are. If the minister has a hard time with that, then I think that’s just too bad. I think the people of this House and the people of British Columbia deserve to understand what the changes are and where they’re coming from.
I’d like to ask the minister. This particular section, combined with the amendment to section 6, emphasizes that the AGLG is now an OIC appointment serving at the pleasure of government. Is that correct?
Hon. P. Fassbender: It’s very clear what the employment standards are. It’s under the Public Service Act. The individual, indeed, will be responsible to the terms of that act and will be governed accordingly.
What is really obvious here…. And I will say this. We have looked back. We have talked to local governments. We have recognized what wasn’t working. We are moving forward to ensure that what local governments have asked for will be met, that the office will work collaboratively with them. That is the intent, that is the purpose, and that is absolutely what the results will be.
S. Robinson: I didn’t quite get an answer about whether or not the AGLG, as an OIC appointment, serves at the pleasure of government. If the minister would let us know that, I would really appreciate that.
Hon. P. Fassbender: It’s very obvious. The individual is hired under the Public Service Act, is responsible to the terms of that act and serves at the pleasure of government — absolutely.
S. Robinson: If the Auditor General for Local Government produced a number of reports, as required by their employment, but the government didn’t like what the reports had to say or just didn’t get along well with the AGLG for whatever reason, could the government also then end the employment of the AGLG?
Hon. P. Fassbender: I’m not going to speculate on the kinds of things that the member opposite has raised. The objective of these changes, the objective of the amendments to the act, the objective of the employment process for the AGLG, the objective of collaboration and cooperation with local governments are at the heart of this. And our objective as government is to see success, not look for failure.
S. Robinson: Well, I would like to point out to the minister that this was part of what happened with Bill 20 three years ago. It was the subject of debate in this House. There was certainly lots of discussion from this side of the House pointing out some of the gaps, some of the issues.
Of course, no one on that side of the House would listen, so then you had a waste of millions and millions of taxpayer dollars. Of course, Minister, there really is only one taxpayer, and this office happened to waste a whole whack of it.
I would like to know if the minister sees a change at all in the level of independence of this office, because we certainly heard, when I went back and I read Hansard, from a lot of members on the other side of the House about how important independence was. We certainly heard….
Last February, the previous minister stood up in this House at least a half a dozen times really being very clear about the critical importance of the independence of this office — independent of politicians, independent of mayors and councillors and independent of members of this Legislature.
Can the minister stand up in this House today and tell us that this office will be independent of any influence and how that plays out, given this new appointment?
Hon. P. Fassbender: What’s very obvious in this legislative change is that the independence of the office in terms of its function — in the performance reviews that are done, the reports and the criteria that are established in conjunction and in consultation with local governments…. The Auditor General for Local Government and the office have complete independence in determining the scope of those and how those are initiated.
What is the key difference is that we are ensuring accountability and transparency to ensure that there is a process, of which the audit council plays a very significant role, to ensure that the office does perform and delivers on the expectations that everyone has for the office.
[ Page 9467 ]
S. Robinson: Can the minister tell the members of this House about his consultation with the UBCM around this particular piece that has to do with independence? Does the UBCM feel…? Have they demonstrated or commented to the minister about independence, given this new hiring process?
Hon. P. Fassbender: There is nothing in this change to legislation that weakens the independence or the ability of the office to develop the scope for the reviews and the reports that are going to be done. If anything, it actually strengthens those, because the Auditor General for Local Government (1) will work with local governments and (2) will work with the audit council to ensure that the objectives of the office are being met.
What is important here is that I met with the outgoing president of UBCM. I met with the incoming president prior to his taking office at UBCM this year. And I said very clearly that the report and the survey that they did, in terms of the concerns expressed by local governments on the previous functioning of the office and the accountability and transparency, would be dealt with in this change to legislation and that, again, the government would not be dictating to the office how to operate. That was up to the Auditor General for Local Government, working with the audit council and working in collaboration with local governments and UBCM.
S. Robinson: Well, the minister did not answer my question, which was: does the UBCM agree that this position — this new way of hiring — actually maintains the level of independence that is so critical to doing this work?
Hon. P. Fassbender: Well, I’m not going to try and speak for UBCM. I’m sure the member can talk to UBCM if she likes to. What I do know is that, in my discussions with the new president, the outgoing president, and what I said in my speech at UBCM, the importance is how this office is going to function in working in a supportive way with local governments. Again, I don’t have a quantum of how many local governments I talked to, but I said: “That is the purpose of the office. That is going to be the intent of the office. That is indeed what the audit council and the Auditor General for Local Government intend to do.”
The response that I got from individual communities is that that’s exactly what they hope the office will do, and I assured them that it will.
S. Robinson: It sounds like…. While the minister made assurances of certain things — that he would consider what complaints and concerns local governments had — it would seem like the minister hasn’t really had, perhaps, an opportunity to explain exactly how the assurances are going to be played out in legislation. I actually think that there is some concern about this independence and what it looks like, because it doesn’t seem, rereading the legislation, that it’s particularly independent.
I’d like to know from the minister how he plans to guarantee independence of this office. It’s not clear in this legislation that there is a separation. I’d like to know what’s in place to ensure that this office remains independent from government influence.
Hon. P. Fassbender: Well, again, the intent and the purpose is that the Auditor General for Local Government will work with the audit council to ensure that the work of the office and the criteria, the audits and the work that is done, fall within what is agreed to as being appropriate. That check and balance is there.
The difference now is that the minister does not dictate that, but the minister has the opportunity to receive feedback and recommendations from the audit council on how the office is functioning, and the minister has the opportunity to take steps if it is necessary. But I am convinced that the independence of the auditor general, the independence of the office, the independence of the auditor general working with the audit council and with local governments is clearly defined and will be the practice.
V. Huntington: The minister has at least twice now commented on the openness and transparency of the work of the auditor general, of his office and of the audit council. Could he be more specific in how he anticipates this openness and transparency will actually work?
Hon. P. Fassbender: Thank you to the member. Clearly, the Office of the Auditor General for Local Government, working with the audit council, will develop a service plan. They will report out on the number of reviews that will be done and the criteria of those. They will have an annual report that will be published publicly, on what has been accomplished and those plans.
It is also very clear that as the program moves forward there will be response, as there has been to the successful reviews that have been done up to date, where local governments have said they found it of value.
There is clearly a process, both structurally and in the things that I mentioned — the service plan and the review of the plan. There is also the provision in the act for the minister to make it part of the estimates process and reporting out on that. I’m sure the member opposite, in the next set of estimates, will be asking all kinds of questions, and answers will be given at that point.
There are all kinds of opportunities for openness, transparency and communication — and here’s the key: feedback from local governments on how they felt the process has worked, the value they’ve received. Once that comes out, if there are other modifications, the Auditor General for Local Government, working with the audit council, [ Page 9468 ]can review and modify their service plan to ensure that it meets the needs of the local governments as well.
S. Robinson: I think that was an excellent question from my colleague over here, and it was an interesting response. Everything that the minister listed, aside from the estimates process, already existed. The Auditor General for Local Government did an annual report, had a workplan and certainly responded to reviews. None of that’s new. We don’t really have anything new except this estimates process. Is that an accurate assessment?
Hon. P. Fassbender: Some of those provisions, absolutely, were there before. The difference now is the accountability structure to the audit council and, ultimately, to the minister, with recommendations from the audit council. That was not in place; that will be in place. That is the key element in this: to ensure that as we receive feedback, the audit council hears from local governments, modifications can be made in conjunction with the Auditor General for Local Government.
But again, the Auditor General for Local Government, working with the audit council, will establish the process and the function of the reviews and define the scope of those. The Auditor General for Local Government has the opportunity, and we’re encouraging that, to work with local governments to make sure that it meets their needs as well.
S. Robinson: Will there be any new regulation forthcoming, flowing from this new subsection, that will detail the terms and conditions of the Auditor General for Local Government’s appointment and remuneration?
Hon. P. Fassbender: No, that is dealt with through the appointment letter, as it is defined under the Public Service Act.
Section 2 approved.
On section 3.
S. Robinson: In section 3, it comments: “In planning and conducting a performance audit and in preparing a performance audit report under this Act, the auditor general must comply with the auditing or assurance standards or guidelines or parts thereof, if any, as adopted by regulation.” Can the minister please explain this new subsection?
Hon. P. Fassbender: This section clearly brings into focus that the performance and the work of the Auditor General for Local Government complies with professional standards in the performance reviews that it will be doing. It is to bring clarity to that and define it in such a way that there is no ambiguity.
S. Robinson: Does the minister see a little bit of a funny juxtaposition when talking about professional standards that are required to be followed but that the auditor general doesn’t have to be a professional?
Hon. P. Fassbender: No, I don’t.
S. Robinson: Okay. Well, it seems pretty clear to me, but perhaps he has a different way of looking at these things.
I want to ask how the Trumpy review informed this amendment — if that was what stimulated this subsection.
Hon. P. Fassbender: Well, Mr. Trumpy’s review did not have specific comments on this, but absolutely, his review as well as the UBCM survey that was done is reflected in the changes we’re making to make sure of the accountability and the transparency of the office.
S. Robinson: Was there anything specific in that UBCM review that sort of suggested there needs to be assurance standards or guidelines adopted by regulation?
Hon. P. Fassbender: No, that was not in the UBCM report.
S. Robinson: So the previous answer. The minister suggested that there was nothing specific in Mr. Trumpy’s review, but in taking a look overall at these two, it prompted developing some regulation. I’m still trying to understand where this idea for regulation came from. Is this because there’s no intention to hire a professional auditor in the role, so therefore, we’re going to have in regulation exactly what the standards are, rather than having professional standards?
I’d like to hear from the minister a little bit more about how this came about.
Hon. P. Fassbender: Clearly, this section is intended to address the very concerns that the member raised in section 1.
But what is important here is that it clearly defines that if standards change — if there are professional practices that are brought forward as times change — it allows and requires the office to ensure that they meet those standards. Again, I will say: the office of the auditor general and the staff within the office, of which the auditor general is the lead.
S. Robinson: I do have a quote from Mr. Trumpy’s review: “The AGLG performance audit manual, which is in draft, sets out the processes and procedures for ‘planning, execution and reporting’ of performance audits. The manual is based on relevant professional standards adapted to meet the needs of the office.”
[ Page 9469 ]
The existing audit manual is based on professional standards adapted to meet the office. Here we have a section that’s saying: “No, we’re not going to follow professional standards. We’re going to do them by regulation.”
I’m just wanting to make sure that I understand that that’s really the intent of this subsection.
Hon. P. Fassbender: These are absolutely complementary with each other. If audit standards change and are adopted by the province, it requires that the auditor general’s office complies with those changes. They are complementary. This absolutely reinforces the principle that professional standards today and those in the future are required to be followed by the office of the auditor general.
S. Robinson: I’m trying to understand what these regulations will be. Whose regulations or what regulations will be forthcoming?
Hon. P. Fassbender: The public sector auditing and accounting standards are established by the professional bodies that regulate those standards. It’s very clear that if there are changes, it is required that the office follow those standards. They are currently in place. They are being followed, and they will be in the future.
S. Robinson: What’s really interesting is that we have a government that keeps talking about red tape reduction. Then we have a little piece here that talks about having a bit more red tape and having more regulation. I always find that that’s really ironic when you don’t have the perspective right through all of these bills.
V. Huntington: My reading of this is slightly different, I think, than the minister’s. Perhaps he could answer this question. If the Auditor General for Local Government no longer is required to be an auditor, then that auditor general, that auditor, is no longer subject to the professional standards of his profession. If he’s no longer a subject to the professional standards of his profession, then who and what is he accountable to, other than the minister and the cabinet at pleasure?
Is that, then, why we need regulations — so that the auditor general, who is not a professional and therefore not accountable to professional standards, is accountable to a standard now regulated by this government? Is that the reason for this section?
Hon. P. Fassbender: I’ve said it a number of times already in these discussions. The Auditor General for Local Government and the office are accountable for the professional standards that are established by practice and by regulations, not by us. We’re not adding more.
We are simply saying that those standards that are adopted by professional organizations, including public sector accounting and auditing practices, will be followed. Whether the person is an auditor or is not an auditor, that process is in place.
If the person is an auditor, they are bound to follow those standards. If they’re not an auditor, they are still bound to follow those standards. It is the office that will ensure that happens.
The other accountability structure is the audit council, which reviews to ensure that the office is meeting those standards.
V. Huntington: Perhaps the confusion here is the word “regulation.” Could the minister point us to guidelines for performance standards that are regulated by this province?
Hon. P. Fassbender: I don’t have the list of all of the organizations and the standards. Our staff will provide the member with a list and the websites that the member can go to, to see the professional standards by the profession, who establishes them and where they are.
V. Huntington: Well, I understand professional standards. I know where I can find the professional standards. I understand that this section is saying the auditor general should be compliant with those professional standards. But I don’t understand where the regulations are found.
Are we talking about regulations by a professional body and not this government? Are we requiring, then, a person who is not an auditor to be bound by the professional regulations of an association outside of government?
Hon. P. Fassbender: For the member, the government will, by regulation, adopt standards that are set by professional organizations. We will not be developing new regulations that are unique to government. They will follow the best practices in industry and professional organizations.
V. Huntington: Well, thank you. I think now we’re at the kernel of it. The government will be adopting regulations that are basically the equivalent of the professional association’s. Is that right? We have no regulations right now, but we will be adopting them in order to ensure the guidelines for performance audit reports are in place.
Hon. P. Fassbender: Yes.
V. Huntington: Could I ask, then: how has our auditor general managed to conduct his office in the absence of these regulations? Again I go back to this section and wonder whether it might not better say the deputy auditor general must comply. Without these regulations, then,
[ Page 9470 ]
we’re saying the auditor general has nothing that he has to comply with, because he’s not an auditor. So we have to put regulations in, in order to make the office of the auditor general comply. That’s kind of what I’m trying to get to here.
Hon. P. Fassbender: For real clarity, this ensures that if the auditor general is an auditor, they are bound by their professional standards to comply. If the auditor general is not an auditor, this clarity ensures that those regulations are followed by the auditor general and the office.
V. Huntington: Just to clarify, that’s what I asked at the beginning of this discussion. Are we putting these regulations in place because the auditor general is not an auditor and is not, therefore, bound by his professional standards? So we, therefore, need regulations to ensure that that is the case. I think the minister has just confirmed my comments of an earlier moment.
Section 3 approved.
On section 4.
S. Robinson: In this section, in section 4, there are amendments that are made that speak to changing “for cause or because of incapacity and substituting “with or without cause” in the language in subsection (1)(a).
I would like to ask the minister how that is decided. Who decides with or without cause?
Hon. P. Fassbender: There are two dimensions to this. Employment law is very clear on any employment and termination of employment and the standards by which that is judged.
But what is important here is that the minister does not have to, if there is a case where there is a situation that it is felt needs to be moved on…. The minister can make a recommendation to cabinet to remove that person, and that is there to ensure that we can move quickly and efficiently if there is an issue that goes beyond purely the performance of the office, which the audit council will be providing recommendations to the minister on.
S. Robinson: For clarity, “without cause” is really the change, being able to terminate the individual. I want to get a sense of where this came from. Is this as a direct result of the challenges that we had with the previous AGLG? I realize that there was certainly some challenge in how the original legislation was written. Really, with or without cause…. The way I read it is that the minister can decide to fire the Auditor General for Local Government.
Hon. P. Fassbender: It is all about greater clarity on the functioning of the office. I clearly remember sitting in this House and hearing about: why wasn’t the minister responsible at the time or the Premier taking action on an office that didn’t seem to be functioning to the standard that was expected? This provides the opportunity for leadership to move in areas if it is required. Again, it is our sincere desire that the office function, moving forward, in an efficient, transparent and open way.
S. Robinson: Can the minister tell us if he is planning for a new regulation to govern the termination of the AGLG, or will the existing employment termination standards regulation that applies to deputy ministers now also capture this office?
Hon. P. Fassbender: The public service employment standards, which are under the public service employment act, will be the standard.
S. Robinson: A number of changes that are being discussed here suggest to me that the minister will have more control and more power in regards to the Auditor General for Local Government than currently exists, which is a situation that’s at odds with something we’ve heard over and over again in this House around the importance of independence.
I’d like to hear from the minister how he reconciles the new powers that will be given to his office in relationship with the Auditor General for Local Government and this concept, this notion, of independence from government.
Hon. P. Fassbender: What is very important here is that the audit council and the performance of the office, in terms of delivering the work that is required and is worked with, with local governments, is one standard. And the performance of the individual who holds the office is another key requirement. It does give the minister the ability to move on situations, if it is not functioning the way it should be. Again, that is providing clarity and clear lines of authority when it comes to taking the leadership that may be required as we move forward.
S. Robinson: In this change, (c) in subsection (2), the amendment strikes out “the recommendation of the audit council” and substitutes “a recommendation, if any, of the audit council,” in terms of the language that’s actually used here.
The way I read it is that the audit council doesn’t have to provide a recommendation — that it’s “if any.” So how does this impact this role of independence that the minister has been talking about for the last couple of hours?
Hon. P. Fassbender: There are really two functions here. The audit council in its relationship and review of the office and the role of the Auditor General for Local Government can make a recommendation to the minis-
[ Page 9471 ]
ter. Or if, indeed, there is a situation…. I don’t want to speculate on what those could be, but if they are clear that there are performance issues around the auditor general, the minister can make a decision and move decisively to correct that problem. That’s what this provides the opportunity for.
S. Robinson: If I’m to understand the minister correctly, then, the audit council really isn’t the mediator of independence, because the way that I’ve understood the minister just describe it is that the minister has absolute power to make those decisions about the employment of the Auditor General for Local Government.
Hon. P. Fassbender: What is very clear is that the government and the minister respect the role of the audit council. That’s why they are there. That’s why they are appointed. They will work with the Auditor General for Local Government in establishing the functioning of the office, the reports that are done and the scope. The Auditor General for Local Government can ask for support and advice from the audit council.
What is also clear…. If there is a situation that the minister needs to act on and be decisive in that process and provide the leadership that I know the member opposite talked about before, the ability is now there in the act for that to happen in a very timely fashion to ensure that a situation is dealt with.
S. Robinson: I am sure that the minister can appreciate the importance of taking one’s time in making these decisions. There certainly were lots of speeches made about the role of the audit council in supporting this notion of independence. But what we have here is a clause that says that the audit council doesn’t have to recommend anything. They can actually be silent. They don’t have to do anything. But the minister, alone, can make the decision to remove somebody from this office.
I just would like to have a straight answer — that would be really helpful — of whether it’s yes or no. Either the minister can…. Because they deem so, they can relieve somebody of this office.
Hon. P. Fassbender: Accountability and functioning are not mutually exclusive, but what is important — and I will say it again very clearly; I’ve said it already — is if the minister deems that a situation arose that needs to be dealt with in a timely and expedient fashion, the minister ultimately has the ability to make that decision without a recommendation from the audit council.
[R. Chouhan in the chair.]
S. Robinson: The minister seems to put accountability on one side and functioning on the other. Well, I would suggest that it’s actually accountability on one side and independence on the other. So what we have now is a message that came clearly three years ago, when this office was set up, about the importance and the critical nature of independence, that this needed to operate outside of government. And now we have some legislation that is saying: “No, actually, it’s coming into government, where the minister has absolute power.”
I would like to hear the minister talk about that balance between accountability, which I absolutely think is necessary — I’m not disputing that at all — but how it plays out with independence. I think those are the principles that are being challenged here, not whether or not the office is running. I think we would expect that of all of our public servants, to be doing what is requested of them.
Hon. P. Fassbender: I, again, will try and answer it in a different way — but the same answer. And that is simply this. The responsibility for determining the work that is done by the office, the independence of those decisions, rests solely within the office. The government does not dictate the scope or the process or the reviews that are done by the office. That is done by the office, the Auditor General for Local Government.
The accountability of the auditor general for doing the work that needs to be done and doing it in a fashion that meets the needs, as we’ve established and have talked about, is the responsibility of the Auditor General for Local Government. The role of the audit council is to ensure that that happens and that they provide the support to the Auditor General for Local Government.
So there is absolutely independence on the functioning of the office and in the work that it is charged with doing. There is accountability if indeed there are other issues that need to be dealt with, and the minister can do that with or without a recommendation from the audit council.
S. Robinson: Well, that actually brings me to the amendments being proposed in 2.1, which says: “For certainty, the minister may make a recommendation referred to in subsection (1) without requesting the audit council to consider suspension or removal of the auditor general, as the case may be, and in the absence of a recommendation of the audit council under section 19.”
The way I’m reading it…. Well, perhaps the minister can just explain to me how he reads this. I have a certain way of reading it, and perhaps I’ll just wait to hear his interpretation of what that means.
Hon. P. Fassbender: It’s the same answer I’ve given. The audit council, in their functioning, can review the office, review performance and make recommendations to the minister. The minister also has the ability under these changes to move on an issue that the minister deems is important to move on in a timely and expedient fashion.
S. Robinson: If I’m to understand correctly, then…. I know that the minister said he doesn’t like to speculate, but I would think that if you’re writing legislation, you have to speculate. If you don’t speculate, you have holes and gaps all over the legislation. So you have to anticipate the different kinds of things that would come up so that you can make sure that there aren’t gaps and holes in your legislation.
If the minister, perhaps, didn’t like the direction of a particular local government, the direction that it’s going, or if the Auditor General for Local Government doesn’t think it’s appropriate to audit a certain government and the minister wants that local government audited, who’s to say that the minister can’t just say: “Well, you know what? I think we’re done with you. We’re going to get another Auditor General for Local Government”? I’d like to know what the….
I appreciate that the minister has said: “Well, the audit council — that’s their responsibility.” I get that. I get that’s their responsibility. But the minister has lots of power to act in ways that don’t support that office’s independence. I want to know what safeguards there are so that that kind of thing doesn’t happen. This minister might believe that he’s the kind of minister that won’t do that. But, you know, ministers change. I want to know what’s there to protect that independence.
Hon. P. Fassbender: The criteria under the public service employment act, employment law, clearly dictate what criteria can be used, and it is very simply this. If there is a situation that is not in the best interests of the functioning of the office, the relationship of the office as it relates to issues which I’m not going to speculate on at this point, the minister can but is accountable to employment standards for those kinds of decisions.
It has nothing to do with the criteria that the office determines — and that’s the Auditor General for Local Government — on the reviews and the reports that are done. That would absolutely not be appropriate. If the government or the minister felt that the auditor general should do a report on a particular thing, we do not speak to that. That is the sole discretion of the Auditor General for Local Government. That’s the way it has been, and that’s the way it will continue to be.
Section 4 approved.
On section 5.
S. Robinson: I appreciate that these sections are all repealed — sections 8, 9 and 10 in the original act. I just have a question about the repealing of section 9, which requires the Auditor General for Local Government to prepare and present a budget estimate for the chair of Treasury Board. Has the Auditor General for Local Government presented a submission to Treasury Board for its office for fiscal 2016-17?
Hon. P. Fassbender: No, they have not. But once this act passes, if it passes the House, it will be required that the office do that and present that through myself to Treasury Board.
S. Robinson: I’m wondering if the minister can explain the need to create new controls over an office whose function, ironically, is to ensure that other public offices are exercising value for money. In some ways, it just reinforces the argument that the AGLG be disbanded in favour of the provincial Auditor General. We’re just creating this brand-new sort of structure, this whole new process for getting money for this separate office. I just want to hear from the minister if he thinks this is exactly the way to go.
Hon. P. Fassbender: Well, it is not a new practice. It’s an existing practice that is in place. All this does is put it into the legislation to clarify that that is the process.
S. Robinson: I do appreciate being able to ask about this office in estimates, because I certainly spent a lot of time in estimates begging for some information. It was really hard to get any information about this.
While I certainly complained about it, I just find it interesting that there’s more control over the spending of this office when, in fact, it’s the office that’s supposed to be doing value for money, yet there’s not trust, it sounds like, from this government that it would provide value for money.
I would want to hear from the minister if the trust of this office has been eroded because of the bad hire that they made several years ago.
Hon. P. Fassbender: Mr. Chair, for a member opposite to talk about not having any accountability, not having transparency, and not going through a process that is common practice within government to ensure that there’s clarity on what moneys are allocated, how they’re spent and the accountability for that….
As the minister responsible in the estimates process, I am sure I’m going to get lots of questions. The bottom line here is to ensure that the office is meeting its requirements, is using taxpayers’ dollars efficiently and effectively and producing the results that everybody expects it to.
S. Robinson: It would seem to me that even the government’s trust and belief in this office to manage its own finances have been eroded — which is something, I’m very proud to say, that we certainly saw on this side of the House. It certainly just took a long time on the other side to recognize that.
It would make more sense, we think, to house this work in with the Auditor General for the province, because it already exists, and there are lots of resources
[ Page 9473 ]
there. But clearly, that was not of any interest to the government side.
I have no other questions on this section.
Section 5 approved.
On section 6.
V. Huntington: I’m interested in the fact that the minister is still insisting that the deputy auditor general now be authorized under section 205 of the Business Corporations Act to act as an auditor of a company. When the original act came into being, and the discussion prior to that act, it was financial auditing that was really at the….
The Chair: Member, are you on section 6 now?
V. Huntington: Yes.
S. Robinson: In section 6, I heard the words spoken by my colleague from Delta South, and I’m on a similar path. I have some questions about some of the language in section 6.
We note that in the original act, section 11(1) is repealed and the following substituted: “The auditor general, in accordance with the Public Service Act, (a) must appoint as deputy auditor general an individual who is authorized under section 205 of the Business Corporations Act to act as an auditor of a company.”
If the minister can sort of explain this other layer, and that’s what it feels like. There’s this other layer of bureaucracy that’s been created here. If he can just explain why that seems so important to him.
Hon. P. Fassbender: I think I answered that earlier in similar questions, but I’ll try and again be very clear. The deputy auditor general for local government must be a certified auditor. That is being done to ensure, if indeed we were to appoint an Auditor General for Local Government who is not a certified auditor, that the deputy auditor general is certified.
S. Robinson: So now we have two people hired to do the work of one. I find that absolutely fascinating. That’s not what I would consider a good use of taxpayer dollars. Perhaps the minister can explain how much more efficient that is — given that we hire one person to make friends with local government and to manage an office, who may or not may be an auditor, and now we have to hire a deputy auditor general who must be an auditor.
Hon. P. Fassbender: I think the member, again, either has never looked at the facts or doesn’t want to understand them.
The deputy auditor general role has always been in place. This is not new. This is not another position, in the event that…. It is there to ensure that the capacity of the office is clear and that the deputy auditor general will be able to ensure that the rest of the staff in the office comply with those standards and assist the auditor general if the person is not a certified auditor or even if they are. It’s always been in place.
V. Huntington: Given that part of the problem that was experienced under the original act was the total lack of understanding of local government within the audit function, why wouldn’t the minister here require the deputy auditor to be familiar with local government audit, with the local government financial structure?
Here we have an auditor general who doesn’t have to know anything about auditing and who will be eventually, once they’re written, subject to regulations. Now we’re appointing a deputy auditor, who’s familiar with financial audits in a business environment, but we have nobody of authority that’s going to be familiar with the local government financial system and what local government operates for and to.
We’re going to have people that are performing performance audits on local government. Yet I don’t think auditors under the Business Corporations Act are necessarily familiar with performance review audits. It’s a specialized function. It’s a specialized function that now has to look at local government, and we have nobody in authority required, by this act, to be familiar with local government.
I wonder if the minister could tell us why we’re looking at a deputy auditor certified under the Business Corporations Act rather than one who is familiar with auditing within the local government structure.
Hon. P. Fassbender: Again, I’m not sure the member was present at UBCM when I did indicate that I plan very shortly to appoint two previously elected individuals to the audit council who will provide input and support to the Office of the Auditor General for Local Government. That’s No. 1.
Number 2, since the acting and the interim Auditor General for Local Government came into place, he put in standards that the new auditor general who will be taking office…. Those standards and those practices clearly recognize the feedback that we had from UBCM about sensitivity, about training for the remainder of the staff. Those procedures are in place.
Quite honestly, with feedback that I’ve heard from local governments on recent reports, they have already seen the improvement in understanding the sensitivity and the importance of understanding local government process. That is being delivered by the office now, and we will build on that. The new Auditor General for Local Government will build on that.
[ Page 9474 ]
I think the member may be aware that the name that I have brought forward actually has local government experience in the new Auditor General for Local Government and is a certified auditor on top of all that.
V. Huntington: I’ll just say to the minister that no, I have no idea who he is contemplating for the role of auditor general. It is a pleasure to hear that he or she will be, in fact, an auditor.
S. Robinson: Responding to the minister’s previous response to the member for Delta South where she asked what I thought was a very good question about where the familiarity is with local government, the minister responded by…. I heard him make a commitment that there would be two people who had been on local government on that audit council, but that’s not anywhere in the legislation. While this minister has agreed to do that, I haven’t seen it anywhere in the legislation.
Perhaps the minister can point us in the right direction about where that is a commitment — to make that happen — until we no longer need an Auditor General for Local Government.
Hon. P. Fassbender: Again, I’ve met with the new president of UBCM. I’ve talked to local governments. I have assured them that we heard their concerns. I have clearly….
Under the act, the minister can appoint people to the audit council. I am going to add two more positions, which is within the purview of the minister and within the terms of the act. Those individuals will have direct local-government-elected experience.
There is also, currently, an individual on the audit council who was a former city manager for a local government and who understands the workings of local government from a management point of view. The remaining members of the audit council are people with professional experience. That adds the dimension that has been talked about in some of the questions.
I believe we have an audit council that reflects what UBCM and their survey asked us to do. That will be in place. I cannot speculate what the future holds, but I can say this. These legislative changes, the appointments that I’m going to be making to the audit council and the appointment of the new auditor general, which was made public at UBCM….
His credentials were put on the website. They are there now. I’d encourage the member to go and read this individual’s background. It is public. I think we have met all of the issues that were raised in terms of how we got to where we are today. This is to meet the needs for the future, and that is the key behind all of the changes that are being made.
S. Robinson: I did hear the minister over and over again repeat his commitment to the UBCM and his commitment to responding to their concerns by appointing members who had been on local government to the audit council. But I think we need to be really clear that it’s not in the legislation and that that’s the decision of whoever sits in the seat of the Minister for Community, Sport and Cultural Development.
I haven’t seen it here in the legislation. I’d like to know if that’s something that the minister has been contemplating. And if not, why not?
Hon. P. Fassbender: In the legislation, when it talks about the people appointed to the audit council…. I think it’s important to read this. “In order for a person to be appointed as a member of the audit council, the person must have knowledge, skills, education or experience in one…of the following areas: (a) accounting; (b) auditing; (c) governance of the Province; (d) local and regional governance; (e) a subject area set out in the regulations.”
S. Robinson: Can the minister please…? So that I could follow along, which section was that?
Hon. P. Fassbender: The section is 18(5).
S. Robinson: If that’s the case, if that’s the existing legislation, it would be really interesting to understand how it is that the minister now has to identify specific individuals who have this specific knowledge.
Hon. P. Fassbender: In reviewing all the feedback, in reviewing the response from the survey of UBCM, I determined clearly that adding two other individuals…. There’s already one individual in there who meets the criteria of local government experience from a management point of view.
In responding to the concerns of local governments, I believed it was important to appoint two people who had experience as elected officials and who understand those nuances from an elected official’s point of view. That is why I am making those appointments in response to what I heard from UBCM.
S. Robinson: I would like to say, for the record, that I’m pleased to see that the minister is making those appointments. But I want to point out, too, one of the flaws in this legislation. We know what happens when you don’t listen to anyone on this side of the House when they point out flaws, but I’m going to do it anyway.
“In order for a person to be appointed as a member of the audit council, the person must have knowledge, skills, education or experience in one or more of the following areas,” and it lists five areas.
So it could be that you can have all accountants on this
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committee — all accountants who don’t know anything, perhaps, about local government. Or they could know a lot about governance of the province but know nothing about local government.
Here’s an example, if you want to project into the future. I know the minister doesn’t like to do that, but I think it’s important to do that if you want to have some good legislation. What happens when, two ministers down the road, the minister doesn’t appreciate local government, has got this task and is learning the ropes and appoints an audit council where the knowledge of local government is not a criteria, and the minister is not required to recognize that, like this minister has? Perhaps that’s an opportunity to actually put it in the legislation.
Hon. P. Fassbender: The difference here is that unlike the election process, where anybody can run without any experience or any qualifications, the appointments made to the Auditor General for Local Government audit council…. As you do on any board — I am sure the member knows this; I believe she may have sat on some boards in a volunteer capacity — you look for balance.
You look for people who bring different skill sets so that the totality of those individuals meets the criteria and the goals that you have for the office. That is the intent of this. That is why I am appointing two additional individuals than were there before. It’s to ensure as much sensitivity to local governments as we can have and balance on professional experience. I think that that criteria…. There is no question in my mind. That is the goal, and that’s what we will achieve.
S. Robinson: Just a last question on that point, only because it’s interesting. I find that this minister has done a reasonably good job of listening to what local governments were saying about needing to have some people who understood local government. I think he has recognized that part of the flaw in the setup with the audit council originally was that there wasn’t enough voice for local government.
UBCM — certainly, the members — didn’t see their governance issues reflected in the audit council. The minister, I think, has filled that gap with two additional appointments.
But I just want to make sure I understand, because there’s a bit of a contradiction in the last response, on the one hand saying that there needs to be the voice of local government in some way at the audit council — that that’s the piece of information, the piece of expertise that provides value and we ought to have that value at that table. Then, on the other hand, there is some legislation, and we’re rejigging that entire legislation.
There’s nothing that says that there will be people… Definitely there will be two. The minister has picked two. I don’t know why he has picked two, but he has picked two. There will be two voices representing local government at the audit council. I’d like to know why that wasn’t considered as part of this whole package of amendments.
Hon. P. Fassbender: I think the issue of whether it should be mandatory or it is practice…. Again, as we have listened to local government, my response is that I am appointing two people. I think that is the practice and will continue to be the practice to ensure that the balance on the audit council is based on the criteria that are spelled out in the legislation.
S. Robinson: I’d like to know if the minister sees any value in putting it into legislation. Given that if you really believe that it’s important, that it’s a critical piece of making this work better — because it has worked terribly for years — why wouldn’t you include that in the legislation? Why wouldn’t the minister include that in the legislation?
Hon. P. Fassbender: I don’t believe it has to be spelled out in the legislation. What is are the balance and the criteria, which are very clear.
I can assure the member opposite that part of the next part of the section in the act speaks about working with and in consultation with UBCM. I’ve clearly said to the executive that we will continue to dialogue on how the office is operating, what flaws or gaps there may be in the future, if any. And I sincerely believe there will not be any gaps or flaws because we have learned from the past, and we’re moving ahead in a positive fashion.
I do not believe it needs to be enshrined in legislation. I believe the practice is what I’ve just said. The same as the other criteria that are there. I don’t think that the individuals who we select need to necessarily fit all of those, but they need to be conversant in each one of those categories. That’s why we have left it flexible, so we can pick the right people for the right reason.
Section 6 approved.
On section 7.
S. Robinson: In this section, there is a change of language that I just want to get some clarity on.
It says that section 16 is amended (a) in subsection (2)(c) by striking out “staff who, under section 20, provide assistance to” and substituting “persons.”
I wonder if the minister can explain the change in language.
Hon. P. Fassbender: That particular change is consequential to section 20. We can have a further discussion on that when we get to section 20, but the two are tied together.
S. Robinson: In section 7, there is an additional subsection. I’m just trying to understand where it came
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from. It says: “The auditor general may disclose to a law enforcement agency information relating to the commission of an offence against an enactment of British Columbia or Canada.”
I’m looking to make sense of where this came from. And why now?
Hon. P. Fassbender: This recommendation came to us from the individual who was acting as the Auditor General because the Auditor General cannot, other than with this provision, make disclosure if indeed the Auditor General sees a practice that may be deemed to be illegal and can refer that to the appropriate agencies.
Section 7 approved.
On section 8.
S. Robinson: I’m feeling like I’m just bouncing around here.
Section 8 talks about amending section 19 of the original act. It repeals subsection 1(j) and substitutes the following. There’s this whole long list. I’m wondering if the minister can explain what the intent of that amendment is.
Hon. P. Fassbender: The purpose of this is to give the audit council real clarity as to what they can review with the Auditor General for Local Government in terms of the performance of the office. That clarity was not there before. Indeed, the feedback we had from the audit council is that they wanted that clarity, and that’s why this amendment was made.
S. Robinson: I’m just looking at my notes. In the original legislation, (j) says: “reviewing and monitoring the performance of the auditor general, including, without limitation, the performance of the auditor general….” We don’t have that here. I’m wondering if the minister can speak to that.
Hon. P. Fassbender: What we have now is much more specific criteria on that role. That is why we’re spelling it out, as opposed to leaving it, as the audit council said to us that they felt it did not give them clarity as to what they could review.
S. Robinson: Thank you for that. I have one other question. I think I know the answer, but I would just like to hear it from the minister for the record.
There’s also a repealing of subsection (3) that certainly speaks to…. I think I know the answer, but I just wanted to get it clarified. “Before making a recommendation under subsection 1(b), the audit council need only be satisfied that the person to be recommended as acting auditor general is authorized to be an auditor of a company under section 205 of the Business Corporations Act.
Hon. P. Fassbender: That is consequential to the requirement that the auditor general must be a certified auditor.
The Chair: Shall section 8 pass?
S. Robinson: I had a question. It just sort of caught my attention.
I want to clarify for the record that the minister said that the auditor general is a certified auditor, or is not a certified auditor. I didn’t quite hear that correctly.
Hon. P. Fassbender: It repeals the requirement that the auditor general must be a certified auditor.
Section 8 approved.
On section 9.
S. Robinson: On section 9, we have a substitution. It says: “For the purpose of assisting the audit council to carry out its responsibilities, the minister may do one or both of the following.” And it shifts some responsibility. I’m just wondering if the minister can speak to that.
Hon. P. Fassbender: This provides the opportunity for the deputy for the ministry to provide support services to the audit council in the performance of their duties.
S. Robinson: Can the minister provide an example regarding staff that would be recruited under…? The next part talks about retaining persons and setting the remuneration and other terms and conditions of the retainers.
I’m wanting to know if the minister can provide an example regarding staff who would be recruited under a retainer agreement to assist the audit council.
Hon. P. Fassbender: This does not specifically refer to staff. For example, Mr. Trumpy, who did the report, under this section will be able to be retained as he was to provide the function as determined will be of support to the audit council, as Mr. Trumpy did in the preparation of his report.
S. Robinson: If I’m to understand what this does, it permits the minister to ask the deputy minister to provide staff resources. So ministry staff would be, now, providing service to the Office of the Auditor General for Local Government — we’d have ministry staff working in an independent office, which I think is interesting — and there is the ability to hire staff to help one group of government appointees oversee another government appointee.
It leaves me wondering if the responsibilities of the AGLG can be just reassigned to the office of the provincial
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Auditor General. It sounds like there is room to use staff in the ministry office and to hire contractors as needed. Is that how I’m reading this? Am I reading this correctly?
Hon. P. Fassbender: No, the member is not reading it properly. This is support to the audit council if they deem they need support. The deputy would be authorized to provide either staff support, if indeed that meets the needs that they’ve identified, or to contract people to provide support to the audit council, which oversees the office and the performance of that office. To use staff in that office to oversee or to provide a perspective on themselves would not make any sense.
S. Robinson: The minister just answered most of the question but said they could do either (a) or (b). This actually says that the minister may do “one or both of the following.” If we can just get some clarity, because both of the following means you could have staff resources and you could hire a contractor.
Hon. P. Fassbender: Well, yes, absolutely. Depending on what the need was, either or both could be employed. But that decision is made based on the request and the support that the audit council needs.
S. Robinson: Can the minister explain what it was that demonstrated that this needed to be added to the legislation?
Hon. P. Fassbender: In the feedback from the audit council, they clearly do not have resources. These people are appointed. They at times need…. The Trumpy report is a very good example of a need that was identified. The contractor was hired to do the work. The report was delivered to the audit council. Again, they do not have staff. They should not, for a lot of their work, be asking the office staff in the Auditor General for Local Government for that support.
S. Robinson: I’m going to take it that this might have been an oversight in the original legislation, which might very well be. But Mr. Trumpy was clearly hired by the ministry, so there was the ability to hire a contractor. I’m just trying to understand what the impact is of this piece of legislation.
Hon. P. Fassbender: Well, Mr. Trumpy was not hired by the government. He was hired by the audit council. They gave him the very clear criteria on what report they wanted and why they needed it. He worked with them. He provided the report to the audit council and subsequently the government.
This provides the authority and the clarity for the audit council that they can receive support either through the ministry or through contractors as deemed necessary.
S. Robinson: I’m going back over these words as I’m listening to the minister. This actually says that the minister may retain persons and set the remuneration and other terms and conditions of the retainer. In that case, then, if this legislation had been in place, Mr. Trumpy would have been working for the minister and not necessarily the audit council. Is that how I’m reading it?
Hon. P. Fassbender: Clearly, the audit council does not have a budget to retain contractors. This provides the mechanism by which contractors could be hired. Or if indeed there is some other secretarial support or other things that the audit council needs on a particular project, the deputy is authorized to provide that through the auspices of the ministry.
S. Robinson: I’m a little confused, then. Clearly, the minister explained that Mr. Trumpy was hired by the audit council. But if they don’t have resources, now I’m really confused about: who pays? Where does it come from? If the minister could please share that information with the House, I’d appreciate that.
Hon. P. Fassbender: Clearly, the audit council does not have a budget. In the case of Mr. Trumpy, they felt that a report and the review by Mr. Trumpy was appropriate. The ministry provided the resources for that work to be done, under the direction of Mr. Trumpy, by the audit council.
V. Huntington: Given the authorities and duties of the audit council as they’re outlined in section 8, those duties are quite extensive, could be fairly onerous and certainly involve a great deal of information, assistance, discussion and, I would say, permanent secretarial assistance.
I’m wondering if the minister and his staff have given — I mean this very respectfully — enough thought to whether or not there should be a budget to that audit council. It would seem to me that reviewing and monitoring the performance, the purpose and mandate of the auditor general, the exercise of his powers and the performance of his duties, “including, without limitation, the planning and conduct of performance audits and the preparation of performance audit reports, annual reports and other reports….” They can make recommendations to the auditor general about their service plans and their reports.
If there is no support staff to this body, then their independence is completely in question. They will be constantly, I would suggest, referring to the minister for resources on, if not a temporary, a full-time basis.
Well, I’ll stop with that and ask for the minister’s reply.
Hon. P. Fassbender: This provision provides support in the legislation that was not there clearly before. We have
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worked with the audit council. We have had feedback from them where they need support. It does not impinge on their independence at all, because they report to the minister on the work that they do. Providing them with support when they deem they need it is exactly what this does. It gives them the support that they want and is based on the feedback that we received from the audit council.
V. Huntington: Well, I understand that that’s what this section does. I can see the clear necessity for this. But I wonder if there was a full discussion with the audit council on whether or not they did in fact need a budget. I would suggest that if they’re going to…. Now that they have a very clear and specific mandate and duties, as they requested, whether that clarity itself will require assistance on an ongoing basis.
I’d like to ask the minister: did he and his staff ever discuss with the audit council whether they thought a budget would be appropriate?
Hon. P. Fassbender: In my own personal discussions with the chair of the audit council, he clearly did indicate that in the case of the Trumpy report, when they identified that they wanted that work done, they came to government, they asked for the resources to hire the contractor to do that report, and we provided that.
He has never said to me that they feel at this stage that they need full-time secretarial support or structure within their current mandate. If they were to approach us because their workload has got to the point where they would need that support, there are two ways we’d provide it. We either provide it with funding for contractors that they could engage, or in the future, there may be a need for that. But at this point, that has not been indicated by the audit council.
V. Huntington: To follow up quickly, the minister mentioned just previously that the auditor general’s staff would not be staffing the audit council.
How are they, then, being given and working with the reports that are being generated by the auditor general’s office? How is that flow of material working, back and forth? And how is that being done and given to the audit council without some support network?
Hon. P. Fassbender: In my discussions, again, with the chair of the audit council, there were and there will be regular meetings between themselves. When reports are done, those are provided to the audit council. They receive those from the office. How they’re transmitted, whether by courier or whether electronically — I don’t have the answer for that.
The relationship and one of the important elements to even some of the changes we’ve made is a clear expectation that there is a strong working relationship between the Auditor General for Local Government and the chair of the audit council — and, when required, between the other members of the audit council, as represented by their chair or collectively, with the AGLG office.
That relationship is a very important one, moving forward, because again, their responsibility is to ensure that the criteria, the standards, the scope of the work that is being done is clearly articulated by the independence of the AGLG but given to the audit council for their review and input.
Section 9 approved.
On section 10.
S. Robinson: I’m wondering if the minister can…. This speaks to section 21 of the original act. There are some changes made. In particular, I’m interested in the…. They added an additional subsection: “For certainty, at a meeting convened in accordance with subsection (3) (a), the audit council may consider recommending to the minister the suspension or removal of the auditor general.”
I’m wanting to know if the minister could please just clarify what prompted those changes.
Hon. P. Fassbender: Noting the hour, I’ll give a brief answer. The issue in this particular portion of the change is to ensure that the audit council does not have to be invited by the minister to give recommendations, that they can do that on their own volition if they believe it is important to communicate that to the minister.
I move that we rise and report progress and ask leave to sit again.
Motion approved.
The committee rose at 6:24 p.m.
The House resumed; Madame Speaker in the chair.
The Committee of the Whole (Section B), having reported progress, was granted leave to sit again.
Hon. T. Stone 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 6:25 p.m.
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